Exhibit 10.12
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INTERIM FINANCING AGREEMENT
AGREEMENT, entered into as of the 30th day of October, 1997, among Prodigy,
Inc., a Delaware corporation (the "Company"), Carso Global Telecom, S.A. de C.V.
("Carso Global"), and Xxxx X. Xxxx ("Xx. Xxxx").
WHEREAS, the Company plans to make a rights offering (the "Rights
Offering") to all stockholders of the Company entitling each stockholder to
purchase one share of Common Stock for each one share held;
WHEREAS, the Company requires funding in order to complete the
restructuring of the 8% Contingent Convertible Promissory Notes (the "Contingent
Notes") held by IBM and Sears as well as funding to finance its operations prior
to completion of the Rights Offering; and
WHEREAS, Carso Global and Xx. Xxxx hold warrants (the "$3.00 Warrants") to
purchase 13,000,000 shares and 2,000,000 shares, respectively, of Common Stock
for $3.00 per share, exercisable prior to the earlier of (i) May 12, 1998 or
(ii) the closing of an underwritten public offering of Common Stock or other
equity securities in which the gross proceeds to the Company exceed U.S.
$25,000,000;
NOW, THEREFORE, for good and valuable consideration, the Company, Carso
Global and Xx. Xxxx hereby agree as follows:
1. Commitments of Carso Global.
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(a) Pursuant to a letter agreement dated October 20, 1997, Carso
Global agreed, in order to complete the restructuring of the Contingent Notes,
to (i) arrange for the issuance of a $4,000,000 letter of credit (the "Xxxxx
XX") in favor of IBM and Sears and (ii) arrange for $7,964,578 to be advanced to
the Company.
(b) Carso Global arranged for Banco Inbursa, S.A. ("Banco Inbursa")
to advance $13,750,000 to the Company, of which (i) $7,964,578 was advanced
pursuant to the arrangements described in Section 1(a) above, and (ii)
$3,750,000 is secured by Xx. Xxxx'x pledge of 7,500,000 shares of Common Stock.
(c) Carso Global intends to purchase its maximum allocation of
49,543,822 shares of Common Stock in the Rights Offering. Payment for the
shares purchased by Carso Global shall be made as follows: (i) Carso Global
shall be credited with $4,000,000 by reason of the issuance of the Xxxxx XX,
(ii) Carso Global shall pay $13,750,000 directly to Banco Inbursa on the
Company's behalf in repayment of $13,750,000 of indebtedness owed by the Company
to Banco Inbursa and (iii) Carso Global shall pay the remainder to the Company.
(d) From and after the issuance of the Xxxxx XX, Carso Global shall
pay the Company each quarter an amount equal to $333,333 less any draws on the
Xxxxx XX during such quarter until the entire $4,000,000 has been paid to the
Company or drawn under the Xxxxx XX.
2. Commitments of Xx. Xxxx. Xx. Xxxx agrees to (i) lend the Company up
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to $2,250,000 (of which $250,000 has been loaned as of the date hereof) without
interest, (ii) pledge 7,500,000 shares of Common Stock to secure advances of
$3,750,000 from Banco Inbursa to the Company until the earlier of the initial
closing of the Rights Offering or December 15, 1997, and (iii) convert his
advances to the Company into Common Stock at $1.00 per share promptly after the
Rights Offering is commenced.
3. Warrant Repricing. In consideration of the interim financing
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commitments made by Carso Global and Xx. Xxxx, the exercise price of the $3.00
Warrants is hereby reduced from $3.00 per share to $1.00 per share.
4. 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.
5. 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.
6. 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.
7. 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.
8. 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.
IN WITNESS WHEREOF, this Amendment has been duly executed by the parties
hereto as of and on the date first above written.
PRODIGY, INC.
/s/
By:-------------------------------
Title:____________________________
CARSO GLOBAL TELECOM, S.A. DE C.V.
/s/
By:-------------------------------
Title:____________________________
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XXXX X. XXXX
/s/
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Xxxx X. Xxxx
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