EXHIBIT 10.7
June 4, 1999
Global Marine Inc.
000 X. Xxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000-0000
Ladies and Gentlemen:
We are pleased to make available to you an uncommitted credit facility
for general corporate purposes on the terms set forth in this letter
(the "LETTER AGREEMENT").
1. We agree to consider from time to time your requests that we
make advances to you, on an interest bearing basis ("ADVANCES"), in an
aggregate amount not to exceed at any one time outstanding the amount
set forth on SCHEDULE I hereto as the "Facility Amount", on the terms
and conditions set forth below. This letter is not a commitment to lend
but rather sets forth the procedures to be used in connection with your
requests for our making of Advances to you from time to time on or
prior to the termination hereof pursuant to PARAGRAPH 10 and, in the
event that we make Advances to you hereunder, your obligations to us
with respect thereto. The Advances shall be evidenced by the "grid"
promissory note executed by you in substantially the form of Exhibit
A hereto (or such other form as may be agreed to between us and you)(as
amended from time to time, the "NOTE").
2. The net amount of each Advance shall be in an amount at least
equal to the amount set forth on SCHEDULE I hereto as the "MINIMUM
ADVANCE AMOUNT" and shall be made upon (i) your request to us by
telephone, telecopy or letter, given by any of the persons listed on
EXHIBIT B hereto or otherwise designated by you in writing ("DESIGNATED
PERSONS"), that you wish to borrow money on a specified date, in a
specified amount and for a specified term (which shall, in no event, be
longer than the number of days set forth on SCHEDULE I hereto as the
"MAXIMUM TERM" (and in any event, no such Advance shall mature after
January 31, 2000); and (ii) our mutual agreement as to such date,
amount and term and as to the interest rate per annum. On the date of
any such Advance, we will make such Advance available to you in same
day funds by transferring or wiring the net proceeds of such Advance to
an account designated in writing by a Designated Person. Promptly after
the date of each Advance, we will send you a written confirmation of
such Advance and the amount and term thereof and the interest rate per
annum.
3. Your agreement and acceptance of this letter, together with
your furnishing to us certified copies of (i) your charter and by-laws
and (ii) resolutions of your board of directors authorizing a
Designated Person to execute this letter and any documents delivered
pursuant hereto and to request Advances, together with specimen
signatures of such Designated Persons, shall constitute a
representation and warranty by you that (a) the execution, delivery and
performance of this letter has been duly authorized by all necessary
corporate action and does not contravene any law, or any contractual or
legal restriction, applicable to you, (b) no authorization or approval
or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for such execution, delivery
and performance or for the making of any Advance and (c) this letter is
your legal, valid and binding obligation, enforceable against you in
accordance with its terms.
4. Each request by you for an Advance shall constitute a
representation and warranty by you, as of the making of such Advance
and giving effect to the application of the proceeds therefrom, that
(i) no payment default has occurred and is continuing under any
agreement or instrument relating to any of your indebtedness for
borrowed money the outstanding principal of which aggregates
$25,000,000 or more, (ii) such Advance when made will constitute your
legal, valid and binding obligation, except as such enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights and by the application of
general principles of equity, and (iii) no event has occurred and no
circumstance exists as a result of which the written information which
you have provided to us in connection herewith would include an untrue
statement of a material fact or omit to state any material fact or any
fact necessary to make the statements contained therein, in the light
of the circumstances under which they were made, not misleading.
5. You shall repay each Advance, and pay interest on such
Advance, in accordance with the terms hereof and of the Note.
6. You shall make each payment hereunder and under the Note on
or before 12:00 noon (New York City time) on the day when due in lawful
money of the United States of America to us at Societe Generale, ABA #
000-000-000, A/C 9038973, Ref: Global Marine Inc., in same day funds.
All computations of interest shall be made by us on the basis of a year
of 360 days, for the actual number of days (including the first day but
excluding the last day) elapsed.
7. Subject to the terms of the Note, whenever any payment to be
made hereunder shall be otherwise due on a Saturday, a Sunday or other
day of the year on which banks are required or authorized to close in
New York City, New York (any other day being a "BUSINESS DAY"), such
payment shall be made on the next succeeding Business Day.
8. You agree that you will not apply the proceeds of any Advance
to purchase or carry margin stock within the meaning of Regulations U
and T issued by the Board of Governors of the Federal Reserve System.
9. We shall incur no liability to you in acting upon any
telephone, telecopy, telex or letter request or communication which we
believe in good faith to have been given by a Designated Person or in
otherwise acting in good faith under this letter. Further, all
documents required to be executed in conjunction with Advances under
this letter may be signed by any Designated Person.
10. This letter shall remain in effect until terminated by either
you or us by giving prior written notice of termination hereof to the
other party hereto, but no such termination shall affect your or our
obligations with respect to the Advances hereunder outstanding at the
time of such termination.
11. All written communications hereunder shall be mailed,
telecopied or delivered to the address specified on SCHEDULE I hereto
for you and for us, or as to each party, to such other address as may
be designated by such party in a written notice to the other party.
Written communication shall be effective upon receipt unless such
communication is mailed, in which case it shall be effective three
Business Days after deposit in first class mail.
12. We may assign to one or more banks or other entities all or
any part of, or may grant participations to one or more banks or other
entities in or to all or any part of, any Advance or Advances hereunder
and under the Note; provided that no assignment shall be effective
without our prior written consent which shall not be unreasonably
withheld or delayed. You may not assign your rights or obligations
hereunder or any interest herein without our prior written consent and
any such assignment without our consent shall be null and void.
13. You agree to pay on demand all reasonable out-of-pocket
costs, expenses and losses, if any, incurred by us in connection with
the enforcement of this letter or the Note other than such costs,
expenses or losses arising out of your gross negligence or wilful
misconduct.
14. You agree to furnish us with such financial statements or
other information as we may reasonably request. We agree to keep all
such information confidential and use it solely in connection with the
administration of this Letter Agreement.
15. If any of the following events shall occur and be continuing:
(a) you shall fail to pay any amount due hereunder or under
the Note when the same becomes due and payable; or
(b) any material representation or warranty made by you (or
any of your officers) in connection with any Advance or otherwise
in connection with this letter or the Note shall prove to have
been incorrect in any material respect when made; or
(c) you shall, without our prior written consent, merge or
consolidate with or into, or convey, transfer, lease or dispose of
(whether in one transaction or in a series of transactions) all or
substantially all of your assets to, any person or entity other
than any transaction permitted under the Five-Year Credit
Agreement (as defined below); or
(d) you shall fail to perform or observe any other material
term, covenant or agreement in connection with any Advance or
otherwise in connection with this letter or the Note on your part
to be performed or observed and such failure is not remedied
within 30 days after your receipt of written notice from us; or
(e) any Event of Default occurs and continues as defined in
the Second Amended and Restated Credit Agreement dated as of
December 9, 1997 (as amended from time to time "FIVE-YEAR CREDIT
AGREEMENT") among you, the lending institutions party thereto and
Bankers Trust Company as Administrative Agent; or
(f) you shall fail to pay any principal of or premium or
interest on any indebtedness for borrowed money the outstanding
principal of which aggregates $25,000,000 or more (excluding
indebtedness evidenced by the Note), when the same becomes due and
payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such indebtedness; or any
other event shall occur or condition shall exist under any
agreement or instrument relating to such indebtedness and shall
continue after the receipt of any applicable notice or the expiry
of any applicable grace period, if any, specified in such
agreement or instrument, if the effect of such event or condition
is to accelerate, or to permit the acceleration of, the maturity
of such indebtedness; or any such indebtedness shall be declared
to be due and payable, or required to be prepaid (other than by a
regularly scheduled required payment), prior to the stated
maturity thereof; or
(g) you shall generally not pay your debts as such debts
become due, or shall admit in writing your inability to pay your
debts generally, or shall make a general assignment for the
benefit of creditors; or any proceeding shall be instituted by or
against you seeking to adjudicate you as bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of you or your
debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee,
custodian or other similar official for you or any substantial
part of your property; or you shall take any corporate action to
authorize any of the actions set forth above in this SUBSECTION
(g);
then, and in any such event, we may declare the Note, and all amounts
payable thereunder to be forthwith due and payable, whereupon the Note
and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind all
of which you hereby expressly waive; PROVIDED, HOWEVER, that in the
event of any occurrence described in SUBSECTION (g), the Note and all
such other amounts shall automatically become and be due and payable,
without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by you. In the event that the Note
becomes due and payable pursuant to this PARAGRAPH 15 you shall also
pay us, in addition to all amounts payable under the Note, to the
extent permitted by law, an amount equal to the positive difference, if
any, for each Advance between (i) the interest that would have accrued
with respect to such Advance under the Note from the date such Advance
was paid to the scheduled maturity date therefor and (ii) the interest
actually earned by us on the amount repaid to us with respect to such
Advance from the date of payment thereof to the scheduled maturity date
for such Advance (the "MAKE-WHOLE AMOUNT").
16. You agree that no amendment or waiver of any provision of
this letter or the Note nor consent to any departure by you therefrom,
shall in any event be effective unless the same shall be in writing and
signed by the you and the undersigned ("BANK"), and then such waiver or
consent shall be effective only in the specific instance and for the
specific purpose for which given.
17. You agree to indemnify the Bank, its officers, directors,
employees, representatives and agents from and discharge, release, and
hold each of them harmless against any and all reasonable losses,
liabilities, obligations, claims, damages, expenses, fines or penalties
incurred by any of them as a result of, or directly arising out of, or
directly related to (a) any actual or proposed used by you or any
subsidiary of the proceeds of the Advances, (b) any breach by you of
any provision of this letter or the Note, (c) any investigation,
litigation or other proceeding (whether or not the Bank is a party
thereto) related to the foregoing, including, but not limited to, the
entering into and/or performance of this letter or the Note, or the use
of proceeds of any Advances hereunder, or (d) any Environmental Claim
(as defined in the Five-Year Credit Agreement) or requirement of
Environmental Laws (as defined in the Five-Year Credit Agreement)
concerning or relating to (i) any Real Property (as defined in the
Five-Year Credit Agreement), offshore drilling rig, facility, or
location which you at any time owned or operated, or (ii) your
operations or business, and you agree to reimburse the Bank and its
directors, officers, employees and agents within 30 days' of demand for
any reasonable out-of-pocket expenses (including outside legal fees)
incurred in connection with any such investigation, litigation or other
proceeding; and expressly including any such losses, liabilities,
claims, damages, or expenses incurred by reason of negligence by such
person seeking indemnification, but excluding any such losses,
liabilities, claims, damages, or expenses incurred by reason of the
gross negligence or willful misconduct of the person seeking
indemnification. To the extent that the undertaking to indemnify, pay
or hold harmless the person seeking indemnification as set forth in the
preceding sentence may be unenforceable because it is violative of any
law or public policy, you agree to make the maximum contribution to the
payment and satisfaction of each of the indemnified liabilities which
is permissible under applicable law.
18. THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
19. You and we each hereby irrevocably waive all right to trial
by jury in any action, proceeding or counterclaim (whether based upon
contract, tort or otherwise) arising out of or relating to this letter
or the Note.
20. As long as you shall have any Advances outstanding, you agree
that you will maintain an unutilized aggregate amount equal to the
amount of all outstanding Advances under (a) the Five-Year Credit
Agreement and (b) any successor or replacement facilities with
financial institutions; PROVIDED that, the commitments relied upon for
determining such availability must remain effective through a date that
is later than January 31, 2000.
If the terms of this letter are satisfactory to you, please
indicate your agreement and acceptance thereof by signing a counterpart
of this letter and returning it to us.
Very truly yours,
SOCIETE GENERALE
By: /S/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Director
Agreed and Accepted:
GLOBAL MARINE INC.
By: /s/ X. Xxxx Xxxxx
Name: X. Xxxx Xxxxx
Title: Senior Vice President,
Chief Financial Officer
and Treasurer
SCHEDULE I
to Letter Agreement
dated as of June 4, 1999
between SOCIETE GENERALE and GLOBAL MARINE INC.
(i) For the purpose of Sections 1 and 2 of this Letter Agreement:
The "Facility Amount" is $50,000,000.
The "Minimum Advance Amount" is $3,000,000.
The "Maximum Term" is 70 days.
(ii) For the purpose of Section 11 of this Letter Agreement:
The address for written communications to you is:
Global Marine Inc.
000 X. Xxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000-4493
Attention: X. Xxxx Xxxxx
Telephone: 000-000-0000
Fax: 000-000-0000
The address for written communications to us is:
Societe Generale
0000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxx Xxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
(iii)For purposes of this Letter Agreement, instructions for wire
transfer of funds to the Borrower are:
Name of Bank: First Union National Bank - Charlotte, NC
Bank ABA Number: 053 000 219
Borrower Number: 2-000-000-372-037
Reference: Global Marine Inc.
EXHIBIT A
TO THE LETTER AGREEMENT
PROMISSORY NOTE
New York, New York
$ [Date]
FOR VALUE RECEIVED, the undersigned, GLOBAL MARINE INC., a
Delaware company ("BORROWER"), unconditionally promises to pay to
the order of SOCIETE GENERALE (the "Bank") the unpaid principal
amount of each advance made by the Bank to the Borrower, on the
maturity date of such advance as recorded on the grid attached
hereto and made a part hereof; provided that the aggregate
principal amount of all advances at any one time outstanding shall
not exceed [Amount in Words] United States Dollars (US $[ ]).
The Borrower further promises to pay interest (computed for
the actual number of days elapsed on the basis of a year of 360
days) on the principal amount of each advance made hereunder,
commencing on the date hereof until the maturity date of such
advance (as indicated on the grid), at a rate per annum equal to
such percent as is indicated on the grid in excess of the rate
(the "Eurodollar Rate") quoted to the Bank in an off-shore
interbank dollar market selected by the Bank for deposits in U.S.
Dollars in an amount similar to the principal amount of such
advance for a period commencing on the date of the making of such
advance and ending on the maturity date of such advance (the
"Interest Period"). Interest shall be payable on the last day of
an Interest Period, on any date on which the advance or this
promissory note is prepaid and on the due date for the payment of
principal (whether the stated maturity date of such advance, upon
acceleration or otherwise). The Borrower agrees that in the event
that any principal amount of such advance is not paid on the date
when due (whether the stated maturity date of such advance, upon
acceleration or otherwise), the Borrower shall pay interest
thereon on demand at a rate equal to 2 percent per annum above the
Federal Funds Rate as in effect from time to time, which interest
rate shall change when and as the Federal Funds Rate changes.
"Federal Funds Rate" means the rate for overnight Federal Funds,
as published by the Federal Reserve Bank of New York.
The Borrower may prepay the outstanding principal amount of
any advance in whole or in part at any time, without premium or
penalty upon not less than two Business Days notice to the Bank.
Any such prepayment shall be accompanied by accrued but unpaid
interest on the principal amount so prepaid. In the event that the
Borrower makes any repayment or prepayment in respect of any
advance other than on the last day of an Interest Period, the
Borrower shall forthwith pay to the Bank such additional amount as
shall be necessary to compensate the Bank for any actual out-of-
pocket loss or expense sustained or incurred by reason of the
liquidation of reemployment of deposits or other funds acquired by
the Bank in order to fund the amount of such advance which is then
being repaid or prepaid. The Borrower shall pay all such costs,
losses and expenses upon the delivery to it by the Bank of a
certificate setting forth such reasonable additional amounts. Such
certificate shall include all calculations used to determine such
additional amounts and shall be binding on the Borrower and the
Bank absent demonstrable error.
In the event that any change in any applicable law or
regulation or in the interpretation thereof by any governmental
authority shall make it unlawful for the Bank to make or maintain
any advance evidenced by this promissory note, the Borrower shall,
upon notice to such effect from the Bank, repay to the Bank within
30 days the aggregate unpaid principal amount of such advance,
together with accrued and unpaid interest thereon. The Borrower
shall also pay to the Bank all reasonable costs incurred by the
Bank in connection with such prepayment and compensate the Bank
for any actual out-of-pocket loss suffered by the Bank by reason
of such prepayment's not being made on the last day of an Interest
Period.
If any reserve, special deposit or similar requirement shall
be imposed against any assets of the Bank, any deposits with the
Bank or for the Bank's account, or any credit extended by the
Bank, or the Bank shall be subject to any tax, duty or other
charge (excluding taxes payable on income or gross receipts), in
each case, resulting from any advance evidenced by this promissory
note, then at the Bank's reasonable discretion the interest rate
applicable to such advance shall be subject to upward adjustment
to compensate the Bank for the cost (as reasonably determined by
the Bank) of complying with the foregoing. In the event of such
adjustment, the Borrower shall have the right to prepay the unpaid
principal amount of such advance, together with accrued and unpaid
interest thereon. The Borrower shall pay to the Bank all
reasonable costs incurred in connection with such prepayment and
compensate the Bank for any loss suffered by reason of such
prepayment's not being made on the last day of an Interest Period.
Xxxx agrees to request compensation within 180 days of incurring
any amounts described in the two foregoing paragraphs or agrees to
waive its rights to compensation.
All payments of principal of and interest payable under this
promissory note shall be made by the Borrower not later than 12:00
noon (New York time) on the date when due to the Bank at its
office located on the date hereof at 0000 Xxxxxx xx xxx Xxxxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 in lawful money of the United States of
America, in immediately available funds without setoff, deduction
or counterclaim and free and clear of any present or future taxes,
levies, imposts, duties, fees, assessments or other charges
(excluding taxes payable on income or gross receipts). If any day
on which a payment is due hereunder is not a business day, which
for purposes of this promissory note shall mean a day other than
Saturday or Sunday or other than a day on which commercial banks
in New York City are authorized or required to close, then such
payment shall be due on the following business day and such
additional time shall be included in the calculation of interest.
The Borrower agrees to pay reasonable costs of collection
(including reasonable legal fees and disbursements of counsel) if
default is made in the payment of the principal of or interest on
this promissory note.
The Borrower hereby irrevocably submits to the non-exclusive
jurisdiction of any United States Federal or New York State court
sitting in New York City in any action or proceeding arising out
of or relating to this promissory note, and hereby consents that
personal jurisdiction over the Borrower may be obtained by mailing
a summons to the Borrower by registered mail or certified mail,
return receipt requested, within or without such court's
jurisdiction, or by personal service, provided a reasonable time
for appearance is allowed. The Borrower hereby waives all
objections as to venue, inconvenient forum and the like. The
Borrower hereby waives trial by jury in any legal proceeding
arising out of or relating to this promissory note.
Presentment, demand, protest and notices of any kind with
respect to this promissory note are hereby expressly waived by the
Borrower.
The Promissory Note is the "grid" promissory note referred to
in, and is entitled to the benefits of the Letter Agreement dated
June 4, 1999 (as amended from time to time, the "Letter
Agreement"), between Borrower and the Bank, which Letter
Agreement, among other things, sets forth procedures to be used in
connection with the Borrower's periodic requests that the Bank
make advances to it.
This promissory note shall be governed by and construed in
accordance with the laws of the State of New York.
GLOBAL MARINE INC.
By:
Name:
Title:
GRID
Amount Maturity Interest Rate
Date of of of of Notation Made
Advance Advance Advance Advance By
EXHIBIT B
TO LETTER AGREEMENT
For the purpose of Section 2 of this Letter Agreement, the
"DESIGNATED PERSONS" are:
NAME TITLE
X. Xxxx Xxxxx Senior Vice President, Chief Financial Officer
and Treasurer
Xxxxxxx X. Xxxxxxxxxxxx Assistant Treasurer
Xxxxxx X. Xxxxxxx Vice President and Corporate Controller
Xxxxx XxXxxxxxxx Senior Vice President and General Counsel
