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Exhibit 2.6
FIFTH AMENDMENT TO AGREEMENT AND PLAN OF MERGER
This Fifth Amendment to Agreement and Plan of Merger ("Amendment") is
entered into as of July 25, 2000 by and among AT&T Corp. ("Parent"), a New York
corporation, AT&T Latin America Corp. ("RV"), a Delaware corporation (formerly
named Kiri Inc.), Frantis, Inc.("Merger Sub"), a Delaware corporation, and
FirstCom Corporation (the "Company"), a Texas Corporation.
RECITALS
A. Parent, RV, Merger Sub and the Company (the "Parties") have entered into
an Agreement and Plan of Merger, dated as of November 1, 1999 (as amended on
February 1, 2000, February 23, 2000, May 10, 2000 and June 15, 2000, the "Merger
Agreement").
B. The Parties amended the Merger Agreement on June 15, 2000 to extend the
date on which Parent or the Company may terminate the Merger Agreement from June
30, 2000 to July 31, 2000.
C. The Parties desire to extend further again the date on which Parent or
the Company may terminate the Merger Agreement.
D. The Parties also desire to amend the Merger Agreement in order to
accommodate a change in par value of the RV Common Stock and the issuance of a
series of a non-voting, non-participating, and non-convertible RV Preferred
Stock.
NOW, THEREFORE, the parties agree as follows:
1. Defined Terms. Capitalized terms used herein without definition
shall have the respective meanings ascribed to them in the Merger
Agreement.
2. Extension Date. The date of July 31, 2000 appearing in clause (i)
of Section 6.1(b) of the Merger Agreement is hereby amended to read "August
31, 2000."
3. Amendment of Section 2.1(a). The words "share of Class A common
stock, par value $0.01 per share, of RV" in Paragraph (a) of Section 2.1 of
the Merger Agreement are hereby deleted and replaced in their entirety with
"share of Class A common stock, par value $0.0001 per share, of RV."
4. Amendment to Section 3.2. Paragraph (d)(i) of Section 3.2 of the
Merger Agreement is hereby amended by the addition of new sentence at the
end of such paragraph the reads:
Notwithstanding the foregoing, as of the Closing, the capital stock of
RV may also include shares of non-voting, non-convertible and
non-participating RV Preferred Stock issued by RV to Parent or a
wholly-owned subsidiary of Parent in an aggregate amount not to exceed
$190 million, substantially on the terms attached as Exhibit H.
4. Amendment to Exhibits. Annex A attached hereto shall be inserted
after Exhibit G of the Merger Agreement as a new Exhibit H.
5. Consent. Pursuant to Section 4.13(c)(ii) of the Merger Agreement,
FirstCom hereby consents to the issuance by RV of shares of non-voting,
non-convertible and non-participating RV Preferred Stock to Parent or a
wholly-owned subsidiary of Parent in an aggregate amount not to exceed $190
million, substantially on the terms attached as Annex A hereto.
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6. Counterparts. This Amendment may be executed by one or more of the
parties hereto on any number of separate counterparts, and all of such
counterparts taken together shall be deemed to constitute one and the same
instrument.
7. Effectiveness. This Amendment shall be effective only upon
execution and delivery by each of the parties hereto.
[INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the date first written above.
AT&T CORP.
By: /s/ XXXX X. XXXXX
------------------------------------
Name: Xxxx X. Xxxxx
Title: Vice President
AT&T LATIN AMERICA CORP.
By: /s/ XXXX X. XXXXX
------------------------------------
Name: Xxxx X. Xxxxx
Title: President
FRANTIS, INC.
By: /s/ XXXX X. XXXXX
------------------------------------
Name: Xxxx X. Xxxxx
Title: President
FIRSTCOM CORPORATION.
By: /s/ XXXXXXXX X. NORTHLAND
------------------------------------
Name: Xxxxxxxx X. Northland
Title: Chairman, CEO & President
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ANNEX A
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FORM OF CERTIFICATE OF DESIGNATION OF
SHARES OF 15% SERIES B PREFERRED
STOCK OF AT&T LATIN AMERICA CORP.
AT&T LATIN AMERICA CORP.
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CERTIFICATE OF DESIGNATION
PURSUANT TO SECTION 151 OF THE
DELAWARE GENERAL CORPORATION LAW
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15% SERIES B CUMULATIVE PREFERRED STOCK
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1. DESIGNATION AND AMOUNT. This series of Preferred Stock shall be
designated as the 15% Series B Cumulative Preferred Stock (the "SERIES B
PREFERRED STOCK"), and the authorized number of shares constituting such series
shall be 100,000, par value $0.001 per share.
2. RANK. The Series B Preferred Stock shall, with respect to dividend
rights and rights on liquidation of the Corporation, rank (A) senior to all
classes of Common Stock and to each other class or series of shares of the
Corporation hereafter created, the terms of which do not expressly provide that
it ranks senior to, or on a parity with, the Series B Preferred Stock as to
dividends and distributions upon the liquidation of the Corporation
(collectively with the Common Stock, referred to for purposes of this
Certificate as the "JUNIOR STOCK"); (B) on a parity with each class of shares or
series of preferred shares issued by the Corporation after the date hereof, the
terms of which specifically provide that such class or series will rank on a
parity with the Series B Preferred Stock as to dividends and distributions upon
the liquidation of the Corporation (collectively referred to for purposes of
this Certificate as "PARITY STOCK"), PROVIDED that any such Parity Stock not
approved by the Holders in accordance with Section 5(b) hereof shall be Junior
Stock and not Parity Stock; and (C) junior to the Series A Preferred Stock, par
value $0.001, of the Corporation (the "SERIES A PREFERRED STOCK") and to each
class or series of shares of the Corporation hereafter created that has been
approved by the Holders in accordance with Section 5(b) hereof and the terms of
which expressly provide that such class or series will rank senior to the Series
B Preferred Stock as to dividends and distributions upon liquidation, winding-up
or dissolution of the Corporation (collectively referred to as "SENIOR STOCK"),
PROVIDED that any such Senior Stock that was not approved by the Holders in
accordance with Section 5(b) shall be Junior Stock and not Senior Stock.
3. DIVIDENDS.
(a) Beginning on the Original Issue Date, the Holders of the outstanding
shares of Series B Preferred Stock shall be entitled to receive, payable when
and as declared by the Board of Directors of the Corporation out of assets
legally available therefor, distributions in the form of cash dividends on each
share of Series B Preferred Stock at an annual rate of fifteen percent (15%) of
the sum of (i) [$ ] (the "SERIES B PURCHASE PRICE") and (ii) all accumulated and
unpaid dividends accrued thereon pursuant to this Section 3 from the date of
issuance thereof (the "SERIES B DIVIDENDS"; the sum of the Series B Purchase
Price and Series B Dividends is referred to herein as the "SERIES B PREFERENCE
AMOUNT"). All dividends shall (i) be cumulative, whether or not earned or
declared and whether or not there are profits, surplus or other funds legally
available for the payment of dividends, (ii) continue to accrue on a daily basis
from the Original Issue Date until paid out of assets legally available therefor
and (iii) be payable semi-annually in arrears on each Dividend Payment Date,
commencing on the first Dividend Payment Date after the Original Issue
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Date. Each dividend shall be payable to the Holders of record as they appear on
the stock books of the Corporation on the Dividend Record Date immediately
preceding the related Dividend Payment Date or, if dividends are payable on a
date other than a Dividend Payment Date pursuant to the terms hereof, ten
Business Days prior to such date.
(b) So long as any shares of Series B Preferred Stock are outstanding, the
Corporation shall not declare, pay or set apart for payment any dividend on
account of, or purchase, redeem, retire or otherwise acquire for value, or set
apart for payment money for a sinking or other similar fund for the purchase,
redemption, retirement or other acquisition for value of, any Junior Stock or
Parity Stock or any warrants, rights, calls or options exercisable for or
convertible into Junior Stock or Parity Stock, or make any distribution or
dividend in respect thereof, either directly or indirectly, whether in cash,
obligations or shares of the Corporation or other property.
4. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon a liquidation, dissolution
or winding up of the Corporation, whether voluntary or involuntary, (each, a
"LIQUIDATION"), each Holder shall be entitled, after provision for the payment
of the Corporation's debts, any liquidation preference on Senior Stock and any
other non-contingent liabilities to be paid in cash in full, before any
distribution is made on any Junior Stock but in parity with any distribution to
Parity Stock, an amount in cash equal to the Series B Preference Amount plus an
amount equal to a prorated dividend for the period from the last Dividend
Payment Date to the date fixed for liquidation, dissolution or winding-up (the
"LIQUIDATION AMOUNT") for each Series B Preferred Share held by such Holder. If,
upon a Liquidation, the net assets of the Corporation distributable among the
Holders and the holders of any Parity Stock shall be insufficient to permit the
payment of the Liquidation Amount and the liquidation preference for such Parity
Stock in full, then the entire net assets of the Corporation remaining after the
provision for the payment of the Corporation's debts, any liquidation preference
on Senior Stock and any other non-contingent liabilities shall be distributed
among the Holders and the holders of any Parity Stock, respectively, ratably in
proportion to the full preferential amounts to which they would otherwise be
entitled on account of their Series B Preferred Stock or Parity Stock, as the
case may be.
5. VOTING.
(a) Except as otherwise required under law or as set forth in this Section
5 below, the Holders shall not be entitled or permitted to vote on any matter
required or permitted to be voted upon by the stockholders of the Corporation.
(b) So long as any shares of Series B Preferred Stock shall be outstanding,
the approval of Holders of at least a majority of the shares of Series B
Preferred Stock at the time outstanding, voting as a separate class, shall be
required for (i) the authorization or issuance of any shares of Senior Stock not
authorized or issued as of the Original Issue Date, (ii) the authorization or
issuance of any additional shares of Series B Preferred Stock, (iii) the
authorization or issuance of any shares of Parity Stock, (iv) the
reclassification of any shares of the Corporation into shares of Preferred Stock
that are not Junior Stock, (v) the authorization of any security of the
Corporation exchangeable for, convertible into, or evidencing the right to
purchase any Senior Stock, Parity Stock or Series B Preferred Stock, (vi) any
amendment, alteration or revocation of the Certificate of Incorporation
(including this Certificate of Designation) or the Bylaws of the Corporation
that causes a modification in the preferences, privileges, rights or powers of
the Series B Preferred Stock and (vii) any amendment or modification of the
preferences, privileges, rights or powers of the Class A Preferred Stock that
would have an adverse effect on the Holders. Any increase in the aggregate
principal amount of any Indebtedness or other security convertible into any
class or series of shares shall be deemed an authorization or issuance of such
class or series of shares.
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(c) So long as any shares of Series B Preferred Stock shall be outstanding,
without the affirmative approval of Holders of at least a majority of the
outstanding shares of Series B Preferred Stock voting as a separate class, the
Corporation shall not, in a single transaction or series of related
transactions, consolidate or merge with or into, or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of its assets to,
another Person, engage in any other similar transaction or adopt a plan of
liquidation unless: (i) either (A) the Corporation is the surviving or
continuing Person or (B) the Person (if other than the Corporation) formed by
such consolidation or into which the Corporation is merged or the Person that
acquires by conveyance, transfer or lease the properties and assets of the
Corporation substantially as an entirety or in the case of a plan of
liquidation, the Person to which assets of the Corporation have been
transferred, shall be a corporation, limited liability company, partnership or
trust organized and existing under the laws of the United States or any State
thereof or the District of Columbia; (ii) if the Corporation is not the
surviving Person, the Series B Preferred Stock shall be converted into or
exchanged for and shall become shares of such successor, transferee or resulting
Person, having in respect of such successor, transferee or resulting Person the
same powers, preferences and relative, participating, optional or other special
rights and the qualifications, limitations or restrictions thereon, that the
Series B Preferred Stock had immediately prior to such transaction; (iii)
immediately after giving effect to such transactions, no Triggering Event shall
have occurred or be continuing; and (iv) such surviving Person shall have
delivered to the Holders prior to the consummation of the proposed transaction
an officers' certificate and an opinion of counsel, each reasonably satisfactory
in form and substance to Holders of a at least a majority of the outstanding
Series B Preferred Stock, each stating that such consolidation, merger or
transfer complies with the terms hereof and that all conditions precedent herein
relating to such transaction have been satisfied.
For purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise, in a single transaction or series of related transactions) of all or
substantially all of the properties or assets of one or more Subsidiaries of the
Corporation, the capital stock of which constitutes all or substantially all of
the properties and assets of the Corporation shall be deemed to be the transfer
of all or substantially all of the properties and assets of the Corporation.
(d) If and whenever at any time or from time to time, (i) cash dividends on
the Series B Preferred Stock are in arrears and unpaid for three or more
semi-annual Dividend Periods (whether or not consecutive), (ii) the Corporation
fails to discharge any redemption obligation with respect to the Series B
Preferred Stock, (iii) the Corporation fails to make an Offer to Purchase
following a Change of Control in accordance with Section 8 hereof or fails to
purchase shares of Series B Preferred Stock from Holders who validly tender
their shares pursuant to an Offer to Purchase or (iv) the Corporation breaches
or violates one of the provisions set forth in Section 9 hereof and such breach
or violation continues for a period of 30 days or more; (each such event, a
"TRIGGERING EVENT"), then occurrence of such Triggering Event shall xxxx the
beginning of a period (herein called a "DEFAULT PERIOD") which shall extend
until:
(A) any accumulated dividends that are in arrears on the Series B
Preferred Stock are declared and paid in full cash; and
(B) the failure, breach or default giving rise to any such Triggering
Event is cured or waived by the Holders of at least a majority of the
shares of Series B Preferred Stock then outstanding and entitled to vote
thereon.
During the continuance of each and every Default Period, the Holders shall
have the right (in addition to any other rights they may have), voting
separately as a class, to elect two members of the Board of Directors. The right
of the Holders to elect members of the Board of Directors during a Default
Period may be exercised initially either at a special meeting of stockholders
called as
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provided below or at the Corporation's next annual meeting of stockholders, and
thereafter at each subsequent annual meeting of stockholders, until such Default
Period has ended, at which time such right shall terminate, except as herein or
by law expressly provided, subject to the revesting of such rights to such
holders if a subsequent Default Period should occur. In case of any vacancy
occurring among the directors elected by the Holders, such vacancy may be filled
only by the affirmative vote of the Holders of at least a majority of the shares
of Series B Preferred Stock. At elections for such directors, each Holder shall
be entitled to one vote for each share.
At any time when such special voting rights shall have vested in the
Holders as provided in this Section 5(d), an authorized officer of the
Corporation shall, upon the written request of the Holders of record of at least
10% of the aggregate par value of the shares of Series B Preferred Stock,
addressed to the Secretary of the Corporation, call a special meeting of the
Holders for the purpose of electing such additional directors. Such meeting
shall be held at the earliest practicable date at the principal office of the
Corporation or such other place as is agreed by the Corporation and Holders of a
least a majority of the outstanding shares of Series B Preferred Stock. If such
meeting shall not be called by a proper officer of the Corporation within 15
days after receipt of written request upon the Secretary of the Corporation (or
any Assistant Secretary if the Secretary is absent) sent by first class mail,
postage prepaid, or by overnight air courier, or within 15 days after mailing
the same within the United States of America by registered mail addressed to the
Secretary of the Corporation at its principal office, then Holders of record of
at least 10% of the aggregate par value of the shares of Series B Preferred
Stock at the time outstanding may designate in writing one of the Holders to
call such meeting at the expense of the Corporation, and such meeting may be
called by such Person so designated upon the notice required for annual meetings
of stockholders and shall be held at such principal office. Any Holder so
designated shall have access to the stock books of the Corporation relating to
the Holders of Series B Preferred Stock for the purpose of causing meetings of
stockholders to be called pursuant to these provisions.
At any meeting held for the purpose of electing directors at which the
Holders shall have the special right, voting together as one class to elect
directors as provided in this Section 5(d), the presence, in person or by proxy,
of the Holders of at least a majority of the shares of Series B Preferred Stock
at the time outstanding shall be required to constitute a quorum of such class
for the election of directors pursuant to this Section 5(d), and the affirmative
vote of the Holders of at least a majority of the shares of Series B Preferred
Stock present in person or by proxy at such meeting shall constitute the act of
such Series B Preferred Stock. At any such meeting or adjournment thereof, in
the absence of a quorum, Holders of at least a majority of the Series B
Preferred Stock present in person or by proxy shall have the power to adjourn
the meeting for the election of the directors that they are entitled to elect
from time to time, without notice other than announcement at the meeting, until
such a quorum shall be present.
Immediately upon the commencement of any Default Period, the Corporation
will give written notice thereof to each Holder of then outstanding shares of
Series B Preferred Stock, at the address of each such Holder as it appears on
the books of the Corporation.
6. REDEMPTION AT CORPORATION'S OPTION.
(a) The Corporation shall have the right (the "REDEMPTION RIGHT"), in its
sole discretion, to redeem any outstanding shares of Series B Preferred Stock at
any time after the fourth annual anniversary of the Original Issue Date. The
redemption price (the "CORPORATION REDEMPTION PRICE") of each share of Series B
Preferred Stock so redeemed shall be equal to the Series B Preference Amount
plus an amount equal to a prorated dividend for the period from the date after
the last Dividend Payment Date to the Corporate Redemption Date.
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(b) The Corporation may elect to exercise the Redemption Right by written
notice (a "CORPORATION NOTICE OF REDEMPTION") to each registered Holder
specifying the time and place of such redemption and the number of shares of
Series B Preferred Stock held by such Holder to be redeemed. Such Corporation
Notice of Redemption shall be mailed by certified mail, return receipt
requested, at least 10, and not more than 30 days prior to the date specified
for redemption (the "CORPORATION REDEMPTION DATE"), to each registered Holder at
such Holder's last address as it appears on the Corporation's books. At the
closing of any redemption pursuant to this Section 6, the Corporation shall pay
to each of the Holders called for redemption, against the Corporation's receipt
from such Holder of the certificate or certificates representing the shares of
such Series B Preferred Stock then held by such Holder, an amount equal to the
Corporation Redemption Price for each such share, by wire transfer of
immediately available funds.
(c) In the case of any redemption pursuant to this Section 6, unless the
Corporation fails to pay in full the Corporation Redemption Price, dividends on
the shares called for redemption shall cease to accumulate on the applicable
Corporation Redemption Date, and all rights of the Holders subject to such
redemption by reason of their ownership of such shares shall cease on such
Corporation Redemption Date, except the right to receive the Corporation
Redemption Price on surrender to the Corporation of the certificates
representing such shares. After the applicable Corporation Redemption Date, the
shares shall not be deemed to be outstanding and shall not be transferable on
the books of the Corporation, except to the Corporation.
(d) Any shares of Series B Preferred Stock redeemed by the Corporation
pursuant to this Section 6 shall be canceled and shall have the status of
authorized and unissued preferred stock, without designation as to series.
7. REDEMPTION AT HOLDER'S OPTION.
(a) Each Holder shall have the right (the "PUT RIGHT"), in its sole
discretion, to require the Corporation to redeem all or any portion of its
outstanding shares of Series B Preferred Stock at any time after the fourth
annual anniversary of the Original Issue Date. The redemption price (the "HOLDER
REDEMPTION PRICE") of each share of Series B Preferred Stock so redeemed shall
be equal to the Series B Preference Amount plus an amount equal to a prorated
dividend for the period from the date after the last Dividend Payment Date to
the Holder Redemption Date.
(b) A Holder may elect to exercise its Put Right pursuant to Section 7(a)
by mailing written notice (a "HOLDER REDEMPTION NOTICE") to the Corporation by
certified mail, return receipt requested. The Holder Redemption Notice shall
specify:
(i) the name of the Holder delivering such Holder Redemption Notice;
(ii) that such Holder is exercising its Put Right to require the
Corporation to redeem shares of Series B Preferred Stock held by such
holder; and
(iii) the number of shares of Series B Preferred Stock to be subject
to such redemption.
(c) The Corporation shall, within thirty days of receipt of such Holder
Redemption Notice, deliver to each Holder exercising its Put Right, a notice
(the "CORPORATION NOTICE") specifying the date set for such redemption, which
date shall be no more than thirty days after the Corporation Notice (the "HOLDER
REDEMPTION DATE"). At the closing of any redemption pursuant to this Section 7,
the Corporation shall pay to each of the Holders exercising its Put Right,
against the Corporation's receipt from such Holder of the certificate or
certificates representing the shares of such Series B Preferred Stock set forth
in the Holder Redemption Notice, an amount equal to the Holder Redemption Price
for each such share, by wire transfer of immediately available funds.
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(d) Notwithstanding anything contained in this Section 7 to the contrary,
the Corporation shall not be obligated to redeem shares of Series B Preferred
Stock that are the subject of a Holder Redemption Notice if such redemption
would result in a breach of, or would cause a default or event of default under,
the Certificate of Designation of the Series A Preferred Stock, provided that if
such breach, event of default or default would not result from the redemption of
any number of shares of Series B Preferred Stock which is less than the total
number of shares the Corporation is obligated to redeem on the Holder Redemption
Date, the Corporation shall purchase on the Holder Redemption Date the maximum
number of shares of Series B Preferred Stock it may so purchase, allocated among
the holders which have elected to have their shares so repurchased ratably
according to the number of shares so tendered; provided, further, however, the
Corporation shall use its reasonable efforts to cure such default or violation
in a timely manner and remove any associated restrictions or limitations which
are applicable to the rights of the Holders contained in this Section 7.
(e) In the case of any redemption pursuant to this Section 7, unless the
Corporation defaults in the payment in full of the Holder Redemption Price,
dividends on the shares called for redemption shall cease to accumulate on the
applicable Holder Redemption Date, and all rights of the Holders subject to such
redemption by reason of their ownership of such shares shall cease on such
redemption date, except the right to receive the Holder Redemption Price on
surrender to the Corporation of the certificates representing such shares. After
the applicable Holder Redemption Date, the shares shall not be deemed to be
outstanding and shall not be transferable on the books of the Corporation,
except to the Corporation.
(f) Any shares of Series B Preferred Stock redeemed by the Corporation
pursuant to this Section 7 shall be canceled and shall have the status of
authorized and unissued preferred stock, without designation as to series.
8. CHANGE OF CONTROL.
(a) OFFER TO PURCHASE. Within ten days following a Change of Control, the
Corporation shall notify Holders of the Change of Control and shall make an
offer (the "OFFER TO PURCHASE") to each such Holder to purchase for cash such
Holder's shares of Series B Preferred Stock, or such portion thereof as may be
determined by such Holder, at a price equal to 101% of sum of the Series B
Preference Amount plus an amount equal to a prorated dividend for the period
from the date after the last Dividend Payment Date to the closing date for Offer
to Purchase (the "CHANGE OF CONTROL PRICE").
(b) On the twentieth Business Day following the date of the Offer to
Purchase or such other date agreed by the Corporation and Holders holding at
least a majority of the outstanding shares of Series B Preferred Stock, the
Corporation shall (A) accept for payment such shares of Series B Preferred Stock
that are validly tendered pursuant to the Offer to Purchase, and (B) pay to the
Holders of shares so accepted an amount in cash per share equal to the Change of
Control Price by wire transfer of immediately available funds. Unless the
Corporation defaults in the payment for the Series B Preferred Stock tendered
pursuant to the Offer to Purchase, dividends will cease to accrue with respect
to the Series B Preferred Stock so tendered and all rights of Holders of such
tendered shares will terminate, except for the right to receive payment
therefor. Any shares of Series B Preferred Stock which shall have been redeemed
pursuant to this Section 8 shall be canceled and shall have the status of
authorized and unissued preferred stock, without designation as to series.
9. OTHER PROVISIONS.
(a) ISSUANCES OF CAPITAL STOCK OF SUBSIDIARIES. The Corporation shall not
permit any Subsidiary directly or indirectly to issue, sell, assign, pledge or
otherwise encumber or dispose of any shares of its Capital Stock (except to the
Corporation or another Subsidiary).
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(b) LIMITATIONS ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES. The Corporation shall not, and shall not cause or permit any of
its Subsidiaries to, directly or indirectly, create or otherwise cause or permit
or suffer to exist or become effective any encumbrance or restriction on the
ability of any Subsidiary of the Corporation to (i) pay dividends or make any
other distributions on its Capital Stock or any other interest or participation
in, or measured by, such Subsidiary's profits; or (ii) make loans or advances or
pay any Indebtedness or other obligation owed to the Corporation or to any
Subsidiaries of the Corporation (any such restriction or encumbrance a "PAYMENT
RESTRICTION"), except for such Payment Restrictions existing under or by reason
of:
(A) this Certificate of Designation;
(B) any outstanding Indebtedness as in effect on the Original Issue
Date;
(C) the Global Card Holdings Inc. Credit Facility Agreement;
(D) Acquired Indebtedness permitted by the terms of this Certificate
of Designation, provided that such Indebtedness is not incurred as a result
or in contemplation of the Asset Acquisition or acquisition of a Person
resulting in such Indebtedness becoming Acquired Indebtedness; or
(E) applicable law or regulations.
10. DEFINITIONS. As used in this Certificate of Designation, and unless the
context requires a different meaning, the following terms have the meanings
indicated:
(i) "ACQUIRED INDEBTEDNESS" means Indebtedness of a Person (a) assumed in
connection with an Asset Acquisition from such Person and (b) existing at the
time such Person becomes a Subsidiary of any other Person.
(ii) "AFFILIATE" of a Person means a Person that directly or indirectly
through one or more intermediaries, controls, is controlled by, or is under
common control with, the first Person. "CONTROL" (including the terms
"CONTROLLED BY" and "UNDER COMMON CONTROL WITH") means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
policies of a Person, whether through the ownership of voting securities, by
contract or credit arrangement, as trustee or executor, or otherwise.
(iii) "ASSET ACQUISITION" means (a) a transaction in which a Person becomes
a Subsidiary of the Corporation or is merged with or into the Corporation or any
Subsidiary of the Corporation or (b) the acquisition by the Corporation or a
Subsidiary of the Corporation of assets of any Person which constitute all or
substantially all of the assets of such Person or any division or line of
business of such Person.
(iv) "BUSINESS DAY" means any day other than a Saturday, Sunday or day on
which banking institutions in the New York, New York are authorized or obligated
by law or executive order to close.
(v) "CAPITAL STOCK" means, with respect to any Person, any ownership
interest in the voting or nonvoting capital stock or similar equity interest of
such Person, whether held or controlled directly or indirectly through the
ownership or control of capital stock or similar equity interest in one more
affiliates.
(vi) "CHANGE OF CONTROL" means the occurrence, on or prior to the fourth
annual anniversary of the Original Issue Date, of any of the following events:
(A) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as
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amended (the "EXCHANGE ACT")), other than AT&T Corp., AT&T Global Card Holdings
Inc., any of their Affiliates or a Concert Party, is or becomes the "beneficial
owner" (as defined in Rule 13d-3 and 13d-5 under the Exchange Act, except that a
Person shall be deemed to have "beneficial ownership" of all securities that
such Person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of more
than 50% of the Voting Stock of the Corporation; (B) the Corporation
consolidates with, or mergers with or into, another Person, or sells, assigns,
conveys, transfers, leases or otherwise disposes of all or substantially all of
its assets to any Person, or any Person consolidates with, or merges with or
into the Corporation, in any such event pursuant to a transaction in which the
outstanding Voting Stock of the Corporation is converted into or exchanged for
cash, securities, or other property, other than any such transaction where (I)
the outstanding Voting Stock of the Corporation is converted into or exchanged
for Voting Stock of the surviving or transferee Person or its parent
corporation, and (II) the shareholders of the Corporation immediately prior to
such transaction, together with their Affiliates or a Concert Party, own more
than 50% of the Voting Stock of the surviving person; or (C) any voluntary
liquidation, dissolution or winding up of the Corporation, other than in a
circumstance described in the preceding clause (b).
(vii) "COMMON STOCK" means the Class A Common Stock of the Corporation (the
"CLASS A COMMON STOCK") and the Class B Common Stock of the Corporation (the
"CLASS B COMMON STOCK").
(viii) "CONCERT PARTY" means any Person controlled (as such term is defined
in the definition of Affiliate), indirectly or directly, by AT&T Corp. and
British Telecommunications plc. in connection with their Concert joint venture
(ix) "DIVIDEND PAYMENT DATE" means [June 15 and December 15] of each year;
PROVIDED that if any such day is not a Business Day, the relevant Dividend
Payment Date shall be the first Business Day preceding such day.
(x) "DIVIDEND RECORD DATE" means [June 1 and December 1] of each year.
(xi) "DIVIDEND PERIOD" means a period commencing on the next succeeding
date after the Dividend Payment Date and ending on the next Dividend Payment
Date.
(xii) "GLOBAL CARD HOLDINGS INC. CREDIT FACILITY AGREEMENT" means the
Credit Facility Agreement, dated [ ], 2000, among the Corporation, Global
Card Holdings Inc. and certain subsidiaries of the Corporation, as the same may
be amended from time to time.
(xiii) "HOLDER" means a holder of outstanding Series B Preferred Stock as
reflected in the stock books of the Corporation.
(xiv) "INDEBTEDNESS" of any Person at any date, means all indebtedness for
borrowed money or for the deferred purchase price of property or services (other
than trade liabilities incurred in the ordinary course of business and payable
in accordance with customary practices), obligations under capital leases
appearing or required to appear on the balance sheet of such Person and any
other indebtedness of such Person which is evidenced by a note, bond, debenture
or similar instrument.
(xv) "ORIGINAL ISSUE DATE" means the date on which a share of Series B
Preferred Stock was first issued.
(xvi) "PERSON" means any natural person, firm, partnership, association,
corporation, company, limited liability company, trust, business trust,
governmental authority or other entity.
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(xvii) "SUBSIDIARY" means each Person in which a Person owns or controls,
directly or indirectly, capital stock or other equity interests representing
more than 50% of the outstanding voting stock or other equity interests.
(xviii) "VENDOR FINANCING FACILITY" means any credit facilities of the
Corporation or any of its Subsidiaries to finance the purchase or use of
equipment, software and/or services provided by the vendors thereof, provided
such facility is not secured by any assets other than the assets acquired from
such vendor or vendors by Borrower or its Subsidiaries in connection with such
facility as permitted by this Agreement.
(xix) "VOTING STOCK" means at any time with respect to any Person shares of
any class of capital stock of such Person which are then entitled to vote
generally in the election of directors.
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