EXHIBIT 10.3
REIMBURSEMENT AGREEMENT
July 26, 2001
Global Crossing Holdings Ltd.
Xxxxxx Xxxxx
00 Xxxx Xxxxxx
Xxxxxxxx XX00 Xxxxxxx
Ladies and Gentlemen:
Reference is made to the Irrevocable Letter of Credit in the amount of up to
$7,500,000 dated the date hereof (the "L/C") issued by The Chase Manhattan Bank
(in such capacity, the "L/C Bank") at the request of Global Crossing Holdings
Ltd. (the "Account Party") for the benefit of The Chase Manhattan Bank (in such
capacity, the "Creditor"). The L/C was issued to support certain credit
extensions and financial accommodations made by the Creditor to Xxxxxxxx Xxxx
under the Term Promissory Note dated the date hereof in the aggregate principal
amount of up to $7,500,000 (the "Underlying Obligations"). Xxxxxxxx Xxxx agrees
to use the proceeds of such extensions and accommodations to repay in full the
obligations of Lodwrick and Xxxxxx Xxxx (the "Cooks") to Xxxxxxx Xxxxx Barney
Inc. ("SSB") under their margin account with SSB. In consideration of the
procurement of the issuance of the L/C, the Cooks hereby agree, on the terms set
forth below, to reimburse the Account Party for the amount of any drawing on the
L/C and for all costs and expenses incurred by the Account Party in maintaining
the L/C.
The Account Party shall notify the undersigned promptly after any drawing on
the L/C. On or prior to July 12, 2002 (or such later date on which the L/C shall
be drawn upon), the Cooks shall reimburse the Account Party for any drawing on
the L/C, together with interest on such amount at a rate per annum equal to the
greater of (a) the rate then applicable to the Account Party's reimbursement
obligations related to the L/C or (b) the rate then applicable to the Underlying
Obligations. Such interest shall accrue for each day during the period starting
on the date of the drawing on the L/C (the "Drawing Date") and ending on the
date of reimbursement by the Cooks. In furtherance and not in limitation of the
foregoing, the undersigned agree that commencing on the Drawing Date the Account
Party shall be entitled to all rights of the Creditor under the agreements
relating to the Underlying (including any rights as pledgee under the Collateral
Agreement executed in favor of the Creditor) as though the Account Party were a
party to such agreements, subject to all rights retained by the Creditor. The
undersigned also agree to pay any and all reasonable expenses (including
attorneys' fees) incurred by the Account Party in connection with the
enforcement of its rights hereunder.
On or prior to July 5, 2002, the Underlying Obligations shall be repaid in
full. Until the L/C has been terminated and the undersigned have fully satisfied
all of their reimbursement obligations set forth herein, the undersigned shall
not sell or otherwise transfer any of their rights in the approximately
2,500,000 shares of Global Crossing Ltd. common stock pledged by the undersigned
in support of the Underlying Obligations; provided that the undersigned may
effectuate sale or hedging transactions at fair market value to the extent that
all of the net proceeds of any such transactions are used to indefeasibly repay
the Underlying Obligations.
The Cooks shall reimburse the Account Party for its costs and expenses of
maintaining the L/C. Payments covering such costs and expenses shall be made on
the dates and in the amounts applicable to the Account Party under the
agreements between the L/C Bank and the Account Party pursuant to which the L/C
was issued. The Account Party shall provide the Cooks with reasonable supporting
documentation
relating to each such payment.
The undersigned's obligations hereunder shall be absolute and unconditional
under all circumstances and irrespective of any setoff, counterclaim or defense
which the undersigned might otherwise have, including any defense based upon an
assertion that the L/C Bank should not have drawn down upon the L/C. The Account
Party's rights hereunder are in addition to, and not in limitation of, any
rights of subrogation the Account Party may have under applicable law.
THIS LETTER AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES
OF CONFLICTS OF LAW. THE UNDERSIGNED AND GLOBAL CROSSING HOLDINGS LTD. EACH
WAIVES THE RIGHT TO A JURY TRIAL OR COURT TRIAL. THE SOLE AND EXCLUSIVE METHOD
TO RESOLVE ANY CLAIM IS BINDING ARBITRATION UNDER THE RULES OF THE AMERICAN
ARBITRATION ASSOCIATION. The parties each waive his/her right to commence an
action in any court to resolve any claim arising out of or related to this
letter agreement, except for an action for injunctive relief pending resolution
of a claim through binding arbitration.
Yours truly,
/s/ Xxxxxxxx Xxxx
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Xxxxxxxx Xxxx
/s/ Xxxxxx Xxxx
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Xxxxxx Xxxx
THE XXXX FAMILY TRUST
By:
/s/ Xxxxxxxx Xxxx
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Xxxxxxxx Xxxx, Trustee
By:
/s/ Xxxxxx Xxxx
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Xxxxxx Xxxx, Trustee
ACCEPTED:
GLOBAL CROSSING HOLDINGS LTD.
By:
/s/ Xxx XxXxxx
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