EXHIBIT 2.1
FIRST AMENDMENT TO THE
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
THIS FIRST AMENDMENT (the "Amendment") to the Agreement and Plan of
Merger and Reorganization (the "Merger Agreement;" capitalized terms used
but not defined herein shall have the meanings ascribed to them therein),
dated as of the 4th day of June, 1998, among WORLD ACCESS, INC., a Delaware
corporation ("WAG"), WAXS INC., a Delaware corporation and a direct wholly-
owned subsidiary of WAG ("Parent"), TAIL ACQUISITION CORPORATION, a
Delaware corporation and a direct wholly-owned subsidiary of WAG ("Merger
Sub"), and TELCO SYSTEMS, INC., a Delaware corporation (the "Company"), is
made as of the 27th day of October, 1998 among Parent, WAG, Merger Sub and
the Company (collectively, the "Parties").
W I T N E S S E T H:
WHEREAS, the Parties have entered into the Merger Agreement which
provides, upon the terms and conditions set forth therein, for the Merger;
and
WHEREAS, the boards of directors of the Parties have determined that
it is fair to and in the best interests of their respective stockholders to
amend the Merger Agreement as provided herein;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein, the Parties hereto do hereby agree as
follows:
SECTION 1. Amendments to Merger Agreement. The Merger
Agreement is hereby amended as follows:
(a) The first "whereas" clause of the Merger Agreement is
hereby amended and restated in its entirety as follows:
"WHEREAS, the boards of directors of WAG, Parent, Merger Sub
and the Company have each determined that it is fair to and in
the best interests of their respective stockholders to combine
the respective businesses of WAG, Parent and the Company by means
of a merger (the "Merger") of the Company with and into Merger
Sub upon the terms and subject to the conditions set forth herein
and in accordance with the General Corporation Law of the State
of Delaware;"
(b) Section 1.01 of the Merger Agreement is hereby amended
to add the following defined terms appearing therein in alphabetical order:
"Average Tax Value" shall mean the average of the high and
low trading prices of the WAG Common Stock or, in the event that
the Holding Company Reorganization shall have been consummated,
the Parent Common Stock on the date of the Closing, in either
case as reported on Nasdaq.
"Cash Consideration Pool" shall mean an amount of cash
determined by the Parent in its sole discretion upon irrevocable
notice given to the Company in accordance with Section 10.02
hereof on the Determination Date, provided that such amount does
not exceed the excess of (a) 55% of the Tax Consideration over
(b) the estimated aggregate amount of cash paid or to be paid to
Dissenting Stockholders, if applicable, the estimated aggregate
amount of cash paid or to be paid in lieu of fractional shares of
WAG Common Stock or Parent Common Stock, as the case may be,
pursuant to Section 3.04, such estimates to be determined as
provided in Schedule A hereto.
"Common Stock Exchange Ratio" shall have the meaning
specified in Section 3.01(a).
"Determination Date" shall mean the third business day prior
to the date on which the Effective Time is expected to occur.
"Merger Consideration" shall have the meaning specified in
Section 3.01(a).
"Nominal Consideration" shall mean the value determined by
multiplying the Closing Date Market Price by the product of (i)
the number of shares of Company Common Stock issued and
outstanding immediately prior to the Effective Time (other than
any shares of Company Common Stock to be cancelled pursuant to
Section 3.01(b) hereof) and (ii) the Common Exchange Ratio.
"Share Consideration Pool" shall mean that number of shares
of WAG Common Stock determined by (i) subtracting from the
Nominal Consideration the amount of the Cash Consideration Pool
and (ii) dividing the number obtained therefrom by the Closing
Date Market Price.
"Tax Consideration" shall mean the value determined by
multiplying the Average Tax Value by the product of (i) the
number of shares of Company Common Stock issued and outstanding
immediately prior to the Effective Time (other than any shares of
Company Common Stock to be cancelled pursuant to Section 3.01(b)
hereof) and (ii) the Common Exchange Ratio; provided, however,
that if the Closing Date Market Price is less than $20.47, then
for purposes of this calculation, the Common Exchange Ratio shall
equal the quotient of (x) $12.00 divided by (y) the Closing Date
Market Price.
"Top-Up Consideration Pool" shall mean an amount of cash
and/or a number of shares of WAG Common Stock (which shares shall
be valued at the Closing Date Market Price) that have an
aggregate value equal to the amount (if any) determined by
subtracting (i) the Nominal Consideration from (ii) the number of
shares of Company Common Stock issued and outstanding immediately
prior to the Effective Time (other than any shares of Company
Common Stock to be cancelled pursuant to Section 3.01(b) hereof)
multiplied by $12.00 per share (the product thereof being
referred to herein as the "Top-Up Amount"), with the proportion
of cash comprising a part thereof equaling the ratio of the Cash
Consideration Pool to the sum of the Cash Consideration Pool and
the value of the Share Consideration Pool (where the value of the
shares in such pool is determined by reference to the Closing
Date Market Price).
(c) The definition of "Capital Increase" in Section 1.01 of
the Merger Agreement is hereby amended and restated in its entirety as
follows:
"Capital Increase" shall have the meaning specified in Section
7.01(a).
(d) Section 2.01 of the Merger Agreement is hereby amended
and restated in its entirety as follows:
"SECTION 2.01 The Merger. Upon the terms and subject to
the conditions set forth in this Agreement, and in accordance
with the Delaware General Corporation Law, at the Effective Time,
the Company shall be merged with and into Merger Sub; provided,
however, that if the Holding Company Reorganization shall not
have occurred prior to the Effective Time, then notwithstanding
anything herein to the contrary, (a) the Company shall be merged
with and into WAG and the provisions of this Agreement thereupon
shall be deemed amended to the extent necessary to provide
therefor and (b) Parent and WAG shall waive any failure to
satisfy Section 8.03(a) or 8.03(b) to the extent such non-
compliance results only from any differences between the
structure of such modified Merger and the Merger. As a result of
the Merger, the separate corporate existence of the Company shall
cease and Merger Sub shall continue as the surviving corporation
of the Merger (the "Surviving Corporation"). Parent may, upon
notice to the Company given not less than five business days
prior to the Determination Date and with the Company's consent
(which will not be unreasonably withheld), elect to amend this
Agreement to provide for a merger of the Company with and into
Parent or one or more direct or indirect Subsidiaries of WAG or
Parent (an "Alternative Merger"); provided, however, that (i) any
such Alternative Merger shall not alter or change the amount or
kind of consideration to be issued to holders of Company Capital
Stock or Company Stock Options as provided for in this Agreement,
(ii) any such Alternative Merger shall not adversely affect the
tax or accounting treatment provided for herein and shall not
materially delay consummation of the transactions contemplated
hereby, (iii) in the event of any such election, the Company
shall have the opportunity to update the Company Disclosure
Schedule to reflect additional items that are required to be set
forth therein only as a result of any differences between the
Alternative Merger structure and that of the Merger, and
(iv) Parent and WAG shall waive any failure to satisfy Section
8.03(a) or 8.03(b) to the extent such non-compliance results only
from any differences between the structure of the Alternative
Merger and that of the Merger."
(e) Section 2.02 of the Merger Agreement is hereby amended
and restated in its entirety as follows:
"SECTION 2.02. Closing. Unless this Agreement shall have
been terminated and the Merger shall have been abandoned pursuant
to Section 9.01 and subject to the satisfaction or waiver of the
conditions set forth in Article VIII, the consummation of the
merger shall take place one business day following the date of
the Company Stockholders' Meeting or, if such conditions shall
not then have been satisfied or waived, as promptly as
practicable thereafter (and in any event within one business day)
after satisfaction or waiver of the conditions set forth in
Article VIII, at a closing (the "Closing") to be held at such
location as is agreed to by the parties hereto, unless another
date is agreed to by the Company and Parent."
(f) Section 3.01(a) of the Merger Agreement is hereby
amended and restated in its entirety as follows:
"(a) Each share of Company Common Stock (together with the
right to purchase one-hundredth (1/100th) of a share of Company
Preferred Stock (the "Rights")) issued and outstanding
immediately prior to the Effective Time (other than any shares of
Company Common Stock to be cancelled pursuant to Section 3.01(b)
and, if applicable, any shares of Company Common Stock which are
held by stockholders entitled to and validly exercising appraisal
rights pursuant to Section 262 of the Delaware General
Corporation Law ("Dissenting Stockholders")) and all rights in
respect thereof shall forthwith cease to exist and shall be
converted into and become exchangeable for the following (the
"Merger Consideration"):
(i) subject to subsection (ii) below, that number of
shares of WAG Common Stock (the "Common Exchange Ratio")
equal to the quotient of (A) $17.00 divided by (B) the
Closing Date Market Price; provided, however, that (x) if
the Closing Date Market Price is less than $29.00, then the
Common Exchange Ratio shall be equal to .5862, and (y) if
the Closing Date Market Price is more than $36.00, then the
Common Exchange Ratio shall be equal to .4722;
(ii) in lieu of the shares of WAG Common Stock provided
by subsection (i) above, at the election of Parent upon
irrevocable notice given to the Company in accordance with
Section 10.02 hereof on the Determination Date, a pro rata
portion of (A) the Cash Consideration Pool and (B) the Share
Consideration Pool; and
(iii) in the case of either subsection (i) or
subsection (ii) above, if the aggregate Nominal
Consideration is less than the Top-Up Amount, a pro rata
portion of the Top-Up Consideration Pool."
(g) Section 3.01(c) of the Merger Agreement is hereby
amended and restated in its entirety as follows:
"(c) Each share of common stock, par value $0.01 per share,
of Merger Sub ("Merger Sub Common Stock") issued and outstanding
immediately prior to the Effective Time shall be converted into
and become one fully paid and nonassessable share of common
stock, $0.01 par value per share, of the Surviving Corporation."
(h) Section 3.02 of the Merger Agreement is hereby amended
and restated in its entirety as follows:
"SECTION 3.02 Exchange of Shares Other than Treasury
Shares. Subject to the terms and conditions hereof, at or prior
to the Effective Time, WAG shall appoint an exchange agent
reasonably acceptable to the Company to effect the exchange of
shares of Company Common Stock for the Merger Consideration, in
accordance with the provisions of this Article III (the "Exchange
Agent"). From time to time after the Effective Time, WAG shall
deposit, or cause to be deposited, certificates representing WAG
Common Stock, the amount of the Cash Consideration Pool and the
amount of cash (if any) comprising a portion of the Top-Up
Consideration Pool for conversion of shares of Company Common
Stock, in accordance with the provisions of Section 3.01 (such
certificates, together with any dividends or distributions with
respect thereto, and funds comprising the Cash Consideration Pool
and the Top-Up Consideration Pool (if any) being herein referred
to as the "Exchange Fund"). Commencing immediately after the
Effective Time and until the appointment of the Exchange Agent
shall be terminated, each holder of a certificate or certificates
theretofore representing shares of Company Common Stock may
surrender the same to the Exchange Agent and, after the
appointment of the Exchange Agent shall be terminated, any such
holder may surrender any such certificate to WAG. Such holder
shall be entitled upon such surrender to receive in exchange
therefor a certificate or certificates representing the number of
full shares of WAG Common Stock, the portion of the Cash
Consideration Pool and the portion of the Top-Up Consideration
Pool into which the shares of Company Common Stock theretofore
represented by the certificate or certificates so surrendered
shall have been converted in accordance with the provisions of
Section 3.01, together with a cash payment in lieu of fractional
shares, if any, in accordance with Section 3.04, and the Merger
Consideration shall be deemed to have been issued at the
Effective Time. Until so surrendered and exchanged, each
outstanding certificate which, prior to the Effective Time,
represented issued and outstanding shares of Company Common Stock
shall be deemed for all corporate purposes of WAG, other than the
payment of dividends and other distributions, if any, to evidence
ownership of the number of full shares of WAG Common Stock, the
portion of the Cash Consideration Pool and the portion of the
Top-Up Consideration Pool into which the shares of Company Common
Stock theretofore represented thereby shall have been converted
at the Effective Time in accordance with the provisions of
Section 3.01. Unless and until any such certificate theretofore
representing shares of Company Common Stock is so surrendered, no
dividend or other distribution, if any, payable to the holders of
record of WAG Common Stock as of any date subsequent to the
Effective Time shall be paid to the holder of such certificate in
respect thereof. Upon the surrender of any such certificate
theretofore representing shares of Company Common Stock, however,
the record holder of the certificate or certificates representing
shares of WAG Common Stock issued in exchange therefor shall
receive from the Exchange Agent or from WAG, as the case may be,
(i) payment of the amount of dividends and other distributions,
if any, which as of any date subsequent to the Effective Time and
until such surrender shall have become payable with respect to
such number of shares of WAG Common Stock ("Presurrender
Dividends") and (ii) at the appropriate payment date, the amount
of dividends or other distributions with a record date after the
Effective Time but prior to such surrender and with a payment
date subsequent to such surrender payable with respect to such
whole shares of WAG Common Stock. No interest shall be payable
with respect to the payment of Presurrender Dividends upon the
surrender of certificates theretofore representing shares of
Company Common Stock. After the appointment of the Exchange
Agent shall have been terminated, such holders of WAG Common
Stock which have not received payment of Presurrender Dividends
shall look only to WAG for payment thereof. Notwithstanding the
foregoing provisions of this Section 3.02, risk of loss and title
to such certificates representing shares of Company Common Stock
shall pass only upon proper delivery of such certificates to the
Exchange Agent, and neither the Exchange Agent nor any party
hereto shall be liable to a holder of shares of Company Capital
Stock for any Merger Consideration, or dividends or distributions
thereon, delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law or to a
transferee pursuant to Section 3.03. References in this Section
3.02 to Company Common Stock shall be deemed to include the
associated Rights."
(i) Section 3.03(a) of the Merger Agreement is hereby
amended and restated in its entirety as follows:
"SECTION 3.03 Stock Transfer Books. (a) At the Effective
Time, each of the stock transfer books of the Company with
respect to shares of Company Common Stock shall be closed, and
there shall be no further registration of transfers of shares of
Company Common Stock thereafter on the records of any such stock
transfer books. In the event of a transfer of ownership of
shares of Company Common Stock that is not registered in the
stock transfer records of the Company, at the Effective Time, a
certificate or certificates representing the number of full
shares of WAG Common Stock into which such shares of Company
Common Stock shall have been converted shall be issued to the
transferee together with a cash payment representing the portion
of the Cash Consideration Pool and the Top-Up Consideration Pool
into which such shares shall have been converted in accordance
with Section 3.01 and cash in lieu of fractional shares, if any,
in accordance with Section 3.04, and a cash payment in the amount
of Presurrender Dividends, if any, in accordance with
Section 3.02, if the certificate or certificates representing
such shares of Company Capital Stock is or are surrendered as
provided in Section 3.02, accompanied by all documents required
to evidence and effect such transfer and by evidence of payment
of any applicable stock transfer tax."
(j) Sections 3.05(a) and (b) of the Merger Agreement are
hereby amended and restated in their entirety as follows:
"(a) the number of shares of WAG Common Stock to be subject
to the new option shall be equal to the product of (i) the number
of shares of Company Common Stock subject to the original option
and (ii) the Common Exchange Ratio; provided, however, that if
the value of the Top-Up Consideration Pool is greater than zero,
then the Common Exchange Ratio for purposes of this Section
3.05(a) shall be equal to the quotient of $12.00 divided by the
Closing Date Market Price;
(b) the exercise price per share of Parent Common Stock
under the new option shall be equal to the quotient of (i) the
exercise price per share of Company Common Stock under the
original option divided by (ii) the Common Exchange Ratio;
provided, however, that if the value of the Top-Up Consideration
Pool is greater than zero, then the Common Exchange Ratio for
purposes of this Section 3.05(b) shall be equal to the quotient
of $12.00 divided by the Closing Date Market Price; and"
(k) A new Section 3.08 of the Merger Agreement is added as
follows:
"SECTION 3.08. Dissenters' Rights. Notwithstanding anything
in this Agreement to the contrary, any issued and outstanding
shares of Company Common Stock held by a Dissenting Stockholder
shall not be converted as described in Section 3.01(a) but, as of
the Effective Time, shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist
and shall become the right to receive such consideration as may
be determined to be due to such Dissenting Stockholder pursuant
to the laws of the State of Delaware; provided, however, that the
shares of Company Common Stock outstanding immediately prior to
the Effective Time and held by a Dissenting Stockholder who
shall, after the Effective Time withdraw his or her demand for
appraisal or lose his or her right of appraisal, in either case
pursuant to the Delaware General Corporation Law, shall be deemed
to be converted as of the Effective Time into the right to
receive the Merger Consideration. The Company shall give Parent
(i) prompt notice of any written demands for appraisal of shares
of Company Common Stock received by the Company and (ii) the
opportunity to participate in all negotiations and proceedings
with respect to any such demands."
(l) A new Section 6.09(c) of the Merger Agreement is added
as follows:
"(c) Parent shall give the Company the notices provided for
in the definition of "Cash Consideration Pool" and in Section
3.01(a)(ii) on the Determination Date."
(m) Section 7.01(a)(ii) of the Merger Agreement is hereby
amended by deleting the reference to the number "100,000,000" appearing
therein and replacing it with the number "150,000,000".
(n) The first sentence of Section 7.12 of the Merger
Agreement is hereby amended and restated in its entirety as follows:
"Individuals who are employed by the Company or the Company
Subsidiaries as of the Effective Time shall remain employees of
the Surviving Corporation or the Surviving Corporation's
subsidiaries, as applicable, immediately following the Effective
Time (each such employee, an "Affected Employee").
(o) Section 9.01(b) of the Merger Agreement is hereby
amended and restated in its entirety as follows:
"(b) by either Parent or the Company, if the Effective Time
shall not have occurred on or before December 31, 1998; provided,
however, that in the event that the Effective Time has not
occurred by such time solely due to the failure to satisfy the
condition specified in Section 8.01(d) or 8.01(e), then such date
may be extended, at the option of Parent or the Company, until
January 31, 1999; provided further, that the right to terminate
this Agreement under this Section 9.01(b) shall not be available
to any party whose failure to fulfill any obligation under this
Agreement shall have caused, or resulted in, the failure of the
Effective Time to occur on or before such date;"
(p) Section 9.01(g) of the Merger Agreement is hereby
amended and restated in its entirety as follows:
"(g) by Parent (i) if the Closing Date Market Price is less
than $12.00 per share, or (ii) upon a breach of any
representation, warranty, covenant or agreement on the part of
the Company set forth in this Agreement, or if any representation
or warranty of the Company shall have become untrue, incomplete
or incorrect, in either case such that the conditions set forth
in Section 8.03 would not be satisfied (a "Terminating Company
Breach"); provided, however, that if such Terminating Company
Breach is curable by the Company through the exercise of its
reasonable efforts within 30 days and for so long as the Company
continues to exercise such reasonable efforts, Parent may not
terminate this Agreement under this Section 9.01(g); and provided
further that the immediately preceding proviso shall not in any
event be deemed to extend any date set forth in paragraph (b) of
this Section 9.01;"
(q) Section 9.05 of the Merger Agreement is hereby amended
to add a new subsection (f) thereto which shall read in its entirety as
follows:
"(f) In the event that Parent terminates this Agreement
pursuant to Section 9.01(g)(i), the Company shall pay to the
Parent within two business days after such termination an amount
equal to $1,000,000 in full satisfaction of any and all
obligations hereunder."
SECTION 2. Representations and Warranties.
(a) Representations and Warranties of The Company. The
Company hereby represents and warrants to Parent and Merger Sub that: The
Company has all necessary corporate power and authority to execute and
deliver this Amendment, to perform its obligations under the Merger
Agreement as amended and to consummate the transactions contemplated
hereby. The execution and delivery of this Amendment by the Company and
the consummation by the Company of the transactions contemplated by the
Merger Agreement as amended hereby have been duly and validly authorized by
all necessary corporate action (other than stockholder approval as
described in the Merger Agreement). This Amendment has been duly executed
and delivered by the Company and, assuming the due authorization, execution
and delivery by WAG, Parent and Merger Sub, constitutes the legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms. After giving effect to this Amendment and
except as set forth on Schedule A hereto, each of the representations and
warranties of the Company contained in the Merger Agreement that is
qualified by materiality or Company Material Adverse Effect is true,
complete and correct on and as of the date hereof as if made at and as of
the date hereof (other than representations and warranties which address
matters only as of a certain date which shall be true, complete and correct
as of such certain date) and each of the representations and warranties
that is not so qualified shall be true, complete and correct in all
material respects on and as of the date hereof as if made at and as of the
date hereof (other than representations and warranties which address
matters only as of a certain date which shall be true, complete and correct
in all material respects as of such certain date), in each case except as
contemplated or permitted by the Merger Agreement.
(b) Representations and Warranties of WAG, Parent and
Merger Sub. WAG, Parent and Merger Sub hereby jointly and severally
represent and warrant to the Company that: WAG, Parent and Merger Sub have
all necessary corporate power and authority to execute and deliver this
Amendment, to perform their respective obligations under the Merger
Agreement as amended hereby and to consummate the transactions contemplated
hereby. The execution and delivery of this Amendment by WAG, Parent and
Merger Sub and the consummation by WAG, Parent and Merger Sub of the
transactions contemplated by the Merger Agreement as amended hereby have
been duly and validly authorized by all necessary corporate action (other
than stockholder approval as described in the Merger Agreement). This
Amendment has been duly executed and delivered by WAG, Parent and Merger
Sub and, assuming the due authorization, execution and delivery by the
Company, constitutes the legal, valid and binding obligation of WAG, Parent
and Merger Sub, enforceable against WAG, Parent and Merger Sub in
accordance with its terms. Each of the representations and warranties of
Parent and Merger Sub contained in the Merger Agreement that is qualified
by materiality or Parent Material Adverse Effect is true, complete and
correct on and as of the date hereof as if made at and as of the date
hereof (other than representations and warranties which address matters
only as of a certain date which shall be true, complete and correct as of
such certain date) and each of the representations and warranties that is
not so qualified shall be true, complete and correct in all material
respects on and as of the date hereof as if made at and as of the date
hereof (other than representations and warranties which address matters
only as of a certain date which shall be true, complete and correct in all
material respects as of such certain date), in each case except as
contemplated or permitted by the Merger Agreement.
SECTION 3. Acknowledgement. The Company hereby acknowledges
and agrees that neither the consummation of, nor the failure to consummate,
the acquisition of RCG and Cherry U.K. shall in any way give the Company a
right to terminate the Merger Agreement or the Merger.
SECTION 4. Effect on Merger Agreement. Except as otherwise
specifically provided herein, the Merger Agreement shall not be amended but
shall remain in full force and effect.
SECTION 5. Headings. The Section headings contained in this
Amendment are for reference purposes only and will not affect in any way
the meaning or interpretation of this Amendment.
SECTION 6. Governing Law. THIS AMENDMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
DELAWARE (WITHOUT REFERENCE TO CONFLICT OF LAW PRINCIPLES OTHER THAN THOSE
DIRECTING DELAWARE LAW).
SECTION 7. Counterparts. This Amendment may be executed
simultaneously in counterparts, each of which will be deemed an original,
but all of which together will constitute one and the same instrument.
SECTION 8. Entire Agreement. This Amendment (together with
the Merger Agreement, the Exhibits thereto, the Mutual Nondisclosure and
Confidentiality Agreement dated as of November 7, 1997 among WAG and the
Company, the Parent Disclosure Schedule and the Company Disclosure
Schedule) constitute the entire agreement among the parties with respect to
the subject matter hereof and supersede all prior agreements and
understandings among the parties with respect thereto, it being the intent
of the parties that this Amendment shall be the effectuation of the October
13, 1998 letter agreement between WAG and the Company.
IN WITNESS WHEREOF, each of the Parties has caused this Amendment
to be executed and delivered by their respective officers thereunto duly
authorized, all as of the day and year above written.
WAXS INC.
By: /s/ Xxxx X. Xxxxxx
_________________________________
Its: Executive Vice President and Chief
Financial Officer
WORLD ACCESS, INC.
By: /s/ Xxxx X. Xxxxxx
____________________________________
Its: Executive Vice President and Chief
Financial Officer
TAIL ACQUISITION CORPORATION
By: /s/ Xxxx X. Xxxxxx
__________________________________
Its: Executive Vice President and Chief
Financial Officer
TELCO SYSTEMS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
__________________________________
Its: Vice President and Chief Financial
Officer
SCHEDULE A TO AMENDMENT
Supplement to Company Disclosure Schedule
For purposes of calculating the Cash Consideration Pool, the aggregate
amount of cash paid or to be paid to Dissenting Stockholders, if
applicable, shall be estimated for such purpose only to equal 1.5 times the
product of (x) the quotient of (i) the Tax Consideration divided by (ii)
the number of shares of Company Common Stock issued and outstanding
immediately prior to the Effective Time (other than any shares of Company
Common Stock to be cancelled pursuant to Section 3.01(b) hereof) and (y)
the aggregate number of shares of Company Common Stock subject to demands
for appraisal in accordance with the Delaware General Corporation Law. In
addition, for purposes of calculating the Cash Consideration Pool, the cash
paid or to be paid in lieu of fractional shares of WAG Common Stock or
Parent Common Stock, as the case may be, pursuant to Section 3.04 shall be
estimated for such purpose only to equal .99 times the product of (x) the
aggregate number of holders of record of Company Common Stock immediately
prior to the Effective Time and (y) the closing price for a share of WAG
Common Stock or Parent Common Stock, as the case may be, reported on Nasdaq
on the first business day immediately prior to the Effective Time.
Pursuant to that certain Stock Purchase and Merger Option Agreement
dated as of August 7, 1998 by and among Synaptyx Corporation ("Synaptyx"),
Xxxxxx X. Xxxxxxx and Xxxxxxx Xxxx, as amended by the First Amendment
thereto dated as of October 23, 1998, the Company acquired Synaptyx on
terms previously disclosed to, and approved by, WAG, and the
representations and warranties of the Merger Agreement are hereby modified
accordingly.
