EXHIBIT 10.1
Credit Agreement
Dated as of March 5, 2001
(this "Agreement")
Lender: Verizon Investments Inc., a Delaware corporation ("Lender").
Borrower: Genuity Inc., a Delaware corporation ("Borrower").
Facility: $500,000,000 line of credit (the "Facility").
Commitment Period: March 8, 2001 to, but not including, May 31, 2001
(the "Commitment Period").
Maturity Date: May 31, 2001 (the "Maturity Date").
Five-Year
Agreement: All references to the Five-Year Agreement herein
shall be deemed to refer to the $2,000,000,000 Five-Year
Credit Agreement, dated as of September 5, 2000, as amended
on December 6, 2000 and as may be amended from time to time
hereafter, among Borrower, the initial lenders named
therein, The Chase Manhattan Bank, as administrative agent
for said lenders, Chase Securities, Inc., as arranger,
Citibank, N.A., as syndication agent, and Credit Suisse
First Boston and Deutsche Bank AG, New York and/or Cayman
Islands Branches, as co-documentation agents (the "Five-Year
Agreement").
Availability: Borrower shall have the right to borrow from time to time
under the Facility during the Commitment Period following
three business days notice provided through and subject to
the terms of a Notice of Borrowing given by Borrower as
hereinafter provided (a "Notice of Borrowing"), in an amount
not to be less than $25,000,000 or more than $200,000,000 on
any business day. All borrowings shall be repaid in full on
or before the Maturity Date.
Use of Proceeds: The proceeds of any borrowing by Borrower under the Facility
shall be available for the general corporate purposes of
Borrower.
Notice of
Borrowing: In writing on the Notice of Borrowing form attached hereto,
to be delivered to Lender at least three business days in
advance of the requested borrowing.
Term of Borrowing: At Borrower's option, any period to the extent possible, but
not less than five business days and not to extend beyond
the Maturity Date (a "Term of Borrowing").
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Interest Rate: The rate of interest on any borrowing under the
Facility will be calculated at London Interbank Offer
("LIBO") rate plus 200 basis points per annum, LIBO being
the average (rounded upward, if necessary, to the next 1/16
of 1%) of the rates per annum at which XX Xxxxxx Xxxxx, or
any successor thereto, is offered deposits in United States
dollars as of 11:00 a.m. London time, on the second London
business day preceding the first day of the Term of
Borrowing, by prime banks in the London interbank market of
an amount and for an interest period most similar to the
Term of Borrowing, adjusted for applicable reserve
requirements.
Increased Costs: If (i) Lender borrows funds from any source at an interest
rate based on the LIBO rate during the Commitment Period in
response to or in anticipation of the receipt of a Notice of
Borrowing from Borrower, (ii) Lender lends such funds to
Borrower through the Facility and (iii) Lender incurs or
reasonably anticipates that it will incur costs of a nature
generally described in Section 2.11 (a) and (b) of the Five-
Year Agreement, then Borrower shall reimburse Lender for any
such costs incurred or to be incurred by Lender.
Payments: Interest is payable on the last day of the applicable
interest period in immediately available funds. Interest is
to be calculated on the basis of the actual number of days
elapsed in a year of 360 days. Notwithstanding the
foregoing, principal and all remaining interest due and
owing to the maturity of each borrowing shall be due and
payable at the maturity of each borrowing. If any payment on
any borrowing under the Facility is paid for whatever reason
on a date other than the last day of the interest period
applicable thereto, Borrower shall, upon demand by Lender,
pay to Lender any amounts required to compensate Lender for
any additional losses, costs or expenses that Lender incurs
or reasonably expects to incur as a result of such payment,
including, without limitation, any costs which Lender pays
or will be required to pay to any source from which Lender
may have previously borrowed funds to lend to Borrower under
the Facility.
Evidence of Debt: The Master Promissory Note attached hereto shall evidence
borrowings under the Facility.
Representations Borrower represents and warrants, as of the first day of
and Warranties the Commitment Period and on each date that Borrower
submits to Lender a Notice of Borrowing, as follows:
(a) Borrower is a corporation duly organized, validly
existing and in good standing under the laws of
the state of its incorporation.
(b) The execution, delivery and performance by
Borrower of this Agreement and the Master
Promissory Note, and the consummation of the
transactions contemplated hereby, are within
Borrower's corporate powers, have been duly
authorized by all necessary corporate action, and
do not contravene (i) Borrower's charter or
by-laws (or other equivalent organizational
documents)
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or (ii) any law or contractual restriction binding
on or affecting Borrower.
(c) No authorization or approval or other action by,
and no notice to or filing with, any governmental
authority or regulatory body or any other third
party is required for the due execution, delivery
and performance by Borrower of this Agreement or
the Master Promissory Note.
(d) This Agreement and the Master Promissory Note have
been duly executed and delivered by Borrower.
Assuming that this Agreement has been duly
executed and delivered by Lender, this Agreement
and the Master Promissory Note are legal, valid
and binding obligations of Borrower enforceable
against Borrower in accordance with their terms,
subject to (i) bankruptcy, insolvency,
reorganization, moratorium and other similar laws
of general application affecting the rights and
remedies of creditors and secured parties and (ii)
general principals of equity, regardless of
whether applied in proceedings in equity or at
law.
(e) The consolidated balance sheet of Borrower and its
subsidiaries as at December 31, 2000, and the
related consolidated statements of income and cash
flows of Borrower and its subsidiaries for the
fiscal year then ended fairly present the
consolidated financial condition of Borrower and
its subsidiaries as at such date and the
consolidated results of the operations of Borrower
and its subsidiaries for the period ended on such
date, all in accordance with generally accepted
accounting principles consistently applied, and
any report or audit opinion issued on such
financial statements by Xxxxxx Xxxxxxxx LLP shall
be in standard form and unqualified.
(f) There is no pending or (to the knowledge of
Borrower) threatened action or proceeding
affecting Borrower or any of its subsidiaries
before any court, governmental agency or
arbitrator that purports to affect the legality,
validity or enforceability of this Agreement or
the Master Promissory Note.
(g) Neither Borrower nor any of its subsidiaries is an
investment company, as such term is defined in the
Investment Company Act of 1940, as amended.
(h) The Five-Year Agreement remains in full force and
effect, is enforceable against Borrower in
accordance with its terms, subject to (i)
bankruptcy, insolvency, reorganization, moratorium
and other similar laws of general application
affecting the rights and remedies of creditors and
secured parties and (ii) general principles of
equity, regardless of whether applied in
proceedings in equity or at law; and Borrower is
permitted to make additional borrowings thereunder
(or would be permitted to make such additional
borrowings thereunder but for the fact that
Borrower is currently indebted to the lenders
thereunder in a principal amount equal to
$2,000,000,000).
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Standard Covenants: The provisions with respect to covenants set forth in
Article V of the Five-Year Agreement shall be incorporated
by reference herein and shall be deemed for all purposes to
apply equally to the Facility; provided, however, that (i)
the term "Advance" shall be deemed to apply to any
borrowing under the Facility and "Commitment" shall be
deemed to apply to the obligation of Lender to Borrower to
permit Borrower to borrow funds under the Facility, (ii)
the terms "Lender," "Lenders" and "Agent" shall each be
deemed to apply to Lender, and (iii) Section 5.01(j) shall
not be deemed to apply to the Facility.
Additional
Covenants: Borrower further covenants that during the Commitment
Period:
(a) Borrower shall not make any additional borrowings
under the Five-Year Agreement if the principal
amount of any borrowings made hereunder plus the
principal amount of all borrowings then
outstanding under the Five-Year Agreement shall
exceed $2,000,000,000 until Borrower shall have
received at least $500,000,000 in proceeds from
any, or any combination of, the following: (i) the
issuance of indebtedness in the public or private
capital markets, (ii) borrowings under bank credit
facilities (other than through borrowings pursuant
to the Five-Year Agreement), or (iii) the sale of
capital assets no longer used and useful in
Borrower's business as then being conducted;
provided, however, that the foregoing covenant
shall not be applicable during any period that the
ratio of the indebtedness actually incurred by
Borrower under the Five-Year Agreement to the
indebtedness actually incurred by Borrower under
the Facility shall equal or exceed 4:1.
(b) Borrower shall apply all net proceeds received
from the issuance of indebtedness in public or
private capital markets transactions during the
Commitment Period to the repayment of all amounts
then borrowed under the Facility until all amounts
borrowed under the Facility shall have been repaid
in full.
(c) Borrower shall never permit the sum of all amounts
borrowed under the Facility plus the aggregate
principal amount of all public or private capital
market securities issued by Borrower and
guaranteed by Lender or any affiliate of Lender to
exceed 25% of the aggregate debt financing that
Borrower is permitted to incur under the
Recapitalization Agreement dated June 22, 2000
between Lender and GTE Corporation, as such
Recapitalization Agreement may be amended from
time to time.
Taxes: If (i) Lender borrows funds from any source during the
Commitment Period in response to or in anticipation of the
receipt of a Notice of Borrowing from Borrower, (ii) Lender
lends such funds to Borrower through the Facility and (iii)
Lender is required to pay, or reasonably anticipates that it
will be required to pay, Taxes or Other Taxes of a nature
generally described in Section 2.14 of the Five-Year
Agreement, then Borrower shall reimburse Lender for any such
Taxes or Other Taxes paid or to be paid by Lender.
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Expenses: Borrower agrees to pay an initial fee of $10,000 and on
demand all reasonable out-of-pocket costs and expenses of
Lender in connection with the preparation, execution,
delivery, administration, modification and amendment of this
Agreement, the Master Promissory Note and the other
documents to be delivered hereunder, upon presentation of an
itemized statement of account (after reasonable time for
Borrower to review such statement of account). Borrower
further agrees to pay on demand all costs and expenses of
Lender (including, without limitation, reasonable counsel
fees and expenses), in connection with the enforcement
(whether through negotiations, legal proceedings or
otherwise) of this Agreement, the Master Promissory Note and
the other documents to be delivered hereunder, including,
without limitation, reasonable fees and expenses of counsel
for Lender in connection with the enforcement of rights
hereunder.
Indemnification: Borrower agrees to indemnify and hold harmless Lender and
each of their affiliates and their officers, directors,
employees, agents and advisors (each, an "Indemnified
Party") from and against any and all claims, damages,
losses, liabilities and expenses (including, without
limitation, reasonable fees and expenses of counsel) that
may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in
connection with or by reason of, or in connection with the
preparation for a defense of, any investigation, litigation
or proceeding arising out of, related to or in connection
with this Agreement, the Master Promissory Note, any of the
transactions contemplated herein or the actual or proposed
use any borrowings hereunder, whether or not such
investigation, litigation or proceeding is brought by
Borrower, its directors, shareholders or creditors or an
Indemnified Party or any other Person or any Indemnified
Party is otherwise a party thereto, except to the extent
such claim, damage, loss, liability or expense (i) results
from such Indemnified Party's gross negligence or willful
misconduct, or (ii) arises from litigation commenced by
Borrower against Lender which seeks enforcement of any of
the rights of Borrower hereunder or under the Master
Promissory Note and is determined adversely to Lender.
Borrower also agrees not to assert any claim against Lender,
any of its affiliates, or any of their respective directors,
officers, employees, attorneys and agents, on any theory of
liability, for special, indirect, consequential or punitive
damages arising out of or otherwise relating to this
Agreement, the Master Promissory Note, any of the
transactions contemplated herein or the actual or proposed
use of the any borrowings hereunder. Without prejudice to
the survival of any other agreement of Borrower hereunder,
the agreements and obligations of Borrower contained in this
Indemnification section shall survive the payment in full of
principal, interest and all other amounts payable and under
the Master Promissory Note.
Events of Default: In the event (each an "Event of Default") that:
(a) Borrower shall fail to pay any principal of the
Master Promissory Note when due; or
(b) Borrower shall fail to pay any interest on the
Master Promissory Note, or any facility fee,
administration fee or other amounts hereunder,
when due, and such amounts remain unpaid for a
period of five business days; or
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(c) any representation or warranty made or deemed made
by Borrower herein or by Borrower (or any of its
officers) in connection with this Agreement shall
prove to have been incorrect in any material
respect when made or deemed made; or
(d) Borrower shall fail to perform or observe any
term, covenant or agreement contained in or
incorporated by reference into this Agreement on
its part to be performed or observed if such
failure shall remain unremedied for 30 days after
written notice thereof shall have been given to
Borrower by Lender; or
(e) Borrower shall commence a voluntary case or
proceeding seeking liquidation, reorganization or
other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidation,
custodian or other similar official of its or any
substantial part of its property, or shall consent
to any such relief or to the appointment of or
taking possession by any such official in an
involuntary case or other proceeding commenced
against it, or shall make a general assignment of
the benefit of creditors, or shall fail generally
to pay its debts as they become due, or shall take
any corporate action to authorize any of the
foregoing; or
(f) An involuntary case or other proceeding shall be
commenced against Borrower seeking liquidation,
reorganization or other relief with respect to it
or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver,
liquidation, custodian or other similar official
or it or a substantial part of its property, and
such involuntary case or other proceedings shall
remain undismissed and unstayed for a period of 60
days or an order for relief shall be entered
against Borrower under the federal bankruptcy laws
as now or hereafter in effect; or
(g) An event of default (as such term is used in the
Five- Year Agreement) shall have occurred and be
continuing under the Five-Year Agreement;
(h) (i) Verizon shall cease, prior to the exercise of
the option by Verizon Communications Inc.
("Verizon") to exchange its Class B Common Stock
of Borrower for Class C Common Stock of Borrower
(the "Verizon Option"), to control, directly or
indirectly, a sufficient number of shares of
Borrower's capital stock such that, upon exercise
of the Verizon Option, Verizon would own, directly
or indirectly, at least 50% of the combined voting
power of all Voting Stock of Borrower; or (ii) the
Verizon Option is cancelled or becomes invalid or
unenforceable (other than upon the exercise
thereof) or the U.S. Federal Communications
Commission issues a final ruling that will prevent
the exercise of the Verizon Option; or (iii) after
the exercise of the Verizon Option, Verizon shall
cease to own, directly or indirectly, at least 50%
of the combined voting power of all Voting Stock
of Borrower;
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then, and in every such event, (i) in the case of
any of the events specified in paragraphs (e) or
(f) above, the Facility shall thereupon
automatically be terminated and any outstanding
principal and accrued interest on any borrowings
hereunder shall automatically become due and
payable without presentment, demand, protest or
other notice or formality of any kind, all of
which are hereby expressly waived, and (ii) in the
case of any event specified in paragraphs (a),
(b), (c) (d), (g) or (h) above, Lender may, by
notice in writing to Borrower, terminate the
Facility hereunder, if still in existence, and it
shall thereupon be terminated, and Lender may, by
notice in writing to Borrower, declare any
outstanding principal and accrued interest on any
borrowing hereunder to be, and the same shall
thereupon forthwith become, due and payable
without presentment, demand, protest or other
notice of formality of any kind, all of which are
hereby expressly waived.
Conditions: The obligation of Lender to make loans in
accordance with the terms of the Facility is
subject to the conditions precedent that: (i) the
representations and warranties made herein shall
be true on the date of each borrowing (and
Borrower's acceptance of the proceeds of such
borrowing shall constitute Borrower's
representation that the representations and
warranties contained in this Agreement are true on
the date of such loan) and (ii) no event which,
with the giving of notice or passage of time, or
both, would constitute an Event of Default has
occurred and is continuing.
Defined Terms: All terms used and not otherwise defined
herein shall have the meanings ascribed to such
terms in the Five-Year Agreement, in each case as
in effect on the date hereof and as may be amended
from time to time hereafter.
Documentation: Prior to or concurrently with the first
Notice of Borrowing delivered by Borrower to
Lender hereunder, Borrower will provide copies of
borrowing resolutions adopted by the Board of
Directors of Borrower and signature certificates
of authorized officers of Borrower to Lender with
respect to the Facility in form reasonably
satisfactory to Lender. Prior to the initial
borrowing under the Facility, Borrower will
provide appropriate opinions of counsel
substantially in the forms set forth in Exhibit E
of the Five-Year Agreement.
Jurisdiction: Each of the parties hereto hereby irrevocably
and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any
New York State court or federal court of the
United States of America sitting in New York City,
and any appellate court from any thereof, in any
action or proceeding arising out of or relating to
this Agreement or the Master Promissory Note, or
for recognition or enforcement of any judgment,
and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in
respect of any such action or proceeding may be
heard and determined in any such New York State
court or, to the extent permitted by law, in such
federal court. Each of the parties hereto agrees
that a final judgment in any such action or
proceeding shall be conclusive and may be enforced
in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in
this Agreement shall affect any right that any
party may otherwise have to bring any action or
proceeding relating
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to this Agreement or the Master Promissory Note in
the courts of any jurisdiction.
Venue: Each of the parties hereto irrevocably and
unconditionally waives, to the fullest extent it
may legally and effectively do so, any objection
that it may now or hereafter have to the laying of
venue of any suit, action or proceeding arising
out of or relating to this Agreement or the Master
Promissory Note in any New York State or federal
court. Each of the parties hereto hereby
irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient
forum to the maintenance of such action or
proceeding in any such court.
Waiver of Jury Trial: Borrower and Lender hereby irrevocably waive all
right to trial by jury in any action, proceeding
or counterclaim (whether based on contract, tort
or otherwise) arising out of or relating to this
Agreement or the Master Promissory Note or the
actions of Lender in the negotiation,
administration, performance or enforcement
thereof.
Substitution of Lender: Lender shall have the right to assign and transfer
its rights, privileges and obligations hereunder
to any corporate affiliate of Lender which has the
financial capacity to serve as Lender hereunder
("New Lender") without the consent of Borrower,
and following such assignment, (a) New Lender
shall be deemed for all purposes hereunder to be
Lender hereunder, as if New Lender had served as
Lender hereunder as of the first day of the
Commitment Period, and (b) the corporation
previously serving as Lender hereunder shall be no
longer for any purpose hereunder be deemed to be
Lender hereunder.
Successors and Assigns: This Agreement shall inure to the parties hereto
and their respective successors and assigns.
Governing Law: New York.
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In witness whereof, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
GENUITY INC.
By: /s/ W. Xxxx Xxxxxx
--------------------------
Name: W. Xxxx Xxxxxx
Title: Vice President and Treasurer
VERIZON INVESTMENTS INC.
By: /s/ Xxxxx X. Xxxxxxx
--------------------------
Name: Xxxxx X. Xxxxxxx
Title: President and Treasurer
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