[citibank(R) LETTERHEAD]
CITIBANK N.A.
730 Veterans Memorial Highway
Hauppauge, NY 11788
Tel 631 265 3055
Fax 631 265 4888
October 25, 2006
Globecomm Systems Inc.
45 Oser Avenue
Hauppauge, NY 11788
Re:
$25,000,000 borrowing base line of credit
$7,000,000 bridge line of credit
$10,000,000 foreign exchange line
Gentlemen or Ladies:
Citibank, N.A. ("Citibank") is pleased to advise you it holds
available for
Globecomm Systems Inc (the "Borrower"), a corporation organized and
in good
standing under the laws of the State of Delaware, (i) a borrowing
base line of
credit in the amount of $25,000,000 (the "Line"), (ii) a bridge
line of credit
in the amount of $7,000,000 (the "Bridge Line") and (iii) a foreign
exchange
line in the amount of $10,000,000 (the "F/X Line" together with the
Line and the
Bridge Line being collectively, the "Credit Facilities"), subject
to the
following terms and conditions:
1. Description of the Line:
The Line shall be fully available for standby letters of credit
(each,
an "SBLC" and collectively, the "SBLCs").
SBLCs shall be evidenced by Citibank's Letter of Credit Agreement.
There shall be payable in respect of each SBLC, a fee equal to: (i)
1% per annum
for SBLCs secured by collateral other than cash and (ii) 1/2% per
annum for
SBLCs secured by cash collateral together with Citibank's fees and
charges
therewith. Each SBLC shall expire not more than three (3) years
after its
issuance but may automatically renew for successive one year
periods unless
timely notice of termination is delivered by either the Borrower or
Citibank.
There shall be available under the Line sublimits for (i)
commercial
letters of credit (each, an "L/C" and collectively, the "L/Cs") and
(ii) direct
borrowings (each, a "Loan" and collectively, the "Loans") in an
amount not
exceeding $20,000,000 in the aggregate.
Loans provided under the Line shall be evidenced by Citibank's
Master
Note (the "Note") in the amount of the $20,000,000. Each advance
thereunder
shall bear interest at a rate to be elected by the Borrower at the
time of each
request for an advance equal to either:
(i) Prime Rate Option: A rate of interest equal to the prime rate
of
interest as published in the Money Rates column of the Wall Street
Journal from
time to time (the "Prime Rate"). Any change in the Prime Rate shall
take effect
on the date of the change in the Prime Rate, or
(ii) LIBOR Rate Option: A rate of interest equal to the Reserve
Adjusted LIBOR, as such term is defined in the Note, plus a margin
of 200 basis
points for interest periods of 30, 60 or 90 days.
Interest on the unpaid principal balance of the Note from time to
time
outstanding shall be payable monthly in arrears commencing on the
first day of
the month following the date of the first advance under the Note.
Any advance
under the Line made by Citibank in its discretion shall be in an
amount not less
than $100,000 for Prime Rate Advances and $500,000 for LIBOR Rate
Advances.
In the case of a Prime Rate advance, such advance may be prepaid,
in
whole or in part, in increments of not less than $100,000, without
premium or
penalty.
The Borrower agrees to indemnify Citibank and hold Citibank
harmless
from any loss or expense that Citibank may sustain or incur, as
more
particularly described in the Note should the Borrower make any
prepayment of
the principal of an advance hereunder bearing interest at the LIBOR
Rate or in
the event of a default by the Borrower in the payment or
performance of any
terms of the Note or this line letter.
The maximum tenor for each L/C shall be one year. Each L/C issued
under the Line shall be governed by the terms and conditions set
forth in
Citibank's Master Letter of Credit Agreement. There shall be
payable in respect
of each L/C, a fee equal to 1/4% upon the opening and 1/4% upon the
presentation
of documents thereof together with Citibank's fees and charges
therewith.
The expiry of any SBLC or L/C issued under the Line may, consistent
with the terms hereof, exceed the Expiration Date, as defined
below.
In the event that there are any SBLCs or L/Cs outstanding past the
Expiration Date and Citibank or the Borrower have decided not to
renew the Line
all such outstanding must be cash secured or indemnified by a new
lender.
Notwithstanding any provisions herein to the contrary, the maximum
availability under the Line shall not exceed an amount determined
with
application to the following borrowing base formula:
The sum of (i) eighty percent (80%) of the Borrower's "Eligible
Accounts Receivable", that is, all accounts of the Borrower dated
not more than
ninety (90) days from their respective invoice dates, excluding
those accounts
deemed ineligible by Citibank in its sole discretion and (ii) one
hundred
percent (100%) of unrestricted cash and equivalents maintained in
deposit or
investments held at Citibank for both the Borrower and Globecomm
Network
Services Corporation ("GNSC") (the
2
"Borrowing Limit"). Terms used in this paragraph shall have the
meaning given to
such terms in the Borrowing Base Certificate, identified herein.
The aggregate
of all advances and loans under the Line shall at no time exceed
the
availability under the Borrowing Limit and the Borrower shall pay
to Citibank
promptly after demand such amounts as may be necessary from time to
time to
reduce the aggregate of all such loans and advances to an amount
not in excess
of the Borrowing Limit.
2.
Description of the Bridge Line:
Loans provided under the Bridge Line shall be evidenced by
Citibank's
Master
