Exhibit 10.3

 

AMENDMENT NO. TWO TO THE RIGHTS AGREEMENT

 

This Amendment No. Two (this “Amendment”) to the Rights Agreement dated as of
November 2, 1999, as amended by Amendment No. One (“Amendment No. One”) to the
Rights Agreement dated as of April 21, 2005 (as amended by Amendment No. One,
the “Rights Agreement”), is made by and between Matrix Service Company, a
Delaware corporation (the “Company”), and UMB Bank, N.A., as Rights Agent (the
“Rights Agent”), effective as of October 3, 2005;

 

WHEREAS, pursuant to the terms and conditions of the Rights Agreement, the
Company and the Rights Agent desire to further amend the Rights Agreement as set
forth below;

 

WHEREAS, the Company, by its execution of this Amendment, hereby directs the
Rights Agent to execute this Amendment;

 

WHEREAS, all capitalized terms used, but not otherwise defined, herein shall
have the meaning ascribed to them in the Rights Agreement; and

 

NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:

 

Section 1. Amendment to Rights Agreement.

 

1.1 Amendment to Section 1.

 

a. The third sentence (as previously amended) of the definition of “Acquiring
Person” set forth in Section 1(a) of the Rights Agreement is hereby amended by
adding the following after the language “on the Closing Date” in the second line
thereof: “and the purchase of Common Shares pursuant to the October Securities
Purchase Agreement”.

 

b. The definition of “Acquiring Person” set forth in Section 1(a) of the Rights
Agreement is hereby amended by inserting the following text immediately
following the third sentence of such definition (as previously amended):

 

“Notwithstanding the foregoing or anything to the contrary in this Rights
Agreement, “Acquiring Person” shall not include the Tontine Group, acting
individually or with another Person, unless and until such time as the Tontine
Group shall increase its Beneficial Ownership of Common Shares to an amount in
excess of 25% or more of the then-outstanding Common Shares; provided, however,
that the Tontine Group will not be deemed to be an Acquiring Person solely as a
result of (i) stock issuances by the Company to any member of the Tontine Group,
which are not part of a broader sale of stock, or (ii) a reduction in the number
of Common Shares outstanding unless and until such time after such reduction as
(A) the Tontine Group becomes the Beneficial Owner of additional Common Shares
(other than as a result of a stock dividend, stock split, stock repurchases or
similar transaction effected by the Company in which all holders of Common
Shares are treated equally, and other than issuances of stock by the Company to

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any member of the Tontine Group, which are not part of a broader sale of stock)
and after giving effect to such additional Common Shares the Tontine Group is
the Beneficial Owners of an amount in excess of 25% or more of the
then-outstanding Common Shares, or (B) any other Person who is a Beneficial
Owner of Common Shares thereafter becomes an Affiliate or Associate of the
Tontine Group and after giving effect thereto the Tontine Group is the
Beneficial Owner of an amount in excess of 25% or more of the then-outstanding
Common Shares.”

 

c. The fourth word in the last sentence of the definition of “Acquiring Person”
contained in Section 1(a) of the Rights Agreement is hereby changed from “four”
to “five.”

 

d. The definition of “Distribution Date” set forth in Section 1(h) of the Rights
Agreement (as such Section may have been re-designated pursuant to Amendment No.
One and this Amendment) is hereby amended by inserting the following text
immediately after the period concluding the definition:

 

“Notwithstanding the foregoing or anything to the contrary in this Rights
Agreement, a “Distribution Date” shall not include, and shall not occur by
virtue of: (i) the negotiation, execution, delivery, or preparation of the
October Securities Purchase Agreement; or (ii) the consummation of the
transactions contemplated by the October Securities Purchase Agreement”

 

e. The definition of “Flip-In Event” set forth in Section 1(l) of the Rights
Agreement (as such Section may have been re-designated pursuant to Amendment No.
One and this Amendment) is hereby amended by inserting the following text
immediately after the period concluding the definition:

 

“Notwithstanding the foregoing or anything to the contrary in this Rights
Agreement, a “Flip-In Event” shall not include, and shall not occur by virtue
of: (i) the negotiation, execution, delivery, or preparation of the October
Securities Purchase Agreement; or (ii) the consummation of the transactions
contemplated by the October Securities Purchase Agreement.”

 

f. The definition of “Flip-Over Event” set forth in Section 1(m) of the Rights
Agreement (as such Section may have been re-designated pursuant to Amendment No.
One and this Amendment) is hereby amended by inserting the following text
immediately after the period concluding the definition:

 

“Notwithstanding the foregoing or anything to the contrary in this Rights
Agreement, a “Flip-Over Event” shall not include, and shall not occur by virtue
of: (i) the negotiation, execution, delivery, or preparation of the October
Securities Purchase Agreement; or (ii) the consummation of the transactions
contemplated by the October Securities Purchase Agreement.”

 

g. The definition of “Share Acquisition Date” set forth in Section 1(z) of the
Rights Agreement (as such Section may have been re-designated pursuant to
Amendment No. One and this Amendment) is hereby amended by inserting the
following text immediately after the period concluding the definition:

 

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“Notwithstanding the foregoing or anything to the contrary in this Rights
Agreement, a “Stock Acquisition Date” shall not include, and shall not occur by
virtue of: (i) the negotiation, execution, delivery, or preparation of the
October Securities Purchase Agreement; or (ii) the consummation of the
transactions contemplated by the October Securities Purchase Agreement.”

 

h. The definition of “Triggering Event” set forth in Section 1(cc) of the Rights
Agreement (as such Section may have been re-designated pursuant to Amendment No.
One and this Amendment) is hereby amended by inserting the following text
immediately after the period concluding the definition:

 

“Notwithstanding the foregoing or anything to the contrary in this Rights
Agreement, a “Triggering Event” shall not include, and shall not occur by virtue
of: (i) the negotiation, execution, delivery, or preparation of the October
Securities Purchase Agreement; or (ii) the consummation of the transactions
contemplated by the October Securities Purchase Agreement.”

 

i. The following definitions are hereby added to Section 1 of the Rights
Agreement in their proper alphabetical order and any cross-references to
subsections of Section 1 are modified as appropriate:

 

“October Securities Purchase Agreement” means the Securities Purchase Agreement
dated as of October 3, 2005, by and among the Company, Tontine and the
Investors.

 

“Tontine Group” means Jeffrey L. Gendell, Tontine Capital Partners, L.P.,
Tontine Capital Management L.L.C. and any of their Affiliates or Associates.

 

1.2 Addition of Section 35. The Rights Agreement is hereby further amended by
adding a new Section 35 as follows:

 

“35. Exception for October Securities Purchase Agreement. Notwithstanding
anything to the contrary in this Rights Agreement, no Person shall be granted or
issued any Rights, and no holder of any Rights shall be entitled to exercise
such Rights under any of the sections, terms, or provisions of this Agreement,
by reason of: (i) the negotiation, execution, delivery, or preparation of the
October Securities Purchase Agreement; or (ii) the consummation of the
transactions contemplated by the Securities Purchase Agreement.”

 

Section 2. Miscellaneous.

 

2.1 Effectiveness. This Agreement shall be deemed effective as of the date first
written above, as if executed by both parties on such date. Except as amended
hereby, the Rights Agreement shall remain in full force and effect and shall not
be otherwise affected by this Agreement.

 

2.2 Further Assurances. Each party agrees that, from time to time upon the
written request of the other party, it will execute and deliver such further
documents and do such other acts and things as the other party may reasonably
request to effect the purposes of this Agreement.

 

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2.3 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the domestic laws of the State of Delaware without giving
effect to any choice or conflict of law provision or rule (whether of the State
of Delaware or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Delaware.

 

2.4 Severability. Any term or provision of this Agreement that is invalid or
unenforceable in any situation in any jurisdiction shall not affect the validity
or enforceability of the remaining terms and provisions hereof or the validity
or enforceability of the offending term or provision in any other situation or
in any other jurisdiction.

 

2.5 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the respective successors and assigns of the parties; provided,
however, that neither party shall assign or transfer its rights hereunder
without the prior written consent of the other party.

 

2.6 Counterparts. This Agreement may be executed in one or more counterparts and
all of such counterparts taken together shall constitute one and the same
instrument.

 

[THE NEXT PAGE IS THE SIGNATURE PAGE]

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the date first above written.

 

MATRIX SERVICE COMPANY

By:

 

/s/ George L. Austin

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Name:

 

George L. Austin

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Title:

 

VP and CFO

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UMB BANK, N.A.

By:

 

 

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Name:

 

 

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Title:

 

 

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