Exhibit 3
VOTING AGREEMENT
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VOTING AGREEMENT (the "Agreement"), dated as of November 19, 1999, among
the undersigned stockholders (the "Stockholders") of Prodigy Communications
Corporation, a Delaware corporation ("Prodigy"), and SBC Communications Inc., a
Delaware corporation ("SBC"). Except as otherwise provided herein, capitalized
terms that are used but not otherwise defined herein shall have the meaning
assigned to such terms in the Investment Agreement (as defined below).
WHEREAS, contemporaneously with the execution of this Agreement, Prodigy,
Prodigy Sub, Operating Partnership, SBC, and SBC Sub have entered into an
Investment, Issuance, Contribution and Assumption Agreement (the "Investment
Agreement"), providing for, among other things, the approval and adoption of the
Restated Certificate of Incorporation and the Amended and Restated By-Laws
(collectively, the "Charter and By-Law Amendments") and the approval of the
Investment Share Issuance, the Prodigy Contribution, the Unit Issuance and SBC
Contribution and the other transactions contemplated thereby (collectively, the
"Transactions") upon the terms and subject to the conditions set forth in the
Investment Agreement, and setting forth certain representations, warranties,
covenants and agreements of the parties thereto in connection with the
Transactions and the Charter and By-Law Amendments;
WHEREAS, contemporaneously with the execution of this Agreement, Prodigy,
Operating Partnership, SBC and SBC Sub have entered into a Strategic and
Marketing Agreement (the "Strategic Agreement"), providing for the transactions
contemplated thereby upon the terms and subject to the conditions set forth in
the Strategic Agreement;
WHEREAS, the Investment Agreement contemplates the execution and delivery
of this Agreement;
WHEREAS, in order to induce SBC and SBC Sub to enter into the Investment
Agreement and the Strategic Agreement, the Stockholders wish to agree (i) to
deliver to SBC an irrevocable proxy to Vote (as defined in Section 2 hereof) the
Shares (as defined in Section 1 hereof) and any other such shares of capital
stock of Prodigy so as to approve and adopt the Investment Agreement, the
Strategic Agreement and the transactions contemplated thereby, the Transactions
and the Charter and By-Law Amendments and (ii) not to transfer or otherwise
dispose of any of the Shares, or any other shares of capital stock of Prodigy
acquired hereafter and prior to the termination of the Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt,
sufficiency and adequacy of which is hereby acknowledged, the parties hereto
agree as follows:
1. Representations of Stockholders. Each of the Stockholders represents and
warrants to SBC and SBC Sub that (a) such Stockholder lawfully owns beneficially
(as such term is defined in Rule 13d-3 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) and of record each of the shares of Common
Stock, par value $0.01 per share (the "Prodigy Common Stock"), of Prodigy set
forth opposite such Stockholder's name on Exhibit A hereto (such Stockholder's
"Shares") free and clear of all Liens, claims, charges, security interests or
other encumbrances and, except for this Agreement and the Investment Agreement,
there are no options, warrants or other rights, agreements, arrangements or
commitments of any character to which such Stockholder is a party relating to
the pledge, disposition or Voting of any shares of capital stock of Prodigy and
there are no Voting trusts or Voting agreements with respect to such Shares, (b)
such Stockholder does not beneficially own (as such term is used in Rule 13d-3
of the Exchange Act) any shares of Prodigy Common Stock other than such Shares
and does not have any options, warrants or other rights to acquire any
additional shares of capital stock of Prodigy or any security exercisable for or
convertible into shares of capital stock of Prodigy, (c) such Stockholder has
full power and authority and has taken all actions necessary to enter into,
execute and deliver this Agreement and to perform fully such Stockholder's
obligations hereunder. This Agreement has been duly executed and delivered and
constitutes the legal, valid and binding obligation of such Stockholder
enforceable against such Stockholder in accordance with its terms, subject to
the Bankruptcy and Equity Exception, (d) other than filings under the Exchange
Act, no notices, reports or other filings are required to be made by such
Stockholder with, nor are any consents, registrations, approvals, permits or
authorizations required to be obtained by such Stockholder from, any
Governmental Entity, in connection with the execution and delivery of this
Agreement by such Stockholder, and (e) the execution, delivery and performance
of this Agreement by such Stockholder does not, and the consummation by such
Stockholder of the transactions contemplated hereby will not, violate, conflict
with or constitute a breach of, or a default under, the certificate of
incorporation or by-laws of such Stockholder or any or their comparable
governing instruments or result in a violation or breach of, or constitute (with
or without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation, modification or acceleration) (whether after
the giving of or the passage of time of both) under any Contract to which such
Stockholder is a party or which is binding on it or its assets and will not
result in the creation of any Lien on, or security interest in, any of the
assets on properties of such Stockholder.
2. Agreement to Deliver Proxy. Each of the Stockholders agrees to deliver
to SBC on the date hereof an irrevocable proxy substantially in the form
attached hereto as Exhibit B to Vote such Stockholder's Shares (a) in favor of
adoption and approval of the Investment Agreement, the Strategic Agreement and
the transactions contemplated thereby, the Transactions and the Charter and
By-Law Amendments at every meeting of the stockholders of Prodigy at which such
matters are considered and at every adjournment or postponement thereof, (b)
against any action or agreement that would compete with, impede, interfere with
or tend to discourage the Transactions or inhibit the timely consummation of the
Transactions, (c) against any action or agreement that would result in a breach
in any material respect of any covenant, representation or warranty or any other
obligation of Prodigy or Operating Partnership under the Investment Agreement or
the Strategic Agreement and (d) except for the Transactions and the Investment
Agreement, against any merger, consolidation, business combination,
reorganization, recapitalization, liquidation or sale or transfer of any
material assets of Prodigy or its Subsidiaries. The proxy delivered by each of
the Stockholders pursuant to this Section 2 shall be irrevocable during the term
of this Agreement to the extent permitted under Delaware law. For purposes of
this Agreement, "Vote" shall include voting in person or by proxy in favor of or
against any action, otherwise consenting or withholding consent in respect of
any action (including, but not limited to, consenting in accordance with Section
228 of the Delaware General Corporation Law) or taking other action in favor of
or against any action. "Voting" shall have a correlative meaning.
3. No Voting Trusts. Each of the Stockholders agrees that they will not,
nor will they permit any entity under their control to, deposit any of its
Shares or New Shares (as defined in Section 6 hereof) in a Voting trust or
subject any of their Shares or New Shares to any arrangement with respect to the
Voting of such Shares or New Shares other than agreements entered into with SBC
or SBC Sub.
4. No Proxy Solicitations. Each of the Stockholders agrees that such
Stockholder will not, nor will such Stockholder permit any entity under such
Stockholder's control, (a) to solicit proxies or become a "participant" in a
"solicitation" (as such terms are defined in Regulation 14A under the Exchange
Act) in opposition to or competition with the consummation of the Transactions
or otherwise encourage or assist any party in taking or planning any action
which would compete with, impede, interfere with or tend to discourage the
Transactions or inhibit the timely consummation of the Transactions in
accordance with the terms of the Investment Agreement, (b) to directly or
indirectly encourage, initiate or cooperate in a stockholders' Vote or action by
consent of Prodigy's stockholders in opposition to or in competition with the
consummation of the Transactions, or (c) to become a member of a "group" (as
such term is used in Section 13(d) of the Exchange Act) with respect to any
voting securities of Prodigy for the purpose of opposing or competing with the
consummation of the Transactions; provided, that the foregoing shall not
restrict any director of Prodigy from taking any action such director
reasonably believes after consultation with outside counsel is necessary to
satisfy such director's fiduciary duty to stockholders of Prodigy.
5. Transfer and Encumbrance. On or after the date hereof and during the
term of this Agreement, each of the Stockholders agrees not to transfer, sell,
offer, exchange, pledge or otherwise dispose of or encumber any of such
Stockholder's Shares or New Shares.
6. Additional Purchases. Each of the Stockholders agrees that such
Stockholder will not purchase or otherwise acquire beneficial ownership (as such
term is used in Rule 13d-3 of the Exchange Act) of any shares of Prodigy Common
Stock after the execution of this Agreement ("New Shares"), nor will any
Stockholder voluntarily acquire the right to Vote or share in the Voting of any
shares of Prodigy Common Stock other than the Shares, unless such Stockholder
agrees to deliver to SBC immediately after such purchase or acquisition an
irrevocable proxy substantially in the form attached hereto as Exhibit C with
respect to such New Shares. Each of the Stockholders also severally agrees that
any New Shares acquired or purchased by him or her shall be subject to the terms
of this Agreement to the same extent as if they constituted Shares.
7. Agreement to Vote Shares. (i) SBC shall vote or cause any of its
Subsidiaries to vote all shares of Class A Common Stock and Class B Common Stock
owned or held of record by SBC or any of its Subsidiaries at any meeting of
Prodigy stockholders held for such purpose in favor of electing three persons
designated by the Stockholders in writing to SBC prior to such meeting (each
such person, a "Stockholder Designee") as Class A Directors (as defined in the
Restated Certificate of Incorporation) to the board of directors of Prodigy;
provided, however, that at any time that a First Telmex/Carso Triggering Event
(as defined in the Restated Certificate of Incorporation) occurs, SBC shall vote
or cause any of its Subsidiaries to vote such shares in favor of electing two
Stockholder Designees as Class A Directors to the board of directors of Prodigy;
provided, further, that at any time a Second Telmex/Carso Triggering Event (as
defined in the Restated Certificate of Incorporation) occurs, SBC shall vote or
cause any of its Subsidiaries to vote such shares in favor of electing one
Stockholder Designee as a Class A Director to the board of directors of Prodigy;
provided, further, that at any time that a Third Telmex/Carso Triggering Event
(as defined below) occurs, SBC's obligation to vote or cause any of its
Subsidiaries to vote such shares in favor of electing any Stockholder Designees
as Class A Directors to the board of directors of Prodigy shall terminate. For
purposes of this Agreement, "Third Telmex/Carso Triggering Event" means any time
that Telefonos de Mexico, S.A. de C.V. ("Telmex") and Carso Global Telecom, S.A.
de C.V. ("Carso"), acting separately or jointly, shall have transferred (other
than to an Affiliate within the same corporate group) in the aggregate (i.e.,
together with all other shares of Prodigy Common Stock previously transferred by
Telmex or Carso other than to an Affiliate within the same corporate group) a
number of shares of Prodigy Common Stock constituting an aggregate of one
hundred percent (100%) of the number of shares of Prodigy Common Stock owned or
held of record by Telmex and Carso as of the date hereof (subject to adjustment
in accordance with Article FOURTH, Clause (b)(iv) of the Restated Certificate of
Incorporation); provided, that calculations of whether the Third Telmex/Carso
Triggering Event has occurred shall be made on the same basis as the
calculations of whether First or Second Telmex/Carso Triggering Events have
occurred in accordance with the Restated Certificate of Incorporation.
(ii) If at any time there shall be a vacancy with respect to a Class A
Director on the board of directors of Prodigy such that the number of Class A
Directors on the board of directors of Prodigy does not include the number of
Stockholder Designees provided for in Section 7(i) above, the Class B Directors
shall vote to fill such vacancy with a Stockholder Designee in order to give
effect to Section 7(i) above; provided that at any time that a Third
Telmex/Carso Triggering Event occurs, the Class B Directors' obligation to vote
to fill any such vacancies with a Stockholder Designee shall terminate.
8. Specific Performance. Each party hereto acknowledges that it will be
impossible to measure in money the damage to the other party if a party hereto
fails to comply with any of the obligations imposed by this Agreement, that
every such obligation is material and that, in the event of any such failure,
the other party will not have an adequate remedy at law or damages. Accordingly,
each party hereto agrees that injunctive relief or other equitable remedy, in
addition to remedies at law or damages, is the appropriate remedy for any such
failure and will not oppose the granting of such relief on the basis that the
other party has an adequate remedy at law. Each party hereto agrees that it will
not seek, and agrees to waive any requirement for, the securing or posting of a
bond in connection with any other party's seeking or obtaining such equitable
relief.
9. Entire Agreement; Amendment; Waiver. This Agreement (including the
exhibits hereto) supersedes all prior agreements, written or oral, among the
parties hereto with respect to the subject matter hereof and contains the entire
agreement among the parties with respect to the subject matter hereof. This
Agreement may not be amended, supplemented or modified, and no provisions hereof
may be modified or waived, except by an instrument in writing signed by all the
parties hereto. No waiver of any provisions hereof by any party shall be deemed
a waiver of any other provisions hereof by any such party, nor shall any such
waiver be deemed a continuing waiver of any provision hereof by such party.
10. Notices. All notices, requests, claims, demands or other communications
hereunder shall be in writing and shall be deemed given when delivered
personally, upon receipt of a transmission confirmation if sent by telecopy or
like transmission and on the next business day when sent by Federal Express,
Express Mail or other reputable overnight courier service to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
If to SBC:
SBC Communications Inc.
000 Xxxx Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxx
Senior Vice President
Corporate Development
Telecopy: 000-000-0000
With copies, which shall not constitute notice, to:
SBC Communications Inc.
000 Xxxx Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxx 00000
Attention: Senior Counsel - M&A
Telecopy: 000-000-0000
and
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
Telecopy: (000) 000-0000
If to a Stockholder, to the address or telecopy number set forth for such
Stockholder on the signature page hereof:
With a copy to:
Prodigy Communications Corporation
00 Xxxxx Xxxxxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telecopy: 000-000-0000
or to such other Persons on addresses as may be designated in writing by the
party to receive such notice as provided above.
11. Miscellaneous.
(a) Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH AND SUBJECT
TO THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO CONFLICTS OF LAWS
PRINCIPLES.
(b) Venue; WAIVER OF JURY TRIAL. The parties hereby irrevocably submit to
the jurisdiction of the courts of the State of Delaware and the Federal court of
the United States of America located in the State of Delaware solely in respect
of the interpretation and enforcement of the provisions of this Agreement and of
the documents governed by Delaware law referred to in this Agreement, and in
respect of the transactions contemplated hereby, and hereby waive, and agree not
to assert, as a defense in any action, suit or proceeding for the interpretation
or enforcement hereof or of any such document, that it is not subject thereto or
that such action, suit or proceeding may not be brought or is not maintainable
in said courts or that the venue thereof may not be appropriate or that this
Agreement or any such document may not be enforced in or by such courts, and the
parties hereto irrevocably agree that all claims with respect to such action or
proceeding shall be heard and determined in such a Delaware State or Federal
court. The parties hereby consent to and grant any such court jurisdiction over
the person of such parties and over the subject matter of such dispute and agree
that mailing of process or other papers in connection with any such action or
proceeding in the manner provided in Section 10 of this Agreement or in such
other manner as may be permitted by law shall be valid and sufficient service
thereof.
EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY
RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY
MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 11 (b).
(c) Severability. In the event that any provision of the Agreement is held
to be illegal, invalid or unenforceable in a final, unappealable order or
judgment (each such provision, an "invalid provision"), then such provision
shall be severed from this Agreement and shall be inoperative and the parties
promptly shall negotiate in good faith a lawful, valid and enforceable provision
that is as similar to the invalid provision as may be possible and that
preserves the original intentions and economic positions of the parties as set
forth herein to the maximum extent feasible, while the remaining provisions of
this Agreement shall remain binding on the parties hereto. Without limiting the
generality of the foregoing sentence, in the event a change in any applicable
law, rule or regulation makes it unlawful for a party to comply with any of its
obligations hereunder, the parties shall negotiate in good faith a modification
to such obligation to the extent necessary to comply with such law, rule or
regulation that is as similar in terms to the original obligation as may be
possible while preserving the original intentions and economic positions of the
as set forth herein to the maximum extent feasible.
(d) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same instrument.
(e) Termination. Except for Section 7, this Agreement shall terminate upon
the earliest to occur of (i) the Closing, (ii) the date eighteen months after
termination of the Investment Agreement unless the Investment Agreement is
properly terminated by Prodigy pursuant to Section 7.4(b) thereof, in which case
this Agreement shall terminate upon termination of the Investment Agreement and
(iii) the date specified in a written agreement duly executed and delivered by
SBC and each of the Stockholders. Section 7 of this Agreement shall terminate
upon the earliest to occur of (i) the termination of the Investment Agreement,
(ii) the date that a Third Telmex/Carso Triggering Event occurs, (iii) the date
that a Third Class B Triggering Event (as defined in the Restated Certificate of
Incorporation) occurs and (iv) the date specified in a written agreement duly
executed and delivered by SBC and each of the Stockholders.
(f) Further Assurances. Each party hereto shall execute and deliver such
additional instruments and other documents and shall take such further actions
as may be necessary or desirable to effectuate, carry out and comply with all of
the terms of this Agreement and the transactions contemplated hereby.
(g) Headings; Recitals. All Section headings and the recitals herein are
for convenience of reference only and are not part of this Agreement, and no
construction or reference shall be derived therefrom.
(h) THIRD PARTY BENEFICIARIES. NOTHING IN THIS AGREEMENT, EXPRESS OR
IMPLIED, IS INTENDED TO CONFER UPON ANY THIRD PARTY ANY RIGHTS OR REMEDIES OF
ANY NATURE WHATSOEVER UNDER OR BY REASON OF THIS AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first written above.
SBC Communications Inc.
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Senior Executive Vice
President - Corporate Development
THE STOCKHOLDERS:
Carso Global Telecom, S.A. de C.V.
By: /s/ Xxxxxxx Xxxxxx Acra
-------------------------
Name: Xxxxxxx Xxxxxx Acra
Title: Attorney-in-Fact
Address: Xxxxxxxxxxx Xxx 0000
Col. Xxxx Xxxxx Xxxxxxx
Xxxxxx, X.X. 00000
Telecopy: 000-000-000-0000
Telefonos de Mexico, S.A. de C.V.
By: /s/ Xxxxxx Xxxxxx Xxxxx
-------------------------
Name: Xxxxxx Xxxxxx Xxxxx
Title: Chief Financial Officer
Address: Parque Xxx 000
Xxx. Xxxxxxxxxx,
00000 Xxxxxx,
X.X., Xxxxxx
Telecopy: 000-000-000-0000
(EXHIBIT A)
THE COMPANY
LIST OF STOCKHOLDERS
NAME # SHARES
---- --------
Carso Global Telecom, S.A. de C.V. 29,396,911
Telefonos de Mexico, S.A. de C.V. 11,412,500
(EXHIBIT B)
FORM OF PROXY
The undersigned, for consideration received, hereby appoints Xxxxx X. Xxxxx
or another representative of SBC Communications Inc. designated by him and each
of them my proxies, with power of substitution and resubstitution, (i) to vote
all shares of Common Stock, par value $0.01 per share, of Prodigy Communications
Corporation, a Delaware corporation ("Prodigy"), owned by the undersigned (the
"Shares") as of the date hereof at the Special Meeting of Stockholders of
Prodigy to be held as soon as practicable after the date hereof and at any
adjournment or postponement thereof (the "Special Meeting") FOR approval and
adoption of (a) the Investment, Issuance, Contribution and Assumption Agreement,
dated as of November 19, 1999 (the "Investment Agreement"), by and among
Prodigy, Prodigy Transition Corporation, a Delaware corporation and a wholly
owned subsidiary of Prodigy ("Prodigy Sub"), Prodigy Communications Limited
Partnership, a Delaware limited partnership ("Operating Partnership"), SBC
Communications Inc., a Delaware corporation ("SBC"), and SBC Internet
Communications, Inc., a Delaware corporation and an indirect wholly owned
subsidiary of SBC ("SBC Sub"), (b) the Strategic and Marketing Agreement, dated
as of November 19, 1999 (the "Strategic Agreement"), by and among, Prodigy,
Operating Partnership, SBC and SBC Sub, and the transactions contemplated
thereby, (c) the Restated Certificate of Incorporation and the Amended and
Restated By-Laws (collectively, the "Charter and By-Law Amendments") and (d) the
approval of the Investment Share Issuance, the Prodigy Contribution, the Unit
Issuance and SBC Contribution and the other transactions contemplated by the
Investment Agreement (collectively, the "Transactions"), and AGAINST (a) any
action or agreement that would compete with, impede, interfere with or tend to
discourage the Transactions or inhibit the timely consummation of the
Transactions or (b) any action or agreement that would result in a breach in any
material respect of any covenant, representation or warranty or any other
obligation of Prodigy or Operating Partnership under the Investment Agreement or
the Strategic Agreement or, (c) except for the Transactions and the Investment
Agreement, any merger, consolidation, business combination, reorganization,
recapitalization, liquidation or sale or transfer of any material assets of
Prodigy or its Subsidiaries, (ii) if the Special Meeting is not held within five
months of the date hereof, to consent with respect to such Shares in favor of
adoption and approval of (a) the Investment Agreement, (b) the Strategic
Agreement and the transactions contemplated thereby, (c) the Transactions and
(d) the Charter and By-Law Amendments and (iii) to withhold consents with
respect to such Shares for (a) any action or agreement that would compete with,
impede, interfere with or tend to discourage the Transactions or inhibit the
timely consummation of the Transactions or (b) any action or agreement that
would result in a breach in any material respect of any covenant, representation
or warranty or any other obligation of Prodigy or Operating Partnership under
the Investment Agreement or the Strategic Agreement or, (c) except for the
Transactions and the Investment Agreement, any merger, consolidation, business
combination, reorganization, recapitalization, liquidation or sale or transfer
of any material assets of Prodigy or its Subsidiaries. This proxy is coupled
with an interest, revokes all prior proxies granted by the undersigned and is
irrevocable until such time as the Voting Agreement, dated as of November 19,
1999, among certain stockholders of Prodigy, including the undersigned, and SBC,
terminates in accordance with its terms, at which time this proxy shall expire.
Dated November 19, 1999
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(Signature of Stockholder)
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(Signature of Stockholder)
(EXHIBIT C)
FORM OF PROXY
The undersigned, for consideration received, hereby appoints [insert names
of SBC designees] and each of them my proxies, with power of substitution and
resubstitution, (i) to vote the [insert number of shares] shares of Common
Stock, par value $0.01 per share (the "New Shares"), of Prodigy Communications
Corporation, a Delaware corporation ("Prodigy"), purchased or otherwise acquired
by the undersigned, or for which the undersigned has voluntarily acquired the
right to vote or share in the voting of such shares, since the execution of the
Voting Agreement, dated as of November 19, 1999 (the "Voting Agreement"), by and
among certain stockholders of Prodigy, including the undersigned, and SBC, at
the Special Meeting of Stockholders of Prodigy to be held [insert date, time and
place] and at any adjournment or postponement thereof (the "Special Meeting")
FOR approval and adoption of (a) the Investment, Issuance, Contribution and
Assumption Agreement, dated as of November 19, 1999 (the "Investment
Agreement"), by and among Prodigy, Prodigy Transition Corporation, a Delaware
corporation and a wholly owned subsidiary of Prodigy ("Prodigy Sub"), Prodigy
Communications Limited Partnership, a Delaware limited partnership ("Operating
Partnership"), SBC Communications Inc., a Delaware corporation ("SBC"), and SBC
Internet Communications, Inc., a Delaware corporation and an indirect wholly
owned subsidiary of SBC ("SBC Sub"), (b) the Strategic and Marketing Agreement,
dated as of November 19, 1999 (the "Strategic Agreement"), by and among,
Prodigy, Operating Partnership, SBC and SBC Sub, and the transactions
contemplated thereby, (c) the Restated Certificate of Incorporation and the
Amended and Restated By-Laws (collectively, the "Charter and By-Law Amendments")
and (d) the approval of the Investment Share Issuance, the Prodigy Contribution,
the Unit Issuance and SBC Contribution and the other transactions contemplated
by the Investment Agreement (collectively, the "Transactions"), and AGAINST (a)
any action or agreement that would compete with, impede, interfere with or tend
to discourage the Transactions or inhibit the timely consummation of the
Transactions or (b) any action or agreement that would result in a breach in any
material respect of any covenant, representation or warranty or any other
obligation of Prodigy or Operating Partnership under the Investment Agreement or
the Strategic Agreement or, (c) except for the Transactions and the Investment
Agreement, any merger, consolidation, business combination, reorganization,
recapitalization, liquidation or sale or transfer of any material assets of
Prodigy or its Subsidiaries, (ii) if the Special Meeting is not held within five
months of the date hereof, to consent with respect to such New Shares in favor
of adoption and approval of (a) the Investment Agreement, (b) the Strategic
Agreement and the transactions contemplated thereby, (c) the Transactions and
(d) the Charter and By-Law Amendments and (iii) to withhold consents with
respect to such Shares for (a) any action or agreement that would compete with,
impede, interfere with or tend to discourage the Transactions or inhibit the
timely consummation of the Transactions or (b) any action or agreement that
would result in a breach in any material respect of any covenant, representation
or warranty or any other obligation of Prodigy or Operating Partnership under
the Investment Agreement or the Strategic Agreement or, (c) except for the
Transactions and the Investment Agreement, any merger, consolidation, business
combination, reorganization, recapitalization, liquidation or sale or transfer
of any material assets of Prodigy or its Subsidiaries. This proxy is coupled
with an interest, revokes all prior proxies granted by the undersigned and is
irrevocable until such time as the Voting Agreement terminates in accordance
with its terms.
Dated ____________________, 199_
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(Signature of Stockholder)
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(Signature of Stockholder)
