SECOND AMENDMENT
TO
RIGHTS AGREEMENT
Second Amendment, dated as of October 22, 1995, to the Rights
Agreement, dated as of December 13, 1994 and amended by the First Amendment,
dated as of May 23, 1995 (the "Rights Agreement"), between Top Source
Technologies, Inc., a Delaware corporation (the "Company"), and Bank of New
York, a New York Trust Company (the "Rights Agent").
W I T N E S S E T H :
WHEREAS, the Company and the Rights Agent executed and delivered the
Rights Agreement specifying the terms of the Rights (as defined therein); and
WHEREAS, the Board of Directors of the Company deems it desirable to
amend the Rights Agreement pursuant to the provisions of Section 26 of the
Rights Agreement to make certain modifications to the Rights Agreement upon the
terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
1. a. The definition of the term "Acquiring Person" set forth in
Section 1(a) of the Rights Agreement hereby is amended to read in its entirety
as follows:
"'Acquiring Person' shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates (as such
term is hereinafter defined) and Associates (as such term is hereinafter
defined) of such Person, shall be the Beneficial Owner (as such term is
hereinafter defined) of 15% or more of the Voting Stock of the Company then
outstanding; provided, that, if any Person, together with all Affiliates
and Associates of such Person, is the Beneficial Owner of 10% or more of
the outstanding Voting Stock of the Company as of December 13, 1994 (a
"current 10% holder"), then such Person shall not be deemed to be an
Acquiring Person unless and until such Person, together with all Affiliates
and Associates of such Person, becomes the Beneficial Owner of 20% or more
of the Voting Stock of the Company then outstanding (the 20% threshold
referred to in this provision shall apply to a current 10% holder only so
long as such Person's Beneficial Ownership of the Voting Stock equals or
exceeds 10% of the outstanding shares, and if such Person's Beneficial
Ownership of the Voting Stock were to be reduced after the date of this
Agreement to below 10% of the outstanding shares, then the 15% threshold
referred to in the 6th line of this definition thereafter shall apply to
such Person); provided, further, that an Acquiring Person shall not include
(i) an Exempt Person (as such term is hereinafter defined) or (ii) any
Person, together with all Affiliates and Associates of such Person, who or
which would be an Acquiring Person solely by reason of (A) being the
Beneficial Owner of shares of Voting Stock of the Company, the Beneficial
Ownership of which was acquired by such Person pursuant to any action or
transaction or series of related actions or transactions approved by the
Board of Directors before such Person otherwise became an Acquiring Person
or (B) a reduction in the number of issued and outstanding shares of Voting
Stock of the Company pursuant to a transaction or a series of related
transactions approved by the Board of Directors of the Company; provided,
further, that in the event such Person described in this clause (ii) does
not become an Acquiring Person by reason of subclause (A) or (B) of this
clause (ii), such Person nonetheless shall become an Acquiring Person in
the event such Person thereafter acquires Beneficial Ownership of an addi-
tional 1% of the Voting Stock of the Company, unless the acquisition of
such additional Voting Stock would not result in such Person becoming an
Acquiring Person by reason of subclause (A) or (B) of this clause (ii).
Notwithstanding the foregoing, if the Board of Directors of the Company
determines in good faith (but only if at the time of such determination by
the Board of Directors there are then in office not less than two
Continuing Directors and such action is approved by a majority of the
Continuing Directors then in office) that a Person who would otherwise be
an "Acquiring Person" as defined pursuant to the foregoing provisions of
this paragraph (a) has become such inadvertently, and such Person divests
as promptly as practicable a sufficient number of shares of Common Stock so
that such Person would no longer be an "Acquiring Person" as defined
pursuant to the foregoing provisions of this paragraph (a), then such
Person shall not be deemed an "Acquiring Person" for any purposes of this
Rights Agreement."
2. This Second Amendment to the Rights Agreement may be executed in
any number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
3. Except as specifically provided in this Second Amendment to the
Rights Agreement, the Rights Agreement shall remain in full force and effect and
shall in no way be amended, modified or affected.
IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to the Rights Agreement to be duly executed, all as of the day and
year first above written.
TOP SOURCE TECHNOLOGIES, INC.
By:/s/Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: Chief Financial
Officer
BANK OF NEW YORK
By:/s/Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Vice President
