Exhibit 10.14
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STOCK PURCHASE AGREEMENT
AGREEMENT effective as of the 24th day of July, 1998 between Prodigy, Inc.,
a Delaware corporation ("Prodigy"), and Carso Global Telecom, S.A. de C.V., a
Mexican corporation ("Carso Global").
In consideration of the mutual promises hereinafter set forth and other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereby agree as follows:
1. Purchase and Sale of the Shares.
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(a) At the Closing (as defined in Section 3 below), Prodigy shall
issue and sell to Carso Global, and Carso Global shall purchase from Prodigy,
5,500,000 shares (the "Shares") of Common Stock, $.01 par value per share
("Common Stock"), of Prodigy for a purchase price of U.S. $2.00 per Share for an
aggregate purchase price of U.S. $11,000,000.
(b) The purchase price for the Shares shall be paid to Prodigy at the
Closing by wire transfer or other form of payment acceptable to Prodigy.
2. Use of Proceeds. Prodigy will use the proceeds from the sale of the
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Shares, together with the proceeds from the contemporaneous sale of 24,500,000
shares to Telefonos de Mexico, S.A. de C.V., a Mexican corporation ("Telmex"),
as follows: U.S. $26,400,000 to repay indebtedness owed to Banco Inbursa, S.A.
and the balance for general corporate purposes.
3. The Closing. The closing (the "Closing") of the transactions
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contemplated hereby shall take place as soon as practicable after satisfaction
or waiver of the Closing conditions specified in Sections 6 and 7 below.
4. Representations and Warranties of Prodigy. Prodigy represents and
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warrants as follows:
4.1 Authorization and Binding Nature. The execution, delivery and
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performance by Prodigy of this Agreement has been duly authorized by all
requisite corporate action and this Agreement constitutes the valid and legally
binding obligation of Prodigy, enforceable against Prodigy in accordance with
its terms.
4.2 Non-Contravention. The execution, delivery and performance by
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Prodigy of this Agreement will not, with or without the giving of notice or the
passage of time or both, (a) violate the provisions of any law, rule or
regulation applicable to Prodigy, (b) violate the provisions of the charter
documents of Prodigy, (c) violate any judgment, decree, order or award of any
court, governmental body or arbitrator applicable to Prodigy, or (d) conflict
with or violate any agreement to which Prodigy is a party or by which it is
bound.
4.3 Capitalization. The authorized capital stock of Prodigy consists
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of 280,000,000 shares of Common Stock, of which 150,225,727 shares are issued
and outstanding (excluding the shares to be issued to Telmex as contemplated by
Section 2 above), and 10,000,000 shares of Preferred Stock, $.01 par value per
share, of which no shares are issued or outstanding. All of the issued and
outstanding shares of Common Stock have been duly authorized and validly issued
and are fully paid and nonassessable. When issued, sold and delivered against
payment therefor in accordance with the provisions of this Agreement, the Shares
will be duly and validly issued, fully paid and nonassessable. There are not
outstanding any warrants, options or other rights granted by Prodigy to purchase
or acquire any capital stock of Prodigy, except for (a) options granted under
Prodigy's 1996 Stock option Plan to purchase up to 12,500,000 shares of Common
Stock, (b) warrants granted by Prodigy to purchase an
aggregate of 437,389 shares of Common Stock and (c) the rights of IBM and Sears
under the 8% Contingent Convertible Promissory Notes and the Contingent Common
Stock Purchase Warrants, each dated November 5, 1997.
4.4 Financial Statements. Prodigy has furnished to Carso Global (i)
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the unaudited consolidated financial statements of Prodigy and its subsidiaries
as of and for periods ended December 31, 1997 (the "Prodigy Financial
Statements") and (ii) the unaudited financial statements of Prodigy Services
Corporation, a wholly-owned subsidiary of Prodigy ("PSC"), as of and for periods
ended June 30, 1998 (the "PSC Financial Statements"). The Prodigy Financial
Statements are complete and correct in all material respects, present fairly the
consolidated financial condition and results of operations of Prodigy and its
subsidiaries as at the dates and for the periods indicated, and have been
prepared in accordance with generally accepted accounting principles ("GAAP")
consistently applied, except that the Prodigy Financial Statements are subject
to normal year-end audit adjustments which in the aggregate will not be
material. The PSC Statements are complete and correct in all material respects,
present fairly the financial condition and results of operations of PSC as at
the dates and for the periods indicated, and have been prepared in accordance
with GAAP consistently applied, except that the PSC Financial Statements are
subject to normal year-end audit adjustments which in the aggregate will not be
material and do not contain footnotes normally contained in audited financial
statements.
5. Representations and Warranties of Carso Global. Carso Global
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represents and warrants as follows:
5.1 Investment. Carso Global is acquiring the Shares for its own
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account for investment, not for resale to any other person and not with a view
to or in connection with any resale or distribution. Carso Global understands
that the Shares have not been registered under the securities laws of the United
States or any other jurisdiction and cannot be transferred or resold except as
permitted pursuant to a valid registration statement or an applicable exemption
from registration. Carso Global acknowledges that Prodigy has not made any
representations with respect to registration of the Shares under applicable
securities laws, that there can be no assurance that there will be any market
for the Common Stock in the foreseeable future and that, as a result, Carso
Global must be prepared to bear the economic risk of its investment for an
indefinite period of time. Carso Global understands that the certificate
representing the Shares shall bear a legend substantially in the following form:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and may not be sold,
exchanged, transferred, pledged, hypothecated or otherwise disposed of
unless and until such securities are registered under such Act or an
opinion of counsel satisfactory to the issuer is obtained to the effect
that such registration is not required."
5.2 Authorization and Binding Nature. The execution, delivery and
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performance by Carso Global of this Agreement has been duly authorized by all
requisite corporate action and this Agreement constitutes the valid and legally
binding obligation of Carso Global, enforceable against Carso Global in
accordance with its terms.
5.3 Non-Contravention. The execution, delivery and performance by
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Carso Global of this Agreement will not, with or without the giving of notice or
the passage of time or both, (a) violate the provisions of any law, rule or
regulation applicable to Carso Global, (b) violate the provisions of the charter
documents of Carso Global, (c) violate any judgment, decree, order or award of
any court, governmental body or arbitrator applicable to Carso Global, or (d)
conflict with or violate any agreement to which Carso Global is a party or by
which it is bound.
5.4 Control of Telmex. Carso Global controls Telmex (within the
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meaning of the Securities Act of 1933, as amended, and the rules and regulations
thereunder).
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5.5 Access to Information. Carso Global has substantial knowledge
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and experience in making investment decisions of this type and is capable of
evaluating the merits and risks of its investment in Prodigy. Prodigy has made
available to Carso Global all documents and other information necessary for
Carso Global to evaluate the merits and risks of its investment in Prodigy.
Prodigy has made available to Carso Global all documents requested and has
provided answers to all of its questions relating to an investment in Prodigy.
In evaluating the suitability of an investment in Prodigy, Carso Global has not
relied upon any representations (whether oral or written) other than as set
forth herein. Carso Global has had an opportunity to discuss this investment
with representatives of Prodigy and to ask questions of them. Carso Global
understands that an investment in Prodigy involves significant risks.
6. Carso Global's Conditions to Closing. The obligation of Carso Global
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to consummate the transactions contemplated hereby is subject to the following
conditions only, each of which may be waived in the sole discretion of Carso
Global:
6.1 Representations and Covenants. The representations and
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warranties of Prodigy contained in this Agreement shall be true as of the
Closing and Prodigy shall have performed the covenants and agreements to be
performed by it under this Agreement at or prior to the Closing.
6.2 Government Approvals. The transactions contemplated hereby shall
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have been approved by all United States government agencies from whom such
approval is required.
6.3 Closing of ▇▇▇▇/Telmex Agreement. The Initial Closing (as
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defined therein) under the Stock Purchase Agreement of even date hereof among
Prodigy, Carso Global, ▇▇▇▇ ▇. ▇▇▇▇ and Telmex, shall have been consummated.
6.4 Closing of ▇▇▇▇▇▇▇/Telmex Agreement. The Initial Closing (as
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defined therein) under the Stock Purchase Agreement of even date hereof among
Telmex, Prodigy, Carso Global and Rolling Breeze, LLC (▇▇▇▇ ▇. ▇▇▇▇▇▇▇) shall
have been consummated.
6.5 Closing of Prodigy/Telmex Agreement. The Initial Closing (as
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defined therein) under the Stock Purchase Agreement of even date hereof between
Telmex and Prodigy shall have been consummated.
7. Prodigy's Conditions to Closing. The obligation of Prodigy to
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consummate the transactions contemplated hereby is subject to the following
conditions only, each of which may be waived in the sole discretion of Prodigy:
7.1 Representations and Covenants. The representations and
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warranties of Carso Global contained in this Agreement shall be true as of the
Closing and Carso Global shall have performed the respective covenants and
agreements to be performed by them under this Agreement at or prior to the
Closing.
7.2 Government Approvals. The transactions contemplated hereby shall
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have been approved by all United States government agencies from whom such
approval is required.
7.3 Fairness Opinion. Prodigy's Board of Directors shall have
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received a written opinion, from an investment banking firm of its selection and
satisfactory to Prodigy's Board of Directors in form and substance, to the
effect that the terms of the purchase and sale of the Shares as contemplated
hereby are fair, from a financial point of view, to Prodigy.
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8. Termination of Agreement.
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8.1 By Prodigy. Prodigy may terminate this Agreement, without
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liability to Carso Global, if the Closing has not occurred by July 24, 1998 due
to the failure of any of the conditions specified in Section 7 hereof to be
satisfied.
8.2 By Carso Global. Carso Global may terminate this Agreement,
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without liability to Prodigy, if the Closing has not occurred by July 24, 1998
due to the failure of any of the conditions specified in Section 6 hereof to be
satisfied.
9. Notices. Any notices or other communications required or permitted
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hereunder shall be in the English language and shall be sufficiently given if
delivered personally or sent by telecopy or via a reputable express courier,
with charges prepaid, to the address set forth below or to such other address of
which the parties may have given notice. Unless otherwise specified herein,
such notices or other communications shall be deemed received one business day
after personal delivery or delivery by telecopy, or three business days after
being sent, if sent by reputable express courier.
If to Prodigy:
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇ and ▇▇▇▇ LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to Carso Global:
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇
#▇▇▇, ▇▇▇. ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, Duclaud y ▇▇▇▇▇▇, S.C.
Paseo de las Palmas
#405, Col. ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
10. Successors and Assigns. No party may assign its obligations hereunder
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without the prior written consent of the other party, except that Carso Global
may assign its rights and obligations hereunder to any affiliate of Carso
Global. Subject to the foregoing, this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns. Any assignment in contravention of this provision shall be void.
11. Entire Agreement. This Agreement 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
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written and all contemporaneous oral negotiations, commitments and
understandings between such parties. The parties may amend or modify this
Agreement, in such manner as may be agreed upon, only by a written instrument
executed by the parties hereto.
12. Expenses. Each party shall pay its own expenses in connection with
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this Agreement and the transactions contemplated hereby.
13. Governing Law. This Agreement shall be governed by and construed in
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accordance with the laws of the State of Delaware in the United States, without
reference to conflict of laws principles, and the parties hereby consent to the
jurisdiction of the courts of the State of Delaware.
14. Section Headings. The section headings are for the convenience of the
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parties and in no way alter, modify, amend, limit or restrict the contractual
obligations of the parties.
15. Severability. The invalidity or unenforceability of any provision of
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this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
16. Counterparts. This Agreement may be executed in two 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 Agreement 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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