Exhibit 10.1
MASTER FRAMEWORK AGREEMENT
This MASTER FRAMEWORK AGREEMENT (this “Framework Agreement”), is made and entered into as of January 26, 2022 (the “Effective Date”), by and between:
(i) MUFG BANK, LTD., NEW YORK BRANCH, a Japanese banking corporation acting through its New York Branch (“Buyer”); and
(ii) USCC EIP LLC, a Delaware limited liability company (“Seller”).
Each of Buyer and Seller may also be referred to herein individually as a “Party”, and collectively as the “Parties”.
RECITALS
WHEREAS, Seller owns Receivables and Buyer wishes to provide Seller with a facility pursuant to which Buyer may purchase Receivables from Seller from time to time subject to the terms and conditions hereof.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants, agreements and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. Interpretation.
1.1 Definitions. All capitalized terms used in this Framework Agreement (including its recitals, Exhibits and Schedules) shall, unless defined herein, have the respective meanings set forth in Schedule 1 hereto.
1.2 Construction.
(a) The headings, sub-headings and table of contents in this Framework Agreement shall not affect its interpretation. References in this Framework Agreement to Sections, Exhibits and Schedules shall, unless the context otherwise requires, be references to Sections of, and Exhibits and Schedules to, this Framework Agreement.
(b) Words denoting the singular number only shall include the plural number also and vice versa; words denoting one gender only shall include the other genders and words denoting persons shall include firms and corporations and vice versa.
(c) References to a Person are also to its permitted successors or assigns.
(d) References in this Framework Agreement to any agreement or other document shall be deemed also to refer to such agreement or document as amended or varied or novated from time to time.
(e) References to an amendment include a supplement, novation, restatement or re-enactment, and “amend” and “amended” (or any of their derivative forms) will be construed accordingly.
(f) Reference to a time of day is a reference to New York City, New York time.
(g) “Include”, “includes” and “including” shall be deemed to be followed by the words “without limitation.”
(h) “Hereof”, “hereto”, “herein” and “hereunder” and words of similar import when used in this Framework Agreement refer to this Framework Agreement as a whole and not to any particular provision of this Framework Agreement.
(i) References to a “writing” or “written” include any text transmitted or made available on paper or through electronic means.
(j) References to “$”, U.S. Dollars or otherwise to dollar amounts refer to the lawful currency of the United States.
(k) References to a law include any amendment or modification to such law and any rules and regulations issued thereunder, whether such amendment or modification is made, or issuance of such rules and regulations occurs, before or after the Effective Date.
2. Transaction Agreements.
2.1 Agreements to be Executed at the Closing. Concurrently with this Framework Agreement, the Parties intend to execute the following additional agreements (together with this Framework Agreement and each Confirmation entered into during the Facility Term, the “Transaction Agreements”) to which they are party:
(a) the Master Repurchase Agreement;
(b) the Fee Letter; and
(c) the Guaranty.
2.2 Definitions. When used in any Transaction Agreement, capitalized terms not otherwise defined therein will, to the extent defined herein, have the meanings set forth in this Framework Agreement (including Schedule 1).
3. Closing; Closing Deliveries.
3.1 Closing. Subject to the terms and conditions of this Framework Agreement, the transactions contemplated in this Framework Agreement to occur concurrently with the execution hereof (other than the entry into any Confirmations) will take place at a closing (the “Closing”) to be held on the Effective Date at a mutually agreeable location or by the exchange of electronic documentation.
3.2 Seller Closing Deliverables. At the Closing or prior to the Closing, Seller will deliver, or cause to be delivered, to Buyer:
(a) an executed counterpart to each of the Transaction Agreements (other than any Confirmations) to which it is a party;
(b) a counterpart of the Guaranty executed by Guarantor;
(c) a certificate of the Secretary or an Assistant Secretary of Seller, dated the Effective Date, certifying as to (i) the incumbency of the officers of Seller executing the Transaction Agreements, (ii) attached copies of Seller’s certificate of formation and limited liability company agreement; and (iii) copies of all limited liability company approvals and consents of Seller that are required by it in connection with entering into, and the exercise of its rights and the performance of its obligations under, the Transaction Agreements;
(d) a certificate of the Secretary or an Assistant Secretary of Guarantor, dated the Effective Date, certifying as to (i) the incumbency of the officer(s) of Guarantor executing the Guaranty, (ii) attached copies of Guarantor’s certificate of incorporation and bylaws; and (iii) copies of all corporate approvals and consents of Guarantor that are required by it in connection with entering into, and the exercise of its rights and the performance of its obligations under, the Guaranty;
(e) a customary legal opinion or opinions, in form and substance satisfactory to Buyer, with respect to Seller opining on existence, due authorization and execution, absence of conflicts with Organizational Documents and with the Credit Facility Documents and the Securitization Facility Documents, binding nature of obligations, absence of violations of, and absence of consents under, certain U.S. Federal and New York State laws and creation and perfection of security interests;
(f) a customary legal opinion or opinions, in form and substance satisfactory to Buyer, with respect to Guarantor opining on existence, due authorization and execution, absence of conflicts with Organizational Documents and with the Credit Facility Documents, binding nature of obligations, and absence of violations of, and absence of consents under, certain U.S. Federal and New York State laws;
(g) results of UCC lien searches with respect to Seller for the State of Delaware as of a date not more than thirty (30) days prior to the Closing; and
(h) a fully prepared UCC-1 financing statement describing the Collateral.
3.3 Buyer Closing Deliverables. At the Closing or prior to the Closing, Buyer will deliver to Seller:
(a) an executed counterpart to each of the Transaction Agreements (other than any Confirmations) to which it is a party; and
(b) an executed copy of IRS Form W-8ECI.
4. Transactions.
4.1 Requests for Transactions.
(a) Transaction Notices. Seller may, from time to time during the Facility Term, deliver a written notice, substantially in the form attached hereto as Exhibit A (a “Transaction Notice”) to Buyer requesting that Buyer enter into a Transaction on any Permitted Business Day; provided that no Permitted Business Day may be selected that would result in two Transactions being outstanding at any one time. Such notice (i) shall be delivered to Buyer not less than three (3) Business Days prior to such proposed Permitted Business Day, (ii) shall include a completed forms of Confirmations for such Transaction (including the proposed Purchase Price (which shall not exceed the Maximum Purchase Price and shall be not be less than $5,000,000 and shall be in minimum increments of $1,000,000) but excluding the terms thereof pertaining to Pricing Rate, Price Differential and Repurchase Price), and (iii) shall be accompanied by a copy of the Portfolio Report.
(b) Buyer’s Option to Proceed or Decline. Following receipt of a properly completed Transaction Notice and other documentation specified in Section 4.1(a), Buyer may, at its sole discretion, elect to either (i) so long as the Funding Conditions with respect to such proposed Transaction have been satisfied or waived by Buyer, enter into the proposed Transaction with Seller on the terms set forth in the Transaction Notice (with such modifications as Buyer and Seller shall have agreed) by delivering to Seller the finalized and executed Confirmation evidencing such Transaction and paying any applicable Funded Purchase Price in accordance with Section 4.1(c) below or (ii) decline Seller’s request to enter into such Transaction (in which case Buyer shall deliver written notice of such election promptly after determining to make such election (but in any event not later than the second Business Day immediately preceding the proposed Purchase Date specified in the Transaction Notice)). To the extent Buyer wishes to proceed with the Transaction, Buyer shall, no later than 2:00 p.m. on the Business Day immediately preceding the proposed Purchase Date, deliver to Seller a fully completed draft Confirmation with respect to the proposed Transaction. In the event Seller and Buyer disagree with respect to any portion of the draft Confirmation or in the event Buyer determines that any applicable Funding Conditions are not, or will not be, satisfied as of the relevant Purchase Date, Seller or Buyer (as applicable) shall promptly notify the other of the same, and Seller and Buyer shall, subject to Section 4.1(d), cooperate expeditiously and in good faith to resolve any such matters (to the extent the same are capable of being resolved). If, notwithstanding such efforts, such disagreement is not resolved or the applicable Funding Conditions are not satisfied or waived as of the proposed Purchase Date, then no Transaction shall be entered into on such proposed Purchase Date.
(c) Confirmation and Closings. In the event Buyer elects to enter into the proposed Transaction, Buyer shall, subject to satisfaction of the Funding Conditions, enter into such Transaction by executing and delivering to Seller the finalized and executed Confirmation evidencing such Transaction in accordance with the Master Repurchase Agreement at or prior to the time of closing for such Transaction. Concurrently with its delivery of such Confirmation, Buyer shall pay the Funded Purchase Price (if any) for the Transaction in accordance Section 7.1 hereof and the terms of the Master Repurchase Agreement and such Confirmation, whereupon Seller will sell and assign, and Buyer will purchase, the Seller Receivables subject to such Transaction. The closing of such Transaction and payment of any such Funded Purchase Price shall occur at or before 2:00 p.m. on the applicable Purchase Date (or such later time on such Purchase Date as Seller and Buyer may agree).
(d) UNCOMMITTED ARRANGEMENT. SELLER AND BUYER ACKNOWLEDGE THAT THIS IS AN UNCOMMITTED ARRANGEMENT. PROPOSED TRANSACTIONS FOR THE SALE OF RECEIVABLES BY SELLER SHALL BE REQUESTED AT SELLER’S SOLE AND ABSOLUTE DISCRETION, AND ACCEPTANCE OF ANY SUCH REQUESTS AND ENTRY INTO ANY SUCH TRANSACTIONS BY BUYER SHALL BE AT BUYER’S SOLE AND ABSOLUTE DISCRETION.
4.2 [Reserved].
4.3 Funding Conditions.
(a) The obligation of Buyer to enter into a Transaction shall be subject to satisfaction of the following conditions (in each case, as of the applicable Purchase Date) (together, the “Funding Conditions”):
(i) solely with respect to the initial Transaction, each of the items required to be delivered by Seller pursuant to Section 3.2 shall have been delivered in accordance with the terms hereof;
(ii) all amounts (if any) then due and owing by Seller under the Fee Letter shall have been paid in full;
(iii) [reserved];
(iv) the Transaction Notice (including the Portfolio Report required to be included therewith), shall have been duly delivered to Buyer in accordance with Section 4.1(a);
(v) Seller shall have delivered to Buyer a duly executed counterpart to the Confirmation with respect to such Transaction;
(vi) each of the representations and warranties of Seller and Guarantor (as applicable) set forth in the Transaction Agreements (giving effect to the entry into such Transaction) shall be true and correct in all material respects (except that any representation or warranty that is subject to any materiality qualification shall be true and correct in all respects);
(vii) the Purchase Date for such Transaction shall be a Business Day occurring no later than five (5) Business Days prior to the Facility Expiration Date;
(viii) Buyer shall have received the full amount of Funded Repurchase Price (if any) due and payable by Seller on such Purchase Date;
(ix) no Potential Event of Default or Event of Default shall have occurred and be continuing;
(x) after entering into such Transaction only one Transaction will be outstanding; and
(xi) in the case of the initial Transaction, Seller shall have paid the fees payable by it pursuant to the last sentence of Section 8.2.
4.4 Funding of Transaction Repurchase Prices. On each Repurchase Date for a Transaction on which Funded Repurchase Price is payable by Seller pursuant to the Transaction Agreements (including, for the avoidance of doubt, on the Facility Expiration Date), Seller shall fund the Funded Repurchase Price for such Transaction by wire transfer of immediately available funds to the account of Buyer specified in Schedule 2, no later than 12:00 p.m. on such Repurchase Date.
5. Representations and Warranties; Certain Covenants.
5.1 Representations and Warranties of Seller. Seller represents to Buyer as of the Effective Date and each Purchase Date that:
(a) Organization and Good Standing. Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the state of its formation, and has the limited liability company power to own its assets and to transact the business in which it is currently engaged, and to execute, deliver and perform its obligations under this Framework Agreement and the other Transaction Agreements to which it is a party.
(b) Due Qualification. Seller is duly qualified to do business as a foreign company and is in good standing in each jurisdiction in which the character of the business transacted by it or properties owned or leased by it requires such qualification and in which the failure so to qualify could reasonably be expected to have a material adverse effect on the business, properties, assets, or condition (financial or otherwise) of Seller, or Seller’s ability to perform its applicable duties under this Framework Agreement and the other Transaction Agreements to which it is a party.
(c) Authorization; Binding Obligations. Seller has the power and authority to make, execute, deliver and perform this Framework Agreement and the other Transaction Agreements to which Seller is a party and all of the transactions contemplated under this Framework Agreement and the other Transaction Agreements to which Seller is a party, and has taken all necessary limited liability company or corporate action, as applicable, to authorize the execution, delivery and performance of this Framework Agreement and the other Transaction Agreements to which it is a party. This Framework Agreement and each other Transaction Agreement to which Seller is a party has been duly executed and delivered by Seller and constitutes the legal, valid and binding obligation of Seller, enforceable in accordance with their terms, except as enforcement of such terms may be limited by applicable Insolvency Laws, any applicable law imposing limitations upon, or otherwise affecting, the availability or enforcement of rights to indemnification hereunder, and by the availability of equitable remedies.
(d) Licensing. Seller is properly licensed in each jurisdiction to the extent required by the laws of such jurisdiction in order to originate, acquire or own the Receivables.
(e) No Violations. Seller’s execution, delivery and performance of this Framework Agreement and the other Transaction Agreements to which it is a party will not violate any existing law or regulation or any order or decree of any court or Governmental Authority in any material respect or the certificate of formation or limited liability company agreement of Seller or constitute a breach of any material mortgage, indenture, contract or other agreement to which Seller is a party or by which it or any of its properties may be bound.
(f) No Proceedings. There are no Proceedings or investigations pending or, to the best knowledge of Seller, threatened, against Seller before any Governmental Authority (i) asserting the invalidity of this Framework Agreement or any other Transaction Agreement to which it is a party, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Framework Agreement or any other Transaction Agreement to which it is a party, (iii) seeking any determination or ruling that, in the reasonable judgment of Seller, would materially and adversely affect the performance by Seller of its obligations under this Framework Agreement or the other Transaction Agreements to which it is a party, or (iv) seeking any determination or ruling that would materially and adversely affect the validity or enforceability of this Framework Agreement or any other Transaction Agreement to which it is a party which, in each case, if adversely determined would be reasonably likely to result in a material adverse effect on the transactions contemplated by, or Seller’s ability to perform its obligations under, this Framework Agreement or any other Transaction Agreement to which it is a party.
(g) All Consents. All authorizations, consents, orders or approvals of or registrations or declarations with any Governmental Authority required to be obtained, effected or given by Seller in connection with the execution and delivery by Seller of this Framework Agreement and the other Transaction Agreements to which it is a party and the performance by Seller of the transactions contemplated by this Framework Agreement and the other Transaction Agreements to which it is a party have been duly obtained, effected or given and are in full force and effect, except for those which the failure to obtain would not have a material adverse effect on this Framework Agreement or the other Transaction Agreements to which it is a party or the transactions contemplated hereby or thereby, or on the ability of Seller to perform its obligations under this Framework Agreement or the other Transaction Agreements to which it is a party.
(h) Investment Company Act. Seller is not required to register as an “Investment Company” under (and as defined in) the Investment Company Act.
(i) No Defaults. No Event of Default or Potential Event of Default has occurred and is continuing, or would result from the entry into the proposed Transaction on the applicable Purchase Date.
(j) No Insolvency Event. No Insolvency Event with respect to Seller has occurred and each transfer of the Receivables by Seller to Buyer has not been made in contemplation of the occurrence thereof.
(k) Beneficial Ownership Rule. Seller is wholly-owned by an entity (other than a bank) whose common stock or analogous equity interests are listed on the New York Stock Exchange or the American Stock Exchange or have been designated as a NASDAQ National Market Security listed on the NASDAQ stock exchange (as used in this clause, a “listed entity”) or that is organized under the laws of the United States or of any state and at least 51 percent of whose common stock or analogous equity interest is owned by a listed entity and is excluded on that basis from the definition of Legal Entity Customer as defined in the Beneficial Ownership Rule.
(l) Market Value. As of the applicable date specified in the Portfolio Report delivered in connection with a Transaction Notice for such Purchase Date, the aggregate Market Value of the Seller Receivables that would be selected in accordance with the Ordering Priority on such date for inclusion in in the applicable Transaction Portfolio if such date were the Purchase Date is equal to or greater than 125% of the proposed Purchase Price for such Purchase Date.
5.2 Asset Representations and Warranties. Seller represents and warrants to Buyer as of the applicable Transfer Date with respect to each Purchased Receivable included in the Transaction Portfolio for the Transaction being entered into or in effect as of such Transfer Date (or, in the case of Section 5.2(a) and (b), with respect to the Portfolio Report delivered in connection with such Transaction), that:
(a) Accuracy of Information. The information set forth in each Portfolio Report delivered by Seller pursuant to the Transaction Agreements is true and correct in all material respects as of the applicable date specified therein and, in the case of any Full Portfolio Report, such Full Portfolio Report includes an accurate and complete listing in all material respects of all the Receivables required to be included therein pursuant to the terms of the Transaction Agreements as of the applicable date specified in such Portfolio Report.
(b) Eligibility. Each such Receivable treated as having a positive Market Value included in any Portfolio Report is an Eligible Receivable as of date specified in such Portfolio Report as if such date were the Purchase Date.
(c) Ownership. Each such Purchased Receivable, together with the Related Rights, immediately prior to giving effect to the sale thereof pursuant to the applicable Confirmation is owned by Seller free and clear of any Lien. The Master Repurchase Agreement, taken together with the applicable Confirmation, constitutes a valid sale to Buyer of all right, title and interest of Seller in the Purchased Receivables, together with the Related Rights, and all actions necessary to perfect the grant of the security interest by Seller in such Purchased Receivables pursuant to Section 6(a) of the Master Repurchase Agreement have been taken.
(d) Consents. All authorizations, consents, orders or approvals of or registrations or declarations with any Governmental Authority required to be obtained, effected or given by Seller in connection with the conveyance of Receivables from Seller to Buyer hereunder have been duly obtained, effected or given and are in full force and effect.
5.3 Certain Covenants. Seller covenants with Buyer as follows:
(a) [Reserved].
(b) Preservation of Existence. Except as otherwise provided in this Section 5.3, Seller will keep in full force and effect its existence, rights and franchises as a limited liability company under the laws of its jurisdiction of formation, and Seller will obtain and preserve its qualification to do business as a foreign limited liability company in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Framework Agreement, any Transaction Agreements and any of the Purchased Receivables which have been conveyed under a Transaction Agreement, and to perform its duties under this Framework Agreement.
(c) Performance of Agreements. Seller shall perform and comply with each Contract governing a Purchased Receivable in such a way as would not (or would not reasonably be expected to) materially and adversely affect the entitlement and/or ability to receive and/or to recover and/or enforce and/or collect payment of the full amount of such Purchased Receivable, and the exercise by Buyer of its rights under this Framework Agreement and the other Transaction Agreements shall not relieve Seller of such obligations.
(d) Seller’s Obligations. Except as otherwise expressly provided herein, the obligations of Seller to make any payments contemplated by this Framework Agreement or the Master Repurchase Agreement are absolute and unconditional (including, in the case of its obligation to pay the Repurchase Price and any Price Differential, irrespective of the existence of, or the Receivable Balance of, any Purchased Receivables) and all payments to be made by Seller under or in connection with this Framework Agreement or the Master Repurchase Agreement, as applicable, shall be made free and clear of, and Seller hereby irrevocably and unconditionally waives all rights of, any counterclaim, set-off, deduction or other analogous rights or defenses, in connection with such obligations, which it may have against Buyer.
(e) Books and Records; Marking of Records.
(i) At all times, Seller will maintain books of account, with the particulars of all monies, goods and effects belonging to or owing to Seller or paid, received, sold or purchased in the course of Seller’s business, and of all such other transactions, matters and things relating to the business of Seller.
(ii) At its expense, Seller will maintain records evidencing that the Purchased Receivables have been sold in accordance with the Master Repurchase Agreement and a security interest therein granted to Buyer.
(f) Indemnification. Seller will indemnify and keep indemnified Buyer, their Affiliates, and their respective officers, directors, employees and agents and their successors and assigns (each, an “Indemnified Party”) against any cost, claim, loss, expense, liability or damages (including reasonable and documented legal costs and out-of-pocket expenses) arising out of or involving a claim or demand made by any Person (other than by any Indemnified Party) against such Indemnified Party (each a “Claim”) and incurred or suffered by it in connection with:
(i) any representation or warranty made by Seller or Guarantor under or in connection with any Transaction Agreement (including with respect to any Portfolio Report delivered by Seller pursuant hereto) that shall have been false or incorrect when made or deemed made (without regard to any knowledge, materiality or Material Adverse Effect qualifiers contained therein);
(ii) the failure by Seller to comply with any applicable Law with respect to any Purchased Receivable included in any Transaction Portfolio, or the nonconformity of any related Contract with any such applicable Law or any failure of Seller to keep or perform any of its obligations with respect to any such Contract;
(iii) any failure of Seller or Guarantor to perform its duties, covenants or other obligations in accordance with the provisions of any Transaction Agreement;
(iv) any products liability, personal injury or damage, suit or other similar claim arising out of or in connection with merchandise, insurance or services that are the subject of any Receivable in which any Indemnified Party becomes involved as a result of any of the transactions contemplated by the Transaction Agreements;
(v) any investigation, litigation or proceeding related to or arising from any Transaction Agreement, any Transactions entered into thereunder, Seller’s use of the proceeds of such Transactions, the ownership of any Receivables originated by Seller, the Collateral or any exercise of remedies by Buyer with respect thereto, or any other investigation, litigation or proceeding relating to Seller or Guarantor in which any Indemnified Party becomes involved as a result of any of the transactions contemplated by the Transaction Agreements; and
(vi) any civil penalty or fine assessed by OFAC or any other Governmental Authority administering any Anti-Terrorism Law, anti-money laundering law or Sanctions against, and all reasonable costs and expenses (including reasonable documented legal fees and disbursements) incurred in connection with defense thereof by, any Indemnified Party as a result of any action of Seller or its Affiliates;
provided, that notwithstanding the foregoing, in no event shall Seller be liable hereunder to any Indemnified Party or any other Person for (A) any special, indirect, consequential or punitive damages or (B) Claims to the extent arising from any Indemnified Party’s gross negligence or willful misconduct.
(g) No Sales, Liens. Seller will not sell, pledge, assign (by operation of law or otherwise) or transfer to any other Person, or otherwise dispose of, or grant, create, incur, assume or suffer to exist any Lien (arising through or under the Seller) upon or with respect to, any Purchased Receivable or any interest therein, or assign any right to receive income in respect thereof, or take any other action inconsistent with Buyer’s ownership of, the Purchased Receivables, except to the extent arising under any Transaction Agreement and except as expressly permitted under the Transaction Agreements and Seller shall not claim any ownership interest in any Purchased Receivable and shall defend the right, title and interest of Buyer in, to and under the Purchased Receivables against all claims (other than any claims of third parties claiming through or under Buyer).
(h) Contracts and Credit and Collection Policies; Modification of Receivables.
(i) Seller shall timely and fully comply with and perform its obligations, covenants and other promises under the Contracts relating to the Purchased Receivables and the Credit and Collection Policies except insofar as any failure so to comply or perform would not materially and adversely affect the rights of Buyer.
(ii) Seller will not amend, modify or waive in any material respect any term or condition relating to payments under or enforcement of any Contract related thereto.
(i) Notice of Liens. Seller shall notify the Buyer promptly after becoming aware of any Lien arising through or under Seller on any Purchased Receivables other than the conveyances hereunder.
(j) Documentation of Transfer. Seller shall timely file in all appropriate filing offices the documents which are necessary or advisable to perfect and maintain the perfection of the security interest granted by Seller under Paragraph 6(a) of the Master Repurchase Agreement in favor of Buyer in the Purchased Receivables.
(k) Changes Concerning Seller. Seller will not change its (i) jurisdiction of organization, (ii) name or (iii) type of organization, unless it shall have notified Buyer of the same and delivered to Buyer all financing statement amendments and other documents necessary to maintain the perfection of the security interest granted by Seller under Paragraph 6(a) of the Master Repurchase Agreement in favor of Buyer under the Transaction Agreements in connection with such change or relocation without giving Buyer not less than 45 days’ prior written notice of such change.
(l) Compliance with Laws. So long as any Transaction is outstanding, Seller will comply in all material respects with all applicable laws, rules, regulations and orders and preserve and maintain its existence, rights, franchises, qualifications, and privileges except to the extent that the failure so to comply with such laws, rules and regulations or the failure so to preserve and maintain such existence, rights, franchises, qualifications and privileges would not materially adversely affect the collectability of the Purchased Receivables or the ability of Seller to perform its obligations under the Transaction Agreements in all material respects.
(m) Taxes. Subject to the provision by Buyer of the IRS Form W-8ECI in accordance with Section 3.3 and any other relevant tax forms and related documentation confirming its exemption from withholding Taxes (including, without limitation, withholding Taxes under FATCA), Seller will pay all Taxes (other than Excluded Taxes) and Seller shall indemnify and hold Buyer harmless from and against any Taxes (for the avoidance of doubt, other than Excluded Taxes), including any Taxes payable in connection with Purchased Receivables or the sale thereof contemplated by the Transaction Agreements.
(n) Margin Reporting. So long as any Transaction is outstanding, Seller shall promptly following the later of (x) two (2) Business Days following after such Business Day and (y) having actual knowledge thereof notify Buyer in writing if, as of any Business Day, the aggregate Market Value of such the applicable Transaction Portfolio (after giving effect to any transfer of Additional Purchased Receivables pursuant to Paragraph 4(a) of the Master Repurchase Agreement) decreases to an extent sufficient to require the transfer of cash pursuant to Paragraph 4(a) of the Master Repurchase Agreement.
(o) Request to Deliver Full Portfolio Report. So long as any Transaction is outstanding, if requested by Buyer from time to time, Seller shall, within five (5) Business Days of such request, deliver to Buyer an updated Full Portfolio Report for the applicable Transaction, which shall include a complete listing of all Purchased Receivables comprising the Transaction Portfolio as of the last day of the month immediately preceding the date on which such updated Portfolio Report is delivered and shall indicate the Market Value of the Transaction Portfolio as of such date; provided, that, so long as no Event of Default has occurred and is continuing, Buyer shall make such interim reporting request no more than once during any 12-month period.
(p) Amendments to Securitization Facility Documents. Seller shall deliver (or cause to be delivered) to Buyer written notice of any actual or contemplated material amendment, supplement or other modification to any Securitization Facility Document (including a copy of such amendment, supplement or other modification) no less than five (5) Business Days (or such shorter period of time as may be consented to in writing by Buyer) prior to such amendment, supplement or other modification becoming effective, in each case to the extent such amendment, supplement or other modification could affect the sale of Seller Receivables contemplated hereby; provided that Buyer shall at the request of Seller execute a non-disclosure agreement to the extent required by any applicable confidentiality covenants.
(q) Mergers, Sales, Etc. Any Person into which the Seller may be merged or consolidated, or any entity resulting from such merger or consolidation to which the Seller is a party, or any Person succeeding to the business of the Seller, shall be successor to the Seller hereunder, without execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding; provided that Seller shall not merge or consolidate with or into any Person without giving Buyer not less than 45 days’ prior written notice thereof.
(r) Sanctions. Seller shall not directly or knowingly indirectly, use the proceeds of any Transaction, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other individual or entity, to fund any activities of or business with any individual or entity, or in any Designated Jurisdiction, that, at the time of such Transaction, is the subject of Sanctions, or in any other manner that will result in a violation of any applicable Sanctions by any individual or entity (including any individual or entity participating in the transactions contemplated by the Transaction Agreements).
6. Reserved.
7. Certain Calculations.
7.1 Buyer shall calculate the Funded Purchase Prices, and all other amounts to be calculated under the Transaction Agreements, as well as any adjustments thereto, which calculations shall be conclusive absent manifest error. Upon the reasonable request of Seller, Buyer shall promptly provide such calculations to Seller.
8. Miscellaneous.
8.1 Further Assurances. Subject to Paragraph 6(d) of the Master Repurchase Agreement, Seller agrees that from time to time it will promptly execute and deliver such other documents and instruments, all instruments and documents, and take all further action that Buyer may reasonably request, to carry out the purpose and intent of the Transaction Agreements, including in order to perfect, protect or more fully evidence Buyer’s interest in the Purchased Receivables and any proceeds thereof.
8.2 Expenses. Seller shall, promptly following written demand thereof, which shall be accompanied by reasonable detail with respect thereto, pay all reasonably incurred costs, liabilities, losses, damages and expenses (including reasonable and documented fees and expenses of its outside counsel) incurred or suffered by Buyer in connection with (x) any amendments of the Transaction Agreements or any related documents after the Effective Date or (y) the occurrence of an Event of Default or the exercise of any remedies under the Transaction Agreements in connection therewith. Seller shall pay the reasonable and documented fees and expenses of its outside counsel incurred in connection with the negotiation, execution and delivery of the Transaction Agreements which amounts shall be paid on the Effective Date to the extent an invoice is received therefor no later than the Business Day prior to the Effective Date and otherwise no later than five (5) Business Days following receipt of such invoice.
8.3 Entire Agreement. This Framework Agreement, together with the other Transaction Agreements, constitutes the entire agreement between the Parties and supersedes all prior oral and written negotiations, communications, discussions, and correspondence pertaining to the subject matter of the Transaction Agreements.
8.4 Order of Precedence. If there is a conflict between this Framework Agreement and any other Transaction Agreement, this Framework Agreement will control unless the conflicting provision of the other Transaction Agreement specifically references the provision of this Framework Agreement to be superseded.
8.5 Amendments and Waivers. No amendment, supplement, modification or waiver of any provision of this Framework Agreement or any other Transaction Agreement, and no consent to any departure by Seller or Guarantor therefrom, shall be effective unless in writing signed by Buyer and Seller and/or Guarantor, as the case may be, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.
8.6 Binding Effect. The Transaction Agreements will be binding upon and inure to the benefit of the Parties and their respective successors, and permitted assigns.
8.7 Assignment. Except as provided in this Framework Agreement or any other Transaction Agreement, neither this Framework Agreement nor any other Transaction Agreement, respectively, may be assigned or otherwise transferred, nor may any right or obligation hereunder or under another Transaction Agreement be assigned or transferred by any Party without the consent of the other Party. Any permitted assignee shall assume all obligations of its assignor under this Framework Agreement; provided, that if an Event of Default shall have occurred and be continuing, Buyer may assign all or any portion of its rights and obligations under any Transaction Agreement without the consent of Seller. Any attempted assignment not in accordance with this Section 8.7 shall be void.
8.8 Notices. All notices, requests, demands, and other communications required or permitted to be given under any of the Transaction Agreements to any Party must be in writing delivered to the applicable Party at the following address:
If to Buyer:
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MUFG Bank, Ltd., New York Branch
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1251 Avenue of the Americas
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New York, New York 10020-1104
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Attention:
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Thomas Giuntini
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E-Mail:
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TGiuntini@us.mufg.jp
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If to Seller:
USCC EIP LLC
30 N. LaSalle, Suite 4000
Chicago, IL 60602
Attention: John M. Toomey
Telephone: 312-592-5308
Facsimile: 608-830-5530
Electronic Mail: John.Toomey@tdsinc.com
With a copy to (which shall not constitute notice):
USCC EIP LLC
8410 West Bryn Mawr Avenue
Chicago, Illinois 60631
Attention: Doug Chambers
Telephone: (773) 399-8930
Electronic Mail: doug.chambers@uscellular.com
and
Sidley Austin LLP
One S. Dearborn Street
Chicago, Illinois 60603
Attention: John P. Kelsh, General Counsel
Telephone: (312) 853-7097
Facsimile: (312) 853-7036
Electronic Mail: jkelsh@sidley.com
or to such other address as such Party may designate by written notice to each other Party. Each notice, request, demand, or other communication will be deemed given and effective, as follows: (i) if sent by hand delivery, upon delivery; (ii) if sent by first-class U.S. Mail, postage prepaid, upon the earlier to occur of receipt or three days after deposit in the U.S. Mail; (iii) if sent by a recognized prepaid overnight courier service, one Business Day after the date it is given to such service; (iv) if sent by facsimile, upon receipt of confirmation of successful transmission by the facsimile machine; and (v) if sent by e-mail, upon acknowledgement of receipt by the recipient.
8.9 GOVERNING LAW. THIS FRAMEWORK AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAW PROVISIONS THEREOF OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
8.10 Jurisdiction. Each Party hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or proceeding relating to this Framework Agreement, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the courts of the state of New York located in the Borough of Manhattan in the City of New York, the courts of the United States of America for the Southern District of New York and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to the applicable party at its respective address set forth in Section 8.8 or at such other address which has been designated in accordance therewith; and
(d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by Law or shall limit the right to sue in any other jurisdiction.
8.11 WAIVER OF JURY TRIAL. EACH PARTY HEREBY WAIVES ITS RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO ANY OF THE TRANSACTION AGREEMENTS OR THE TRANSACTIONS CONTEMPLATED BY THE TRANSACTION AGREEMENTS, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY EITHER PARTY AGAINST THE OTHER, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. EACH PARTY HEREBY AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION WILL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE PREVIOUS SENTENCE, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM, OR OTHER PROCEEDING THAT SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF ANY PORTION OF ANY TRANSACTION AGREEMENTS. THIS WAIVER WILL APPLY TO ANY SUBSEQUENT AMENDMENT, RENEWAL, SUPPLEMENT, OR MODIFICATION TO ANY OF THE TRANSACTION AGREEMENTS.
8.12 Severability. If any provision of a Transaction Agreement is held by a court of competent jurisdiction to be invalid, unenforceable, or void, that provision will be enforced to the fullest extent permitted by applicable Law, and the remainder of the applicable Transaction Agreement will remain in full force and effect. If the time period or scope of any provision is declared by a court of competent jurisdiction to exceed the maximum time period or scope that that court deems enforceable, then that court will reduce the time period or scope to the maximum time period or scope permitted by Law.
8.13 Survival. The provisions of Section 5.3(f), Section 5.3(m) and this Article 8 shall survive any termination or expiration of this Framework Agreement and any of the other Transaction Agreements.
8.14 Counterparts. This Framework Agreement shall be valid, binding, and enforceable against a party only when executed and delivered by an authorized individual on behalf of the party by means of (i) any electronic signature permitted by the federal Electronic Signatures in Global and National Commerce Act, state enactments of the Uniform Electronic Transactions Act, and/or any other relevant electronic signatures law, including relevant provisions of the Uniform Commercial Code (collectively, “Signature Law”); (ii) an original manual signature; or (iii) a faxed, scanned, or photocopied manual signature. Each electronic signature or faxed, scanned, or photocopied manual signature shall for all purposes have the same validity, legal effect, and admissibility in evidence as an original manual signature. Each Party shall be entitled to conclusively rely upon, and shall have no liability with respect to, any faxed, scanned, or photocopied manual signature, or other electronic signature, of any Party and shall have no duty to investigate, confirm or otherwise verify the validity or authenticity thereof. This Framework Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts shall, together, constitute one and the same instrument.
8.15 Right of Setoff. If an Event of Default shall have occurred and be continuing, Buyer is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable Requirements of Law, to set off any obligations at any time owing by Buyer to or for the credit or the account of the Seller (other than obligations of Buyer arising under the Transaction Agreements) against any and all of the obligations of the Seller now or hereafter existing under this Framework Agreement or any other Transaction Agreement to Buyer, irrespective of whether or not Buyer shall have made any demand under this Framework Agreement or any other Transaction Agreement. The rights of Buyer under this Section 8.15 are in addition to other rights and remedies (including other rights of setoff) that Buyer may have. Buyer agrees to notify Seller promptly after any such setoff and application; provided, that the failure to give such notice shall not affect the validity of such setoff and application.
8.16 Extensions of Facility Expiration Date. Notwithstanding anything in Section 8.5 to the contrary, on or before the date that is thirty (30) days prior to the Current Facility Expiration Date, the Parties hereto may, in their sole discretion, upon mutual written agreement, extend the Scheduled Facility Expiration Date then in effect for an additional Extension Period beyond the Current Facility Expiration Date, with such extension to become effective on the Current Facility Expiration Date.
8.17 USA PATRIOT Act. Buyer hereby notifies Seller that pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies Seller and Guarantor, which information includes name and address and other information that will allow Buyer to identify Seller and Guarantor, as applicable, in accordance with the Patriot Act. Seller shall, promptly following a request by the Buyer, provide all documentation and other information that the Buyer requests in order to comply with its ongoing obligations under applicable Anti-Terrorism Laws, including the Patriot Act.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the Parties have executed this Framework Agreement as of the date first written above.
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Buyer:
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MUFG BANK, LTD., NEW YORK BRANCH
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By:
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/s/ Thomas Giuntini
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Name:
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Thomas Giuntini
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Title:
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Managing Director
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[SIGNATURE PAGES CONTINUE ON FOLLOWING PAGE]
IN WITNESS WHEREOF, the Parties have executed this Framework Agreement as of the date first written above.
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Seller:
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USCC EIP LLC
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By:
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/s/ Douglas W. Chambers
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Name:
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Douglas W. Chambers
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Title:
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Authorized Person of USCC EIP LLC and Executive Vice President, Chief Financial Officer and Treasurer of United States Cellular Corporation
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By:
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/s/ John M. Toomey
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Name:
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John M. Toomey
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Title:
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Authorized Person of USCC EIP LLC and Vice President and Treasurer of Telephone and Data Systems, Inc.
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SCHEDULE 1
DEFINITIONS
As used in the Transaction Agreements, the following terms have the following meanings unless otherwise defined in any Transaction Agreement:
“Additional Purchased Receivables” has the meaning set forth in the Master Repurchase Agreement.
“Affiliate” means, with respect to any specified Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, another Person or a Subsidiary of such other Person; and the terms “controlling” and “controlled” have meanings correlative to the foregoing. A Person shall be deemed to control another Person if the controlling Person owns, directly or indirectly, 10% or more of any class of voting securities of the controlled Person or possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the controlled Person, whether through ownership of stock or otherwise.
“Anti-Terrorism Laws” means any Requirements of Law relating to financing terrorism, “know your customer” or money laundering, including Executive Order No. 13224, the Patriot Act, the Laws comprising or implementing the Bank Secrecy Act, and the Laws administered by the United States Treasury Department’s Office of Foreign Asset Control.
“Bankruptcy Code” means title 11 of the United States Code, 11 U.S.C. §§ 101 et seq.
“Beneficial Ownership Rule” means 31 C.F.R. § 1010.230.
“Business Day” means any day other than (i) a Saturday or Sunday or (ii) any other day on which national banking associations or state banking institutions in New York City, New York or Chicago, Illinois are authorized or obligated by law, executive order or governmental decree to be closed.
“Buyer” has the meaning set forth in the Preamble.
“Category A Receivables” means each Seller Receivable arising under a Contract with a sales credit class rated A, AC or E (Business Major and Regular only) as reflected on Seller’s books and records.
“Category B Receivables” means each Seller Receivable arising under a Contract with a sales credit class rated B, J, or K as reflected on Seller’s books and records.
“Category C Receivables” means each Seller Receivable arising under a Contract with a sales credit class rated D, DL, DM, BC, C, or E (Consumer and Sole Owner only) as reflected on Seller’s books and records.
“Category D Receivables” means each Seller Receivable arising under a Contract with a sales credit class rated CC, DC, L, L2, L3, LH, LM, M, M2, M3, MM, N, O, Y, or Z as reflected on Seller’s books and records.
“Category E Receivables” means each Seller Receivable arising under a Contract with a sales credit class rated X, X1, X2, X3, XC, XL, or XM as reflected on Seller’s books and records.
“Category F Receivables” means Seller Receivables not having the characteristics of any Seller Receivables in any other Receivables Category.
“Collateral” has the meaning set forth in the Master Repurchase Agreement.
“Collections” means, with respect to any Receivable, any payments (or equivalent) made by or on behalf of the related Obligor with respect to such Receivable, in the form of cash, checks, wire transfers, electronic transfers, ATM transfers or any other form of payment in accordance with a Contract in effect from time to time, and any other cash proceeds of such Receivable, including recoveries in respect of Defaulted Receivables and cash proceeds of Related Rights with respect to such Receivable.
“Confirmation” has the meaning set forth in the Master Repurchase Agreement.
“Consolidated Affiliate” means, with respect to any Person, each Affiliate of such Person (whether now existing or hereafter created or acquired) the financial statements of which are (or should be) consolidated with the financial statements of such Person in accordance with GAAP.
“Contract” means with respect to a Receivable, the retail installment contract, credit sale contract, retail installment obligation, or retail installment sale agreement or any other agreement between an Originator and an Obligor pursuant to or under which such Obligor shall be obligated to pay for a wireless communication device sold by such Originator, along with the agreements between the Originator or an Affiliate of such Originator and the related Obligor governing the terms and conditions of such contract, as such agreements or statements may be amended, modified or otherwise changed from time to time.
“Credit and Collection Policies” means, with respect to the Receivables and Related Rights, those policies and procedures of the Servicer (or one of its Affiliates) relating to the operation of its retail equipment installment plan sales contract financing business, including the established policies and procedures for determining the creditworthiness of sales contract customers, and relating to the origination, underwriting, servicing, administration, and maintenance of and collection of retail equipment installment plan sales contract receivables, as such policies and procedures may be amended, modified, or otherwise changed from time to time.
“Credit Facility Documents” means the First Amended and Restated Credit Agreement dated as of July 20, 2021 among Guarantor, each lender from time to time party thereto, Toronto Dominion (Texas) LLC, as Administrative Agent, and The Toronto-Dominion Bank, New York Branch, as L/C Issuer and as Swing Line Lender and each Guaranty (as defined therein).
“Current Facility Expiration Date” means, as of any time of determination, the Scheduled Facility Expiration Date (taking into account any prior extensions of the Scheduled Facility Expiration Date pursuant to Section 8.15).
“Defaulted Receivable” shall mean, as of any date of determination, any Receivable (without duplication) which (a) is sixty-one (61) days or more past due, (b) has been charged off as uncollectible in accordance with the Credit and Collection Policies, or (c) has been identified as fraudulent and has not been otherwise written-off or adjusted as of such date.
“Delinquent Receivable” means, as of any date of determination, any Receivable (without duplication) which is thirty-one (31) days or more past due, but less than sixty (60) days past due, after its original Due Date, as of the last day of the most recently ended calendar month.
“Designated Jurisdiction” shall mean any country or territory to the extent that such country or territory itself is the subject of any Sanction.
“Dilutions” means, with respect to any Receivable, the aggregate amount of any reductions or adjustments in the Receivable Balance of such Receivable, including as a result of any defective, rejected, returned, repossessed or foreclosed goods or any credit, rebate, sales allowance, discount or other adjustment or setoff.
“Due Date” means, with respect to any Receivable, any date on which such Receivable becomes due and payable pursuant to the corresponding Invoice.
“Eligibility Criteria” means the criteria set forth in Part 2 of Schedule 3.
“Eligible Receivable” means, as of any time of determination, a Seller Receivable that meets all of the Eligibility Criteria as of the applicable time of determination.
“Event of Default” means any of the following:
(a) Seller or Guarantor shall have failed to pay any Repurchase Price (other than the portion thereof attributable to Price Differential) or Margin Payment in respect of any Transaction when and as the same shall become due and payable and, in the case of the failure to pay any Margin Payment, such failure shall continue unremedied for a period of three (3) or more Business Days;
(b) Seller or Guarantor shall have failed to pay any portion of Repurchase Price attributable to Price Differential, any fee required to be paid under the Fee Letter, any amount required to be refunded pursuant to Section 4.2(c) hereof, or any other amounts owing under any Transaction Agreement (other than amounts specified in clause (a) of this definition), in each case, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of five (5) or more Business Days;
(c) [reserved];
(d) Seller or Guarantor shall fail to observe or perform any covenant, condition or agreement contained in this Framework Agreement or any other Transaction Agreement (excluding any covenants, conditions or agreements specified in clauses (a), (b) or (c) of this definition) and such failure shall continue unremedied for a period of thirty (30) or more days;
(e) any representation or warranty made or deemed made by or on behalf of Seller or Guarantor in or in connection with this Framework Agreement or any other Transaction Agreement shall prove to have been incorrect in any material respect when made or deemed made, and such failure to be correct shall continue unremedied for a period of thirty (30) or more days;
(f) the grant by Seller if favor of Buyer of the security interest pursuant to Paragraph 6(a) of the Master Repurchase Agreement shall cease to be perfected with respect to any material portion of the Collateral , except to the extent released in accordance with, or in connection with a disposition permitted under, the Transaction Agreements;
(g) an Event of Insolvency shall occur with respect to Seller or Guarantor;
(h) the Guaranty shall cease to be in full force and effect, or its validity or enforceability shall be disputed by Seller or Guarantor;
(i) Seller shall cease to be a wholly-owned direct or indirect subsidiary of Guarantor;
(j) an “Event of Default” shall occur and be continuing under any Credit Facility Document if the effect of such “Event of Default” is to cause the indebtedness under such Credit Facility Document to be declared or to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise) prior to its stated maturity or cash collateral in respect thereof to be demanded.
“Excluded Taxes” means any of the following Taxes imposed on or with respect to an Indemnified Person or required to be withheld or deducted from a payment to an Indemnified Person: (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes and branch profits Taxes, in each case, (i) imposed as a result of such Indemnified Person being organized under the laws of, or having its principal office in the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Indemnified Person pursuant to a law in effect on the Effective Date, (c) Taxes attributable to such Indemnified Person’s failure to provide relevant IRS forms and related documentation, and (d) any Taxes imposed pursuant to FATCA.
“Extension Period” means, with respect to any extension of the Scheduled Facility Expiration Date pursuant to Section 8.15, the period commencing on (and including) the Current Facility Expiration Date (prior to giving effect to such extension) and expiring on (but excluding) the anniversary of such Current Facility Expiration Date.
“Facility Expiration Date” means the Scheduled Facility Expiration Date in effect from time to time; provided, that (i) the Facility Expiration Date shall be deemed to have occurred on the first date (if any) upon which a Repurchase Date shall be deemed to occur pursuant to Paragraph 11 of the Master Repurchase Agreement, and (ii) on any Business Day Buyer may deliver a written notice to Seller terminating the Facility Term as of the date that is thirty (30) days following the receipt by Seller of such notice, in which case the Facility Expiration Date shall be deemed to occur on the last day of such thirty-day period.
“Facility Term” means the period beginning on the Effective Date and ending on the Facility Expiration Date.
“Fee Letter” means that certain Fee Letter Agreement dated as of the Effective Date, by and between Seller and Buyer.
“Framework Agreement” has the meaning set forth in the Preamble.
“Full Portfolio Report” means a report substantially in the form attached as Exhibit B to this Framework Agreement. The Full Portfolio Report shall set forth information with respect to the Purchased Receivables as of the end of the most recently ended calendar month.
“Funded Purchase Price” means, with respect to any Transaction entered into (or proposed to be entered into) on any Purchase Date, the excess of (a) the Purchase Price for such Transaction over (b) the amount of Repurchase Price under any Transaction whose Repurchase Date coincides with such Purchase Date which is netted against such Purchase Price in accordance with Paragraph 12 of the Master Repurchase Agreement (any such netting being subject to Paragraph 12 of Annex I to the Master Repurchase Agreement).
“Funded Repurchase Price” means, with respect to any Transaction expiring on any Repurchase Date, the excess of (a) the Repurchase Price for such Transaction over (b) the amount of any Purchase Price under any other Transaction whose Purchase Date coincides with such Repurchase Date which is netted against such Repurchase Price in accordance with Paragraph 12 of the Master Repurchase Agreement (any such netting being subject to Paragraph 12 of Annex I to the Master Repurchase Agreement).
“Funding Conditions” has the meaning set forth in Section 4.3(a).
“GAAP” means generally accepted accounting principles as applied in the United States.
“Governmental Authority” means the United States of America, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.
“Guarantor” means United States Cellular Corporation, a Delaware corporation.
“Guaranty” means that certain Guaranty, dated as of the Effective Date, executed by Guarantor in favor of Buyer.
“Insolvency Event” means, with respect to any Person:
(a) such Person shall file a petition commencing a voluntary case under any chapter of the federal bankruptcy laws; or such Person shall file a petition or answer or consent seeking reorganization, arrangement, adjustment, or composition under any other similar Insolvency Law, or shall consent to the filing of any such petition, answer, or consent; or such Person shall appoint, or consent to the appointment of, a custodian, receiver, liquidator, trustee, assignee, sequestrator or other similar official in bankruptcy or insolvency of it or of any substantial part of its property; such Person shall make an assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts generally as they become due; or
(b) the commencement by a court having jurisdiction in the premises of an action seeking: (i) a decree or order for relief in respect of such Person in a case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization, or other similar law, (ii) the appointment of a custodian, receiver, liquidator, conservator, assignee, trustee, sequestrator, or other similar official of such Person or (iii) the winding up or liquidation of the affairs of such Person, and notwithstanding the objection by such Person, any such action shall have remained undischarged or unstayed for a period of sixty (60) consecutive days or any order or decree providing the sought after relief, remedy or other action shall have been entered.
“Insolvency Law” means (a) the Bankruptcy Code and any other applicable federal or state liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization, suspension of payments, readjustment of debt, marshalling of assets, assignment for the benefit of creditors and similar debtor relief laws from time to time in effect in any jurisdiction affecting the rights of creditors generally.
“Invoice” means, with respect to any Receivable, the monthly bill related to such Receivable issued by or on behalf of the Servicer to the related Obligor.
“Lien” means any security interest, mortgage, deed of trust, pledge, hypothecation, assignment, deposit arrangement, equity interest, encumbrance, lien (statutory or other), preference, participation interest, priority or other security agreement or preferential arrangement of any kind or nature whatsoever, including any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing and the filing of any financing statement under the UCC or comparable law of any jurisdiction to evidence any of the foregoing.
“Margin Deficit” has the meaning set forth in the Master Repurchase Agreement.
“Margin Payment” means any cash required to be transferred by Seller to Buyer pursuant to Paragraph 4(a) of the Master Repurchase Agreement.
“Market Value” has the meaning set forth in the Master Repurchase Agreement.
“Master Repurchase Agreement” means that certain 1996 SIFMA Master Repurchase Agreement dated as of January 26, 2022, between Seller and Buyer, including Annex I thereto (and as amended thereby).
“Maximum Purchase Price” means $200,000,000.
“Monthly Date” means the last Business Day of each calendar month.
“Obligor” means, with respect to any Receivable and the related Contract, the Person or Persons party to the Contract who is (are) obligated to make payments with respect to such Receivable.
“OFAC” means the Office of Foreign Assets Control of the U.S. Department of the Treasury.
“Ordering Priority” means the selection of Unsold Receivables in accordance with the following order of priority:
(a) such Unsold Receivables consisting of (i) Category A Receivables shall be selected before any other Unsold Receivables, (ii) Category B Receivables shall be selected prior to any other Unsold Receivables (other than Category A Receivables), (iii) Category C Receivables shall be selected prior to any other Unsold Receivables (other than Category A Receivables and Category B Receivables), (iv) Category D Receivables shall be selected prior to any other Unsold Receivables (other than Category A Receivables, Category Receivables and Category C Receivables), (iv) Category E Receivables shall be selected prior to Category F Receivables, and (v) Category F Receivables shall be selected if there are no other Unsold Receivables in any other Receivables Category; and
(b) within each Receivables Category, such Unsold Receivables shall be selected based on the Origination Date (i.e., the earliest originated Receivable shall be selected first) and if Unsold Receivables have the same Origination Date, Unsold Receivables shall selected in descending order of the Receivable Balance thereof, with the Unsold Receivable having the highest Receivable Balance being selected first and the Unsold Receivable having the lowest Receivable Balance being selected last.
“Organizational Documents” means a Party’s articles, certificate of incorporation or certificate of formation and its by-laws, limited liability company agreement or similar governing instruments required by the laws of its jurisdiction of formation or organization.
“Origination Date” means, with respect to any Receivable, the date on which the Contract with respect thereto is entered into.
“Originator” or “Originators” means each Person party to the Receivables Sale Agreement from time to time as an “Originator”.
“Patriot Act” means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001).
“Party” and “Parties” have the meaning set forth in the Preamble.
“Permitted Business Day” means any Business Day that is at least five (5) Business Days prior to the next Monthly Date or the Facility Expiration Date and which is not a Business Day on which a Transaction is then scheduled to be in effect.
“Person” means any person or entity, including any individual, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust, unincorporated organization, governmental entity or other entity of any nature.
“Portfolio Report” means (x) in the case of the initial Transaction, a Full Portfolio Report and (y) otherwise, a Summary Portfolio Report.
“Potential Event of Default” means the occurrence of any event that, with the giving of notice or lapse of time, would become an Event of Default.
“Price Differential” has the meaning set forth in the Master Repurchase Agreement.
“Proceeding” means any suit in equity, action at law or other judicial or administrative proceeding.
“Purchase Date” has the meaning set forth in the Master Repurchase Agreement.
“Purchase Time” means, with respect to any transfer of Receivables on a Purchase Date or pursuant to Paragraph 4(a) of Annex I to the Master Repurchase Agreement, the time of day on such Purchase Date or such day when Receivables are transferred to Buyer pursuant to Paragraph 4(a) of Annex I to the Master Repurchase Agreement specified in the definition of Ordering Priority and Paragraph 4(a), respectively.
“Purchase Price” has the meaning set forth in the Master Repurchase Agreement.
“Purchased Receivables” has the meaning set forth in the Master Repurchase Agreement.
“Receivable” means any indebtedness, payment obligation or other amounts payable by an Obligor from time to time in connection with a Contract, including amounts payable for Scheduled Payments, whether constituting an account, chattel paper, instrument, payment intangible or general intangible arising out of or in connection with the sale of new or used retail equipment installment plan sales contracts, which is sold from time to time by the applicable Originator to the Seller pursuant to the Receivables Sale Agreement, and in each case identified on the applicable Portfolio Report delivered pursuant to the Transaction Agreements.
“Receivable Balance” means, with respect to any Receivable, as of any date or time of determination the sum of the unpaid Scheduled Payments thereon, which, for the avoidance of doubt, shall be net of any Dilutions in respect thereof, in each case, as of such date or time of determination, as applicable; provided, that in the case of Receivables relating to Obligors and related devices that are eligible for a device upgrade pursuant to the terms of the related Contract, the Receivable Balance shall mean only the amount of the unpaid Scheduled Payments owing by such Obligor prior to the date on which the Contract becomes eligible for an upgrade; provided further, that the Receivable Balance of any Receivable may not exceed the outstanding principal amount, if any, owing by the related Obligor, and provided further, that the Receivable Balance of any Receivable which is an Ineligible Receivable as of such date or time of determination, as applicable, shall be zero.
“Receivables Category” means Category A Receivables, Category B Receivables, Category C Receivables, Category D Receivables, Category E Receivables or Category F Receivables.
“Receivables Sale Agreement” means that certain Receivables Sale Agreement, dated as of March 17, 2017, among each of the initial Originators named therein (and such additional Originators that may become party thereto from time to time), as sellers, and USCC EIP LLC, as purchaser.
“Related Rights” means, with respect to any Receivable, all of Seller’s right, title and interest in, to and under:
(a) the related Contract (but not Seller’s or the applicable Originator’s obligations, if any, under such Contract), all property (other than, in each case, any wireless device or Surrendered Device and any insurance contract related thereto), security interests, hypothecations, reservations of ownership, liens or other adverse claims and property subject thereto from time to time purporting to secure payment of such Receivable, whether pursuant to the contract pursuant to which such Receivable was originated, together with all financing statements, registrations, hypothecations, charges or other similar filings or instruments against an Obligor and all security agreements describing any collateral securing such Receivable, if any;
(b) all guarantees, letters of credit, insurance and other agreements or arrangements of whatever character from time to time supporting or securing payment of such Receivable whether pursuant to the Contract related to such Receivable or otherwise;
(c) all Collections with respect to such Receivable;
(d) all rights under the related Contract and related assignment as they relate to such Receivable; and
(e) all of Seller’s right, title and interest in, to and under the Receivables Sale Agreement, including, without limitation, all amounts due or to become due to Seller from the applicable Originator under the Receivables Sale Agreement and all rights, remedies, powers, privileges and claims of Seller against any Originator under the Receivables Sale Agreement (whether arising pursuant to the terms of the Receivables Sale Agreement or otherwise available to Seller at law or in equity).
“Repurchase Date” has the meaning set forth in the Master Repurchase Agreement.
“Repurchase Price” has the meaning set forth in the Master Repurchase Agreement.
“Requirements of Law” means, as to any Person, any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject, whether federal, state or local (including usury laws and the federal Truth in Lending Act).
“Sanctions” shall mean any economic or financial sanctions or trade embargoes imposed, administered or enforced by the United States Government (including without limitation, OFAC), the United Nations Security Council, the European Union, Her Majesty’s Treasury (“HMT”) or other relevant sanctions authority.
“Scheduled Facility Expiration Date” means January 31, 2023, as such date may be extended from time to time pursuant to Section 8.15.
“Scheduled Payment” on a Receivable means the scheduled periodic payment of principal and, if applicable, interest, required to be made by the Obligor.
“Securitization Facility Documents” means (i) the Master Indenture, dated as of December 20, 2017, among USCC Master Note Trust, USCC Services, LLC and U.S. Bank National Association, as Indenture Trustee, as the same may be amended, supplemented or otherwise modified from time to time and (ii) the Receivables Purchase Agreement dated as of December 20, 2017 between Seller and USCC Receivables Funding LLC.
“Securitization Transfer Notice” means a notice in the form of Exhibit D hereto identifying Receivables that are to be transferred pursuant to the Securitization Facility Documents and specifying the date on which such Receivables are to be so transferred.
“Seller” has the meaning set forth in the Preamble.
“Seller Receivable” means a Receivable owned by Seller.
“Servicer” has the meaning set forth in the Master Repurchase Agreement.
“Subject Receivable” has the meaning set forth in the Master Repurchase Agreement.
“Subsidiary” means, as to any Person, any other Person that is controlled, directly or indirectly by such Person; and for purposes of this definition, the term “control” means: (a) the direct or indirect ownership of a majority of the Voting Shares of such Person, (b) having the right to appoint a majority of the board of directors or supervisory board or like board or body, or (c) having the power to direct the management and policies of such Person, whether through the ownership of such Voting Shares, by contract or otherwise.
“Summary Portfolio Report” means a report substantially in the form attached as Exhibit C to this Framework Agreement. The Summary Portfolio Report shall set forth information with respect to the Purchased Receivables as of the second Business Day prior to the delivery thereof.
“Surrendered Device” means a qualifying device under a Contract that is traded in by the related Obligor in termination of its remaining payment obligations under the terms of such Contract.
“Tax” means all taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges payable to or imposed by any Governmental Authority, including any stamp, registration, documentation, sales, use, excise or similar taxes and inclusive of any interest, additions to tax, penalties or fines applicable thereto.
“Transaction” has the meaning set forth in the Master Repurchase Agreement.
“Transaction Agreements” has the meaning set forth in Section 2.1.
“Transaction Notice” has the meaning set forth in Section 4.1.
“Transaction Period” has the meaning set forth in the Master Repurchase Agreement.
“Transaction Portfolio” means, with respect to any Transaction, the portfolio of Receivables comprising the Purchased Receivables acquired by Buyer in connection with such Transaction in accordance with the terms of the Master Repurchase Agreement and applicable Confirmation, which shall consist of (i) Seller Receivables that are Eligible Receivables selected as Purchased Receivables as of the applicable Purchase Date, which selection shall occur by application of the Ordering Priority at 9:00 a.m. on such Purchase Date until the aggregate Market Value of the Receivables selected equals or exceeds 125% of the applicable Purchase Price for such Transaction (it being understood that no determination regarding the Purchased Receivables so selected (including the identification thereof) shall be required to be made for any purpose under this Agreement or any other Transaction Agreement prior to two (2) Business Days following the applicable Purchase Date) and (ii) all additional Seller Receivables subsequently transferred by Seller to Buyer as Additional Purchased Receivables during the Transaction Period for such Transaction pursuant to Paragraph 4(a) of the Master Repurchase Agreement (it being understood that no determination regarding the Additional Purchased Receivables so transferred (including the identification thereof) shall be required to be made for any purpose under this Agreement or any other Transaction Agreement prior to two (2) Business Days following the applicable Transfer Date) (including any such Seller Receivables reflected as having been so transferred in any Portfolio Report delivered by Seller), in each case, together with all Related Rights pertaining to such Receivables; provided, that any such Receivables and Related Rights that are re-transferred to Seller pursuant to Paragraph 4(f) of Annex I to the Master Repurchase Agreement in connection with Seller’s delivery of a Securitization Transfer Notice shall thereafter cease to be included in such Transaction Portfolio.
“Transfer Date” means, with respect to any Receivable included (or proposed to be included) in the Transaction Portfolio for any Transaction (x) if such Receivable is included in the Transaction Portfolio as of such Purchase Date, the Purchase Date for such Transaction or (y) if such Receivable is not included in the Transaction Portfolio as of such Purchase Date, the date on which such Receivable is transferred from Seller to Buyer pursuant to Paragraph 4(a) of the Master Repurchase Agreement.
“UCC” means the Uniform Commercial Code, as amended from time to time, as in effect in any specified jurisdiction.
“Unsold Receivable” means, as of any date, a Seller Receivable that is an Eligible Receivable and that is not a Purchased Receivable subject to an outstanding Transaction as of such date and is not a Subject Receivable with respect to which Seller has delivered a Securitization Transfer Notice; provided, that for purposes of applying the Ordering Priority on any Purchase Date that coincides with the Repurchase Date for an expiring Transaction, the Seller Receivables then constituting Purchased Receivables subject to such expiring Transaction shall be deemed to be Unsold Receivables as of the applicable Purchase Time.
“Voting Shares” means, with respect to any Person, any class or classes of capital stock or other ownership interests pursuant to which the holders thereof have the general voting power under ordinary circumstances to elect directors, managers or trustees of such Person (irrespective of whether or not, at the time, stock of any other class or classes has, or might have, voting power by reason of the happening of any contingency).
SCHEDULE 3
ELIGIBILITY CRITERIA
In order for a Receivable to meet the Eligibility Criteria in respect of any Transaction as of any date of determination, it must satisfy all of the following (in each case, as of such date of determination, or as otherwise provided below):
(a) it is in existence;
(b) it is payable in United States dollars;
(c) it has an Obligor that is (i) not a Consolidated Affiliate of Seller, (ii) if not a natural person, organized under the laws of the United States, a State thereof or the District of Columbia and (iii) as of the date specified in the Portfolio Report delivered in connection with the Transaction Date for the applicable Purchase Date, is not identified by the applicable Originator or Seller in its computer files as being the subject of a voluntary or involuntary bankruptcy proceeding;
(d) as of the applicable Purchase Time, it is not a Delinquent Receivable;
(e) it has not been identified by the applicable Originator or Seller or the relevant Obligor as having been incurred as a result of fraudulent use;
(f) the sale, assignment or transfer of such Receivable by the applicable Originator or Seller does not require any consent or approval by the related Obligor and does not contain a confidentiality provision that restricts or purports to restrict the exercise of rights under the Contract by the holder of such Contract;
(g) it has an Obligor that is in good standing;
(h) it has not been charged off as uncollectible in accordance with the Credit and Collection Policies or otherwise written-off;
(i) it arises under a Contact that has an original term of no more than thirty-six (36) months;
(j) [reserved];
(k) [reserved];
(l) it has a Contract that relates to an agreement for service provided by an Affiliate of the Servicer, which requires the Obligor to maintain service with an Affiliate of the Servicer (a breach of which accelerates amounts due under the Contract), and which contains cross-default provisions with the related service agreement;
(m) it was created in compliance in all material respects with the Servicer’s underwriting criteria and the Credit and Collection Policies and all Requirements of Law applicable to the applicable Originator and pursuant to a Contract which complies with all Requirements of Law applicable to the applicable Originator;
(n) with respect to which all material consents, licenses, approvals or authorizations of, or registrations or declarations with, any Governmental Authority required to be obtained, effected or given by the applicable Originator or Seller in connection with the creation of such Receivable or the execution, delivery and performance by the applicable Originator or Seller of its obligations, if any, under the related Contract have been duly obtained, effected or given and are in full force and effect;
(o) (i) as of the applicable Purchase Time, the applicable Originator has good and marketable title thereto free and clear of all liens, and (ii) at the time of the sale of such Receivable to Buyer, Seller has good and marketable title thereto free and clear of all liens;
(p) it has been the subject of a valid sale and assignment from (i) the applicable Originator to Seller of all of such Originator’s right, title and interest therein and (ii) Seller to Buyer of all of Seller’s right, title and interest therein;
(q) it is the legal, valid and binding payment obligation of the Obligor thereon, enforceable against such Obligor in accordance with its terms, except as such enforceability may be limited by applicable Insolvency Laws and except as such enforceability may be limited by general principles of equity (whether considered in a suit at law or in equity);
(r) it constitutes an “account,” “general intangible,” “payment intangible,” or “chattel paper” as defined in Article 9 of the UCC as then in effect in the State of Delaware and the State of New York;
(s) as of the applicable Purchase Time, it has not been waived or modified except as permitted in accordance with the Credit and Collection Policies and which waiver or modification is reflected in the applicable Originator’s and the Seller’s computer file of retail installment sales contracts at the time of its sale to Buyer;
(t) as of the applicable Purchase Time, it is not subject to any right of rescission, setoff, counterclaim or any other defense (including the defenses arising out of violations of usury laws), other than defenses arising out of applicable Insolvency Laws or other similar laws affecting the enforcement of creditors’ rights in general and except as such enforceability may be limited by general principles of equity (whether considered in a suit at law or in equity);
(u) (i) as to which, at the time of its sale to Seller, the applicable Originator has not taken any action which would impair, or omitted to take any action the omission of which would impair, the rights of the Seller therein, and (ii) as to which, as of the applicable Purchase Time, Seller has not taken any action which would impair, or omitted to take any action the omission of which would impair, the rights of Buyer therein;
(v) as to which, (i) at the time of its sale to Seller, the applicable Originator has satisfied and fully performed all of its obligations under the related Contract, and (ii) as of the applicable Purchase Time, Seller has satisfied and fully performed all of its obligations under the related Contract (if any); and
(w) it (i) was originated in the ordinary course of business from the sale of a device, and (ii) satisfies all of the requirements of the Credit and Collection Policies.
Exhibit A
Form of Transaction Notice
MUFG BANK, LTD., a Japanese limited company acting through its New York Branch, as Agent
RE: Transaction under the Framework Agreement and the Master Repurchase Agreement
Ladies and Gentlemen:
This Transaction Notice is delivered to you pursuant to Section 4.1 of the Master Framework Agreement, dated as of January 26, 2022 (the “Framework Agreement”), by and between USCC EIP LLC, as seller (the “Seller”), and MUFG Bank, Ltd., New York Branch (“Buyer”), relating to repurchase transactions to be entered into pursuant to the terms of the 1996 SIFMA Master Repurchase Agreement, dated as of January 26, 2022, including Annex I thereto (the “Master Repurchase Agreement”) by and between Seller and Buyer. Capitalized terms used but not defined herein have the meanings set forth in the Framework Agreement, or if not defined therein, in the Master Repurchase Agreement.
Seller hereby requests that, in accordance with the terms of the Framework Agreement, a Transaction under the Master Repurchase Agreement with a proposed Purchase Price of $__________________ be entered into on the proposed Purchase Date of _____________________, with a proposed Repurchase Date of ________________________. Attached hereto is a completed Portfolio Report required to be delivered pursuant to Section 4.1(a).]
Exhibit B
FORM OF FULL PORTFOLIO REPORT
Reference is hereby made to (i) the Master Framework Agreement dated as of January 26, 2022 (the “Framework Agreement”) between USCC EIP LLC and MUFG Bank, Ltd., New York Branch and (ii) the 1996 SIFMA Master Repurchase Agreement dated as of January 26, 2022 (including, and as amended by, Annex I thereto, the “Master Repurchase Agreement”), between USCC EIP LLC and MUFG Bank, Ltd., New York Branch. Capitalized terms used but not defined herein shall have the meaning set forth in the Master Repurchase Agreement. In accordance with and subject to the terms and conditions of the Framework Agreement and the Master Repurchase Agreement, this report constitutes a “Full Portfolio Report” required to be delivered pursuant to Section 4.1(a) or Section 5.3(o) of the Framework Agreement, as applicable, and sets forth certain information with respect to the portfolio of Seller Receivables as of the date specified herein.
Exhibit C
FORM OF SUMMARY PORTFOLIO REPORT
Reference is hereby made to (i) the Master Framework Agreement dated as of January 26, 2022 (the “Framework Agreement”) between USCC EIP LLC and MUFG Bank, Ltd., New York Branch and (ii) the 1996 SIFMA Master Repurchase Agreement dated as of January 26, 2022 (including, and as amended by, Annex I thereto, the “Master Repurchase Agreement”), between USCC EIP LLC and MUFG Bank, Ltd., New York Branch. Capitalized terms used but not defined herein shall have the meaning set forth in the Master Repurchase Agreement. In accordance with and subject to the terms and conditions of the Framework Agreement and the Master Repurchase Agreement, this report constitutes a “Summary Portfolio Report” required to be delivered pursuant to Section 4.1(a) of the Framework Agreement, as applicable, and sets forth certain information with respect to the portfolio of Seller Receivables as of the date specified herein.
Exhibit D
FORM OF SECURITIZATION TRANSFER NOTICE
Dated: [Date]
To: MUFG Bank, Ltd., New York Branch (“Buyer”)
Attention: Thomas Giuntini
1251 Avenue of the Americas
New York, New York 10020-1104
E-Mail: TGiuntini@us.mufg.jp
From: USCC EIP LLC (“Seller”)
30 N. LaSalle, Suite 4000
Chicago, IL 60602
Attention: John M. Toomey
Telephone: 312-592-5308
Facsimile: 608-830-5530
Electronic Mail: John.Toomey@tdsinc.com
Re: Securitization Transfer Notice
____________________________________________________________________________________________
Dear MUFG Bank, Ltd., New York Branch:
This Securitization Transfer Notice (this “Notice”) is being delivered to you pursuant to Paragraph 4(f) of Annex I to that certain 1996 SIFMA Master Repurchase Agreement, dated as of January 26, 2022 (as amended by such Annex I and as further amended and supplemented from time to time, the “Master Repurchase Agreement”) between Buyer and Seller. Capitalized terms used but not defined in this Notice shall have the meanings set forth in the Master Repurchase Agreement.
The purpose of this Notice is to notify Buyer that those Receivables set forth on Attachment 1 hereto are to be transferred pursuant to the Securitization Facility Documents on the date hereof (the “Securitization Transfer Date”).
Any Subject Receivables identified in such Attachment 1 shall be automatically re-transferred to Seller from Buyer, and the security interest in such Subject Receivables (and in the Related Rights pertaining thereto) granted pursuant to Paragraph 6 of the Master Repurchase Agreement shall be automatically released as, when and to the extent provided in Paragraph 4(f) of Annex I to the Master Repurchase Agreement.
Seller represents and warrants that upon giving effect to such re-transfer of Subject Receivables to Seller and the transfer of Additional Purchased Receivables on the Business Day prior to the Securitization Transfer Date, the Market Value (as of the second Business Day prior to such Business Day) of all Purchased Receivables subject to a Transaction will be at least equal to Buyer’s Margin Amount.
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Very truly yours,
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USCC EIP LLC
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By:
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Name:
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Title
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Exhibit 10.2
Master Repurchase Agreement
September 1996 Version
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Dated as of
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January 26, 2022
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Between:
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USCC EIP LLC, a Delaware limited liability company ("Seller")
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and
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MUFG Bank, LTD., New York Branch, a Japanese banking corporation acting through its New York Branch ("Buyer").
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1. Applicability
From time to time the parties hereto may enter into transactions in which one party (“Seller”) agrees to transfer to the other (“Buyer”) securities or other assets (“Securities”) against the transfer of funds by Buyer, with a simultaneous agreement by Buyer to transfer to Seller such Securities at a date certain or on demand, against the transfer of funds by Seller. Each such transaction shall be referred to herein as a “Transaction” and, unless otherwise agreed in writing, shall be governed by this Agreement, including any supplemental terms or conditions contained in Annex I hereto and in any other annexes identified herein or therein as applicable hereunder.
2. Definitions
(a) “Act of Insolvency”, with respect to any party, (i) the commencement by such party as debtor of any case or proceeding under any bankruptcy, insolvency, reorganization, liquidation, moratorium, dissolution, delinquency or similar law, or such party seeking the appointment or election of a receiver, conservator, trustee, custodian or similar official for such party or any substantial part of its property, or the convening of any meeting of creditors for purposes of commencing any such case or proceeding or seeking such an appointment or election, (ii) the commencement of any such case or proceeding against such party, or another seeking such an appointment or election, or the filing against a party of an application for a protective decree under the provisions of the Securities Investor Protection Act of 1970, which (A) is consented to or not timely contested by such party, (B) results in the entry of an order for relief, such an appointment or election, the issuance of such a protective decree or the entry of an order having a similar effect, or (C) is not dismissed within 15 days, (iii) the making by such party of a general assignment for the benefit of creditors, or (iv) the admission in writing by such party of such party’s inability to pay such party’s debts as they become due;
(b) “Additional Purchased Securities”, Securities provided by Seller to Buyer pursuant to Paragraph 4(a) hereof;
(c) “Buyer’s Margin Amount”, with respect to any Transaction as of any date, the amount obtained by application of the Buyer’s Margin Percentage to the Repurchase Price for such Transaction as of such date;
(d) “Buyer’s Margin Percentage”, with respect to any Transaction as of any date, a percentage (which may be equal to the Seller’s Margin Percentage) agreed to by Buyer and Seller or, in the absence of any such agreement, the percentage obtained by dividing the Market Value of the Purchased Securities on the Purchase Date by the Purchase Price on the Purchase Date for such Transaction;
(e) “Confirmation”, the meaning specified in Paragraph 3(b) hereof;
(f) “Income”, with respect to any Security at any time, any principal thereof and all interest, dividends or other distributions thereon;
(g) “Margin Deficit”, the meaning specified in Paragraph 4(a) hereof;
(h) “Margin Excess”, the meaning specified in Paragraph 4(b) hereof;
(i) “Margin Notice Deadline”, the time agreed to by the parties in the relevant Confirmation, Annex I hereto or otherwise as the deadline for giving notice requiring same-day satisfaction of margin maintenance obligations as provided in Paragraph 4 hereof (or, in the absence of any such agreement, the deadline for such purposes established in accordance with market practice);
(j) “Market Value”, with respect to any Securities as of any date, the price for such Securities on such date obtained from a generally recognized source agreed to by the parties or the most recent closing bid quotation from such a source, plus accrued Income to the extent not included therein (other than any Income credited or transferred to, or applied to the obligations of, Seller pursuant to Paragraph 5 hereof) as of such date (unless contrary to market practice for such Securities);
(k) “Price Differential”, with respect to any Transaction as of any date, the aggregate amount obtained by daily application of the Pricing Rate for such Transaction to the Purchase Price for such Transaction on a 360 day per year basis for the actual number of days during the period commencing on (and including) the Purchase Date for such Transaction and ending on (but excluding) the date of determination (reduced by any amount of such Price Differential previously paid by Seller to Buyer with respect to such Transaction);
(l) “Pricing Rate”, the per annum percentage rate for determination of the Price Differential;
(m) “Prime Rate”, the prime rate of U.S. commercial banks as published in The Wall Street Journal (or, if more than one such rate is published, the average of such rates);
(n) “Purchase Date”, the date on which Purchased Securities are to be transferred by Seller to Buyer;
(o) “Purchase Price”, (i) on the Purchase Date, the price at which Purchased Securities are transferred by Seller to Buyer, and (ii) thereafter, except where Buyer and Seller agree otherwise, such price increased by the amount of any cash transferred by Buyer to Seller pursuant to Paragraph 4(b) hereof and decreased by the amount of any cash transferred by Seller to Buyer pursuant to Paragraph 4(a) hereof or applied to reduce Seller’s obligations under clause (ii) of Paragraph 5 hereof;
(p) “Purchased Securities”, the Securities transferred by Seller to Buyer in a Transaction hereunder, and any Securities substituted therefor in accordance with Paragraph 9 hereof. The term “Purchased Securities” with respect to any Transaction at any time also shall include Additional Purchased Securities delivered pursuant to Paragraph 4(a) hereof and shall exclude Securities returned pursuant to Paragraph 4(b) hereof;
(q) “Repurchase Date”, the date on which Seller is to repurchase the Purchased Securities from Buyer, including any date determined by application of the provisions of Paragraph 3(c) or 11 hereof;
(r) “Repurchase Price”, the price at which Purchased Securities are to be transferred from Buyer to Seller upon termination of a Transaction, which will be determined in each case (including Transactions terminable upon demand) as the sum of the Purchase Price and the Price Differential as of the date of such determination;
(s) “Seller’s Margin Amount”, with respect to any Transaction as of any date, the amount obtained by application of the Seller’s Margin Percentage to the Repurchase Price for such Transaction as of such date;
(t) “Seller’s Margin Percentage”, with respect to any Transaction as of any date, a percentage (which may be equal to the Buyer’s Margin Percentage) agreed to by Buyer and Seller or, in the absence of any such agreement, the percentage obtained by dividing the Market Value of the Purchased Securities on the Purchase Date by the Purchase Price on the Purchase Date for such Transaction.
3. Initiation; Confirmation; Termination
(a) An agreement to enter into a Transaction may be made orally or in writing at the initiation of either Buyer or Seller. On the Purchase Date for the Transaction, the Purchased Securities shall be transferred to Buyer or its agent against the transfer of the Purchase Price to an account of Seller.
(b) Upon agreeing to enter into a Transaction hereunder, Buyer or Seller (or both), as shall be agreed, shall promptly deliver to the other party a written confirmation of each Transaction (a “Confirmation”). The Confirmation shall describe the Purchased Securities (including CUSIP number, if any), identify Buyer and Seller and set forth (i) the Purchase Date, (ii) the Purchase Price, (iii) the Repurchase Date, unless the Transaction is to be terminable on demand, (iv) the Pricing Rate or Repurchase Price applicable to the Transaction, and (v) any additional terms or conditions of the Transaction not inconsistent with this Agreement. The Confirmation, together with this Agreement, shall constitute conclusive evidence of the terms agreed between Buyer and Seller with respect to the Transaction to which the Confirmation relates, unless with respect to the Confirmation specific objection is made promptly after receipt thereof. In the event of any conflict between the terms of such Confirmation and this Agreement, this Agreement shall prevail.
(c) In the case of Transactions terminable upon demand, such demand shall be made by Buyer or Seller, no later than such time as is customary in accordance with market practice, by telephone or otherwise on or prior to the business day on which such termination will be effective. On the date specified in such demand, or on the date fixed for termination in the case of Transactions having a fixed term, termination of the Transaction will be effected by transfer to Seller or its agent of the Purchased Securities and any Income in respect thereof received by Buyer (and not previously credited or transferred to, or applied to the obligations of, Seller pursuant to Paragraph 5 hereof) against the transfer of the Repurchase Price to an account of Buyer.
4. Margin Maintenance
(a) If at any time the aggregate Market Value of all Purchased Securities subject to all Transactions in which a particular party hereto is acting as Buyer is less than the aggregate Buyer’s Margin Amount for all such Transactions (a “Margin Deficit”), then Buyer may by notice to Seller require Seller in such Transactions, at Seller’s option, to transfer to Buyer cash or additional Securities reasonably acceptable to Buyer (“Additional Purchased Securities”), so that the cash and aggregate Market Value of the Purchased Securities, including any such Additional Purchased Securities, will thereupon equal or exceed such aggregate Buyer’s Margin Amount (decreased by the amount of any Margin Deficit as of such date arising from any Transactions in which such Buyer is acting as Seller).
(b) If at any time the aggregate Market Value of all Purchased Securities subject to all Transactions in which a particular party hereto is acting as Seller exceeds the aggregate Seller’s Margin Amount for all such Transactions at such time (a “Margin Excess”), then Seller may by notice to Buyer require Buyer in such Transactions, at Buyer’s option, to transfer cash or Purchased Securities to Seller, so that the aggregate Market Value of the Purchased Securities, after deduction of any such cash or any Purchased Securities so transferred, will thereupon not exceed such aggregate Seller’s Margin Amount (increased by the amount of any Margin Excess as of such date arising from any Transactions in which such Seller is acting as Buyer).
(c) If any notice is given by Buyer or Seller under subparagraph (a) or (b) of this Paragraph at or before the Margin Notice Deadline on any business day, the party receiving such notice shall transfer cash or Additional Purchased Securities as provided in such subparagraph no later than the close of business in the relevant market on such day. If any such notice is given after the Margin Notice Deadline, the party receiving such notice shall transfer such cash or Securities no later than the close of business in the relevant market on the next business day following such notice.
(d) Any cash transferred pursuant to this Paragraph shall be attributed to such Transactions as shall be agreed upon by Buyer and Seller.
(e) Seller and Buyer may agree, with respect to any or all Transactions hereunder, that the respective rights of Buyer or Seller (or both) under subparagraphs (a) and (b) of this Paragraph may be exercised only where a Margin Deficit or Margin Excess, as the case may be, exceeds a specified dollar amount or a specified percentage of the Repurchase Prices for such Transactions (which amount or percentage shall be agreed to by Buyer and Seller prior to entering into any such Transactions).
(f) Seller and Buyer may agree, with respect to any or all Transactions hereunder, that the respective rights of Buyer and Seller under subparagraphs (a) and (b) of this Paragraph to require the elimination of a Margin Deficit or a Margin Excess, as the case may be, may be exercised whenever such a Margin Deficit or Margin Excess exists with respect to any single Transaction hereunder (calculated without regard to any other Transaction outstanding under this Agreement).
5. Income Payments
Seller shall be entitled to receive an amount equal to all Income paid or distributed on or in respect of the Securities that is not otherwise received by Seller, to the full extent it would be so entitled if the Securities had not been sold to Buyer. Buyer shall, as the parties may agree with respect to any Transaction (or, in the absence of any such agreement, as Buyer shall reasonably determine in its discretion), on the date such Income is paid or distributed either (i) transfer to or credit to the account of Seller such Income with respect to any Purchased Securities subject to such Transaction or (ii) with respect to Income paid in cash, apply the Income payment or payments to reduce the amount, if any, to be transferred to Buyer by Seller upon termination of such Transaction. Buyer shall not be obligated to take any action pursuant to the preceding sentence (A) to the extent that such action would result in the creation of a Margin Deficit, unless prior thereto or simultaneously therewith Seller transfers to Buyer cash or Additional Purchased Securities sufficient to eliminate such Margin Deficit, or (B) if an Event of Default with respect to Seller has occurred and is then continuing at the time such Income is paid or distributed.
6. Security Interest
Although the parties intend that all Transactions hereunder be sales and purchases and not loans, in the event any such Transactions are deemed to be loans, Seller shall be deemed to have pledged to Buyer as security for the performance by Seller of its obligations under each such Transaction, and shall be deemed to have granted to Buyer a security interest in, all of the Purchased Securities with respect to all Transactions hereunder and all Income thereon and other proceeds thereof.
7. Payment and Transfer
Unless otherwise mutually agreed, all transfers of funds hereunder shall be in immediately available funds. All Securities transferred by one party hereto to the other party (i) shall be in suitable form for transfer or shall be accompanied by duly executed instruments of transfer or assignment in blank and such other documentation as the party receiving possession may reasonably request, (ii) shall be transferred on the book-entry system of a Federal Reserve Bank, or (iii) shall be transferred by any other method mutually acceptable to Seller and Buyer.
8. Segregation of Purchased Securities
To the extent required by applicable law, all Purchased Securities in the possession of Seller shall be segregated from other securities in its possession and shall be identified as subject to this Agreement. Segregation may be accomplished by appropriate identification on the books and records of the holder, including a financial or securities intermediary or a clearing corporation. All of Seller’s interest in the Purchased Securities shall pass to Buyer on the Purchase Date and, unless otherwise agreed by Buyer and Seller, nothing in this Agreement shall preclude Buyer from engaging in repurchase transactions with the Purchased Securities or otherwise selling, transferring, pledging or hypothecating the Purchased Securities, but no such transaction shall relieve Buyer of its obligations to transfer Purchased Securities to Seller pursuant to Paragraph 3, 4 or 11 hereof, or of Buyer’s obligation to credit or pay Income to, or apply Income to the obligations of, Seller pursuant to Paragraph 5 hereof.
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Required Disclosure for Transactions in Which the Seller Retains Custody of the Purchased Securities
Seller is not permitted to substitute other securities for those subject to this Agreement and therefore must keep Buyer’s securities segregated at all times, unless in this Agreement Buyer grants Seller the right to substitute other securities. If Buyer grants the right to substitute, this means that Buyer’s securities will likely be commingled with Seller’s own securities during the trading day. Buyer is advised that, during any trading day that Buyer’s securities are commingled with Seller’s securities, they [will]* [may]** be subject to liens granted by Seller to [its clearing bank]* [third parties]** and may be used by Seller for deliveries on other securities transactions. Whenever the securities are commingled, Seller’s ability to resegregate substitute securities for Buyer will be subject to Seller’s ability to satisfy [the clearing]* [any]** lien or to obtain substitute securities.
* Language to be used under 17 C.F.R. ß403.4(e) if Seller is a government securities broker or dealer other than a financial institution.
** Language to be used under 17 C.F.R. ß403.5(d) if Seller is a financial institution.
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9. Substitution
(a) Seller may, subject to agreement with and acceptance by Buyer, substitute other Securities for any Purchased Securities. Such substitution shall be made by transfer to Buyer of such other Securities and transfer to Seller of such Purchased Securities. After substitution, the substituted Securities shall be deemed to be Purchased Securities.
(b) In Transactions in which Seller retains custody of Purchased Securities, the parties expressly agree that Buyer shall be deemed, for purposes of subparagraph (a) of this Paragraph, to have agreed to and accepted in this Agreement substitution by Seller of other Securities for Purchased Securities; provided, however, that such other Securities shall have a Market Value at least equal to the Market Value of the Purchased Securities for which they are substituted.
10. Representations
Each of Buyer and Seller represents and warrants to the other that (i) it is duly authorized to execute and deliver this Agreement, to enter into Transactions contemplated hereunder and to perform its obligations hereunder and has taken all necessary action to authorize such execution, delivery and performance, (ii) it will engage in such Transactions as principal (or, if agreed in writing, in the form of an annex hereto or otherwise, in advance of any Transaction by the other party hereto, as agent for a disclosed principal), (iii) the person signing this Agreement on its behalf is duly authorized to do so on its behalf (or on behalf of any such disclosed principal), (iv) it has obtained all authorizations of any governmental body required in connection with this Agreement and the Transactions hereunder and such authorizations are in full force and effect and (v) the execution, delivery and performance of this Agreement and the Transactions hereunder will not violate any law, ordinance, charter, bylaw or rule applicable to it or any agreement by which it is bound or by which any of its assets are affected. On the Purchase Date for any Transaction Buyer and Seller shall each be deemed to repeat all the foregoing representations made by it.
11. Events of Default
In the event that (i) Seller fails to transfer or Buyer fails to purchase Purchased Securities upon the applicable Purchase Date, (ii) Seller fails to repurchase or Buyer fails to transfer Purchased Securities upon the applicable Repurchase Date, (iii) Seller or Buyer fails to comply with Paragraph 4 hereof, (iv) Buyer fails, after one business day’s notice, to comply with Paragraph 5 hereof, (v) an Act of Insolvency occurs with respect to Seller or Buyer, (vi) any representation made by Seller or Buyer shall have been incorrect or untrue in any material respect when made or repeated or deemed to have been made or repeated, or (vii) Seller or Buyer shall admit to the other its inability to, or its intention not to, perform any of its obligations hereunder (each an “Event of Default”):
(a) The nondefaulting party may, at its option (which option shall be deemed to have been exercised immediately upon the occurrence of an Act of Insolvency), declare an Event of Default to have occurred hereunder and, upon the exercise or deemed exercise of such option, the Repurchase Date for each Transaction hereunder shall, if it has not already occurred, be deemed immediately to occur (except that, in the event that the Purchase Date for any Transaction has not yet occurred as of the date of such exercise or deemed exercise, such Transaction shall be deemed immediately canceled). The nondefaulting party shall (except upon the occurrence of an Act of Insolvency) give notice to the defaulting party of the exercise of such option as promptly as practicable.
(b) In all Transactions in which the defaulting party is acting as Seller, if the nondefaulting party exercises or is deemed to have exercised the option referred to in subparagraph (a) of this Paragraph, (i) the defaulting party’s obligations in such Transactions to repurchase all Purchased Securities, at the Repurchase Price therefor on the Repurchase Date determined in accordance with subparagraph (a) of this Paragraph, shall thereupon become immediately due and payable, (ii) all Income paid after such exercise or deemed exercise shall be retained by the nondefaulting party and applied to the aggregate unpaid Repurchase Prices and any other amounts owing by the defaulting party hereunder, and (iii) the defaulting party shall immediately deliver to the nondefaulting party any Purchased Securities subject to such Transactions then in the defaulting party’s possession or control.
(c) In all Transactions in which the defaulting party is acting as Buyer, upon tender by the nondefaulting party of payment of the aggregate Repurchase Prices for all such Transactions, all right, title and interest in and entitlement to all Purchased Securities subject to such Transactions shall be deemed transferred to the nondefaulting party, and the defaulting party shall deliver all such Purchased Securities to the nondefaulting party.
(d) If the nondefaulting party exercises or is deemed to have exercised the option referred to in subparagraph (a) of this Paragraph, the nondefaulting party, without prior notice to the defaulting party, may:
(i) as to Transactions in which the defaulting party is acting as Seller, (A) immediately sell, in a recognized market (or otherwise in a commercially reasonable manner) at such price or prices as the nondefaulting party may reasonably deem satisfactory, any or all Purchased Securities subject to such Transactions and apply the proceeds thereof to the aggregate unpaid Repurchase Prices and any other amounts owing by the defaulting party hereunder or (B) in its sole discretion elect, in lieu of selling all or a portion of such Purchased Securities, to give the defaulting party credit for such Purchased Securities in an amount equal to the price therefor on such date, obtained from a generally recognized source or the most recent closing bid quotation from such a source, against the aggregate unpaid Repurchase Prices and any other amounts owing by the defaulting party hereunder; and
(ii) as to Transactions in which the defaulting party is acting as Buyer, (A) immediately purchase, in a recognized market (or otherwise in a commercially reasonable manner) at such price or prices as the nondefaulting party may reasonably deem satisfactory, securities (“Replacement Securities”) of the same class and amount as any Purchased Securities that are not delivered by the defaulting party to the nondefaulting party as required hereunder or (B) in its sole discretion elect, in lieu of purchasing Replacement Securities, to be deemed to have purchased Replacement Securities at the price therefor on such date, obtained from a generally recognized source or the most recent closing offer quotation from such a source.
Unless otherwise provided in Annex I, the parties acknowledge and agree that (1) the Securities subject to any Transaction hereunder are instruments traded in a recognized market, (2) in the absence of a generally recognized source for prices or bid or offer quotations for any Security, the nondefaulting party may establish the source therefor in its sole discretion and (3) all prices, bids and offers shall be determined together with accrued Income (except to the extent contrary to market practice with respect to the relevant Securities).
(e) As to Transactions in which the defaulting party is acting as Buyer, the defaulting party shall be liable to the nondefaulting party for any excess of the price paid (or deemed paid) by the nondefaulting party for Replacement Securities over the Repurchase Price for the Purchased Securities replaced thereby and for any amounts payable by the defaulting party under Paragraph 5 hereof or otherwise hereunder.
(f) For purposes of this Paragraph 11, the Repurchase Price for each Transaction hereunder in respect of which the defaulting party is acting as Buyer shall not increase above the amount of such Repurchase Price for such Transaction determined as of the date of the exercise or deemed exercise by the nondefaulting party of the option referred to in subparagraph (a) of this Paragraph.
(g) The defaulting party shall be liable to the nondefaulting party for (i) the amount of all reasonable legal or other expenses incurred by the nondefaulting party in connection with or as a result of an Event of Default, (ii) damages in an amount equal to the cost (including all fees, expenses and commissions) of entering into replacement transactions and entering into or terminating hedge transactions in connection with or as a result of an Event of Default, and (iii) any other loss, damage, cost or expense directly arising or resulting from the occurrence of an Event of Default in respect of a Transaction.
(h) To the extent permitted by applicable law, the defaulting party shall be liable to the nondefaulting party for interest on any amounts owing by the defaulting party hereunder, from the date the defaulting party becomes liable for such amounts hereunder until such amounts are (i) paid in full by the defaulting party or (ii) satisfied in full by the exercise of the nondefaulting party’s rights hereunder. Interest on any sum payable by the defaulting party to the nondefaulting party under this Paragraph 11(h) shall be at a rate equal to the greater of the Pricing Rate for the relevant Transaction or the Prime Rate.
(i) The nondefaulting party shall have, in addition to its rights hereunder, any rights otherwise available to it under any other agreement or applicable law.
12. Single Agreement
Buyer and Seller acknowledge that, and have entered hereinto and will enter into each Transaction hereunder in consideration of and in reliance upon the fact that, all Transactions hereunder constitute a single business and contractual relationship and have been made in consideration of each other. Accordingly, each of Buyer and Seller agrees (i) to perform all of its obligations in respect of each Transaction hereunder, and that a default in the performance of any such obligations shall constitute a default by it in respect of all Transactions hereunder, (ii) that each of them shall be entitled to set off claims and apply property held by them in respect of any Transaction against obligations owing to them in respect of any other Transactions hereunder and (iii) that payments, deliveries and other transfers made by either of them in respect of any Transaction shall be deemed to have been made in consideration of payments, deliveries and other transfers in respect of any other Transactions hereunder, and the obligations to make any such payments, deliveries and other transfers may be applied against each other and netted.
13. Notices and Other Communications
Any and all notices, statements, demands or other communications hereunder may be given by a party to the other by mail, facsimile, telegraph, messenger or otherwise to the address specified in Annex II hereto, or so sent to such party at any other place specified in a notice of change of address hereafter received by the other. All notices, demands and requests hereunder may be made orally, to be confirmed promptly in writing, or by other communication as specified in the preceding sentence.
14. Entire Agreement; Severability
This Agreement shall supersede any existing agreements between the parties containing general terms and conditions for repurchase transactions. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.
15. Non-assignability; Termination
(a) The rights and obligations of the parties under this Agreement and under any Transaction shall not be assigned by either party without the prior written consent of the other party, and any such assignment without the prior written consent of the other party shall be null and void. Subject to the foregoing, this Agreement and any Transactions shall be binding upon and shall inure to the benefit of the parties and their respective successors and assigns. This Agreement may be terminated by either party upon giving written notice to the other, except that this Agreement shall, notwithstanding such notice, remain applicable to any Transactions then outstanding.
(b) Subparagraph (a) of this Paragraph 15 shall not preclude a party from assigning, charging or otherwise dealing with all or any part of its interest in any sum payable to it under Paragraph 11 hereof.
16. Governing Law
This Agreement shall be governed by the laws of the State of New York without giving effect to the conflict of law principles thereof.
17. No Waivers, Etc.
No express or implied waiver of any Event of Default by either party shall constitute a waiver of any other Event of Default and no exercise of any remedy hereunder by any party shall constitute a waiver of its right to exercise any other remedy hereunder. No modification or waiver of any provision of this Agreement and no consent by any party to a departure herefrom shall be effective unless and until such shall be in writing and duly executed by both of the parties hereto. Without limitation on any of the foregoing, the failure to give a notice pursuant to Paragraph 4(a) or 4(b) hereof will not constitute a waiver of any right to do so at a later date.
18. Use of Employee Plan Assets
(a) If assets of an employee benefit plan subject to any provision of the Employee Retirement Income Security Act of 1974 (“ERISA”) are intended to be used by either party hereto (the “Plan Party”) in a Transaction, the Plan Party shall so notify the other party prior to the Transaction. The Plan Party shall represent in writing to the other party that the Transaction does not constitute a prohibited transaction under ERISA or is otherwise exempt therefrom, and the other party may proceed in reliance thereon but shall not be required so to proceed.
(b) Subject to the last sentence of subparagraph (a) of this Paragraph, any such Transaction shall proceed only if Seller furnishes or has furnished to Buyer its most recent available audited statement of its financial condition and its most recent subsequent unaudited statement of its financial condition.
(c) By entering into a Transaction pursuant to this Paragraph, Seller shall be deemed (i) to represent to Buyer that since the date of Seller’s latest such financial statements, there has been no material adverse change in Seller’s financial condition which Seller has not disclosed to Buyer, and (ii) to agree to provide Buyer with future audited and unaudited statements of its financial condition as they are issued, so long as it is a Seller in any outstanding Transaction involving a Plan Party.
19. Intent
(a) The parties recognize that each Transaction is a “repurchase agreement” as that term is defined in Section 101 of Title 11 of the United States Code, as amended (except insofar as the type of Securities subject to such Transaction or the term of such Transaction would render such definition inapplicable), and a “securities contract” as that term is defined in Section 741 of Title 11 of the United States Code, as amended (except insofar as the type of assets subject to such Transaction would render such definition inapplicable).
(b) It is understood that either party’s right to liquidate Securities delivered to it in connection with Transactions hereunder or to exercise any other remedies pursuant to Paragraph 11 hereof is a contractual right to liquidate such Transaction as described in Sections 555 and 559 of Title 11 of the United States Code, as amended.
(c) The parties agree and acknowledge that if a party hereto is an “insured depository institution,” as such term is defined in the Federal Deposit Insurance Act, as amended (“FDIA”), then each Transaction hereunder is a “qualified financial contract,” as that term is defined in FDIA and any rules, orders or policy statements thereunder (except insofar as the type of assets subject to such Transaction would render such definition inapplicable).
(d) It is understood that this Agreement constitutes a “netting contract” as defined in and subject to Title IV of the Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”) and each payment entitlement and payment obligation under any Transaction hereunder shall constitute a “covered contractual payment entitlement” or “covered contractual payment obligation”, respectively, as defined in and subject to FDICIA (except insofar as one or both of the parties is not a “financial institution” as that term is defined in FDICIA).
20. Disclosure Relating to Certain Federal Protections
The parties acknowledge that they have been advised that:
(a) in the case of Transactions in which one of the parties is a broker or dealer registered with the Securities and Exchange Commission (“SEC”) under Section 15 of the Securities Exchange Act of 1934 (“1934 Act”), the Securities Investor Protection Corporation has taken the position that the provisions of the Securities Investor Protection Act of 1970 (SIPA) do not protect the other party with respect to any Transaction hereunder;
(b) in the case of Transactions in which one of the parties is a government securities broker or a government securities dealer registered with the SEC under Section 15C of the 1934 Act, SIPA will not provide protection to the other party with respect to any Transaction hereunder; and
(c) in the case of Transactions in which one of the parties is a financial institution, funds held by the financial institution pursuant to a Transaction hereunder are not a deposit and therefore are not insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, as applicable.
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MUFG BANK, LTD., NEW YORK BRANCH
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USCC EIP LLC
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By:
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/s/ Thomas Giuntini
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By:
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/s/ Douglas W. Chambers
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Name:
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Thomas Giuntini
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Name:
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Douglas W. Chambers
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Title:
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Managing Director
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Title:
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Authorized Person of USCC EIP LLC and EVP, CFO and Treasurer of United States Cellular Company
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Date:
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January 26, 2022
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Date:
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January 26, 2022
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By:
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/s/ John M. Toomey
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Name:
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John M. Toomey
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Title:
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Authorized Person of USCC EIP LLC and VP and Treasurer of Telephone and Data Systems, Inc.
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Date:
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January 26, 2022
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Annex I
Supplemental Terms and Conditions
This Annex I forms a part of the 1996 SIFMA Master Repurchase Agreement, dated as of January 26, 2022 (the “SIFMA Master,” and as amended by this Annex I, this or the “Agreement”), between USCC EIP LLC and MUFG Bank, Ltd., New York Branch. Subject to the provisions of Paragraph 1 of this Annex I, (a) capitalized terms used but not defined in this Annex I shall have the meanings ascribed to them in the SIFMA Master, and (b) aside from this Annex I, including all exhibits and schedules attached hereto and thereto, no other Annexes or Schedules thereto shall form a part of the SIFMA Master or be applicable thereunder.
1. Applicability; Parties; Framework.
(a) Framework Agreement. This Agreement is being entered into in accordance with that certain Master Framework Agreement, dated as of January 26, 2022 (as amended, restated, supplemented or otherwise modified from time to time, the “Framework Agreement”), between USCC EIP LLC and MUFG Bank, Ltd., New York Branch. Capitalized terms used but not defined in this Agreement or in any Confirmations shall have the meanings set forth in the Framework Agreement (including Schedule 1 thereto). In the event of any inconsistency between this Agreement and the Framework Agreement, the Framework Agreement shall govern.
(b) Seller. USCC EIP LLC will act as Seller with respect to all Transactions entered into hereunder.
(c) Buyer. MUFG Bank, Ltd., New York Branch will act as Buyer with respect to all Transactions entered into hereunder.
(d) Securities. Each reference to “Securities” under this Agreement shall be replaced with a reference to “Seller Receivables” and each reference to “Security” under this Agreement shall be replaced with a reference to “Seller Receivable.” Each reference to “Purchased Securities” under this Agreement shall be replaced with a reference to “Purchased Receivables”.
(e) Entire Agreement. The first sentence of Paragraph 14 of the SIFMA Master is subject to, and superseded by, Section 8.3 of the Framework Agreement.
2. Definitions.
(a) Added Definitions. For purposes of this Agreement, the following additional terms shall have the following meanings:
(i) “Breakage Amount” (x) with respect to any Breakage Event pertaining to any outstanding Transaction, an amount equal to the loss, cost and expense (if any) actually incurred by Buyer and attributable to such Breakage Event but excluding loss of anticipated profits, in each case as determined in good faith by Buyer and notified to Seller in writing; it being understood that any written notice from Buyer indicating such amount and setting forth in reasonable detail the calculations used by Buyer to determine such amount, shall be conclusive absent manifest error and (y) if Seller for any reason fails to sell Seller Receivables to Buyer on a proposed Purchase Date (including as a result of Seller’s failure to satisfy any conditions precedent to the purchase of Seller Receivables on a Purchase Date) after providing a Transfer Notice, the resulting loss, cost, expense or liability incurred by reason of the liquidation or reemployment of deposits, actually sustained by Buyer;
(ii) “Breakage Event”, with respect to any Transaction, (1) the termination of such Transaction before the Repurchase Date specified in the Confirmation for such Transaction whether in accordance with Paragraph 3(c) of this Agreement or Paragraph 11 of this Agreement, or (2) the transfer of any cash by Seller to Buyer during the Transaction Period for such Transaction as required pursuant to Paragraph 4(a) of this Agreement;
(iii) “CBA”, the meaning set forth in the definition of “Term SOFR”;
(iv) “Floor”, a rate of interest equal to 0% per annum;
(v) “Framework Agreement”, the meaning set forth in Paragraph 1(a) of Annex I to this Agreement;
(vi) “Ineligible Receivable”, as of any time of determination, any Receivable that is not an Eligible Receivable as of such time;
(vii) “Lookback Day”, the meaning set forth in the definition of “Term SOFR”;
(viii) “Purchased Receivables”, the Seller Receivables transferred by Seller to Buyer in a Transaction hereunder. The term “Purchased Receivables” with respect to any Transaction at any time also shall include Additional Purchased Receivables (including Substitute Receivables) delivered pursuant to Paragraph 4(a) hereof and shall exclude (i) Receivables released by Secured Party upon payment of the Repurchase Price for the related Transaction and (ii) Seller Receivables returned pursuant to Paragraph 4(f) hereof;
(ix) “SOFR”, with respect to any SOFR Business Day, a rate per annum equal to the secured overnight financing rate for such SOFR Business Day published by the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate) on the website of the Federal Reserve Bank of New York, currently at http://www.newyorkfed.org (or any successor source for the secured overnight financing rate identified as such by the administrator of the secured overnight financing rate from time to time) on the immediately succeeding SOFR Business Day;
(x) “SOFR Business Day” means any day except for (i) a Saturday, (ii) a Sunday or (iii) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.
(xi) “Subject Receivables”, the meaning set forth in Paragraph 4(a) of Annex I to this Agreement;
(xii) “Term SOFR”, with respect to any Transaction Period, the Term SOFR Reference Rate for a one-month tenor that is published by CME Group Benchmark Administration Ltd (“CBA”) or a successor Term SOFR Administrator, as applicable, and displayed on CBA’s Market Data Platform (or other commercially available source of the applicable Term SOFR Administrator providing such quotations as may be selected by the Buyer in its reasonable discretion from time to time), at approximately 6:00 a.m. New York City time, two SOFR Business Days (the “Lookback Day”) prior to the commencement of such Transaction Period (and rounded to the nearest 1/16th of 1%); provided that if, by 5:00 pm (New York City time) on any Lookback Day, Term SOFR for the applicable Transaction Period has not been published, then the Term SOFR for such Transaction Period will be the Term SOFR as published by the Term SOFR Administrator in respect of the first preceding SOFR Business Day for which such rate was published; provided, further, that, if Term SOFR determined as provided above (including pursuant to the immediately preceding proviso) shall ever be less than the Floor, then Term SOFR shall be deemed to be equal to the Floor;
(xiii) “Term SOFR Administrator”, CBA or a successor administrator of the Term SOFR Reference Rate selected by the Buyer in its reasonable discretion;
(xiv) “Term SOFR Reference Rate”, the forward-looking term rate based on SOFR; and
(xv) “Transaction Period”, with respect to any Transaction, the period commencing on (and including) the Purchase Date for such Transaction and expiring on (but excluding) the Repurchase Date for such Transaction.
(b) Revised Definitions. For purposes of this Agreement, and notwithstanding anything in Paragraph 2 of the SIFMA Master to the contrary, the following terms shall have the following amended and restated meanings:
(i) “Buyer’s Margin Amount”, with respect to any Transaction as of any date, the amount obtained by application of the Buyer’s Margin Percentage to the Purchase Price for such Transaction as of such date;
(ii) “Buyer’s Margin Percentage”, with respect to any Transaction as of any date, one hundred percent (100%);
(iii) “Market Value”, as of any date or time with respect to any portfolio of Seller Receivables in connection with any Transaction or otherwise set forth in any Portfolio Report, an amount equal to the sum of the Receivable Balances of all Seller Receivables comprising such portfolio as of such date or time, as applicable;
(iv) “Price Differential”, with respect to any Transaction as of any date, the sum of the aggregate amount obtained by daily application of the Pricing Rate for such Transaction to the Purchase Price for such Transaction on a 360 day per year basis for the actual number of days during the period commencing on (and including) the Purchase Date for such Transaction and ending on (but excluding) the date of determination (reduced by any amount of such Price Differential previously paid by Seller to Buyer with respect to such Transaction); provided, that upon the occurrence of any Breakage Event with respect to such Transaction, such Price Differential shall be increased by the applicable Breakage Amount (if any) for such Breakage Event, determined by Buyer as of the date on which such Breakage Event occurs;
(v) “Pricing Rate”, with respect to any Transaction, the per annum percentage rate for determination of the Price Differential, determined for such Transaction (unless otherwise specified in the Confirmation) as being equal to the sum of (A) (x) Term SOFR for the Transaction Period of such Transaction or (y) if (i) a Transaction Notice with respect to such Transaction is delivered less than 3 Business Days prior to the Purchase Date therefor and Buyer agrees in its sole discretion to proceed with the Transaction or (ii) the Transaction Period for such Transaction does not commence on a Monthly Date, Buyer’s actual costs of funds in respect of such Transaction as determined by Buyer plus (B) 1.25%;
(vi) “Repurchase Date”, the date on which Seller is to repurchase the Purchased Receivables from Buyer, which shall be the earlier of (i) the next Monthly Date immediately succeeding the applicable Purchase Date and (ii) any date determined by application of the provisions of Paragraph 3(c) or 11 of this Agreement; and
(vii) “Repurchase Price”, the price at which Purchased Receivables are to be transferred from Buyer to Seller upon termination of a Transaction, which will be determined in each case as the sum of (A) the Purchase Price for such Transaction plus (B) the accrued and unpaid Price Differential as of the date of such determination (it being understood that all such accrued and unpaid Price Differential shall be payable when and as set forth in Paragraph 12 of Annex I to this Agreement); provided, that if an Event of Default has occurred and is continuing as of the applicable Repurchase Date for a Transaction, then the Repurchase Price for such Transaction shall include, in addition to the amounts specified in the foregoing clauses (A) and (B), all other Secured Obligations due and owing from Seller under the Transaction Agreements through the time such Repurchase Price is paid in full (other than contingent indemnification obligations in respect of which no claim therefor has been made).
3. Initiation; Confirmation; Termination. Notwithstanding anything to the contrary in Paragraph 3 of the SIFMA Master, the following shall apply:
(a) No Oral Agreements. All agreements to enter into Transactions hereunder shall be in writing in accordance with Article 4 of the Framework Agreement.
(b) Confirmations; Priority. All Confirmations with respect to Transactions hereunder shall be substantially in the form attached as Exhibit A to this Annex I. Subject to the proviso the definition of “Repurchase Price” set forth in Paragraph 2(b)(vi) of this Annex I, in the event of any conflict between the terms of a Confirmation and this Agreement, the Confirmation shall prevail.
(c) Termination. Paragraph 3(c) of the SIFMA Master is hereby amended and restated as follows:
“Transactions hereunder shall terminate upon the earlier of (i) the date determined pursuant to the definition of Repurchase Date (without regard to this Paragraph 3(c)) or (ii) a date specified upon demand by Seller, which demand shall be made by Seller in writing no later than 5:00 p.m. on the third Business Day prior to the Business Day on which such termination will be effective. On such earlier date, termination of the Transaction will be effected by transfer to Seller or its agent of the related Purchased Receivables against the payment of the related Repurchase Price by Seller (which may, to the extent permitted under Paragraph 12 of Annex I hereto, be netted against the Purchase Price payable in respect of any new Transaction).”
(d) Outstanding Transactions; Continuity. Notwithstanding anything in this Agreement to the contrary, the Parties agree that no more than one Transaction hereunder shall be outstanding at any given time. The Parties intend that, pursuant to Paragraph 12 of the SIFMA Master and to the extent permitted under Paragraph 12 of this Annex I, the Repurchase Price payable by Seller with respect to each expiring Transaction that coincides with the Purchase Date of a new Transaction shall be netted to the extent applicable against the Purchase Price payable by Buyer with respect to such subsequent Transaction.
4. Margin Maintenance. Notwithstanding anything to the contrary in Paragraph 4 of the SIFMA Master, the following shall apply:
(a) Paragraph 4(a) of the SIFMA Master is hereby amended and restated as follows:
“(i) If, as of 9:00 a.m. on any Business Day during the Transaction Period for an outstanding Transaction hereunder (other than the Purchase Date), the aggregate Market Value of all Purchased Receivables then subject to such Transaction is less than 125% of the Purchase Price with respect to such Transaction, then any Unsold Receivables owned by Seller as of such time shall automatically be transferred to Buyer in the order of priority set forth in the definition of Ordering Priority and shall be included in the Transaction Portfolio for such Transaction (“Additional Purchased Receivables”) until either the aggregate Market Value of such Transaction Portfolio as of such time (including such Additional Purchased Receivables) equals or exceeds 125% of the Purchase Price or until all remaining Unsold Receivables then owned by Seller have been transferred (it being understood that no determination regarding the Additional Purchased Receivables so transferred (including the identification thereof) shall be required to be made for any purpose under this Agreement or any other Transaction Agreement prior to two (2) Business Days following the Current clause (a)(i) Business Day (as hereinafter defined)). If, on any such Business Day (the “Current clause (a)(i) Business Day”), after giving effect to the transfer of Additional Purchased Receivables (if any) in accordance with the preceding sentence, the aggregate Market Value of the Transaction Portfolio for such Transaction is less than the Buyer’s Margin Amount for such Transaction (which determination shall be made on the second Business Day following the Current clause (a)(i) Business Day), then Seller shall transfer to Buyer cash so that the amount of such cash and aggregate Market Value of such Transaction Portfolio as of the Current clause (a)(i) Business Day will thereupon equal or exceed Buyer’s Margin Amount.
(ii) Without limitation of subparagraph (a)(i) above, if on any Business Day during the Transaction Period for an outstanding Transaction hereunder any Subject Receivables are re-transferred to Seller pursuant to Paragraph 4(f) of Annex I to this Agreement, then any Unsold Receivables owned by Seller as of 4:00 p.m. shall, concurrently with the re-transfer of such Subject Receivables pursuant to Paragraph 4(f), automatically be transferred to Buyer in the order of priority set forth in the definition of Ordering Priority and shall be included in the Transaction Portfolio for such Transaction as Additional Purchased Receivables (“Substitute Receivables”) until either the aggregate Market Value of the Substitute Receivables so transferred equals or exceeds the aggregate Market Value of the Subject Receivables re-transferred as of such time on such Business Day or until all remaining Unsold Receivables then owned by Seller have been transferred (it being understood that no determination regarding the Substitute Receivables so transferred (including the identification thereof) shall be required to be made for any purpose under this Agreement or any other Transaction Agreement prior to two (2) Business Days following the Current clause (a)(ii) Business Day (as hereinafter defined)). If on such Business Day (the “Current clause (a)(ii) Business Day”), the aggregate Market Value of the Substitute Receivables (if any) transferred in accordance with the preceding sentence is less than the aggregate Market Value of the Subject Receivables re-transferred on such Business Day and after giving effect the retransfer of the Subject Receivables and transfers of Substitute Receivables the aggregate Market Value of all Purchased Receivables is less than the Buyer’s Margin Amount (which determination shall be made on the second Business Day following the Current clause (a)(ii) Business Day), then Seller shall transfer to Buyer cash so that the amount of such cash and aggregate Market Value of all Purchased Receivables as of the Current clause (a)(ii) Business Day will thereupon equal or exceed the Buyer’s Margin Amount.”
(b) Margin Excess Inapplicable. The provisions of Paragraph 4(b) of the SIFMA Master shall not apply to Transactions under this Agreement, and all references thereto or to “Margin Excess” in the SIFMA Master shall be disregarded.
(c) Margin Deficit Cures. Paragraph 4(c) of the SIFMA Master is hereby amended and restated in its entirety to read as follows:
“If Seller is required to transfer cash under subparagraph (a)(i) or (a) (ii) of this Paragraph, Seller shall transfer such cash as provided in such subparagraph no later than 10:00 a.m. on the third Business Day following the Current clause (a)(i) Business Day or the Current clause (a)(ii) Business Day, respectively.”
(d) Evidence of Additional Purchased Receivables. Paragraph 4(d) of the SIFMA Master is hereby amended and restated as follows:
“Any transfer of Additional Purchased Receivables in accordance with Paragraph 4(a) of the Agreement, shall be made automatically in accordance with the terms thereof, without requiring further action or evidence by any party; it being understood that, from and after the second Business Day following the transfer thereof, all such Additional Purchased Receivables transferred in connection with such outstanding Transaction shall be reflected as having been so transferred in the Seller’s books and records and, to the extent applicable, in any Portfolio Report delivered pursuant to the Framework Agreement.”
(e) Reporting of Margin Deficits. Paragraph 4(e) of the SIFMA Master is hereby amended and restated as follows:
“Seller shall provide Buyer with the notices required pursuant to Section 5.3(n) of the Framework Agreement.”
(f) Delivery of Securitization Transfer Notice. Paragraph 4(f) of the SIFMA Master is hereby amended and restated as follows:
“Unless (i) an Event of Default of the type described in clause (g) of the definition thereof has occurred or (ii) any other Event of Default has occurred and is continuing and Buyer has notified Seller on or prior to the immediately preceding Business Day that Seller may no longer consummate transfers contemplated by Securitization Transfer Notices, Seller may deliver a Securitization Transfer Notice to Buyer on any Business Day. Any Purchased Receivables identified in such Securitization Transfer Notice and then subject to an outstanding Transaction (“Subject Receivables”) shall, upon delivery thereof, automatically be re-transferred to Seller and the security interest in such Subject Receivables (and in the Related Rights pertaining thereto) granted pursuant to Paragraph 6 of this Agreement shall be released without further action by any Person or further evidence thereof, whereupon such Subject Receivables shall no longer constitute Purchased Receivables hereunder. Upon such retransfer, the security interest in the applicable Subject Receivables granted pursuant to Paragraph 6(a) is automatically and irrevocably released at the time of retransfer as described in the immediately preceding sentence, and Buyer agrees, at Seller’s expense, to execute and deliver such other documents as Seller may reasonably request to further evidence such release. Seller shall be deemed to represent and warrant that, upon giving effect to such re-transfer of Subject Receivables to Seller and the transfer of Additional Purchased Receivables on such transfer date, the Market Value (as of the second Business Day prior to such transfer date) of all Purchased Receivables then subject to a Transaction will be at least equal to Buyer’s Margin Amount.”
5. Income Payments. Notwithstanding anything to the contrary in Paragraph 5 of the SIFMA Master, (i) unless following the occurrence of an Event of Default with respect to Seller, Buyer has exercised remedies with respect to the Purchased Receivables under Paragraph 11(d) of the SIFMA Master, as amended by this Annex I, USCC Services, LLC will act as servicer (the “Servicer”) and shall service the Purchased Receivables on behalf of Seller, and (ii) unless following the occurrence of an Event of Default with respect to Seller, Buyer has exercised or is deemed to have exercised its option under Paragraph 11(a) of the SIFMA Master, as amended by this Annex I, Seller shall be entitled to receive and retain all Income paid or distributed on or in respect of such Purchased Receivables; provided that if Buyer has exercised or is deemed to have exercised its option under Paragraph 11(a) of the SIFMA Master, as amended by this Annex I, Seller shall cause the Servicer to remit any Income paid or distributed on or in respect of such Purchased Receivables to an account of Buyer as specified in writing by Buyer. All references in the SIFMA Master to Income received by Buyer prior to such an Event of Default shall be disregarded.
6. Security Interest. Paragraph 6 of the SIFMA Master is hereby amended and restated in its entirety to read as follows:
“(a) Seller hereby grants to Buyer a first priority security interest in all of Seller’s right, title, benefit and interest in and to all Purchased Receivables included in the Transaction Portfolio applicable to each Transaction entered into under this Agreement, all Related Rights with respect to such Purchased Receivables, whether now existing or hereafter arising, and all proceeds thereof (collectively, the “Collateral”), to secure the Seller’s obligations under the Transaction Agreements (the “Secured Obligations”). This Agreement shall create a continuing security interest in the Collateral and, except as otherwise provided in Paragraph 4(f) of Annex I, shall remain in full force and effect until such security interest is released pursuant to (and to the extent provided in) Paragraph 6(c) below or until all unpaid Repurchase Price with respect to outstanding Transactions under this Agreement have been indefeasibly paid in full and the Facility Expiration Date has occurred. Buyer shall have, with respect to all the Collateral, in addition to all other rights and remedies available to Buyer under the Transaction Agreements, all the rights and remedies of a secured party under the Uniform Commercial Code as in effect in any applicable jurisdiction as provided in subparagraph (d) of Paragraph 11, and subject to Paragraph 8.
(b) Seller hereby authorizes Buyer to file such financing statements (and continuation statements with respect to such financing statements when applicable) as may be necessary to perfect the security interest granted pursuant to the foregoing Paragraph 6(a) under the Uniform Commercial Code of the relevant jurisdiction.
(c) The security interest granted pursuant to the foregoing Paragraph 6(a) in (1) the Collateral for any Transaction is automatically released by Buyer upon payment of the Repurchase Price for such Transaction (including by application of set off or netting in accordance with Paragraph 12 of this Agreement (but subject to Paragraph 12 of Annex I hereto)), without further action by any Person and (2) in the applicable Collateral is released as provided in Paragraph 4(f). Buyer hereby agrees, at Seller’s expense, to execute and deliver such other documents as Seller may reasonably request to further evidence such release.
(d) Notwithstanding the foregoing or anything to the contrary herein or in any other Transaction Agreement, (i) any financing statement filed pursuant to the foregoing Paragraph 6(b) shall solely apply to and perfect the security interest granted by Seller pursuant to the foregoing Paragraph 6(a) and shall not apply to or perfect any sale or other transfer of Purchased Receivables or Related Rights and (ii) neither Buyer nor Seller shall, nor shall Buyer request or require Seller to, file any other financing statement, or take any other actions to perfect, any sale or other transfer of Purchased Receivables or Related Rights.”
7. Payment and Transfer. Paragraph 7 of the SIFMA Master is hereby amended and restated in its entirety to read as follows:
“Notwithstanding anything herein to the contrary, except as otherwise provided in Paragraph 4(d) of this Annex I, all transfers of Seller Receivables by Seller to Buyer in connection with any Transaction shall occur in accordance with the terms of the Transaction Agreements and, from and after the second Business Day following the transfer thereof, shall be reflected as having been so transferred in the Seller’s books and records and in each Portfolio Report delivered pursuant to Paragraph 3(b) of this Annex I; it being understood that upon Seller’s payment in full of the Repurchase Price with respect to a Transaction on any Repurchase Date (including as a result of netting), all Purchased Receivables shall be automatically transferred and assigned from Buyer to Seller without further evidence thereof.”
8. Rehypothecation of Purchased Receivables. Paragraph 8 of the SIFMA Master is hereby amended and restated in its entirety to read as follows:
“Notwithstanding anything herein to the contrary, but without limiting Buyer’s rights under Paragraph 11 (including to dispose of the Purchased Receivables as provided therein), Buyer shall be prohibited from engaging in repurchase transactions with the Purchased Receivables or otherwise selling, transferring, pledging or hypothecating the Purchased Receivables.”
9. Substitution. The provisions of Paragraph 9 of the SIFMA Master shall not apply to Transactions under this Agreement, and all terms and provisions thereof and references thereto shall be disregarded for purposes of this Agreement.
10. Representations. The representations and warranties set forth in Paragraph 10 of the SIFMA Master, in the case of Seller, are hereby replaced with the representations and warranties set forth in Section 5.1 of the Framework Agreement. It is acknowledged that Seller is also making the representations and warranties set forth in Section 5.2 of the Framework Agreement with respect to the Purchased Receivables.
11. Events of Default.
(a) Replacement Events of Default. The Events of Default set forth in Paragraph 11 of the SIFMA Master (i) to the extent applicable to Seller, are hereby replaced with the Events of Default set forth in the definition thereof in the Framework Agreement and (ii) to the extent applicable to Buyer, are hereby deleted. All provisions in Paragraph 11 and elsewhere in the SIFMA Master, to the extent relating to the occurrence of any such Event of Default with respect to Buyer or any rights or remedies afforded to Seller in connection therewith, shall be disregarded for purposes of this Agreement. The introductory paragraph of Paragraph 11 of the SIFMA Master is hereby amended and restated in its entirety to read as follows: “If an Event of Default has occurred and is continuing:” Each reference to “Act of Insolvency” in Paragraph 11(a) of the SIFMA Master is replaced with a reference to “Insolvency Event”.
(b) Remedies. Paragraph 11(d) of the SIFMA Master is hereby amended and restated in its entirety to read as follows:
“If Buyer exercises or is deemed to have exercised the option referred to in subparagraph (a) of this Paragraph, Buyer may, at its discretion and with such notice to Seller as may be required by applicable law, immediately (i) take possession of any or all Purchased Receivables subject to any outstanding Transactions, at its discretion, (ii) subject to the requirements of applicable law, sell any or all such Purchased Receivables, at one or more public or private sales called and conducted in any manner permitted by law, and apply the proceeds thereof to amounts owing by Seller hereunder or under any of the other Transaction Agreements and promptly remit to Seller any such sale proceeds in excess of such amounts owing by Seller (it being understood, for the avoidance of doubt, that Seller shall remain liable to the Buyer for the excess of such amounts owing by Seller over any sale proceeds so applied); and (iii) generally exercise any and all rights afforded to a secured party under the Uniform Commercial Code or other applicable law.”
(c) Replacement Securities Inapplicable. The provisions of Paragraphs 11(c), 11(e), and 11(f) of the SIFMA Master shall not apply to Transactions under this Agreement, and all terms and provisions thereof and references thereto (including any references to “Replacement Securities”) shall be disregarded for purposes of this Agreement.
12. Single Agreement. With respect to any Transaction under this Agreement, and notwithstanding anything in this Agreement to the contrary, the portion of the Repurchase Price for such Transaction consisting of the Price Differential shall, in all circumstances, be paid by Seller by wire transfer of immediately available funds to the account of Buyer set forth in Schedule 2 to the Framework Agreement on the Repurchase Date for such Transaction, and such payment of the Price Differential shall not be subject to any setoff, netting or other application by Seller against other amounts, whether pursuant to Paragraph 12 of the SIFMA Master or otherwise.
13. Miscellaneous.
(a) Termination of Agreement. The last sentence of Paragraph 15(a) of the SIFMA Master is hereby amended and restated to read as follows:
“This Agreement shall terminate on the Facility Expiration Date, except that this Agreement shall, notwithstanding such termination, remain applicable to any Transactions then outstanding.”
(b) Notices. The provisions of Paragraph 13 of the SIFMA Master are hereby deleted, and shall be deemed to have been replaced with the provisions of Section 8.8 of the Framework Agreement, which are hereby incorporated by reference.
(c) Other Inapplicable Provisions. Paragraphs 18, 19 and 20 of the SIFMA Master shall not be applicable to Transactions under this Agreement, and all terms and provisions thereof and references thereto shall be disregarded for purposes of this Agreement.
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EXHIBIT A
FORM OF CONFIRMATION
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Dated:
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[Date]
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To:
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USCC EIP LLC (“Counterparty”)
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30 N. LaSalle, Suite 4000
Chicago, IL 60602
Attention: John M. Toomey
Telephone: 312-592-5308
Facsimile: 608-830-5530
Electronic Mail: John.Toomey@tdsinc.com
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With a copy to (which shall not constitute notice):
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USCC EIP LLC
8410 West Bryn Mawr Avenue
Chicago, Illinois 60631
Attention: Doug Chambers
Telephone: (773) 399-8930
Electronic Mail: doug.chambers@uscellular.com
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From:
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MUFG Bank, Ltd., New York Branch (“Buyer”)
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1251 Avenue of the Americas
New York, New York 10020-1104
Attention: Thomas Giuntini
Email: TGiuntini@us.mufg.jp
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Re: Confirmation of a Repurchase Transaction
____________________________________________________________________________________________
Dear USCC EIP LLC:
The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and conditions of the above referenced transaction entered into between Counterparty and Buyer on the Purchase Date specified below (the “Transaction”).
This Confirmation constitutes a "Confirmation" as referred to in the Master Repurchase Agreement specified below.
The definitions and provisions contained in such Master Repurchase Agreement are incorporated into this Confirmation. Subject to the proviso to the definition of Repurchase Price set forth in the Master Repurchase Agreement, in the event of any inconsistency between such Master Repurchase Agreement and this Confirmation, this Confirmation will govern.
1. This Confirmation supplements, forms part of, and is subject to, the 1996 SIFMA Master Repurchase Agreement, dated as of January 26, 2022, including Annex I thereto and as amended thereby (as further amended and supplemented from time to time, the “Master Repurchase Agreement”), between Counterparty and Buyer. All provisions contained in the Master Repurchase Agreement govern this Confirmation except as expressly modified below.
The terms of the particular Transaction to which this Confirmation relates are as follows:
2. General Terms:
Purchase Date: [Date]
Purchase Price: $[ ]
Buyer: MUFG Bank, Ltd., New York Branch
Seller: USCC EIP LLC
Purchased Receivables: A Transaction Portfolio of Seller Receivables consisting of Eligible Receivables selected as of 9:00 a.m. on the Purchase Date in accordance with the Ordering Priority until the Market Value of such Transaction Portfolio equals or exceeds 125% of the Purchase Price, together with any Additional Purchased Receivables subsequently transferred pursuant to Paragraph 4 of the Master Repurchase Agreement (it being understood that such Receivables shall be identified as provided in the Master Repurchase Agreement).
Pricing Rate [ ]
Repurchase Date: [Date]1
Repurchase Price: $[ ]
Price Differential $[ ]
3. Governing law: Unless otherwise provided in the Master Repurchase Agreement (in which case the law so specified shall govern), this Confirmation shall be governed by and construed in accordance with the laws as specified in the Master Repurchase Agreement.
[Remainder of page intentionally left blank]
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1 To be the earlier of (i) the Facility Expiration Date or (ii) the next Monthly Date to occur following the Purchase Date
Please confirm that the foregoing correctly sets forth the terms of our agreement by executing the copy of this Confirmation enclosed for that purpose and returning it to us by electronic mail or by facsimile transmission to telecopier No. [ ].
Very truly yours,
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MUFG BANK, LTD., New York Branch
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By:
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Name:
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Title:
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Confirmed as of the date first above written:
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USCC EIP LLC
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By:
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Name:
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Title:
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Exhibit 10.3
GUARANTY
This GUARANTY (this “Agreement”), dated as of January 26, 2022, is between UNITED STATES CELLULAR CORPORATION, a Delaware corporation (“Guarantor”), and MUFG BANK, LTD., NEW YORK BRANCH, a Japanese banking corporation acting through its New York Branch (“Buyer”) under the Master Framework Agreement, dated as of the date hereof, between USCC EIP LLC, a Delaware limited liability company (“Seller”) and Buyer (as amended, restated, supplemented or otherwise modified from time to time, the “Framework Agreement”). Capitalized terms used and not otherwise defined in this Agreement (including in Section 12) are used as defined in, or by reference in, the Framework Agreement. The interpretive provisions set out in Section 1.2 of the Framework Agreement shall be incorporated herein and applied in the interpretation of this Agreement.
Section 1. Undertaking. For value received by it and its Affiliates, Guarantor hereby absolutely, unconditionally and irrevocably assures and undertakes (as primary obligor and not merely as surety) for the benefit of Buyer and each other Indemnified Party (together, the “Beneficiaries”) the due and punctual performance and observance by Seller (and any of Seller’s successors or assigns in such capacity which is an Affiliate of Guarantor) of all its covenants, agreements, undertakings, indemnities and other obligations or liabilities (including, in each case, those related to any breach by Seller of its representations, warranties and covenants), whether monetary or non-monetary and regardless of the capacity in which incurred (including all of Seller’s payment, repurchase, indemnity or similar obligations), under any of the Transaction Agreements (collectively, the “Guaranteed Obligations”), irrespective of: (A) the validity, binding effect, legality, subordination, disaffirmance, enforceability or amendment, restatement, modification or supplement of, or waiver of compliance with, this Agreement, the other Transaction Agreements or any documents related hereto or thereto, (B) any change in the existence, formation or ownership of, or the bankruptcy or insolvency of, Seller or any other Person, (C) any merger or consolidation of Seller with or into any Person, (D) any extension, renewal, settlement, compromise, exchange, waiver or release in respect of any Guaranteed Obligation (or any collateral security therefor, including the property sold, or purportedly sold, or otherwise pledged or transferred by Seller under the Transaction Agreements) or any party to this Agreement, the other Transaction Agreements or any other related documents, (E) the existence of any claim, set-off, counterclaim or other right that Guarantor or any other Person may have against Seller or any other Person, (F) the failure by the Buyer to take any steps to perfect and maintain perfected its interest in, or the impairment or release of, any Collateral, (G) any failure to obtain any authorization or approval from or other action by or to notify or file with, any Governmental Authority required in connection with the performance of the Guaranteed Obligations or otherwise, (H) any impossibility or impracticability of performance, illegality, force majeure, act of war or terrorism or any act of any Governmental Authority or (I) any other circumstance or occurrence that might otherwise constitute a legal or equitable discharge or defense available to, or provides a discharge of, Seller or Guarantor (other than payment or performance of the Guaranteed Obligations).
Without limiting the generality of the foregoing, Guarantor agrees that if Seller shall fail in any manner whatsoever to perform or observe any of its Guaranteed Obligations when the same shall be required to be performed or observed under any applicable Transaction Agreement to which it is a party, then Guarantor will itself duly perform or observe or cause to be performed or observed such Guaranteed Obligations promptly following such failure. It shall not be a condition to the accrual of the obligation of Guarantor hereunder to perform or to observe any Guaranteed Obligation that Buyer or any other Person shall have first made any request of or demand upon or given any notice to Guarantor, Seller, or any other Person or have initiated any action or proceeding against Guarantor, Seller or any other Person in respect thereof. Guarantor also hereby expressly waives any defenses based on any of the provisions set forth above and all defenses it may have as a guarantor or a surety generally or otherwise based upon suretyship, impairment of collateral or otherwise in connection with the Guaranteed Obligations whether in equity or at law. Guarantor agrees that its obligations hereunder shall be irrevocable and unconditional. Guarantor hereby also expressly waives diligence, presentment, demand, protest or notice of any kind whatsoever, as well as any requirement that the Beneficiaries (or any of them) exhaust any right to take any action against Seller or any other Person (including the filing of any claims in the event of a receivership or bankruptcy of any of the foregoing), or with respect to any collateral or collateral security at any time securing any of the Guaranteed Obligations, and hereby consents to any and all extensions of time of the due performance of any or all of the Guaranteed Obligations. Guarantor agrees that it shall not exercise or assert any right which it may acquire by way of subrogation under this Agreement unless and until all Guaranteed Obligations (other than unasserted contingent indemnification obligations) shall have been paid and performed in full.
Section 2. Confirmation. Guarantor hereby confirms that the transactions contemplated by the Transaction Agreements have been arranged between Seller and Buyer, as applicable, with Guarantor’s full knowledge and consent and any amendment, restatement, modification or supplement of, or waiver of compliance with, the Transaction Agreements in accordance with the terms thereof by Seller or Buyer shall be deemed to be with Guarantor’s full knowledge and consent. Guarantor hereby confirms (i) that on the date hereof, it directly or indirectly owns 100% of the equity interests of Seller and (ii) that it is in the best interest of Guarantor to execute this Agreement, inasmuch as Guarantor (individually) and Guarantor and its Affiliates (collectively) will derive substantial direct and indirect benefit from the transactions contemplated by the Framework Agreement and the other Transaction Agreements. Guarantor agrees to promptly notify Buyer in the event that it ceases to directly or indirectly own 100% of the equity interests of Seller.
Section 3. Representations and Warranties. Guarantor represents and warrants to Buyer as of the date hereof and on each Purchase Date, as follows:
(a) Organization and Good Standing. It is a duly organized and validly existing corporation in good standing under the laws of the State of Delaware, with the power and authority under its organizational documents and under the laws of Delaware to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted and to execute, deliver and perform its obligations under this Agreement.
(b) Licenses and Approvals. It is duly qualified to do business and is in good standing as a foreign corporation (or is exempt from such requirements) and has obtained all necessary licenses and approvals in order to be able to execute, deliver and perform its obligations under this Agreement, in each jurisdiction in which the conduct of its business requires such qualification, except where the failure to do so would not materially adversely affect the ability of Guarantor to perform its obligations under this Agreement in all material respects.
(c) Power and Authority. It has the power and authority to execute and deliver this Agreement and to perform its obligations hereunder; and the execution, delivery and performance of this Agreement, and the consummation by it of the transactions provided for or contemplated thereby, have been duly authorized by it by all necessary corporate action.
(d) Binding Obligation. This Agreement constitutes the legal, valid and binding obligations of it, enforceable against it in accordance with their respective terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and to general principles of equity, whether applied in a proceeding in equity or at law.
(e) No Violation. The execution and delivery of this Agreement, the performance of the transactions contemplated by this Agreement, and the fulfillment of the terms of this Agreement by it, will not conflict with, result in any breach of any of the terms or provisions of or constitute (with or without notice or lapse of time or both) a default under, its organizational documents or any indenture, agreement, mortgage, deed of trust or other instrument to which it is a party or by which it or its properties is bound, or violate any material Requirements of Law applicable to it.
(f) No Proceedings. There are no actions, suits, proceedings or investigations pending, or to its knowledge threatened, against it before any court, arbitrator or Governmental Authority having jurisdiction over it: (i) asserting the invalidity of this Agreement; (ii) seeking to prevent the consummation of this Agreement or the other Transaction Agreements; or (iii) seeking any determination or ruling that would have materially adversely affect the ability of Guarantor to perform its obligations under this Agreement in all material respects. It is not in default with respect to any order, judgment or decree of any court, arbitrator or Governmental Authority.
(g) No Consents. No consent, license, approval, registration, authorization or declaration of or with any Governmental Authority or other Person is necessary in connection with the execution of delivery of this Agreement, or performance of the transactions contemplated hereby or thereby, that has not already been obtained except where the failure to so obtain would not have a material adverse effect on the ability of Guarantor to perform its obligations hereunder.
(h) Financial Statements. (i) The audited consolidated balance sheet of the Guarantor and its consolidated subsidiaries as of December 31, 2020 and the related consolidated statements of income and cash flows for the fiscal year then ended, delivered to Buyer on or prior to the Effective Date, fairly present, in conformity with GAAP, the consolidated financial position of Guarantor and its consolidated subsidiaries as of such date and their consolidated results of operations and cash flows for such fiscal year; and (ii) the unaudited consolidated balance sheet of Guarantor and its consolidated subsidiaries as of September 30, 2021 and the related unaudited consolidated statements of income and cash flows for the three months and nine months then ended, delivered to Buyer on or prior to the Effective Date, fairly present in all material respects, in conformity with GAAP applied on a basis consistent with the financial statements referred to in clause (i) above (except as described in the notes thereto), the financial position of Guarantor and its consolidated subsidiaries as of such date and their consolidated results of operations and cash flows for such three month period (subject to normal year-end adjustments).
(i) ERISA. (i) Each member of the ERISA Group has fulfilled its obligations under the minimum funding standards of ERISA and the Code with respect to each Plan and is in compliance in all material respects with the presently applicable provisions of ERISA and the Code with respect to each Plan, and (ii) no ERISA Event has occurred.
(j) Investment Company Act. Guarantor is not required to register as an “Investment Company” under the Investment Company Act of 1940, as amended.
(k) Anti-Corruption. Guarantor and its Subsidiaries have conducted their businesses in compliance with the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010, and other similar anti-corruption legislation in other jurisdictions and have instituted and maintained policies and procedures designed to promote and achieve compliance with such laws in all material respects.
(l) Sanctions. Neither Guarantor, nor any of its Subsidiaries, nor, to the knowledge of Guarantor and its Subsidiaries, any director, officer, employee, agent, affiliate or representative thereof, is an individual or entity that is, or is owned or controlled by any individual or entity that is (i) currently the subject or target of any Sanctions, (ii) included on OFAC’s List of Specially Designated nationals, HMT's Consolidated List of Financial Sanctions Targets and the Investment Ban List, or any similar list enforced by any other relevant sanctions authority or (iii) located, organized or resident in a Designated Jurisdiction. Guarantor, its Subsidiaries and their respective officers and employees and, to the knowledge of Guarantor, its directors and agents, are in compliance with applicable Sanctions in all material respects. .
(m) Anti-Money Laundering. Guarantor warrants that it is acting on its own behalf with respect to all matters associated with this Agreement. Guarantor undertakes to provide Buyer, upon its reasonable request, with all information and documents which Buyer requires in order to comply with its obligations under all applicable anti-money laundering laws.
Section 4. Covenants. Guarantor covenants and agrees that, from the date hereof until the later of (i) the Facility Expiration Date and (ii) such time as all Guaranteed Obligations (other than unasserted contingent indemnification obligations) shall have been paid and performed in full, it shall observe and perform the following covenants:
(i) Compliance with Requirements of Law. It shall duly satisfy all obligations on its part to be fulfilled under or in connection with this Agreement, will maintain in effect all material qualifications required under applicable Requirements of Law in order to conduct its business and will comply in all material respects with all other applicable Requirements of Law in connection with this Agreement.
(ii) Preservation of Corporate Existence. It will preserve and maintain its existence, rights, franchises and privileges in the jurisdiction of its formation, and qualify and remain qualified in good standing as a corporation in each jurisdiction where its business is conducted and which requires such qualification, and will maintain all requisite authority to conduct its business in each jurisdiction in which its business requires such authority.
(iii) Merger or Consolidation of, or Assumption, of the Obligations of Guarantor. Any Person (i) into which Guarantor may be merged or consolidated, (ii) resulting from any merger or consolidation to which Guarantor shall be a party, (iii) that acquires by conveyance, transfer or lease substantially all of the assets of Guarantor, or (iv) succeeding to the business of Guarantor, which Person shall execute an agreement of assumption to perform every obligation of Guarantor under this Agreement, shall be the successor to Guarantor under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties to this Agreement. Guarantor shall provide notice of any merger, consolidation, succession, conveyance or transfer pursuant to this section to Buyer.
(iv) Reporting Requirements. It shall, unless otherwise consented in writing, furnish (or cause to be furnished) to Buyer all information and reports required to be furnished from time to time to Buyer, by or on behalf of Seller, pursuant to the terms of the Framework Agreement and each of the other Transaction Agreements.
(v) Information and Assistance. So long as any Transaction is outstanding, it shall, from time to time provide such other information (including non-financial information), documents, records or reports reasonably related to the Transaction Agreements or the transactions contemplated thereby and respecting Seller as Buyer may reasonably request. It shall, promptly following request therefor, do all such things and execute all such documents as Buyer may reasonably consider necessary or desirable to give full effect to this Agreement and to perfect and preserve the rights and powers of Buyer hereunder.
(vi) Impairment Actions. Except as permitted under the Transaction Agreements, it shall do nothing to materially impair the rights, title and interest of Buyer in and to the Collateral.
Section 5. Miscellaneous.
(a) Guarantor agrees that any payments hereunder will be applied in accordance with the Framework Agreement.
(b) Any payments hereunder shall be made in U.S. Dollars to Buyer in the United States without any set-off, deduction or counterclaim; and Guarantor’s obligations hereunder shall not be satisfied by any tender or recovery of another currency except to the extent such tender or recovery results in receipt of the full amount of U.S. Dollars required hereunder.
(c) No amendment or waiver of any provision of this Agreement nor consent to any departure by Guarantor therefrom shall be effective unless the same shall be in writing and signed by Buyer and Guarantor. No failure on the part of Buyer or any other Beneficiary to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right.
(d) This Agreement shall bind and inure to the benefit of the parties hereto, the other Beneficiaries and their respective successors and permitted assigns. Guarantor shall not assign, delegate or otherwise transfer any of its obligations or duties hereunder without the prior written consent of Buyer. Each of the parties hereto hereby agrees that each of the Beneficiaries not a signatory hereto shall be a third-party beneficiary of this Agreement.
(e) THIS AGREEMENT, INCLUDING THE RIGHTS AND DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BUT WITHOUT REGARD TO ANY OTHER CONFLICTS OF LAW PROVISIONS THEREOF).
(f) EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY OTHER TRANSACTION AGREEMENT OR UNDER ANY AMENDMENT, INSTRUMENT OR DOCUMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY BANKING OR OTHER RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION AGREEMENT AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT A JURY.
(g) EACH PARTY HERETO HEREBY ACKNOWLEDGES AND AGREES THAT:
(I) IT IRREVOCABLY (i) SUBMITS TO THE JURISDICTION, FIRST, OF ANY UNITED STATES FEDERAL COURT, AND SECOND, IF FEDERAL JURISDICTION IS NOT AVAILABLE, OF ANY NEW YORK STATE COURT, IN EITHER CASE SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OTHER TRANSACTION AGREEMENT, (ii) AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED ONLY IN SUCH NEW YORK STATE OR FEDERAL COURT AND NOT IN ANY OTHER COURT, AND (iii) WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING.
(II) TO THE EXTENT THAT IT HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM THE JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID TO EXECUTION, EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, IT HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER OR IN CONNECTION WITH THIS AGREEMENT.
Section 6. Termination of Guaranty. (a) This Agreement and Guarantor’s obligations hereunder shall remain operative and continue in full force and effect until the later of (i) the Facility Expiration Date, and (ii) such time as all Guaranteed Obligations (other than unasserted contingent indemnification obligations) are duly performed and paid and satisfied in full, provided, that this Agreement and Guarantor’s obligations hereunder shall continue to be effective or shall be reinstated, as the case may be, if at any time payment or other satisfaction of any of the Guaranteed Obligations is rescinded or must otherwise be restored or returned upon the bankruptcy, insolvency, or reorganization of Seller or otherwise, as applicable, as though such payment had not been made or other satisfaction occurred, whether or not Buyer or any of the Beneficiaries (or their respective assigns) are in possession of this Agreement. No invalidity, irregularity or unenforceability by reason of the bankruptcy, insolvency, reorganization or other similar applicable Requirements of Law, or any other applicable Requirements of Law or order of any Governmental Authority thereof purporting to reduce, amend or otherwise affect the Guaranteed Obligations shall impair, affect, or be a defense to or claim against the obligations of Guarantor under this Agreement.
(b) This Agreement shall survive the insolvency of Seller, any Beneficiary or any other Person and the commencement of any case or proceeding by or against Seller or any other Person under any bankruptcy, insolvency, reorganization or other similar applicable Requirements of Law. No automatic stay under any bankruptcy, insolvency, reorganization or other similar applicable Requirements of Law with respect to Seller or any other Person shall postpone the obligations of Guarantor under this Agreement.
Section 7. Set-off. Buyer is hereby authorized by Guarantor at any time and from time to time, but in any case solely during the continuance of an Event of Default, without notice to Guarantor (any such notice being expressly waived by Guarantor) and to the fullest extent permitted by applicable Requirements of Law, to set-off and apply any and all deposits (general or special, time or demand, provisional or final) and other sums (other than any amounts subject to a security interest or lien in favor of any other creditor of Guarantor) at any time held by, and other indebtedness at any time owing to, Buyer to or for the credit to the account of Guarantor, against any and all Guaranteed Obligations of Guarantor, now or hereafter existing under this Agreement. Buyer shall notify the Guarantor promptly after any such setoff and application, provided that the failure to give such notice shall not affect the validity of such setoff and application.
Section 8. Entire Agreement; Severability; No Party Deemed Drafter. This Agreement and the other Transaction Agreements constitute the entire agreement of the parties hereto with respect to the matters set forth herein. The rights and remedies herein provided are cumulative and not exclusive of any remedies provided by applicable Requirements of Law or any other agreement, and this Agreement shall be in addition to any other guaranty of or collateral security for any of the Guaranteed Obligations. Any provisions of this Agreement which are prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. If the obligations of Guarantor hereunder would otherwise be held or determined to be avoidable, invalid or unenforceable in any action or proceeding on account of the amount of Guarantor’s liability under this Agreement, then, notwithstanding any other provision of this Agreement to the contrary, the amount of such liability shall, without any further action by Guarantor or any Beneficiary, be automatically limited and reduced to the highest amount that is valid and enforceable as determined in such action or proceeding. Each of the parties hereto hereby agrees that no party hereto shall be deemed to be the drafter of this Agreement.
Section 9. Expenses. Guarantor agrees to pay on demand:
(a) all reasonable and documented out-of-pocket costs and expenses incurred by Buyer in connection with the negotiation, preparation, execution and delivery of this Agreement and any amendment, restatement or supplement of, or consent or waivers under, this Agreement (whether or not consummated), enforcement of, or any actual or claimed breach of, or claim under, this Agreement, including all reasonable and documented out-of-pocket fees and expenses of attorneys, accountants, auditors, consultants and other agents of Buyer incurred in connection with any of the foregoing or in advising such Persons as to their respective rights and remedies under this Agreement; and
(b) all stamp and other similar Taxes and fees payable or determined to be payable in connection with the execution, delivery, filing and recording of this Agreement, and agrees to indemnify Buyer and each of the other Beneficiaries for such Taxes and fees.
Section 10. [Reserved].
Section 11. Addresses for Notices. All notices and other communications provided for hereunder shall, unless otherwise stated herein, be in writing (including facsimile and email communication) and shall be personally delivered or sent by express mail or nationally recognized overnight courier or by certified mail, first-class postage prepaid, or by facsimile, to the intended party at the address, facsimile number or email address of such party set forth in Schedule A of this Agreement or at such other address, facsimile number or email address as shall be designated by such party in a written notice to the other parties hereto. All such notices and communications shall be effective, (a) if personally delivered or sent by express mail or courier or if sent by certified mail, when received and (b) if transmitted by facsimile or email, when sent; provided that if not sent during normal business hours for the recipient, shall be deemed to have been sent at the opening of business on the next Business Day for the recipient.
Section 12. Definitions. The following terms shall have the following meanings:
“Code” shall mean the Internal Revenue Code of 1986 and, unless otherwise specified herein, shall include all amendments, modifications and supplements thereto from time to time.
“Designated Jurisdiction” shall mean any country or territory to the extent that such country or territory itself is the subject of any Sanction.
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.
“ERISA Event” shall mean any one or more of the following: (a) any reportable event, as defined in Section 4043 of ERISA, with respect to a Plan, as to which the PBGC has not waived under PBGC Regulation Section 4043 the requirement of Section 4043(a) of ERISA that it be notified of such event; (b) the filing of a notice of intent to terminate any Plan, if such termination would require material additional contributions in order to be considered a standard termination within the meaning of Section 4041(b) of ERISA, the filing under Section 4041(c) of ERISA of a notice of intent to terminate any Plan or the termination of any Plan under Section 4041(c) of ERISA; (c) the institution of proceedings, or the occurrence of an event or condition which would reasonably be expected to constitute grounds for the institution of proceedings by the PBGC under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan; (d) the failure to make a required contribution to any Plan that would result in the imposition of a lien or other encumbrance or the provision of security under Section 430 of the Code or Section 303 or 4068 of ERISA, or the arising of such a lien or encumbrance; there being or arising any “unpaid minimum required contribution” or “accumulated funding deficiency” (as defined or otherwise set forth in Section 4971 of the Code or Title I of ERISA), whether or not waived; or the filing of any request for or receipt of a minimum funding waiver under Section 412 of the Code with respect to any Plan or Multiemployer Plan, or that such filing may be made; or a determination that any Plan is, or is expected to be, considered an at-risk plan within the meaning of Section 430 of the Code or Section 303 of ERISA, or that any Multiemployer Plan is, or is expected to be, considered a plan in endangered or critical status within the meaning of Sections 431 and 432 of the Code or Sections 304 and 305 of ERISA; (e) engaging in a non-exempt prohibited transaction within the meaning of Section 4975 of the Code or Section 406 of ERISA with respect to a Plan; (f) the complete or partial withdrawal of any member of the ERISA Group from a Multiemployer Plan, the insolvency under Title IV of ERISA of any Multiemployer Plan; or the receipt by any member of the ERISA Group, of any notice, or the receipt by any Multiemployer Plan from any member of the ERISA Group of any notice, that a Multiemployer Plan is in endangered or critical status under Section 305 of ERISA; (g) any member of the ERISA Group incurring any liability under Title IV of ERISA with respect to any Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (h) any member of the ERISA Group ceasing operations at a facility so as to become subject to the provisions of Section 4068(a) of ERISA, withdrawing as a substantial employer so as to become subject to the provisions of Section 4063 of ERISA or cease making contributions to any Plan subject to Section 4064(a) of ERISA to which it made contributions; or (h) any member of the ERISA Group incurring any liability under Section 4069 or 4212(c) of ERISA.
“ERISA Group” shall mean any entity, including Guarantor, that is a member of any group of organizations (i) described in Section 414(b) or (c) of the Code of which Guarantor is a member, or (ii) solely for the purposes of Section 302 of ERISA and Section 412 of the Code, described in Section 414(m) or (o) of the Code of which Guarantor is a member.
“GAAP” means generally accepted accounting principles as applied in the United States.
“Multiemployer Plan” shall mean a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA which is or was at any time during the current year or the immediately preceding five years contributed to by any member of the ERISA Group on behalf of its employees and which is covered by Title IV of ERISA.
“OFAC” means the Office of Foreign Assets Control of the U.S. Department of the Treasury.
“Plan” means at any time an employee pension benefit plan (other than a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code and is either (a) maintained or contributed to by any member of the ERISA Group for any of its employees or (b) maintained pursuant to a collective bargaining agreement or any other arrangement under which more than one employer makes contributions and to which any member of the ERISA Group is then making or accruing an obligation to make contributions or has within the preceding five plan years made contributions.
“Sanctions” shall mean any economic or financial sanctions or trade embargoes imposed, administered or enforced by the United States Government (including without limitation, OFAC), the United Nations Security Council, the European Union, Her Majesty’s Treasury (“HMT”) or other relevant sanctions authority.
[Signatures Follow]
IN WITNESS WHEREOF, Guarantor has executed this Agreement as of the date first written above.
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UNITED STATES CELLULAR CORPORATION, as Guarantor
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By:
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/s/ Douglas W. Chambers
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Name:
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Douglas W. Chambers
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Title:
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Executive Vice President, Chief Financial Officer and Treasurer
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By:
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/s/ John M. Toomey
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Name:
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John M. Toomey
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Title:
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Authorized Person of United States Cellular Corporation and Vice President and Treasurer of Telephone and Data Systems, Inc.
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ACCEPTED AND ACKNOWLEDGED, as of the date first written above.
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MUFG BANK, LTD., NEW YORK BRANCH, as Buyer
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By:
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/s/ Thomas Giuntini
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Name:
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Thomas Giuntini
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Title:
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Managing Director
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SCHEDULE A
ADDRESSES FOR NOTICE
If to Guarantor:
United States Cellular Corporation
30 N. LaSalle, Suite 4000
Chicago, IL 60602
Attention: John M. Toomey
Telephone: 312-592-5308
Facsimile: 608-830-5530
Electronic Mail: John.Toomey@tdsinc.com
With a copy to (which shall not constitute notice):
USCC EIP LLC
8410 West Bryn Mawr Avenue
Chicago, Illinois 60631
Attention: Doug Chambers
Telephone: (773) 399-8930
Electronic Mail: doug.chambers@uscellular.com
and
Sidley Austin LLP
One S. Dearborn Street
Chicago, Illinois 60603
Attention: John P. Kelsh, General Counsel
Telephone: (312) 853-7097
Facsimile: (312) 853-7036
Electronic Mail: jkelsh@sidley.com
If to Buyer:
MUFG Bank, Ltd., New York Branch
1251 Avenue of the Americas
New York, New York 10020-1104
Attention: Thomas Giuntini
E-Mail: TGiuntini@us.mufg.jp
