EXHIBIT 10.18
[GTE CORPORATION LETTERHEAD]
[Date]
[Genuity Inc. Address]
Re: Financial Support Agreement Regarding Guaranty of Obligation for the
benefit of [___________________], dated__________
Ladies and Gentlemen:
In consideration of the agreement by GTE Corporation ("GTE") to issue or
continue to maintain the guaranty described above which is attached as Exhibit A
hereto (the "Guaranty") following the transfer of GTE's controlling interest in
Genuity Inc. ("Genuity") as contemplated by GTE and Bell Atlantic Corporation's
Supplemental Filing with the FCC on January 27, 2000 (the "Separation"), Genuity
agrees to pay GTE a fee pursuant to the following terms and conditions:
Guaranty Fee: Guaranty Fee shall be ____% per annum,
calculated monthly, charged on the month-end
outstanding balance of the Guaranty, as
evidenced by the amortization schedule
attached thereto or included therein, and
will be payable semi-annually on June 30 and
December 31 of each calendar year. If the
Guaranty is outstanding for less than a full
calendar month, Guaranty Fee shall be
computed based on the outstanding balance of
the Guaranty on each calendar day of such
month that the Guaranty shall remain in
effect.
Adjustment to Guaranty Fee: The Guaranty Fee set forth above was
determined based on the assumption that
Genuity's credit rating post-Separation
would be equivalent to the average of the
ratings of BBB/Baa2 and BBB-/Baa3. GTE shall
have a one-time right to increase, effective
prospectively, the Guaranty Fee (the
"Adjusted Guaranty Fee") if either one of
the following events occurs: (i) Standard &
Poor's issues a credit rating for Genuity of
BB+ or less or (ii) Xxxxx'x issues a credit
rating for Genuity of Ba1 or less. Such
right may be exercised at any time by
written notice to Genuity.
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If either of the events described in (i) or
(ii) above occurs, the Adjusted Guaranty Fee
shall be determined by GTE by averaging the
rates quoted to GTE by three nationally
recognized banking institutions for a credit
equivalent to the published credit ratings
of Genuity. The Adjusted Guaranty Fee shall
become the Guaranty Fee payable under this
letter from and after the date on which GTE
provides Genuity written notice of the
Adjusted Guaranty Fee.
Payment of Fee: Guaranty Fee is due not later than 5
business days following the end of each
semi-annual payment period and shall be
delivered by electronic funds transfer to
[wire transfer instructions] or such other
bank account as shall be provided to Genuity
by GTE in writing at least 5 business days
prior to the date of electronic funds
transfer.
In the event the Guaranty is terminated,
replaced by Genuity or expires prior to the
end of the semi-annual payment period,
Guaranty Fee will be due not later than 5
business days following the termination of
all obligations of GTE under the Guaranty.
Late Payment Fee: A Late Payment Fee in the amount of prime
rate plus 1.00% per annum, calculated daily,
commencing on the day immediately following
the due date and based upon the number of
days elapsed prior to payment of all amounts
due shall be included with any overdue
payment of Guaranty Fee.
Duty of Inquiry: GTE shall have no obligation to consult with
Genuity or make any independent
investigation prior to any decision to honor
or dishonor any payment request under the
Guaranty.
Immediate Repayment: If GTE makes any payment under the Guaranty,
GTE agrees to notify Genuity in writing, at
the address set forth at the end of this
letter or such other address as shall be
subsequently provided to GTE by Genuity in
writing, within three business days of the
amount of such payment, and Xxxxxxx agrees
to pay such amount to GTE within one
business day following the date of such
written notice. A Late Payment Fee shall be
applied to any amounts not received when
due.
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Return of Documents: Genuity shall present the Guaranty to GTE
for cancellation at the address of GTE set
forth at the end hereof, or such other
address as shall be provided to Genuity by
GTE in writing, following the termination of
all obligations of GTE under the Guaranty.
Indemnification: Genuity will reimburse, indemnify and hold
harmless GTE from and against any and all
payments, losses, damages, costs and
expenses (including attorneys' fees and
court costs) paid or incurred by GTE, its
officers, directors, agents, and employees,
as a result of any claim made under this
letter or the Guaranty.
Notice: Any written notice or other information
required to be provided in writing hereunder
shall be made in writing by overnight
delivery service, facsimile transmission or
electronic mail, that provides for evidence
of receipt.
Waiver: No waiver hereunder shall be effective
unless evidenced in writing, and shall be
effective only under the circumstances
specifically described in such waiver.
Underlying Documents: Xxxxxxx agrees to provide GTE with an
executed copy of each document entered into
by Xxxxxxx as of the date first above
written and from time to time which creates
an obligation of Genuity that is guaranteed
by the Guaranty, at the address of GTE set
forth at the end hereof, or such other
address as shall be provided to Genuity by
GTE in writing.
Underlying Obligation: Nothing herein shall modify any term of the
Guaranty unless specifically provided
herein.
Governing Law: New York.
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Please evidence your acceptance of the terms of this letter by executing below,
and return a duplicate original of this letter, together with copies of all
underlying documents which create an obligation of Genuity that is guaranteed by
the Guaranty, to GTE at the address set forth below.
GTE Corporation
By: ____________________________
Title:____________________________
Notices to be delivered to: ___________________________
___________________________
___________________________
Accepted this ____ day of _________, 2000
Genuity Inc.
By: _____________________________
Title:____________________________
Notices to be delivered to: ___________________________
___________________________
___________________________
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