{"id":43440,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/letter-agreement-re-proposed-equity-investments-global.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"letter-agreement-re-proposed-equity-investments-global","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/letter-agreement-re-proposed-equity-investments-global.html","title":{"rendered":"Letter Agreement re: Proposed Equity Investments &#8211; Global Crossing Ltd., Hutchison Whampoa Ltd. and Singapore Technologies Telemedia Pte Ltd."},"content":{"rendered":"<pre>\n                                                              January 28, 2002\n\n\nGlobal Crossing Ltd.\nSeven Giralda Farms\nMadison, NJ 07940 \nU.S.A.\n\nAttention: John J. Legere, Chief Executive Officer\n\nDear Mr. Legere:\n\n         This letter agreement sets forth our understanding concerning proposed\nequity investments by Hutchison Whampoa Limited (\"HWL\") and Singapore \nTechnologies Telemedia Pte Ltd. (\"STT\") or their designees, respectively, in \nGlobal Crossing Ltd. (\"GCL\") pursuant to a plan of reorganization under\nchapter 11, title 11 of the United States Code and related proceedings in other\njurisdictions (the \"Plan\") involving the restructuring of the debt and equity \nof GCL and its subsidiaries other than Asia Global Crossing Ltd. (the \n\"Transaction\"). This letter agreement is not intended to be a solicitation of \nany acceptance of the Plan. Any such solicitation shall be sought in accordance\nwith applicable law and as contemplated by the attached Annex A.\n\n         In consideration of the mutual agreements and understandings\nset forth herein, the parties hereto hereby agree as follows:\n\n         1.    Transaction; Buyer Protection Order; Expense Reimbursement.\n\n         (i)   GCL, HWL and STT hereby confirm their mutual intention to\ncontinue to pursue the Transaction as contemplated by and subject to the terms\nand conditions set forth in Annex A.\n\n         (ii)  The provisions of Section 1 of the Exclusivity Letter dated\nJanuary 21, 2002 among the parties (the \"Exclusivity Letter\") shall continue\nuntil the commencement by GCL of a case under Chapter 11 of the United States\nCode, notwithstanding the provisions of Section 2 of the Exclusivity Letter.\n\n         (iii) Each of the parties agrees to be bound by the provisions set\nforth under the headings \"Expenses\", \"Buyer Protection Order\" and \"Governing\nLaw\" contained in Annex A.\n\n         (iv)  Upon the date of this letter agreement and simultaneously with\nthe execution hereof, GCL shall pay or procure payment of US$1,900,000 to HWL\nand US$1,900,000 to STT, by wire transfer to bank accounts designated by HWL\nand STT, respectively, in reimbursement of actual fees and expenses reasonably\nincurred by them, their \n\n\n\n                                                                             2\n\n\nrespective financial advisors, accountants and legal counsel in respect of\ntheir work on the Transaction to date as contemplated by the provisions set\nforth under the heading \"Expenses\" contained in Annex A. This letter agreement\nshall become effective upon receipt by HWL and STT of the sums set forth\nabove.\n\n         2.    Representations and Warranties. Each party represents and\nwarrants, severally and not jointly, to the other parties that (i) such party\nhas the full power and authority to enter into, execute and deliver this letter\nagreement and perform the obligations contained herein; (ii) the execution and\ndelivery by such party of this letter agreement and the performance by such\nparty of its obligations contemplated in this letter agreement have been duly\nauthorized by all necessary corporate or other action of such party; and (iii)\nthe execution, delivery and performance of this letter agreement by such party\nwill not conflict with or result in any material breach or violation of any of\nthe terms and conditions of, or constitute (with notice or lapse of time or\nboth) a default under, any instrument, contract or other agreement to which\nsuch party is a party or by which such party is bound.\n\n         3.    Confidentiality. The parties agree to be bound by the \nconfidentiality terms set forth in Annex A. If and to the extent that the \nconfidentiality terms set forth in Annex A expressly contravene the provisions \nof the Non-Disclosure Agreements previously executed by HWL and GCL or STT \nand GCL, as the case may be, the provisions contained in Annex A shall govern.\n\n         4.    Conditions.  Except as set forth in clauses (ii) to (iv) of \nparagraph 1 above, any obligations of the parties regarding the Transaction\nshall be subject to the conditions set forth in Annex A, including without\nlimitation the negotiation and execution of definitive documentation concerning\nthe Transaction.\n\n         5.    Miscellaneous.  The terms set forth in this letter agreement\nand Annex A are a part of a comprehensive agreement, each element of which is \nan integral aspect of the Transaction and, as such, are non-severable.\n\n         6.    Governing Law. This letter agreement shall be governed by and\nconstrued in accordance with the internal laws of the State of New York and\nany applicable provision of the Bankruptcy Code, without regard to the \nprinciples of conflict of laws that would provide for application of another \nlaw.\n\n         7.    Concerning Remedies.  Each of the parties acknowledges and\nagrees that no failure or delay in exercising any right, power or privilege \nhereunder will operate as a waiver thereof, nor will any single or partial \nexercise thereof preclude any other right, power or privilege hereunder.\n\n         8.    Entire Agreement; Amendments; Counterparts. This letter \nagreement, Annex A, the Exclusivity Letter, the Non-Disclosure Agreement dated \nas of June 25, 2001 between HWL and GCL, as amended, and the Non-Disclosure\nAgreement dated August 23, 2001, as amended, between STT and GCL set forth the \nentire agreement among GCL on the one hand, and HWL or STT or both, on the \nother hand, with respect to the subject matter hereof. This letter agreement \nmay be amended only by the express written consent of each of the parties. \n\n\n\n                                                                             3\n\n\nThis letter agreement may be executed in counterparts, each of which when taken\ntogether shall constitute an original of this letter agreement. Each of the \nparties agrees and acknowledges that this letter agreement does not contain \nall matters upon which agreement must be reached in order for the Transaction\nto be consummated.\n\n         9.    Third Party Beneficiaries. Except as specifically set forth or\nreferred to in this letter agreement, nothing herein is intended or shall be \nconstrued to confer upon any person or entity other than the parties hereto\nand their successors and assigns, any rights or remedies under or by reason of\nthis letter agreement.\n\n         10.   Notices. All notices, other communications or documents provided\nfor or permitted to be given hereunder shall be made in writing and shall be\ngiven either personally by hand-delivery, by facsimile transmission, by mailing\nthe same in a sealed envelope, registered first-class mail, postage prepaid,\nreturn receipt requested, or by reputable courier guaranteeing overnight\ndelivery:\n\n               (a)      if to GCL, to\n\n                        Global Crossing Ltd.\n                        Seven Giralda Farms\n                        Madison, NJ  07940\n                        U.S.A.\n                        Attention: Company Secretary\n                        Fax: (1 973) 410-8583\n\n               (b)      if to HWL, to:\n\n                        Hutchison Whampoa Limited\n                        22nd Floor\n                        Hutchison House\n                        10 Harcourt Road, Central\n                        Hong Kong\n                        Attention: The Company Secretary\n                        Fax: (852) 2128-1778\n\n               (c)      if to STT, to:\n\n                        Singapore Technologies Telemedia Pte Ltd.\n                        51 Cuppage Road\n                        #10-11\/17, StarHub Centre\n                        Singapore 229469\n                        Attention: Vice President, Legal\n                        Fax: (65) 720-7277\n\nEach party, by written notice given to each other in accordance with this\nparagraph 11 may change the address to which notices, other communications or\ndocuments are to be sent to such party. All notices, other communications or\ndocuments shall be deemed to have been duly given: (i) at the time delivered\nby hand, if personally delivered; (ii) when receipt is acknowledged\n\n\n\n                                                                             4\n\n\norally by addressee or by machine confirmation of transmission, if by facsimile\ntransmission; (iii) five business days after having been deposited in the\nmail, postage prepaid, if mailed by first class air mail; and (iv) on the\nfirst business day with respect to which a reputable air courier guarantees\ndelivery; provided, however, that notices of a change of address shall be\neffective only upon receipt.\n\n         If this letter agreement correctly sets forth our understanding, \nplease so acknowledge by signing below and returning a signed copy of the \nletter agreement to HWL at +852-2128-1778 and to STT at +65-720-7277.\n\n\n\n                                         Very truly yours,\n\n\n                                         HUTCHISON WHAMPOA LIMITED\n\n\n                                         By:  \/s\/  Susan Chow\n                                              -----------------------------\n                                              Name:  Susan Chow\n                                              Title: Deputy Group Managing \n                                                       Director\n\n\n                                         SINGAPORE TECHNOLOGIES TELEMEDIA\n                                           PTE LTD.\n\n\n                                         By:  \/s\/ Lee Theng Kiat\n                                              -----------------------------\n                                              Name:   Lee Theng Kiat\n                                              Title:  President and Chief \n                                                        Executive Officer\n\n\n                                         Accepted and Agreed to as of the \n                                           date set forth above:\n\n\n                                         GLOBAL CROSSING LTD\n\n\n                                         By:  \/s\/ John J. Legere\n                                              -----------------------------\n                                              Name:   John J. Legere\n                                              Title:  Chief Executive Officer\n\n\n\n\n\n                                                                CONFIDENTIAL\n\n\n                               SUMMARY OF TERMS\n\n\nCompany             Global Crossing Ltd. (\"GCL\")(all references to GCL refer\n                    to GCL on a consolidated basis, including all shares of\n                    Asia Global Crossing Ltd. (\"AGC\") held by GCL but\n                    excluding the operations, assets and liabilities of AGC\n                    and its subsidiaries).\n\nNew Investors       Hutchison Whampoa Ltd. (\"HWL\") and Singapore Technologies\n                    Telemedia Pte Ltd (\"STT\") and such other entities as HWL\n                    and STT may designate in accordance with the provisions\n                    set forth under the heading \"New Investors Designations\n                    and Determinations\".\n\nForm of Investment  A combination of newly issued GCL common shares and\n                    convertible preferred stock (\"Senior Convertible Preferred\n                    Stock\"), such that the New Investors shall own 79% of the\n                    equity of GCL pro forma for the GCL Restructuring (as\n                    defined below), assuming conversion of the Senior\n                    Convertible Preferred Stock but subject to pro rata\n                    dilution for the exercise of all options authorized under\n                    the Management Plan (as defined below under \"GCL\n                    Restructuring\") as of the closing date of the GCL\n                    Restructuring (the \"Closing Date\").\n\nAggregate\n Investment Amount  US$750 million in cash. See \"GCL Restructuring\" below for\n                    other terms.\n\nUse of Proceeds     Proceeds from the transaction will be utilized by GCL to\n                    fund its business on an ongoing basis and the GCL\n                    Restructuring.\n\nTerms of Senior Convertible Preferred Stock\n-------------------------------------------\n\nDividends           8.0% cumulative, payable at GCL's option either in cash\n                    and\/or in kind. Cash payments may be accrued if required\n                    by New Exit Financing covenants.\n\nRanking             The Senior Convertible Preferred Stock will rank senior to\n                    all other capital stock of GCL.\n\nConversion          The Senior Convertible Preferred Stock may be converted,\n                    in whole or in part, at the option of the holder at any\n                    time and from time to time, into such number of common\n                    shares as will result in ownership by the New Investors,\n                    when combined with the New Investors' purchase of shares\n                    hereunder, of 79% of the equity of GCL as of the Closing\n                    Date (assuming conversion of the Senior Convertible\n                    Preferred Stock but subject to pro rata dilution for the\n                    exercise of all options authorized under the Management\n                    Plan as of the Closing Date). The conversion price of the\n                    Senior Convertible Preferred Stock will be subject to\n                    customary anti-dilution adjustments.\n\nOptional \nRedemption          None\n\n\n\n\n\nOptional Change \nof Control \nRedemption          None\n\nChange in Control   If GCL becomes subject to a change of control, each holder\nPut                 of the Senior Convertible Preferred Stock will have the\n                    right to require GCL to purchase all or a part of such\n                    securities at 101% of the liquidation preference of an\n                    amount to be agreed, plus any accrued and unpaid dividends\n                    to the date of repurchase.\n\nVoting Rights       The Senior Convertible Preferred Stock will vote on an\n                    as-converted basis with the common stock.\n\n                    The holders of the Senior Convertible Preferred Stock will\n                    have a class voting right with respect to any amendment to\n                    the terms of the Senior Convertible Preferred Stock.\n\n                    So long as a New Investor beneficially owns a specified\n                    minimum percentage (to be agreed) of GCL's outstanding\n                    common shares (for the avoidance of doubt the common\n                    shares issuable upon conversion of any shares of Senior\n                    Convertible Preferred Stock owned by such New Investor\n                    shall be deemed for this purpose only to be beneficially\n                    owned by such New Investor), the approval of such New\n                    Investor holding Senior Convertible Preferred Stock shall\n                    be required for certain major corporate actions of GCL or\n                    actions of GCL in respect of major corporate actions of\n                    AGC, including any of the following: (i) appointing or\n                    replacing GCL's chief executive officer; (ii) any material\n                    acquisitions or dispositions; (iii) any mergers,\n                    consolidations or reorganizations; (iv) any issuances of\n                    equity securities (other than enumerated exceptions); (v)\n                    incurrence of indebtedness in excess of specified amounts;\n                    (vi) capital expenditures in excess of specified amounts;\n                    (vii) commencement of bankruptcy or other insolvency\n                    proceedings; and (viii) certain affiliate transactions.\n\nOther Terms of Investment\n-------------------------\n\nTransferability     No contractual restrictions on the transferability of the\n                    common shares or Senior Convertible Preferred Stock.\n\nBoard \nRepresentation      GCL's board of directors (the \"Board\") shall be\n                    restructured to include no more than 10 members. The New\n                    Investors shall designate at least 8 members of the Board,\n                    including the Chairman. The New Investors' designees shall\n                    be appointed Chairman of each of the Executive Committee,\n                    Nominating Committee, Compensation Committee and Audit\n                    Committee, subject to applicable stock exchange\n                    regulations.\n\nNew Investors'\nConditions to \nClosing             The several obligations of each New Investor to complete\n                    the transaction contemplated hereby will be subject to the\n                    fulfillment to the satisfaction, in the reasonable\n                    judgment of such New Investor, of conditions customary for\n                    transactions of this nature and other agreed conditions,\n                    including: (i) the concurrent completion of the GCL\n                    Restructuring (excluding clauses (vii) and (viii)\n                    thereof); (ii) financial status and business prospects of\n                    AGC,\n\n                                      2\n\n\n\n\n                    including status with respect to a restructuring of the\n                    debt of AGC and its subsidiaries if deemed necessary by\n                    the New Investors, to be cceptable to the New Investors;\n                    (iii) approvals shall have been obtained from all U.S. and\n                    non-U.S. government entities, including the U.S. Federal\n                    Communications Commission, the U.S. Department of Justice\n                    and the U.S. Federal Trade Commission (or applicable\n                    waiting periods shall have expired); (iv) the absence of\n                    any material adverse change in the business, prospects,\n                    properties, assets, liabilities, operations or conditions\n                    (financial or otherwise) of GCL from and after a date to\n                    be specified in the Purchase Agreement, other than as\n                    previously disclosed to and accepted by the New Investors\n                    as of the date the Purchase Agreement is executed; (v) to\n                    the extent the New Investors determine it is necessary,\n                    the amendment of any applicable \"change of control\"\n                    provisions in any agreements or arrangements of GCL which\n                    would otherwise be triggered by this transaction; (vi) as\n                    of the last day of each of GCL's first three fiscal\n                    quarters of 2002, GCL shall have satisfied the minimum\n                    Service Revenues and Service EBITDA performance targets\n                    set forth on Schedule 1 for such quarter and as of the\n                    last day of GCL's 2002 third quarter, GCL shall have (A)\n                    satisfied the minimum cumulative IRU revenue performance\n                    target set forth on Schedule 1 for such 9 month period and\n                    (B) not exceeded the maximum cumulative Cash Capital\n                    Expenditure performance target (as adjusted) set forth on\n                    Schedule 1 for such 9 month period; (vii) management\n                    employment arrangements on terms satisfactory to the New\n                    Investors, including equity-based compensation and\n                    retention packages, to be structured and agreed with key\n                    management personnel consistent with the Management Plan\n                    (defined herein); (viii) the requisite amendment of\n                    certain contracts of GCL and its affiliates (to be\n                    identified by the New Investors to GCL as of the date of\n                    the Purchase Agreement) to eliminate the application of\n                    the non-compete provisions therein to the New Investors\n                    and their affiliates to the satisfaction of the New\n                    Investors; (ix) GCL having complied with all covenants and\n                    conditions set forth in the documentation relating to the\n                    DIP Financing (as defined below), except to the extent\n                    noncompliance with respect thereto is either cured by GCL\n                    or waived by the DIP lender(s); (x) GCL having taken all\n                    such action as may be necessary or appropriate to\n                    facilitate the listing of the new equity issued in\n                    connection with the GCL Restructuring on a US national\n                    stock exchange promptly after the Closing Date provided\n                    that this condition shall be deemed satisfied if a listing\n                    cannot be effected because the New Investors do not\n                    consent to any modification to any of the terms set forth\n                    herein needed to effect such listing; (xi) GCL having made\n                    each of the filings with respect to the GCL Restructuring\n                    specified in Schedule 2 hereto in accordance with the\n                    timetable set forth therein (the \"Restructuring\n                    Timetable\") and the events specified in Schedule 2 hereto\n                    having occurred substantially in accordance with the\n                    Restructuring Timetable and (xii) GCL having complied with\n                    all other applicable pre-closing covenants and customary\n                    representations and warranties.\n\nGCL's Conditions    The obligation of GCL to complete the transaction \n to Closing         contemplated hereby will be subject to the fulfillment to \n                    the satisfaction, in the \n\n                                      3\n\n\n\n\n                    reasonable judgment of GCL, of conditions customary for\n                    transactions of this nature and other agreed conditions,\n                    including the New Investors having complied with all\n                    applicable pre-closing covenants and customary\n                    representations and warranties.\n\nGCL Restructuring   GCL shall conduct a restructuring and recapitalization\n                    through a Chapter 11 plan of reorganization and such\n                    concurrent proceedings under the laws of jurisdictions\n                    outside the United States as may be necessary to give full\n                    effect to such restructuring and recapitalization\n                    (collectively, the \"GCL Restructuring\"). The terms of the\n                    GCL Restructuring must be acceptable to the New Investors,\n                    including:\n\n                    (i)    US$800 million in new debt securities to be\n                           distributed to existing GCL creditors;\n\n                    (ii)   21% of the share capital of GCL (assuming\n                           conversion of the Senior Convertible Preferred Stock\n                           but subject to pro rata dilution for the exercise of\n                           all options authorized under the Management Plan as \n                           of the Closing Date) to be distributed to existing \n                           GCL creditors;\n\n                    (iii)  US$300 million in cash to be distributed to existing\n                           GCL creditors;\n\n                    (iv)   All of GCL's existing bank debt, bond debt and\n                           claims relating to entities having filed for\n                           bankruptcy protection to be eliminated in exchange \n                           for the consideration set forth above;\n\n                    (v)    New Exit Financing (as described below) to be\n                           arranged by GCL;\n\n                    (vi)   Elimination of all existing preferred and common\n                           shares and other equity interests;\n\n                    (vii)  HWL to surrender its existing convertible preferred\n                           and invest new cash of US$375 million in exchange \n                           for a combination of new Senior Convertible\n                           Preferred Stock and common shares as described in \n                           the heading \"Form of Investment\";\n\n                    (viii) STT to invest new cash of US$375 million to\n                           subscribe for a combination of new Senior\n                           Convertible Preferred Stock and common shares as \n                           described in the heading \"Form of Investment\";\n\n                    (ix)   Net working capital of GCL (cash plus receivables\n                           minus payables) of at least US$1.0 billion,\n                           including a minimum cash balance of GCL of at least\n                           US$700 million as of September 30, 2002, as\n                           reflected in a pro forma balance sheet giving effect \n                           to the GCL Restructuring as of such date to be \n                           agreed (the \"Pro Forma Balance Sheet\"), subject to \n                           adjustments to be agreed upon if the Closing Date \n                           occurs before or after September 30, 2002;\n\n                    (x)    Post-restructuring liabilities of GCL, including\n                           taxes, not to exceed a cap to be specified in the \n                           Pro Forma Balance Sheet, subject to adjustments to\n                           be agreed upon if the\n\n                                      4\n\n\n\n                           Closing Date occurs before or after September 30,\n                           2002; and\n\n                   (xi)    Establishment of a new GCL compensation plan (the\n                           \"Management Plan\") providing for equity-based\n                           compensation to management of GCL in an amount of \n                           up to 10% of the fully diluted common equity of GCL \n                           as of the Closing Date. At the Closing Date, an \n                           allocation shall be made under the Management Plan \n                           of a target level of 5% of the common equity as of \n                           such date at an exercise price equal to the per \n                           share buy-in price of the New Investors on the\n                           Closing Date and with a vesting schedule to be \n                           determined at the time of the grant.\n\nNew Exit \n Financing          New debt financing in an amount of not less than US$350\n                    million to be arranged by GCL on terms acceptable to the\n                    New Investors.\n\nAmendments \nto Bye-Laws         Reorganized GCL's Bye-Laws shall be amended in a manner\n                    acceptable to the New Investors, including amendments to:\n\n                    (i)   The voting and transfer provisions;\n\n                    (ii)  Provide for the rights set forth herein under Right\n                          of First Offer and under Board Representation; and\n\n                    (iii) Confer on the New Investors rights consistent with\n                          those contemplated hereby.\n\nPre-closing \n Covenants          GCL shall (i) continue to operate its business in the\n                    ordinary course prior to the closing, (ii) make\n                    information available to the New Investors, (iii) give the\n                    New Investors reasonable access to GCL's management\n                    personnel and premises and periodically update the New\n                    Investors on material business developments and (iv)\n                    consult with the New Investors on all matters outside of\n                    the ordinary course of business related to its business,\n                    strategy, financing and restructuring prior to closing,\n                    including without limitation matters relating to the\n                    restructuring of AGC.\n\n                    GCL shall provide the New Investors with advance copies of\n                    all material pleadings to be filed in the Chapter 11 cases\n                    and related legal proceedings to the extent intended to\n                    effectuate the Restructuring Timetable, which pleadings\n                    shall be reasonably acceptable to New Investors.\n\n                    Each of GCL and the New Investors shall cooperate with the\n                    other parties hereto and take all actions and make all\n                    filings necessary to obtain the consent, approval or\n                    authorization of all U.S. and non-U.S. government entities\n                    necessary or appropriate in connection with the GCL\n                    Restructuring and with the investments in GCL of the\n                    respective New Investors. In addition, the Purchase\n                    Agreement shall provide that each of GCL and the New\n                    Investors shall covenant and agree to use their respective\n                    reasonable efforts to consummate and make effective the\n                    transactions contemplated hereby (including satisfying any\n                    conditions to closing which are its responsibility).\n\n                                      5\n\n\n\n                    After the entry of the Buyer Protection Order, the New\n                    Investors will seek and promptly apply for all applicable\n                    regulatory approvals (other than such regulatory approvals\n                    which are not legally feasible to pursue prior to the\n                    execution of binding documentation).\n\nRegistration                             \n Rights              Customary registration rights with respect to all common\n                    shares owned by the New Investors in reorganized GCL,\n                    including common shares acquired in this transaction and\n                    issued upon conversion of the Senior Convertible Preferred\n                    Stock.\n\nRight of First \n Offer              Subject to certain exceptions to be agreed, the New\n                    Investors will have a right to invest pro rata in\n                    post-restructuring equity securities offerings of\n                    Reorganized GCL, whether or not for cash.\n\nConditions to \nSigning Definitive         \nDocumentation       Signing of the definitive documentation will be subject to\n                    (i) negotiation of definitive documentation acceptable to\n                    GCL and the New Investors, (ii) compliance by GCL and the\n                    New Investors with all the pre-closing covenants and\n                    conditions set forth herein (as if all such covenants and\n                    conditions were binding on GCL), (iii) the terms of the\n                    GCL Restructuring to be supported by the agents for the\n                    banks and the statutory creditors committee by no later\n                    than the Auction date (as referenced in Schedule 2); (iv)\n                    availability of debtor-in-possession financing for GCL of\n                    no less than US$150 million on terms satisfactory to New\n                    Investors (the \"DIP Financing\"); (v) satisfaction of the\n                    New Investors with respect to the status of AGC and the\n                    status of any AGC restructuring; and (vi) the completion\n                    of due diligence satisfactory to the New Investors.\n\nDocumentation       Documentation to be entered into between GCL and the New\n                    Investors will include a Purchase Agreement containing\n                    representations, warranties, covenants and closing\n                    conditions acceptable to the parties. Attached as exhibits\n                    to the Purchase Agreement will be an agreed upon form of\n                    the following documents: (i) new Bye-laws, (ii) a\n                    Registration Rights Agreement and (iii) a certificate of\n                    designations relating to the Senior Convertible Preferred\n                    Stock. The definitive documentation shall provide that all\n                    decisions, approvals or designations of a party hereto may\n                    be made (or withheld) in the sole and absolute discretion\n                    of such party, except to the extent that another standard\n                    expressly governs.\n\nBack-End Date       If the Closing Date does not occur by September 30, 2002,\n                    the New Investors and GCL shall each have the discretion\n                    to terminate the transaction provided that if, on such\n                    date, the only unsatisfied condition to closing is\n                    obtaining a requisite regulatory approval, such date shall\n                    be extended to December 31, 2002.\n\nExpenses            GCL shall reimburse the New Investors for all their\n                    actual, reasonable, documented out-of-pocket costs and\n                    expenses (including, without limitation, the fees and\n                    expenses of counsel, advisors and accountants) incurred in\n                    connection with the transaction contemplated hereby (i) up\n                    to an aggregate maximum amount of US$3.8 million\n                    immediately upon the execution of the \n\n\n                                      6\n\n\n\n                    letter of intent relating to this Term Sheet and (ii)\n                    until termination of the contemplated transaction, those\n                    additional reasonable, actual, documented, out of pocket\n                    costs and expenses (excluding any success fees) payable as\n                    follows: GCL shall pay the monthly retainer payments of\n                    Goldman Sachs &amp; Co. and Merrill Lynch (Singapore) Pte.\n                    Ltd. in the amounts of US$150,000 and US$150,000,\n                    respectively. In addition, each month, the attorneys and\n                    accountants of the New Investors shall submit fee\n                    statements to GCL, counsel for the agents for the banks,\n                    The Office of the United States Trustee and counsel to any\n                    statutory creditors committee. If GCL receives no\n                    objection within 10 business days of receipt of such fee\n                    statement, GCL shall pay the invoiced fees and expenses.\n                    If an objection is so received, GCL shall only pay the\n                    undisputed amount pending court resolution of such\n                    dispute. The total costs and expenses payable pursuant to\n                    such clause (ii) shall not exceed US$10 million in the\n                    aggregate. In addition, it is contemplated that as part of\n                    the GCL Restructuring success fees would be payable by\n                    Reorganized GCL to advisors of HWL and STT on the Closing\n                    Date.\n\nBuyer Protection \nOrder               By the relevant date specified in Schedule 2, GCL shall\n                    file a motion in all applicable courts (including Bermuda\n                    if necessary) seeking an order (the \"Buyer Protection\n                    Order\") that will establish hearings and deadlines\n                    consistent with the Restructuring Timetable and approve\n                    (i) the expense reimbursement specified in clause (ii)\n                    under \"Expenses\" above, (ii) a break-up fee to the New\n                    Investors in an aggregate amount equal to US$40 million in\n                    the event that GCL accepts or approves, or a court\n                    approves or orders, any proposal (any such proposal, an\n                    \"Alternative Transaction\") that provides for one or more\n                    third parties (A) to acquire in one or a series of related\n                    transactions all or substantially all of the assets of GCL\n                    or (B) to make a comparable investment in GCL or sponsor\n                    or be an economic co-proponent of a plan of reorganization\n                    of GCL and (iii) the other binding provisions of this Term\n                    Sheet. The break-up fee will be payable when the\n                    Alternative Transaction closes provided that if an\n                    Alternative Transaction is approved by the court but\n                    ultimately does not close, the New Investors shall be\n                    entitled to a break-up fee in an aggregate amount equal to\n                    US$20 million, payable on the effective date of GCL's plan\n                    of reorganization. No break-up fee will be owed if either\n                    of the New Investors terminates the transaction for any\n                    reason (other than as a result of (i) an Alternative\n                    Transaction, (ii) GCL willfully fails to comply with the\n                    conditions to Closing for the purposes of delaying or\n                    precluding the closing of the transaction or (iii) such\n                    termination results from a failure to adhere to the\n                    Restructuring Timetable that is not attributable to the\n                    New Investors and an Alternative Transaction is approved\n                    by the court within 90 days of such missed deadline). A\n                    break-up fee payable under the circumstances described in\n                    clause (iii) immediately above shall only be payable out\n                    of the proceeds payable at closing of such Alternative\n                    Transaction.\n\nConfidentiality     Until the date on which GCL files a motion seeking\n                    approval of the Buyer Protection Order, GCL and the New\n                    Investors agree to keep this Term Sheet confidential\n                    pursuant to their previous\n\n                                      7\n\n\n\n                    confidentiality undertakings with respect to the potential\n                    transaction, provided that GCL may disclose this Term\n                    Sheet to its bank lenders, its bond\/note holders and any\n                    statutory creditors committee, and their respective\n                    advisors, provided such parties have agreed to keep this\n                    Term Sheet confidential, provided that GCL concurrently\n                    with such disclosure informs the New Investors of the\n                    identity of the person to whom this Term Sheet is being\n                    disclosed. Notwithstanding the foregoing, the New\n                    Investors and GCL may each issue a press release relating\n                    to this Term Sheet disclosing (i) the names of the New\n                    Investors and GCL, (ii) the aggregate US$750 million cash\n                    investment by the New Investors and (iii) such other items\n                    as may be mutually agreed by the parties.\n\nNew Investors \nDesignations and \nDeterminations      HWL and STT may designate other entities as New Investors\n                    provided that, notwithstanding such designation (i) HWL\n                    and STT acting directly or through one or more affiliates\n                    shall each invest an amount that exceeds the amount\n                    invested by any other New Investors and (ii) no entity\n                    shall be designated that adversely effects the timing of\n                    the Closing of the transaction or the ability to obtain\n                    regulatory approval for the consummation of the Closing.\n\n                    Notwithstanding anything to the contrary contained herein,\n                    (i) in each case where this Term Sheet or the definitive\n                    documents contemplated hereby provides for the New\n                    Investors to provide a decision or their approval,\n                    consent, waiver or judgment, such decision, approval,\n                    consent, waiver or judgment shall be solely provided by\n                    HWL and STT (and shall specifically exclude any of their\n                    permitted designees), (ii) the parties further acknowledge\n                    that HWL and STT shall negotiate and approve all\n                    definitive agreements contemplated hereby without the\n                    participation of any additional investor and (iii) if HWL\n                    or STT designates any other entity to participate in the\n                    transaction in accordance with the terms hereof, either\n                    (A) such entity shall be financially capable of performing\n                    its obligations to GCL under the definitive documents\n                    (including its obligations to fund its portion of the\n                    Investment Amount on the Closing Date), as reasonably\n                    determined by GCL, or (B) HWL or STT, as the case may be,\n                    shall remain obligated to perform any such obligations not\n                    performed by such designee.\n\nGoverning\nLaw                 This Term Sheet shall be governed by and construed in\n                    accordance with the laws of the State of New York.\n\nNon-binding Term \nSheet               This Term Sheet except for the provisions relating to\n                    Expenses, Buyer Protection Order, Confidentiality and\n                    Governing Law above (which provisions are intended and\n                    agreed to be fully binding), is intended as an indication\n                    of interest for discussion purposes only and is not\n                    intended to be and does not constitute a legally binding\n                    obligation of any party hereto. No person or entity shall\n                    rely upon anything in this Term Sheet and no person or\n                    entity shall have any right, benefit or remedy of any\n                    nature by reason of this Term Sheet.\n\n                                      8\n\n\n\n                                  Schedule 1\n                                  ----------\n\n                              Performance Targets\n                              -------------------\n\n                    (US$ millions) For Quarters ended 2002\n\n                      Q1           Q2           Q3         9 months\n                      --           --           --         --------\nMinimum\nService Revenue     $722         $677         $658\nService EBITDA      (105)         (68)         (49)\nCumulative IRU's                                            $65\n\n\n                      Q1           Q2           Q3         9 months\n                      --           --           --         --------\nMaximum                                                     $242(1)\nCumulative Cash\nCapEx\n\n\n\n---------------\n(1)   Plus increases for CapEx associated with Service Revenue and IRU Sales\n      that are incrementally higher than projected.\n\n                                      9\n\n\n\n\n\n                                  Schedule 2\n                                  ----------\n\n                            Restructuring Timetable\n                            -----------------------\n\n     Time                                                     \n  (Days after\ncommencement of \nChapter 11 cases)                          Action\n-----------------                          ------\n\n     +7                  Filing of motion seeking approval of Buyer Protection\n                         Order\n\n     +45                 Approval of Buyer Protection Order; Application(s) for\n                         regulatory approvals\n\n     +90                 Deadline for submission of qualified bids1\n\n     +110                Auction, if qualified bids submitted (\"Auction\")\n\n     +125                Filing of draft plan and disclosure statement\n\n     +160                Approval of draft disclosure statement, start of\n                         solicitation of votes on plan\n\n     +205                Confirmation of plan\n\n     +230                Effective date of plan (Closing Date), subject to \n                         receipt of any consent, approval or authorization of\n                         any government entity; closing of the new exit \n                         financing\n\n\n--------------\n1     \"Qualified bids\" to be defined as bids providing for (i) distributions\n      to creditors of no less value than the amounts described above in \n      the GCL Restructuring after taking into account any requisite payment of \n      a break-up fee to the New Investors as a result thereof plus a customary\n      bidding increment and (ii) a reasonable level of liquidity available\n      to Reorganized GCL on the Closing Date. If there are no qualified bids\n      submitted, the remaining timetable can be accelerated.\n\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7648],"corporate_contracts_industries":[9519],"corporate_contracts_types":[9622,9627],"class_list":["post-43440","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-global-crossing-ltd","corporate_contracts_industries-telecommunications__telephone","corporate_contracts_types-planning","corporate_contracts_types-planning__purchase"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43440","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43440"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43440"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43440"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43440"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}