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EXHIBIT 10.30
SECOND AMENDMENT TO
AGREEMENT AND PLAN OF REORGANIZATION
THIS SECOND AMENDMENT TO AGREEMENT AND PLAN OF REORGANIZATION (the
"Second Amendment") is made as of May 22, 1997, by and among Bristol Technology
Systems, Inc., a Delaware corporation ("Bristol"), Smyth Systems, Inc., a
Delaware corporation (the "Company"), Robert T. Smyth, Larry D. Smyth and
William A. Smyth (the "Managing Stockholders"), and Smyth Merger Corp., a
Delaware corporation and a newly-formed, wholly-owned subsidiary of Bristol
("Newco").
RECITALS
WHEREAS, the parties hereto entered into that certain Agreement and
Plan of Reorganization, dated April 3, 1997 (the "Merger Agreement"), which was
amended by that certain First Amendment to Agreement and Plan of Reorganization,
dated May 2, 1997 (the "First Amendment").
WHEREAS, subject to the satisfaction of certain conditions precedent,
the parties hereto intend, through this Second Amendment, to (i) convert the
Merger from a Code Section 368(a)(2)(C) tax-free reorganization to a Code
Section 368(a)(2)(D) tax-free reorganization; (ii) change the intended
accounting for the Merger from pooling of interests to purchase; and (iii)
change the nature of the consideration to be provided in connection with the
Merger from Bristol Common Stock to a combination of cash and Bristol Common
Stock, all pursuant to the terms and conditions provided below.
NOW, THEREFORE, in consideration of the premises and of the
representations, warranties, covenants and agreements herein contained, the
parties hereto, intending to be legally bound, agree as follows:
1. Definitions. Capitalized terms not otherwise defined herein shall
have the meanings ascribed such terms in the Merger Agreement.
2. Conditions Precedent. The effectiveness of this Second Amendment is
conditioned in its entirety upon (i) the approval of this Second Amendment on or
before May 30, 1997, by (A) the Board of Directors of Bristol and the Company,
and (B) at least 51% of the Stockholders; and (ii) the price per share of
Bristol's publicly traded Common Stock ("Bristol Public Stock") being at least
Three Dollars ($3) immediately prior to the Effective Time. If such conditions
are not satisfied, then the Merger Agreement and all amendments thereto shall
terminate and the Merger shall not proceed; provided, however, that in the event
of such termination each party expressly reserves any and all claims that it may
have against any other party. Notwithstanding anything to the contrary in this
paragraph 2, if the condition precedent described in subparagraph (ii), above,
is not satisfied, then the Company and the Stockholders shall waive such
condition if Bristol, in its sole discretion, determines to issue to the
Stockholders additional shares of Bristol Common Stock in an amount necessary to
ensure that the Stock Consideration when valued based upon the per share trading
price of Bristol's publicly Common Stock immediately prior to the Effective Time
is at least forty percent (40%) of the Aggregate Consideration.
3. Amendments. The Merger Agreement shall be amended as follows:
(a) Plan of Reorganization. Sections 1 and 2 of the Merger
Agreement shall be amended and restated in their entirety, as follows:
"1. PLAN OF REORGANIZATION
1.1 The Merger.
(a) The Merger. At the Effective Time (as defined in
Section 2 below), (i) the Company shall be merged with and
into Newco pursuant to this Agreement and the Articles of
Merger, and the separate corporate existence of the Company
shall cease, all in accordance with the Delaware General
Corporation Law (the "Delaware Statute"); and (ii) Newco shall
change its name to Smyth Systems, Inc. Newco, as it exists
from and after the Effective Time, is sometimes referred to
herein as the "Surviving Corporation."
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(b) Effects of the Merger. Subject to the terms and
conditions of this Agreement and the Articles of Merger, at
the Effective Time (i) the separate existence of the Company
shall cease and the Company shall be merged with and into
Newco and (ii) the Merger shall have all the effects provided
by the Delaware Statute, this Agreement and the Articles of
Merger.
(c) Articles of Incorporation; Bylaws; Directors
and Officers. The Articles of Incorporation of the Surviving
Corporation from and after the Effective Time shall be the
Articles of Incorporation of Newco until thereafter amended in
accordance with the provisions therein and as provided by the
Delaware Statute. The Bylaws of the Surviving Corporation from
and after the Effective Time shall be the Bylaws of Newco as
in effect immediately prior to the Effective Time, continuing
until thereafter amended in accordance with their terms and
the Articles of Incorporation of the Surviving Corporation and
as provided by the Delaware Statute. The initial directors of
the Surviving Corporation shall be Richard H. Walker, Paul
Spindler and Robert T. Smyth, in each case until their
successors are elected and qualified. The initial officers of
the Surviving Corporation shall be (i) the officers of the
Company immediately prior to the Effective Time; and (ii)
Richard H. Walker, who shall serve as a Vice President of
Surviving Corporation.
1.2 Conversion of Securities. At the Effective Time, by
virtue of the Merger and without any action on the part of
Bristol, Newco, the Company or any of the Company's
stockholders (the "Stockholders"), the shares of capital stock
of each of the Constituent Corporations shall be converted as
follows:
(a) Capital Stock of Newco. Each issued and
outstanding share of capital stock of Newco shall continue to
be issued and outstanding. Each stock certificate of Newco
evidencing ownership of any such shares shall continue to
evidence ownership of such shares of capital stock of the
Surviving Corporation.
(b) Cancellation of Certain Shares of Capital
Stock of the Company. All shares of capital stock of the
Company that are owned directly or indirectly by the Company
shall be canceled and no consideration shall be delivered in
exchange therefore.
(c) Conversion of Capital Stock of the Company.
Subject to subsections (d) and (e), and Section 1.3, below,
each issued and outstanding share of common stock of the
Company, no par value ("Company Common Stock") (other than
shares to be canceled pursuant to Section 1.2(b)), that is
issued and outstanding immediately prior to the Effective Time
shall automatically be canceled, extinguished and converted,
without any action on the part of the holder thereof, into the
right to receive (i) Thirty-Three ($33) in cash; and (ii)
Twenty-Nine Dollars ($29) of Bristol non-registered,
restricted common stock, $.001 par value ("Bristol Common
Stock"). All such shares of Company Common Stock, when so
converted, shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to
exist, and each holder of a certificate representing any such
shares shall cease to have any rights with respect thereto,
except the right to receive cash and Bristol Common Stock to
be issued or paid in consideration therefor upon the surrender
of such certificate in accordance with Section 1.3 of this
Agreement.
(d) Consideration. The aggregate consideration to be
paid pursuant to the Merger is Two Million Three Hundred
Forty-Eight Thousand Eight Hundred Eight Dollars ($2,348,808)
in cash (the "Cash Consideration") and Two Million Sixty-Four
Thousand One Hundred Four Dollars ($2,064,104) of Bristol
Common Stock, rounded down to the nearest whole share (the
"Stock Consideration" and, together with the Cash
Consideration, the "Aggregate Consideration"). Each share of
Bristol Common Stock shall be valued based upon the last trade
price per share of Bristol's publicly traded Common Stock
("Bristol Public Stock") as reported by NASDAQ on May 19,
1997.
(e) Pledged Shares.
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(i) As collateral security for the payment
of any indemnification obligations of the Managing
Stockholders pursuant to Section 8 of this Agreement, at the
Closing each Managing Stockholder shall, and by execution
hereof does hereby, transfer, pledge and assign to Bristol,
for the benefit of Bristol, a security interest in the
following assets:
(A) such Managing Stockholder's
"Pledged Shares" (as defined below), the certificates and
instruments representing or evidencing the Pledged Shares, and
all cash and non-cash dividends and other property at any time
received or otherwise distributed in respect of or in exchange
or substitution for any or all of the Pledged Shares; and in
the event that a Managing Stockholder receives any such
property, such Managing Stockholder shall immediately deliver
such property to Bristol to be held hereunder as part of the
Pledged Shares. For each Managing Stockholder, "Pledged
Shares" shall mean Twenty Thousand (20,000) shares of the
Bristol Common Stock issued to such Managing Shareholder in
the Merger; and
(B) all rights, titles,
interests, privileges and preferences appertaining or incident
to the foregoing property, except as provided for in Section
1.2(f)(iii).
(ii) Each certificate evidencing the
Pledged Shares issued in the Managing Stockholder's names in
the Merger, shall, at the Closing, be delivered to Bristol,
together with an undated stock power duly signed in blank by
such Managing Stockholder, such certificate bearing no
restrictive or cautionary legend other than those imprinted by
Bristol's transfer agent at Bristol's request.
(iii) The Managing Stockholders shall be
entitled to exercise any voting powers incident to the Pledged
Shares until such time, if ever, as they are transferred to
Bristol pursuant to the indemnification obligations of the
Managing Stockholders pursuant to Section 8 hereof.
(iv) Each Managing Stockholder hereby
acknowledges that each pledge under this Section 1.2(f) is
independent of the pledge by the other Managing Stockholders
hereunder and that Bristol may take any and all actions
against a Managing Stockholder's Pledged Shares under this
Agreement without taking any action against any other Managing
Stockholder's Pledged Shares.
1.3 Payment of Cash/Exchange of Certificates.
(a) Newco to Deliver Cash. Promptly after the
Effective Time and on the Closing Date, Newco shall wire
transfer the Cash Consideration to the Company. After receipt
of the wire transfer, the Company shall then arrange for the
payment of the Cash Consideration to the Stockholders, which
consideration shall be allocated among the Stockholders in
accordance with Section 1.2(c), above.
(b) Bristol to Provide Common Stock. Promptly after
the Effective Time, Bristol shall cause to be made available
the to the Stockholders that number of shares of Bristol
Common Stock equal to the Stock Consideration, which shares
shall be allocated among the Stockholders in accordance with
Section 1.2(c) above.
(c) Certificate Delivery Requirements. At the
Effective Time, the Managing Stockholders shall cause the
Stockholders to deliver to Bristol the certificates (the
"Certificates") representing the Company Common Stock, duly
endorsed in blank by the Stockholders, or accompanied by blank
stock powers, and with all necessary transfer tax and other
revenue stamps, acquired at the Stockholders' expense, affixed
and canceled. The Managing Stockholders shall cause the
Stockholders to promptly cure any deficiencies with respect to
the endorsement of the Certificates or other documents of
conveyance with respect to the stock powers accompanying such
Certificates. The Certificates so delivered shall forthwith be
canceled. Until delivered as contemplated by
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this Section 1.3(c), each Certificate shall be deemed at any
time after the Effective Time to represent the right to
receive upon such surrender cash and Bristol Common Stock as
provided by this Section 1 and the provisions of the Delaware
Statute.
(d) No Further Ownership Rights in Capital Stock of
the Company. All cash and Bristol Common Stock delivered upon
the surrender for exchange of shares of Company Common Stock
in accordance with the terms hereof shall be deemed to have
been delivered in full satisfaction of all rights pertaining
to such shares of Company Common Stock, and following the
Effective Time, the Certificates shall have no further rights
to, or ownership in, shares of capital stock of the Company or
the Surviving Corporation. There shall be no further
registration of transfers on the stock transfer books of the
Surviving Corporation of the shares of Company Common Stock
which were outstanding immediately prior to the Effective
Time. If, after the Effective Time, Certificates are presented
to the Surviving Corporation for any reason, they shall be
canceled and exchanged as provided in this Section 1.3.
(e) Lost, Stolen or Destroyed Certificates. In the
event any certificates evidencing shares of Company Common
Stock shall have been lost, stolen or destroyed, Bristol shall
cause the issuance of Bristol Common Stock to be made in
exchange for such lost, stolen or destroyed certificates, upon
the making of an affidavit of that fact by the holder thereof,
provided, however, that Bristol may, in its discretion and as
a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificates to
deliver a bond in such sum as it may reasonably direct as
indemnity against any claim that may be made against Bristol
with respect to the certificates alleged to have been lost,
stolen or destroyed.
2. CLOSING
The consummation of the Merger and the other transactions
contemplated by this Agreement (the "Closing") shall take
place at the offices of Bristol, 18201 Von Karman Avenue,
Suite 305, Irvine, California 92612 at 10:00 a.m. on June 13,
1997, or on such earlier date and time as determined by
Bristol (the "Closing Date"), provided that all conditions to
Closing shall have been satisfied or waived. Notwithstanding
the above, the Merger shall be deemed to be effective May 31,
1997 for accounting purposes only.
On the Closing Date, the Articles of Merger and any
required officers' certificates, shall be filed with the
Secretary of State of the State of Delaware in accordance with
the provisions of the Delaware Statute. The Merger shall
become effective upon such filing or at such later time on the
Closing Date as may be specified in the filing with the
Secretary of State of the State of Delaware (the "Effective
Time")."
(b) Representations and Warranties of the Company and the
Managing Stockholders. Section 3 of the Merger Agreement shall be amended as
follows:
(i) The last two (2) sentences of Section 3.3
shall be deleted in their entirety; and
(ii) Section 3.33 shall be deleted in its
entirety.
(c) Covenants. Section 5 of the Merger Agreement shall
be amended as follows:
(i) Section 5.8 shall be deleted in its
entirety; and
(ii) Section 5.12 shall be amended and restated in
its entirety as follows:
"5.12 Listing of Bristol Common Stock. Not later
than thirty days (30) prior to the first anniversary
of the Closing Date, Bristol shall apply to have the
Bristol Common Stock approved for inclusion on such
stock exchange as Bristol's publicly traded Common
Stock is then listed, if any. The parties expressly
understand and agree that such application shall only
be made if (i) Bristol's
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publicly traded Common Stock is then listed on a
stock exchange and (ii) such application is necessary
to include the Bristol Common Stock thereon."
(d) Conditions Precedent to Obligations of Bristol
and Newco. Section 6 of the Merger Agreement shall be amended as follows:
(i) Section 6.7 shall be deleted in its entirety; and
(ii) Section 6.12 shall be deleted in its entirety.
(e) Conditions Precedent to Obligations of the Stockholders
and the Company. Section 7 of the Agreement shall be amended to add a new
section 7.7 as follows:
"7.7 No Material Adverse Change. From the date of this Second
Amendment through the Closing Date, Bristol shall not have
become aware of any material adverse change in the business,
affairs, prospects, properties, assets, existing and potential
liabilities, obligations, insurability, profits or condition
(financial or otherwise); and the Company shall have received
a certificate signed on behalf of Bristol to such effect.
Notwithstanding the above, the parties expressly agree that
the following shall not constitute a `material adverse
change:' (i) securing debt financing for purposes of
acquisitions (including the Merger) and/or operations; (ii)
the replacement of any of Bristol's outside service providers;
(iii) subject to paragraph 2, above, any fluctuation in the
price of Bristol Public Stock; (iv) the execution of
definitive agreements for the acquisition by Bristol of
another entity; and (v) the failure to close any of Bristol's
pending acquisitions."
(f) Section 9.15 (Further Representations). The phrase "Other
than the right of Bristol to rely on the letter from D&T (described in Section
6.7, above)" shall be deleted in its entirety from the last sentence of Section
9.15.
4. The Merger Agreement. Except as expressly amended herein, the terms
and conditions of the Merger Agreement, as amended by the First Amendment,
shall remain in full force and effect.
[SIGNATURES SET FORTH ON FOLLOWING PAGES]
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IN WITNESS WHEREOF, the parties hereto have executed this Second
Amendment as of the day and year first above written.
"BRISTOL"
BRISTOL TECHNOLOGY SYSTEMS, INC.,
A DELAWARE CORPORATION
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BY: RICHARD H. WALKER, PRESIDENT
"COMPANY"
SMYTH SYSTEMS, INC, A DELAWARE CORPORATION
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BY: ROBERT T. SMYTH, PRESIDENT
"NEWCO"
SMYTH ACQUISITION CORP., A DELAWARE
CORPORATION
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BY: RICHARD H. WALKER, PRESIDENT
"MANAGING STOCKHOLDERS"
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ROBERT T. SMYTH
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LARRY D. SMYTH
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WILLIAM A. SMYTH
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