Exhibit 10.9
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AMENDMENT TO FUNDING AGREEMENT
AMENDMENT TO FUNDING AGREEMENT, entered into as of the 31st day of October,
1996, among Prodigy, Inc., a Delaware corporation ("Prodigy"), Carso Global
Telecom S.A. de C.V. ("Carso Global"), and Xxxx X. Xxxx ("Xx. Xxxx").
WHEREAS, International Wireless Incorporated ("International Wireless"),
Grupo Carso, S.A. de C.V. ("Grupo Carso"), and Xx. Xxxx entered into that
certain Funding Agreement dated as of May 12, 1996 (the "Funding Agreement");
WHEREAS, in June 1996, International Wireless became an indirect wholly-
owned subsidiary of Prodigy and Prodigy has assumed all of the rights and
obligations of International Wireless under the Funding Agreement;
WHEREAS, in June 1996, Carso Global was spun-off from Grupo Carso and Carso
Global has assumed all of the rights and obligations of Grupo Carso under the
Funding Agreement; and
WHEREAS, Prodigy, Carso Global and Xx. Xxxx wish to make certain
modifications to the Funding Agreement, as set forth herein;
NOW, THEREFORE, for good and valuable consideration, Prodigy, Carso Global
and Xx. Xxxx hereby agree as follows:
1. Stock Put.
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1.1 Reduction in Exercise Price. The exercise price of the Stock Put
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established pursuant to Section 5 of the Funding Agreement is hereby reduced
from $6.00 per share to $3.00 per share (subject to appropriate adjustments for
any stock splits, stock dividends or like events occurring after the date
hereof). Prodigy, Carso Global and Xx. Xxxx hereby agree that the stock puts
exercisable for $6.00 per share are cancelled and replaced by the stock puts
exercisable for $3.00 per share as described in the preceding sentence.
1.2 Reduction in Amount. The reduction in the amount of the stock
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put pursuant to Section 5.1 of the Funding Agreement shall be applied only to
Carso Global until such time as its stock put is reduced from $125,000,000 to
$12,500,000, after which any reduction in the stock put is applied equally to
Carso Global and Xx. Xxxx.
2. Warrants. The Warrant granted to Xx. Xxxx pursuant to Section 6 of
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the Funding Agreement to purchase 1,000,000 shares of Common Stock for $9.00 per
share is hereby cancelled. The Warrant granted to Carso Global pursuant to
Section 6 of the Funding Agreement to purchase 2,000,000 shares of Common Stock
for $9.00 per share is hereby amended to (i) cancel 1,000,000 shares subject to
such Warrant and (ii) reduce the exercise price from $9.00 per share to $7.00
per share with respect to the remaining 1,000,000 shares.
3. Private Placement. Section 4 of the Funding Agreement is hereby
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deleted. Carso Global hereby agrees to invest $3,500,000, and Xx. Xxxx hereby
agrees to invest $3,500,000, in Prodigy's private placement of Common Stock at a
price of $7.00 per share (the "Private Placement"). All shares sold to Carso
Global and Xx. Xxxx in the Private Placement shall be sold on the same terms as
shares are sold to other purchasers in the Private Placement.
4. Stock Pledges to Secure Bank Debt.
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4.1 Existing Arrangements. In June 1996, Banco Inbursa ("Banco
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Inbursa") agreed to provide International Wireless with a $50,000,000 revolving
line of credit expiring on June 13, 1997
(the "Banco Inbursa Revolver"). Pursuant to that certain Pledge and Escrow
Agreement (the "Pledge Agreement") dated as of June 14, 1996 among Xx. Xxxx,
Orient Star Holdings, a wholly-owned subsidiary of Carso Global ("Orient Star"),
Banco Inbursa and State Street Bank and Trust Company ("State Street"), Orient
Star and Xx. Xxxx have pledged 10,000,000 shares and 7,000,000 shares,
respectively, of Common Stock of Prodigy to secure the repayment of advances
under the Banco Inbursa Revolver.
4.2 Modifications. Carso Global and Xx. Xxxx hereby agree as
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follows:
(a) Prodigy has the objective of obtaining a new line of credit
from a U.S. bank or other debt financing to replace the Banco Inbursa Revolver.
If Prodigy obtains a new line of credit from a U.S. bank or other debt financing
to replace the Banco Inbursa Revolver, Xx. Xxxx hereby agrees, until June 13,
1998, to make available for pledge 10,000,000 shares of Prodigy Common Stock to
secure such debt.
(b) Prodigy hereby assumes all of the rights and obligations of
International Wireless under the Banco Inbursa Revolver.
(c) Prodigy, Carso Global and Xx. Xxxx will take such actions,
and execute and deliver such documents, as may be necessary or appropriate to
implement this Section 4.2.
5. Ratification. Prodigy's assumption of all of the rights and
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obligations of International Wireless under the Funding Agreement is hereby
ratified and confirmed. Carso Global's assumption of all of the rights and
obligations of Grupo Carso under the Funding Agreement is hereby ratified and
confirmed. Except as modified hereby, the Funding Agreement is hereby ratified
and confirmed in all respects.
6. Obligations Several. The obligations of Carso Global and Xx. Xxxx
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hereunder shall be several and not joint and the failure of Carso Global or Xx.
Xxxx to perform its or his obligations hereunder shall not relieve the other
from its or his obligations hereunder.
7. Entire Agreement. This Amendment represents the entire understanding
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and agreement between the parties hereto with respect to the subject matter
hereof and supersedes all prior oral and written and all contemporaneous oral
negotiations, commitments and understandings between such parties. The parties
may further amend or modify the Funding Agreement by a written instrument
executed by all parties.
8. Severability. Any provision of this Amendment which is invalid,
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illegal or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability,
without affecting in any way the remaining provisions hereof in such
jurisdiction or rendering that or any other provision of this Amendment invalid,
illegal or unenforceable in any other jurisdiction.
9. Governing Law. This Amendment shall be governed by and construed in
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accordance with the laws of the State of Delaware in the United States and all
parties hereby consent to the jurisdiction of the courts thereof.
10. Counterparts. This Amendment may be executed in one or more
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counterparts, each of which shall be deemed to be an original, but all of which
shall be one and the same document.
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IN WITNESS WHEREOF, this Amendment has been duly executed by the parties
hereto as of and on the date first above written.
PRODIGY, INC.
By: /s/
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Xxxx X. XxXxxxx, President/CEO
CARSO GLOBAL TELECOM S.A. DE C.V.
By: /s/
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Title:______________________________
XXXX X. XXXX
/s/
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Xxxx X. Xxxx
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