Exhibit 10.4
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October 20, 1997
Prodigy, Inc.
00 Xxxxx Xxxx
Xxxxxxx, XX 00000
Ladies/Gentleman:
The purpose of this letter is to confirm the agreement of Prodigy, Inc.
(the "Company") and Carso Global Telecom, S.A. de C.V. ("Carso") as follows:
1. Carso shall arrange for the issuance of the letter of credit (the
"Xxxxx XX") contemplated by Section 3(b) of the Note Exchange Agreement attached
hereto (the "Exchange Agreement").
2. The Xxxxx XX shall not possess Prohibited Attributes (as defined in
Section 3(c) of the Exchange Agreement). In the event the Xxxxx XX is determined
to possess Prohibited Attributes, or if a stay, restraining order or injunction
is in effect that prevents either IBM or Sears from drawing on the Xxxxx XX
based in whole or in part upon an allegation that the Xxxxx XX possesses
Prohibited Attributes, then Carso shall provide a substitute Xxxxx XX that does
not possess Prohibited Attributes.
3. Any obligation of the Company or Prodigy Services Corporation ("PSC")
to reimburse Carso for any amounts drawn under the Xxxxx XX shall be payable
only from the proceeds of the Company's equity financings or through the
issuance of equity securities to Carso.
4. Carso shall advance the Company an amount equal to $7,964,578 by (i)
paying $5,830,841 to Metropolitan Life Insurance Company as contemplated by
Section 2(a) of the Exchange Agreement, (ii) depositing $500,000 with each of
IBM and Sears as contemplated by Section 2(b) of the Exchange Agreement and
(iii) paying $566,868.50 to each of IBM and Sears as contemplated by Section 8
of the Exchange Agreement. Any obligation of the Company or PSC to repay such
amounts shall be payable only from the proceeds of the Company's equity
financings or through the issuance of equity securities to Carso.
This letter is delivered pursuant to the requirements of the Exchange
Agreement and may be relied upon by IBM and Sears.
Very truly yours,
CARSO GLOBAL TELECOM, S.A. DE C.V.
By: /s/
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Title:__________________________
