S SentinelOne Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 19, 2015

 

 

SPRINT CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

Delaware		1-04721		46-1170005
(State of Incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

 

6200 Sprint Parkway, Overland Park, Kansas		66251
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (855) 848-3280

Not Applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

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Item 1.01 Entry into a Material Definitive Agreement.

Handset Sale Leaseback

On November 19, 2015, certain wholly-owned subsidiaries (each, an “Originator” and, collectively, the “Originators”) of Sprint Corporation (“Sprint”) entered into a series of agreements (the “Handset Sale Leaseback”) to sell, for a maximum aggregate purchase price of approximately $1.2 billion, subject to adjustment, certain iPhone devices currently subject to customer leases (each a “Device” and, collectively, the “Devices”) to Mobile Leasing Solutions, LLC (“Mobile Leasing”), a Delaware limited liability company formed by SoftBank Group Corp. (“SoftBank”), which Devices will simultaneously be leased back by certain other wholly-owned subsidiaries of Sprint. The Handset Sale Leaseback will provide additional liquidity and funding for the ongoing business needs of Sprint and its subsidiaries. The consummation of the transactions under the Handset Sale Leaseback, including payment of the Cash Purchase Price (defined below), is expected to occur during the first week of December 2015, subject to the satisfaction of customary closing conditions.

The material documentation for the Handset Sale Leaseback includes (i) the First Step Transfer Agreement, dated as of November 19, 2015 (the “First Step Transfer Agreement”), among the Originators, the special purpose bankruptcy remote Cayman Islands limited liability companies which are wholly owned subsidiaries of the Originators (each, a “Lessee” and, collectively, the “Lessees”) and Sprint Spectrum L.P. (“Sprint Spectrum”), (ii) the Second Step Transfer Agreement, dated as of November 19, 2015 (the “Second Step Transfer Agreement”), among the Lessees and Mobile Leasing, (iii) the Master Lease Agreement, dated as of November 19, 2015 (the “Master Lease Agreement”), among Mobile Leasing, the Lessees, Sprint Spectrum and Mizuho Bank, Ltd., as Collateral Agent, and, (iv) the Performance Support Agreement, dated as of November 19, 2015, by Sprint in favor of Mobile Leasing (the “Performance Support Agreement”), and (v) the Guaranty, dated as of November 19, 2015, by Sprint in favor of Mobile Leasing (the “Guaranty”).

Pursuant to the First Step Transfer Agreement, each Originator will contribute selected Devices and related customer leases (each a “Customer Lease” and, collectively, the “Customer Leases”) to its related wholly-owned Lessee. The Lessees will then sell the Devices and certain residual rights in the Customer Leases to Mobile Leasing in exchange for an aggregate payment by Mobile Leasing of (i) a maximum cash purchase price of approximately $1.1 billion (the “Cash Purchase Price”), subject to adjustment and payable on the closing date of the sale of the Devices (the “Lease Closing Date”), (ii) a deferred purchase price payable February 28, 2018 unless otherwise agreed (the “Final Settlement Date”) and (iii) a contingent purchase price also payable on the Final Settlement Date. On the Lease Closing Date, each Lessee will distribute the portion of the Cash Purchase Price it received to its parent Originator.

Simultaneously with the sale of the Devices and certain residual rights in the Customer Leases to Mobile Leasing and in accordance with the Second Step Transfer Agreement, Mobile Leasing will lease back each Device to the relevant Lessee pursuant to the Master Lease Agreement (together, the “Device Lease”) in exchange for monthly rental payments (the “Device Lease Rental Payments”) to be made by the Lessees to Mobile Leasing. Unless a Device Lease is terminated early, the Lessees will be obligated to pay the full Device Lease Rental Payments under each Device Lease, regardless of whether customers make lease payments (collectively, the “Customer Receivables”) on the Devices leased to them under the Customer Lease or whether the Customer Lease is still in effect. Pursuant to the Guaranty, Sprint will guaranty (subject to a cap of 20% of the aggregate Cash Purchase Price) the Lessees’ obligations to make Device Lease Rental Payments to Mobile Leasing and termination payments (“Termination Payments”) owed to Mobile Leasing in the event that the Master Lease is terminated early. In addition, pursuant to the Performance Support Agreement, Sprint will guaranty for the benefit of Mobile Leasing the performance of the covenants, agreements and undertakings of the Originators, the Lessees and Sprint Spectrum under the transaction documents, other than the obligation to make Device Lease Rental Payments and Termination Payments.

All Devices must be returned to Mobile Leasing, subject to purchase rights of the customers and provided that Lessees have no obligation to return Devices not returned by the customers to a Sprint entity.

Sprint Spectrum will act as servicer for Mobile Leasing and the Lessees in respect of the Customer Leases and the Devices.

 

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To secure the obligations of the Lessees under the Device Lease, the Lessees will provide a security interest to Mobile Leasing in, among other things, the Customer Leases, Customer Receivables and accounts holding amounts paid in respect of the Customer Receivables. The Handset Sale Leaseback agreements contain affirmative and restrictive covenants customary for transactions of this type. Mobile Leasing will be entitled to terminate one or more Device Leases upon certain customary enumerated events of default (each, an “Event of Default”), including (i) payment default, (ii) failure to comply with covenants, (iii) breach of representations, (iv) insolvency of Sprint or other affiliates of Sprint, (v) a change of control and (vi) termination of Sprint’s license to provide wireless communication services. Upon the occurrence and continuance of an Event of Default and the exercise of remedies by Mobile Leasing, the Lessees will be obligated to pay the Termination Payments.

The foregoing description of the Handset Sale Leaseback is qualified in its entirety by reference to the First Step Transfer Agreement, the Second Step Transfer Agreement, the Master Lease Agreement, the Performance Support Agreement and the Guaranty, which are filed as Exhibits 10.1, 10.2, 10.3, 10.4 and 10.5 hereto, respectively, and incorporated herein by reference.

Brightstar Corp. (“Brightstar”) will perform logistics and marketing services with respect to the Devices. Brightstar is a wholly-owned subsidiary of SoftBank, which is the controlling stockholder of Sprint. In addition, Brightstar or its affiliates provides supply chain and inventory management services to Sprint in Sprint’s indirect channels and whereby Sprint may sell new and used devices and new accessories to Brightstar for its own purposes.

Amended and Restated Receivables Facility

Also on November 19, 2015, the Originators entered into an amendment of their existing two-year committed revolving customer accounts receivable facility (the “Receivables Facility”) to provide for the addition of receivables arising from leases of handsets, along with receivables arising from installment sales of equipment and wireless services (collectively, “Receivables”). The amended Receivables Facility has a maximum funding limit of $4.3 billion and is scheduled to expire on November 19, 2017. The Receivables Facility provides liquidity and funding for the ongoing business needs of Sprint and its subsidiaries.

The documentation for the Receivables Facility includes (i) a Second Amended and Restated Receivables Purchase Agreement (the “Amended and Restated RPA”), by and among Sprint Spectrum, as servicer, Sprint formed wholly-owned subsidiaries that are bankruptcy-remote special purpose entities (the “SPEs”), as sellers, certain commercial paper conduits and financial institutions from time to time party thereto (the “Purchasers”), the entities from time to time party thereto as purchaser agents (“Purchaser Agents”), The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as administrative agent for the service Receivables, SMBC Nikko Securities America, Inc., as administrative agent for the customer lease Receivables, and Mizuho Bank, Ltd., as administrative agent for the installment sale Receivables and as collateral agent, and (ii) a Second Amended and Restated Receivables Sale and Contribution Agreement (the “Amended and Restated RSCA”) by and among the Originators and the SPEs. The Amended and Restated RPA amends and restates the previously effective Amended and Restated Receivables Purchase Agreement, dated April 24, 2015 in its entirety, and the Amended and Restated RSCA amends and restates the previously effective Amended and Restated Receivables Sale Agreement, dated as of April 24, 2015, in its entirety.

Pursuant to the Receivables Facility, each Originator transfers, on an ongoing basis, selected Receivables, Related Assets (as defined in the Amended and Restated RPA) and Lease Devices (as defined in the Amended and Restated RPA) to the SPEs. The SPEs may sell the Receivables to the bank and conduit purchasers. The available funding varies based on eligibility requirements set forth in the Receivables Facility, including customary criteria, limits and reserves. Sales of eligible Receivables to the Purchasers may occur daily and are settled on a monthly basis. Sprint pays a fee for the drawn and undrawn portions of the Receivables Facility. Sprint Spectrum services the Receivables in exchange for a monthly servicing fee, and Sprint guarantees the performance of obligations of the Servicer and the Originators under the Receivables Facility.

Upon certain termination events, the purchasers under the Receivables Facility may terminate further purchases of Receivables and impose default fees. Yield is calculated based upon purchaser funding alternatives with respect to outstanding purchases under the Receivables Facility.

 

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The foregoing description of the Receivables Facility is qualified in its entirety by reference to the Amended and Restated RPA and the Amended and Restated RSCA, which are filed as Exhibit 10.6 and Exhibit 10.7 hereto, respectively, and incorporated herein by reference.

Certain of the banks and financial institutions that are parties to the Receivables Facility and their respective affiliates have in the past provided, are currently providing and in the future may continue to provide investment banking, commercial banking and other financial services, to Sprint in the ordinary course of business for which they have received and will receive customary compensation. In the ordinary course of business, such banks and financial institutions and their respective affiliates may participate in loans and actively trade the debt and equity securities of Sprint for their own account or for the accounts of customers and, accordingly, such banks and financial institutions and their respective affiliates may at any time hold long or short positions in such securities.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information provided in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.

Item 7.01 Regulation FD Disclosure.

On November 20, 2015, Sprint intends to host a conference call with analysts, investors and other interested parties to discuss the Handset Sale Leaseback and related business developments. A copy of the slide presentation to accompany that call is attached hereto as Exhibit 99.1 as is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

The following exhibits are filed with this report:

 

Exhibit No.		Description
10.1		First Step Transfer Agreement, dated as of November 19, 2015, among the originators from time to time party thereto, the lessees from time to time party thereto and Sprint Spectrum L.P.
10.2		Second Step Transfer Agreement, dated as of November 19, 2015, among the lessees from time to time party thereto and Mobile Leasing Solutions, LLC
10.3		Master Lease Agreement, dated as of November 19, 2015, among Mobile Leasing Solutions, LLC, the lessees from time to time party thereto, Sprint Spectrum L.P. and Mizuho Bank, ltd., as Collateral Agent
10.4		Performance Support Agreement, dated as of November 19, 2015, by Sprint Corporation in favor of Mobile Leasing Solutions, LLC
10.5		Guaranty, dated as of November 19, 2015, by Sprint Corporation in favor of Mobile Leasing Solutions, LLC
10.6		Second Amended and Restated Receivables Purchase Agreement, dated as of November 19, 2015, by and among Sprint Spectrum L.P., as servicer, certain Sprint special purpose entities, as sellers, certain commercial paper conduits and financial institutions from time to time party thereto, as purchasers, the entities from time to time party thereto as purchaser agents, The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as administrative agent, SMBC Nikko Securities America, Inc., as administrative agent, and Mizuho Bank, Ltd., as administrative agent and collateral agent.
10.7		Second Amended and Restated Receivables Sale and Contribution Agreement, dated as of November 19, 2015, by and among certain Sprint subsidiaries as originators and special purpose entities.
99.1		Slide presentation

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

				SPRINT CORPORATION
Date: November 20, 2015				By:		/s/ Stefan K. Schnopp
						Stefan K. Schnopp Assistant Secretary

 

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EXHIBIT INDEX

 

Exhibit No.		Description
10.1		First Step Transfer Agreement, dated as of November 19, 2015, among the originators from time to time party thereto, the lessees from time to time party thereto and Sprint Spectrum L.P.
10.2		Second Step Transfer Agreement, dated as of November 19, 2015, among the lessees from time to time party thereto and Mobile Leasing Solutions, LLC
10.3		Master Lease Agreement, dated as of November 19, 2015, among Mobile Leasing Solutions, LLC, the lessees from time to time party thereto, Sprint Spectrum L.P. and Mizuho Bank, ltd., as Collateral Agent
10.4		Performance Support Agreement, dated as of November 19, 2015, by Sprint Corporation in favor of Mobile Leasing Solutions, LLC
10.5		Guaranty, dated as of November 19, 2015, by Sprint Corporation in favor of Mobile Leasing Solutions, LLC
10.6		Second Amended and Restated Receivables Purchase Agreement, dated as of November 19, 2015, by and among Sprint Spectrum L.P., as servicer, certain Sprint special purpose entities, as sellers, certain commercial paper conduits and financial institutions from time to time party thereto, as purchasers, the entities from time to time party thereto as purchaser agents, The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as administrative agent, SMBC Nikko Securities America, Inc., as administrative agent, and Mizuho Bank, Ltd., as administrative agent and collateral agent.
10.7		Second Amended and Restated Receivables Sale and Contribution Agreement, dated as of November 19, 2015, by and among certain Sprint subsidiaries as originators and special purpose entities.
99.1		Slide presentation

 

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Exhibit 10.1

EXECUTION COPY

 

 

FIRST STEP TRANSFER AGREEMENT

dated as of November 19, 2015

among

THE ORIGINATORS FROM TIME TO TIME PARTY HERETO,

as Transferors

THE LESSEES FROM TIME TO TIME PARTY HERETO,

as Transferees

and

SPRINT SPECTRUM L.P.,

as Servicer

 

 

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TABLE OF CONTENTS

 

				Page
ARTICLE I     DEFINITIONS AND RELATED MATTERS					1
SECTION 1.1		Defined Terms			1
SECTION 1.2		Other Interpretive Matters			2
ARTICLE II     TRANSFER AND CONTRIBUTION					3
SECTION 2.1		Transfer and Contribution			3
SECTION 2.2		Assignment and Assumption of Related Customer Lease Obligations			3
SECTION 2.3		Distributions			3
SECTION 2.4		No Recourse			3
SECTION 2.5		Intention of the Parties			3
SECTION 2.6		Like-Kind Exchanges			4
SECTION 2.7		Transfers of Rights in Customer Leases Upon Device Repurchase			4
ARTICLE III     ADMINISTRATION AND COLLECTION					4
SECTION 3.1		Servicer			4
SECTION 3.2		Power of Attorney			4
SECTION 3.3		Actions Evidencing Absolute Assignments			4
SECTION 3.4		Continuation Statements			5
ARTICLE IV     REPRESENTATIONS AND WARRANTIES					5
SECTION 4.1		Mutual Representations and Warranties			5
SECTION 4.2		Additional Representations and Warranties of the Originators			6
SECTION 4.3		Breach of Eligibility Representation and Warranty			8
ARTICLE V     GENERAL COVENANTS					8
SECTION 5.1		Mutual Covenants			8
SECTION 5.2		Additional Covenants			9
SECTION 5.3		Negative Covenants of Each Originator			11
ARTICLE VI     INDEMNIFICATION					12
SECTION 6.1		Each Originator’s Indemnity			12
SECTION 6.2		Contribution			13
ARTICLE VII     MISCELLANEOUS					14
SECTION 7.1		Amendments, etc			14

 

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TABLE OF CONTENTS

(continued)

 

				Page
SECTION 7.2		No Waiver; Remedies			14
SECTION 7.3		Notices, Etc			14
SECTION 7.4		Binding Effect; Assignment			14
SECTION 7.5		Survival			14
SECTION 7.6		Costs and Expenses			15
SECTION 7.7		Execution in Counterparts; Integration			15
SECTION 7.8		Governing Law			15
SECTION 7.9		Waiver of Jury Trial			15
SECTION 7.10		Consent to Jurisdiction; Waiver of Immunities			15
SECTION 7.11		Confidentiality			16
SECTION 7.12		No Proceedings			16
SECTION 7.13		No Recourse Against Other Parties			16
SECTION 7.14		Severability			16

 

ANNEX 1		UCC Details Schedule
ANNEX 2		Related Originators; Related Lessees
SCHEDULE I		Devices
SCHEDULE II		Related Customer Leases
SCHEDULE III		Related Distribution Amount

 

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FIRST STEP TRANSFER AGREEMENT

This FIRST STEP TRANSFER AGREEMENT, dated as of November 19, 2015 and effective as of the Lease Closing Date (this “Agreement”), is among THE PERSONS IDENTIFIED ON THE SIGNATURE PAGES HERETO AS ORIGINATORS, as transferors (collectively, the “Originators” and, each, an “Originator”), THE PERSONS IDENTIFIED ON THE SIGNATURE PAGES HERETO AS LESSEES, as transferees (collectively, the “Lessees” and, each, an “LESSEE”) and SPRINT SPECTRUM L.P., as servicer (in such capacity, the “Servicer”).

WHEREAS, pursuant to the Transaction Documents, the Originators desire to enter into a sale and leaseback transaction whereby (i) each Originator will contribute Devices and Related Customer Leases owned by such Originator to its Related Lessee, (ii) each Lessee will sell the Devices and the Customer Lease-End Rights and Obligations to MLS and distribute the net cash proceeds of such sale to its Related Originator and (iii) MLS will lease the Devices to the relevant Lessee; and

WHEREAS, the Parties intend that the Transaction Documents create a financing for all U.S. federal, state and local income tax purposes, and thus specifically that (i) the Cash Purchase Price paid under the Second Step Transfer Agreement at closing be treated for such purposes as amounts loaned by MLS for which the Devices provide security and (ii) all Rental Payments to MLS under the Device Leases be treated for such purposes as payments on such indebtedness owed to MLS.

WITNESSETH, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS AND RELATED MATTERS

SECTION 1.1 Defined Terms. In this Agreement, capitalized terms not otherwise defined herein are defined in that certain Appendix A to the Master Lease Agreement, dated as of the date hereof and effective as of the Lease Closing Date (as amended, supplemented or otherwise modified from time to time, the “Master Lease Agreement”), among, inter alios, the Lessees, Mobile Leasing Solutions, LLC, a Delaware limited liability company (“MLS”), the Servicer and Mizuho Bank, Ltd. (the “Collateral Agent”). In addition, the following terms used herein have the meanings indicated below:

“Agreement” shall have the meaning provided in the preamble of this Agreement.

“Amdocs Sub-Servicing Agreement” shall have the meaning provided in the Servicing Agreement.

“Collateral Agent” shall have the meaning provided in Section 1.1 of this Agreement.

“Collections” shall have the meaning provided in the Servicing Agreement.

 

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“Devices” means the wireless mobiles device identified on Schedule I hereto.

“Lessee” shall have the meaning provided in the preamble of this Agreement.

“Lessee Representative” shall have the meaning provided in the Second Step Transfer Agreement.

“MLS” shall have the meaning provided in Section 1.1 of this Agreement.

“Non-Lockbox Receivables” shall have the meaning provided in the Servicing Agreement.

“OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets Control.

“Originator” shall have the meaning provided in the preamble of this Agreement.

“Originator Indemnified Party” shall have the meaning provided in Section 6.1 of this Agreement.

“Patriot Act” means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)).

“Purchase Date” shall have the meaning provided in the Device Repurchase Agreement.

“Related Distribution Amount” means an amount equal to the amount set forth on Schedule III under the heading “Related Distribution Amount.”

“Related Customer Leases” means each lease with respect to a Device identified on Schedule II hereto.

“Related Lessee” means, with respect to any Originator, the Lessee identified as such on Annex 2.

“Related Originator” means, with respect to any Lessee, the Originator identified as such on Annex 2.

“SEC” means the Securities and Exchange Commission.

“Servicer” shall have the meaning provided in the preamble of this Agreement.

“Specified Breach” shall have the meaning provided in Section 4.3 of this Agreement.

SECTION 1.2 Other Interpretive Matters. The interpretation of this Agreement, unless otherwise specified, is subject to Section 1.2 of the Master Lease Agreement.

 

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ARTICLE II

TRANSFER AND CONTRIBUTION

SECTION 2.1 Transfer and Contribution. Upon the terms and subject to the conditions set forth in this Agreement, on the Lease Closing Date, each Originator, severally and for itself, hereby absolutely assigns by way of capital contribution to its Related Lessee, and each Lessee hereby accepts such capital contribution and acquires from its Related Originator, all of such Related Originator’s right, title and interest in, to and under the Devices identified opposite such Originator’s name on Schedule I (Devices) hereto and the Related Customer Leases, including, without limitation, all Customer Receivables in connection with such Related Customer Leases, all rights to discontinue the leasing program for such Devices under the Customer Leases and all servicing rights with respect to such Devices and the Related Customer Leases. All Customer Receivables under the Customer Leases attributable to any date prior to the Lease Closing Date shall not be transferred and shall remain the property of the Related Originator.

SECTION 2.2 Assignment and Assumption of Related Customer Lease Obligations. For the purposes of this Agreement, (x) all contributions of contractual and other rights of Originators in connection with Devices and Customer Leases shall be deemed to be absolute and irrevocable assignments thereof and (y) all acquisitions of contractual obligations by Lessees shall be deemed to be assumptions thereof. Subject to the Lessees’ rights of further assignment under the Transaction Documents, from and after the Lease Closing Date (i) the Related Lessees shall have assumed the rights and obligations of the Originators under the Related Customer Leases as lessors thereunder and (ii) each Originator shall relinquish its rights (including the right to discontinue the leasing program for the Devices) and be released from its obligations under the Related Customer Leases.

SECTION 2.3 Distributions. Simultaneously with the absolute and irrevocable assignment by each Originator to its Related Lessee of its right, title and interest in each Device and Related Customer Lease, each Lessee agrees to distribute to its Related Originator an amount equal to the Related Distribution Amount. Thereafter, the Lessees agree to distribute to their Related Originators additional amounts of cash proceeds received in accordance with the terms of the Transaction Documents to which any Lessee is a party to the maximum extent permitted by law and such Transaction Documents.

SECTION 2.4 No Recourse. Except as specifically provided in this Agreement, the transfer of the Devices and the Related Customer Leases under this Agreement shall be without recourse to any Originator.

SECTION 2.5 Intention of the Parties. It is the express intent of each of the parties hereto that the transactions hereunder shall constitute absolute and irrevocable assignments (by way of capital contribution) of the Devices and the Related Customer Leases by each Originator to its Related Lessee (such that the Devices and the Related Customer Leases, other than those, if any, subsequently repurchased by the Originators pursuant to the terms of the Transaction Documents, would not be property of any Originator’s estate in the event of any Originator’s bankruptcy). As a protective measure in the event that, notwithstanding the

 

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foregoing, the conveyance of the Devices identified opposite the relevant Originator’s name on Schedule I (Devices) hereto and the Related Customer Leases to the Lessees is recharacterized by any third party as a pledge or other grant of security securing a loan, each Originator does hereby grant to its Related Lessee a security interest in all of such Originator’s now or hereafter existing right, title and interest in, to and under the Devices and the Related Customer Leases and agrees that this Agreement shall constitute a security agreement under applicable Law. Each Originator hereby authorizes its Related Lessee, MLS and the Collateral Agent or their respective designees (i) to file one or more financing or continuation statements, and amendments thereto and assignments thereof, relative to all or any of the Devices and Related Customer Leases now existing or hereafter arising in the name of such Originator and (ii) to the extent permitted by the Servicing Agreement, to notify Customers of the assignment of the Devices and the Related Customer Leases pursuant hereto.

SECTION 2.6 Like-Kind Exchanges. At any time that Servicer (on behalf of the Lessee) does a Like-Kind Exchange under the relevant Customer Lease and as permitted under the Servicing Agreement, the relevant Lessees Related Originator agrees to transfer such Like-Kind Exchange Device and Related Customer Lease to such Lessee.

SECTION 2.7 Transfers of Rights in Customer Leases Upon Device Repurchase. On each Purchase Date, simultaneously with the sale of any Devices by MLS to an Originator pursuant to the Device Repurchase Agreement, the applicable Lessee shall automatically make a distribution to its Related Originator of all of such Lessee’s right, title and interest in and to the Customer Lease related to such Device.

ARTICLE III

ADMINISTRATION AND COLLECTION

SECTION 3.1 Servicer. Pursuant to the Servicing Agreement, Servicer shall be responsible for the servicing, administration and collection of the Devices and Related Customer Leases for the benefit of each Lessee and MLS (and the Collateral Agent as assignee), subject to the terms set out in (including the rights to terminate Sprint Spectrum as Servicer and appoint a successor Servicer pursuant to) the Servicing Agreement.

SECTION 3.2 Power of Attorney. Each Lessee and each Originator hereby grants to Servicer an irrevocable power of attorney, with full power of substitution, coupled with an interest, to take or cause to be taken in the name of such Lessee or such Originator, as the case may be, any and all steps that are necessary or advisable to endorse, negotiate, enforce, or otherwise realize on any Collections and any checks, instruments, writing, other proceeds of the Devices or Related Customer Leases or other right of any kind held or transmitted by such Lessee or such Originator or transmitted or received by such Lessee or such Originator in connection with any Device or Related Customer Lease.

SECTION 3.3 Actions Evidencing Absolute Assignments. On and following the Lease Closing Date, each Originator shall maintain its accounting records to evidence that the Devices and Related Customer Leases have been absolutely and irrevocably assigned to the Related Lessee in accordance with this Agreement. In addition, each Originator agrees that

 

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from time to time, at its expense, it will promptly execute and deliver all further instruments and documents, and take all further action that the Lessees, MLS, the Collateral Agent or any of their respective designees may reasonably request in order to perfect, protect or more fully evidence the absolute assignments hereunder, or to enable the Lessees, MLS or the Collateral Agent to exercise or enforce any of their respective rights with respect to the Devices and the Related Customer Leases. Without limiting the generality of the foregoing, each Originator will upon the request of the Lessees, MLS and/or the Collateral Agent authorize and file such financing or continuation statements, or amendments thereto or assignments thereof, and such other instruments or notices, as may be necessary or appropriate.

SECTION 3.4 Continuation Statements. Without limiting the generality of Section 3.3 above, each Originator shall authorize and deliver and file or cause to be filed appropriate continuation statements not earlier than six months and not later than three months prior to the fifth anniversary of the date of filing of the financing statements filed in connection with the Lease Closing Date or any other financing statement filed pursuant to this Agreement, if the Final Settlement Date shall not have occurred.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

SECTION 4.1 Mutual Representations and Warranties. Each Originator represents and warrants to the Lessees, and each Lessee represents and warrants to the Originators, as of the Lease Closing Date as follows:

(a) Organization and Good Standing. It has been duly organized or incorporated in, and is validly existing as a corporation, exempted company, partnership or limited liability company, as applicable, in good standing under the Laws of its jurisdiction of organization or incorporation, with power and authority to own its properties and to conduct its business as such properties are presently owned and such business is presently conducted and will be conducted except to the extent that such failure could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(b) Due Qualification. It is duly qualified to do business as a foreign organization in good standing, if applicable, and has obtained all necessary qualifications, licenses and approvals, in all jurisdictions in which the ownership or lease of property or the conduct of its business requires such qualifications, licenses or approvals, except where the failure to be in good standing or to hold any such qualifications, licenses and approvals could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(c) Power and Authority; Due Authorization. It (i) has all necessary power and authority to (A) execute and deliver this Agreement and the other Transaction Documents to which it is a party in any capacity and (B) carry out the terms of and perform its obligations under the Transaction Documents applicable to it and (ii) has duly authorized by all necessary corporate, partnership or limited liability company action, as

 

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applicable, the execution, delivery and performance of this Agreement and the other Transaction Documents to which it is a party.

(d) Binding Obligations. This Agreement constitutes, and each other Transaction Document to be signed by such party when duly executed and delivered will constitute, a legal, valid and binding obligation of such party, enforceable against such party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

(e) No Violation. The consummation of the transactions contemplated by this Agreement and the other Transaction Documents to which it is a party and the performance by it of the terms hereof and thereof will not, (i) violate or result in a default under, (A) its articles or certificate of incorporation, memorandum and articles of association, by-laws, certificate of formation, limited liability company agreement, partnership agreement or other organizational documents, as applicable, or (B) in the context of the transactions contemplated by this Agreement and the other Transaction Documents applicable to it, any material indenture, agreement or instrument binding on it, (ii) result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement or instrument except for any Lien that could not reasonably be expected to have a Material Adverse Effect or arising under the Transaction Documents, or (iii) violate in any material respect any Law applicable to it or any of its properties.

(f) Bulk Sales Act. No transaction contemplated hereby requires compliance by it with any bulk sales act or similar Law.

(g) No Proceedings. There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to its actual knowledge, threatened against or affecting it (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect, (ii) seeking to prevent the servicing of the Devices and the Related Customer Leases by Servicer or the consummation of the purposes of this Agreement or of any of the other Transaction Documents to which it is a party, or (iii) that otherwise involve this Agreement or any other Transaction Document to which it is a party.

(h) Governmental Approvals. No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority is required for its due execution, delivery and performance of this Agreement or any other Transaction Document to which it is a party or the transactions contemplated hereby or thereby, except for the filing of the UCC financing statements referred to in such Transaction Documents and filings with the SEC to the extent required by applicable Law.

SECTION 4.2 Additional Representations and Warranties of the Originators. Each Originator represents and warrants to Lessees as of the Lease Closing Date and with

 

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respect to a Like-Kind Exchange Device, as of the date such Like-Kind Exchange Device is transferred Section 4.2(l)(i) only, as follows:

(a) Absolute Assignment. This Agreement constitutes an absolute and irrevocable assignment by way of capital contribution of the Devices and the Related Customer Leases to its Related Lessee.

(b) Use of Proceeds. The use of all funds obtained by it under this Agreement will not conflict with or contravene any of Regulations T, U and X promulgated by the Board of Governors of the Federal Reserve System.

(c) Quality of Title. Prior to its assignment to its Related Lessee hereunder, each Device and each Related Customer Lease, is owned by it free and clear of any Liens (other than Permitted Device Liens); when its Related Lessee acquires such Devices and Related Customer Leases hereunder, such Lessee shall have acquired, for fair consideration and reasonably equivalent value, free and clear of any Lien (other than Permitted Device Liens); and no valid effective financing statement or other instrument similar in effect covering any Device and any Related Customer Lease is on file in any recording office, except such as may be filed (i) in favor of its Related Lessee in accordance with this Agreement or any other Transaction Document (and assigned to MLS and further assigned to the Collateral Agent), (ii) in connection with any Permitted Device Lien.

(d) UCC Details. Its true legal name as registered in the sole jurisdiction in which it is organized and the jurisdiction of such organization are specified in Annex 1 and its chief executive office is at the address specified in Annex 1 (or at such other location, notified to Lessees, MLS and Collateral Agent). Except as described in Annex 1, it has never had any, trade names, fictitious names, assumed names or “doing business as” names and is “located” in the jurisdiction specified in Annex 1 for purposes of Section 9-307 of the UCC. It is organized in only a single jurisdiction.

(e) Servicer Collection Account. The names and addresses of all banks or financial institutions with Servicer Collection Accounts (“Collection Account Banks”), together with the account numbers of the Servicer Collection Accounts at such Collection Account Banks, are specified in Schedule 3 of the Servicing Agreement (or have been notified to and approved by the Collateral Agent and MLS in accordance with Section 2.10(d) of the Servicing Agreement).

(f) Servicing Programs. No license or approval is required for the Lessees’, the Collateral Agent’s or MLS’s use of any software or other computer program used by such Originator, the Servicer or any Sub-Servicer in the servicing of the Related Customer Leases originated by such Originator, other than under the Amdocs Sub-Servicing Agreement and those which have been obtained and are in full force and effect.

(g) Adverse Change. Since March 31 2015, there has been no Material Adverse Effect with respect to such Originator.

 

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(h) Credit and Collection Policies; Compliance with Law. It has complied with the Credit and Collection Policies in all material respects and such policies have not changed in any material respect since the date of origination. It has complied with all applicable Law except where the failure to do so, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

(i) Investment Company Act. It is not an “investment company” under (and as defined in) the Investment Company Act.

(j) Tax Returns and Payments. It has filed all federal income tax returns and all other material tax returns that are required to be filed by it and has paid all taxes due pursuant to such returns or pursuant to any assessment received by it, except (i) for any such taxes or assessments, if any, that are being appropriately contested in good faith by appropriate proceedings and with respect to which adequate reserves in conformity with GAAP have been provided, or (ii) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect. No tax lien has been filed, and, to its actual knowledge, no claim is being asserted, with respect to any such tax or assessment that could reasonably be expected to result in a Material Adverse Effect.

(k) No Sanctions. It is not a Sanctioned Person. To its knowledge after due inquiry, no Customer was a Sanctioned Person at the time of such Originator’s entry into any Related Customer Lease with such Customer. It and its Affiliates: (i) have less than 15% of their assets in Sanctioned Countries; and (ii) derive less than 15% of their operating income from investments in, or transactions with Sanctioned Persons or Sanctioned Countries. Neither it nor any of its Subsidiaries engages in activities related to Sanctioned Countries except for such activities as are (A) specifically or generally licensed by OFAC or (B) otherwise in compliance with OFAC’s sanctions regulations.

(l) Eligible Devices and Related Customer Leases. Each Device is (i) an Eligible Device and (ii) each Related Customer Lease is an Eligible Lease.

SECTION 4.3 Breach of Eligibility Representation and Warranty. If on any day there is discovered a breach of any of the representations or warranties of any Originator set forth in Section 4.2(l) with respect to any Device or Related Customer Lease as of the date of its transfer hereunder (a “Specified Breach”), then, to the extent the Servicer has purchased any such Device and Related Customer Lease pursuant to Section 2.14 of the Servicing Agreement, the Related Originator agrees to purchase on the day the Servicer is required to purchase such Device and Related Customer Lease, such Device and Related Customer Lease on the same terms as the Servicer is required to do so.

ARTICLE V

GENERAL COVENANTS

SECTION 5.1 Mutual Covenants. At all times from the Lease Closing Date to the Final Settlement Date, each Lessee and each Originator shall:

 

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(a) Compliance with Laws, Etc. Comply with all applicable Laws, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

(b) Preservation of Existence. Except as expressly permitted by Section 5.3(c) or (d) with respect to the Originators or the Master Lease Agreement with respect to the Lessees, preserve and maintain its existence, rights, franchises and privileges in the jurisdiction of its organization, and qualify and remain qualified in good standing in each jurisdiction where the failure to qualify or preserve and maintain such existence, rights, franchises, privileges and qualification could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(c) Separateness. Not take any actions inconsistent with the terms of Section 6.1 of the Second Step Transfer Agreement or any Lessee’s organizational documents.

(d) Taxes. Each transfer contemplated hereunder is intended to be an exempt sale for resale for sales and use tax purposes as the purchaser or transferee intends to re-sell or lease each Device in the same form or condition in which it was transferred to others in the normal course of the transferee’s business. Each Originator and each Lessee will cooperate to take all steps to timely prepare and secure any exemption certificate, resale certificate or similar documentation requested or required by any jurisdiction for purposes of qualifying for or documenting such exemption.

SECTION 5.2 Additional Covenants of the Originators. At all times from the Lease Closing Date to the Final Settlement Date, each Originator shall (or shall cause the Servicer to):

(a) Keeping of Records and Books of Account; Delivery. Maintain and implement, or cause to be maintained and implemented, administrative and operating procedures (including an ability to recreate records evidencing the Devices and the Related Customer Leases in the event of the destruction of the originals thereof, backing up on at least a daily basis on a separate backup computer from which electronic file copies can be readily produced and distributed to third parties being agreed to suffice for this purpose), and keep and maintain, or cause to be kept and maintained (or transferred to Servicer), all documents, books, records and other information necessary or advisable for the collection of all Collections in respect of all Devices and the Related Customer Leases.

(b) Location of Records. Keep its chief executive office and principal place of business, and the offices where it keeps its Records (and any original documents relating thereto), at the address of such Originator referred to in Annex 1 or, upon thirty (30) days’ prior written notice to the Collateral Agent and MLS, at such other locations in jurisdictions where all action required by Section 5.2(f) shall have been taken and completed.

 

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(c) Credit and Collection Policies. Until such Device or the Related Customer Lease is contributed to its Related Lessee, comply in all material respects with its Credit and Collection Policy in regard to each Device and the Related Customer Lease.

(d) Collections. Except as otherwise permitted under this Agreement, instruct, or cause the Servicer to instruct, all Customers to cause all Collections in respect of Devices and Related Customer Leases to be deposited directly in a Servicer Collection Account covered by an Account Control Agreement. In the event such Originator or any of its Affiliates receives any Collections such Person will promptly (but not later than three (3) Business Days following receipt) deposit such Collections in a Servicer Collection Account covered by an Account Control Agreement, except Non-Lock Box Receivables. The Originators shall cooperate with the Lessees and the Servicer in collecting amounts due from Customers in respect of the Devices and Related Customer Leases. Each Originator hereby grants to the Lessees and the Servicer an irrevocable power of attorney, with full power of substitution, coupled with an interest, to take or cause to be taken in the name of such Originator all steps necessary or advisable to endorse, negotiate or otherwise realize on any Collections and any checks, instruments or other proceeds of the Devices and Related Customer Leases held or transmitted by such Originator or transmitted or received by such Lessee (whether or not from such Originator) in connection with any Device or Related Customer Lease transferred by it hereunder.

(e) PATRIOT ACT Information. Promptly following a request therefor, it shall provide any documentation or other information that any Lessee, MLS or the Collateral Agent reasonably requests in order to comply with its ongoing obligations under the applicable “know your customer” and anti money laundering rules and regulations, including the PATRIOT Act.

(f) Further Assurance. From time to time, at its expense, it will promptly execute and deliver all further instruments and documents, and take all further action that the Lessees, MLS or the Collateral Agent or any of their respective designees may reasonably request in order to perfect, protect or more fully evidence the assignments and contributions hereunder, or to enable the Lessees, MLS and the Collateral Agent to exercise or enforce any of their respective rights with respect to the Devices and Related Customer Leases. Without limiting the generality of the foregoing, each Originator will upon the request of the Lessees, MLS or the Collateral Agent authorize and file such financing or continuation statements, or amendments thereto or assignments thereof, and such other instruments or notices, as may be necessary or appropriate.

(g) Agreed Upon Procedures. Cooperate reasonably with Servicer and the designated accountants for each annual agreed-upon procedures report required pursuant to Section 8.1(i) of the Servicing Agreement.

(h) Location. Each Originator shall at all times maintain its jurisdiction of organization and its chief executive office within a jurisdiction in the United States in which Article Nine of the UCC (2001 or later revision) is in effect.

 

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(i) Tax Matters. Each Originator shall pay all applicable taxes required to be paid by it when due and payable in connection with the transfer hereunder of the Devices and Related Customer Leases, and acknowledges that neither the Collateral Agent nor MLS shall have any responsibility with respect thereto. Each Originator shall pay and discharge, or cause the payment and discharge of, all federal income taxes (and all other material taxes) of such Originator when due and payable, except (i) such as may be paid thereafter without penalty, (ii) such as may be contested in good faith by appropriate proceeding and for which an adequate reserve has been established and is maintained in accordance with GAAP or (iii) where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

(j) Provision of Wireless Services. Each Originator will or will cause one or more of its Affiliates to provide wireless network services to Customers in accordance with each Related Customer Lease or other agreement, contract or other document (including any purchase order or invoice) related to any rights or obligations of any party under a Related Customer Lease, subject to the Credit and Collection Policy.

SECTION 5.3 Negative Covenants of Each Originator. From the Lease Closing Date until the Final Settlement Date, each Originator shall not:

(a) Liens, Etc. Except as otherwise explicitly provided herein and in the other Transaction Documents, create or suffer to exist any Lien, other than Permitted Device Liens upon or with respect to, any Device or Related Customer Lease or any interest therein, or any Servicer Collection Account to which any Collections of any of the foregoing are sent, or any right to receive income or proceeds (other than distributions made to such Originator in accordance with the Transaction Documents or any proceeds of Collections remitted to such Originator hereunder to the extent such Originator owes no other amounts hereunder) from or in respect of any of the foregoing or, prior to the Final Settlement Date, its equity interest in it Related Lessee, if any.

(b) Nondisturbance of Devices or Customer Leases. Claim ownership in or otherwise interfere with a Lessee’s (or the Servicer’s, MLS’ or the Collateral Agent’s) rights in the Devices or any Related Customer Lease, except if such Originator repurchases such Device pursuant to the Device Repurchase Agreement.

(c) Mergers, Sales, Etc. Consolidate or merge with or into any other Person or sell, lease or transfer all or substantially all of its property and assets, or agree to do any of the foregoing, unless (i) no Event of Default has occurred and is continuing or would result immediately after giving effect thereto, (ii) if such Originator is not the surviving entity or if such Originator sells, leases or transfers all or substantially all of its property and assets, the surviving entity or the Person purchasing or being leased the assets is a Subsidiary of Sprint and agrees to be bound by the terms and provisions applicable to such Originator hereunder, (iii) Sprint reaffirms in a writing, in form and substance reasonably satisfactory to MLS and the Collateral Agent, that its obligations under the Performance Support Agreement shall apply to the surviving entity and (iv)

 

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MLS and the Collateral Agent receives such additional certifications and opinions of counsel as it shall reasonably request.

(d) Change in Organization, Etc. Change its jurisdiction of organization or its name, identity or corporate organization structure or make any other change such that any financing statement filed or other action taken to perfect its Related Lessee’s or MLS’s interests hereunder and under the Second Step Sale Agreement, as applicable, would become seriously misleading or would otherwise be rendered ineffective, unless such Originator shall have given its Related Lessee, MLS and the Collateral Agent not less than 30 days’ prior written notice of such change and shall have cured such circumstances.

(e) Actions Impairing Quality of Title. Take any action that could reasonably be expected to cause a Related Lessee not to have valid ownership, free and clear of any Lien (other than any Permitted Device Lien), of the Devices and Related Customer Leases transferred under this Agreement.

ARTICLE VI

INDEMNIFICATION

SECTION 6.1 Each Originator’s Indemnity. Without limiting any other rights that any such Person may have hereunder or under applicable Law, each Originator severally but not jointly, hereby agrees to indemnify and hold harmless its Related Lessee, such Lessee’s Affiliates and all of their respective successors, transferees, participants and assigns, all Persons referred to in Section 7.4 hereof, and all officers, members, managers, directors, shareholders, employees and agents of any of the foregoing (each an “Originator Indemnified Party”), forthwith on demand, from and against any and all damages, losses, claims, liabilities and related costs and expenses, including reasonable and documented attorneys’ fees and disbursements but excluding Taxes (all of the foregoing being collectively referred to as “Originator Indemnified Amounts”) awarded against or incurred by any of them arising out of the ownership, assignment or lease, as applicable, of the Devices and the Related Customer Leases pursuant to the Transaction Documents or arising out of or relating to or resulting from the actions or inactions of the Originators; provided, however, notwithstanding anything to the contrary in this Article VI, Originator Indemnified Amounts shall be excluded to the extent (w) resulting from the gross negligence or willful misconduct on the part of such Originator Indemnified Party as determined by a final non-appealable judgment by a court of competent jurisdiction, (x) resulting from a claim brought by any Person against an Originator Indemnified Party (other than any Sprint Party) for breach of such Originator Indemnified Party’s (other than any Sprint Party’s) obligations under any Transaction Document as determined by a final non-appealable judgment by a court of competent jurisdiction, (y) constituting recourse with respect to the market or residual value of a Device, the value of a Customer Lease or a Customer Receivable by reason of bankruptcy or insolvency, or the financial or credit condition or financial default, of the related Customer, or as a result of Insolvency Event with respect to any Lessee and (z) resulting from a claim that Lessees are not required to indemnify under Article IV of the Master Lease Agreement. Without limiting the foregoing, each Originator shall indemnify, subject to the

 

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limits set forth in this Section 6.1, and hold harmless each Originator Indemnified Party for any and all Originator Indemnified Amounts arising out of, relating to or resulting from:

(i) the transfer by any Originator of any interest in any Device or Related Customer Lease;

(ii) any representation or warranty made by any Originator under or in connection with any Transaction Document to which it is a party or any other information or report delivered by or on behalf of any Originator pursuant hereto, which shall have been untrue, false or incorrect when made or deemed made;

(iii) the failure of any Originator to comply with the terms of any Transaction Document applicable to it or any applicable Law (including with respect to any Device or Related Customer Lease), or the nonconformity of any Device or Related Customer Lease with any such Law;

(iv) the lack of an enforceable ownership interest or a first priority perfected security interest in the Devices or Related Customer Leases transferred, or purported to be transferred, to any Lessee pursuant to this Agreement against all Persons (including any bankruptcy trustee or similar Person);

(v) the failure to file, or any delay in filing of, financing statements or other similar instruments or documents under the UCC of any applicable jurisdiction or other applicable Laws with respect to any Device or Related Customer Lease transferred by any Originator, or purported to be transferred by any Originator, to any Lessee pursuant to this Agreement whether at the time of any purchase or acquisition, as applicable, or at any time thereafter;

(vi) any suit or claim related to the Devices or Related Customer Leases transferred, or purported to be transferred, to any Lessee pursuant to this Agreement (including any products liability or environmental liability claim arising out of or in connection with the Devices or Related Customer Leases);

(vii) failure by any Originator to comply with the “bulk sales” or analogous Laws of any jurisdiction;

(viii) any commingling by such Originator of any funds relating to the Customer Receivables with any of its own funds or the funds of any other Person other than Non-Lockbox Receivables.

SECTION 6.2 Contribution. If for any reason the indemnification provided above in this Article VI is unavailable to an Originator Indemnified Party or is insufficient to hold an Originator Indemnified Party harmless, then each Originator shall contribute to the amount paid or payable by such Originator Indemnified Party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect not only the relative benefits received by such Originator Indemnified Party on the one hand and such Originator on the other hand but

 

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also the relative fault of such Originator Indemnified Party as well as any other relevant equitable considerations.

ARTICLE VII

MISCELLANEOUS

SECTION 7.1 Amendments, etc. No amendment or waiver of any provision of this Agreement or consent to any departure by any Originator therefrom shall in any event be effective unless the same shall be in writing and signed by the Lessee Representative, MLS and the Collateral Agent and (if an amendment) the Originators, and if such amendment or waiver affects the obligations of Sprint, Sprint consents in writing thereto, and then any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. Each Originator may not amend or otherwise modify any other Transaction Document executed by it without the written consent of the Lessee Representative, MLS and the Collateral Agent, and if such amendment or waiver affects the obligations of Sprint, Sprint consents in writing thereto.

SECTION 7.2 No Waiver; Remedies. No failure on the part of any Lessee or any Originator Indemnified Party to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies provided by Law.

SECTION 7.3 Notices, Etc. The provisions of Section 21 (Notices) of the MLS Intercreditor Agreement shall apply as if fully set forth herein.

SECTION 7.4 Binding Effect; Assignment. Each Originator acknowledges that MLS may rely upon the terms of this Agreement. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Except as provided below, no party may assign its rights and obligations hereunder in whole or in part without the prior written consent of each of the other parties (not to be unreasonably withheld or delayed). Each Originator acknowledges that Lessees’ rights under this Agreement and rights in the Devices and Related Customer Leases may be sold outright or assigned as collateral to MLS under the Second Step Sale Agreement and may be further assigned as collateral to the Collateral Agent on behalf of the Financing Parties, and Originators consent to such assignments. The parties hereto agree that MLS and the Collateral Agent (and any assignee of any of them) is each an intended third-party beneficiary of this Agreement and is entitled to enforce the rights of Lessees arising hereunder, including requiring payment of any amounts required to be paid to MLS or any other Originator Indemnified Party to be paid directly to the MLS Collection Account.

SECTION 7.5 Survival. The rights and remedies with respect to any breach of any representation and warranty made by any Originator or any Lessee pursuant to Article IV, the indemnification provisions of Article VI, and the provisions of Sections 7.4, 7.5, 7.6, 7.8, 7.9, 7.10, 7.11, 7.12 and 7.14 shall survive any termination of this Agreement.

 

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SECTION 7.6 Costs and Expenses. In addition to its obligations under Article VI, each Originator agrees to pay on demand all reasonable and documented out-of-pocket costs and expenses incurred by Lessees and any other Originator Indemnified Party in connection with the negotiation, preparation, execution and delivery of any amendment of or consent or waiver under this Agreement (whether or not consummated), or the enforcement of, or any actual or reasonably claimed breach of, this Agreement, including reasonable and documented accountants’, auditors’, consultants’ and attorneys’ fees and expenses to any of such Persons and the fees and charges of any nationally recognized statistical rating agency or any independent accountants, auditors, consultants or other agents incurred in connection with any of the foregoing or in advising such Persons as to their respective rights and remedies under this Agreement in connection with any of the foregoing.

SECTION 7.7 Execution in Counterparts; Integration. This Agreement may be executed in any number of counterparts and by the different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same Agreement. Executed counterparts may be delivered electronically. This Agreement, together with the other Transaction Documents, contains a final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire understanding among the parties hereto with respect to the subject matter hereof, superseding all prior oral or written understandings.

SECTION 7.8 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, BUT WITHOUT REGARD TO ANY OTHER CONFLICT OF LAWS PROVISIONS THEREOF).

SECTION 7.9 Waiver of Jury Trial. EACH ORIGINATOR AND EACH LESSEE 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 DOCUMENT 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 DOCUMENT AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT A JURY.

SECTION 7.10 Consent to Jurisdiction; Waiver of Immunities. EACH ORIGINATOR AND EACH LESSEE HEREBY ACKNOWLEDGES AND AGREES THAT:

(a) 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 CITY, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, (ii) AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND

 

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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.

(b) 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 7.11 Confidentiality. Each party hereto agrees to comply with, and be bound by, the confidentiality provisions of Section 20 (Confidential Information) of the MLS Intercreditor Agreement as if fully set forth herein.

SECTION 7.12 No Proceedings. The provisions of Section 24.2 (No Proceedings Against MLS) of the MLS Intercreditor Agreement shall apply as if fully set forth herein.

SECTION 7.13 No Recourse Against Other Parties. No recourse under any obligation, covenant or agreement of any Lessee contained in this Agreement shall be had against any stockholder, employee, officer, director, member, manager incorporator or organizer of any Lessee.

SECTION 7.14 Severability. 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.

[SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective duly authorized signatories, as of the date first above written.

 

 

		S-1		First Step Transfer Agreement

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		S-2		First Step Transfer Agreement

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		S-3		First Step Transfer Agreement

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		S-4		First Step Transfer Agreement

Exhibit 10.2

 

 

EXECUTION COPY

SECOND STEP TRANSFER AGREEMENT

dated as of November 19, 2015

among

THE LESSEES FROM TIME TO TIME PARTY HERETO,

as Sellers

and

MOBILE LEASING SOLUTIONS, LLC,

as Buyer

 

 

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TABLE OF CONTENTS

 

				Page
ARTICLE I     DEFINITIONS AND RELATED MATTERS					2
SECTION 1.1		Defined Terms			2
SECTION 1.2		Other Interpretive Matters			9
ARTICLE II     AGREEMENT TO PURCHASE AND SELL					9
SECTION 2.1		Purchase and Sale			9
SECTION 2.2		Assignment and Assumption of Customer Lease-End Rights and Obligations			9
SECTION 2.3		Purchase Price			9
SECTION 2.4		Reserved			10
SECTION 2.5		No Recourse			10
SECTION 2.6		Intention of the Parties			10
SECTION 2.7		Like-Kind Exchanges			10
ARTICLE III     PAYMENT OF DEFERRED PURCHASE PRICE AMOUNT AND CONTINGENT PURCHASE PRICE					11
SECTION 3.1		Deferred Purchase Price Amount			11
SECTION 3.2		Contingent Purchase Price			11
ARTICLE IV     REPRESENTATIONS AND WARRANTIES					11
SECTION 4.1		Mutual Representations and Warranties			11
SECTION 4.2		Additional Representations and Warranties of the Lessees			13
SECTION 4.3		Additional Representations and Warranties of the Buyer			14
ARTICLE V     GENERAL COVENANTS					14
SECTION 5.1		Mutual Covenants			14
SECTION 5.2		Additional Covenants of the Lessees			15
SECTION 5.3		Additional Covenants of the Buyer			17
ARTICLE VI     CORPORATE SEPARATENESS					19
SECTION 6.1		Corporate Separateness			19
ARTICLE VII     INVESTMENT COMPANY ACT PROVISIONS					22
SECTION 7.1		Representations and Agreements of the Lessees.			22
SECTION 7.2		Representations and Agreements of the Buyer.			23
ARTICLE VIII     MISCELLANEOUS					24
SECTION 8.1		Amendments, etc			24

 

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TABLE OF CONTENTS

(continued)

 

 

				Page
SECTION 8.2		No Waiver; Remedies			25
SECTION 8.3		Notices, Etc			25
SECTION 8.4		Binding Effect; Assignment			25
SECTION 8.5		Survival			25
SECTION 8.6		Costs and Expenses			25
SECTION 8.7		Execution in Counterparts; Integration			25
SECTION 8.8		Governing Law			26
SECTION 8.9		Waiver of Jury Trial			26
SECTION 8.10		Consent to Jurisdiction; Waiver of Immunities			26
SECTION 8.11		Confidentiality			26
SECTION 8.12		No Proceedings			26
SECTION 8.13		Severability			26
SECTION 8.14		Lessee Representative			27
Schedule I Devices					1
Schedule II Related Customer Leases					1
Schedule III Cash Purchase Price and Deferred Purchase Price					1
Schedule IV UCC Details					1
Schedule V Special Purpose Bankruptcy Remote Provisions					1
Schedule VI Additional Definitions					1

 

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SECOND STEP TRANSFER AGREEMENT

This SECOND STEP TRANSFER AGREEMENT, dated as of November 19, 2015 and effective as of the Lease Closing Date (this “Agreement”), is among THE PERSONS IDENTIFIED ON THE SIGNATURE PAGES HERETO AS LESSEES, as sellers (collectively, the “Lessees” and, each, a “Lessee”), and MOBILE LEASING SOLUTIONS, LLC, a Delaware limited liability company, as buyer (the “Buyer”).

W I T N E S S E T H:

WHEREAS, pursuant to that certain First Step Transfer Agreement, dated as of the date hereof and effective as of the Lease Closing Date (as amended, supplemented or otherwise modified from time to time, the “First Step Transfer Agreement”), among the Originators and the Lessees, the Originators will on the Lease Closing Date contribute Devices and Related Customer Leases to the Lessees as further described in the First Step Transfer Agreement;

WHEREAS, each Lessee wishes to sell and the Buyer wishes to purchase such Devices and the Customer Lease-End Rights and Obligations under the Related Customer Leases pursuant to and in accordance with the terms hereof;

WHEREAS, the Buyer has agreed to pay to the Lessees the Cash Purchase Price, the Deferred Purchase Price Amount and the Contingent Purchase Price, in each case, in accordance with the terms hereof;

WHEREAS, pursuant to that certain Master Lease Agreement, dated as of the date hereof and effective as of the Lease Closing Date (as amended, supplemented or otherwise modified from time to time, the “Master Lease Agreement”), by and among the Lessees, Servicer, Buyer and Collateral Agent, as supplemented by each Device Lease Schedule agreed as of the Lease Closing Date by the Lessees and Buyer (the Master Lease Agreement together with each Device Lease Schedule, collectively, the “Device Leases” and, each, a “Device Lease”), Buyer will on the Lease Closing Date commence leasing the Devices to the relevant Lessee;

WHEREAS, Servicer will service the Devices and Related Customer Leases for Lessees and the Buyer pursuant to the Servicing Agreement;

WHEREAS, the Parties intend that the Transaction Documents create a financing for all U.S. federal, state and local income tax purposes, and thus specifically that (i) the Cash Purchase Price paid under this Agreement at closing be treated for such purposes as amounts loaned by Buyer for which the Devices provide security and that (ii) the Rental Payments payable to Buyer under the Device Leases be treated for such purposes as payments on such indebtedness owed to Buyer;

NOW, THEREFORE, in consideration of the premises set forth above, the terms and conditions contained herein and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

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ARTICLE I

DEFINITIONS AND RELATED MATTERS

SECTION 1.1 Defined Terms. In this Agreement, capitalized terms not otherwise defined herein have the meaning provided for such terms in Appendix A to the Master Lease Agreement. In addition, the following terms used herein have the meanings indicated below:

“Agreement” shall have the meaning provided in the preamble of this Agreement.

“Available Funds” shall have the meaning provided in the Servicing Agreement.

“Buyer” shall have the meaning provided in the preamble of this Agreement.

“Buyer Obligations” shall have the meaning provided in Section 7.1(b) of this Agreement.

“Buyer Permitted Lien” means

(a) Liens created under the Transaction Documents;

(b) Liens securing Debt under any Permitted Additional Tranche;

(c) Liens for taxes not yet due or that are being contested in good faith by appropriate proceedings diligently conducted, provided that adequate reserves with respect thereto are maintained on the books of Buyer in conformity with GAAP;

(d) pledges or deposits in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other social security legislation;

(e) Liens on insurance policies and proceeds thereof securing the financing of the premiums with respect thereto;

(f) Liens on equipment arising from precautionary UCC financing statements regarding operating leases of equipment;

(g) Liens that are contractual or common law rights of set-off relating to (A) the establishment of depository relations in the ordinary course of business with banks not given in connection with the issuance of Debt or (B) pooled deposit or sweep accounts of Buyer to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of Buyer and (ii) other Liens securing cash management obligations (that do not constitute Indebtedness) in the ordinary course of business; or

(h) Liens of a collection bank arising under Section 4-208 or Section 4-210 of the UCC on items in the course of collection.

“Cash Purchase Price” shall have the meaning provided in Section 2.3(i) of this Agreement.

 

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“Collections” shall have the meaning provided in the Servicing Agreement.

“Contingent Device Purchase Price” means an amount (which may be less than zero) equal to:

(a) the sum of:

(i) the aggregate Device Net Sale Proceeds in respect of all Device disposals on or prior to the Final Settlement Date; plus

(ii) the sum of all Device Dilution Payments on or prior to the Final Settlement Date; plus

(iii) the sum of all Customer Purchase Price Amounts on or prior to the Final Settlement Date; plus

(iv) the aggregate Sprint Net Sale Proceeds in respect of all Device disposals on or prior to the Final Settlement Date; plus

(v) the sum of all Forward Purchase Price Amounts in respect of all Device disposals on or prior to the Final Settlement Date; minus

(b) the sum of:

(i) the aggregate Device Residual Values for each of the Devices referred to in clause (a)(i), (ii), (iii), (iv) and (v) as of the applicable Expected Sales Date of such Device; provided, however the Device Residual Value for a Device shall only be counted once in determining the amount of this clause (b)(i); plus

(ii) the sum of all Supplemental Fixed Amounts;

provided, the deductions in this clause (b) shall be without duplication of any amounts deducted from the calculation of Deferred Purchase Price Amount.

“Contingent Rent Purchase Price” means an amount (which may be less than zero) equal to

(a) the sum of:

(i) all Excess Rental Payments on or prior to the Final Settlement Date; plus

(ii) all Other Payments on or prior to the Final Settlement Date; plus

(iii) all interest payments on the MLS Collection Account attributable to the deposit of Collections (other than Deemed Collections and Device Repayment Purchase Price) into the MLS Collection Account prior to the Device Lease Payment Date that such Collections relate to; minus

(b) the sum of:

 

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(i) the sum of all Rental Payments and other amounts due and owing to Buyer by any Lessee, Servicer or Guarantor as of the Final Settlement Date; plus

(ii) the aggregate additional interest expense incurred by Buyer in respect of the Facilities as a result of Buyer not receiving Device Net Sale Proceeds (or Device Dilution Payments, Customer Purchase Price Amounts, Sprint Net Sale Proceeds or Forward Purchase Price Amounts in lieu thereof) in respect of each Device on or prior to the applicable Expected Sales Date; provided such interest expense with respect to each applicable Device shall be calculated at the rate set forth in the applicable Financing Document applicable to the Device Net Sale Proceeds (or Device Dilution Payments, Customer Purchase Price Amounts, Sprint Net Sale Proceeds or Forward Purchase Price Amounts in respect of such Device) for such Device that would have been repaid for the period between the Expected Sales Date of such Device and the earlier of the Final Settlement Date and the date on which the Device Net Sale Proceeds (or Device Dilution Payments, Customer Purchase Price Amounts, Sprint Net Sale Proceeds or Forward Purchase Price Amounts in lieu thereof) for such Device are actually received by Buyer; provided, further, this clause (ii) shall exclude additional interest expense with respect to any Device returned to Buyer (or its Nominated Agent) that satisfies the Device Return Condition for any period after the Device Disposal Period for such Device; plus

(iii) all unreimbursed costs and fees of Buyer (or its Nominated Agent) as of the Final Settlement Date to repair and restore Devices that when returned were not in Device Return Condition; provided any such repair cost or expense was incurred by Buyer (or its Nominated Agent) in accordance with the Transaction Documents; plus

(iv) the sum of the aggregate Device Residual Values for each Non-Returned Device (other than Non-Returned Devices in respect of which a Device Dilution Payment was made) as of the applicable Expected Sales Date of such Device without duplication of amounts deducted in clause (b)(ii) of the definition of Contingent Device Purchase Price;

provided, however, the deductions in (b)(i)-(iv) shall be without duplication of any amounts deducted from the calculation of Deferred Purchase Price Amount.

“Contingent Purchase Price” means the sum of the Contingent Device Purchase Price plus the Contingent Rent Purchase Price; provided, however, in no event shall this amount be less than zero.

“Customer Lease-End Rights and Obligations” means, with respect to any Related Customer Lease for a Device, (a) during the Term of a Device Lease for such Device, (i) the right to receive possession of such Device if returned by the Customer, (ii) the right to receive purchase price payments or payments in lieu by Customers under such Related Customer Lease, (iii) the obligation to deliver title to such Device to the relevant Customer free and clear of any Adverse Claims by and through the Buyer upon payment of the purchase price and all other amount due and owing for such Device under such Related Customer Lease, (iv) the right to terminate such Related Customer Lease in accordance with the early termination provisions thereof if the Sprint Parties discontinue the Sprint Parties’ leasing program for Devices and (v)

 

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the right to set the fair market value under such Related Customer Lease in relation to the Customer’s purchase option of such Device after the Scheduled Customer Lease Term and (b) at all times after the Term of a Device Lease for such Device, all rights and obligations under such Related Customer Lease.

“Customer Purchase Price Amounts” means with respect to any Device, all purchase price payments and payments in lieu of delivery of such Device received by Buyer, directly or indirectly from the relevant Customers under the related Customer Lease. For the avoidance of doubt this amount shall not include payments on account of scheduled Customer Receivables.

“Debt” means, at any time, indebtedness of any Person at any time, without duplication, all obligations for money borrowed or raised, all obligations (other than accounts payable and other similar items arising in the ordinary course of business) for the deferred payment of the purchase price of property, and all capital lease obligations or other obligations which, in each case, in accordance with GAAP, would be included in determining total liabilities as shown on the liability side of the balance sheet of such Person and all guarantees (whether contingent or otherwise) of such Person guaranteeing the Debt of any other Person, whether directly or indirectly (other than endorsements for collection or deposit in the ordinary course of business).

“Deemed Collections” shall have the meaning provided in the Servicing Agreement.

“Deferred Purchase Price” shall have the meaning provided in Section 2.3(ii) of this Agreement.

“Deferred Purchase Price Amount” shall have the meaning provided in Section 3.1 of this Agreement.

“Deferred Purchase Price Interest” shall have the meaning provided in Schedule VI of this Agreement.

“Delivery Costs” shall have the meaning provided in the Device Repurchase Agreement.

“Device Dilution Payment” means with respect to any Device, any payment to Buyer on account of Dilutions in respect of the Device Residual Value for such Device pursuant to Section 2.7(b) of the Servicing Agreement or Sections 2.9(a)(ii)(A)(3), 2.9(a)(ii)(B)(2), 2.9(a)(ii)(C)(2), 2.9(a)(iii)(A)(3) or 2.9(a)(iii)(B)(2) of the Master Lease Agreement.

“Device Disposal Period” means, with respect to a Device, the period from the return of the Device to Buyer (or its Nominated Agent) to the earlier of (a) in the case of a Device (other than a Reparable Device), 30 days thereafter and in the case of a Reparable Device, 45 days thereafter and (b) the date such Device is disposed of.

“Device Handling Fee” shall have the meaning provided in the Support Services Agreement.

“Device Losses” means with respect to a Device, an amount (which may be less than zero) equal to (a) the sum of (i) the Device Net Sale Proceeds in respect of such Device disposal on or prior to the Final Settlement Date, (ii) any Device Dilution Payment in respect of such

 

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Device on or prior to the Final Settlement Date, (iii) any Customer Purchase Price Amount in respect of such Device on or prior to the Final Settlement Date, (iv) the Sprint Net Sale Proceeds in respect of such Device disposal on or prior to the Final Settlement Date and (v) the Forward Purchase Price Amount in respect of such Device disposal on or prior to the Final Settlement Date; minus (b) the sum of (i) the Device Residual Values for such Device as of the applicable Expected Sales Date of such Device plus (ii) the sum of all Rental Payments and other amounts due and owing to Buyer by any Lessee, Servicer or Guarantor as of the Final Settlement Date in respect of such Device; plus (iii) the aggregate additional interest expense incurred by Buyer in respect of the Facilities as a result of Buyer not receiving Device Net Sale Proceeds (or Device Dilution Payments, Customer Purchase Price Amounts, Sprint Net Sale Proceeds or Forward Purchase Price Amounts in lieu thereof) in respect of such Device on or prior to the applicable Expected Sales Date; provided such interest expense with respect to such Device shall be calculated at the rate set forth in the applicable Financing Document applicable to the Device Net Sale Proceeds (or Device Dilution Payments, Customer Purchase Price Amounts, Sprint Net Sale Proceeds or Forward Purchase Price Amounts in respect of such Device) for such Device that would have been repaid for the period between the Expected Sales Date of such Device and the earlier of the Final Settlement Date and the date on which the Device Net Sale Proceeds (or Device Dilution Payments, Customer Purchase Price Amounts, Sprint Net Sale Proceeds or Forward Purchase Price Amounts in lieu thereof) for such Device are actually received by Buyer; provided, further, this clause (b)(iii) shall exclude additional interest expense with respect to such Device that is returned to Buyer (or its Nominated Agent) and satisfies the Device Return Condition for any period after the Device Disposal Period for such Device; plus (iv) all unreimbursed costs and fees of Buyer (or its Nominated Agent) as of the Final Settlement Date to repair and restore such Device that when returned was not in the Device Return Condition; provided any such repair cost or expense was incurred by Buyer (or its Nominated Agent) in accordance with the Transaction Documents; plus (v) the Supplemental Fixed Amount in respect of such Device, provided, however, the deductions in (b)(i)-(v) shall be without duplication of any amounts deducted from the calculation of Contingent Purchase Price and clause (b)(i) of Section 3.1.

“Device Net Sale Proceeds” means, with respect to a Device sold by Buyer (or its Nominated Agent) in the secondary market, the Device Sale Proceeds for such Device less the Device Handling Fee payable with respect to such transfer incurred in connection with such sale.

“Device Repayment Purchase Price” shall have the meaning provided in the Servicing Agreement.

“Devices” means the wireless mobile device identified on Schedule I hereto and each other wireless mobile device received by the Buyer in connection with a Like-Kind Exchange for any of the foregoing Devices.

“Device Sale Proceeds” means, with respect to a Device sold by Buyer (or its Nominated Agent), the gross proceeds of sale of such Device.

 

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“Excess Rental Payment” means with respect to a Customer Lease, all monthly Customer Receivables paid by Customers in respect of any period after the Scheduled Customer Lease Term of such Customer Lease.

“Facilities” means the Senior Loans and the Senior Subordinated Loans.

“Financing Documents” means each of the documents evidencing the Facilities.

“Forward Purchase Agreement” shall have the meaning provided in the Servicing Agreement.

“Forward Purchase Price Amount” means, with respect to a Device sold by Buyer (or its Nominated Agent) to Forward Purchaser under the Forward Purchase Agreement, the Fixed Price (as defined in the Forward Purchase Agreement) for such Device as of the Sale Date (as defined in the Forward Purchase Agreement) of such Device less the Originator Charge.

“Forward Purchaser” means Hon Hai Precision Ind. Co., Ltd.

“Income Tax” means any tax imposed on the net income or profits of any Person and any similar Taxes, including any minimum Tax, net worth Tax, capital stock Tax or similar Tax.

“Independent Director” means a natural person who (I) is not at the time of initial appointment, or at any time while serving as Independent Director of a Lessee, and has not been at any time during the preceding five (5) years: (a) a stockholder, member, director, manager (with the exception of serving as an independent manager or independent director of any Lessee), officer, employee, partner, attorney or counsel of Guarantor or any of their respective Affiliates (other than the other Lessees); (b) a supplier or other Person who derives any of its purchases or revenues from its activities with such Lessee or Guarantor or any of their respective Affiliates (except in such person’s capacity as an independent manager or independent director of any Lessee); or (c) a member of the immediate family of any such supplier, stockholder, member, director, manager, officer, employee, partner, attorney, counsel or other Person described in clauses (a) or (b) above and (II) (1) has prior experience as an independent manager or independent director for a company whose charter documents required the unanimous consent of all independent managers or independent directors thereof before such company could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy and (2) has at least three years of relevant employment experience.

“Investment Company Act” means the Investment Company Act of 1940, as amended.

“Lessee Representative” shall have the meaning provided in Section 8.14 of this Agreement.

“Net Device Losses” means, with respect to any Device for which the calculation of Device Losses resulted in an amount less than zero, an amount equal to the lesser of (i) the Deferred Purchase Price with respect to such Device and (ii) the Device Losses with respect to such Device (assuming the Device Losses are expressed as a positive amount solely for purposes

 

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of this clause (ii)). As an example, if Device Losses are -50, for purposes of clause (ii), Device Losses would be expressed as 50.

“OFAC” shall have the meaning provided in the First Step Transfer Agreement.

“Originator Charge” shall have the meaning provided in the Support Services Agreement.

“Originator Device Fee” shall have the meaning provided in the Device Repurchase Agreement.

“Other Payments” means the sum of all Collections received by Buyer, directly or indirectly from Customers under Customer Leases (other than scheduled Customer Receivables and Customer Purchase Price Amounts).

“Patriot Act” shall have the meaning provided in the First Step Transfer Agreement.

“Permitted Additional Tranches” means Buyer’s future purchase and leaseback of mobile wireless devices and device leases arising from a mobile telephony operator’s cellular telephony business and financed with non-recourse secured Debt secured solely by such property and that does not constitute Devices, Devices Leases or collateral securing any Device Lease and in respect of which the Persons providing such financing and their agents have entered into the MLS Intercreditor Agreement on the terms provided therein.

“Purchase Price” shall have the meaning provided in Section 2.3 of this Agreement.

“Qualified Purchaser” means a “qualified purchaser” within the meaning of Section 2(a)(51) of the Investment Company Act.

“Related Customer Leases” means each Customer Lease with respect to a Device identified on Schedule II hereto.

“Related Originator” shall have the meaning provided in the First Step Transfer Agreement.

“Related Purchase Price” shall have the meaning provided in Section 2.3 of this Agreement.

“Rent Payment Shortfall” means as of any date of determination, the sum of all accrued and unpaid Rental Payments as of such date.

“Senior Loan Lenders” shall have the meaning provided in the Servicing Agreement.

“Servicer Report” shall have the meaning provided in the Servicing Agreement.

“Sprint Net Sale Proceeds” means, with respect to (i) a Device sold by Buyer (or its Nominated Agent) to any Originator under the Device Repurchase Agreement, the Device Sale Proceeds for such Device less the Originator Device Fee less, to the extent not included in the Originator Device Fee, Delivery Costs and sales and transfer Taxes (not including any Income Taxes), if any, payable with respect to such transfer incurred in connection with such sale, or (ii) a

 

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Device for which any Lessee has made payment under Sections 2.11(c) of the Master Lease Agreement, the amount of such payment.

“Supplemental Fixed Amount” shall have the meaning provided in the Forward Purchase Agreement.

“Support Services Agreement” shall have the meaning provided in the Servicing Agreement.

“Transfer” shall have the meaning provided in Section 7.1(b) of this Agreement.

SECTION 1.2 Other Interpretive Matters. The interpretation of this Agreement, unless otherwise specified, is subject to Section 1.2 of the Master Lease Agreement.

ARTICLE II

AGREEMENT TO PURCHASE AND SELL

SECTION 2.1 Purchase and Sale. Upon the terms and subject to the conditions set forth in this Agreement, on the Lease Closing Date, each Lessee, severally and for itself, hereby sells to the Buyer, and, in consideration of the payment of the Purchase Price, the Buyer hereby purchases from the relevant Lessee, all of such Lessee’s right, title and interest in, to and under (a) each Device and (b) the Customer Lease-End Rights and Obligations under each Related Customer Lease.

SECTION 2.2 Assignment and Assumption of Customer Lease-End Rights and Obligations. For the purposes of this Agreement, (x) all sales of contractual and other rights of Lessees in connection with Devices and Related Customer Leases shall be deemed to be absolute and irrevocable assignments thereof and (y) all purchases of contractual obligations by the Buyer shall be deemed to be assumptions thereof. From and after the date hereof (i) the Buyer shall have assumed the Customer Lease-End Rights and Obligations under the Related Customer Leases and (ii) each Lessee shall have relinquished its rights and be released from its obligations under the Customer Lease-End Rights and Obligations under the Related Customer Leases. For the avoidance of doubt, from and after the Lease Closing Date until the Term of a Device Lease for a Device has terminated or expired, the relevant Lessee shall be the lessor of record of the Device under the Related Customer Lease and own the right to receive all scheduled Customer Receivables in connection with such Related Customer Lease.

SECTION 2.3 Purchase Price. The purchase price for the Devices and the Customer Lease-End Rights and Obligations under the Related Customer Leases sold by each Lessee to the Buyer on the date hereof (each, a “Related Purchase Price” and, in the aggregate, the “Purchase Price”) shall be payable by the Buyer as follows:

(a) first, on the Lease Closing Date, the Buyer shall pay to the Lessee Representative, on behalf of the Lessees, a portion of the Related Purchase Price in cash (in immediately available funds) in the amount set forth on Schedule III under the heading “Cash Purchase Price” (the “Cash Purchase Price”);

 

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(b) second, a portion of such Related Purchase Price in the amount set forth on Schedule III under the heading “Deferred Purchase Price” shall be deferred (the “Deferred Purchase Price”) and paid to the Lessee Representative, on behalf of the Lessees, in accordance with Section 3.1; and

(c) third, the remaining portion of such Related Purchase Price shall be deferred and paid to the Lessee Representative, on behalf of the Lessees, on the Final Settlement Date in accordance with Section 3.2 as the Contingent Purchase Price.

SECTION 2.4 Reserved.

SECTION 2.5 No Recourse. Except as specifically provided in this Agreement, the purchase and sale of the Devices and the Customer Lease-End Rights and Obligations under this Agreement shall be without recourse to any Lessee.

SECTION 2.6 Intention of the Parties. It is the express intent of each of the parties hereto that each purchase and sale hereunder shall (except for U.S. federal, state and local income tax purposes) each severally constitute a true sale and absolute assignment of the Devices and the Customer Lease-End Rights and Obligations by each Lessee to the Buyer (such that the Devices and the Customer Lease-End Rights and Obligations, other than those, if any, subsequently repurchased by the Lessees pursuant to the terms of the Transaction Documents, would not be property of any Lessee’s estate in any Insolvency Event relating to any Lessee). As a protective measure in the event that, notwithstanding the foregoing, the conveyance of the Devices and the Customer Lease-End Rights and Obligations to the Buyer is recharacterized by any third party as a pledge securing a loan, each Lessee does hereby grant to the Buyer a security interest in all of such Lessee’s now or hereafter existing right, title and interest in, to and under the Devices and the Customer Lease-End Rights and Obligations and agrees that this Agreement shall constitute a security agreement under applicable law. Each Lessee hereby authorizes the Buyer, or its respective designees (i) to file one or more financing or continuation statements, and amendments thereto and assignments thereof, relative to all or any of the Devices and the Customer Lease-End Rights and Obligations now existing or hereafter arising in the name of such Lessee and (ii) to the extent permitted by Law and the Servicing Agreement, to notify Customers of the assignment of the Devices and related Customer Lease-End Rights and Obligations pursuant hereto.

SECTION 2.7 Like-Kind Exchanges. At any time that Servicer (on behalf of the Lessee) does a Like-Kind Exchange under the relevant Customer Lease and as permitted under the Servicing Agreement, the Lessee shall be deemed to have sold to Lessor the Device subject to the Like-Kind Exchange (“Like-Kind Exchange Device”) in exchange for the Purchase Price for such Device that was or would have been payable in respect of the original Device. Any amount payable by Lessor in respect of the original Device shall now be payable by the Lessor in respect of such Like-Kind Exchange Device; provided, however, nothing in this Section 2.7 shall operate as to require Lessor to pay any additional amounts on account of the Like-Kind Exchange Device that would not otherwise have been payable by Lessor under the Transaction Documents with respect to the original Device.

 

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ARTICLE III

PAYMENT OF DEFERRED PURCHASE PRICE AMOUNT AND CONTINGENT PURCHASE PRICE

SECTION 3.1 Deferred Purchase Price Amount. On the Final Settlement Date, the Buyer shall pay the Lessee Representative, on behalf of the Lessees, in accordance with the Waterfall, an amount (which shall not be less than zero) (the “Deferred Purchase Price Amount”) equal to (a) the sum of (i) the aggregate Deferred Purchase Price plus (ii) the remainder of (x) the aggregate amount of Deferred Purchase Price Interest accrued to such date minus (y) the aggregate amount of Deferred Purchase Price Interest paid to the Lessees to such date minus (b) the sum of (i) the aggregate amount of Rent Payment Shortfalls to such date without duplication of any amounts deducted from the calculation of Contingent Rent Purchase Price and Net Device Losses plus (ii) the aggregate Net Device Losses to such date.

SECTION 3.2 Contingent Purchase Price. On the Final Settlement Date, the Buyer shall pay the Lessee Representative, on behalf of the Lessees, in accordance with the Waterfall, the Contingent Purchase Price. In the event, the Buyer does not have sufficient Available Funds to pay the Contingent Purchase Price solely as a result of (i) Marketing Services Provider’s failure to timely pay to the Buyer the Device Net Sale Proceeds in accordance with the Support Services Agreement and/or (ii) Forward Purchaser’s failure to timely pay to the Buyer all amounts due and owing under the Forward Purchase Agreement (the “Insufficient Amount”), the Lessees hereby agree that the Contingent Purchase Price shall be reduced by the Insufficient Amount (so long as the Contingent Purchase Price shall not be less than zero after giving effect to such reduction) and Buyer shall transfer any claim it has to the Insufficient Amount to the Lessee Representative and agrees to cooperate with Lessee Representative in connection with pursuing any claim for the Insufficient Amount as reasonably requested by Lessee Representative from time to time.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

SECTION 4.1 Mutual Representations and Warranties. Each Lessee represents and warrants to the Buyer, and the Buyer represents and warrants to the Lessees, as of the Lease Closing Date, as follows:

(a) Organization and Good Standing. It has been duly organized or incorporated in, and is validly existing as a corporation, exempted company or limited liability company, as applicable, in good standing under the Laws of its jurisdiction of organization or incorporation (where applicable), with power and authority to own its properties and to conduct its business as such properties are presently owned and such business is presently conducted and will be conducted, except to the extent that such failure could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

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(b) Due Qualification. It is duly qualified to do business as a foreign organization in good standing, if applicable, and has obtained all necessary qualifications, licenses and approvals, in all jurisdictions in which the ownership or lease of its property or the conduct of its business requires such qualifications, licenses or approvals, except where the failure to be in good standing or to hold any such qualifications, licenses and approvals could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(c) Power and Authority; Due Authorization. It (i) has all necessary power and authority to (A) execute and deliver this Agreement and the other Transaction Documents to which it is a party in any capacity and (B) carry out the terms of and perform its obligations under the Transaction Documents applicable to it and (ii) has duly authorized by all necessary corporate or limited liability company action, as applicable, the execution, delivery and performance of this Agreement and the other Transaction Documents to which it is a party.

(d) Binding Obligations. This Agreement constitutes, and each other Transaction Document to be signed by such party when duly executed and delivered by it will constitute, a legal, valid and binding obligation of such party, enforceable against such party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

(e) No Violation. The consummation of the transactions contemplated by this Agreement and the other Transaction Documents to which it is a party and the performance by it of the terms hereof and thereof will not, (i) violate or result in a default under (A) its articles or certificate of incorporation, memorandum and articles of association, by-laws, certificate of formation, limited liability company agreement, or other organizational documents, as applicable, or (B) any material indenture or other material agreement or instrument binding on it, (ii) result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement or instrument except for any Lien that could not reasonably be expected to have a Material Adverse Effect or arising under the Transaction Documents, or (iii) violate in any material respect any Law applicable to it or any of its properties.

(f) Bulk Sales Act. No transaction contemplated hereby requires compliance by it with any bulk sales act or similar Law.

(g) No Proceedings. There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to its Knowledge, threatened against or affecting it (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect, (ii) seeking to prevent the consummation of the transactions contemplated by this Agreement or any of the other Transaction Documents, or (iii) that otherwise involve this Agreement or any other Transaction Document to which it is a party.

 

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(h) Governmental Approvals. No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority is required for its due execution, delivery and performance of this Agreement or any other Transaction Document to which it is a party or the transactions contemplated hereby or thereby, except, as applicable, for the filing of UCC financing statements required under the Transaction Documents, filings with the Securities Exchange Commission to the extent required by applicable Law.

SECTION 4.2 Additional Representations and Warranties of the Lessees. Each Lessee represents and warrants to the Buyer as of Lease Closing Date and with respect to a Like-Kind Exchange Device, as of the date such Like-Kind Exchange Device is transferred Section 4.2(i)(i) only, as follows:

(a) Valid Sale. This Agreement constitutes an absolute and irrevocable sale of the Devices and the Customer Lease-End Rights and Obligations to the Buyer.

(b) Use of Proceeds. The use of all funds obtained by it under this Agreement will not conflict with or contravene any of Regulations T, U and X promulgated by the Board of Governors of the Federal Reserve System.

(c) Quality of Title. Prior to its sale to the Buyer hereunder, each Device and the Customer Lease-End Rights and Obligations in respect of each Related Customer Lease, is owned by it free and clear of any Adverse Claim (other than Permitted Device Liens); when the Buyer purchases such Devices and Customer Lease-End Rights and Obligations, the Buyer shall have acquired them for fair consideration and reasonably equivalent value, free and clear of any Adverse Claims (other than Permitted Device Liens) and no valid effective financing statement or other instrument similar in effect covering any Device and any Customer Lease-End Rights and Obligations is on file in any recording office, except such as may be filed (i) in favor of the relevant Lessee in accordance with the First Step Transfer Agreement or any other Transaction Document (and assigned to MLS and further assigned to the Collateral Agent), (ii) in connection with any Permitted Device Lien.

(d) UCC Details. Its true legal name as registered in the sole jurisdiction in which it is organized and the jurisdiction of such organization are specified in Schedule IV and its chief executive office is at the address specified in Schedule IV (or at such other location, notified to the Buyer and Collateral Agent). Except as described in Schedule IV, it has never had any, trade names, fictitious names, assumed names or “doing business as” names and is “located” in the jurisdiction specified in Schedule IV for purposes of Section 9-307 of the UCC. It is organized in only a single jurisdiction.

(e) Adverse Change. Since the date of their formation, there has been no change in the financial condition, business or prospects of the Lessees, taken as a whole, that could reasonably be expected to result in a Material Adverse Effect.

(f) Investment Company Act. It is not an “investment company” under (and as defined in) the Investment Company Act.

 

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(g) Tax Returns and Payments. It has filed all federal income tax returns and all other material tax returns that are required to be filed by it and has paid all taxes due pursuant to such returns or pursuant to any assessment received by it, except (i) for any such taxes or assessments, if any, that are being appropriately contested in good faith by appropriate proceedings and with respect to which adequate reserves in conformity with GAAP have been provided or (ii) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect. No tax lien has been filed, and, to its Knowledge, no claim is being asserted, with respect to any such tax or assessment that could reasonably be expected to result in a Material Adverse Effect.

(h) No Sanctions. It is not a Sanctioned Person. To its knowledge after due inquiry, no Customer was a Sanctioned Person at the time of the relevant Originator’s entry into any Related Customer Lease with such Customer. It and its Affiliates: (i) have less than 15% of their assets in Sanctioned Countries and (ii) derive less than 15% of their operating income from investments in, or transactions with Sanctioned Persons or Sanctioned Countries. Neither it nor any of its Affiliates engages in activities related to Sanctioned Countries, except for such activities as are (A) specifically or generally licensed by OFAC or (B) otherwise in compliance with OFAC’s sanctions regulations.

(i) Eligible Devices and Related Customer Leases. Each Device is (i) an Eligible Device and (ii) each Related Customer Lease is an Eligible Lease.

SECTION 4.3 Additional Representations and Warranties of the Buyer. Buyer represents and warrants to the Lessees as of Lease Closing Date that it is not an “investment company” under (and as defined in) the Investment Company Act.

ARTICLE V

GENERAL COVENANTS

SECTION 5.1 Mutual Covenants. At all times from the Lease Closing Date to the Final Settlement Date, each Lessee and the Buyer shall:

(a) Compliance with Laws, Etc. Comply with all applicable Laws, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

(b) Preservation of Existence. Except as expressly permitted by Sections 5.2(h) or 5.2(i) with respect to the Lessees, preserve and maintain its existence, rights, franchises and privileges in the jurisdiction of its organization, and qualify and remain qualified in good standing in each jurisdiction where the failure to qualify or preserve and maintain such existence, rights, franchises, privileges and qualification could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(c) Tax. (i) Agree for all U.S. federal, state and local income tax purposes, (x) to treat the Cash Purchase Price paid hereunder as amounts loaned by the Buyer for which the Devices transferred hereunder provide security, and to treat the Rental Payments payable to the Buyer under the Device Leases as payments on such indebtedness owed to

 

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the Buyer, (y) to treat any proceeds from any sale of a Device and any Excess Rentals Payments as income of the Lessees, with Buyer retaining the related cash only to secure payment of amounts due under such indebtedness and (z) not to treat the Buyer as the owner of the Devices, unless, after the Lease Closing Date, a Change in Law occurs and, as confirmed by an Opinion of Counsel and after consultation in good faith with the other Parties and their respective tax advisors, there is no substantial authority, within the meaning of Section 6662 of the Code, for such treatment, or there is a Final Determination of such treatment.

(ii) The Parties acknowledge that the Buyer has entered into the Tax Services Agreement with the Servicer and Sprint, which will govern responsibility for filing any Tax Returns and paying any Taxes that are due with respect to any payment made or any transfer of Devices or Customer Lease-End Rights and Obligations hereunder. All payments made, or deemed made, pursuant to this Agreement shall be made free and clear of, and without deduction for, any Taxes except to the extent required by applicable Law. The Parties do not expect payments made pursuant to this Agreement to be subject to withholding or other deduction of Taxes. Prior to withholding any Taxes from any payment hereunder, the Buyer and the Lessee Representative shall consult in good faith as to the withholding to be made; and

(iii) Each transfer of the Devices contemplated hereunder is intended to be an exempt sale for resale for sales and use tax purposes as the purchaser or transferee intends to re-sell or lease each Device in the same form or condition in which it was purchased to others in the normal course of the purchaser or transferee’s business. The Parties will cooperate to take all steps to timely prepare and secure any exemption certificate, resale certificate or similar documentation requested or required by any jurisdiction for purposes of qualifying for or documenting such exemption.

SECTION 5.2 Additional Covenants of the Lessees. At all times from the Lease Closing Date to the Final Settlement Date, each Lessee shall:

(a) Evidence of Purchase. Maintain its accounting records to evidence that the Devices and Customer Lease-End Rights and Obligations have been irrevocably transferred to the Buyer in accordance with this Agreement.

(b) Keeping of Records and Books of Account; Delivery. Maintain and implement, or cause to be maintained and implemented, administrative and operating procedures (including an ability to recreate records evidencing the Devices and the Related Customer Leases in the event of the destruction of the originals thereof, backing up on at least a daily basis on a separate backup computer from which electronic file copies can be readily produced and distributed to third parties being agreed to suffice for this purpose), and keep and maintain, or cause to be kept and maintained (or transferred to Servicer), all documents, books, records and other information necessary or advisable for the collection of all Collections in respect of all Devices and the Related Customer Leases.

(c) Location of Records. Keep its chief executive office and principal place of business at the address of such Lessee referred to in Schedule IV or, upon thirty (30)

 

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days’ prior written notice to the Collateral Agent and the Buyer, at such other locations in jurisdictions where all action required under the Master Lease Agreement shall have been taken and completed.

(d) PATRIOT ACT Information. Promptly following a request therefor, provide any documentation or other information that the Buyer or any of its assignees under the Transaction Documents reasonably requests in order to comply with its ongoing obligations under the applicable “know your customer” and anti- money laundering rules and regulations, including the PATRIOT Act.

(e) Continuation Statements. Authorize and deliver and file or cause to be filed appropriate continuation statements not earlier than six months and not later than one month prior to the fifth anniversary of the date of filing of the financing statements filed in connection with the Lease Closing Date or any other financing statement filed pursuant to this Agreement, in each case naming such Lessee as debtor, if the Final Settlement Date shall not have occurred.

(f) Further Assurances. From time to time, at its expense, promptly execute and deliver all further instruments and documents, and take all further action that the Buyer or any of its assignees under the Transaction Documents may reasonably request in order to perfect, protect or more fully evidence the purchases, sales and assignments and security interests hereunder, or to enable the Buyer or any such assignee to exercise or enforce any of their respective rights with respect to the Devices and the Related Customer Leases. Without limiting the generality of the foregoing, each Lessee will upon the request of the Buyer or any of its assignees under the Transaction Documents authorize and file such financing or continuation statements, or amendments thereto or assignments thereof, and such other instruments or notices, as may be necessary or appropriate.

(g) Tax Matters. Each Lessee shall pay and discharge, or cause the payment and discharge of, all federal income taxes (and all other material taxes) of such Lessee when due and payable, except (x) such as may be paid thereafter without penalty, (y) such as may be contested in good faith by appropriate proceeding and for which an adequate reserve has been established and is maintained in accordance with GAAP or (iii) where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

(h) Mergers, Sales, Etc. Not consolidate or merge with or into any other Person or sell, lease or transfer all or substantially any portion of its property and assets, or agree to do any of the foregoing, unless (i) the Buyer shall have received 30 days’ prior notice thereof, (ii) no Lease Event of Default or Lease Default has occurred and is continuing or would result immediately after giving effect thereto, (iii) the Buyer shall have consented in writing thereto, if the resulting entity following such merger, consolidation or other restructuring is any Person other than a Lessee, (iv) Guarantor reaffirms in a writing, in form and substance reasonably satisfactory to the Buyer, that its obligations under the Sprint Guarantee and the Performance Support Agreement shall apply to the surviving entity and (v) the Buyer receives such additional certifications and opinions of counsel as it shall reasonably request.

 

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(i) Change in Organization, Etc. Not change its jurisdiction of organization or incorporation or its name, identity or corporate organization structure or make any other change such that (i) any financing statement filed or other action taken to perfect the Buyer’s interests hereunder would become seriously misleading or would otherwise be rendered ineffective unless such Lessee shall have given Buyer and the Collateral Agent not less than 30 days’ prior written notice of such change or (ii) it would no longer be a special purpose entity or would result in a violation of its corporate separateness covenants in Section 6.1.

SECTION 5.3 Additional Covenants of the Buyer. At all times from the Lease Closing Date to the Final Settlement Date, the Buyer shall:

(a) Notices. Promptly (but in any event within three (3) Business Day after obtaining Knowledge thereof) notify the Lessee Representative of the existence of any Default or Event of Default (or the equivalent thereof) under and as defined in the applicable Financing Documents describing with particularity the nature of such event.

(b) Books and Records. Maintain proper books of record and account, in which full, true and correct entries in conformity with tax-based accounting consistently applied will be made of all financial transactions and matters involving the assets and business of the Buyer.

(c) Inspection Rights. Permit representatives and independent contractors of the Lessees, at their own expense, to visit and inspect any of its offices, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its officers having direct knowledge or responsibility of the subject matter in order to confirm Buyer’s performance of its obligations under this Agreement, provided, however, that such visits, inspections or examinations will be made at a reasonable time during normal business hours with due regard for, and minimal disruption of, the business of the Buyer, and will not (a) occur more frequently than once in any 12-month period and (b) be made without five (5) Business Days’ prior written notice.

(d) Enforcement of Support Services Agreement. Promptly enforce the obligations of Marketing Services Provider under the Support Services Agreement to cause resale of Devices in accordance with the Support Services Agreement and the deposit of proceeds in respect thereof, in accordance with the terms of such agreement and the other Transaction Documents.

(e) Replacement of Logistics Services Provider and/or Marketing Services Provider. If a termination event has occurred and is continuing under Section 10.1 of the Support Services Agreement, upon one (1) Business Day prior written notice of any Sprint Party to the Buyer requesting termination of the Support Services Agreement, the Buyer shall deliver written notice to the Logistics Services Provider and Marketing Services Provider terminating the Support Services Agreement.

 

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(f) Fair Market Value under Customer Leases for Devices. Promptly (and in no event later than one (1) Business Day after request by any Sprint Party), provide such Sprint Party with the fair market value in relation to a Customer’s purchase option of a Device under a Related Customer Lease for any period after the relevant Scheduled Customer Lease Term, provided, however, Buyer’s determination of the fair market value of such Device shall be the higher of (x) the Secondary Market Value of such Device on the basis that such Device is a Grade B Device and (y) the fair market value of such Device determined by the relevant Sprint Party acting reasonably provided in writing by a Sprint Party to Buyer at the time of or prior to any Sprint Party’s request under this Section 5.3(f).

(g) [Reserved].

(h) [Reserved].

(i) Access to Buyer Database. Promptly (and in no event later than one (1) Business Day after request by any Sprint Party), provide such Sprint Party with read-only access to Buyer’s database in respect of the Devices for purposes of billing and accounting reconciliation.

(j) [Reserved].

(k) Special Purpose Entity/Bankruptcy Remoteness. The Buyer shall comply with the special purpose entity and bankruptcy remoteness provisions set forth in Schedule V.

(l) Indebtedness Covenant. Except for Debt incurred to finance Buyer’s purchases in respect of Permitted Additional Tranches, Buyer shall not create, incur, assume, guarantee, permit to exist or otherwise become directly or indirectly liable for or in respect of any Debt or other obligation or purchase any asset (whether or not pursued for gain or other pecuniary advantage), except in accordance with the Transaction Documents and as permitted by its certificate of formation and limited liability company agreement.

(m) Liens. Buyer shall not create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than Buyer Permitted Liens.

(n) Application of Collections. Not declare or make or permit any other Person to declare or make, directly or indirectly, any payment or distribution of cash constituting Collections or Rental Payments other than in accordance with the Waterfall.

(o) Amendment or Waiver of Transaction Documents. Not cause, consent to, or permit, any termination, modification, amendment, variance or waiver of timely compliance with any term or condition of any of the Transaction Documents (other than the Sprint Transaction Documents) without (i) first providing five (5) Business Days prior notice to a Lessee Representative along with a copy of or the terms of the proposed modification, amendment, variance or waiver and (ii) in the case of any modification, amendment, variance or waiver that would reasonably be expected to be materially

 

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adverse to any Sprint Party first obtaining the prior written consent of the Lessee Representative; provided, however, Buyer shall promptly provide the Lessee Representative with a copy of any such modification, amendment, variance or waiver.

(p) Actions Under Related Customer Leases. Not take enforcement actions or exercise remedies or take any other action under the Related Customer Leases other than through the Servicer.

(q) Servicing Information. Provide and cause Marketing Services Provider to provide to the Servicer all data and other information necessary to permit the Servicer to prepare and deliver each Servicer Report in accordance with and at the times required under the Servicing Agreement.

(r) Further Assurances. From time to time, at the expense of the Lessees, promptly execute and deliver all further instruments and documents, and take all further action that the Lessee Representative may reasonably request in order to perfect, protect or more fully evidence the purchases, sales and assignments and security interests hereunder or under the other Transaction Documents, or to enable the Lessees or any Affiliate thereof to exercise or enforce any of their respective rights hereunder and under the other Transaction Documents. Without limiting the generality of the foregoing, the Buyer will upon the request of the Lessee Representative authorize and file such financing or continuation statements, or amendments thereto or assignments thereof, and such other instruments or notices, and take such other actions, as may be necessary or appropriate to perfect and protect any Liens granted by the Buyer to the Lessees.

ARTICLE VI

CORPORATE SEPARATENESS

SECTION 6.1 Corporate Separateness. Each Lessee hereby acknowledges that the Buyer is entering into the transactions contemplated by this Agreement and the other Transaction Documents in reliance upon each Lessee’s identity as a legal entity separate from Guarantor, the Servicer, the Originators and their respective Affiliates. In addition to and consistent with the other covenants set forth herein, each Lessee shall take such actions as shall be required in order that:

(a) Special Purpose Entity. Each Lessee will be a special purpose limited liability company whose primary activities are restricted in its memorandum and articles of association to: (i) acquiring, owning, holding or selling interests in the Devices and the related Customer Leases in accordance with the Transaction Documents, (ii) granting security interests in the Devices, the related Customer Leases and any of its other assets required to be granted by it under the Transaction Documents, (iii) entering into and exercising its rights and performing its obligations under the Customer Leases and the Transaction Documents (iv) acting as lessor under Customer Leases and as lessee under Device Leases, receiving the Purchase Price for the sale of Devices and other rights, under Customer Leases and any other payments due to it under the Transaction Documents, paying amounts due under the Master Lease Agreement and other

 

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Transaction Documents, and declaring and paying dividends and distributions to its Related Originator from such amounts and (v) conducting such other activities as it deems necessary or appropriate to carry out the primary activities described above or as otherwise contemplated by the Transaction Documents.

(b) Commingling. Except as otherwise expressly permitted by any Transaction Document, no Lessee shall commingle any of its assets or funds with those of any of its Affiliates (other than any other Lessee);

(c) Independent Director. At least one member of each Lessee’s board of directors shall be an Independent Director and the memorandum and articles of association of such Lessee shall provide: (i) for the same definition of “Independent Director” as used herein, (ii) that such Lessee’s board of directors shall not approve, or take any other action to cause the filing of, a voluntary bankruptcy petition with respect to such Lessee unless the Independent Director shall approve the taking of such action in writing before the taking of such action and (iii) that the provisions required by clauses (i) and (ii) of this sentence cannot be amended except in accordance with this Agreement and without the prior written consent of the Independent Director and the Buyer;

(d) Corporate Formalities. Each Lessee will strictly observe corporate formalities in its dealings with the Servicer, the Originators and any Affiliates thereof (other than any other Lessee). Except as permitted under the Transaction Documents, the Lessees shall not maintain joint bank accounts or other depository accounts to which the Servicer, the Originators and any Affiliates (other than any other Lessee) thereof has independent access, other than the Servicer’s right to access such accounts in accordance with the Transaction Documents. Each Lessee shall procure that its Related Originator maintain such Lessee’s memorandum and articles of association and other organizational documents in conformity with this Agreement;

(e) Conduct of Business. Each Lessee shall conduct its affairs strictly in accordance with its organizational documents and observe all necessary, appropriate and customary company formalities, including, but not limited to, holding all regular and special members’ and board of directors’ (or managers’) meetings appropriate to authorize all corporate action, keeping separate and accurate minutes of its meetings, passing all resolutions or consents necessary to authorize actions taken or to be taken, and maintaining accurate and separate books, records and accounts, including, but not limited to, intercompany transaction accounts;

(f) No Other Business or Debt. No Lessee shall engage in any business or activity except as set forth in the Transaction Documents to which it is a party nor incur any indebtedness or liability other than as expressly permitted by the Transaction Documents to which it is a party.

(g) Books and Records. Each Lessee’s books and records will be maintained separately from those of the Servicer, the Originators and any of their Affiliates (other than any other Lessee) and in a manner such that it will not be difficult or costly to segregate, ascertain or otherwise identify the assets and liabilities of such Lessee from the

 

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assets and liabilities of the Servicer, the Originators and any of their Affiliates (other than any other Lessee);

(h) Operating Expenses. Each Lessee’s operating expenses will not be borne by the Servicer, any Originator or any of their Affiliates (other than any other Lessee), except from capital contributions from its equity holders or as expressly contemplated by the Transaction Documents to which it is a party.

(i) Disclosure of Transactions. All financial statements of the Servicer, the Originators, and any of their Affiliates that are consolidated to include any Lessee will disclose that (i) such Lessee’s sole business consists of the purchase or acceptance through capital contributions of the Devices and Related Customer Lease from its Related Originator, the subsequent retransfer of or granting of a security interest in such Devices and certain rights and obligations under the Related Customer Leases to the Buyer pursuant to this Agreement, the subsequent lease of the Devices pursuant to the Device Leases to which it is a party and performing its obligations under the Customer Leases and the Transaction Documents to which it is a party, (ii) such Lessee is a separate legal entity with its own separate creditors who will be entitled, upon its liquidation, to be satisfied out of the Lessee’s assets prior to any assets or value in the Lessee becoming available to the Lessee’s equity holders and (iii) the assets of the Lessee are not available to pay creditors of the Servicer, any Originator or any Affiliate thereof (other than any other Lessee);

(j) Arm’s-Length Relationships. Each Lessee shall maintain an arm’s-length relationship with the Servicer, each Originator, and its other Affiliates. Except as expressly contemplated by the Transaction Documents to which it is a party, no Lessee, on the one hand, or the Servicer, any Originator, or any of its other Affiliates, on the other hand, will be or will hold itself out to be responsible for the debts of the other (other than any other Lessee) or the decisions or actions respecting the daily business and affairs of the other. Each Lessee, the Servicer, any Originators, and its other Affiliates will immediately correct any known misrepresentation with respect to the foregoing, and they will not operate or purport to operate as an integrated single economic unit with respect to each other or in their dealing with any other entity (other than among the Lessee);

(k) Allocation of Overhead. To the extent that any Lessee, on the one hand, and the Servicer, any Originator or any Affiliate thereof, on the other hand, have offices in the same location, there shall be a fair and appropriate allocation of overhead costs between them, and such Lessee shall bear its fair share of such expenses, which may be paid through the Servicing Fee or otherwise;

(l) Identification. Each Lessee shall at all times hold itself out to the public under such Lessee’s own name as a legal entity separate and distinct from its equity holders, members, managers, the Servicer, any Originator or any Affiliate thereof (other than any other Lessee);

(m) Capital. Each Lessee shall maintain adequate capital in light of its contemplated business operations;

 

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(n) Additional Agreements. Each Lessee also agrees that:

(i) no Lessee shall issue any security of any kind except certificates evidencing equity interests issued to its Related Originator in connection with its formation, or incur, assume, guarantee or otherwise become directly or indirectly liable for or in respect of any obligation other than, (i) such Lessee’s liability for obligations under the Transaction Documents to which it is a party, (ii) as otherwise expressly permitted or contemplated by the Transaction Documents to which it is a party and (iii) ordinary course operating expenses;

(ii) no Lessee shall sell, pledge or dispose of any of its assets, except as permitted by, or as provided in, the Transaction Documents to which it is a party;

(iii) no Lessee shall purchase any asset (or make any investment, by share purchase, loan or otherwise) except as specifically permitted by, or as provided in, the Transaction Documents to which it is a party;

(iv) no Lessee shall make any payment, directly or indirectly, to, or for the account or benefit of, any owner of any security interest or equity interest in such Lessee or any Affiliate of any such owner (except, in each case, as expressly permitted by, or as provided in, the Transaction Documents to which it is a party);

(v) no Lessee shall make, declare or otherwise commence or become obligated in respect of, any dividend, stock or other security redemption or purchase, distribution or other payment to, or for the account or benefit of, any owner of any equity interest in such Lessee to any such owner or any Affiliate of any such owner other than from funds received by it under the Transaction Documents to which it is a party and so long as, in any case, the result would not directly or indirectly cause such Lessee to be considered insolvent;

(vi) No Lessee shall have any employees; and

(vii) Each Lessee will provide for not less than ten (10) Business Days’ prior written notice to the Buyer of any removal, replacement or appointment of any director that is currently serving or is proposed to be appointed as an Independent Director of such Lessee, such notice to include the identity of the proposed replacement Independent Director, together with a certification that such replacement satisfies the requirements for an Independent Director set forth in this Agreement and the memorandum and articles of association of such Lessee.

ARTICLE VII

INVESTMENT COMPANY ACT PROVISIONS

SECTION 7.1 Representations and Agreements of the Lessees. Each Lessee makes the representation and warranties in Section 7.1(a), (c), (d), (e) and (f) to the Buyer as of the Lease Closing Date and makes the agreements in Section 7.1(b) and (f) from the Lease Closing Date to the Final Settlement Date.

 

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(a) Assuming the correctness of the representations and agreements of the Buyer in Section 7.2, each Lessee represents that it is a Qualified Purchaser.

(b) Each Lessee understands and agrees that if in the future it decides to sell, transfer, assign, pledge or otherwise dispose of, in whole or in part (each, a “Transfer”) its interest in the Deferred Purchase Price Amount or the Contingent Purchase Price (collectively, the “Buyer Obligations”), such Lessee will only Transfer such Buyer Obligations to a Qualified Purchaser (it being understood and agreed that any subsequent Transfers of such Buyer Obligations shall only be made to a Qualified Purchaser).

(c) Each Lessee is acquiring the Buyer Obligations for its own account, for investment purposes only and not with a view to distribute or resell such Buyer Obligations in whole or in part.

(d) Each Lessee represents and warrants that it was offered the Buyer Obligations through private negotiations, not through any general solicitation or general advertising, or through any solicitation by a person not previously known to such Lessee in connection with investments generally.

(e) Each Lessee has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of its investment in the Buyer Obligations and is able to bear such risks, and has obtained, in its judgment, sufficient information from the Buyer or its authorized representatives to evaluate the merits and risks of such investment. Each Lessee has evaluated the risks of investing in the Buyer Obligations and has determined that the Buyer Obligations is a suitable investment for it. Each Lessee can afford a complete loss of the investment in the Buyer Obligations and can afford to hold the investment in the Buyer Obligations for an indefinite period of time.

(f) Assuming the correctness of the representations and agreements of the Buyer in Section 7.2, if any Lessee would be an “investment company” under the Investment Company Act but for the exceptions provided by section 3(c)(1) or 3(c)(7) thereof, then it hereby: (i) represents and warrants that it has obtained the consent to its treatment as a Qualified Purchaser from the appropriate beneficial owners of its securities in accordance with the requirements of Section 2(a)(51)(C) of, and Rule 2a51-2 promulgated under, the Investment Company Act; (ii) consents to the treatment of the Buyer as a Qualified Purchaser; and (iii) represents and warrants that it has obtained the consent to such treatment from the appropriate beneficial owners of its securities in accordance with the requirements of Section 2(a)(51)(C) of, and Rule 2a51-2 promulgated under, the Investment Company Act.

SECTION 7.2 Representations and Agreements of the Buyer. The Buyer makes the representation and warranties in Section 7.2(a), (c), (d), (e) and (f) to the Lessees as of the Lease Closing Date and makes the agreements in Section 7.2(b) and (f) from the Lease Closing Date to the Final Settlement Date.

(a) Assuming the correctness of the representations and agreements of the Lessees in Section 7.1, the Buyer represents that it is a Qualified Purchaser.

 

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(b) The Buyer understands and agrees that if in the future it decides to Transfer any Device Lease, the Buyer will only Transfer such Device Lease to a Qualified Purchaser (it being understood and agreed that any subsequent Transfers of such Device Lease shall only be made to a Qualified Purchaser).

(c) The Buyer is acquiring the Device Leases for its own account, for investment purposes only and not with a view to distribute or resell such Device Leases in whole or in part.

(d) The Buyer represents and warrants that it was offered the Device Leases through private negotiations, not through any general solicitation or general advertising, or through any solicitation by a person not previously known to the Buyer in connection with investments generally.

(e) The Buyer has such knowledge and experience in financial and business matters that the Buyer is capable of evaluating the merits and risks of its investment in the Device Leases and is able to bear such risks, and has obtained, in the Buyer’s judgment, sufficient information from the Lessees or their authorized representatives to evaluate the merits and risks of such investment. The Buyer has evaluated the risks of investing in the Device Leases and has determined that the Device Leases are a suitable investment for the Buyer. The Buyer can afford a complete loss of the investment in the Device Leases and can afford to hold the investment in the Device Leases for an indefinite period of time.

(f) Assuming the correctness of the representations and agreements of the Lessees in Section 7.1 and that the Senior Loan Lenders and the Senior Subordinated Loan Creditor have obtained and given the consents described in this Section 7.2(f) to the extent applicable to such Senior Loan Lenders and Senior Subordinated Loan Creditor for purposes of this Section 7.2(f), if the Buyer would be an “investment company” under the Investment Company Act but for the exceptions provided by section 3(c)(1) or 3(c)(7) thereof, then the Buyer hereby: (i) represents and warrants that it has obtained the consent to its treatment as a Qualified Purchaser from the appropriate beneficial owners of its securities in accordance with the requirements of Section 2(a)(51)(C) of, and Rule 2a51-2 promulgated under, the Investment Company Act; (ii) consents to the treatment of the Lessees as Qualified Purchasers; and (iii) represents and warrants that it has obtained the consent to such treatment from the appropriate beneficial owners of its securities in accordance with the requirements of Section 2(a)(51)(C) of, and Rule 2a51-2 promulgated under, the Investment Company Act.

ARTICLE VII

IMISCELLANEOUS

SECTION 8.1 Amendments, etc. No amendment or waiver of any provision of this Agreement or consent to any departure by any Lessee therefrom shall in any event be effective unless the same shall be in writing and signed by the Buyer and the Lessee Representative and, if such amendment or waiver affects the obligations of Guarantor or any of its Affiliates, Guarantor

 

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consents in writing thereto, and then any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

SECTION 8.2 No Waiver; Remedies. No failure on the part of the Buyer or any Lessee to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies provided by Law.

SECTION 8.3 Notices, Etc. The provisions of Section 21 of the MLS Intercreditor Agreement shall apply as if fully set forth herein.

SECTION 8.4 Binding Effect; Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Each Lessee acknowledges that Buyer’s rights under this Agreement may be assigned as collateral to the Collateral Agent for the benefit of the Finance Parties, and Lessees consent to such assignments; provided that such assignment shall neither release Buyer from the performance of its obligations under this Agreement nor impair any Lessee’s rights under this Agreement. The parties hereto agree that the Collateral Agent (and any of its assignees) is an intended third-party beneficiary of this Agreement and is entitled to enforce the rights of Buyer arising hereunder.

SECTION 8.5 Survival. The rights and remedies with respect to any breach of any representation and warranty made by any Lessee or the Buyer pursuant to Article IV and the provisions of Sections 8.4, 8.5, 8.6, 8.8, 8.9, 8.10, 8.11, 8.12 and 8.14 shall survive any termination of this Agreement.

SECTION 8.6 Costs and Expenses. Each party agrees to pay on demand all reasonable and documented out-of-pocket costs and expenses incurred by the other party in connection with the negotiation, preparation, execution and delivery of any amendment of or consent or waiver under this Agreement (whether or not consummated) requested by such party, or the enforcement of, or any actual or reasonably claimed breach of, this Agreement, including reasonable and documented accountants’, auditors’, consultants’ and attorneys’ fees and expenses to any of such Persons and the reasonable and documented fees and charges of any independent accountants, auditors, consultants or other agents incurred in connection with any of the foregoing or in advising such Persons as to their respective rights and remedies under this Agreement in connection with any of the foregoing.

SECTION 8.7 Execution in Counterparts; Integration. This Agreement may be executed in any number of counterparts and by the different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same Agreement. Executed counterparts may be delivered electronically. This Agreement, together with the other Transaction Documents, contains a final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire understanding among the parties hereto with respect to the subject matter hereof, superseding all prior oral or written understandings.

 

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SECTION 8.8 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, BUT WITHOUT REGARD TO ANY OTHER CONFLICT OF LAWS PROVISIONS THEREOF.

SECTION 8.9 Waiver of Jury Trial. EACH LESSEE AND THE BUYER 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 DOCUMENT OR 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 DOCUMENT AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT A JURY.

SECTION 8.10 Consent to Jurisdiction; Waiver of Immunities. EACH LESSEE AND THE BUYER HEREBY ACKNOWLEDGES AND AGREES THAT:

(a) 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 CITY, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, (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.

(b) 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 8.11 Confidentiality. Each party hereto agrees to comply with, and be bound by, the confidentiality provisions of Section 20 of the MLS Intercreditor Agreement as if they were set forth herein.

SECTION 8.12 No Proceedings. The provisions of Section 24.2 of the MLS Intercreditor Agreement shall apply as if fully set forth herein.

SECTION 8.13 Severability. Any provisions of this Agreement that are prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of

 

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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.

SECTION 8.14 Lessee Representative.

(a) Each Lessee hereby irrevocably appoints and constitutes SLV- III LLC (“Lessee Representative”) as its agent and attorney-in-fact to (i) provide all notices and instructions to be given by the Lessees or any thereof under this Agreement and the other Transaction Documents (and any notice or instruction provided by Lessee Representative shall be deemed to be given by the applicable Lessee and shall bind such Lessee), (ii) receive notices and instructions to be given to the Lessees or any thereof under this Agreement and the other Transaction Documents (and any notice or instruction provided to the Lessee Representative shall be deemed to have been given to the applicable Lessee), (iii) make payments required to be paid by the Lessees or any thereof Lessee under this Agreement and the other Transaction Documents (and any payment made by Lessee Representative shall be deemed to be paid by the applicable Lessee), (iv) receive payments and disbursements to be made to the Lessees or any thereof under this Agreement and the other Transaction Documents (and any payment made to Lessee Representative shall be deemed to be paid to the applicable Lessee), (v) grant any security interest required to be granted by any Lessee under the Transaction Documents, including any security interest in the Servicer Collection Accounts, and execute and deliver any deposit account control agreement with respect to any such security interest granted by a Lessee in the Servicer Collection Accounts or other deposit accounts in the name of any Lessee, (vi) take such action on behalf of the Lessees as the Lessee Representative deems appropriate to effectuate the sale and leaseback arrangements contemplated under the Transaction Documents and to exercise such other powers as are reasonably incidental thereto to carry out the purposes of this Agreement and the other Transaction Documents (and any action by Lessee Representative shall be deemed to be made by the applicable Lessee and shall bind such Lessee) and (vii) execute and deliver any amendments, consents, waivers or other instruments related to this Agreement and the other Transaction Documents on behalf of the Lessees (and any such amendment, consent, waiver or other instrument shall be binding upon and enforceable against such other Lessee to the same extent as if made directly by such Lessee).

(b) Lessee Representative hereby accepts the appointment by the Lessees to act as the agent and attorney-in-fact of the Lessees pursuant to this Section 8.14. Lessee Representative shall ensure that the disbursement of any payments to any Lessee paid to or for the account of Lessee Representative shall be paid to or for the account of such Lessee.

(c) No resignation or termination of the appointment of Lessee Representative as agent as aforesaid shall be effective, except after ten (10) Business Days’ prior written notice to the Buyer. If Lessee Representative resigns under this Agreement, the Lessees shall be entitled to appoint a successor Lessee Representative (which shall be a Lessee). Upon the acceptance of its appointment as successor Lessee Representative hereunder, such successor Lessee Representative shall succeed to all the rights, powers and duties of

 

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the retiring Lessee Representative and the term “Lessee Representative” shall mean such successor Lessee Representative and the retiring or terminated Lessee Representative’s appointment, powers and duties as Lessee Representative shall be terminated.

[SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective duly authorized signatories, as of the date first above written.

 

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Exhibit 10.3

Execution Copy

MASTER LEASE AGREEMENT

Dated as of November 19, 2015

among

MOBILE LEASING SOLUTIONS, LLC,

as Lessor

and

LESSEES FROM TIME TO TIME PARTY HERETO,

as Lessee

and

SPRINT SPECTRUM L.P.

as Servicer

and

MIZUHO BANK, LTD.

as Collateral Agent

COUNTERPART NO. [            ] OF 5 SERIALLY NUMBERED MANUALLY EXECUTED COUNTERPARTS. TO

THE EXTENT (IF ANY) THAT THIS DOCUMENT CONSTITUTES CHATTEL PAPER UNDER THE

UNIFORM COMMERCIAL CODE, NO SECURITY INTEREST IN THIS DOCUMENT MAY BE CREATED

THROUGH THE TRANSFER AND POSSESSION OF ANY COUNTERPART OTHER THAN COUNTERPART

NO. 1.

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TABLE OF CONTENTS

 

		Page
ARTICLE I DEFINITIONS AND INTERPRETATION			1
SECTION 1.1 Defined Terms			1
SECTION 1.2 Interpretation			1
ARTICLE II DEVICE LEASES			2
SECTION 2.1 Agreement to Lease			2
SECTION 2.2 Deemed Delivery			3
SECTION 2.3 Ownership of the Devices			3
SECTION 2.4 Subleasing			4
SECTION 2.5 Software and Other Rights			4
SECTION 2.6 Approved Devices			5
SECTION 2.7 Term			5
SECTION 2.8 Rent and Other Payments			5
SECTION 2.9 Termination of a Device Lease			6
SECTION 2.10 Title Transfer			9
SECTION 2.11 Returned Devices			9
SECTION 2.12 Non-Return Remedies			10
SECTION 2.13 Like-Kind Exchanges			10
SECTION 2.14 Updates to Devices Subject to Device Leases			10
SECTION 2.15 Quiet Enjoyment			10
ARTICLE III LEASE EVENTS OF DEFAULT			11
SECTION 3.1 Lease Events of Default			11
SECTION 3.2 Remedies			12
ARTICLE IV INDEMNITIES			13
SECTION 4.1 Indemnities			13
ARTICLE V CONDITIONS PRECEDENT			14
ARTICLE VI REPRESENTATIONS AND WARRANTIES			15
SECTION 6.1 Organization and Good Standing			15
SECTION 6.2 Due Qualification			16
SECTION 6.3 Power and Authority; Due Authorization			16
SECTION 6.4 Binding Obligations			16
SECTION 6.5 No Violation			16
SECTION 6.6 No Proceedings			16
SECTION 6.7 Licenses and approvals			17
SECTION 6.8 Software licenses			17

 

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ARTICLE VII COVENANTS			17
SECTION 7.1 Affirmative Covenants			17
SECTION 7.2 Negative Covenants			19
ARTICLE VIII EXCLUSION OF LIABILITY; ACKNOWLEDGEMENT			20
SECTION 8.1 Exclusion of Liability			20
SECTION 8.2 Acknowledgments			20
ARTICLE IX COLLATERAL			21
SECTION 9.1 Granting Clause			21
SECTION 9.2 Granting Clause to Collateral Agent			22
SECTION 9.3 UCC Financing Statements			22
SECTION 9.4 No Assumption of Liability			22
SECTION 9.5 Further Assurances			23
SECTION 9.6 Power of Attorney			23
ARTICLE X			23
TAXES			23
SECTION 10.1 Consistency of Treatment			23
SECTION 10.2 Taxes			23
SECTION 10.3 Payments			23
SECTION 10.4 Gross Up			24
SECTION 10.5 Non-Duplication			24
ARTICLE XI MISCELLANEOUS			24
SECTION 11.1 Amendments, etc.			24
SECTION 11.2 No Waiver			24
SECTION 11.3 Notices			24
SECTION 11.4 Data File			25
SECTION 11.5 Binding Effect			25
SECTION 11.6 Third Party Rights			25
SECTION 11.7 Execution in Counterparts; Integration			25
SECTION 11.8 Governing Law			25
SECTION 11.9 Waiver of Jury Trial			25
SECTION 11.10 Consent to Jurisdiction; Waiver of Immunities			26
SECTION 11.11 No Proceedings			26
SECTION 11.12 Severability			26

 

Appendix		A Definitions

 

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Schedule 1		Device Lease Schedule
Schedule 2		Device Residual Values
Schedule 3		Schedule Of Approved Devices
Schedule 4		Forms Of Customer Leases
Schedule 5		Additional Information
Schedule 6		Repair Costs

 

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MASTER LEASE AGREEMENT

This MASTER LEASE AGREEMENT, dated as of November 19, 2015 and effective as of the Lease Closing Date, (this “Agreement”) is among MOBILE LEASING SOLUTIONS, LLC, a Delaware limited liability company (“Lessor”), THE PERSONS IDENTIFIED ON THE SIGNATURE PAGES HERETO AS LESSEES (collectively, “Lessees” and, each, a “Lessee”), SPRINT SPECTRUM L.P., a Delaware limited partnership (“Sprint Spectrum” or “Servicer”), and MIZUHO BANK, LTD., as collateral agent for the Finance Parties (“Collateral Agent”).

W I T N E S S E T H:

WHEREAS, the parties hereto are entering into this Agreement for the purpose of establishing the terms and conditions by which Lessor will lease Devices from time to time to the relevant Lessee; and

WHEREAS, the leasing of the Devices shall be governed by the terms and conditions in this Agreement, as well as the terms and conditions set forth in the relevant Device Lease Schedule and any related documentation.

NOW, THEREFORE, in consideration of the premises and the mutual promises contained in this Agreement, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION

SECTION 1.1 Defined Terms. Capitalized terms used and not otherwise defined in this Agreement are used as defined in (or by reference in) Appendix A (Definitions).

SECTION 1.2 Interpretation. For purposes of this Agreement and the other Sprint Transaction Documents, unless the context otherwise requires:

(a) accounting terms not otherwise defined herein, and accounting terms partly defined herein to the extent not defined, shall have the respective meanings given to them under, and shall be construed in accordance with, GAAP;

(b) terms used in Article 9 of the UCC in the State of New York, and not specifically defined herein, are used herein as defined in such Article 9;

(c) the words “hereof”, “herein” and “hereunder” and words of similar import used in this Agreement or in any other Sprint Transaction Document refer to this Agreement (or the certificate or other document in which they are used) as a whole and not to any particular provision of this Agreement (or such certificate or document);

(d) references to any clause, section, schedule or exhibit are references to clauses, sections, schedules and exhibits in or to this Agreement (or the certificate or other document in which the reference is made) and references to any paragraph, subsection, clause or other

 

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subdivision within any section or definition refer to such paragraph, subsection, clause or other subdivision of such section or definition;

(e) the term “including” means “including without limitation”;

(f) references to any Law refer to that Law as amended from time to time and include any successor Law;

(g) references to any agreement or other document refer to that agreement or other document as from time to time amended or supplemented, or as the terms of such agreement are waived or modified, in each case in accordance with the terms of such agreement or document;

(h) references to any Party include that Party’s successors and permitted assigns;

(i) headings in this Agreement or in any other Sprint Transaction Document are for purposes of reference only and shall not otherwise affect the meaning or interpretation of any provision thereof;

(j) unless otherwise specifically provided with respect to any computation of a period of time, in the computation of a period of time from a specified date to a later specified date, the word “from” means “from and including”, the words “to” and “until” each means “to but excluding”, and the word “within” means “from and excluding a specified date and to and including a later specified date”;

(k) a reference to assets includes present and future properties, undertakings, revenues, rights and benefits of every description;

(l) a reference to an authorisation includes an approval, authorisation, consent, exemption, filing, licence, notarisation, registration and resolution;

(m) a reference to a disposal of any asset, undertaking or business includes a sale, lease, licence, transfer, loan or other disposal by a person of that asset, undertaking or business (whether by a voluntary or involuntary single transaction or series of transactions);

(n) unless otherwise defined, capitalised terms defined in this Agreement in the singular form shall have a corresponding meaning when used in the plural form, and vice versa; and

(o) “$”, “USD” and “dollars” denote the lawful currency of the United States of America.

ARTICLE II

DEVICE LEASES

SECTION 2.1 Agreement to Lease

 

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(a) Agreement to Lease. Upon satisfaction of all conditions precedent set out in Article V (Conditions Precedent) and the transfer of title to the Devices from Lessees to Lessor pursuant to the Second Step Transfer Agreement, Lessor hereby agrees to lease such Devices to Lessees and Lessees hereby agree to lease such Devices from Lessor, from time to time, on the terms and conditions set forth in this Agreement and the Device Lease Schedule with respect to the relevant Devices being leased (this Agreement together with a Device Lease Schedule, each a “Device Lease” and, collectively, the “Device Leases”). This Agreement is intended to be incorporated by reference into each Device Lease Schedule agreed to from time to time as particular Devices are leased by Lessor to the relevant Lessee. Each Device Lease is intended to be a separate instrument of lease. As to Devices leased pursuant to any such individual Device Lease, the terms of the applicable Device Lease Schedule shall control over the terms of this Agreement in the event of conflict. The rights, remedies, powers and privileges of Lessor and the relevant Lessee under each Device Lease shall be interpreted separately and apart from any other Device Lease.

(b) Acceptance of each Device Lease. Entry into each Device Lease is subject to the relevant Lessee and Lessor agreeing to a Device Lease Schedule. The relevant Lessee agrees to initially provide or cause to be provided to Lessor the information required by each Device Lease Schedule to the extent such information is available to such Lessee. Lessor agrees to evaluate the information provided by the relevant Lessee, work with the relevant Lessee to reconcile any discrepancies and provide or cause to be provided any additional information required for each Device Lease Schedule, in each case, as promptly as possible.

(c) Intention of the Parties. It is the express intent of each of the parties hereto that each Device Lease constitute a true lease and not a sale of the Devices. As a protective measure in the event that, notwithstanding the foregoing, the lease of the Devices to Lessees is recharacterized by any third party as a sale, then solely in that event and for the expressly limited purposes thereof, each Lessee does hereby grant to Lessor a security interest in all of such Lessee’s now or hereafter existing right, title and interest to, and under the Devices and agrees that this Agreement shall constitute a security agreement under applicable Law. Each Lessee hereby authorizes Lessor or its respective designee to file one or more financing or continuation statements, and amendments thereto and assignments thereof, relative to all or any of the Devices now existing or hereafter arising in the name of such Lessee.

SECTION 2.2 Deemed Delivery

(a) Upon the relevant Lessee and Lessor agreeing to a Device Lease on the Lease Closing Date, Lessor shall be deemed to have delivered the relevant Devices under such Device Lease to the relevant Lessee and the relevant Lessee will be deemed to have accepted such Devices.

(b) Each Lessee accepts the leasing of the Devices by it and receives the Devices on an “as-is where-is” basis.

SECTION 2.3 Ownership of the Devices

 

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(a) Ownership. At all times during the Term of each Device Lease, full legal title to the Devices will remain vested in Lessor to the exclusion of Lessees, notwithstanding the possession and use thereof by Lessees or any Customers. Lessees and Servicer each agree that at all times during the Term of each Device Lease for each Device, it shall not (i) imply or represent that any Person other than Lessor owns the Devices, (ii) sell or dispose of or directly or indirectly attempt to sell or dispose of the Devices in any way other than to a Customer pursuant to a Customer Lease, (iii) part with possession of the Devices without the prior written consent of Lessor other than pursuant to Section 2.4 (Subleasing) or as otherwise contemplated herein, and (iv) place on the Devices any plates, stickers or marks that are inconsistent with the ownership of the Devices by Lessor. For the avoidance of doubt, and without limiting the obligations of Servicer under the Servicing Agreement, Lessees shall have no obligation with respect to a Customer’s use or stewardship of a Device.

(b) Liens. At all times during the Term of each Device Lease, Lessees and Servicer shall not directly or indirectly give or allow another Person to give any interest in or Lien over the Devices or any Device Lease, other than Permitted Device Liens. Lessees shall promptly, at their own cost and expense, take such action as may be necessary to duly discharge or eliminate any such Liens (other than Permitted Device Liens) upon obtaining Knowledge thereof.

SECTION 2.4 Subleasing

(a) Lessor acknowledges that the relevant Lessee is subleasing each Device to a Customer. The relevant Lessee agrees to ensure that:

(i) at such time that a Customer Lease is in effect, the Customer is legally and contractually bound by the terms of such Customer Lease with respect to a relevant Device;

(ii) no Customer Lease prevents such Lessee from complying with its obligations under a Device Lease to which it is a party or any other Transaction Document to which it is a party;

(iii) neither such Lessee, nor any Customer Lease, shall directly or indirectly give any impression or confirmation or otherwise provide that the relevant Customer shall be or may become the legal and beneficial owner of any Device at any time other than if the Customer exercises any option to purchase the Device under such Customer Lease as permitted thereby;

(iv) such Lessee has all material licenses and authorizations necessary in connection with Lessee’s subleasing of the Devices to the Customers pursuant to the Customer Lease; and

(v) the Customer Leases will be administered in accordance with this Agreement and the Servicing Agreement.

SECTION 2.5 Software and Other Rights

 

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(a) The Devices may contain software in which none of the parties hereto have ownership or other proprietary rights. Where required by a software owner or manufacturer, the relevant Lessee will enter into a license or other agreement for the use of the software. Any such agreement will be separate and distinct from each Device Lease, and Lessor will have no rights or obligations thereunder unless otherwise agreed by it in writing. To the extent that Lessor is the owner or has rights in software related to the Devices and such rights are transferable by Lessor, Lessor hereby grants to Lessees such rights that Lessor has (if any) to use such software during the Term of the applicable Device Lease. No separate license fee is payable by Lessees to Lessor in relation to such software. Lessee acknowledges that Lessor has made no representation or warranty to Lessees as to Lessor’s title to or ability to grant rights to Lessees for any software available on any Device.

SECTION 2.6 Approved Devices

(a) Lessor and Lessees acknowledge and agree that a full list of Approved Devices as at the date hereof is set out on Schedule 3 (Schedule of Approved Devices) to this Agreement (“Schedule of Approved Devices”).

(b) Lessor shall be entitled at any time to amend or replace the Schedule of Approved Devices without Lessee’s consent in order to add additional Devices of a new Type to such Approved Schedule and/or remove Devices from the Schedule of Approved Devices.

(c) Upon any amendment or replacement of the Schedule of Approved Devices in accordance with Section 2.6(b) (Approved Devices), Lessor shall provide Lessees with a new Schedule of Approved Devices (in the form set out in Schedule 3 (Schedule of Approved Devices)). The Approved Devices for the purposes of any Device Lease entered into pursuant to Section 2.1(Agreement to Lease) following such amendment or replacement shall be the Devices listed on such new Schedule of Approved Devices and such new Schedule of Approved Devices shall replace all previous schedules.

(d) For the avoidance of doubt, any amendment or replacement of the Schedule of Approved Devices shall not, however, affect any Device Leases which are in place prior to Lessor providing the new Schedule of Approved Devices to Lessees.

SECTION 2.7 Term

(a) The term (the “Term”) of each Device Lease shall commence on the relevant Device Lease Commencement Date and, subject to paragraph (b) below, end on the Device Lease Expiration Date.

(b) Each Device leased under a Device Lease shall be leased for the Term of such Device Lease, subject to termination of the Device Lease with respect to a particular Device in accordance with Section 2.9 (Termination of a Device Lease).

SECTION 2.8 Rent and Other Payments

(a) Rent. Lessees will pay or cause to be paid to Lessor or its Nominated Agent (by paying into the MLS Collection Account, or any other bank account as notified by Lessor) on

 

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each Device Lease Payment Date, throughout the Term of each Device Lease, the Rental Payments for each Device subject to a Device Lease. Rental Payments for each Device subject to a Device Lease are payable for each calendar month (or the relevant portion thereof) on the Device Lease Payment Date until the Device Lease for such Device terminates. The Lessor will issue an invoice in the amount of the Rental Payments due for each month on the 5^th day of each month (or, if not a Business Day, on the next Business Day). Once paid, each Rental Payment is not refundable for any reason unless such Rental Payment has been paid in error or when not actually due and payable. Each transfer of Available Funds into the MLS Collection Account in respect of scheduled Customer Receivables or Rental Payments due during the calendar month of the applicable Device Lease Payment Date, payments by Guarantor under the Sprint Guarantee in respect of Rental Payments due during the calendar month of the applicable Device Lease Payment Date and the portion of any Dilution that is in respect of a Rental Payment due during the calendar month of the applicable Device Lease Payment Date shall be deemed satisfaction, first, of Lessees’ obligation to make a scheduled Rental Payment on the relevant Device Lease Payment Date and second, any other payment due and owing under this Agreement, to the extent of the amount paid by any Sprint Party into the MLS Collection Account during the relevant period.

(b) [Reserved]

(c) Electronic Fund Transfers. Lessees shall, and shall take all necessary actions so that all payments under each Device Lease will be made by electronic fund transfer.

(d) Obligations Absolute. During the Term of each Device Lease, Lessees’ obligation to make the Rental Payments and other payments due under such Device Leases is absolute and unconditional and is not affected or reduced by:

(i) any Lessee or any Customer being unable to use the Devices;

(ii) the failure by any Customer (x) to make any payment under a Customer Lease or otherwise or (y) to return a Device to the relevant Lessee or Lessor;

(iii) the Devices being damaged, lost, stolen, not in the possession of any Lessee or any Customer, or not working at any time;

(iv) any set-off, counterclaim or other right any Lessee has or claims to have against Lessor or another Person; or

(v) Lessor’s title to or ability to grant rights to use software being defective for any reason, or the unavailability of any required software to any Lessees or any Customer.

Notwithstanding any other provision of this Agreement or any Device Lease to the contrary, no Lessee shall be impaired in the exercise of any right it may have to assert and sue upon any claim it may have against Lessor in a separate action.

SECTION 2.9 Termination of a Device Lease . The Device Lease with respect to a Device will be terminated upon the occurrence of any of the following:

 

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(a) Servicer Termination of the Customer Lease. Servicer will (on behalf and acting at the direction of the relevant Lessee) have terminated or be deemed to have terminated, as applicable, a Customer Lease with respect to a Device on the below terms and, upon such termination of the relevant Customer Lease, the Device Lease with respect to such Device will be terminated:

(i) Return Device Satisfying the Device Return Condition but Customer has not paid all Customer Receivables. If at any time during the Term of the Device Lease for such Device, the relevant Customer returns such Device satisfying the Device Return Condition but has not paid all amounts due and owing under the related Customer Lease, delivery of such Device to Lessor (or its Nominated Agent) together with payment by Servicer to Lessor of (1) all previously accrued and unpaid Rental Payments, if any, plus (2) the Rental Payments that would have accrued under the Device Lease during the remainder of the Scheduled Device Lease Term.

(ii) Return Device Not Satisfying the Device Return Condition. If the relevant Customer returns such Device not satisfying the Device Return Condition:

(A) prior to the last day of the Scheduled Customer Lease Term of the related Customer Lease, delivery of such Device to Lessor (or its Nominated Agent) together with payment by Servicer to Lessor of the sum of (1) all previously accrued and unpaid Rental Payments, if any, plus (2) the Rental Payments that would have accrued under the Device Lease during the remainder of the Scheduled Device Lease Term, plus (3) the Device Residual Value as of the Expected Sales Date;

(B) on the last day of the Scheduled Customer Lease Term of the related Customer Lease, delivery of such Device to Lessor (or its Nominated Agent) together with payment by Servicer to Lessor of the sum of (1) all previously accrued and unpaid Rental Payments, if any, plus (2) the Device Residual Value as of the Expected Sales Date; or

(C) at any time after the last day of the Scheduled Customer Lease Term of the related Customer Lease but prior to the Device Lease Expiration Date for such Device, delivery of such Device to Lessor (or its Nominated Agent) together with payment by Servicer to Lessor of the sum of (1) all previously accrued and unpaid Rental Payments during the Scheduled Device Lease Term, if any, plus (2) the lesser of (x) Device Residual Value as of the return date of such Device to Lessor (or its Nominated Agent) and (y) the Device Residual Value as of the Expected Sales Date.

(iii) Non-Returned Device. If the Customer has not returned such Device (other than as a result of an exercise by the Customer of its purchase option or by making a payment in lieu of delivery of the Device):

(A) on or prior to the last day of the Scheduled Customer Lease Term of the related Customer Lease, payment by Servicer to Lessor of the sum of (1) all

 

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previously accrued and unpaid Rental Payments, if any, plus (2) the Rental Payments that would have accrued during the remainder of the Scheduled Device Lease Term, plus (3) the Device Residual Value as of the Expected Sales Date; or

(B) at any time after the last day of the Scheduled Customer Lease Term of the related Customer Lease but prior to the Device Lease Expiration Date for such Device, payment by Servicer to Lessor of the sum of (1) all previously accrued and unpaid Rental Payments during the Scheduled Device Lease Term, if any, plus (2) the lesser of (x) the Device Residual Value as at the date of termination, and (y) the Device Residual Value as of the Expected Sales Date.

(b) Termination of the Customer Lease By Customer Performance. If the Customer Lease terminates in accordance with its terms under the following scenarios:

(i) if the relevant Customer returns such Device satisfying the Device Return Condition prior to the last day of the Scheduled Customer Lease Term of the related Customer Lease, delivery of such Device to Lessor (or its Nominated Agent) together with payment to Lessor of the sum of (A) all previously accrued and unpaid Rental Payments, if any, plus (B) the Rental Payments that would have accrued during the remainder of the Scheduled Device Lease Term;

(ii) if the relevant Customer returns such Device satisfying the Device Return Condition on or at any time after the last day of the Scheduled Customer Lease Term, delivery of such Device to Lessor (or its Nominated Agent) plus all previously accrued and unpaid Rental Payments, if any;

(iii) if prior to the last day of the Scheduled Customer Lease Term and the Customer has made a payment in lieu of delivery of such Device, payment to Lessor of the sum of (A) all previously accrued and unpaid Rental Payments, if any, plus (B) the Rental Payments that would have accrued during the remainder of the Scheduled Device Lease Term, plus (C) the required purchase price payment under the Customer Lease;

(iv) if on last day of the Scheduled Customer Lease Term of the related Customer Lease the Customer exercises a purchase option in relation to such Device under the Customer Lease, payment to Lessor of the purchase option price under the Customer Lease plus all previously accrued and unpaid Rental Payments, if any; or

(v) if at any time after the last day of the Scheduled Customer Lease Term of the related Customer Lease but prior to the Device Lease Expiration Date for such Device the Customer exercises a purchase option in relation to such Device under the Customer Lease, payment to Lessor of the purchase option price as of the purchase option exercise date plus all previously accrued and unpaid Rental Payments, if any, during the Scheduled Device Lease Term.

(c) Originator Repurchase Event. If the relevant Originator purchases a Rent Shortfall Returned Device in accordance with the Device Repurchase Agreement.

 

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SECTION 2.10 Title Transfer. Upon a Customer Lease termination under Section 2.9(b)(iii), (iv) or (v) (Termination of the Customer Lease by Customer Performance) Lessor shall transfer to the relevant Customer, title to the relevant Device free and clear of all Liens (including any rights of the relevant Lessee therein which such Lessee agrees to automatically and concurrently release) by and through Lessor.

SECTION 2.11 Returned Devices

(a) Returned Devices. At all times during the Term of each Device Lease, Lessees covenant and agree to return or cause the return of each Device to the Device Return Address of Lessor (or its Nominated Agent) within the Required Return Period to the extent it has received such Device from the relevant Customer. For the avoidance of doubt, Lessees’ obligation under this Section 2.11 (Returned Devices) is not in any way conditional upon returned Devices satisfying the Device Return Condition.

(b) Procedure for Returned Devices. Upon the return of a Device by the relevant Customer during the Term, the relevant Lessee will or will cause Servicer to:

(i) at Lessor’s expense (which includes all transport, insurance and related costs within its jurisdiction), ship such Device within the Required Return Period to the Device Return Address of Lessor (or its Nominated Agent);

(ii) ensure that such Device is packed in a manner normally used for the transportation of similar Devices;

(iii) use commercially reasonable efforts to procure that the Device contains no network block, barring or password protection and in particular, Lessee shall ensure that the Devices will be unlocked by Servicer for use on any wireless network;

(iv) use commercially reasonable efforts to procure that the Customer disables the “Find My iPhone” feature at the time of the Customer’s return of such Device and, if the Customer does not disable the “Find my iPhone” feature, carry out the Non-Return Remedies in respect of that Customer (other than a Protected Customer) and such Device shall be treated as a Non-Returned Device for the purposes of this Transaction;

(v) provide the PUK for each Device to Lessor; and

(vi) pay, or reimburse the Lessor for, any shipping costs and expenses incurred pursuant to Section 2.11(b)(i) (Procedure for Returned Devices) above within 5 Business Days of shipping such Devices.

(c) Lessee Failure to Return. If any Lessee (or its Nominated Agent) fails to return to Lessor (or its Nominated Agent) by the Device Lease Expiration Date any Device returned to any Sprint Party by a Customer, the relevant Lessee shall pay to Lessor the higher of (i) the Device Residual Value for such Device as of the Expected Sales Date, or (ii) the Secondary Market Value for such Device as of the Expected Sales Date on the basis that such Device is a Grade B Device, no later than 5 Business Days after Lessee having Knowledge of such failure to return unless Servicer has already paid such amount.

 

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SECTION 2.12 Non-Return Remedies

If a Customer (other than a Protected Customer) is in breach of a payment or a delivery obligation under its Customer Lease which has not been remedied by the Customer, Servicer, any Lessee or any other Person (other than the Guarantor) by the Non-Return Remedies Commencement Date:

(a) Servicer shall use commercially reasonable efforts to collect, without incurring any obligation to the extent that (notwithstanding its commercially reasonable efforts) it does not collect, the Customer’s payment under the Customer Lease (and all further payments made by the Customer thereunder, including the Customer’s payment for or in respect of the Device) and shall remit any such Customer payments it does collect (i) to the extent such amount has not been previously remitted to Lessor as a regularly scheduled Rental Payment or another payment due and owing to Lessor under this Agreement, to Lessor and (ii) otherwise to the relevant Lessee; and

(b) neither Servicer nor any other Sprint Party will provide any new or incremental device, accessory, network service (or other asset or service) which it is not already providing (or already obligated to provide, or will be obligated to provide with the passage of time and/or a payment or performance by Customer which Servicer or other Sprint Party is obligated to accept) as of the date of such breach under contract (including pursuant to applicable terms and conditions) to such Customer (by sale, lease or otherwise) until such breach is remedied (the “Non-Return Remedies”),

provided that paragraphs (a) and (b) above shall not apply if Servicer terminates the Customer Lease in accordance with Section 2.7 (Right to Terminate Customer Leases) of the Servicing Agreement.

SECTION 2.13 Like-Kind Exchanges. If at any time during the Term of a Device Lease, that Servicer performs a Like-Kind Exchange, the Like-Kind Exchange Device shall be automatically substituted for the original Device and such Like-Kind Exchange Device shall be subject to the relevant Device Lease to the same extent and on the same terms as the original Device, including the Rental Payments, which shall be the same as the Rental Payments that would otherwise have been due with respect to the original Device. Lessor agrees that, upon consummation of the Like-Kind Exchange, title to the original Device free and clear of all Liens by and through Lessor shall pass automatically from Lessor to Lessee on an as-is basis without any warranty whatsoever from Lessor.

SECTION 2.14 Updates to Devices Subject to Device Leases. The Devices subject to the relevant Device Lease shall be deemed to be automatically amended without further action upon a Like-Kind-Exchange or the termination of any Device Lease with respect to any Device. Upon the request of any Lessee or Lessor, Servicer shall provide a status report reflecting the Devices then leased pursuant to any Device Lease.

SECTION 2.15 Quiet Enjoyment

Lessor covenants that during the Term of a Device Lease, so long as no Lease Event of Default shall have occurred and be continuing, neither Lessor nor any Person claiming any

 

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interest in the Devices by, through or under Lessor shall disturb Lessees’ quiet enjoyment of the Devices and the Customer Leases under such Device Lease. Collateral Agent covenants that during the Term of a Device Lease, so long as no Lease Event of Default shall have occurred and be continuing, Collateral Agent shall not disturb Lessees’ quiet enjoyment of the Devices and the Customer Leases under such Device Lease

ARTICLE III

LEASE EVENTS OF DEFAULT

SECTION 3.1 Lease Events of Default

A Lease Event of Default occurs if:

(a) any Lessee (or the Guarantor on its behalf) fails to make any Rental Payment within 5 Business Days following the due date thereof;

(b) any Lessee (or the Guarantor on its behalf) fails to pay any other amount (other than as set forth in Section 3.1(a)(Lease Events of Default)) due and payable under this Agreement or a Device Lease unless such breach is remedied within 10 Business Days following the date of receipt of a written notice from Lessor specifying the breach;

(c) any Lessee breaches Section 2.3(b) (Liens), Section 2.12 (Non-Return Remedies), Section 4.1(a) (Indemnities), Section 6.7 (Licenses and approvals), Section 7.1(i) (Notification of default.), Section 7.2(b) (No Modification of Customer Leases), or Section 7.2(c) (Change in Credit and Collection Policy or Business) of this Agreement, and such breach is not remedied within 10 Business Days of the date of receipt of written notice from Lessor specifying the breach;

(d) any Lessee breaches any other representation, warranty, covenant or other provision of this Agreement or any other Transaction Document in any material respect (other than as specified in paragraphs (a), (b) and (c) above), and such breach is not remedied within 10 Business Days of the date of receipt of written notice from Lessor specifying the breach;

(e) any Originator breaches any provision of any Transaction Document to which it is a party in any material respect and such breach is not remedied within 10 Business Days of the date of receipt of written notice from Lessor specifying the breach;

(f) [reserved];

(g) a Servicer Replacement Event occurs;

(h) Sprint’s license to provide wireless telephony services is terminated and not replaced;

(i) the occurrence of an Insolvency Event with respect to a Sprint Party;

 

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(j) the Guarantor fails to pay any amount due and payable under the Sprint Guarantee, or the Sprint Guarantee is terminated or ceases to be in full force and effect for any reason (other than termination in accordance with its terms) before the Final Settlement Date, unless such breach is remedied within 5 Business Days of the date of receipt of a written notice from Lessor specifying the breach;

(k) a Change of Control has occurred; or

(l) the Performance Support Provider fails to perform any of its obligations under the Performance Support Agreement, or the Performance Support Agreement is terminated or ceases to be in full force and effect for any reason before the Final Settlement Date, unless such breach is remedied within 5 Business Days of the date of receipt of a written notice from Lessor specifying the breach.

SECTION 3.2 Remedies

(a) Upon the occurrence and continuance of a Lease Event of Default, Lessor may terminate this Agreement and/or any one or more (including all) of the Device Leases (or any portion thereof) by providing written notice of termination to the relevant Lessees. Lessor shall be deemed to have given each Lessee a notice terminating all relevant Device Leases immediately upon the occurrence of an Insolvency Event with respect to any Lessee or the Guarantor. For the avoidance of doubt, the occurrence of a Lease Event of Default under a Device Lease will trigger a Lease Event of Default under all Device Leases entered into under this Agreement (regardless of the identity of Lessee and whether a Lease Event of Default has occurred under a particular Device Lease) unless otherwise waived by Lessor.

(b) If this Agreement or any Device Lease hereunder (or any portion thereof) has been terminated pursuant to paragraph (a) above:

(i) in relation to the occurrence of the Lease Event of Default under Section 3.1(d) (Lease Events of Default) above then Lessees shall pay only the Present Value Device Lease Amount for the relevant Devices within 5 Business Days of receipt of an invoice from Lessor. Upon payment of the Present Value Device Lease Amount, title free and clear of all Liens arising by and through Lessor to the relevant Devices (and all Customer Lease-End Rights and Obligations) shall hereby pass from Lessor to the relevant Lessee on an as-is basis without any warranty whatsoever from Lessor and no further Rental Payments shall be payable by the relevant Lessee in respect of such Devices;

(ii) subject to Section 3.2(c) (Remedies), in relation to the occurrence of any Lease Events of Defaults (other than the Lease Event of Default under Section 3.1(d)(Lease Events of Default)) prior to the end of the Term, then Lessees must pay the Device Lease Early Termination Amount for the relevant Devices to Lessor within 5 Business Days of receipt of an invoice from Lessor. Upon payment of the Device Lease Early Termination Amount, title free and clear of all Liens by and through Lessor to the relevant Devices and all Customer Lease-End Rights and Obligations, shall hereby pass from Lessor to the relevant Lessee on an as-is basis without any warranty whatsoever

 

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from Lessor and no further Rental Payments shall be payable by the relevant Lessee in respect of such Devices.

(c) Notwithstanding anything herein to the contrary, upon the occurrence and continuance of any Lease Event of Default which does not satisfy the below criteria, the sole remedy shall be that Lessees pay the Present Value Device Lease Amount for the relevant Devices within 5 Business Days of receipt of an invoice from Lessor:

(i) the default covenant provision is customary in financing arrangements;

(ii) the occurrence of the Lease Event of Default is objectively determinable (for example, subjective acceleration clauses would not satisfy this condition);

(iii) predefined criteria, related solely to any Sprint Party and their operations, have been established for the determination of the Lease Event of Default; and

(iv) it is reasonable to assume, based on the facts and circumstances that exist at Device Lease inception, that the Lease Event of Default will not occur. In applying this condition, it is expected that any Person making such determination would consider recent trends in Lessees’ operations.

Upon payment of the Present Value Device Lease Amount in accordance with this Section 3.2 (c) (Remedies), title free and clear of all Liens by and through Lessor to the relevant Devices (and all Customer Lease-End Rights and Obligations) shall hereby pass from Lessor to the relevant Lessee on an as-is basis without any warranty whatsoever from Lessor and no further Rental Payments shall be payable by the relevant Lessee in respect of such Devices.

ARTICLE IV

INDEMNITIES

SECTION 4.1 Indemnities

(a) Lessees hereby indemnify Lessor and its Members (each a “Lessee Indemnitee”) and hold any Lessee Indemnitee harmless from, any and all losses, claims, damages, liabilities, charges, Lessee Covered Taxes, penalties, levies and related expenses (including the reasonable and documented fees and expenses of counsel for Lessor), including, on account of funds borrowed, contracted for or used to fund any amount payable by a Lessee Indemnitee in connection with the purchase or the lease of any Devices subject to a Device Lease or proceedings related thereto (the “Liabilities”) incurred by any Lessee Indemnitee, without duplication of any other amount paid, as a result of:

(i) a Device Lease (or any part of it) being void, voidable or unenforceable for any reason;

(ii) the Devices being lost, stolen, damaged, or destroyed by, or confiscated from, in each case, any Lessee;

 

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(iii) the sublease of any Devices to a Customer;

(iv) any information provided by or on behalf of a Sprint Party or any Affiliate for inclusion in a Device Lease Schedule being incorrect;

(v) a Device Lease terminating in relation to some or all of the Devices before the end of the Term of that Device Lease, except as otherwise expressly contemplated under this Agreement;

(vi) any failure by Lessee to comply with its obligations in the Transaction Documents to which it is a party; or

(vii) any Lease Event of Default other than (x) a Lease Event of Default under Section 3.1(d) (Lease Events of Default) or (y) a Lease Event of Default that does not satisfy the criteria in Section 3.2(c) (Lease Events of Default);

provided, however, Lessee’s indemnity will not extend to (x) any Liability to the extent determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence, fraud or willful misconduct of any Lessee Indemnitee, or (y) any Liability arising as a result of a Device being a Non-Returned Device.

(b) Indemnity Continuing. Lessees’ indemnity is a continuing obligation, separate and independent from Lessee’s other obligations. Lessees’ indemnity continues after a Device Lease ends or is terminated and it is not necessary for Lessor to incur an expense or cost or make a payment before it enforces a right of indemnity.

(c) Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable Law, the parties hereto shall not assert, and each party hereto hereby waives, any claim against any other party hereto, on any theory of liability, for special, indirect, consequential (including lost profits) or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Transaction Document or any agreement or instrument contemplated hereby, or the transactions contemplated hereby or thereby (save for claims in connection with breaches of confidentiality).

ARTICLE V

CONDITIONS PRECEDENT

The purchase from, and lease to Lessees, of any Devices on the Lease Closing Date, shall be subject to the satisfaction of, or the waiver in writing by, Lessor of each of the conditions precedent set forth below:

(a) Lessee has provided the Agreed Schedule Information with respect to all Devices to be subject to a Device Lease;

(b) the Device Lease Schedule contains with respect to each Device to be leased, the information set out in Schedule 1 (Device Lease Schedule);

 

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(c) all Devices that are to be subject to such Device Lease are Approved Devices;

(d) immediately prior to the contribution under the First Step Transfer Agreement, each Originator is the owner of unencumbered legal and beneficial title to each Device that is to be subject to such Device Lease (other than the rights of Customers under the Customer Leases);

(e) the Devices are Eligible Devices and the Customer Leases are Eligible Leases;

(f) the representations and warranties of each Sprint Party set forth in Article VI or in any other Transaction Document are true and correct in all material respects on and as of the Lease Closing Date with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date, in which case, such representations and warranties shall have been true and correct as of such earlier date;

(g) no Lease Event of Default has occurred and is continuing;

(h) all documents (including Customer Leases) required to be in effect with respect to the relevant Devices, are duly executed by each party other than Lessor;

(i) all Sprint Transaction Documents have been executed and delivered to Lessor;

(j) receipt of evidence that all Agreed Start-Up Costs have been paid or will be paid simultaneously with the consummation of the Transactions,

(k) receipt of the Data File which contains all information for each Device Lease Schedule to which each Lessee and Lessor agree; and

(l) Lessees shall have obtained any approvals, legal opinions, filings or other documents reasonably requested by Lessor.

Lessees acknowledge and agree that this Agreement is not a committed facility and that Lessor is not obligated to purchase or lease any Devices to Lessee or enter into any Device Lease.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

Each Lessee represents and warrants to Lessor that, as of the Lease Closing Date (with reference to the circumstances existing on each such date):

SECTION 6.1 Organization and Good Standing

It has been duly organized or incorporated in, and is validly existing as a corporation, exempted company, partnership or limited liability company, as applicable in good standing under the Laws of its jurisdiction of organization or incorporation, with power and authority to own its properties and to conduct its business as such properties are presently owned and such business is presently conducted and will be conducted, except to the extent that such failure

 

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could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

SECTION 6.2 Due Qualification

It is duly qualified to do business as a foreign organization in good standing, if applicable, and has obtained all necessary qualifications, licenses and approvals, in all jurisdictions in which its ownership or lease of property or the conduct of its business (including its obligations under this Agreement) requires such qualifications, licenses or approvals, except where the failure to be in good standing or to hold any such qualifications, licenses and approvals could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

SECTION 6.3 Power and Authority; Due Authorization

It (i) has all necessary power and authority to (A) execute and deliver this Agreement and (B) carry out the terms of and perform its obligations under this Agreement, and (ii) has duly authorized by all necessary corporate, partnership or limited liability company action, as applicable, the execution, delivery and performance of this Agreement.

SECTION 6.4 Binding Obligations

This Agreement constitutes a legal, valid and binding obligation of such party, enforceable against such party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

SECTION 6.5 No Violation

The due execution, delivery and performance by it of this Agreement shall not (i) violate or result in a default under, (A) its articles or certificate of incorporation, memorandum and articles of association, by-laws, certificate of formation, limited liability company agreement, partnership agreement or other organizational documents, as applicable or (B) in the context of the transactions contemplated by this Agreement and the other Transaction Documents, any material indenture, agreement or instrument binding on it, (ii) result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement or instrument, except for any Lien that could not reasonably be expected to have a Material Adverse Effect or that arises under the Transaction Documents, or (iii) violate in any material respect any Law applicable to it or any of its properties.

SECTION 6.6 No Proceedings

There are no actions, suits or proceedings by or before any arbitrator or governmental authority pending against or, to its Knowledge, threatened against or affecting it (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse

 

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Effect, (ii) seeking to prevent the consummation of the purposes of this Agreement or the transactions contemplated hereby or (iii) that involve this Agreement.

SECTION 6.7 Licenses and approvals

No license, authorization or approval or other action by, and no notice to or filing with, any Governmental Authority is required for its due execution, delivery and performance of this Agreement or the transactions contemplated hereby, in each case, that has not been made or obtained other than registrations and notifications that are permitted to be obtained after the Lease Closing Date, which Servicer shall obtain or cause to be obtained within the statutorily prescribed timeframe.

SECTION 6.8 Software licenses

The execution and performance of the First Step Transfer Agreement and the Second Step Transfer Agreement do not infringe any licenses or other agreements for the use of the software connected to the Device.

ARTICLE VII

COVENANTS

At all times from the Lease Closing Date to the Final Settlement Date, unless Lessor shall otherwise consent in writing:

SECTION 7.1 Affirmative Covenants

(a) Reporting Requirements. Each Lessee will furnish to Lessor promptly following a request therefor, any documentation Lessor reasonably requests relating to such Lessee, the transactions contemplated hereby or the Lessee Collateral in order to comply with its obligations in relation to this Transaction, protect Lessor’s interest as contemplated by this Agreement or any other Transaction Document or to comply with applicable Law; provided, Lessees shall not be required to furnish any information to the extent that any Lessee has determined in good faith it is prohibited from furnishing such other information by any Law or a Contractual Obligation or because such information is Relevant Personal Data subject to Section 7.1(h) (Personal Data) (it being understood and agreed that this Section 7.1(a) (Reporting Requirements) shall not be applied to augment the periodic reporting obligations of Sprint under Section 4(e) of the Performance Support Agreement).

(b) Change in Accountants. Promptly after the occurrence thereof, notice of any change in the accountants of any Lessee.

(c) Preservation of Existence. Except as expressly permitted by Sections 5.2(h) or 5.2(i) of the Second Step Transfer Agreement, each Lessee shall (i) do all things necessary to remain duly organized, validly existing and qualified in good standing in its jurisdiction of organization, except where the failure to qualify or be in good standing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect and (ii) maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted,

 

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except where the failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(d) Compliance with Laws, Etc. Each Lessee shall comply with all applicable Laws, regulations and standards of all jurisdictions applicable to each party’s performance under this Agreement (including, without limitation, consumer protection requirements, the U.S. Foreign Corrupt Practices Act and international anti-money laundering laws applicable to it) except where the failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Lessees shall also comply with all applicable international export laws and sanctions regulations applicable to it with respect to the export of the Devices except where the failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(e) Keeping of Records and Books of Account. Lessees shall (and shall cause Servicer to) maintain and implement administrative and operating procedures (including an ability to recreate records evidencing Customer Receivables and any related contract in the event of the destruction of the originals thereof), and keep and maintain, all documents, books, computer tapes, disks, Records and other information reasonably necessary or advisable for the collection and administration of all Customer Receivables (including records adequate to permit the daily identification of each new Customer Receivable and all Collections of and adjustments to each existing Customer Receivable). Lessees shall give Lessor prompt notice of any material change in its administrative and operating procedures referred to in the previous sentence.

(f) Furnishing of Information. Subject to any limitation in Section 7.1(h) (Personal Data), Lessees shall furnish or cause to be furnished to Lessor from time to time such information with respect to the Customer Receivables and other Lessee Collateral as Lessor may reasonably request (it being understood and agreed that this Section 7.1(f) (Furnishing of Information) shall not be applied to augment or duplicate the reporting obligations of Servicer under the Servicing Agreement).

(g) Inspection of Records. Upon reasonable advance notice by Lessor to Lessees, Lessees shall, at any time and from time to time during regular business hours, as requested by Lessor permit Lessor, or its agents or representatives, at the expense of Lessees (provided that unless a Lease Event of Default shall have occurred and is continuing, Lessees shall not be responsible for the expense of any such inspections other than one inspection per year by Lessor) (i) to examine and make copies of and take abstracts from all books, records and documents (including computer tapes and disks) reasonably related to Lessee Collateral, including any related Customer Leases, and (ii) to visit the offices and properties of Lessees for the purpose of examining such materials described in clause (i), and to discuss matters reasonably related to the Customer Leases and Device Leases or Lessees’ performance hereunder, and under the other Transaction Documents to which any Lessee is a party, with any of the officers, directors, relevant employees or independent public accountants of the relevant Lessee having Knowledge of such matters. Subject to Section 20 (Confidential Information) of the MLS Intercreditor Agreement, Lessor and such agents and representatives shall be bound to treat any information received pursuant to this paragraph (g) as confidential.

 

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(h) Personal Data. Notwithstanding anything in any Transaction Document to the contrary, each Lessee shall ensure that no Relevant Personal Data is transmitted or delivered to, or otherwise received by, Lessor if such transmission, delivery or receipt would result in the violation by such Person of any Applicable Data Protection Laws or any Contractual Obligation; provided that, upon the request of Lessor at any time after a Lease Event of Default has occurred and is continuing, the relevant Lessee shall, in each case, at its own expense, co-operate, assist and otherwise take all necessary actions as may be required to ensure that all Relevant Personal Data is transferred to Lessor (or such other Person as Lessor may direct) in accordance with all applicable Law and any Contractual Obligations, including entering into any further deeds or documents which may be required to comply with any such legislation or regulations relating to data protection.

(i) Notification of Default. Lessees shall furnish to Lessor and Collateral Agent as soon as possible and in any event within two (2) Business Days after any Lessee obtains Knowledge of (A) the occurrence of any Lease Event of Default or Lease Default, a statement by an appropriate officer of the relevant Lessee setting forth details of such Lease Event of Default or Lease Default and the action which it proposes to take with respect thereto, which information shall be updated promptly from time to time; (B) any litigation, investigation, proceeding or fact or circumstance that may exist at any time between it and any Person that could reasonably be expected to result in a Material Adverse Effect or any litigation or proceeding to which it is a party relating to any Transaction Document, notice of such litigation, investigation or proceeding; and (C) the existence of a Material Adverse Effect, notice of such Material Adverse Effect.

(j) Audit. In relation to the administration of Devices and the Device Leases, Lessee shall upon reasonable advance notice provide access to its databases to Deloitte or another independent accounting firm selected by Lessor not more than twice a year, on a confidential basis, at the expense of Lessor, to confirm compliance in all material respects of certain procedures with respect to certain documents and records relating to the administration of Device, Customer and Customer Lease information, including without limitation the following:

(i) access to database to administer, among others, the identity, ownership, pricing and status of the Devices,

(ii) access to database to administer, among others, the name and contact details of the Customers, and control compliance with underwriting standards, compliance with relevant policies and laws, and

(iii) access to database to administer the existence and details of the Customer Leases.

SECTION 7.2 Negative Covenants

At all times from the Lease Closing Date to the Final Settlement Date, unless Lessor shall otherwise consent in writing:

(a) No Modification of a Device. Lessees will not, and will not permit, the Devices in its possession to be modified, altered or changed; provided, however, none of Lessees shall be

 

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responsible for any modifications, alterations or changes made by Customers or for any repairs made by a third-party maintenance provider on behalf of any Customer.

(b) No Modification of Customer Leases. Lessees shall not amend, waive or otherwise modify any term or condition of any Customer Lease, other than for the avoidance of doubt, any amendments, waivers and modifications made by Servicer in accordance with the Servicing Agreement or this Agreement.

(c) Change in Credit and Collection Policy or Business. Lessees shall not (i) make or consent to any change or amendment to the Credit and Collection Policy, other than for the avoidance of doubt, any changes or amendments made by Servicer in accordance with the Servicing Agreement and (ii) make any change in the character of their business.

(d) Dilution. No Lessee shall take any action or omit to take any action that is within the relevant Lessee’s control that would cause a Dilution (if taken by Servicer, any Sub-Servicer or any of their agents or representatives); provided that this Section 7.2(d) (Dilution) shall not limit Servicer’s ability to take actions and pay Dilutions under Section 2.9 (Termination of a Device Lease) or under the Servicing Agreement.

ARTICLE VIII

EXCLUSION OF LIABILITY; ACKNOWLEDGEMENT

SECTION 8.1 Exclusion of Liability

(a) To the full extent permitted by any applicable Law, each party excludes all express or implied terms, conditions and warranties other than those set out herein and in each Device Lease.

(b) Except as expressly provided for under the Transaction Documents, Lessor shall have no liability for:

(i) replacing the relevant Devices with the same or similar Devices, or paying the cost of replacing the relevant Devices, such obligation to remain at all times with the relevant Lessee under the relevant Customer Lease; or

(ii) repairing the relevant Devices or paying for their repair, such obligation to remain at all times with the relevant Lessee in accordance with the relevant Customer Lease.

(c) If the supplier or manufacturer of Devices has given Lessor warranties for those Devices then, to the full extent permitted by Law, Lessee or Servicer may during the Term make any claim on the supplier or manufacturer that Lessor could have made.

(d) Lessees shall not liable for any default or other underperformance by any Customer under its Customer Lease.

SECTION 8.2 Acknowledgments . Each Lessee acknowledges that:

 

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(a) it has not relied on Lessor’s skill or judgment in deciding to enter into any Device Lease;

(b) it has taken its own advice as to the taxation, accounting and financial consequences of entering into any Device Lease, and has not relied on Lessor in relation to any of these matters;

(c) it does not enter into any Device Lease as trustee of any trust or settlement;

(d) it alone is responsible for examining the Devices before accepting them and for satisfying itself of, among other things:

(i) their compliance with their description;

(ii) their condition, suitability and fitness for Lessee’s purposes; and

(iii) the validity of any supplier’s, manufacturer’s or dealer’s warranties or guarantees and entitlements to patents or other intellectual property rights;

(e) except for any representation, warranty or undertaking that may be implied by Law, Lessor has not made any representation, warranty or undertaking about the condition or quality of any Devices, their suitability or fitness for purpose, or their safety; and

(f) Lessor may (but is not obliged to) do anything which should have been done by a Lessee under a Device Lease but which Lessor considers the relevant Lessee has not done properly.

ARTICLE IX

COLLATERAL

SECTION 9.1 Granting Clause to Lessor. In order to secure the prompt and full payment and performance as and when due of any and all obligations and indebtedness of Lessees to Lessor under this Agreement, now existing or hereafter created, each Lessee hereby collaterally assigns to Lessor, and grants to Lessor a security interest, in, all of such Lessee’s right, title and interest in, to and under all personal property and other assets, whether now owned by or owing to, or hereafter acquired by or arising in favor of such Lessee, and regardless of where located (all of which will be collectively referred to as the “Lessee Collateral”), including:

(1) all Accounts;

(2) all Chattel Paper;

(3) all Copyrights, Patents and Trademarks;

(4) all Documents;

(5) all Equipment;

 

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(6) all Fixtures;

(7) all General Intangibles;

(8) all Instruments;

(9) all Inventory;

(10) all Investment Property;

(11) all cash or Cash Equivalents;

(12) all letters of credit, Letter-of-Credit Rights and Supporting Obligations;

(13) all Deposit Accounts (including the Servicer Collection Accounts);

(14) all Commercial Tort Claims (now or hereafter arising);

(15) all Customer Leases;

(16) the Transfer Agreements; and

(17) all accessions to, substitutions for and replacements, proceeds, insurance proceeds and products of the foregoing, together with all books and records, customer lists, credit files, computer files, programs, printouts and other computer materials and records related thereto and any General Intangibles at any time evidencing or relating to any of the foregoing.

SECTION 9.2 Granting Clause to Collateral Agent. Additionally, (i) each Lessee hereby grants to Collateral Agent a security interest in all of such Lessee’s right, title and interest in, to and under Servicer Collection Accounts and all proceeds of the foregoing and (ii) the Lessee Representative hereby grants to Collateral Agent a security interest in all of such Lessee Representative’s right, title and interest in, to and under Lessee Representative Account and all proceeds of the foregoing.

SECTION 9.3 UCC Financing Statements. Each Lessee authorizes Lessor to file, transmit, or communicate, as applicable, from time to time, Uniform Commercial Code financing statements, along with amendments and modifications thereto, in all filing offices reasonably selected by Lessor, listing the applicable Lessee as the debtor and Lessor as the secured party, and describing the collateral covered thereby in such manner as Lessor may elect, including using descriptions such as “all personal property of debtor” or “all assets of debtor” or words of similar effect, in each case without such Lessee’s signature. Each Lessee also hereby ratifies its authorization for Lessor to have filed in any filing office any financing statements filed prior to the date hereof.

SECTION 9.4 No Assumption of Liability. The Lien on Lessee Collateral granted hereunder is given as security only and shall not subject Lessor to, or in any way modify, any obligation or liability of Lessees relating to any Lessee Collateral.

 

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SECTION 9.5 Further Assurances. Promptly upon request, but not later than three Business Days thereafter, each Lessee shall deliver such instruments, assignments, or other documents or agreements, and shall take such actions, as Lessor reasonably deems appropriate under applicable Law to evidence or perfect its Lien on any Lessee Collateral, or otherwise to give effect to the intent of this Agreement.

SECTION 9.6 Power of Attorney. In addition to all of the powers granted to Lessor in this Article IX, each Lessee hereby appoint and constitute Lessor as such Lessee’s attorney-in-fact to sign Lessee’s name on any of documents, instruments and other item consistent with the terms of this Agreement and the other Sprint Transaction Documents which Lessor may deem necessary or advisable to accomplish the purposes hereof (but Lessor shall not be obligated to and shall have no liability to any Lessee or any third party for failure to so do or take action), and, upon the occurrence and during the continuance of a Lease Event of Default, (i) to convey any item of Lessee Collateral to any purchaser thereof and (ii) to make any payment or take any act necessary or desirable to protect, collect or preserve any Lessee Collateral. Lessor’s authority hereunder shall include, without limitation, the authority to execute and give receipt for any certificate of ownership or any document, to transfer title to any item of Lessee Collateral and to take any other actions arising from or incident to the powers granted to Lessor under this Agreement. This power of attorney is coupled with an interest and is irrevocable.

ARTICLE X

TAXES

SECTION 10.1 Consistency of Treatment. Lessor, Servicer, and Lessees acknowledge and agree, for all U.S. federal, state and local income tax purposes, the parties intend (i) to treat the Cash Purchase Price under the Second Step Transfer Agreement at closing as amounts loaned by Lessor for which the Devices provide security, and to treat the Rental Payments payable to Lessor under the Device Leases created by this Agreement and each Device Lease Schedule as payments on such indebtedness owed to the Lessor, and (ii) not to treat such Leases as “true leases” or treat the Lessor as the owner of the Devices. The Lessor, Servicer, and Lessees agree not to take any position on any federal state or local income tax return or filing that is inconsistent with the previous sentence unless, after the Lease Closing Date, a Change in Law occurs and, as confirmed by an Opinion of Counsel and after consultation in good faith with Lessor, Servicer and Lessees and their respective tax advisors, there is no substantial authority, within the meaning of Section 6662 of the Code, for such treatment, or there is a Final Determination of such treatment.

SECTION 10.2 Taxes. The Lessees will be responsible for Taxes with respect to the Device Leases as provided in the Tax Services Agreement.

SECTION 10.3 Payments. All payments made, or deemed made, pursuant to this Agreement shall be made free and clear of, and without deduction for, any Taxes except to the extent required by applicable law. Prior to withholding any Taxes other than Lessee Covered Taxes from any payment hereunder, Lessee(s) and/or Servicer shall consult with Lessor in good faith as to the withholding to be made.

 

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SECTION 10.4 Gross Up. If a withholding or deduction of Lessee Covered Taxes is required by law, with respect to any payment made to Lessor under a Device Lease during the Term of such Device Lease, Servicer and/or relevant Lessee(s) shall:

(a) withhold or deduct the required amount from the covered payment;

(b) pay (or procure the payment of) directly to the relevant authority the full amount required to be so withheld or deducted;

(c) promptly forward to the recipient, with a copy to Lessor, an official receipt or other documentation reasonably satisfactory to Lessor evidencing such payment to such authority; and

(d) pay (or procure the payment of) to Lessor such additional amount or amounts as is necessary to ensure that the net amount actually received by Lessor will equal the full amount Lessor would have received had no such withholding or deduction of Lessee Covered Taxes been required.

SECTION 10.5 Non-Duplication. The parties acknowledge that Lessor (and its Members) have entered into the Tax Services Agreement with Servicer and Sprint and that such agreement addresses matters covered by this Agreement, and, specifically, provides an indemnity to Lessor for Lessee Covered Taxes. The Parties agree that indemnities calculated in respect of the Tax Services Agreement shall take into account any gross-up made under Section 10.4 (Gross Up) to the extent required to avoid duplication.

ARTICLE XI

MISCELLANEOUS

SECTION 11.1 Amendments, etc.

No amendment or other modification of any provision of this Agreement shall be effective unless the same shall be in writing and signed by the parties hereto. No waiver of an obligation of any party hereto shall be effective unless in writing and signed by the other parties hereto.

SECTION 11.2 No Waiver

No failure on the part of any party hereto to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies provided by Law.

SECTION 11.3 Notices

Section 21 (Notices) of the MLS Intercreditor Agreement is incorporated into this Agreement by way of reference.

 

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SECTION 11.4 Data File

The parties agree that the Data File to be delivered on or about the Lease Closing Date shall become integral part of this Agreement on the Lease Closing Date.

SECTION 11.5 Binding Effect

The parties to this Agreement may not assign any rights under this Agreement, except with the consent of the other parties to this Agreement except Lessor may collaterally assign its rights under this Agreement for the benefit of the Finance Parties.

SECTION 11.6 Third Party Rights

This Agreement shall, to the extent provided herein, inure to the benefit of the Finance Parties. Each party hereto acknowledges that Lessor’s rights under this Agreement may be assigned to Collateral Agent and consents to such assignment and to the exercise of those rights directly by Collateral Agent.

SECTION 11.7 Execution in Counterparts; Integration

This Agreement may be executed in any number of counterparts and by the different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same Agreement. Executed counterparts may be delivered electronically. This Agreement, together with the other Transaction Documents, contains a final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire understanding among the parties hereto with respect to the subject matter hereof, superseding all prior oral or written understandings with respect hereto.

SECTION 11.8 Governing Law

THIS AGREEMENT AND THE DEVICE LEASES SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, BUT WITHOUT REGARD TO ANY OTHER CONFLICT OF LAWS PROVISIONS THEREOF).

SECTION 11.9 Waiver of Jury Trial

EACH PARTY HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, THE DEVICE LEASES, ANY OTHER TRANSACTION DOCUMENT OR UNDER ANY AMENDMENT, INSTRUMENT OR DOCUMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT A JURY.

 

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SECTION 11.10 Consent to Jurisdiction; Waiver of Immunities

EACH PARTY HERETO HEREBY ACKNOWLEDGES AND AGREES THAT:

(a) 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 CITY, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, (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.

(b) 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 11.11 No Proceedings

The provisions of Section 24.2 (No Proceedings against MLS) of the MLS Intercreditor Agreement shall apply as if fully set forth herein.

SECTION 11.12 Severability

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.

 

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SIGNATURE PAGE (MASTER LEASE AGREEMENT)

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized signatories as of the day and year first above written.

 

This is Counterpart No. [    ] of a total of 5 counterparts. Only Counterpart No. 1 shall be considered chattel paper for purposes of the Uniform Commercial Code and a security interest may be perfected only by Counterpart No.1.

 

 

[S-1 Signature Page to the Master Lease Agreement]

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This is Counterpart No. [    ] of a total of 5 counterparts. Only Counterpart No. 1 shall be considered chattel paper for purposes of the Uniform Commercial Code and a security interest may be perfected only by Counterpart No.1.

 

[S-2 Signature Page to the Master Lease Agreement]

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This is Counterpart No. [    ] of a total of 5 counterparts. Only Counterpart No. 1 shall be considered chattel paper for purposes of the Uniform Commercial Code and a security interest may be perfected only by Counterpart No.1.

 

[S-3 Signature Page to the Master Lease Agreement]

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This is Counterpart No. [    ] of a total of 5 counterparts. Only Counterpart No. 1 shall be considered chattel paper for purposes of the Uniform Commercial Code and a security interest may be perfected only by Counterpart No.1.

 

[S-4 Signature Page to the Master Lease Agreement]

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This is Counterpart No. [    ] of a total of 5 counterparts. Only Counterpart No. 1 shall be considered chattel paper for purposes of the Uniform Commercial Code and a security interest may be perfected only by Counterpart No.1.

 

[S-5 Signature Page to the Master Lease Agreement]g

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APPENDIX A

DEFINITIONS

“1934 Act” means the Securities Exchange Act of 1934;

“Account Bank” has the meaning given to that term in the Servicing Agreement;

“Account Control Agreement” has the meaning given to that term in the Servicing Agreement;

“Actual Repair Costs” means the amounts specified in Schedule 6 (Repair Costs) or any updated amounts provided by the Lessee Representative from time to time reflecting the actual repair costs generally charged by Sprint for repairs of the Eligible Devices;

“Affiliate” means, with respect to any Person, another Person that, directly or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified; provided, however, for purposes of the Sprint Transaction Documents, neither Brightstar nor any of its Subsidiaries shall be considered Affiliates of any Sprint Party;

“Agreed Schedule Information” means, with respect to a Device Lease:

 

(a)	a description of the Devices to be subject to such Device Lease;

 

(b)	the Device Lease Commencement Date;

 

(c)	the Scheduled Customer Lease Term;

 

(d)	the Device Lease Expiration Date;

 

(e)	the Device Lease Payment Dates;

 

(f)	the Rental Payments due under the Device Lease; and

 

(g)	the Device Residual Values for each Device subject to the Device Lease.

“Agreed Start-Up Costs” means all costs and expenses which Lessor is responsible to pay in the amount agreed between the Lessor and the relevant provider of services;

“Agreement” has the meaning given to that term in the preamble of this Agreement;

“Applicable Data Protection Law” means all relevant provisions of the Data Protection Act 1998 and any other applicable data protection legislation, guidelines and industry standards (to the extent applicable) in the jurisdictions from which and to which the relevant Services are to be performed;

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“Approved Devices” means each of the devices listed on the Schedule of Approved Devices as the same may be updated and amended from time to time in accordance with Section 2.6 (Approved Devices) of this Agreement;

“Bankruptcy Code” means Title 11 of the United States Code;

“Brightstar” means Brightstar Corp., a Delaware corporation;

“Business Day” means a day other than Saturday or Sunday on which commercial banks in New York City, New York are not authorized or required to be closed for business;

“Cash Equivalents” means, as at any date of determination, any of the following: (a) marketable securities (i) issued or directly and unconditionally guaranteed as to interest and principal by the United States Government or (ii) issued by any agency of the United States the obligations of which are backed by the full faith and credit of the United States, in each case maturing within one year after such date; (b) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof, in each case maturing within one year after such date and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moody’s; (c) commercial paper maturing no more than three months from the date of creation thereof and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moody’s; (d) certificates of deposit or bankers’ acceptances maturing within three months after such date and issued or accepted by any commercial bank organized under the laws of the United States of America or any state thereof or the District of Columbia that (i) is at least “adequately capitalized” (as defined in the regulations of its primary Federal banking regulator) and (ii) has Tier 1 capital (as defined in such regulations of not less than $1,000,000,000; and (e) shares of any money market mutual fund that (i) has substantially all of its assets invested continuously in the types of investments referred to in clauses (a) and (b) above, (ii) has net assets of not less than $5,000,000,000, and (iii) has the highest rating obtainable from either S&P or Moody’s;

“Cash Purchase Price” has the meaning given to that term in the Second Step Transfer Agreement;

“Change in Law” means any amendment to or change in the Tax laws (or any regulations or rulings thereunder) of a jurisdiction or any political subdivision thereof, or any amendment or change in the administrative or judicial interpretation of such laws, which becomes legally effective with respect to the relevant documents or transactions, and which occurs or is announced after the date of this Agreement. For the purpose of this definition “change” includes the introduction of a new law or interpretation, but does not include as of any date a proposal that is not effective;

“Change of Control” means the occurrence of any of the following:

 

(a)	SoftBank ceases to own (directly or indirectly) more than 50% of the Voting Securities of Sprint;

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(b)

the occurrence of any of the following: (i) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of Sprint’s and its Subsidiaries’ properties or assets, taken as a whole, to any “person” (as that term is used in Section 13(d)(3) of the 1934 Act) other than to one or more Permitted Holders or (ii) the adoption of any plan relating to Sprint’s liquidation or dissolution;

 

(c)	Sprint shall cease to own (directly) 100% of the Voting Securities of SCI;

 

(d)	SCI shall cease to own (directly or indirectly) 100% of the Voting Securities of Sprint Spectrum and each Originator; or

 

(e)	Sprint shall cease to own (directly or indirectly) 100% of the Voting Securities of Lessees;

“Collateral Agent” has the meaning given to that term in the preamble of this Agreement;

“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound which has been entered into in good faith;

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise, and “Controlling” and “Controlled” have meanings correlative thereto;

“Copyrights” shall mean, with respect to any Lessee, all of such Lessee’s right, title and interest in and to all works of authorship and all intellectual property rights therein, all United States and foreign copyrights (whether or not the underlying works of authorship have been published), including but not limited to copyrights in software and databases, all designs (including but not limited to all industrial designs, “Protected Designs” within the meaning of 17 U.S.C. 1301 et. Seq. and Community designs), and all “Mask Works” (as defined in 17 U.S.C. 901 of the U.S. Copyright Act), whether registered or unregistered, and with respect to any and all of the foregoing: (i) all registrations and applications for registration thereof, (ii) all extensions, renewals and restorations thereof, (iii) all rights to sue or otherwise recover for any past, present and future infringement or other violation thereof, (iv) all proceeds of the foregoing, including, without limitation, license fees, royalties, income, payments, claims, damages and proceeds of suit now or hereafter due and/or payable with respect thereto, and (v) all other rights of any kind accruing thereunder or pertaining thereto throughout the world;

“Credit and Collection Policy” has the meaning given to that term in the Servicing Agreement;

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“Customer” means the “lessee” of a Device under a Customer Lease and an obligor on a related Customer Receivable;

“Customer Lease” means a contract originally entered into between an Originator and a Customer, in substantially the form attached as Schedule 3 of this Agreement;

“Customer Lease-End Rights and Obligations” has the meaning given to that term in the Second Step Transfer Agreement;

“Customer Receivable” means all rental and other payment obligations of a Customer under the relevant Customer Lease attributable to any date on or after the Lease Closing Date;

“Data File” means the Adobe Acrobat pdf-file in read-only format with file name “Device Lease Schedule.pdf” on a CD ROM identified and agreed to by Lessees and Lessor on the Lease Closing Date;

“Defaulted Customer Receivable” means any Customer Receivable as to which any payment or any part thereof, is charged off, remains unpaid for more than sixty (60) days or for which any Lessee or Servicer has any Knowledge that the Customer thereon is subject to an Insolvency Event;

“Defaulted Device Return” means (a) the failure by a Customer to timely return a Device pursuant to the terms of the Customer Lease on or prior to the Required Return Date therefor and such Customer’s Customer Lease represents a Defaulted Customer Receivable; or (b) the return of a Device by a Customer not in the Device Return Condition;

“Delinquent Receivables” means any Customer Receivable that is considered in collections pursuant to the Credit and Collections Policy, provided, that upon such Customer Receivable being written off in accordance with the Credit and Collections Policy, such Customer Receivable shall not be considered a Delinquent Receivable;

“Device” means a mobile wireless handset that is subject to a Device Lease at the time such handset is initially acquired by Lessor;

“Device Lease” has the meaning given to that term under Section 2.1(a) (Agreement to Lease) of this Agreement;

“Device Lease Commencement Date” means with respect to a Device Lease, the commencement date of such Device Lease as specified in the relevant Device Lease Schedule;

“Device Lease Early Termination Amount” means with respect to a Device under a Device Lease that has been terminated prior to the end of the Term, an amount equal to the sum of (a) any previously unpaid Rental Payments, (b) the Rental Payments that would have accrued under such Device Lease during the remainder of such Scheduled

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Device Lease Term plus (b) the Device Residual Value of such Device as of the Expected Sales Date of such Device;

“Device Lease Expiration Date” means with respect to a Device Lease, the scheduled expiration date of such Device Lease as set forth in the relevant Device Lease Schedule;

“Device Lease Payment Date” means the last Business Day of a calendar month unless otherwise provided in the Device Lease Schedules;

“Device Lease Schedule” means a schedule substantially in the form of Schedule 1 to this Agreement and included in the Data File;

“Device Repurchase Agreement” means the Device Repurchase Agreement, dated as of the date hereof and effective as of the Lease Closing Date, between the Originators and Lessor;

“Device Residual Value” means the device residual value as set forth in Schedule 2 (Device Residual Values);

“Device Return Condition” means with respect to a Device, the return conditions described below:

 

(a)	such Device is fully functional with no technical problems, with only reasonable wear and tear due to normal use.

 

(b)	Functional Criteria

 

(i)

such Device must be in a standard “working” condition, able to charge and power on and perform all core functions; and

 

(ii)

such Device has no activation locks (i.e. not network or iCloud locked); and

 

(iii)

Customer data must be cleared; and

 

(iv)

such Device’s LCD display must be functional with no visible damage; and

 

(v)

such Device’s external ports and buttons are free from damage, and are fully functional.

 

(c)	Cosmetic Criteria

 

(i)

such Device may have scratches on the front glass; provided that each scratch is reasonably consistent with normal use and are less than 50mm in length and 2mm in width, but no cracks on the front glass; and

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(ii)

such Device may have unlimited scratches on housing; provided that each scratch is reasonably consistent with normal use and are less than 80mm in length and 2mm in width; and

 

(iii)

such Device housing may have reasonable dents associated with normal wear, but no cracks; and

 

(iv)

such Device does not have any missing parts that would render it unfit to function; and

 

(v)

such Device’s external liquid indicators may be tripped but there must be no visible water damage or corrosion.

“Device Return Address” means the following address:

 

(a)	Mobile Leasing Solutions, LLC, Dept 5001, 1950 USG Drive, Libertyville, IL 60048; or

 

(b)	any other address in the continental United States that Lessor designates by written notice to Lessees and Servicer;

“Dilution” means a reduction in the Unpaid Balance attributable to any modification of any Customer Lease by Servicer (or any Sub-Servicer or any agent or representative of either thereof) after the contribution thereof to the relevant Lessee, any non cash items including credits, rebates, billing errors, cash discounts, volume discounts, allowances, disputes, set offs, counterclaims, charge-backs, returned or repossessed goods, sales and marketing discounts, warranties, any unapplied credit memos and other adjustments that are made in respect of a Customer Lease and shall include, but not be limited to, circumstances in which Servicer (or any Sub-Servicer or any agent or representative of either thereof):

 

(a)

specifies (including by posting to its website) a purchase option price for a Device less than the fair market value notified by Lessor in writing to any Sprint Party upon request in accordance with Section 5.3(f) (Fair Market Value under Customer Leases for Devices) of the Second Step Transfer Agreement;

 

(b)	forgives or reduces prior to the expiry of the Scheduled Customer Lease Term, any monthly Customer Receivable, retrospectively or prospectively, in the monthly invoice or otherwise, to an amount which is lower than that set out in the Data File;

 

(c)	reduces, after the expiry of the Scheduled Customer Lease Term, a monthly Customer Receivable to an amount less than the monthly Customer Receivable payable during the Scheduled Customer Lease Term;

 

(d)	modifies the rental payments, or any other payment amount or obligation of a Customer, or the timing thereof, in a manner that is economically less favorable to Lessor;

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(e)	charges a customer for repairs in an amount less than the Actual Repair Costs;

 

(f)	charges a customer for unreasonable wear and tear in an amount less than the Actual Repair Costs;

 

(g)	discontinues the leasing program and forgives the Customer any or all remaining rental payments under any Customer Lease; and

 

(h)	agrees to the terms of a return that are less favorable to Lessor than as set out in the returns policy at www.sprint.com/returns (as in existence on the Lease Closing Date);

“Eligible Devices” means Apple: (a) iPhone 6 16 GB all colours; (b) iPhone 6 64 GB, all colours; (c) iPhone 6 128 GB, all colours; (d) iPhone 6 Plus 16 GB all colours; (e) iPhone 6 Plus 16 GB all colours; and (e) iPhone 6 Plus 128 GB, all colours;

“Eligible Leases” means as of any date of determination, a Customer Lease:

 

(a)

(i) which represents the lease of goods initially leased by an Originator and the Customer Receivables in respect of which are billed to the related Customer in the ordinary course of business, (ii) with respect to which (x) all obligations of the Originator in connection with which have been fully performed, and (y) not more than thirty-one (31) days have passed since such Customer Receivable was billed to the related Customer, (iii) the Customer Receivables with respect to which, no portion is in respect of any amount as to which the related Customer is permitted to withhold payment until the occurrence of a specified event or condition, (iv) the Customer Receivables with respect to which, is not owed to any Originator or any Lessee as a bailee or consignee for another Person, and (v) the Customer Receivables with respect to which, is not issued under cash-in-advance or cash-on-account terms;

 

(b)	which constitutes either “chattel paper”, “electronic chattel paper” or an “account” as defined in Section 9-102(a) of the UCC;

 

(c)	which is not a Defaulted Customer Receivable or a Delinquent Receivable;

 

(d)	under which the Customer is not a Governmental Authority; provided, that any Customer Lease under which the lessee is a Governmental Authority but employee of such Governmental Authority is personally liable for the Customer Receivables related to such Customer Lease shall be an “Eligible Lease”;

 

(e)	the transfer of which pursuant to the Transfer Agreements does not violate or contravene any Law or any related Transaction Document;

 

(f)	which is denominated and payable only in U.S. Dollars in the United States to any Sprint Party;

 

(g)	that (i) is in full force and effect and constitutes the legal, valid and binding obligation of the related Customer to pay lease payments and other amounts to a

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Sprint Party enforceable against such Customer in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or similar laws relating to and limiting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or in law), (ii) is not subject to any dispute, offset, netting, litigation, counterclaim or defense whatsoever (including defenses arising out of violations of usury Laws) (other than potential discharge in a bankruptcy of the related Customer), (iii) is not subject to any Lien (other than Permitted Device Liens), and (iv) the Unpaid Balance of which is not subject to reduction, cancellation, setoff, special refunds or credits for any reason, including without limitation as a result of defective or rejected goods;

 

(h)

that does not contravene any Law applicable thereto (including Laws relating to usury, consumer protection, truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy) in any respect which could, individually or in the aggregate, reasonably be expected to have a material adverse effect on the validity, collectability or enforceability of the related Customer Receivable or would or could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect and with respect to which the origination thereof did not violate any such Law in any such respect;

 

(i)

which (i) was originated by the applicable Originator in the ordinary course of its business, (ii) satisfies the requirements of the Credit and Collections Policy in all material respects and (iii) has been acquired by the applicable Lessee from its Related Originator pursuant to and in accordance with the terms of the First Step Transfer Agreement;

 

(j)	the Customer under which is not (i) the Lessor or any of the Members, or (ii) Sprint, any Originator, the Servicer or a Subsidiary of any of them or identified on Sprint’s or the Servicer’s records as an employee of Sprint, the Servicer of any of their respective Subsidiaries;

 

(k)	the Customer under which is not a Sanctioned Person;

 

(l)	the Customer under which is required to make payments no less frequently than monthly under such Customer Lease;

 

(m)

the Customer under which is either (i) a Customer of an Originator or any of its Affiliates (prior to the transfer of the Customer Lease to the relevant Lessee) is a Prime Customer, or (ii) a Customer of an Originator or any of its Affiliates (prior to the transfer of the Customer Lease to the Lessee) is a Near Prime Customer;

 

(n)	arose under an Customer Lease which (i) is substantially in the form of Schedule 4 (Customer Leases) hereto; and (ii) relates to a Eligible Device which is compatible with market technology and service platforms;

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(o)	the Customer under which is an active paying subscriber of Sprint’s or any of its Affiliates’ wireless services;

 

(p)

(i) that (A) has been outstanding beyond the date that is one payment after the origination date of such Customer Lease or (B) the Customer under which has been an active paying subscriber of Sprint’s or any of its Affiliates’ wireless services for a minimum of thirteen (13) months immediately before the origination date of such Customer Lease;

 

(q)	the Customer under which has not elected to participate in the iPhone Forever Program;

 

(r)	all sales taxes to be paid in connection with the origination of such Customer Receivable have been fully paid or will be scheduled to be fully paid upon payment of installments on such Customer Lease to the extent required by applicable Laws;

 

(s)	the Customer Receivable with respect to which, as of any date of determination, is not a Non Lock-Box Receivable (as defined in the Servicing Agreement) comprising any part of any amount in excess of 6.00% of the Unpaid Balance of all Customer Receivables; and

 

(t)

which, as of any date of determination when aggregated with all other Customer Leases no Customer’s aggregate Unpaid Balance for all such Customer’s Customer Leases exceeds 1.00% of the aggregate balance of the Unpaid Balance of all Eligible Leases, provided, that in the case of a Customer having one or more Affiliate Customers, all such Customers shall be considered a single Customer;

“Expected Sales Date” means, with respect to a Device, the expected sale date of such Device as of the commencement of the Device Lease, in each case, as specified in the relevant Device Lease Schedule;

“Final Determination” means the final resolution of liability for any Lessee Covered Tax, for any issue and for any taxable period, by or as a result of (i) IRS Form 870-AD (or any similar or successor IRS form) or a comparable form under any state, local or foreign law on the date of acceptance by or on behalf of the relevant Tax Authority, except that a Form 870-AD or comparable form that reserves the right of the taxpayer to file a claim for refund and/or the right of the Tax Authority to assert a further deficiency shall not constitute a Final Determination with respect to the item or items so reserved, (ii) a final decision, judgment, decree or other order by any court of competent jurisdiction that can no longer be appealed or reheard (except that a decision of a U.S. Court of Appeals or highest state court shall be considered final notwithstanding the possibility of an application for a writ of certiorari can be made to the U.S. Supreme Court, unless such a writ has been applied for and granted), (iii) a closing agreement or similar agreement entered into with a Tax Authority in connection with an administrative or judicial proceeding, (iv) an allowance of a refund or credit in respect of an overpayment of Tax, but only after the expiration of all periods of limitations during which such refund or credit may be recovered by the jurisdiction imposing the Tax, (v)

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any other final resolution, including by reason of the expiration of the applicable period of limitations or the execution of a pre-filing agreement with the applicable Tax Authority, or (vi) the occurrence of any event which the parties agree in writing is a Final Determination;

“Final Settlement Date” means 28 February 2018 unless, Lessees, Lessor, the Senior Agent (to the extent any Senior Loans are outstanding) and the Senior Subordinated Loan Creditor (to the extent any Senior Subordinated Loans are outstanding) agree on a different date;

“Finance Parties” has the meaning given to that term in the Servicing Agreement;

“First Step Transfer Agreement” means the First Step Transfer Agreement, dated as of the date hereof and effective as of the Lease Closing Date among Lessees and each other Person party thereto as an Originator;

“GAAP” means, generally accepted accounting principles in the United States of America;

“Governmental Authority” means any federal, state, regional or local government or political subdivision thereof and any Person exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government;

“Grade A” means with respect to a Device, such Device is like new.

“Grade B” means with respect to a Device, such Device is fully functional with no technical problems, but does not satisfy Grade A.

“Guarantor” means Sprint;

“Incremental Rate” has the meaning given to that term in Schedule 5 (Additional Information);

“Insolvency Event” shall be deemed to have occurred with respect to a Person if either:

(a) (i) a case or other proceeding shall be commenced, without the application or consent of such Person, in any court, seeking the liquidation, reorganization, debt arrangement, dissolution, winding up, or composition or readjustment of debts of such Person, the appointment of a trustee, receiver, custodian, liquidator, assignee, sequestrator (or other similar official) for such Person or all or substantially all of its assets, or any similar action with respect to such Person under any Law relating to bankruptcy, insolvency, reorganization, winding up or composition or adjustment of debts, and such case or proceeding shall continue unstayed or undismissed for a period of sixty (60) days; or (ii) an order for relief in respect of such Person shall be entered in an involuntary case under federal bankruptcy laws or other similar Laws now or hereafter in effect; or

(b) such Person (i) shall commence a voluntary case or other proceeding under any applicable bankruptcy, insolvency, reorganization, debt arrangement, dissolution or other similar Law now or hereafter in effect, (ii) shall consent to the appointment of or taking

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possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) for, such Person or for any substantial part of its property, or (iii) shall make any general assignment for the benefit of creditors, or shall fail to, or admit in writing its inability to, pay its debts generally as they become due, or, if a corporation or similar entity, its board of directors (or any board or Person holding similar rights to control the activities of such Person) shall vote to implement any of the foregoing;

“iPhone Forever Program” means the program offered by the Originators or the Servicer pursuant to which a Customer may, if such Customer has agreed to participate in such program upon entering into the relevant Customer Lease, in consideration for making a specified additional monthly payment with respect to such Customer Lease, elect to trade in the Device subject to such Customer Lease upon the manufacturer of such Device releasing an upgraded version of such Device;

“Knowledge” means, with respect to any Person (other than an individual) as to any event or circumstance, the actual knowledge of a Responsible Officer of such Person (without independent investigation or inquiry and without imputing to such Responsible Officer the knowledge of any third party) or receipt by such Person of written notice of such event or circumstance;

“Laws” means, collectively, all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law;

“Lease Closing Date” means the date on which all conditions precedent pursuant to Article V (Conditions precedent) have been satisfied or waived;

“Lease Default” means an event or circumstance which, after the giving of notice or lapse of time, or both, would become a Lease Event of Default;

“Lease Event of Default” has the meaning given to that term under Section 3.1 (Lease Events of Default) of this Agreement;

“Lessee” has the meaning given to that term in the preamble of this Agreement;

“Lessee Collateral” has the meaning given to that term under Section 9.1 (Granting Clause to Lessee) of this Agreement;

“Lessee Covered Taxes” has the meaning given that term under the Tax Services Agreement;

“Lessee Indemnitee” has the meaning given to that term under Section 4.1(a) (Indemnities) of this Agreement;

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“Lessee Representative” has the meaning given to that term under the Second Step Transfer Agreement;

“Lessee Representative Account” has the meaning given to that term under the Servicing Agreement;

“Lessor” has the meaning given to that term in the preamble of this Agreement;

“Lessor’s Liens” means (a) any Lien arising out of a voluntary or involuntary transfer by Lessor of any of its rights, title or interest in the Devices or the Device Leases (other than (i) this Lease or any Transaction Document, (ii) any transfer to any Lessee, as a result of an Event of Default or in connection with the exercise by the relevant Lessee of any rights or options under the Transaction Documents or (iii) any Lien arising by, through or under any Lessee) or (b) any Lien of any Person arising by, through or under Lessor, not based upon or relating to the the Transaction Documents or the transactions contemplated thereby;

“Liabilities” has the meaning given to that term under Section 4.1(a) (Indemnities) of this Agreement;

“Lien” means any mortgage, deed of trust, pledge, security interest, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever, including any conditional sale or other title retention agreement and any financing lease having substantially the same economic effect as any of the foregoing;

“Like-Kind Exchange” means, with respect to a Customer Lease, an exchange of a Device pursuant to which the replacement Device is a Type of Device that is currently an Approved Device that satisfies the Device Return Condition, is the same Type (or a Type with a higher Device Residual Value) as the exchanged Device, and with respect to which the scheduled Customer Receivables under the modified Customer Lease are not less in amount, frequency and number than under the Customer Lease immediately prior to such modification;

“Like-Kind Exchange Device means a replacement Device subject to a Like-Kind Exchange;

“Logistics Services Provider” has the meaning given to that term under the Servicing Agreement;

“Material Adverse Effect” means, with respect to any event or circumstance, a material adverse effect on:

 

(a)

if a particular Person is specified, (i) the ability of such Person to perform its obligations under any Transaction Document to which it is a party or (ii) if a particular Person is not specified, the ability of any Originator, Servicer, any Lessee or Sprint to perform its obligations under the Transaction Document to which it is a party;

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(b)	(i) the validity or enforceability of any Sprint Transaction Document or (ii) the value, validity, enforceability or collectability of any material portion of Lessee Collateral; or

 

(c)	the status, existence, perfection, priority, enforceability or other rights and remedies of Collateral Agent or Lessor associated in respect of its interest in Lessee Collateral;

“Members” means SBLS HD US, Inc. and JPLS HD US, Inc.;

“MLS Collection Account” means the account notified by the Lessor in writing to Servicer, Lessees and Collateral Agent;

“MLS Intercreditor Agreement” means the Intercreditor Agreement dated on or about the Lease Closing Date among the Lessee Representative, the Senior Agent, the Senior Subordinated Loan Creditor, Lessor and the other parties thereto;

“Near Prime Customer” means any Customer under a Customer Lease that was not a Prime Customer as of the date of origination of such Customer Lease, and which (i) has a credit class designation of “Q2”, “H1”, “S5” or “T4”, or any equivalent credit class as set forth in the Credit and Collection Policies, and (ii) required a down payment of less than 35% of the device manufacturer’s suggested retail price, by the internal scoring system of the Servicer or an Originator;

“Nominated Agent” means, with respect to a Party, a Person appointed to act as that Party’s agent with respect to that Party’s obligations and rights under the Transaction Documents;

“Non-Return Remedies” has the meaning given to that term under Section 2.12(b) (Non-Return Remedies) of this Agreement;

“Non-Return Remedies Commencement Date” means:

 

(a)	in relation to a non-payment of any amount due under a Customer Lease, the date on which Servicer suspends service to the relevant Customer in accordance with the Credit and Collection Policies;

 

(b)	in relation to Device that is Non-Returned Device pursuant to Section (a) of the definition of Defaulted Device Returns, the Required Return Date therefor; and

 

(c)	in relation to a Device that, following its return did not satisfy the Device Return Condition, the date on which the Device was returned to a Sprint Party;

“Non-Returned Device” means any Device that is subject to a Defaulted Device Return;

“Opinion of Counsel” means the written opinion of a nationally or internationally recognized counsel that is selected by a Party to decide questions of law raised by Transaction Documents;

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“Originators” has the meaning given to that term under the First Step Transfer Agreement;

“Party” and “Parties” means with respect to any Transaction Document, each party to the relevant agreement;

“Patents” shall mean, with respect to any Lessee, all of such Lessee’s right, title and interest in and to all patentable inventions and designs, all United States, foreign, and multinational patents, certificates of invention, and similar industrial property rights, and applications for any of the foregoing, including, without limitation, (i) all reissues, substitutes, divisions, continuations, continuations-in-part, extensions, renewals, and reexaminations thereof, (ii) all inventions and improvements described and claimed therein, (iii) all rights to sue or otherwise recover for any past, present and future infringement or other violation thereof, (iv) all proceeds of the foregoing, including, without limitation, license fees, royalties, income, payments, claims, damages, proceeds of suit and other payments now or hereafter due and/or payable with respect thereto, and (v) all other rights accruing thereunder or pertaining thereto throughout the world;

“Performance Support Agreement” means the Performance Support Agreement, dated as of the date hereof and effective as of the Lease Closing Date, between Sprint and Lessor;

“Performance Support Provider” means Sprint;

“Permitted Device Liens” means

 

(a)	Liens arising pursuant to any Transaction Document;

 

(b)	Liens of Customers under the Customer Leases;

 

(c)	Lessor’s Liens;

 

(d)

Liens for taxes not yet due or that are being contested in good faith by appropriate proceedings diligently conducted and inchoate materialmen’s, mechanic’s, workmen’s, repairmen’s, employee’s, or other like Liens arising in the ordinary course of business of Lessee for sums not yet due or that are being contested in good faith by appropriate proceedings diligently conducted, provided that adequate reserves with respect thereto are maintained in conformity with GAAP; and

 

(e)	any customary rights of setoff, revocation, refund or chargeback and, as applicable, statutory or common law liens, in each case, of any Account Bank under the applicable Account Control Agreement.

“Permitted Holder” means SoftBank and its Affiliates;

“Person” means a natural individual, partnership, sole proprietorship, limited liability company, corporation (including a business trust), joint stock company, trust,

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unincorporated association, joint venture, Governmental Authority or any other entity of whatever nature;

“Present Value Device Lease Amount” means an amount equal to the sum of (a) all previously accrued and unpaid Rental Payments plus (b) the remaining Rental Payments that would have accrued during the remainder of the Scheduled Device Lease Term discounted to present value at the Incremental Rate;

“Prime Customer” means any Customer that was categorized as “Prime” by the internal scoring system of the Servicer or an Originator as of the date of origination of the relevant Customer Lease or had graduated to such status as of Lease Closing Date;

“Protected Customers” means any current or former Customer that (i) is or has been subject to protections under the Servicemembers Civil Relief Act (the “SCRA”), but only with respect to, and to the extent of, Customer Receivables that are subject to the protections of the SCRA, or (ii) is a debtor in a bankruptcy proceeding, to the extent that the automatic stay applies to such debtor’s Customer Receivables under Section 362 of the Bankruptcy Code;

“PUK” means personal identification number unlock key;

“Records” means all contracts (including the Customer Lease), if any, and other documents, purchase orders, invoices, agreements, books, records and any other media, materials or devices for the storage of information (including tapes, disks, punch cards, computer programs and databases and related property) maintained by Servicer or Lessees with respect to the Customer Receivables;

“Related Originator” has the meaning given to that term under Annex 2 (Related Originators; Related Lessees) of the First Step Transfer Agreement;

“Relevant Personal Data” has the meaning given to that term under Section 8.1(l) of the Servicing Agreement;

“Rent Shortfall Returned Device” means a Returned Device in respect of which the Customer has not paid all accrued and unpaid Customer Receivables with respect to such Device during the Scheduled Customer Lease Term;

“Rental Payment” means, with respect to each Device Lease, the rental payments specified in the relevant Device Lease Schedule;

“Reparable Device” has the meaning given to that term under the Device Repurchase Agreement;

“Required Return Date” means the date a Customer is required to return a Device, which is promptly following the termination of a Customer Lease and in any event not later than 30 calendar days following the termination of the Customer Lease;

“Required Return Period” means to the extent a Sprint Party has received a Device from a Customer, the period ending 30 days after the earlier of (a) the last day of the

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Scheduled Customer Lease Term, and (b) the actual receipt of a Sprint Party of the Device;

“Responsible Officer” means, as applicable, (i) an authorized officer of Lessor, or (ii) an authorized officer of any Sprint Party. Any document delivered hereunder that is signed by a Responsible Officer of Lessor or any Sprint Party, as applicable, will be conclusively presumed to have been authorized by all necessary corporate, limited liability company, partnership and/or other action on the part of Lessor or such Sprint Party, as applicable, and such Responsible Officer will be conclusively presumed to have acted on behalf of Lessor or such Sprint Party, as applicable;

“Returned Device” has the meaning given to that term under Section 2.3(a) of the Device Repurchase Agreement;

“Sanctions” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by any Sanctions Authority;

“Sanctions Authorities” has the meaning given to it in the definition of Sanctioned Person;

“Sanctioned Country” means, at any time, a country which is itself the subject or target of any country-wide Sanctions;

“Sanctioned Person” means, at any time:

 

(a)	any person listed in any Sanctions-related list of designated persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State (“Sanctions Authorities”);

 

(a)	any person operating, organized or resident in a Sanctioned Country; or

 

(b)	any person owned or controlled by any such person or persons.

“Scheduled Customer Lease Term” means, with respect to any Customer Lease, a period representing the remaining number of obligatory monthly rental payments due under such Customer Lease at the time such Customer Lease and the associated Device are contributed by an Originator to a Lessee as set forth in the relevant Device Lease Schedule;

“Scheduled Device Lease Term” means, with respect to any Device Lease, means the period commencing on the Device Lease Commencement Date and ending on the last day of the Scheduled Customer Lease Term;

“Schedule of Approved Devices” has the meaning given to that term under Section 2.6(a) (Approved Devices) of this Agreement;

“SCI” means Sprint Communications, Inc;

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“Second Step Transfer Agreement” means the Second Step Transfer Agreement, dated the date hereof and effective as of the Lease Closing Date, between Lessees and Lessor;

“Secondary Market Value” has the meaning given to that term under the Device Repurchase Agreement;

“Senior Agent” has the meaning given to that term under the Servicing Agreement;

“Senior Loan Agreement” has the meaning given to that term under the Servicing Agreement;

“Senior Loan” has the meaning given to that term under the Servicing Agreement;

“Senior Subordinated Loan” has the meaning given to that term under the Servicing Agreement;

“Senior Subordinated Loan Creditor” has the meaning given to that term under the Servicing Agreement;

“Servicer” has the meaning given to that term under the Servicing Agreement;

“Servicer Collection Accounts” has the meaning given to that term under the Servicing Agreement;

“Servicer Replacement Event” has the meaning given to it under Section 3.1 of the Servicing Agreement;

“Servicing Agreement” means the Servicing Agreement dated as of the date hereof amd effective as of the Lease Closing Date, among Lessor, Servicer, Lessees and Collateral Agent;

“Settlement Date” has the meaning given to that term in the MLS Intercreditor Agreement;

“SoftBank” means SoftBank Corp.;

“Sprint” means Sprint Corporation, a Delaware corporation;

“Sprint Guarantee” means the Guaranty, dated as of the date hereof and effective as of the Lease Closing Date, by Sprint in favor of Lessor;

“Sprint Party” means Sprint, each Originator, Servicer, each Lessee, and each other Subsidiary of Sprint party to a Transaction Document;

“Sprint Spectrum” has the meaning given to that term in the preamble of this Agreement;

“Sprint Transaction Documents” has the meaning given to that term under the Servicing Agreement;

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“Sub-Servicer” has the meaning given to that term under the Servicing Agreement;

“Subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent;

“Tax Authority” has the meaning given to that term under the Tax Services Agreement;

“Taxes” means all income, gross receipts, rental, franchise, excise, stamp, occupational, capital, value added, sales, use, ad valorem (real and personal), property (real and personal) and taxes, fees, levies, imposts, charges or withholdings of any nature whatsoever, together with any assessments, penalties, fines, additions to tax and interest thereon, howsoever imposed, by any Governmental Authority or other taxing authority in the United States or by any foreign government, foreign governmental subdivision or other foreign or international taxing authority;

“Tax Services Agreement” has the meaning given to that term under the Servicing Agreement;

“Term” has the meaning given to that term under Section 2.7 (Term) of this Agreement;

“Trademarks” shall mean, with respect to any Lessee, all of such Lessee’s right, title and interest in and to all domestic, foreign and multinational trademarks, service marks, trade names, corporate names, company names, business names, fictitious business names, trade dress, trade styles, logos, internet domain names, other inidicia of origin or source identification, and general intangibles of a like nature, whether registered or unregistered, and, with respect to any and all of the foregoing, (i) all registrations and applications for registration thereof including, without limitation, (ii) all extensions and renewals thereof, (iii) all of the goodwill of the business connected with the use of and symbolized by any of the foregoing, (iv) all rights to sue or otherwise recover for any past, present and future infringement, dilution, or other violation thereof, (v) all proceeds of the foregoing, including, without limitation, license fees, royalties, income, payments, claims, damages, proceeds of suit and other payments now or hereafter due and/or payable with respect thereto, and (vi) all other rights of any kind accruing thereunder or pertaining thereto throughout the world;

Transaction” means, collectively the transactions contemplated by the Transaction Documents;

“Transaction Documents” has the meaning given to that term under the Servicing Agreement;

“Transfer Agreements” means the First Step Transfer Agreement and the Second Step Transfer Agreement;

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“Type” means, with respect to a Device, the make, model, memory and colour of such Device;

“Uniform Commercial Code” or “UCC” shall mean the Uniform Commercial Code (or any similar or equivalent legislation), as in effect from time to time in any applicable jurisdiction;

“Unpaid Balance” means, with respect to any Customer Lease at any time, all remaining Customer Receivables payable by a Customer under such Customer Lease at and after such time;

“Voting Securities” means, with respect to any Person, the stock or other ownership or equity interests, of whatever class or classes, the holders of which ordinarily have the power to vote for the election of the members of the board of directors, managers, trustees or other voting members of the governing body of such Person (other than stock or other ownership or equity interests having such power only by reason of the happening of a contingency); and

“Waterfall” has the meaning given to that term under the Servicing Agreement.

Exhibit 10.4

EXECUTION COPY

PERFORMANCE SUPPORT AGREEMENT

THIS PERFORMANCE SUPPORT AGREEMENT dated as of November 19, 2015 and effective as of the Lease Closing Date (this “Agreement”), is between SPRINT CORPORATION, a Delaware corporation (“Performance Support Provider”) and MOBILE LEASING SOLUTIONS, LLC, a Delaware limited liability company (“Performance Beneficiary”).

WHEREAS, pursuant to that certain First Step Transfer Agreement dated as of the date hereof and effective as of the Lease Closing Date (as amended, supplemented or otherwise modified from time to time, the “First Step Transfer Agreement”), among the Originators, as transferees, and the Lessees, as transferors and Servicer, the Originators will on the Lease Closing Date and from time to time contribute Devices and related Customer Leases to the Lessees as further described in the First Step Transfer Agreement;

WHEREAS, pursuant to that certain Second Step Transfer Agreement dated as of the date hereof and effective as of the Lease Closing Date (as amended, supplemented or otherwise modified from time to time, the “Second Step Transfer Agreement”), among the Lessees, as sellers, and Performance Beneficiary, as buyer, (i) the Lessees will on Lease Closing Date and from time to time sell Devices and the Customer Lease-End Rights and Obligations (as defined in the Second Step Transfer Agreement) under the related Customer Leases to Performance Beneficiary as further described in the Second Step Transfer Agreement and (ii) the Performance Beneficiary has agreed to pay to the Lessees the Purchase Price (as defined in the Second Step Transfer Agreement), all as further described in the Second Step Transfer Agreement;

WHEREAS, pursuant to that certain Master Lease Agreement, dated as of the date hereof and effective as of the Lease Closing Date (as amended, supplemented or otherwise modified from time to time, the “Master Lease Agreement”; capitalized terms used herein and not defined herein shall have the meanings assigned to such terms in the Master Lease Agreement), by and among the Lessees, Servicer, Performance Beneficiary and Collateral Agent, as supplemented by each Device Lease Schedule agreed as of the Lease Closing Date by the Lessees and Performance Beneficiary (the Master Lease Agreement together with each Device Lease Schedule, collectively, the “Device Leases” and, each, a “Device Lease”), Performance Beneficiary will on the Lease Closing Date commence leasing Devices to Lessees;

WHEREAS, pursuant to that Servicing Agreement, dated as of the date hereof and effective as of the Lease Closing Date (as amended, supplemented or otherwise modified from time to time, the “Servicing Agreement”), by and among the Lessees, Servicer, Performance Beneficiary and Collateral Agent, Servicer will service the Devices and Related Customer Leases for Lessees and Performance Beneficiary as further described in the Servicing Agreement;

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WHEREAS, the Parties intend that the Transaction Documents create a financing for all U.S. federal, state and local income tax purposes, and thus specifically that (i) the Cash Purchase Price paid under the Second Step Transfer Agreement at closing be treated for such purposes as amounts loaned by Performance Beneficiary for which the Devices provide security and (ii) the Rental Payments payable to Performance Beneficiary under the Device Leases be treated for such purposes as payments on such indebtedness owed to Performance Beneficiary;

WHEREAS, Performance Support Provider is the direct or indirect parent of each of the Originators, the Lessees and Servicer (each, a “Covered Entity” and, collectively, the “Covered Entities”) and will receive substantial direct and indirect benefits from the sale and leaseback arrangements contemplated by the First Step Transfer Agreement, the Second Step Transfer Agreement, the Device Leases and the other Sprint Transaction Documents; and

WHEREAS, it is a condition precedent to Performance Beneficiary entering into the Second Step Transfer Agreement and the Device Leases that Performance Support Provider shall have executed and delivered this Agreement.

NOW, THEREFORE, in consideration of the premises set forth above, the terms and conditions contained herein and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

Section 1. Undertaking. Performance Support Provider hereby absolutely, unconditionally and irrevocably assures and undertakes for the benefit of Performance Beneficiary the due and punctual performance and observance by the Covered Entities of all their respective covenants, agreements, undertakings, indemnities and other obligations (including, in each case, those related to the breach by any Covered Entity of its respective representations and warranties), whether monetary or non-monetary and regardless of the capacity in which incurred (including all of its payment, repurchase, indemnity and similar obligations, including in respect of Dilutions), under the Transaction Documents to which any Covered Entity is a party but excluding any covenant, agreement, undertaking, indemnity and other obligation of any Lessee to pay any Rental Payment, Device Lease Early Termination Amount or Present Value Device Lease Amount, whether or not constituting a Guaranteed Obligation under the Sprint Guarantee) (collectively, the “Performance Support Obligations”), irrespective of: (a) the validity, binding effect, legality, subordination, disaffirmance, enforceability or amendment, restatement, modification or supplement of, or waiver of compliance with, the Master Lease Agreement, the other Transaction Documents or any documents related hereto or thereto, (b) any change in the existence, formation or ownership of, or the bankruptcy or insolvency of, any Covered Entity, (c) any extension, renewal, settlement, compromise, exchange, waiver or release in respect of any Performance Support Obligation (or any collateral security therefor, including the property sold, contributed (or purportedly sold or contributed) or otherwise pledged or transferred by any Originator under the First Step Transfer Agreement or by any Lessee under the Second Step Transfer Agreement) or by any party to this Agreement, the other Transaction Documents or any related documents, (d) the existence of any claim, set-off, counterclaim or other right that Performance Support Provider or any other Person may have against any Covered Entity or any other Person, (e) any impossibility or impracticability of performance, illegality, force majeure, act of Governmental Authority or

 

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other circumstance that might otherwise constitute a legal or equitable discharge or defense available to, or provide a discharge of, Performance Support Provider, (f) any Law affecting any term of any of the Performance Support Obligations, the Device Leases or any other Transaction Document or any rights of Performance Beneficiary with respect thereto or otherwise, (g) the failure by Performance Beneficiary to take any steps to perfect and maintain perfected its interest in any collateral security or (h) any failure to obtain any authorization or approval from or other action by, or to make any notification to or filing with, any Governmental Authority required in connection with the performance of the Performance Support Obligations or otherwise.

Without limiting the generality of the foregoing, Performance Support Provider agrees that if any Covered Entity shall fail in any manner whatsoever to perform or observe any of its Performance Support Obligations when the same shall be required to be performed or observed under any applicable Transaction Document to which it is a party, Performance Support Provider will itself duly and punctually perform or observe or cause to be performed or observed such Performance Support Obligations. Performance Support Provider hereby expressly waives diligence, presentment, demand, protest or notice of any kind whatsoever, as well as any requirement that Performance Beneficiary exhaust any right to take any action against any Covered Entity or any other Person (including the filing of any claims in the event of a receivership or bankruptcy of any Covered Entity or any other Person), or with respect to any collateral at any time securing any of the Performance Support Obligations, and hereby consents to any and all extensions of time of the due performance of any or all of the Performance Support Obligations. Performance Support Provider hereby irrevocably waives, and agrees that it shall not exercise or assert, any right to reimbursement from any Lessee or any Originator that it may acquire by way of subrogation or otherwise. Performance Support Provider also hereby expressly waives all other 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 Performance Support Obligations, whether in equity or at law. Notwithstanding anything to the contrary herein, it is expressly acknowledged that this Agreement is not a guarantee of the collection of any particular Customer Receivable, and there shall be no recourse to Performance Support Provider for any non-payment or delay in payment of any Customer Receivable solely by reason of the bankruptcy, insolvency or lack of creditworthiness of the related Customer or the uncollectability of any such Customer Receivable or for any Performance Support Obligations the payment of which could otherwise constitute recourse to Performance Support Provider or any Covered Entity for uncollectible Customer Receivables; provided that, for the avoidance of doubt, this paragraph shall not relieve Performance Support Provider or any Covered Entity from making any payments required to be made by it pursuant to any Transaction Document to which it is a party with respect to any Deemed Collections (as defined in the Servicing Agreement).

Section 2. Confirmation. Performance Support Provider hereby confirms that the transactions contemplated by the Transaction Documents have been arranged among the Covered Entities and Performance Beneficiary, as applicable, with Performance Support Provider’s full knowledge and consent and any amendment, restatement, modification or supplement of, or waiver of compliance with, the Transaction Documents in accordance with the terms thereof by any of the foregoing shall be deemed to be with Performance Support Provider’s full knowledge and consent. Performance Support Provider hereby confirms that on

 

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the date hereof it owns (directly or indirectly) 100% of the equity interests of each Covered Entity. Performance Support Provider agrees to notify Performance Beneficiary in the event that it ceases to own (directly or indirectly) 100% of the equity interests of any Covered Entity.

Section 3. Representations and Warranties. Performance Support Provider represents and warrants to Performance Beneficiary as of the Lease Closing Date, as follows:

(a) Organization and Good Standing. It has been duly organized and is validly existing as a corporation in good standing under the Laws of its jurisdiction of organization, with power and authority to own its properties and to conduct its business as such properties are presently owned and such business is presently conducted.

(b) Due Qualification. It is duly qualified to do business in good standing, and has obtained all necessary qualifications, licenses and approvals, in all jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualifications, licenses or approvals, except where the failure to be in good standing or to hold any such qualifications, licenses and approvals could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(c) Power and Authority; Due Authorization. It (i) has all necessary power and authority to (A) execute and deliver this Agreement and the other Transaction Documents to which it is a party and (B) carry out the terms of and perform its obligations under this Agreement and the other Transaction Documents to which it is a party and (ii) has duly authorized by all necessary corporate action the execution, delivery and performance of this Agreement and the other Transaction Documents to which it is a party.

(d) Binding Obligations. This Agreement constitutes, and each other Transaction Document to be signed by it when duly executed and delivered by it will constitute, a legal, valid and binding obligation of Performance Support Provider, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

(e) No Violation. The consummation of the transactions contemplated by this Agreement and the other Transaction Documents to which it is a party and the performance by it of the terms hereof and thereof will not (i) violate or result in a default under, (A) its certificate of incorporation or by-laws or (B) in the context of the transactions contemplated by this Agreement and the other Transaction Documents applicable to it, any material indenture, agreement or instrument binding on it, (ii) result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement or instrument except for any Lien arising pursuant to the Transaction Documents or that could not reasonably be expected to have a Material Adverse Effect, or (iii) violate in any material respect any Law applicable to it or any of its properties.

(f) No Proceedings. There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to its actual knowledge, threatened

 

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against it (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect or (ii) relating to the consummation of the purposes of this Agreement or of any of the other Transaction Documents to which it is a party.

(g) Governmental Approvals. No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority is required for the due execution, delivery and performance by it of this Agreement or the other Transaction Documents to which it is a party or the transactions contemplated hereby or thereby except for filings with the Securities and Exchange Commission (the “SEC”) to the extent required by Law.

(h) Financial Condition. All financial statements of Performance Support Provider and its consolidated Subsidiaries (including the notes thereto) delivered to Performance Beneficiary pursuant to Section 4 present fairly, in all material respects, the actual financial position and results of operations and cash flows of Performance Support Provider and its consolidated Subsidiaries as of the dates and for the periods presented or provided, in each case, in accordance with GAAP, subject to year-end audit adjustments and the absence of footnotes in the case of all interim balance sheets of Performance Support Provider. Since March 31, 2015, there has been no material adverse change in the business, assets, operations or financial condition of Performance Support Provider and its Subsidiaries, taken as a whole.

(i) Accurate Reports. None of the reports, financial statements, certificates or other information (other than forward-looking statements, projections and statements of a general industry nature, as to which it represents only that it acted in good faith and utilized assumptions reasonable at the time made and due care in the preparation of such statement or projection) furnished or to be furnished by or on behalf of it (excluding information received from Customers) in writing (including, without limitation, by electronic delivery) to Performance Beneficiary in connection with this Agreement or any other Transaction Document or any amendment hereto or delivered hereunder or thereunder (as modified or supplemented by other information so furnished) taken together with any information contained in the public filings made by Performance Support Provider with the SEC pursuant to the 1934 Act contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not materially misleading.

(j) ERISA. No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect.

As used in this Section 3(j), the following terms shall have the following meanings:

“Code” means the Internal Revenue Code of 1986, as amended.

“ERISA” means the U.S. Employee Retirement Income Security Act of 1974.

“ERISA Affiliate” means, with respect to any Person, any trade or business (whether or not incorporated) that, together with such Person, is treated as a single employer under Section

 

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414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414(m) of the Code.

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043(c) of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period referred to in Section 4043(a) is waived), (b) any failure by any Plan to satisfy the minimum funding standards (within the meaning of Sections 412 or 430 of the Code or Section 302 of ERISA) applicable to such Plan, whether or not waived, (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan, (d) the incurrence by Performance Support Provider, the Servicer, any Originator, any Lessee or any ERISA Affiliate thereof of any liability under Title IV of ERISA with respect to the termination of any Plan, (e) the receipt by Performance Support Provider, the Servicer, any Originator, any Lessee or any ERISA Affiliate thereof from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan under Section 4042 of ERISA, (f) the incurrence by Performance Support Provider, the Servicer, , any Originator, any Lessee or any ERISA Affiliate thereof of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan, or (g) the receipt by Performance Support Provider, the Servicer, any Originator, any Lessee or any ERISA Affiliate thereof of any notice, or the receipt by any Multiemployer Plan from Performance Support Provider, the Servicer, any Originator, any Lessee or any ERISA Affiliate thereof of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent within the meaning of Section 4245 of ERISA, or is in reorganization within the meaning of Section 4241 of ERISA, or in endangered or critical status (within the meaning of Section 432 of the Code or Section 305 or Title IV of ERISA).

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which Performance Support Provider, the Servicer, any Originator, any Lessee or any ERISA Affiliate thereof is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

(k) Tax Returns and Payments. It has filed all federal income tax returns and all other material tax returns that are required to be filed by it and has paid all taxes due pursuant to such returns or pursuant to any assessment received by it, except (i) for any such taxes or assessments that are being appropriately contested in good faith by appropriate proceedings and with respect to which adequate reserves in conformity with GAAP have been provided or (ii) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect.

 

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No tax lien has been filed, and, to its actual knowledge, no claim is being asserted, with respect to any such tax or assessment that could reasonably be expected to result in a Material Adverse Effect.

Section 4. Covenants. Performance Support Provider covenants and agrees that, from the Lease Closing Date until (i) all the Performance Support Obligations are indefeasibly paid and satisfied in full and (ii) all the Guaranteed Obligations under and as defined in the Sprint Guarantee are indefeasibly paid and satisfied in full, it shall observe and perform the following covenants:

(a) Compliance with Laws. It shall comply with all applicable Laws, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

(b) Preservation of Corporate Existence. Except as expressly permitted under Section 4(c), it shall preserve and maintain its existence, rights, franchises and privileges in the jurisdiction of its organization, and qualify and remain qualified in good standing in all jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualifications, except where the failure to be in good standing or to qualify or preserve or maintain such existence, rights, franchises or privileges could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(c) Mergers, Sales, Etc. It shall not consolidate with or merge with or into any other Person or sell, lease or transfer all or substantially all of its property and assets, unless (i) no Default or Lease Event of Default has occurred and is continuing or would result immediately after giving effect thereto, (ii) if it is not the surviving entity or if it sells, leases or transfers all or substantially all of its property and assets, the surviving entity or the Person purchasing or being leased the assets agrees to be bound by the terms and provisions applicable to it hereunder and under the Transaction Documents to which it is a party, (iii) Performance Support Provider reaffirms in a writing, in form and substance reasonably satisfactory to Performance Beneficiary, that its obligations under this Agreement and any other Transaction Document to which it is a party shall apply to the surviving entity, and (iv) Performance Beneficiary receives such additional certifications and opinions of counsel as it shall reasonably request.

(d) Other Information. It shall promptly, from time to time, provide such other information, documents, records or reports respecting the condition or operations, financial or otherwise, of any Covered Entity as Performance Beneficiary may from time to time reasonably request relating to the Covered Entities and the transactions contemplated by this Agreement and any other Transaction Document, in order to protect the interests of Performance Beneficiary under or as contemplated by this Agreement or any other Transaction Document or to comply with any Law or any regulatory authority; provided that Performance Support Provider shall not be required to furnish such other information to the extent that Performance Support Provider has determined in good faith that it is prohibited from furnishing such other information by any Law or a Contractual Obligation or because such information is Relevant Personal Data subject to Section 7.1(h) of the Master Lease Agreement or Section 8.1(l) of the Servicing Agreement (it

 

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being understood and agreed that this Section 4(d) shall not be applied to augment the periodic reporting obligations of Performance Support Provider under this Agreement).

(e) Reporting Requirements. It shall, unless Performance Beneficiary shall otherwise consent in writing, furnish to Performance Beneficiary each of the following:

(i) Quarterly Financial Statements. Within 45 days after the close of each of the first three fiscal quarters of each fiscal year, its Form 10-Q as filed with the SEC.

(ii) Annual Financial Statements. Within 75 days after the end of each of its fiscal years, the audited consolidated statements of operations, changes in stockholders’ equity and cash flows of Performance Support Provider and its Subsidiaries for such fiscal year and the related audited consolidated balance sheet for Performance Support Provider and its Subsidiaries as of the end of such fiscal year, setting forth in each case in comparative form the corresponding figures for the previous fiscal year, all reported on by Deloitte LLP or other independent public accountants of recognized national standing (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit), to the effect that such audited consolidated financial statements present fairly in all material respects the financial condition and results of operations of Performance Support Provider and its Subsidiaries on a consolidated basis in accordance with GAAP consistently applied.

(iii) Compliance Certificate. Together with the financial statements required hereunder, a compliance certificate in substantially the form of Exhibit A attached hereto signed by an authorized officer of Performance Support Provider and dated the date of such annual financial statement or such quarterly financial statement, as the case may be.

Documents and information required to be delivered pursuant to this Section 4 (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically, and, if so delivered, shall be deemed to have been delivered on the date on which Performance Support Provider posts such documents, or provides a link thereto, on its website or another relevant website, if any, to which Performance Beneficiary has access (whether a commercial, third-party website or whether sponsored by Performance Beneficiary or any express third-party beneficiary of this Agreement). Any information provided by Performance Support Provider under this Section 4(e) or any other provision of this Agreement shall be subject to the confidentiality provisions set forth in Section 20 of the MLS Intercreditor Agreement or otherwise applicable to such information pursuant to the terms of any other Transaction Document.

(f) Provision of Wireless Services. It will or will cause one or more Affiliates to provide wireless network services to Customers in accordance with each Customer Lease or other agreement, contract or document (including any terms and conditions, purchase order or invoice) related to any rights or obligations of any party under a Customer Lease, subject to the Credit and Collection Policy.

 

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(g) Leasing Program. It will not and will cause its Affiliates not to discontinue the leasing program relating to the Devices or Related Customer Leases or take any corporate action to discontinue such leasing program.

(h) Non-Return Remedies. It will and will cause the Covered Entities and, if applicable, any other Sprint Party, to comply with the Non-Return Remedies.

(i) Fair Market Value Consideration. It will not and will cause each Covered Entity not to publish or disseminate on its website or otherwise the fair market value consideration for any Device purchasable by a Customer pursuant to such Customer’s purchase option in the relevant Customer Lease for any period after the relevant Scheduled Customer Lease Term other than the fair market value consideration specified by Performance Beneficiary in writing to Performance Support Provider pursuant to Section 5.3(f) of the Second Step Transfer Agreement.

(j) Arm’s Length Relationship. It will and will cause the Covered Entities to maintain an arm’s-length relationship with Performance Beneficiary (for the avoidance of doubt, the parties hereto agree that the Transaction Documents and the transactions contemplated by the Transaction Documents are arm’s-length commercial transactions between the Sprint Parties, on the one hand, and the Performance Beneficiary, on the other). Performance Support Provider will not and will cause each Covered Entity not to hold itself out as being in any way connected or associated with the business of Performance Beneficiary (other than solely as a result of the transactions and relationships contemplated by the Transaction Documents and except that Servicer may act as agent for Performance Beneficiary in accordance with the Servicing Agreement).

(k) No Modification. It will not and will cause each Covered Entity not to alter, modify or change the Devices other than in the ordinary course of business, except that no Sprint Party shall be responsible for any alteration, modification or change made to a Device by a Customer or for any repairs made by a third-party maintenance provider on behalf of a Customer. Performance Support Provider will not and will cause each Covered Entity not to amend, waive or otherwise modify any term or condition of any Customer Lease except in accordance with Section 8.2(a) of the Servicing Agreement.

Section 5. Miscellaneous.

(a) Performance Support Provider agrees that any payments hereunder will be made in the manner set forth in Section 2.15 of the Servicing Agreement.

(b) No amendment or waiver of any provision of this Agreement nor consent to any departure by Performance Support Provider therefrom shall be effective unless the same shall be in writing and signed by Performance Beneficiary and Performance Support Provider. No failure on the part of Performance 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.

 

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(c) This Agreement shall bind and inure to the benefit of the parties hereto and their respective successors and assigns. The parties hereto may not assign, delegate or otherwise transfer any rights or obligations hereunder except as permitted under Section 11.5 of the Master Lease Agreement and, in any event, except as permitted under Section 4(c), Performance Support Provider shall not assign, delegate or otherwise transfer any of its obligations or duties hereunder without the prior written consent of Performance Beneficiary. Performance Support Provider expressly acknowledges that all of Performance Beneficiary’s right, title and interest in, to and under this Agreement shall be assigned as collateral to the Collateral Agent for the benefit of the Finance Parties, and Performance Support Provider consents to such assignment. The parties hereto agree that the Collateral Agent (and any assignee thereof) is an intended third-party beneficiary of this Agreement and is entitled to enforce the rights of Performance Beneficiary arising hereunder, including requiring payment of any amounts required to be paid to Performance Beneficiary to be paid directly to the MLS Collection Account.

(d) 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 CONFLICT OF LAWS PROVISIONS THEREOF).

(e) 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 DOCUMENT OR ANY AMENDMENT, INSTRUMENT OR DOCUMENT DELIVERED OR THAT MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT A JURY.

(f) EACH PARTY HERETO HEREBY ACKNOWLEDGES AND AGREES THAT:

(i) IT IRREVOCABLY (A) 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 DOCUMENT, (B) 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 (C) WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING.

 

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(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.

(g) Performance Support Provider agrees to do all such things and execute all such documents as Performance Beneficiary may reasonably consider necessary or desirable to give full effect to this Agreement and to perfect or preserve the rights and powers of Performance Beneficiary hereunder or with respect hereto.

Section 6. Termination of Agreement.

(a) This Agreement and Performance Support Provider’s obligations hereunder shall remain operative and continue in full force and effect from the Lease Closing Date until such time as (i) all the Performance Support Obligations are indefeasibly paid and satisfied in full and (ii) all the Guaranteed Obligations under and as defined in the Sprint Guarantee are indefeasibly paid and satisfied in full, provided that this Agreement and Performance Support Provider’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 Performance Support Obligations is rescinded or must otherwise be restored or returned upon the bankruptcy, insolvency or reorganization of any Covered Entity as though such payment had not been made or other satisfaction had not occurred. To the fullest extent permitted by Law, no invalidity, irregularity or unenforceability by reason of the bankruptcy, insolvency, reorganization or other similar Laws or any other Law or order of any Governmental Authority thereof purporting to reduce, amend or otherwise affect the Performance Support Obligations shall impair, affect or be a defense to or claim against the obligations of Performance Support Provider under this Agreement.

(b) This Agreement shall survive the insolvency of any Covered Entity, Performance Beneficiary or any other Person and the commencement of any case or proceeding by or against any Covered Entity or any other Person under any bankruptcy, insolvency, reorganization or other similar Law. No automatic stay under any bankruptcy, insolvency, reorganization or other similar Law with respect to any Covered Entity or any other Person (other than the Performance Support Provider to the extent required by applicable law) shall postpone the obligations of Performance Support Provider under this Agreement.

Section 7. Set-off. Performance Beneficiary is hereby authorized at any time during the continuance of an Event of Default (in addition to any other rights it may have) to setoff, appropriate and apply (without presentment, demand, protest or other notice, each of which are hereby expressly waived) any indebtedness held or owing by Performance Beneficiary to or for the account of Performance Support Provider against amounts owing by Performance Support Provider hereunder (even if contingent and unmatured).

 

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Section 8. Entire Agreement; Severability; No Party Deemed Drafter. This Agreement and the other Transaction Documents 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 Law or any other agreement, and this Agreement shall be in addition to any other guaranty of or collateral security for any of the Performance Support Obligations. The provisions of this Agreement are severable, and in any action or proceeding involving any state corporate or limited liability company law, or any bankruptcy, insolvency, reorganization or other similar Law, if the obligations of Performance Support Provider hereunder would otherwise be held or determined to be avoidable, invalid or unenforceable on account of the amount of Performance Support Provider’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 Performance Support Provider or Performance Beneficiary, be automatically limited and reduced to the highest amount that is valid and enforceable as determined in such action or proceeding. Any provisions of this Agreement that 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. Each of the parties hereto hereby agrees that no party hereto shall be deemed to be the drafter of this Agreement.

Section 9. Expenses. Performance Support Provider agrees to pay on demand:

(a) all reasonable and documented out-of-pocket costs and expenses incurred by Performance Beneficiary in connection with any amendment, restatement or supplement of, or consent or waivers under, this Agreement, enforcement of, or any actual or reasonably claimed breach of, or claim under, this Agreement, including the reasonable fees and expenses of counsel incurred in connection therewith and all accountants’, attorneys’, auditors’, consultants’ and other agents’ fees and expenses 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 and delivery, and, if applicable, filing and recording, of this Agreement, and agrees to indemnify and hold harmless Performance Beneficiary against any liabilities with respect to or resulting from any delay in paying or omission to pay such Taxes and fees;

provided, however, that so long as no Default or Event of Default has occurred and remains continuing, Performance Support Provider’s obligation under this Section 9 to pay the reasonable and documented attorneys’ fees and expenses incurred by Performance Beneficiary shall be limited to paying the reasonable and documented fees and expenses of one law firm selected by Performance Beneficiary in its sole discretion; provided, further, however, that, for the avoidance of doubt, such limitation shall not apply to any reasonable and documented attorneys’ fees and expenses incurred by Performance Beneficiary during the continuance of a Default or Event of Default even if such event subsequently ceases to be continuing.

 

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Section 10. Indemnities by Performance Support Provider. Without limiting any other rights that Performance Beneficiary may have hereunder or under applicable Law, Performance Support Provider agrees to indemnify and hold harmless each Lessee Indemnity forthwith and on demand from and against any and all damages, losses, claims, liabilities and related costs and expenses (including all filing fees, if any), including reasonable and documented attorneys’ fees and disbursements (all of the foregoing being collectively referred to as “Indemnified Amounts”) incurred by any of them and arising out of, relating to or resulting from (but not including amounts that are expressly excluded from Performance Support Obligations): (a) any breach by Performance Support Provider (in any capacity) of any of its obligations or duties under this Agreement or any other Transaction Document; (b) the untruth or inaccuracy of any representation or warranty made by Performance Support Provider (in any capacity) hereunder or under any other Transaction Document; (c) the failure of any information provided to any such Lessee Indemnity by, or on behalf of, Performance Support Provider (in any capacity) to be true and correct; (d) any negligence or willful misconduct of Performance Support Provider (in any capacity) arising out of, relating to, in connection with, or affecting any transaction contemplated by the Transaction Documents; or (e) the failure by Performance Support Provider (in any capacity) to comply with any applicable Law, rule or regulation with respect to this Agreement or any other Transaction Document to which it is a party, the transactions contemplated hereby or thereby, the Performance Support Obligations or otherwise; provided, however, notwithstanding anything to the contrary in this Section 10, excluding Indemnified Amounts solely to the extent (x) resulting from the gross negligence or willful misconduct on the part of such Lessee Indemnity as determined by a final non-appealable judgment by a court of competent jurisdiction, (y) resulting from a claim brought by Performance Support Provider or any Covered Entity against a Lessee Indemnity for breach of such Lessee Indemnity’s obligations under any Transaction Document as determined by a final non-appealable judgment by a court of competent jurisdiction or (z) constituting recourse with respect to a Customer Receivable by reason of bankruptcy or insolvency, or the financial or credit condition or financial default, of the related Customer.

Section 11. Addresses for Notices. The provisions of Section 21 (Notices) of the MLS Intercreditor Agreement shall apply as if fully set forth herein.

[Signatures Follow]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

 

Exhibit 10.5

Execution Copy

GUARANTY

THIS GUARANTY dated as of November 19, 2015 and effective as of the Lease Closing Date (this “Guaranty”), is between SPRINT CORPORATION, a Delaware corporation (“Guarantor”) and MOBILE LEASING SOLUTIONS, LLC, a Delaware limited liability company (“Guaranty Beneficiary”).

WHEREAS, pursuant to that certain First Step Transfer Agreement dated as of the date hereof and effective as of the Lease Closing Date (as amended, supplemented or otherwise modified from time to time, the “First Step Transfer Agreement”), among the Originators, as transferees, and the Lessees, as transferors and Servicer, the Originators will on the Lease Closing Date and from time to time contribute Devices and related Customer Leases to the Lessees as further described in the First Step Transfer Agreement;

WHEREAS, pursuant to that certain Second Step Transfer Agreement dated as of the date hereof and effective as of the Lease Closing Date (as amended, supplemented or otherwise modified from time to time, the “Second Step Transfer Agreement”), among the Lessees, as sellers, and Guaranty Beneficiary, as buyer, (i) the Lessees will on the Lease Closing Date and from time to time sell Devices and the Customer Lease-End Rights and Obligations (as defined in the Second Step Transfer Agreement) under the related Customer Leases to Guaranty Beneficiary as further described in the Second Step Transfer Agreement and (ii) the Guaranty Beneficiary has agreed to pay to the Lessees the Purchase Price (as defined in the Second Step Transfer Agreement), all as further described in the Second Step Transfer Agreement;

WHEREAS, pursuant to that certain Master Lease Agreement, dated as of the date hereof and effective as of the Lease Closing Date (as amended, supplemented or otherwise modified from time to time, the “Master Lease Agreement”; capitalized terms used herein and not defined herein shall have the meanings assigned to such terms in the Master Lease Agreement), by and among the Lessees, Servicer, Guaranty Beneficiary and Collateral Agent, as supplemented by each Device Lease Schedule (the Master Lease Agreement together with each Device Lease Schedule agreed as of the Lease Closing Date by the Lessees and Performance Beneficiary, collectively, the “Device Leases” and, each, a “Device Lease”), Guaranty Beneficiary will on the Lease Closing Date commence leasing Devices to Lessees;

WHEREAS, pursuant to that Servicing Agreement, dated as of the date hereof and effective as of the Lease Closing Date (as amended, supplemented or otherwise modified from time to time, the “Servicing Agreement”), by and among the Lessees, Servicer, Guaranty Beneficiary and Collateral Agent, Servicer will service the Devices and Related Customer Leases for Lessees and Guaranty Beneficiary as further described in the Servicing Agreement;

WHEREAS, the Parties intend that the Transaction Documents create a financing for all U.S. federal, state and local income tax purposes, and thus specifically that (i) the Cash Purchase

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Price paid under the Second Step Transfer Agreement at closing be treated for such purposes as amounts loaned by Guaranty Beneficiary for which the Devices provide security and (ii) Rental Payments payable to Guaranty Beneficiary under the Device Leases be treated for such purposes as payments on such indebtedness owed to Guaranty Beneficiary;

WHEREAS, Guarantor is the direct or indirect parent of each of the Lessees and will receive substantial direct and indirect benefits from the sale and leaseback arrangements contemplated by the First Step Transfer Agreement, the Second Step Transfer Agreement, the Device Leases and the other Sprint Transaction Documents; and

WHEREAS, it is a condition precedent to Guaranty Beneficiary entering into the Second Step Transfer Agreement and the Device Leases that Guarantor shall have executed and delivered this Guaranty.

NOW, THEREFORE, in consideration of the premises set forth above, the terms and conditions contained herein and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

Section 1. Guaranty. Guarantor hereby absolutely, unconditionally and irrevocably guarantees, for the benefit of Guaranty Beneficiary, the due and punctual payment by the Lessees of (i) the Rental Payments to the extent constituting a Rent Payment Shortfall (as defined in the Second Step Transfer Agreement), if any, due and payable under each Device Lease, and (ii) any Device Lease Early Termination Amount or Present Value Device Lease Amount due and payable under the Master Lease Agreement and provided further that in no event shall Guarantor’s aggregate liability under this Guaranty under clauses (i) and (ii) above exceed 20% multiplied by the Cash Purchase Price (collectively, as limited, the “Guaranteed Obligations”), in each case, irrespective of: (a) the validity, binding effect, legality, subordination, disaffirmance, enforceability or amendment, restatement, modification or supplement of, or waiver of compliance with, the Master Lease Agreement, the Device Leases, any other Transaction Document or any documents related hereto or thereto, (b) any change in the existence, formation or ownership of, or the bankruptcy or insolvency of, any Lessee or any other Sprint Party, (c) any extension, renewal, settlement, compromise, exchange, waiver or release in respect of any Guaranteed Obligation (or any collateral security therefor, including the property sold, contributed (or purportedly sold or contributed) or otherwise pledged or transferred by any Originator under the First Step Transfer Agreement or by any Lessee under the Second Step Transfer Agreement) or by any party to this Guaranty, the Device Leases, any other Transaction Document or any related documents, (d) the existence of any claim, set-off, counterclaim or other right that Guarantor or any other Person may have against any Lessee or any other Person, (e) any impossibility or impracticability of performance, illegality, force majeure, act of Governmental Authority or other circumstance that might otherwise constitute a legal or equitable discharge or defense available to, or provide a discharge of, Guarantor, (f) any Law affecting any term of any of the Guaranteed Obligations, the Device Leases or any other Transaction Document or any rights of Guaranty Beneficiary with respect thereto or otherwise, (g) the failure by Guaranty Beneficiary to take any steps to perfect and maintain perfected its interest in any collateral security or (h) any failure to obtain any authorization or approval from, or other action by, or to make any notification to or filing with, any Governmental Authority

 

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required in connection with the performance of the Guaranteed Obligations or otherwise. This Guaranty is a guaranty of payment and not merely of collection.

Without limiting the generality of the foregoing, Guarantor agrees that if any Lessee shall fail in any manner whatsoever to pay any of its Guaranteed Obligations when the same shall be required to be paid under the Device Leases or the Second Step Transfer Agreement, then Guarantor will itself pay within two Business Days following demand such Guaranteed Obligations. Guarantor hereby expressly waives diligence, presentment, demand, protest or notice of any kind whatsoever, as well as any requirement that Guaranty Beneficiary exhaust any right to take any action against any Lessee or any other Person (including the filing of any claims in the event of a receivership or bankruptcy of any Lessee or any other Person), or with respect to any collateral 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 hereby irrevocably waives, and agrees that it shall not exercise or assert, any right to reimbursement from any Lessee or any Originator that it may acquire by way of subrogation or otherwise. Guarantor also hereby expressly waives all other 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. Notwithstanding anything to the contrary herein, it is expressly acknowledged that this Guaranty is not a guarantee of the performance by any Customer of its obligations under its Customer Lease, and there shall be no recourse to Guarantor for any non-payment or non-performance or delay in payment or performance of any Customer Lease solely by reason of the bankruptcy, insolvency or lack of creditworthiness of the related Customer or the uncollectability of the obligations under such Customer Lease or for any Guaranteed Obligations the payment of which could otherwise constitute recourse to Guarantor or any Lessee for uncollectible obligations under Customer Leases, in each case above, except to the extent that the guarantee of any Rent Payment Shortfall constituting Guaranteed Obligations indirectly constitutes such recourse.

Section 2. Confirmation. Guarantor hereby confirms that the transactions contemplated by the Transaction Documents have been arranged among the Lessees, the Originators and Guaranty Beneficiary, as applicable, with Guarantor’s full knowledge and consent and any amendment, restatement, modification or supplement of, or waiver of compliance with, the Transaction Documents in accordance with the terms thereof by any of the foregoing shall be deemed to be with Guarantor’s full knowledge and consent. Guarantor hereby confirms that on the date hereof it owns (directly or indirectly) 100% of the equity interests of each Lessee. Guarantor agrees to notify Guaranty Beneficiary in the event that it ceases to own (directly or indirectly) 100% of the equity interests of any Lessee.

Section 3. Miscellaneous.

(a) Guarantor agrees that any payments hereunder will be made in the manner set forth in Section 2.8(c) of the Master Lease Agreement.

(b) No amendment or waiver of any provision of this Guaranty nor consent to any departure by Guarantor therefrom shall be effective unless the same shall be in writing and

 

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signed by Guaranty Beneficiary and Guarantor. No failure on the part of Guaranty 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.

(c) This Guaranty shall bind and inure to the benefit of the parties hereto and their respective successors and assigns. The parties hereto may not assign, delegate or otherwise transfer any rights or obligations hereunder except as permitted under Section 11.5 of the Master Lease Agreement, and, in any event, except as permitted under Section 4(c) of the Performance Support Agreement, Guarantor shall not assign, delegate or otherwise transfer any of its obligations or duties hereunder without the prior written consent of Guaranty Beneficiary. Guarantor expressly acknowledges that all of Guaranty Beneficiary’s right, title and interest in, to and under this Guaranty shall be assigned as collateral to the Collateral Agent for the benefit of the Finance Parties, and Guarantor consents to such assignment. The parties hereto agree that the Collateral Agent (and any assignee thereof) is an intended third-party beneficiary of this Guaranty and is entitled to enforce the rights of Guaranty Beneficiary arising hereunder, including requiring payment of any amounts required to be paid to Guaranty Beneficiary to be paid directly to the MLS Collection Account.

(d) THIS GUARANTY, 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 CONFLICT OF LAWS PROVISIONS THEREOF).

(e) 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 GUARANTY, ANY OTHER TRANSACTION DOCUMENT OR ANY AMENDMENT, INSTRUMENT OR DOCUMENT DELIVERED OR THAT MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT A JURY.

(f) 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 GUARANTY AND ANY OTHER TRANSACTION DOCUMENT, (ii) AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED ONLY IN SUCH NEW YORK STATE OR

 

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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 GUARANTY.

(g) Guarantor agrees to do all such things and execute all such documents as Guaranty Beneficiary may reasonably consider necessary or desirable to give full effect to this Guaranty and to perfect or preserve the rights and powers of Guaranty Beneficiary hereunder or with respect hereto.

Section 4. Termination of Guaranty.

(a) This Guaranty and Guarantor’s obligations hereunder shall remain operative and continue in full force and effect from the Lease Closing Date until such time as all the Guaranteed Obligations are duly performed and indefeasibly paid and satisfied in full, provided that this Guaranty 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 any Lessee as though such payment had not been made or other satisfaction had not occurred. To the fullest extent permitted by Law, no invalidity, irregularity or unenforceability by reason of the bankruptcy, insolvency, reorganization or other similar Laws or any other 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 Guaranty.

(b) This Guaranty shall survive the insolvency of any Lessee, Guaranty Beneficiary or any other Person and the commencement of any case or proceeding by or against any Lessee or any other Person under any bankruptcy, insolvency, reorganization or other similar Law. No automatic stay under any bankruptcy, insolvency, reorganization or other similar Law with respect to any Lessee or any other Person (other than Guarantor to the extent required by applicable law) shall postpone the obligations of Guarantor under this Guaranty.

Section 5. Set-off. Guaranty Beneficiary is hereby authorized at any time during the continuance of an Event of Default (in addition to any other rights it may have) to setoff, appropriate and apply (without presentment, demand, protest or other notice, each of which are hereby expressly waived) any indebtedness held or owing by Guaranty Beneficiary to or for the

 

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account of Guarantor against amounts owing by Guarantor hereunder (even if contingent and unmatured).

Section 6. Entire Agreement; Severability; No Party Deemed Drafter. This Guaranty and the other Transaction Documents 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 Law or any other agreement, and this Guaranty shall be in addition to any other guaranty of or collateral security for any of the Guaranteed Obligations. The provisions of this Guaranty are severable, and in any action or proceeding involving any state corporate or limited liability company law, or any bankruptcy, insolvency, reorganization or other similar Law, if the obligations of Guarantor hereunder would otherwise be held or determined to be avoidable, invalid or unenforceable on account of the amount of Guarantor’s liability under this Guaranty, then, notwithstanding any other provision of this Guaranty to the contrary, the amount of such liability shall, without any further action by Guarantor or Guaranty Beneficiary, be automatically limited and reduced to the highest amount that is valid and enforceable as determined in such action or proceeding. Any provisions of this Guaranty that 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. Each of the parties hereto hereby agrees that no party hereto shall be deemed to be the drafter of this Guaranty.

Section 7. Expenses. Guarantor agrees to pay on demand:

(a) all reasonable and documented out-of-pocket costs and expenses incurred by Guaranty Beneficiary in connection with any amendment, restatement or supplement of, or consent or waiver under, this Guaranty, enforcement of, or any actual or reasonably claimed breach of, or claim under, this Guaranty, including the reasonable fees and expenses of counsel incurred in connection therewith and all accountants’, attorneys’, auditors’, consultants’ and other agents’ fees and expenses incurred in connection with any of the foregoing or in advising such Persons as to their respective rights and remedies under this Guaranty; and

(b) all stamp and other similar Taxes and fees payable or determined to be payable in connection with the execution and delivery, and, if applicable, filing and recording, of this Guaranty, and agrees to indemnify and hold harmless Guaranty Beneficiary against any liabilities with respect to or resulting from any delay in paying or omission to pay such Taxes and fees;

provided, however, that so long as no Default or Event of Default has occurred and remains continuing, Guarantor’s obligation under this Section 7 to pay the reasonable and documented attorneys’ fees and expenses incurred by Guaranty Beneficiary shall be limited to paying the reasonable and documented fees and expenses of one law firm selected by Guaranty Beneficiary in its sole discretion; provided, further, however, that, for the avoidance of doubt, such limitation shall not apply to any reasonable and documented attorneys’ fees and expenses incurred by

 

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Guaranty Beneficiary during the continuance of a Default or Event of Default even if such event subsequently ceases to be continuing.

Section 8. Addresses for Notices. The provisions of Section 21 (Notices) of the MLS Intercreditor Agreement shall apply as if fully set forth herein.

[Signatures Follow]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Guaranty as of the date first written above.

 

Exhibit 10.6

EXECUTION VERSION

 

 

SECOND AMENDED AND RESTATED

RECEIVABLES PURCHASE AGREEMENT

Dated as of November 19, 2015

among

SPRINT SPECTRUM L.P.,

individually and as Servicer,

THE PERSONS PARTY HERETO AS SELLERS,

as Sellers,

THE VARIOUS CONDUIT PURCHASERS, COMMITTED PURCHASERS, AND

PURCHASER AGENTS FROM TIME TO TIME PARTY HERETO,

MIZUHO BANK, LTD.,

as Collateral Agent,

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH,

as an Administrative Agent,

MIZUHO BANK, LTD.,

as an Administrative Agent,

and

SMBC NIKKO SECURITIES AMERICA, INC.

as an Administrative Agent

 

 

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TABLE OF CONTENTS

 

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ARTICLE I     PURCHASES AND REINVESTMENTS					2
SECTION 1.1		Purchases; Limits on Purchasers’ Obligations			2
SECTION 1.2		Purchase Procedures; Assignment of the Sellers’ Interests			3
SECTION 1.3		Reinvestments of Certain Collections; Payment of Remaining Collections; Asset Portfolios			9
SECTION 1.4		Repurchase of Certain Receivables			13
SECTION 1.5		Sellers Jointly and Severally Liable for Obligations			14
ARTICLE II     COMPUTATIONAL RULES					18
SECTION 2.1		Selection of Rate Tranches			18
SECTION 2.2		Computation of each Purchaser’s Investment and each Purchaser’s Tranche Investment			19
SECTION 2.3		Computation of Yield			19
SECTION 2.4		Estimates of Yield Rate, Fees, Etc			19
ARTICLE III     SETTLEMENTS					20
SECTION 3.1		Settlement Procedures			20
SECTION 3.2		Deemed Collections; Reduction of Purchasers’ Total Investment, Etc			25
SECTION 3.3		Payments and Computations, Etc			27
SECTION 3.4		Treatment of Collections and Deemed Collections			33
SECTION 3.5		Extension of the Purchase Termination Date			33
ARTICLE IV     FEES AND YIELD PROTECTION					34
SECTION 4.1		Fees			34
SECTION 4.2		Yield Protection			34
SECTION 4.3		Funding Losses			36
SECTION 4.4		Removal of Purchasers			37
SECTION 4.5		Non-Reinvestment Events			37
ARTICLE V     CONDITIONS OF PURCHASES					40
SECTION 5.1		Conditions Precedent to Effectiveness			40
SECTION 5.2		Conditions Precedent to All Purchases and Reinvestments			41
ARTICLE VI     REPRESENTATIONS AND WARRANTIES					42
SECTION 6.1		Representations and Warranties of the Sellers			42
SECTION 6.2		Representations and Warranties of Sprint Spectrum			47
ARTICLE VII     GENERAL COVENANTS OF SELLERS AND SERVICER					51

 

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TABLE OF CONTENTS

(continued)

 

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SECTION 7.1		Affirmative Covenants of the Sellers			51
SECTION 7.2		Reporting Requirements of the Sellers			55
SECTION 7.3		Negative Covenants of the Sellers			56
SECTION 7.4		Affirmative Covenants of Sprint Spectrum			59
SECTION 7.5		Reporting Requirements of Sprint Spectrum			62
SECTION 7.6		Negative Covenants of Sprint Spectrum			65
SECTION 7.7		Nature of Obligations			67
SECTION 7.8		Corporate Separateness; Related Matters and Covenants			67
ARTICLE VIII     ADMINISTRATION AND COLLECTION					71
SECTION 8.1		Designation of the Servicer			71
SECTION 8.2		Duties of the Servicer			73
SECTION 8.3		Rights of the Collateral Agent			74
SECTION 8.4		Responsibilities of the Servicer			76
SECTION 8.5		Further Action Evidencing Purchases and Reinvestments			76
SECTION 8.6		Application of Collections			76
SECTION 8.7		Collections outside the Lock-Box Accounts			76
SECTION 8.8		Clean-up Call			77
SECTION 8.9		Cap Reserve Account; Cap Pool Hold-Back Amount; Calculation Agents			77
ARTICLE IX     SECURITY INTEREST					79
SECTION 9.1		Grant of Security Interest			79
SECTION 9.2		Remedies; Waiver			80
ARTICLE X     EVENTS OF TERMINATION					80
SECTION 10.1		Events of Termination			80
ARTICLE XI     PURCHASER AGENTS; COLLATERAL AGENT; ADMINISTRATIVE AGENTS; CERTAIN RELATED MATTERS					82
SECTION 11.1		Limited Liability of Purchasers, Purchaser Agents, Collateral Agent and the Administrative Agents			82
SECTION 11.2		Authorization and Action of each Purchaser Agent			83
SECTION 11.3		Authorization and Action of each Administrative Agent and Collateral Agent			83
SECTION 11.4		Delegation of Duties of each Purchaser Agent			84

 

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TABLE OF CONTENTS

(continued)

 

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SECTION 11.5		Delegation of Duties of each Administrative Agent and the Collateral Agent			84
SECTION 11.6		Successor Administrative Agent and Collateral Agent			84
SECTION 11.7		Indemnification			85
SECTION 11.8		Reliance, etc			85
SECTION 11.9		Purchasers and Affiliates			86
SECTION 11.10		Sharing of Recoveries			86
SECTION 11.11		Non-Reliance			86
ARTICLE XII     INDEMNIFICATION					87
SECTION 12.1		Indemnities by the Sellers			87
SECTION 12.2		Indemnity by the Servicer			89
ARTICLE XIII     MISCELLANEOUS					89
SECTION 13.1		Amendments, Etc			89
SECTION 13.2		Notices, Etc			90
SECTION 13.3		Successors and Assigns; Participations; Assignments			91
SECTION 13.4		No Waiver; Remedies; Set-Off			93
SECTION 13.5		Binding Effect; Survival			94
SECTION 13.6		Costs and Expenses			94
SECTION 13.7		No Proceedings			95
SECTION 13.8		Confidentiality			95
SECTION 13.9		Captions and Cross References			98
SECTION 13.10		Integration			99
SECTION 13.11		Governing Law			99
SECTION 13.12		Waiver of Jury Trial			99
SECTION 13.13		Consent to Jurisdiction; Waiver of Immunities			99
SECTION 13.14		Execution in Counterparts			100
SECTION 13.15		Pledge to a Federal Reserve Bank			100
SECTION 13.16		Severability			100
SECTION 13.17		No Party Deemed Drafter			100
SECTION 13.18		Excluded Originator			100
SECTION 13.19		Restatement; No Novation			102

 

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TABLE OF CONTENTS

(continued)

 

 

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APPENDIX A		Definitions
SCHEDULE I		Payment Instructions
SCHEDULE II		Related Originators and Related Sellers
SCHEDULE III		Credit and Collection Policy
SCHEDULE IV		Form of ISC Contract
SCHEDULE V		ISC Advance Rate Matrix
SCHEDULE VI		Form of Collection Account Agreement
SCHEDULE VII		ISC Pool Commitments, SCC Pool Commitments and Lease Pool Commitments
SCHEDULE VIII		Form of Lease Contract
SCHEDULE IX		Lease Advance Rate Matrix
SCHEDULE 1.2(a)		Purchase Notice
SCHEDULE 3.2(b)		Paydown Notice
SCHEDULE 6.1(l)		UCC Details
SCHEDULE 6.1(m)		Lock-Box Information
SCHEDULE 13.2		Addresses for Notices
EXHIBIT 3.1(a)		Form of Information Package
EXHIBIT 7.5		Form of Compliance Certificate

 

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SECOND AMENDED AND RESTATED

RECEIVABLES PURCHASE AGREEMENT

This SECOND AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT dated as of November 19, 2015 (this “Agreement”), is entered into by and among SPRINT SPECTRUM L.P., a Delaware limited partnership (“Sprint Spectrum”), individually and as Servicer, THE PERSONS IDENTIFIED ON THE SIGNATURE PAGES HERETO AS SELLERS (each a “Seller” and together, the “Sellers”), the various CONDUIT PURCHASERS, COMMITTED PURCHASERS and PURCHASER AGENTS from time to time party hereto, THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH (“BTMUNY”), as SCC Administrative Agent (as defined below), MIZUHO BANK, LTD., (“Mizuho”) as ISC Administrative Agent (as defined below), SMBC NIKKO SECURITIES AMERICA, INC., (“SMBCSI”) as Lease Administrative Agent (as defined below) and Mizuho, as Collateral Agent (as defined below).

B A C K G R O U N D:

1. Restatement. The Sellers, Sprint Spectrum, the Purchasers (as defined below), the Purchaser Agents (as defined below) and the SCC Administrative Agent have entered into that certain Amended and Restated Receivables Purchase Agreement dated as of April 24, 2015 (the “Existing RPA”), pursuant to which, on the terms and conditions set forth therein, the Purchasers agreed to purchase SCC Receivables and ISC Receivables from the Sellers. The parties hereto desire to amend and restate the Existing RPA in order to, among other things, effect the sale by the Sellers of the Lease Receivables (as defined below) and the Purchase of such Lease Receivables by the Lease Administrative Agent on behalf of the Purchasers as set forth herein and to effect the appointment of SMBCSI, as Lease Administrative Agent.

2. Rebalancing of Purchaser Group Investments. With respect to each Receivable Pool, the Sellers hereby request a one-time non-ratable reduction of Investment from each Pool Assigning Purchaser in an amount equal to the excess of (i) such Pool Assigning Purchaser’s Purchaser Group’s Investment with respect to such Receivable Pool over (ii) an amount equal to such Pool Assigning Purchaser’s Purchaser Group’s Ratable Share in respect of such Receivable Pool times the Purchasers’ Pool Commitment with respect to such Receivable Pool (after giving effect to the adjustments set forth in this Agreement). All accrued and unpaid Yield and fees with respect to such Investments so reduced shall be payable by the Sellers on the next occurring Settlement Date. In connection therewith, the Sellers hereby request a one-time non-ratable Purchase from each Pool Assignee Purchaser in an amount equal to the excess of (i) an amount equal to such Pool Assignee Purchaser’s Purchaser Group’s Ratable Share in respect of such Receivable Pool times the Purchasers’ Pool Commitment with respect to such Receivable Pool (after giving effect to the adjustments set forth in this Agreement) over (ii) such Pool Assignee Purchaser’s Purchaser Group’s Investment. For administrative convenience, the Sellers hereby instruct Pool Assignee Purchasers to fund the foregoing Purchases by paying the proceeds thereof directly to the Pool Assigning Purchasers as the foregoing reduction in Investment of the Pool Assigning Purchasers on the Sellers’ behalf and as detailed on the final flow of funds

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memorandum delivered on the Second Restatement Date. For purposes of this paragraph the following terms shall have the following meanings:

“Pool Assignee Purchaser” means, with respect to any Receivable Pool, a Purchaser whose Purchaser Group’s Ratable Share in respect of such Receivable Pool times the Purchasers’ Pool Commitment with respect to such Receivable Pool (after giving effect to the adjustments set forth in this Agreement) exceeds such Purchaser’s Purchaser Group’s Investment.

“Pool Assigning Purchaser” means, with respect to any Receivable Pool, a Purchaser whose Purchaser Group’s Ratable Share in respect of such Receivable Pool times the Purchasers’ Pool Commitment with respect to such Receivable Pool (after giving effect to the adjustments set forth in this Agreement) is less than such Purchaser’s Purchaser Group’s Investment.

NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, the parties hereto agree as follows:

Capitalized terms used and not otherwise defined in this Agreement are used as defined in (or by reference in) Appendix A, and the other interpretive provisions set out in Appendix A shall be applied in the interpretation of this Agreement.

ARTICLE I

PURCHASES AND REINVESTMENTS

SECTION 1.1 Purchases; Limits on Purchasers’ Obligations. Upon the terms and subject to the conditions of this Agreement, any Seller (on behalf of all Sellers, or the Servicer on their behalf) may, from time to time prior to the Purchase Termination Date, request that the Purchasers (which in the case of the Conduit Purchasers, shall be in their sole discretion), make purchases of SCC Pool Receivables and the Related Assets, to make purchases of ISC Pool Receivables and the Related Assets and/or to make purchases of Lease Pool Receivables and the Related Assets (each such purchase of SCC Pool Receivables, ISC Pool Receivables or Lease Pool Receivables, as the case may be, whether made by a Conduit Purchaser or a Committed Purchaser, a “Purchase”) and the Purchaser Agents on behalf of the Purchasers in their Purchaser Group in respect of each such Purchase shall make payments to the Sellers in its Ratable Share in respect thereof. The aggregate purchase price for the Purchase of each Pool Receivable and Related Assets in respect of a Receivable Pool shall be comprised of an initial cash purchase price (the “Initial Cash Purchase Price”) and a deferred purchase price payable pursuant to Section 1.2(g) (the “RPA Deferred Purchase Price”). If any Conduit Purchaser is unwilling or unable for any reason to make its Purchaser Group’s Ratable Share of any of the Initial Cash Purchase Price of any proposed Purchase in respect of a Receivable Pool, the Sellers shall be deemed to have automatically requested that the Committed Purchaser in such Conduit Purchaser’s Purchaser Group make such Ratable Share of any such Purchase, in accordance with Section 1.2(b) in a cash amount equal to the lesser of: (i) the amount requested by the Sellers under Section 1.2(a) and (ii) after giving effect to any other Purchases on such day, the largest amount that will not cause (a) the Purchasers’ Pool Investment in respect of such Receivable Pool to exceed the Purchasers’ Pool Commitment in respect of such Receivable Pool, (b) the sum of the Purchasers’ Pool Investment and the Required Reserves in respect of such Receivable Pool

 

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to exceed the Net Portfolio Balance for such Receivable Pool or (c) the aggregate Investment of such Purchaser’s Purchaser Group in respect of such Receivable Pool to exceed the Pool Commitment in respect of such Receivable Pool of the Committed Purchasers in such Purchaser Group; provided, that the aggregate Initial Cash Purchase Price with respect to each Purchase made pursuant to this Section 1.1 relating to a Receivable Pool shall be an amount at least equal to $10,000,000 for any Purchase, and, in each case, in integral multiples of $100,000 in excess thereof. Each Committed Purchaser shall, subject to the terms and conditions hereof, make its Purchaser Group’s Ratable Share of any Purchase in respect of a Receivable Pool deemed requested by the Sellers above (unless its related Conduit Purchaser is making such Ratable Share of such Purchase), in such amount as would not cause its Purchaser Group Investment in respect of such Receivable Pool after giving effect to such Purchase (and any other Purchase to be made by such Purchaser Group on such date) to exceed its Purchaser Group’s Commitment in respect of such Receivable Pool . At no time shall a Conduit Purchaser that is not a Committed Purchaser have any obligation or commitment to make any Purchase. Each Purchaser will also make reinvestment Purchases in respect of each Receivable Pool (each such Purchase, a “Reinvestment”), in its Purchaser Group’s Ratable Share, as, and to the extent, described in Section 1.3. In respect of each Purchase of Pool Receivables, the excess of (i) in respect of the Purchase of SCC Pool Receivables, the aggregate Unpaid Balances of such SCC Pool Receivables as of such Purchase Date, (ii) in respect of the Purchase of ISC Pool Receivables, the aggregate Unpaid Balances of such ISC Pool Receivables as of such Purchase Date and (iii) in respect of the Purchase of Lease Pool Receivables, the aggregate Unpaid Balances of such Lease Pool Receivables as of such Purchase Date, over the Initial Cash Purchase Price (including a Reinvestment of Collections) in respect of such Purchase shall constitute the RPA Deferred Purchase Price payable with respect to the Purchase of such Pool Receivables pursuant to Section 1.2(g).

SECTION 1.2 Purchase Procedures; Assignment of the Sellers’ Interests.

(a) Notice of Purchase. Each Purchase of SCC Pool Receivables, ISC Pool Receivables or Lease Pool Receivables, as the case may be, shall be made on notice from any Seller or the Servicer (on behalf of all Sellers) to the applicable Administrative Agent not later than 11:00 a.m. (New York City time) on the third (3^rd) Business Day preceding the date of such proposed Purchase and Purchases of SCC Pool Receivables, Lease Pool Receivables and ISC Pool Receivables may be made in one notice to all three Administrative Agents. Any such notice of a proposed Purchase shall be in substantially the form of Schedule 1.2(a) hereto and shall specify (A) the desired amount and date of such proposed Purchase (which shall be a Business Day), (B) the amount of such proposed Purchase and (C) a pro forma calculation of the Net Portfolio Balance for the related Receivable Pool after giving effect to such Purchase; provided, however, that, Sellers (and the Servicer on their behalf) shall not submit, and the Purchasers shall not be required to fund, more than six (6) Purchases per calendar month. If any Conduit Purchaser is willing and able, in its sole discretion, to make its Purchaser Group’s Ratable Share of a Purchase requested of it pursuant to this Section 1.2(a) subject to the terms and conditions hereof, such Conduit Purchaser shall make such Purchase by transferring such amount in accordance with clause (b) below on the requested Purchase Date. If any Conduit Purchaser is unwilling or unable for any reason to make its Purchaser Group’s Ratable Share of such Purchase, subject to the terms and conditions hereof, the

 

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Committed Purchaser in such Conduit Purchaser’s Purchaser Group shall, subject to the terms and conditions hereof, make such Purchaser Group’s Ratable Share of such Purchase by transferring such amount in accordance with clause (b) below on the requested Purchase Date.

Not later than noon (New York City time) on the Business Day following its receipt of a Purchase notice in respect of Receivables of a Receivable Pool pursuant to the foregoing paragraph (it being understood that any such notice received by the applicable Administrative Agent after 11:00 a.m. (New York City time) shall be deemed to have been received on the following Business Day) the applicable Administrative Agent shall deliver a copy of such Purchase notice to each Purchaser Agent and the other Administrative Agents (or shall advise each Purchaser Agent and the other Administrative Agents as to the contents thereof) and shall advise each Purchaser Agent of the amount of the requested Purchase to be funded by each Purchaser Group in accordance with each Purchaser Group’s Ratable Share.

(b) Payment of Initial Cash Purchase Price. On the date of each Purchase hereunder in respect of Receivables of a Receivable Pool (the “Purchase Date”) (or on the Delayed Purchase Date with respect to a Purchaser Group that has delivered a related Delayed Purchase Notification pursuant to Section 1.2(i)), the applicable Purchasers shall, upon satisfaction of the applicable conditions set forth herein (including in Article V), pay their Purchaser Group’s Ratable Share of the aggregate Initial Cash Purchase Price with respect to such Purchase in immediately available funds to the Sellers at the account of the Sellers specified on Schedule I or at such other account designated from time to time by the Servicer (on behalf of the Sellers) in a written notice to the applicable Administrative Agent. The Initial Cash Purchase Price in respect of the Receivables relating to a Receivable Pool shall also be deemed to be paid to the Sellers for any Pool Receivable and Related Assets by the amounts of any Collections in respect of such Receivable Pool applied as a Reinvestment in a new Pool Receivable and Related Assets in accordance with Section 1.3. The amount funded by the Purchasers in respect of each Purchase shall be allocated among the various Sellers on the applicable Purchase Date ratably in proportion to the amounts of their respective Eligible Receivables funded thereby, as reasonably determined by the Servicer. The Servicer shall maintain such books of account and other records adequate to make, evidence and record such allocations.

(c) Sale of Pool Receivables. On the date of each Purchase and Reinvestment of Pool Receivables relating to a Receivable Pool hereunder, each Seller sells, assigns and transfers to the Collateral Agent (for the benefit of the Purchasers) (ratably, according to each Purchaser’s Investment), in consideration of the aggregate Initial Cash Purchase Price and the RPA Deferred Purchase Price in respect of such Receivable Pool, as applicable, effective on and as of the date of each Purchase and Reinvestment, all of its right, title and interest in, to and under (i) all Pool Receivables relating to each Receivable Pool, (ii) all Related Assets with respect to each Pool Receivable, (iii) all Collections with respect to such Pool Receivables, (iv) the Lock-Box Accounts and all Collections relating to such Receivable Pool on deposit therein, and all certificates and instruments, if any, from time to time evidencing such Lock-Box Accounts and amounts

 

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on deposit therein, (v) subject to the proviso below, all rights (but none of the obligations) of the Sellers under the Sale Agreement relating to each Receivable Pool, and (vi) all proceeds of, and all amounts received or receivable under any or all of the foregoing (with respect to each Receivable Pool, an “Asset Portfolio”); provided that the Asset Portfolio shall not include the Lease Contracts or the Lease Devices. For the avoidance of doubt, the foregoing shall not (x) derogate from any right the Collateral Agent, the Administrative Agents, the Purchasers or the Purchaser Agents may have (under Applicable Law or otherwise) to seek or obtain an involuntary Lien (including, without limitation, a judgment lien) on any Lease Device now owned or hereafter acquired by any Seller or (y) invalidate or limit the security interest in the Lease Contracts granted by the Sellers to the Collateral Agent pursuant to Section 9.1.

(d) Characterization as a Purchase and Sale; Recharacterization. (i) It is the intention of the parties to this Agreement that the transfer and conveyance of each Seller’s right, title and interest in, to and under each Asset Portfolio to the Collateral Agent (for the benefit of the Purchasers) pursuant to this Agreement shall constitute a purchase and sale and not a pledge for security, and such purchase and sale of the Asset Portfolios to the Collateral Agent (for the benefit of the Purchasers) hereunder shall be treated as a sale for all purposes (except as may be permitted for tax purposes as provided in Section 1.2(d)(ii)). The provisions of this Agreement and the other Transaction Documents shall be construed to further these intentions of the parties. If, notwithstanding the foregoing, the transfer and conveyance of any Asset Portfolio to the Collateral Agent (for the benefit of the Purchasers) is characterized by any bankruptcy trustee or any other Person as a pledge and not a sale, the parties intend that each Seller shall be deemed hereunder to have granted, and each Seller does hereby grant, to the Collateral Agent (for the benefit of the Purchasers) a security interest in and general lien on all of such Seller’s right, title and interest now or hereafter existing in, to and under all of such Seller’s assets, whether now owned or hereafter acquired, and wherever located (whether or not in the possession or control of such Seller), including all of such Seller’s right, title and interest in, to and under such Asset Portfolio; provided that no Seller hereby pledges or otherwise grants a security interest in the Lease Contracts or the Lease Devices. For the avoidance of doubt, (x) the foregoing is in addition to, and shall not be construed to limit, Section 9.1 or the Sellers’ grants of security interests thereunder, and (y) the foregoing shall not derogate from any right the Collateral Agent, the Administrative Agents, the Purchasers or the Purchaser Agents may have (under Applicable Law or otherwise) to seek or obtain a Lien on any Lease Contract or Lease Device now owned or hereafter acquired by any Seller. For the avoidance of doubt, the foregoing shall not be construed to require any party hereto to characterize the transfer and conveyance of Lease Receivables hereunder as a sale for financial accounting purposes.

(ii) Tax Treatment.

(A) It is the intention of the Sellers (or, if applicable, the Originators), the Servicer, the Administrative Agents and the Purchasers that, for purposes of U.S. federal income tax and state and local taxes measured by net income, each Purchase and Reinvestment will be treated as a loan from the applicable Purchaser

 

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to the applicable Originator or Seller, as the case may be under applicable tax laws (it being understood that all payments to the Purchasers, in their capacity as such, representing Yield, fees and other amounts accrued under this Agreement or the other Transaction Documents shall be deemed to constitute interest payments or other payments in connection with such loan), and none of the Sellers (or, if applicable, the Originators), the Servicer, any Administrative Agent, the Collateral Agent nor the Purchasers shall take any position inconsistent therewith for such tax purposes, unless otherwise required by applicable laws as confirmed in the opinion of nationally recognized tax counsel and the person taking any such inconsistent position provides written advance notice to the other Affected Parties of such change in position, it being understood that the parties to this Agreement will otherwise defend in good faith such agreed-upon position prior to such change in position.

(B) The Servicer and each Seller, by entering into this Agreement, and the Purchasers, by funding the Purchase of the Asset Portfolios and any Reinvestment, agree to treat the Purchase of the Asset Portfolios and any Reinvestment, for purposes of U.S. federal income tax and state and local taxes measured by net income, and for state and local sales and other transactional tax purposes, as creating indebtedness secured by the Asset Portfolios. Accordingly, the Sellers (or, if applicable, the Originators), rather than the Collateral Agent, the Administrative Agents, the Purchasers or any other Affected Party, shall be entitled to and shall retain the benefit of (1) any bad debt deduction for written-off receivables for purposes of U.S. federal income tax and state and local taxes measured by net income and (2) any deduction, credit or refund with respect to state and local sales and other transactional taxes paid or collected and remitted to the appropriate Governmental Authority on written-off receivables. The provisions of this Agreement and all related Transaction Documents shall be construed to further these intentions of the parties.

(e) Purchasers Limitation on Payments. Notwithstanding any provision contained in this Agreement or any other Transaction Document to the contrary, none of the Purchasers, Purchaser Agents, the Collateral Agent or the Administrative Agents shall be obligated (whether on behalf of a Purchaser or otherwise) to, pay any amount to any Seller as a Reinvestment under Section 1.3 or in respect of any portion of the RPA Deferred Purchase Price relating to any Receivable Pool, except to the extent that Collections in respect of the applicable Receivable Pool are available for distribution to the Sellers for such purpose in accordance with this Agreement. In addition, notwithstanding anything to the contrary contained in this Agreement or any other Transaction Document, the obligations of any Purchaser that is a commercial paper conduit or similar vehicle under this Agreement and all other Transaction Documents shall be payable by such Purchaser solely to the extent of funds received from the Sellers in accordance herewith or from any party to any Transaction Document in accordance with the terms thereof in excess of funds necessary to pay such Person’s matured and maturing Commercial Paper Notes or other senior indebtedness when due. Any amount which an Administrative Agent, the Collateral Agent, a Purchaser Agent or a Purchaser is not obligated to pay pursuant to the operation of the two preceding sentences shall not

 

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constitute a claim (as defined in § 101 of the Bankruptcy Code) against, or corporate obligation of, any Purchaser Agent, the Collateral Agent, any Purchaser or any Administrative Agent, as applicable, for any such insufficiency unless and until such amount becomes available for distribution to the Sellers pursuant to the terms hereof.

(f) Obligations Not Assumed. The foregoing sale, assignment, transfer and conveyance does not constitute, and is not intended to result in, the creation or an assumption by any Administrative Agent, any Purchaser Agent, the Collateral Agent or any Purchaser of any obligation or liability of any Seller, any Originator, the Servicer, or any other Person under or in connection with all, or any portion of, any Asset Portfolio, all of which shall remain the obligations and liabilities of the Sellers, Originators, the Servicer and such other Persons, as applicable.

(g) RPA Deferred Purchase Price. In accordance with the terms of this Agreement, the Servicer shall, on behalf of the Collateral Agent, the applicable Administrative Agent, and each Purchaser, be deemed to automatically and immediately pay to the Sellers the RPA Deferred Purchase Price relating to each Receivable Pool from time to time (i) prior to the Final Payout Date, when and to the extent funds are available therefor pursuant to Section 1.3 and (ii) after the Final Payout Date, on each Business Day from Collections received in respect of such Receivable Pool to the extent such Collections exceed the accrued and unpaid Servicing Fee, in each case without further set-off or counterclaim. Any payment of any amount of RPA Deferred Purchase Price shall be deemed to be made by each Purchaser Group according to its Ratable Share of such amount. Collections in respect of a Receivable Pool remitted to the Sellers in payment of the RPA Deferred Purchase Price in respect of a Receivable Pool hereunder shall be allocated among the various Sellers ratably in proportion to the amounts of their respective Eligible Receivables relating to such Receivable Pool funded thereby, as reasonably determined by the Servicer. The Servicer shall maintain such books of account and other records adequate to make, evidence and record such allocations.

(h) Obligations. Each Committed Purchaser’s obligations hereunder shall be several, such that the failure of any Committed Purchaser to make a payment in connection with any Purchase hereunder, shall not relieve any other Committed Purchaser of its obligations hereunder to make payment for any Purchase.

(i) Delayed Funding. Notwithstanding anything to the contrary in this Agreement, at any time after any Seller delivers a Purchase notice in respect of a Receivable Pool pursuant to Section 1.2(a), and prior to the Purchase Date requested thereby, any Purchaser Agent (on behalf of the Purchasers in its Purchaser Group) that has delivered the certifications set forth in the following paragraph may notify the applicable Administrative Agent, each Purchaser Agent and the Servicer and the Sellers in writing (such notice, a “Delayed Purchase Notification”) of its Purchaser Group’s intention to fund all or any portion of its Ratable Share of such Purchase on the Delayed Purchase Date rather than on the requested Purchase Date. If any Purchaser Agent so delivers a Delayed Purchase Notification with respect to a requested Purchase Date, no Purchaser shall be obligated to, or shall, fund the related Purchase (or such Purchaser’s portion thereof) until the applicable Delayed Purchase Date, and the Sellers may (i) not

 

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later than three (3) Business Days prior to such Delayed Purchase Date, deliver an updated Purchase notice to the applicable Administrative Agent in accordance with Section 1.2(a) specifying the information set forth in clauses (A) through (C) thereof with respect to such Delayed Purchase Date, and such Delayed Purchase Date shall constitute a Purchase Date for all purposes hereof or (ii) at any time prior to the third (3^rd) Business Day preceding the Delayed Purchase Date, rescind the Purchase notice partially or in its entirety (and if partially, pro rata among the Purchaser Groups in accordance with the terms of this Agreement and the amount of such partial reduction shall be an amount at least equal to $10,000,000 for any Purchase and in integral multiples of $100,000 in excess thereof). In the event the Sellers comply with clause (i) above following any Delayed Purchase Notification, all Purchaser Groups shall fund their respective portions of the applicable Purchase on the applicable Delayed Purchase Date (rather than on the Sellers’ originally requested Purchase Date) so long as all conditions precedent to Purchases set forth herein are satisfied on such Delayed Purchase Date.

If any Purchaser Agent delivers a Delayed Purchase Notification pursuant to this Section 1.2(i), such Purchaser Agent shall (i) concurrently with such delivery, deliver to the applicable Administrative Agent, each Purchaser Agent and the Sellers a certification by such Purchaser Agent or the Committed Purchaser in its Purchaser Group certifying that such Committed Purchaser intends to take similar action in other substantially similar purchase or financing arrangements (which are subject to comparable funding levels) in which it is involved in a correlative role, and (ii) not less than sixty (60) days prior to delivering its first Delayed Purchase Notification hereunder, deliver to the applicable Administrative Agent, each Purchaser Agent and the Servicer (on behalf of the Sellers) a certification by such Purchaser Agent or the Committed Purchaser in its Purchaser Group certifying that (x) such Committed Purchaser (or its holding company) is required to comply with a “liquidity coverage ratio” (including as set forth in “Basel III” or as “Basel III” or portions thereof may be adopted in any particular jurisdiction) which negatively impacts such Committed Purchaser’s (or its holding company’s) capital requirements for holding interests or obligations hereunder and (y) implementing the delayed funding mechanics provided in this Section reduces the negative impact on such “liquidity coverage ratio” on such Committed Purchaser’s (or its holding company’s) regulatory capital requirements. The Administrative Agents, the Purchaser Agents, the Purchasers and the Sellers may, without incurring any liability to any party hereto or any other Person, rely and act upon the foregoing certifications and any related Delayed Purchase Notification without further investigation or inquiry. Notwithstanding anything to the contrary in this Agreement, for the avoidance of doubt, the parties hereto hereby agree that this Section 1.2(i) and the delayed funding mechanism described herein shall not apply to Reinvestments permitted hereunder.

(j) ISC Upgrade Program. To the extent an ISC Contract evidencing an ISC Upgrade Receivable permits the Obligor to terminate the ISC Contract upon the trade-in of a qualifying ISC Device (the “ISC Surrendered Device”) in accordance with the ISC Upgrade Program, then, notwithstanding any other provision of, or failure to satisfy any condition under, the Transaction Documents (but only so long as no Event of Termination or Non-Reinvestment Event has occurred and is continuing), upon receipt of such ISC Surrendered Device, the Servicer, on behalf of the Purchasers, shall deliver

 

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such ISC Surrendered Device to or at the direction of the applicable Seller (whereupon the applicable Seller may distribute or otherwise transfer such ISC Surrendered Device to the applicable Originator or another Affiliate) and such delivery shall fulfill both the ISC Surrendered Device Return Requirement attributable to such ISC Upgrade Receivable and the obligation of the ISC Administrative Agent on behalf of the Purchasers to pay the ISC Conditional DPP relating to such ISC Upgrade Receivable.

(k) Returned Lease Devices and Lease Purchase Option Proceeds. When any Lease Device related to a Lease Contract is returned to the Servicer (or any of its Affiliates) in connection with the expiration of such Lease Contract in accordance with its terms or in connection with termination of such Lease Contract pursuant to the Lease Upgrade Program (any such Lease Device, a “Lease Returned Device”) or the Servicer (or any of its Affiliates) receives Lease Purchase Option Proceeds, then, notwithstanding any other provision of, or failure to satisfy any condition under, the Transaction Documents (but only so long as no Event of Termination or Non-Reinvestment Event has occurred and is continuing), upon receipt of such Lease Returned Device or Lease Purchase Option Proceeds, the Servicer shall deliver such Lease Returned Device or Lease Purchase Option Proceeds to or at the direction of the applicable Seller (whereupon the applicable Seller may distribute or otherwise transfer such Lease Returned Device or Lease Purchase Option Proceeds to the applicable Originator or another Affiliate) and such delivery shall fulfill both the Lease Returned Device Return Requirement attributable to such Lease Returned Device and the obligation of the Lease Administrative Agent on behalf of the Purchasers to pay any remaining Lease Conditional DPP relating to such Lease Contract.

SECTION 1.3 Reinvestments of Certain Collections; Payment of Remaining Collections; Asset Portfolios.

(a) On the close of business on each Business Day during the period from the Closing Date, with respect to the SCC Receivable Pool, the Restatement Effective Date, with respect to the ISC Receivable Pool and the Second Restatement Effective Date, with respect to the Lease Receivable Pool, to the Final Payout Date, the Servicer shall in respect of each Receivable Pool out of all Collections from Pool Receivables relating to such Receivable Pool received (or deemed received) since the end of the immediately preceding Business Day:

(i) set aside and hold in trust for the applicable Administrative Agent on behalf of each Purchaser Group, an amount (the “Pool Hold-Back Amount”) (based on information provided by such Administrative Agent pursuant to Article II) equal to the sum of: (a) the estimated amount of aggregate Yield accrued in respect of each Rate Tranche relating to such Receivable Pool, (b) all other Obligations payable to the Administrative Agents, the Collateral Agent, Purchaser Agents, Purchasers or any other Affected Party hereunder which have been allocated by the Servicer to such Receivable Pool pursuant to Section 8.2(a) and (c) the estimated amount of such Receivable Pool’s Pro Rata Share of the Servicing Fee (in each case, accrued through such day and not so previously set aside or anticipated to accrue through the end of the then current Settlement

 

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Period, as determined by the Servicer based upon, among other relevant information, the then outstanding Purchasers’ Pool Investment and the Yield Rates then in effect in respect of such Receivable Pool), (d) in respect of the ISC Receivable Pool and Lease Receivable Pool, an amount equal to the then current Estimated Cap Deficiency Amount, and prior to the time that an amount equal to the Cap Reserve Amount has been remitted to the Cap Reserve Account following the Cap Account Trigger Date pursuant to Section 8.9(b), an amount equal to the Cap Reserve Amount; provided, that the Servicer shall not be required to hold Collections relating to any Receivable Pool that have been so set aside in a separate deposit account containing only such Collections, and may commingle such Collections with its own funds, so long as the Servicer is able, on each Business Day and on an equitable and consistent basis, to identify which funds are Collections relating to each such Receivable Pool; it being understood that the Collateral Agent and applicable Administrative Agent, on behalf of Purchasers, shall have a claim against the Servicer to make payments pursuant to Sections 1.3(c), 3.1(b) or 3.1(d) in respect of a Receivable Pool (which claims shall be full recourse to the Servicer) in an amount equal to the amount of such Collections relating to such Receivable Pool that have not been set aside but that have been so commingled; provided further, that the Servicer shall hold Collections that have been so set aside in a separate deposit account containing only such Collections if the Collateral Agent or any Administrative Agent has requested that the Servicer not commingle funds during the continuance of any Specified Unmatured Event, Event of Termination, Collection Control Event or Non-Reinvestment Event; and

(ii) subject to Sections 3.1(b), 3.1(c)(iv), 3.1(d), 3.2(a) and 3.2(b), apply such Collections in excess of the Pool Hold-Back Amount relating to such Receivable Pool which are not required to be set aside and held in trust pursuant to clause (i) above (including any such Collections not set aside but commingled), to make Reinvestments in additional Pool Receivables and Related Assets relating to such Receivable Pool and, to the extent of any such amounts remaining after such Reinvestments, to be applied as RPA Deferred Purchase Price on existing Pool Receivables and Related Assets relating to such Receivable Pool; provided, that, (A) if (I) the sum of the Purchasers’ Pool Investment and the Required Reserves in respect of any Receivable Pool would exceed the Net Portfolio Balance for such Receivable Pool, (II) any Purchaser Group Investment in respect of such Receivable Pool would exceed the related Purchaser Group Commitment in respect of such Receivable Pool, (III) the Purchasers’ Pool Investment in respect of such Receivable Pool would exceed the Purchasers’ Pool Commitment in respect of such Receivable Pool or (IV) the aggregate Investment of any Exiting Purchaser is greater than zero (in each case, at such time and after giving effect to such Reinvestment), then the Servicer shall only make Reinvestments or apply such remaining amounts as RPA Deferred Purchase Price, as applicable, after first setting aside and holding in trust for the benefit of the applicable Administrative Agent on behalf of each Purchaser Group, in addition to the Pool Hold-Back Amount, a portion of such available Collections relating to such Receivable Pool not previously set aside for such purpose and then so held in respect of such Receivable Pool equal to the sum of the following amounts (the

 

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“Pool Deficiency Amount”) (i) the amount, if any, which is necessary to reduce the sum of the Purchasers’ Pool Investment in such Receivable Pool and the Required Reserves in respect of such Receivable Pool at such time to an amount equal to the Net Portfolio Balance for such Receivable Pool at such time, plus (ii) the amount, if any, which is necessary to reduce the aggregate Investment in respect of such Receivable Pool of all Exiting Purchasers in such Receivable Pool to zero, plus (iii) the amount necessary to reduce the Purchasers’ Pool Investment in respect of such Receivable Pool to an amount equal to the Purchasers’ Pool Commitment in respect of such Receivable Pool, plus (iv) the amount, if any, necessary to reduce each Purchaser Group Investment in respect of such Receivable Pool to an amount equal to or less than the related Purchaser Group Commitment in respect of such Receivable Pool, plus (v) the amount, if any, equal to the difference between the Available Pool Deficiency Amount in respect of the other Receivable Pool which has been set aside for the purposes set forth in clauses (i) through (iv) in respect of such other Receivable Pool and the Pool Deficiency Amount for such other Receivable Pool, in each case, at such time (any remaining Collections relating to such Receivable Pool after giving effect to this proviso shall then be applied as described above in this Section 1.3(a)(ii)); and (B) if the conditions precedent to Reinvestment in clauses (a) or (b) of Section 5.2 are not satisfied or no Reinvestments are to be made in accordance with Section 3.2(d), then the Servicer shall not apply any of such remaining Collections to a Reinvestment or as RPA Deferred Purchase Price pursuant to this clause (ii) (it being understood and agreed that, in any event, no portion of the RPA Deferred Purchase Price in respect of any Receivable Pool may be paid to any Seller on any applicable date if, on or prior to such date, an Event of Termination, Collection Control Event or Non-Reinvestment Event has occurred and is continuing or the Liquidation Period has commenced, in each case, until Obligations have been indefeasibly paid in full in cash).

(b) Unreinvested Collections. Subject to Sections 1.3(a)(ii) and 3.1(c)(iv), the Servicer shall in respect of each Receivable Pool set aside and hold in trust for the applicable Administrative Agent on behalf of each Purchaser Group, all Collections in respect of the Pool Deficiency Amount relating to such Receivable Pool which, pursuant to clause (ii) of Section 1.3(a), may not be reinvested in the Pool Receivables and Related Assets or applied as RPA Deferred Purchase Price in respect of such Receivable Pool; provided, that the Servicer may in respect of any Receivable Pool commingle such Collections with its own funds, so long as the Servicer is able, on each Business Day and on an equitable and consistent basis, to identify which funds are Collections relating to each such Receivable Pool; it being understood that the Collateral Agent and the applicable Administrative Agent, on behalf of Purchaser Groups, shall have a claim against the Servicer to make payments pursuant to Sections 1.3(c), 3.1(b) or 3.1(d) (which claims shall be full recourse to the Servicer) in an amount equal to the amount of such Collections that have not been set aside or that have been so commingled; provided further, that the Servicer shall hold Collections that have been so set aside in a separate deposit account containing only such Collections if the Collateral Agent or any Administrative Agent has requested that the Servicer not commingle funds during the continuance of any Specified Unmatured Event, Event of Termination, Collection

 

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Control Event or Non-Reinvestment Event. If, prior to the date when Collections in respect of a Receivable Pool are required to be paid to the Purchaser Agents, pursuant to Section 1.3(c), the amount of such Collections so set aside in respect of a Receivable Pool exceeds the sum of the Pool Hold-back Amount plus the Pool Deficiency Amount in respect of such Receivable Pool and the conditions precedent to Reinvestment set forth in clauses (a) and (b) of Section 5.2 are satisfied and Reinvestments in respect of such Receivable Pool are permitted in accordance with Section 3.2(d), then the Servicer shall apply such Collections (or, if less, a portion of such Collections equal to the amount of such excess) in accordance with Section 1.3(a)(ii) to the making of a Reinvestment in respect of such Receivable Pool or otherwise to the payment of RPA Deferred Purchase Price in respect of such Receivable Pool.

(c) Payment of Amounts Set Aside.

(i) The Servicer shall, from the portion of the Pool Hold-Back Amount relating to each Receivable Pool set aside and held in trust pursuant to clause (i) of Section 1.3(a) in respect of Yield on a Rate Tranche relating to such Receivable Pool not funded by the issuance of Commercial Paper Notes (including under a Liquidity Agreement or an Enhancement Agreements) pay to the applicable Purchaser Agent such Yield on the last day of the then current Yield Period for such Rate Tranche based on information provided by such Purchaser Agent pursuant to Article II, or during the Liquidation Period or after the occurrence of an Event of Termination, Collection Control Event or Non-Reinvestment Event that remains continuing, on such earlier date or dates as the applicable Administrative Agent or the Collateral Agent shall require on at least one (1) Business Day’s prior written notice to the Servicer.

(ii) The Servicer shall, from the portion of the Pool Hold-Back Amount relating to each Receivable Pool set aside and held in trust pursuant to clause (i) of Section 1.3(a) above and not applied pursuant to clause (i) of this Section 1.3(c) and not set aside in respect of such Receivable Pool’s Pro Rata Share of the Servicing Fee, pay to the applicable Administrative Agent in respect of amounts owing to it in its capacity as Administrative Agent and each applicable Purchaser Agent and the Collateral Agent in respect of amounts owed to it and to the members of its Purchaser Group on the Settlement Date for each Settlement Period, as provided in Section 3.1, or during the Liquidation Period or after the occurrence of an Event of Termination, Collection Control Event or Non-Reinvestment Event that remains continuing, on such earlier date or dates as the Collateral Agent or the applicable Administrative Agent shall require on at least one (1) Business Day’s prior written notice to the Servicer.

(iii) If as of any Reporting Date prior to the Cap Account Trigger Date, the Cap Pool Hold-Back Amount (including the portion of the Cap Pool Hold-Back Amount which represents the then current Estimated Cap Deficiency Amount) is less than the Cap Reserve Amount as of such Reporting Date, the Sellers and the Servicer shall as promptly as practicable (and in any event within one (1) Business Day) cause an amount equal to such shortfall to be added to the

 

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Cap Pool Hold-Back Amount. To the extent that prior to the Cap Account Trigger Date, the Cap Pool Hold-Back Amount exceeds the sum of (x) the then current Cap Reserve Amount, and (y) the then current Estimated Cap Deficiency Amount as of such Reporting Date, such excess may be applied in accordance with Section 1.3(a).

(iv) On the Cap Account Trigger Date, the Servicer shall remit to the Cap Reserve Account from the Cap Pool Hold-Back Amount, an amount equal to the then current Cap Reserve Amount. If as of any Reporting Date after the Cap Account Trigger Date, a Cap Deficiency Amount exists, then the Servicer shall, from the portion of the Pool Hold-Back Amount set aside and held in trust pursuant to clause (i) of Section 1.3(a) above in respect of the Estimated Cap Deficiency Amount, remit to the Cap Reserve Account such Cap Deficiency Amount. If after the Cap Account Trigger Date, the Estimated Cap Deficiency Amount set aside and held in trust pursuant to clause (i) of Section 1.3(a) is less the Cap Deficiency Amount, the Servicer and the Sellers shall as promptly as practicable (and in any event within one (1) Business Day) remit, or cause to be remitted to the Cap Reserve Account an amount equal to such shortfall. To the extent that the Estimated Cap Deficiency Amount set aside pursuant to clause (i) of Section 1.3(a) above exceeds the Cap Deficiency Amount as of any Reporting Date, such excess may be applied in accordance with Section 1.3(a).

(v) The Servicer shall, from the Available Pool Deficiency Amount set aside and held in trust pursuant to Section 1.3(b) above, pay to the applicable Purchaser Agents the amounts required to be paid pursuant to, and for application, in accordance with Section 3.1(c)(ii).

SECTION 1.4 Repurchase of Certain Receivables.

(a) On each day during a Settlement Period, each Seller shall in respect of the SCC Receivable Pool and Lease Receivable Pool be deemed to have immediately repurchased from the Collateral Agent on behalf of the Purchasers any Receivables that become Aged Receivables on such day, and the Collateral Agent on behalf of the Purchasers shall convey (without any further action on any of their part required to accomplish such conveyance) to such Seller such Aged Receivables on such day and prior to such Aged Receivables being written off as uncollectible, it being understood and agreed that (i) the repurchase thereof shall be settled on the first Settlement Date to occur after the end of such Settlement Period in accordance with the following provisions of this Section, (ii) a Seller shall repurchase, and the Collateral Agent on behalf of the Purchasers shall so convey to such Seller, related Aged Receivables pursuant to this Section only to the extent that the aggregate Unpaid Balance of all of the Aged Receivables relating to the SCC Receivable Pool or Lease Receivable Pool, as applicable, repurchased by the Sellers during any Settlement Period would not exceed 8.0% of the aggregate initial Unpaid Balance of Receivables relating to such Receivable Pool transferred to the Purchasers pursuant to this Agreement during the related Settlement Period, and (iii) unless the Seller has paid the related repurchase price pursuant to clause (b)(ii)(B) below in cash by deposit to a Lock-Box Account on the applicable Settlement

 

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Date, no such repurchase or reconveyance shall occur if any Event of Termination, Unmatured Event of Termination, Specified Unmatured Event, Non-Reinvestment Event or Collection Control Event has occurred and is continuing or after the expiration of any applicable grace period, if any, would result therefrom.

(b) The repurchase price applicable to each conveyance payable on the Settlement Date in respect of any Settlement Period shall be comprised of (i) the Funding Advance Rate for such Aged Receivables times the aggregate Unpaid Balance of such Aged Receivables plus (ii) the remaining Unpaid Balance of such Aged Receivables after application of clause (i) above. The amount in clause (i) shall be paid by the Seller (A) first, as a setoff against any RPA Deferred Purchase Prices payable to such Seller (and to which such Seller otherwise would have been entitled) and (B) second, at the Seller’s option (subject to clause (a)(iii) above), in cash by deposit to a Lock-box Account on the applicable Settlement Date from any other funds not constituting Collections, available to the Seller at such time. The amount in clause (ii) above shall be paid by the Seller through the extinguishment of its right to payment on the remaining Unpaid Balance of such Aged Receivables.

(c) For purposes of this Section:

(i) “Aged Receivable” means, on any date of determination, any Receivable relating to the SCC Receivable Pool or the Lease Receivable Pool that becomes more than 90 days past due on such date or that is at risk of imminent write-off as determined by the Servicer in accordance with the Credit and Collection Policy.

(ii) “Funding Advance Rate” means in respect of any Receivable relating to the SCC Receivable Pool or the Lease Receivable Pool, as of any Settlement Date, a fraction, expressed as a percentage, (a) the numerator of which is the Purchasers’ Pool Investment in respect of the SCC Receivable Pool or the Lease Receivable Pool, as applicable, and (b) the denominator of which is the Net Portfolio Balance in respect of the SCC Receivable Pool or the Lease Receivable Pool, as applicable.

For the avoidance of doubt, no Receivable repurchased pursuant to this Section shall, as a result of such repurchase, be excluded from (i) any calculation of the SCC Adjusted Dilution Ratio, the SCC Delinquency Ratio, the Lease Delinquency Ratio, the SCC Dilution Horizon Ratio, the SCC Dilution Ratio, the SCC Loss Horizon Ratio, the SCC Loss Ratio, the Lease Loss Ratio, the SCC Loss-to-Liquidation Ratio, the SCC Peak Loss Ratio or any component of the foregoing or (ii) Defaulted Receivables for purposes of clause (c) of the definition of “Eligible Receivable”.

SECTION 1.5 Sellers Jointly and Severally Liable for Obligations.

(a) Joint and Several Liability. Notwithstanding anything to the contrary herein or in any other Transaction Document, each Seller shall be jointly and severally liable for all the other Sellers’ Obligations. Each Seller acknowledges, agrees, represents and warrants the following:

 

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(i) Inducement. Each Purchaser, the Collateral Agent and each Administrative Agent has been induced to enter into this Agreement and each Purchaser has been induced to make Investments and Reinvestments in part based upon the assurances by each Seller that such Seller desires that the other Sellers’ Obligations be honored and enforced as separate obligations of such Seller, should the Collateral Agent or any Administrative Agent (on behalf of the Purchasers) desire to do so.

(ii) Combined Liability. Notwithstanding the foregoing, the Sellers shall be jointly and severally liable to the Purchasers for all the Sellers’ Obligations, including, without limitation, all their respective representations, warranties, covenants, payment obligations and indemnities, and the Collateral Agent or any Administrative Agent (on behalf of each Purchaser) may at its option enforce any Obligation of a Seller against any one or all of the Sellers.

(iii) Separate Exercise of Remedies. Subject to Section 11.3(b), the Collateral Agent or any Administrative Agent (on behalf of the Purchasers) may exercise remedies against each Seller and its property (including the Collateral) separately, whether or not the Collateral Agent or any Administrative Agent exercises remedies against the other Sellers or their property. Subject to Sections 11.3(b), the Collateral Agent may enforce one or all Sellers’ Obligations without enforcing the other Sellers’ Obligations. Any failure or inability of the Collateral Agent to enforce a Seller’s Obligations shall not in any way limit the Collateral Agent’s or any Administrative Agent’s right to enforce the Obligations of the other Sellers.

(b) Guaranty. Without limiting clause (a) above, each Seller hereby unconditionally guarantees to the Collateral Agent, each Administrative Agent, each Purchaser, each Purchaser Agent and each other Affected Party the prompt payment of the Obligations of the other Sellers in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration or otherwise) and the timely performance by the other Sellers of all their other obligations under this Agreement and the other Transaction Documents. This guaranty is a guaranty of payment and not of collection and is a continuing guaranty and shall apply to all of the Sellers’ Obligations whenever arising. Notwithstanding any provision to the contrary contained herein or in any other Transaction Document, to the extent the liability of a Seller for the Obligations of the other Sellers under this Section 1.5 shall be adjudicated to be invalid or unenforceable for any reason (including, without limitation, because of any applicable state or federal law relating to fraudulent conveyances or transfers) then the liability of such Seller for the Obligations of the other Seller under this Section 1.5 shall be limited to the maximum amount that is permissible under applicable law (whether federal or state or otherwise).

(c) Obligations Unconditional. The obligations of each Seller under this Section 1.5 are absolute and unconditional, irrespective of the value, genuineness, validity, regularity or enforceability of any of the Transaction Documents or any other agreement or instrument referred to therein, to the fullest extent permitted by applicable law, irrespective of any other circumstance whatsoever which might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor. Each Seller agrees that this Section 1.5 may be enforced by the Collateral Agent, each Administrative Agent, the Purchasers, the Purchaser Agents and the other Affected Parties without the necessity at any time of resorting to or exhausting any other security

 

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or collateral and without the necessity at any time of having recourse to any other Transaction Documents or any collateral hereafter securing the Obligations of a Seller or otherwise, and each Seller hereby waives the right to require any Affected Party to make demand on or proceed against any Seller, Servicer, any Originator or any other Person (including a co-guarantor) or to require any Affected Party to pursue any other remedy or enforce any other right. Each Seller further agrees that it shall have no right of subrogation, indemnity, reimbursement or contribution against the other Sellers or any other guarantor of any Seller’s Obligations for amounts paid under this Section 1.5 until the Final Payout Date. Each Seller further agrees that nothing contained herein shall prevent any Affected Party from suing on any of the other Transaction Documents or foreclosing its or their, as applicable, security interest in or lien on any collateral securing the Obligations or from exercising any other rights available to it or them, as applicable, under this Agreement, any other Transaction Document, or any other instrument of security, if any, and the exercise of any of the aforesaid rights and the completion of any foreclosure proceedings shall not constitute a discharge of such Seller’s obligations hereunder; it being the purpose and intent of each Seller that its obligations under this Section 1.5 shall be absolute, independent and unconditional under any and all circumstances. Neither any Seller’s obligations under this Section 1.5 nor any remedy for the enforcement thereof shall be impaired, modified, changed or released in any manner whatsoever by an impairment, modification, change, release, increase or limitation of the liability of the other Sellers, of Servicer or of any Originator or by reason of the bankruptcy or insolvency of the other Sellers, of Servicer or of any Originator. Each Seller waives any and all notice of the creation, renewal, extension or accrual of any of the Obligations of the other Sellers and notice of or proof of reliance by any Affected Party on the guarantees set forth in this Section 1.5 or acceptance thereof. The Obligations, and any part of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantees set forth in this Section 1.5. All dealings between any Seller (or any of its Affiliates, including the initial Servicers and the Originators), on the one hand, and the Affected Parties, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the guarantees set forth in this Section 1.5. Each Seller hereby subordinates to the Obligations of the other Sellers all debts, liabilities and other obligations, whether direct, indirect, primary, secondary, several, joint and several or otherwise, and irrespective of whether such debts, liabilities and obligations be evidenced by note, contract, open account, book entry or otherwise, owing to such Seller by the other Sellers, Servicer, any Originator or any of their respective Affiliates.

(d) Modifications. Each Seller agrees that (i) all or any part of the other Sellers’ Collateral now or hereafter held for the Obligations, if any, may be exchanged, compromised or surrendered from time to time; (ii) none of the Affected Parties shall have any obligation to protect, perfect, secure or insure any such security interests, liens or encumbrances now or hereafter held, if any, for the Obligations; (iii) the time or place of payment of the other Sellers’ Obligations may be changed or extended, in whole or in part, to a time certain or otherwise, and may be renewed or accelerated, in whole or in part; (iv) the other Sellers and any other party liable for payment of the other Sellers’ Obligations may be granted indulgences generally; (v) any of the other Sellers’ rights, duties, obligations or liabilities under any of the Transaction Documents may be modified, amended or waived; (vi) any party (including any co-guarantor) liable for the payment of all or any part of the Obligations may be granted indulgences or be released; and (vii) any deposit balance for the credit of the other Sellers or any other party liable for the payment of the Obligations or liable upon any security therefor may be released, in whole

 

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or in part, at, before or after the stated, extended or accelerated maturity of the Obligations, all without notice to or further assent by such Seller.

(e) Waiver of Rights. Each Seller hereby expressly waives diligence, presentment, demand, protest or notice of any kind whatsoever, as well as any requirement that the Affected Parties (or any of them) exhaust any right to take any action against any Seller, any Originator, Servicer or any other Person (including the filing of claims in the event of receivership or bankruptcy of any Seller, Servicer, any Originator or any other entity) or with respect to any collateral or collateral security at any time securing any of the Obligations, and hereby consents to any and all extensions of time of the due performance of any or all of the Obligations. Each Seller agrees that it shall not exercise or assert any right which it may acquire by way of contribution, reimbursement or subrogation under this Agreement unless and until, subject to Section 13.5, the occurrence of the Purchase Termination Date (as defined below). Each Seller also hereby expressly waives all other 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 Obligations whether in equity or at law other than, subject to Section 13.5, the occurrence of the Purchase Termination Date. Each Seller agrees that its obligations hereunder shall be irrevocable and unconditional.

(f) Reinstatement. Notwithstanding anything contained in this Agreement or the other Transaction Documents, the obligations of each Seller under this Section 1.5 shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of any Person in respect of the other Sellers’ Obligations is rescinded or must be otherwise restored by any holder of any of the other Sellers’ Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise, and each Seller agrees that it will indemnify each Affected Party on demand for all reasonable costs and expenses (including, without limitation, reasonable fees of counsel) incurred by such Person in connection with such rescission or restoration, including any such costs and expenses incurred in defending against any claim alleging that such payment constituted a preference, fraudulent transfer or similar payment under any bankruptcy, insolvency or similar law.

(g) Remedies. Each Seller acknowledges and agrees that its obligations under this Section 1.5 are secured in accordance with the terms of this Agreement (including, without limitation, the terms of Sections 1.2(d)).

(h) Subrogation. Each Seller agrees that, until the indefeasible payment of all the Obligations in full in cash and the termination of the Pool Commitments in respect of all of the Receivable Pools, it will not exercise, and hereby waives, any right of reimbursement, subrogation, contribution, offset or other claims against the other Sellers arising by contract or operation of law in connection with any payment made or required to be made by such Seller under this Section 1.5. After the indefeasible payment in full in cash of all the Obligations and the termination of the Pool Commitments in respect of all of the Receivable Pools, each Seller shall be entitled to exercise against the other Sellers all such rights of reimbursement, subrogation, contribution, and offset, and all such other claims, to the fullest extent permitted by law.

 

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(i) Maximum Guaranty Amount. Notwithstanding any other provision of this Agreement to the contrary, in the event that any action is brought seeking to invalidate any Seller’s obligations under this Agreement under any fraudulent conveyance or fraudulent transfer theory, such Seller shall be liable under this Agreement only for an amount equal to the maximum amount of liability that could have been incurred under applicable law by such Seller under any guaranty of the other Sellers’ Obligations (or any portion thereof) at the time of the execution and delivery of this Agreement (or, if such date is determined not to be the appropriate date for determining the enforceability of such Seller’s obligations hereunder for fraudulent conveyance or transfer purposes, on the date determined to be so appropriate) without rendering such a hypothetical guaranty voidable under applicable law relating to fraudulent conveyance or fraudulent transfer (the “Maximum Guaranty Amount”), and not for any greater amount, as if such Seller’s obligations under this Agreement had instead been the Maximum Guaranty Amount.

ARTICLE II

COMPUTATIONAL RULES

SECTION 2.1 Selection of Rate Tranches. Subject to the requirements set forth in this Article II, each Purchaser Agent shall from time to time, only for purposes of computing Yield relating to each Receivable Pool with respect to each Purchaser in its Purchaser Group, account for such Purchaser’s Investment in respect of each Receivable Pool in terms of one or more Rate Tranches, and the applicable Yield Rate may be different for each Rate Tranche. Each Purchaser’s Investment in respect of each Receivable Pool shall be allocated to each Rate Tranche by the related Purchaser Agent to reflect the funding sources for each portion of the Asset Portfolio relating thereto, so that:

(a) there will be one or more Rate Tranches in respect of each Receivable Pool, selected by each Purchaser Agent, reflecting the portion, if any, of the aggregate Investment of the Purchasers in its Purchaser Group in respect of each Receivable Pool funded or maintained by such Purchasers other than through the issuance of Commercial Paper Notes (including by outstanding Liquidity Advances or by funding under an Enhancement Agreement); and

(b) there will be a Rate Tranche in respect of each Receivable Pool, selected by each Purchaser Agent, equal to the excess of the aggregate Investment of the Purchasers in its Purchaser Group in respect of such Receivable Pool over the aggregate amounts allocated at such time pursuant to clause (a) above, which Rate Tranche shall reflect the portion of such aggregate Investment in respect of such Receivable Pool funded or maintained by such Purchasers through the issuance of Commercial Paper Notes.

Each Purchaser Agent may in respect of a Receivable Pool, in its sole discretion, declare any Yield Period applicable to any Investment of a Purchaser in its Purchaser Group in respect of such Receivable Pool to be terminated and allocate the portion of such Purchaser’s Investment allocated to such Yield Period to one or more other Yield Periods and Yield Rates as such Purchaser Agent shall select.

 

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SECTION 2.2 Computation of each Purchaser’s Investment and each Purchaser’s Tranche Investment. In making any determination of the Purchasers’ Total Investment, the Purchasers’ Pool Investment in respect of a Receivable Pool, any Purchaser’s Investment in a Receivable Pool and any Purchaser’s Tranche Investment with respect to a Receivable Pool, the following rules shall apply:

(a) each Purchaser’s Investment in respect of a Receivable Pool shall not be considered reduced by any allocation, setting aside or distribution of any portion of Collections unless such Collections shall have been actually received by the applicable Purchaser Agent for application hereunder to reduce the applicable Purchaser’s Investment in such Receivable Pool in accordance with the terms hereof;

(b) each Purchaser’s Investment in any Receivable Pool (or any other amounts payable under any Transaction Document) shall not be considered reduced (or paid) by any distribution of any portion of Collections or other payments, as applicable, if at any time such distribution or payment is rescinded or must otherwise be returned for any reason; and

(c) if there is any reduction in any Purchaser’s Investment in respect of a Receivable Pool, there shall be a corresponding reduction (in the aggregate) in such Purchaser’s Tranche Investment in respect of such Receivable Pool with respect to one or more Rate Tranches selected by the related Purchaser Agent in its reasonable discretion.

SECTION 2.3 Computation of Yield. In making any determination of Yield, the following rules shall apply:

(a) Each Purchaser Agent shall determine the Yield accruing with respect to each Rate Tranche relating to a Receivable Pool for the Purchasers in its Purchaser Group, based on the Yield Period therefor determined in accordance with Section 2.1 and the other terms hereof (or, in the case of the Rate Tranche funded by Commercial Paper Notes, each Settlement Period), in accordance with the definition of Yield;

(b) no provision of this Agreement shall require the payment or permit the collection of Yield in excess of the maximum permitted by applicable Law; and

(c) Yield for any Rate Tranche shall not be considered paid by any distribution or other payment if at any time such distribution or payment is rescinded or must otherwise be returned for any reason.

SECTION 2.4 Estimates of Yield Rate, Fees, Etc. It is understood and agreed that (a) the Yield Rate for any Rate Tranche may change from one applicable Yield Period or Settlement Period to the next, and the applicable Bank Rate, Base Rate or CP Rate used to calculate the applicable Yield Rate may change from time to time and at any time during an applicable Yield Period or Settlement Period, (b) any rate information provided by any Purchaser Agent to any Seller or the Servicer shall be based upon such Purchaser Agent’s good faith estimate, (c) the amount of Yield actually accrued with respect to a Rate Tranche during any Yield Period (or, in the case of the Rate Tranche funded by Commercial Paper Notes, any Settlement Period) may exceed, or be less than, the amount set aside with respect

 

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thereto by the Servicer, and (d) the amount or amounts provided for in Section 4.3 payable to any Affected Party accrued hereunder with respect to any Settlement Period may exceed, or be less than, the amount set aside with respect thereto by the Servicer. Failure to set aside any amount so accrued shall not relieve the Servicer of its obligation to remit Collections to the applicable Purchaser Agent or otherwise to any other Person with respect to such accrued amount, as and to the extent provided in Section 3.1.

ARTICLE III

SETTLEMENTS

SECTION 3.1 Settlement Procedures.

The parties hereto will take the following actions with respect to each Settlement Period:

(a) Information Package. On the twentieth (20^th) day of each calendar month (or if such day is not a Business Day, the next Business Day) following the Cut-Off Date for such Settlement Period, (each a “Reporting Date” for and related to the Settlement Period ending immediately prior to such date), the Servicer shall deliver to the Collateral Agent and each Administrative Agent an e-mail attaching an Excel file and a file in .pdf or similar format signed by the Servicer containing the information described in Exhibit 3.1(a), including the information calculated by the Servicer pursuant to this Section 3.1 (each, an “Information Package”) for the related Settlement Period; provided, that each Administrative Agent may modify, in good faith and in the exercise of reasonable (from the perspective of a secured asset-based lender) business judgment, the information relating to its related Receivable Pool required to be provided by the Servicer in, or the form of, the Information Package upon reasonable prior notice to the Servicer; provided, further, that during the Liquidation Period, during the continuance of an Event of Termination, an Unmatured Event of Termination, Collection Control Event or Non-Reinvestment Event, the Collateral Agent or any Administrative Agent may request, in its reasonable discretion, the Servicer to, and the Servicer agrees to, deliver any information related to the Asset Portfolios, Lease Devices, Lease Contracts or the transactions contemplated hereby that can reasonably be produced by Servicer with its then-current reporting system at such time as the Collateral Agent or such Administrative Agent shall reasonably request (including a calculation of Required Reserves for each Receivable Pool and each component thereof) on each Business Day. The parties hereto hereby agree that, prior to the receipt by the Collateral Agent and each Administrative Agent of the Lease Inclusion Pro Forma Information Package, the form of Information Package shall be that set forth on Exhibit 3.1(a) as of the Second Restatement Date and, thereafter, the form of Information Package and Exhibit 3.1(a) shall be the form of the Lease Inclusion Pro Forma Information Package.

(b) Yield; Other Amounts Due. On or before the second (2^nd) Business Day prior to each Reporting Date, each Purchaser Agent shall notify the Servicer of (i) the amount of Yield accrued in respect of each related Rate Tranche for the Purchasers in each Purchaser Group for each Receivable Pool during such Settlement Period and (ii) all Fees and other amounts accrued and payable or to be paid by the Sellers under this

 

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Agreement and the other Transaction Documents on the related Settlement Date (other than amounts described in clause (c) below) to any Purchaser Agent or any Purchaser in, or Affected Party related to, any Purchaser Group. The Sellers (or the Servicer on their behalf), on the Settlement Date for such Settlement Period, or when otherwise required hereunder prior to each such date, shall pay such Yield and all Fees and other amounts due in respect of such Settlement Period to the applicable Purchaser Agent out of amounts set aside pursuant to Section 1.3 for such purpose and, to the extent such amounts were not so set aside, the Sellers hereby agree to pay such amounts (notwithstanding any limitation on recourse or other liability limitation contained herein to pay such amounts). Each Cap Calculation Agent shall, on or before the second (2^nd) Business Day prior to each Reporting Date (or in the case of the Lease Administrative Agent acting in that capacity, each Reporting Date falling after the initial Purchase relating to the Lease Receivable Pool), notify the Servicer of the Cap Reserve Amount.

(c) Settlement Computations.

(i) On each Reporting Date, the Servicer shall include in the Information Package calculations, as of the most recent Cut-Off Date for the related Settlement Period, and based upon the assumption in the next sentence, (A) the Unpaid Balance of all of the Pool Receivables in each Receivable Pool, the Purchasers’ Pool Investment for each Receivable Pool, the aggregate ISC Conditional Unpaid Balance in respect of the ISC Receivable Pool, the aggregate Lease Conditional Unpaid Balance in respect of the Lease Receivable Pool, the Purchasers’ Total Investment, the Purchaser Group Investment of each Purchaser Group for each Receivable Pool, the Required Reserves for each Receivable Pool, the Net Portfolio Balance for each Receivable Pool and each component of each of the foregoing, (B) the amount of the reduction or increase (if any) in each of the Required Reserves for each Receivable Pool, the Net Portfolio Balance for each Receivable Pool, the Purchasers’ Pool Investment for each Receivable Pool, the Purchaser Group Investment for each Receivable Pool of any Purchaser Group and the Purchasers’ Total Investment since the Cut-Off Date immediately preceding the Cut-Off Date for the most recently ended Settlement Period, (C) the excess (if any) of the sum of the Purchasers’ Pool Investment for each Receivable Pool and the Required Reserves for such Receivable Pool, over the Net Portfolio Balance for such Receivable Pool, (D) the excess (if any) of the Purchasers’ Pool Investment in respect of such Receivable Pool, over the Purchasers’ Pool Commitment in respect of such Receivable Pool, (E) the excess (if any) of the Purchaser Group Investment in respect of such Receivable Pool of each Purchaser Group, over the Purchaser Group Commitment in respect of such Receivable Pool of each such Purchaser Group, (F) the then current Cap Reserve Amount and the then current Estimated Cap Deficiency Amount, (G) the aggregate Cap Payments received since the previous Cut-Off Date, and (H) the aggregate Investment of any Exiting Purchasers in respect of each Receivable Pool. Such calculations shall be based upon the assumption that Collections in respect of each Receivable Pool set aside pursuant to Section 1.3 (and not otherwise applied in accordance with such Section) will be paid to the applicable Purchaser Agent for the benefit of the applicable Purchasers in its Purchaser Group in accordance with the related

 

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Purchaser Group’s Ratable Share of such Collections on the Settlement Date for the Settlement Period related to such Reporting Date.

(ii) If, in respect of a Receivable Pool, according to the computations made pursuant to clause (i) of this Section 3.1(c), the sum of the Purchasers’ Pool Investment and the Required Reserves in respect of any Receivable Pool at such time exceeds the Net Portfolio Balance for such Receivable Pool at such time, the Purchasers’ Pool Investment in respect of such Receivable Pool exceeds the Purchasers’ Pool Commitment in respect of such Receivable Pool, the Purchaser Group Investment of any Purchaser Group in respect of such Receivable Pool exceeds the Purchaser Group Commitment in respect of such Receivable Pool of such Purchaser Group or the aggregate Investment of Exiting Purchasers shall exceed zero, the Servicer shall, on behalf of the Sellers, (i) promptly notify the Collateral Agent and the Administrative Agents thereof and (ii) immediately pay to the applicable Purchaser Agents for the benefit of the applicable Purchasers from Collections in respect of such Receivable Pool received during the applicable period and not previously paid to such Purchaser Agents, which have been set aside in respect of the Pool Deficiency Amount in respect of such Receivable Pool in accordance with Section 1.3, (the “Available Pool Deficiency Amount”) the amount necessary to reduce (A) the Purchasers’ Pool Investment in respect of such Receivable Pool to the Purchasers’ Pool Commitment in respect of such Receivable Pool, (B) the sum of the Purchasers’ Pool Investment and the Required Reserves at such time to the Net Portfolio Balance at such time, (C) the Purchaser Group Investment of each Purchaser Group in respect of such Receivable Pool to the Purchaser Group Commitment of each such Purchaser Group in respect of such Receivable Pool and (D) the aggregate Investment of all Exiting Purchasers to zero. The Servicer shall apply such Available Pool Deficiency Amount in respect of a Receivable Pool in the following order: (i) first, to reduce the sum of the Purchasers’ Pool Investment and the Required Reserves in respect of such Receivable Pool to an amount equal to the Net Portfolio Balance for such Receivable Pool at such time, (ii) second, to reduce the sum of the Purchaser’s Pool Investment in respect of such Receivable Pool, to an amount equal to the Purchasers’ Pool Commitment in respect of such Receivable Pool, (iii) third, to reduce the aggregate Investment in respect of such Receivable Pool of all Exiting Purchasers to zero, and (iv) fourth, on a pro rata basis, the remaining Available Pool Deficiency Amount, to the other applications for which such Available Pool Deficiency Amount was set aside in accordance with Section 1.3.

(iii) The payments described in clause (ii) of this Section 3.1(c) shall be made out of the Available Pool Deficiency Amount relating to such Receivable Pool set aside pursuant to Section 1.3 and, to the extent such amounts were not so set aside, the Sellers hereby agree to pay such amounts (notwithstanding any limitation on recourse or other liability limitation contained herein to pay such amounts) to the Servicer (for distribution by the Servicer to the Purchaser Agents for the benefit of the applicable Purchasers in accordance with Section 3.1(c)(ii)) during the relevant Settlement Period. Notwithstanding anything to the contrary

 

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set forth above, on any date on or prior to the Final Payout Date, if the sum of the Purchasers’ Pool Investment and the Required Reserves in respect of a Receivable Pool at such time exceeds the Net Portfolio Balance of such Receivable Pool at such time, the Servicer shall immediately pay to each Purchaser Agent (ratably, based on the Purchaser Group Investment of such Purchaser Agent’s Purchaser Group in respect of such Receivable Pool at such time) from amounts held in trust, or that should have been so held, pursuant to Section 1.3, an amount equal to such excess.

(iv) In addition to the payments described in clause (ii) of this Section 3.1(c), during the Liquidation Period or after the occurrence of an Event of Termination, Collection Control Event or Non-Reinvestment Event that remains continuing, the Servicer shall pay to each Purchaser Agent the Ratable Share of its Purchaser Group of all other Collections on all Pool Receivables, whether or not required to be set aside pursuant to Section 1.3 on the dates specified pursuant to Section 1.3(c).

(d) Order of Application. The Servicer shall distribute the funds relating to each Receivable Pool (and in respect of the accrued and unpaid Yield referred to in clause (ii) below, first from Cap Payments received since the prior Cut-Off Date, if any) required to be distributed pursuant to this Section 3.1 with respect to any Settlement Period, in the following order of priority:

(i) to the Collateral Agent and the Administrative Agents in respect of all expenses and Indemnified Amounts payable to the Collateral Agent and the Administrative Agents (solely in their capacities as such) under this Agreement and the other Transaction Documents and allocated to such Receivable Pool in accordance with Section 8.2; provided, that, the aggregate amount paid under this Section 3.1(d)(i) shall not exceed $600,000 in any calendar year;

(ii) to the applicable Administrative Agent in respect of such Receivable Pool (in the case of Fees) and each Purchaser Agent (in the case of Yield and Fees) ratably (based on the aggregate accrued and unpaid Yield and Fees payable to them and the members of their respective Purchaser Groups) Yield accrued and unpaid on all Rate Tranches relating to such Receivable Pool for the Purchasers in its Purchaser Group howsoever funded or maintained during the related Settlement Period and to the accrued and unpaid Fees relating to such Receivable Pool for its Purchaser Group (or for itself in the case of the applicable Administrative Agent);

(iii) to the Servicer, such Receivable Pool’s Pro Rata Share of all accrued and unpaid Servicing Fee (if the Servicer is not Sprint Spectrum or an Affiliate of Sprint Corporation);

(iv) to each Purchaser Agent ratably (based on their respective Purchaser Group Investments) in respect of such Receivable Pool, to the reduction of the Purchasers’ Pool Investment in respect of such Receivable Pool (x) if

 

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clause (y) below does not then apply, to the extent such reduction is required under Section 3.1(c) or 3.2(b) or (y) during the Liquidation Period or during the continuance of an Event of Termination, Collection Control Event or a Non-Reinvestment Event, (1) first, to reduce the Purchasers’ Pool Investment in respect of such Receivable Pool to zero, and (2) second, then to reduce the Purchasers’ Pool Investment in respect of the other Receivable Pool to zero; provided, that for the avoidance of doubt, any amounts paid to any Purchaser Agent pursuant to this clause (iv) shall be applied in reduction of the Investment of the relevant Purchasers in such Purchaser Agent’s Purchaser Group;

(v) to the extent not paid pursuant to Section 3.1(d)(i) above, to the Collateral Agent and the Administrative Agents in respect of all expenses and Indemnified Amounts payable to the Collateral Agent and the Administrative Agents (solely in their capacities as such) under this Agreement and the other Transaction Documents and allocated to such Receivable Pool in accordance with Section 8.2;

(vi) to each Purchaser Agent ratably (based on the aggregate accrued and unpaid Obligations owing to their respective Purchaser Groups) all accrued and unpaid Obligations owed to any Affected Parties in such Purchaser Agent’s Purchaser Group (x) first, to the unpaid Obligations to the extent that such Obligations have been allocated to such Receivable Pool in accordance with Section 8.2, and (y) second, to the unpaid Obligations to the extent that such Obligations have been allocated to the other Receivable Pool; and

(vii) to the Servicer (i) first, to accrued and unpaid Servicing Fee relating to such Receivable Pool in an amount equal to such Receivable Pool’s Pro Rata Share of such Servicing Fee and (ii) second, to the accrued and unpaid Servicing Fee in an amount equal to the other Receivable Pool’s Pro Rata Share of such Servicing Fee (in each case if the Servicer is Sprint Spectrum or an Affiliate of Sprint Corporation).

(e) Non-Distribution of Servicing Fee. The amounts (if any) in respect of a Receivable Pool set aside by the Servicer pursuant to Section 1.3 in respect of the Servicing Fee may be retained by the Servicer or any permitted subservicer for its own account; provided, however, that if a Specified Unmatured Event, Event of Termination, Collection Control Event or Non-Reinvestment Event in respect of such Receivable Pool has occurred and remains continuing, the Servicer shall, if so instructed by the Collateral Agent or the applicable Administrative Agent, cease retaining the Servicing Fee pursuant to this clause (e) and shall instead pay such Servicing Fee only on Settlement Dates in accordance with the priority for distributions set forth in Section 3.1(d). To the extent the Servicer sets aside and retains such amounts in respect of a Receivable Pool, no distribution shall be made in respect of the Servicing Fee in respect of a Receivable Pool pursuant to Section 3.1(d)(iii) or Section 3.1(d)(vii) above.

(f) Delayed Payment. Notwithstanding anything in this Agreement to the contrary, if, on any day for payment described in this Section 3.1 (or in Section 1.3(c) in

 

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respect of accrued Yield on Rate Tranches relating to a Receivable Pool funded by Liquidity Advances or under an Enhancement Agreement), Collections in respect of such Receivable Pool during the relevant Settlement Period or Yield Period were less than the aggregate amounts of such Yield payable hereunder, the Servicer shall not make any payment otherwise required, and the next available Collections shall be applied to such payment, and no Reinvestment or payment of RPA Deferred Purchase Price shall be permitted hereunder until such amount payable has been paid in full. The foregoing shall not limit or otherwise affect the full recourse nature of any Seller’s obligations hereunder.

SECTION 3.2 Deemed Collections; Reduction of Purchasers’ Total Investment, Etc.

(a) Deemed Collections. If on any day:

(i) the Unpaid Balance of any Pool Receivable is:

(A) reduced or cancelled as a result of Dilution; and

(B) less than the amount included in calculating the Net Portfolio Balance for the Receivable Pool relating to such Receivable for purposes of any Information Package (for any reason other than as a result of such Pool Receivable becoming a Defaulted Receivable or due to the application of Collections received with respect to such Pool Receivable);

(ii) any Pool Receivable (or the terms of any related Contract governing such Pool Receivable or in respect of any ISC Upgrade Receivable, the ISC Upgrade Program or in respect of any Lease Upgrade Receivable, the Lease Upgrade Program) is extended, amended, waived or otherwise modified (except as expressly permitted under Section 8.2(b));

(iii) the due date for payment of any Pool Receivable is extended to a date that is more than thirty (30) days after such Pool Receivable’s original due date; or

(iv) any of the representations or warranties of any Seller set forth in Section 6.1(n) were untrue when made with respect to any Pool Receivable;

then, on such day, the Sellers shall be deemed to have received a Collection of such Pool Receivable and the Sellers shall pay to the applicable Administrative Agent (for the Purchaser Agents) on the next Settlement Date (or during the Liquidation Period or after the occurrence of an Event of Termination, a Collection Control Event or a Non-Reinvestment Event that remains continuing, within one (1) Business Day from the event giving rise to such Deemed Collection) for application as provided in this Agreement an amount equal to:

(1) in the case of clause (i) above, in the amount of such reduction or cancellation or the difference between the actual Unpaid Balance (as determined immediately prior to the applicable event) and the amount included in respect of such Pool Receivable in calculating the Net

 

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Portfolio Balance for the related Receivable Pool or, with respect to clauses (ii) and (iii) above, in the amount that such extension, amendment, modification or waiver affects the Unpaid Balance of the related Pool Receivable in the sole determination of the applicable Administrative Agent, as applicable; or

(2) in the case of clause (iv) above, in the amount of the entire Unpaid Balance of the relevant Pool Receivable or Pool Receivables (as determined immediately prior to the applicable event) with respect to which such representations or warranties were or are untrue.

Collections deemed received by the Sellers under this Section 3.2(a) are herein referred to as “Deemed Collections”. If the Deemed Collections in respect of any Pool Receivable relating to a Receivable Pool is determined as provided in clause (2) above, upon the payment or deemed payment of such Deemed Collections, the portion of the RPA Deferred Purchase Price relating to such Pool Receivable shall be deemed to be fully satisfied and discharged, without any further action on the part of any Person. Notwithstanding anything to the contrary set forth herein (including, without limitation, Sections 3.2(a)(ii), 7.3(b), 7.6(a) and 7.6(b) and 8.2(b)), neither the Servicer nor any Seller shall permit any Obligor with respect to an ISC Receivable or a Lease Receivable to extend, amend, terminate, waive or otherwise modify the related ISC Contract, the related Lease Contract, the ISC Upgrade Program or the Lease Upgrade Program in a manner that reduces the Unpaid Balance of such ISC Receivable or such Lease Receivable unless prior to any such extension, amendment, termination, waiver or modification a corresponding Deemed Collection payment equal to the amount of such reduction in respect of the related Pool Receivable is made in connection therewith.

(b) The Sellers’ Optional Reduction of Purchasers’ Pool Investment. The Sellers may at any time and from time to time elect to reduce (in whole or in part) Purchasers’ Pool Investment relating to any Receivable Pool as follows:

(i) the Servicer (on behalf of the Sellers) shall give the Collateral Agent and each Administrative Agent at least five (5) Business Days’ prior written notice (which shall be in substantially the form of Schedule 3.2(b) hereto) of such elected reduction (including the amount of such proposed reduction and the proposed date on which such reduction will commence);

(ii) on the proposed date of commencement of such reduction and on each day thereafter, the Servicer shall refrain from making Reinvestments of Collections pursuant to Section 1.3 in respect of such Receivable Pool until the amount thereof not so reinvested shall equal the desired amount of reduction; and

(iii) the Servicer shall hold such Collections in trust for Purchasers, pending payment to the applicable Purchaser Agents, as provided in Section 1.3; provided, that,

(A) the amount of any such reduction shall be not less than $10,000,000 and shall be an integral multiple of $100,000; and

 

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(B) each Seller shall use reasonable efforts to choose a reduction amount, and the date of commencement thereof, so that such reduction shall commence and conclude in the same Settlement Period.

(c) The Sellers’ Optional Permanent Reduction of Purchase Facility. The Sellers may, upon at least thirty (30) days’ prior written notice to the Collateral Agent and each Administrative Agent, terminate the Purchase Facility and the Purchasers’ Total Commitment in whole without penalty or premium (other than any amounts payable pursuant to Section 4.3) or, the Sellers may, upon at least ten (10) Business Days’ prior written notice to the Collateral Agent and each Administrative Agent, from time to time, irrevocably reduce in whole or part without penalty or premium the unused portion of the Purchasers’ Pool Commitment in respect of any Receivable Pool; provided, that each partial reduction shall be in the amount of at least $10,000,000, or an integral multiple of $100,000 in excess thereof, and that, unless terminated in whole, the Purchasers’ Total Commitment shall in no event be reduced below $500,000,000. Any such partial reduction of the Purchasers’ Pool Commitment in respect of any Receivable Pool shall be ratably allocated (based on then-existing Pool Commitments) among the Committed Purchasers to reduce their respective Pool Commitments in respect of such Receivable Pool. No termination of the Purchase Facility in whole shall be effective unless and until the Purchasers’ Total Investment is reduced to zero and all other Obligations and other amounts owed to the Collateral Agent, the Administrative Agents, the Purchaser Agents, the Purchasers and the other Affected Parties under this Agreement and each of the other Transaction Documents have been paid in full. Notwithstanding anything to the contrary set forth in this Agreement, any reduction of the Purchase Facility or the Purchasers’ Total Commitment pursuant to this Section 3.2(c) shall be on a pro rata basis in respect of each Receivable Pool.

(d) No Reinvestments if Purchasers’ Total Investment is Zero. Notwithstanding anything to the contrary set forth herein (including Section 3.1), after giving effect to any reduction of the Purchasers’ Total Investment to zero, so long as there are no outstanding Obligations, no further Reinvestments shall be made in respect of any Receivable Pool and all Collections shall immediately be paid to the Sellers as the RPA Deferred Purchase Price, in accordance with Section 1.3 unless and until a new Purchase is made in accordance with Sections 1.1 and 1.2.

SECTION 3.3 Payments and Computations, Etc.

(a) Payments. All amounts to be paid to, or deposited by any Seller, the Servicer or Sprint Corporation with, the Collateral Agent, any Administrative Agent, any Purchaser Agent or any other Person hereunder (other than amounts payable under Sections 3.3(e) and 4.2) shall be paid or deposited in accordance with the terms hereof no later than 11:00 a.m. (New York City time) on the day when due in U.S. Dollars in same day funds to the applicable account set forth on Schedule I or to such other account as the Collateral Agent, any Administrative Agent or any Purchaser Agent, as applicable, shall designate in writing to the Servicer from time to time.

 

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(b) Late Payments. The Sellers or the Servicer, as applicable, shall, out of amounts set aside pursuant to Section 1.3 for such purpose and to the extent permitted by Law, pay to the applicable Purchaser Agent, for the benefit of the applicable Affected Party, interest on all amounts not paid or deposited by such party on the date when due hereunder at an annual rate equal to 2.00% above the Base Rate, payable on demand, provided, that such interest rate shall not at any time exceed the maximum rate permitted by applicable Law.

(c) Method of Computation. All computations of interest, Yield, SCC Liquidation Discount, SCC Yield Reserve, ISC Yield and Fee Reserve, Lease Yield and Fee Reserve, any fees payable under Section 4.1 and any other fees payable by the Sellers to the Collateral Agent, any Purchaser, any Purchaser Agent, any Administrative Agent or any other Affected Party in connection with Purchases hereunder shall be made on the basis of a year of 360 days for the actual number of days (including the first day but excluding the last day) elapsed (except that calculations with respect to the Prime Rate shall be on the basis of a year of 365 or 366 days, as the case may be).

(d) Payment of Currency and Setoff. All payments by the Sellers or the Servicer to any Affected Party or any other Person shall be made in U.S. Dollars and without set-off or counterclaim. Any of the Sellers’ or the Servicer’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.

(e) Taxes.

(i) Except to the extent required by applicable Law, any and all payments and deposits required to be made hereunder, under any other Transaction Document or under any instrument delivered hereunder or thereunder to any Affected Party or otherwise hereunder or thereunder by any Seller or the Servicer shall be made free and clear of, and without withholding or deduction for, any and all present or future Indemnified Taxes. If any Seller or the Servicer shall be required by applicable Law to make any such withholding or deduction, (A) such Seller (or the Servicer, on its behalf) shall make an additional payment to such Affected Party, in an amount sufficient so that, after making all required withholdings or deductions (including withholdings or deductions applicable to additional sums payable under this Section 3.3(e)), such Affected Party receives an amount equal to the sum it would have received had no such withholdings or deductions been made, (B) such Seller (or the Servicer, on its behalf) shall make such deductions and (C) such Seller (or the Servicer, on its behalf) shall pay the full amount deducted to the relevant taxation authority or other Governmental Authority in accordance with applicable Law.

(ii) The Sellers will indemnify each Affected Party for the full amount of (A) Indemnified Taxes (including any Indemnified Taxes imposed by any jurisdiction on amounts payable under this Section) paid by such Affected Party, as the case may be, and any reasonable expenses payable by such Affected Party arising therefrom or with respect thereto; and (B) any incremental U.S. federal

 

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income or withholding Taxes or state or local Taxes measured by net income that arise because a Purchase of any Asset Portfolio is not treated by a taxing authority as intended for purposes of U.S. federal income Tax or state or local Taxes measured by net income under Section 1.2(d)(ii)(A) (such indemnification described in this clause (B) will include U.S. federal income and withholding Taxes and state and local Taxes measured by net income necessary to make such Affected Party whole on an after-tax basis taking into account the taxability of receipt of payments under this clause (B) and any reasonable expenses (other than Taxes) arising out of, relating to, or resulting from the foregoing); provided, however, that no Affected Party shall be entitled to indemnification under this clause (B) for Taxes other than Taxes attributable solely and directly to income derived from the transactions effectuated by the Transaction Documents. Notwithstanding anything to the contrary in this Agreement, no Affected Party shall recover, whether through a payment of additional amounts pursuant to Section 3.3(e)(i) or a payment pursuant to the indemnification obligations of this Section 3.3(e)(ii), more than once for any Tax imposed. Any indemnification under this Section 3.3(e)(ii) shall be paid on the next Settlement Date (or during the Liquidation Period or after the occurrence of an Event of Termination, Collection Control Event or Non-Reinvestment Event that remains continuing, within two (2) Business Days) after the date any Affected Party makes written demand therefor, together with a statement of reasons for such demand and the calculations of such amount. Such calculations, if made in good faith, absent manifest error, shall be final and conclusive on all parties.

(iii) Within 10 days after the date of any payment of Taxes withheld by any Seller or the Servicer, as applicable, in respect of any payment to any Affected Party, such Seller(s) or the Servicer, as applicable, will furnish to the Administrative Agents, the original or a certified copy of a receipt evidencing payment thereof (or other evidence reasonably satisfactory to the Administrative Agents).

(iv) Without prejudice to the survival of any other agreement contained herein, the agreements and obligations contained in this Section shall survive the payment in full of Obligations hereunder.

(v) (A) Any Affected Party that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Transaction Document shall deliver to the Servicer (on behalf of the Sellers) and the Administrative Agents, at the time or times reasonably requested by any Seller or the Servicer and at the time or times prescribed by applicable Law, such properly completed and executed documentation reasonably requested by any Seller or the Servicer as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Affected Party, if reasonably requested by any Seller or the Servicer, shall deliver such other documentation prescribed by applicable Law or reasonably requested by any Seller or the Servicer as will enable such Seller or the Servicer to determine whether or not such Affected Party is subject to backup withholding or

 

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information reporting requirements. Notwithstanding the foregoing, submission of such documentation (other than any documentation required by clause (B) below) shall not be required if in the Purchaser’s reasonable judgment such completion, execution or submission would subject such Purchaser to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Purchaser.

(B)Without limiting the generality of the foregoing,

(1) Each Affected Party that is not a “United States person,” within the meaning of Section 7701(a)(30) of the Code, shall, on or before the date it becomes a party to this Agreement, deliver to the Servicer (on behalf of the Sellers) and the SCC Administrative Agent such certificates, documents or other evidence, as required by the Code or Treasury Regulations issued pursuant thereto, including Internal Revenue Service Form W-8BEN, Form W-8BEN-E, Form W-8ECI, W-IMY (or any successor form), with appropriate attachments, or any other applicable certificate or statement of exemption, properly completed and duly executed by such Affected Party establishing that any payment made or deemed made to such Affected Party is (i) not subject to United States Federal withholding Tax under the Code because such payments are effectively connected with the conduct by such Affected Party of a trade or business in the United States, (ii) exempt or entitled to a reduction from United States Federal withholding tax under a provision of an applicable Tax treaty, (iii) eligible for the benefits of the exemption for portfolio interest under Section 881(c) of the Code, in which case such Affected Party shall also deliver a certificate to the effect that such Affected Party is not (A) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of any Seller, within the meaning of Section 881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code, or (iv) made to a person who is not the beneficial owner of the payments. In addition, each such Affected Party shall, if legally able to do so, thereafter deliver such certificates, documents or other evidence from time to time establishing that payments received hereunder are not subject to, or subject to a reduced rate of, such withholding upon receipt of a written request therefor from a Seller or the SCC Administrative Agent.

(2) Each Affected Party that is a “United States person,” shall, on or before the date it becomes a party to this Agreement, deliver to the Servicer (on behalf of the Sellers) and the SCC Administrative Agent such certificates, documents or other evidence, as required by the Code or Treasury Regulations

 

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issued pursuant thereto, including Internal Revenue Service Form W-9 (or any successor form) or any other applicable certificate or statement of exemption properly completed and duly executed by such Affected Party establishing that payment made to such Affected Party is not subject to United States Federal backup withholding Tax under the Code. In addition, each such Affected Party shall, if legally able to do so, thereafter deliver such certificates, documents or other evidence from time to time establishing that payments received hereunder are not subject to such withholding upon receipt of a written request therefor from any Seller or the SCC Administrative Agent.

(3) Each Affected Party that is entitled to any exemption or reduction of non-U.S. withholding tax with respect to any payment under this Agreement shall, on or before the date it becomes a party to this Agreement, deliver to the Servicer (on behalf of the Sellers) and the SCC Administrative Agent such certificates, documents or other evidence as may reasonably be requested by the Servicer (on behalf of the Sellers) or the SCC Administrative Agent, establishing that such payment is not subject to, or is subject to a reduced rate of, withholding. In addition, each such Affected Party shall, if legally able to do so, thereafter deliver such certificates, documents or other evidence from time to time establishing that payments received hereunder are not subject to such withholding, or are subject to a reduced rate of withholding, upon receipt of a written request therefor from the Servicer (on behalf of the Sellers) or the SCC Administrative Agent.

(4) If a payment made to an Affected Party under any Transaction Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Affected Party were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Affected Party shall deliver to the Sellers (or the Servicer on behalf of the Sellers) and the SCC Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Sellers (or the Servicer on behalf of Sellers) or the SCC Administrative Agent such documentation prescribed by applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Sellers (or the Servicer on behalf of Sellers) or the SCC Administrative Agent as may be necessary for the Sellers (or the Servicer on behalf of the Sellers) and the SCC Administrative Agent to comply with their obligations under FATCA and to determine that such Affected Party has complied with such Affected Party’s

 

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obligations under FATCA or to determine the amount to deduct and withhold from such payment.

(vi) For purposes of this Section 3.3(e), “applicable Law” includes FATCA.

(vii) Any Affected Party claiming compensation under Section 4.2(a) or any Indemnified Taxes or additional amounts payable pursuant to this Section 3.3 shall use reasonable efforts (consistent with its internal policies and legal and regulatory restrictions) to, at the expense of the Servicer, file any certificate or document reasonably requested in writing by any Seller or the Servicer or to change the jurisdiction of its applicable lending office if the making of such a filing or change would avoid the need for or reduce the amount of any such additional amounts which may thereafter accrue and would not, in the sole determination of such Affected Party, be otherwise disadvantageous to such Affected Party.

(viii) If any Affected Party receives a refund in respect of any Indemnified Taxes as to which it has been indemnified by any Seller or with respect to which any Seller has paid additional amounts, in each case pursuant to this Section, it shall promptly repay such refund to such Seller (to the extent of amounts that have been paid by such Seller (or the Servicer, on its behalf) under this Section with respect to such refund), net of all out-of-pocket expenses (including Taxes imposed with respect to such refund) of such Affected Party and without interest (other than interest paid by the relevant taxing authority with respect to such refund); provided, however, that each Seller (or the Servicer, on its behalf) upon the request of such Affected Party, agrees to return such refund (plus penalties, interest or other charges) to such Affected Party in the event such Affected Party or the SCC Administrative Agent is required to repay such refund. Nothing in this Section shall obligate any Affected Party to apply for any such refund.

(ix) Subject to the provisions of this Section 3.3, if any Affected Party shall, to its knowledge, have received notice of any attempt by a taxing authority to impose or collect any Indemnified Tax from such Affected Party, such Affected Party shall use commercially reasonable efforts to notify the Servicer (on the Sellers’ behalf) of such attempt, and the Sellers shall, provided that the Sellers shall first deposit with the applicable Purchaser Agent amounts sufficient to indemnify the Affected Party as provided under Section 3.3(e)(ii), have the right, at their sole expense, (A) if such Affected Party is contesting the imposition of any such Tax in good faith by appropriate proceedings, to be kept reasonably informed by such Affected Party about the progress of such proceedings or (B) if such Affected Party is not so contesting, to initiate any proceedings resisting or objecting to the imposition or collection of any such Tax.

 

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(x) The Servicer (on behalf of the Sellers) shall pay, or at the option of the SCC Administrative Agent timely reimburse it for the payment of, Other Taxes.

(xi) Nothing contained in this Section shall require any Affected Party to make available any of its Tax returns (or any other information relating to its Taxes which it deems to be confidential).

(xii) For purposes of this Section 3.3, the term “Affected Party” shall include any assignee pursuant to Section 13.3(c) or 13.3(d).

SECTION 3.4 Treatment of Collections and Deemed Collections. Subject to Section 3.2(a), the Sellers shall immediately deliver to the Servicer all Deemed Collections, and the Servicer shall hold or distribute such Deemed Collections in accordance with the terms hereof as if such Collections had actually been received on the date of such delivery to the Servicer. So long as any Seller or the Servicer shall hold any Collections (including Deemed Collections) required to be paid to the Servicer, any Purchaser, any Purchaser Agent, the Collateral Agent, or any Administrative Agent, the Servicer shall hold and apply such Collections in accordance with Section 1.3 and shall clearly mark its records to reflect the same. Each Seller shall promptly enforce all obligations of Originators under the Sale Agreement, including, payment of Deemed Collections (as defined in the Sale Agreement).

SECTION 3.5 Extension of the Purchase Termination Date. Provided that no Event of Termination, Unmatured Event of Termination, Collection Control Event or Non-Reinvestment Event has occurred and is continuing, no earlier than six (6) months prior to (but no later than sixty (60) days prior to) the then current Purchase Termination Date, the Sellers may request an extension of the then current Purchase Termination Date by submitting a request for an extension (each, an “Extension Request”) to the Collateral Agent, each Administrative Agent, and each Purchaser Agent. Such Extension Request must specify (i) the new proposed Purchase Termination Date requested by the Sellers and (ii) the date (which must be at least forty-five (45) days after the applicable Extension Request is delivered to the Collateral Agent, each Administrative Agent, and each Purchaser Agent) as of which each Purchaser is requested to respond to such Extension Request by (each, a “Response Date”). Promptly upon receipt of an Extension Request, each Purchaser Agent (on behalf of its Purchasers) shall notify the Servicer (on behalf of the Sellers) as to whether each Purchaser in its Purchaser Group approves such Extension Request (it being understood that each Purchaser in a Purchaser Group may accept or decline such Extension Request in its sole discretion). The failure of any Purchaser to affirmatively notify the Servicer (on behalf of the Sellers) of such Purchaser’s election regarding such Extension Request by the applicable Response Date shall be deemed to be a refusal by such Purchaser to grant the requested extension. In the event that any Purchaser shall approve such Extension Request, each such Purchasers and the other parties hereto that approved such Extension Request shall enter into such documents as such Purchasers may deem necessary or appropriate to reflect such extension with respect to such Purchasers. In the event that any Purchaser declines an Extension Request (any such declining Purchaser, an “Exiting Purchaser”), such Exiting Purchaser shall so notify the Servicer (on behalf of the Sellers), the Collateral Agent, each Administrative Agent and each of the other parties hereto of such Exiting Purchaser’s determination. If any Committed Purchaser becomes an Exiting Purchaser, such

 

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Committed Purchaser’s Pool Commitments in respect of all three Receivable Pools shall automatically be reduced to zero on the then-current Purchase Termination Date, without giving effect to any other Purchaser’s agreement to extend the Purchase Termination Date, if any.

ARTICLE IV

FEES AND YIELD PROTECTION

SECTION 4.1 Fees. From the Closing Date until the Final Payment Date, the Sellers shall pay to each Administrative Agent, each Purchaser Agent and each Purchaser, as applicable, all fees specified in the Fee Letters.

SECTION 4.2 Yield Protection.

(a) If any Change in Law:

(i) shall subject an Affected Party to any duty or other charge (other than Taxes, which shall be governed by Section 3.3(e)) with respect to any Investment or interest in any Asset Portfolio owned, maintained or funded by it (or its participation in any of the forgoing), or any obligations or right to make Purchases or Reinvestments or to provide funding or maintenance therefor (or its participation in any of the foregoing);

(ii) shall impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of any Affected Party, deposits or obligations with or for the account of any Affected Party or with or for the account of any Affiliate (or entity deemed by the Federal Reserve Board or other Governmental Authority to be an affiliate) of any Affected Party, or credit extended by any Affected Party;

(iii) shall impose any other condition affecting any Investment or any Asset Portfolio owned, maintained or funded in whole or in part by any Affected Party, or its obligations or rights, if any, to make (or participate in) Purchases or Reinvestments or to provide (or participate in) funding therefor or the maintenance thereof;

(iv) shall change the rate for, or changes the manner in which the Federal Deposit Insurance Corporation (or a successor thereto) or similar Person assesses, deposit insurance premiums or similar charges which an Affected Party is obligated to pay; or

(v) shall (i) change the amount of capital maintained or required or requested or directed to be maintained by any Affected Party or (ii) subject any Affected Party to any Taxes (other than (A) Indemnified Taxes and (B) Excluded Taxes) on its Purchases, Asset Portfolios, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto;

 

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and the result of any of the foregoing is or would be, in each case, as determined by the applicable Purchaser Agent or the applicable Affected Party:

(A) to increase the cost to (or impose a cost on) (1) an Affected Party funding or making or maintaining any Purchases or Reinvestments, any purchases, reinvestments, or loans or other extensions of credit under any Liquidity Agreement, any Enhancement Agreement or any commitment (hereunder or under any Liquidity Agreement or any Enhancement Agreement) of such Affected Party with respect to any of the foregoing, or (2) the Collateral Agent, any Purchaser Agent or any Administrative Agent for continuing its relationship with any Purchaser;

(B) to reduce the amount of any sum received or receivable by an Affected Party under this Agreement, any Liquidity Agreement or any Enhancement Agreement (or its participation in any such Liquidity Agreement or Enhancement Agreement) with respect thereto; or

(C) to reduce the rate of return on the capital of such Affected Party as a consequence of its obligations hereunder, under any Liquidity Agreement or under any Enhancement Agreement (or its participation in any such Liquidity Agreement or Enhancement Agreement), including its funding or maintenance of any portion of any Investment or any Asset Portfolio, or arising in connection herewith (or therewith) to a level below that which such Affected Party could otherwise have achieved hereunder or thereunder,

then, subject to Section 4.2(d) below, on the Settlement Date (or during the Liquidation Period or after the occurrence of an Event of Termination, Collection Control Event or Non-Reinvestment Event that remains continuing, within two (2) Business Days) following its receipt of notice from such Affected Party (or by an Administrative Agent or a Purchaser Agent on its behalf) in accordance with Section 4.2(c), the Sellers shall pay directly to such Affected Party such additional amount or amounts as will compensate such Affected Party for such additional or increased cost or such reduction.

(b) Each Affected Party (or an Administrative Agent or a Purchaser Agent on its behalf), shall promptly notify the Servicer (on behalf of the Sellers) and each Administrative Agent of any event of which it has knowledge which will entitle such Affected Party to compensation pursuant to this Section 4.2; provided, that no failure to give or delay in giving such notification shall adversely affect the rights of any Affected Party to such compensation; provided that the Sellers shall not be required to compensate an Affected Party for any increased costs or reductions incurred more than six months prior to the date that such Affected Party notifies the Sellers of such event giving rise to such increased costs or reductions and of such Affected Party’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the six-month period referred to above shall be extended to include the period of retroactive effect thereof.

 

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(c) In determining any amount provided for or referred to in this Section 4.2, an Affected Party may use any reasonable averaging and attribution methods that it, in its sole discretion, shall deem applicable. Any Affected Party (or an Administrative Agent or a Purchaser Agent on its behalf) when making a claim under this Section 4.2 shall submit to the Servicer (on behalf of the Sellers) and the Administrative Agents a written statement of such increased cost or reduced return, which statement, in the absence of manifest error, shall be conclusive and binding so long as it reflects a reasonable basis for the calculation of the amounts set forth therein.

(d) Failure or delay on the part of any Affected Party (or any Administrative Agent or any Purchaser Agent) to demand compensation pursuant to this Section 4.2 shall not constitute a waiver of such Affected Party’s (or any Administrative Agent’s or any Purchaser Agent’s on its behalf) right to demand such compensation; provided that the Sellers shall not be required to compensate an Affected Party for any increased costs or reductions incurred more than six (6) months prior to the date that such Affected Party notifies the Sellers of the event giving rise to such increased costs or reductions and of such Affected Party’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the six-month period referred to above shall be extended to include the period of retroactive effect thereof.

(e) Notwithstanding anything to the contrary set forth in this Agreement, Sellers shall not be liable to any member of any Purchaser Group for any amounts under this Section 4.2 caused by delivery of a Delayed Purchase Notification by any member of such Purchaser Group.

SECTION 4.3 Funding Losses. If any Affected Party incurs any cost, loss or expense (including any loss or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Affected Party), at any time, as a result of (a) any optional or required settlement or repayment with respect to any Purchaser’s Tranche Investment of any Rate Tranche, howsoever funded, being made on any day other than the scheduled last day of an applicable Yield Period with respect thereto, (b) any Purchase not being completed by the Sellers in accordance with its request therefor under Section 1.2, (c) the failure to exercise or complete (in accordance with Section 3.2(b)) any reduction in Purchasers’ Total Investment or Purchasers’ Pool Investment elected to be made under Section 3.2(b), (d) any reduction in Purchasers’ Total Investment or Purchasers’ Pool Investment elected under Section 3.2(b) exceeding the total amount of Rate Tranches, howsoever funded, with respect to which the last day of the related Yield Period is the date of such reduction or (e) the failure to reduce Purchasers’ Total Investment or Purchasers’ Pool Investment, then, upon written notice from such Affected Party (or any Administrative Agent or a Purchaser Agent on its behalf) to the Servicer (on behalf of the Sellers), the Sellers shall pay to the Servicer, and the Servicer shall pay to the applicable Purchaser Agent for the account of the applicable Affected Parties, on the next Settlement Date (or during the Liquidation Period, after the occurrence of an Event of Termination, Collection Control Event or Non-Reinvestment Event that remains continuing, within two (2) Business Days from the receipt of such notice) the amount of such cost, loss or expense. Such written notice shall, in the absence of manifest error, be conclusive and binding upon Seller and the Servicer so long as it reflects a reasonable basis for the calculation of the

 

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amounts set forth therein. If an Affected Party incurs any cost, loss or expense (including any loss or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Affected Party), at any time, and is not entitled to reimbursement for such loss or expense in the manner set forth above, such Affected Party shall individually bear such loss or expense without recourse to, or payment from, any other Affected Party. Notwithstanding anything to the contrary set forth in this Agreement, Sellers shall not be liable to any member of any Purchaser Group for any costs, losses or expenses in this Section 4.3 caused by delivery of a Delayed Purchase Notification by any member of such Purchaser Group.

SECTION 4.4 Removal of Purchasers. If a Removal Event has occurred with respect to any Purchaser Group then, at any time during the 30-day period immediately following such occurrence so long as no Event of Termination, Unmatured Event of Termination, Collection Control Event or Non-Reinvestment Event has occurred and remains continuing, the Sellers may, at their sole expense and effort (including payment of any applicable processing and recordation fees), upon notice to the Collateral Agent, the related Purchaser Agent and each Administrative Agent, require all Purchasers in such Purchaser Group to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in this Agreement), all of their respective interests, rights and obligations under this Agreement and the other Transaction Documents to a willing assignee that is an Eligible Assignee and that shall assume such interests, rights and obligations (which assignee may be another Conduit Purchaser or Committed Purchaser, as applicable, if such Purchaser accepts such assignment in its sole discretion) pursuant to a written agreement reasonably acceptable to the Collateral Agent and the Administrative Agents and the assigning Purchasers; provided, that (x) the Sellers shall have received the prior written consent of the Collateral Agent and each Administrative Agent with respect to any assignee that is not already a member of a Purchaser Group hereunder, which consent shall not unreasonably be withheld, conditioned or delayed and (y) each member of such assigning Purchaser Group shall have received payment of an amount equal to all outstanding Investments and Yield in respect thereof, accrued fees and all other amounts to it hereunder, from the assignee or the Sellers; provided, further, that any such assigning Purchaser shall be a beneficiary of any of this Agreement’s terms that expressly survive termination of this Agreement; and provided, still further, that if the Person then serving as the Collateral Agent and/or an Administrative Agent is a member of the Purchaser Group being removed pursuant to this Section, such Person shall cease to be an Administrative Agent and/or Collateral Agent, as applicable, upon the foregoing assignment and such assignment shall not be effective until a successor Collateral Agent and/or Administrative Agent, as the case may be, has been appointed by the Required Purchasers and has accepted such appointment and assumed all of the obligations of such Person.

SECTION 4.5 Non-Reinvestment Events. The following events shall be “Non-Reinvestment Events” in respect of each Receivable Pool hereunder and any such event occurring with respect to one Receivable Pool shall constitute a Non-Reinvestment Event with respect to all Receivable Pools:

(a) the average of the SCC Delinquency Ratios for the SCC Receivable Pool for the three preceding Settlement Periods shall at any time exceed 3.50%;

 

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(b) the average of the SCC Loss Ratios for the SCC Receivable Pool for the three preceding Settlement Periods shall at any time exceed 6.50%;

(c) the average of the SCC Dilution Ratios for the three preceding Settlement Periods shall at any time exceed 8.00%;

(d) the average of the SCC Loss-to-Liquidation Ratios for the three preceding Settlement Periods shall at any time exceed 4.50%;

(e) the average ISC Delinquency Ratios in respect of the ISC Receivable Pool for the three preceding Settlement Periods shall at any time exceed 6.50%;

(f) the average of the ISC Loss Ratios in respect of the ISC Receivable Pool for the three preceding Settlement Periods shall at any time exceed 7.25%;

(g) the average Lease Delinquency Ratios in respect of the Lease Receivable Pool for the three preceding Settlement Periods shall at any time exceed 4.00%;

(h) the average of the Lease Loss Ratios in respect of the Lease Receivable Pool for the three preceding Settlement Periods shall at any time exceed 3.00%;

(i) at any time, either (i) the sum of the aggregate Purchasers’ Pool Investment and the Required Reserves in respect of the ISC Receivable Pool exceeds the Net Portfolio Balance of the ISC Receivable Pool or (ii) Purchasers’ Pool Investment in respect of such Receivable Pool exceeds the Purchasers’ Pool Commitment in respect of such Receivable Pool, in either case, and such circumstance shall not have been cured within three (3) consecutive Business Days after the earlier of the date (A) such Person receives notice of such failure from the applicable Administrative Agent, or (B) a Responsible Officer obtains actual knowledge of such failure;

(j) at any time, either (i) the sum of the aggregate Purchasers’ Pool Investment and the Required Reserves in respect of the SCC Receivable Pool exceeds the Net Portfolio Balance of the SCC Receivable Pool or (ii) Purchasers’ Pool Investment in respect of such Receivable Pool exceeds the Purchasers’ Pool Commitment in respect of such Receivable Pool, in either case, and such circumstance shall not have been cured within three (3) consecutive Business Days after the earlier of the date (A) such Person receives notice of such failure from the applicable Administrative Agent or (B) a Responsible Officer obtains actual knowledge of such failure; or

(k) at any time, either (i) the sum of the aggregate Purchasers’ Pool Investment and the Required Reserves in respect of the Lease Receivable Pool exceeds the Net Portfolio Balance of the Lease Receivable Pool or (ii) Purchasers’ Pool Investment in respect of such Receivable Pool exceeds the Purchasers’ Pool Commitment in respect of such Receivable Pool, in either case, and such circumstance shall not have been cured within three (3) consecutive Business Days after the earlier of the date (A) such Person receives notice of such failure from the applicable Administrative Agent, or (B) a Responsible Officer obtains actual knowledge of such failure.

 

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A Non-Reinvestment Event shall be deemed to be continuing until waived in writing by the Collateral Agent, each Administrative Agent and the Required Purchasers. Unless an Event of Termination, Unmatured Event of Termination, Collection Control Event or Non-Reinvestment Event has occurred and remains continuing, upon the request of the Servicer following each period of six (6) calendar months occurring after the Closing Date, (i) the SCC Administrative Agent and the Purchaser Agents agree to review the percentages set forth in clauses (a) through (d) above with the Servicer in light of the historical and anticipated character and performance of the SCC Pool Receivables to determine whether any changes to such percentages are necessary or appropriate at such time, (ii) the ISC Administrative Agent and the Purchaser Agents agree to review (x) the percentages set forth in clauses (e) through (f) above with the Servicer and (y) the ISC Advance Rates and the ISC Advance Rate Matrix, in each case, in light of the historical and anticipated character and performance of the ISC Pool Receivables to determine whether any changes to such percentages, ISC Advance Rates and the ISC Advance Rate Matrix are necessary or appropriate at such time, and (iii) the Lease Administrative Agent and the Purchaser Agents agree to review (x) the percentages set forth in clauses (g) through (h) above with the Servicer and (y) the Lease Advance Rates and the Lease Advance Rate Matrix, in each case, in light of the historical and anticipated character and performance of the Lease Pool Receivables to determine whether any changes to such percentages, Lease Advance Rates and the Lease Advance Rate Matrix are necessary or appropriate at such time; provided, however, that none of the Administrative Agents or the Purchaser Agents shall be obligated to make any such change, and any such change may be effected only by an amendment to this Agreement in accordance with Section 13.1.

In addition to the foregoing, (i) on or about each twelve (12) month anniversary of the Second Restatement Effective Date and (ii) upon any waiver of a Non-Reinvestment Event in accordance with the terms of this Agreement, the Lease Administrative Agent and the Purchaser Agents may (in their discretion) undertake a review of the Lease Advance Rates and the Lease Advance Rate Matrix in light of the historical and anticipated character and performance of the Lease Pool Receivables (and individual cohorts thereof) to determine whether any changes to the Lease Advance Rates and the Lease Advance Rate Matrix are necessary or appropriate at such time. Based on such review and at any time during the sixty (60) day period following any such twelve (12) month anniversary or waiver, the Lease Administrative Agent and the Purchaser Agents may, in their discretion and acting unanimously, change, amend or otherwise modify the Lease Advance Rates and the Lease Advance Rate Matrix by joint written notice to the Servicer, which notice shall specify such change, amendment or modification in reasonable detail. Any such change, amendment or modification of the Lease Advance Rates and the Lease Advance Rate Matrix pursuant to this paragraph shall be effective on the date that is thirty (30) days (or, if such 30th day is not a Business Day, on the first Business Day thereafter) following the Lease Administrative Agent’s and Purchaser Agents’ delivery of such written notice to the Servicer (or on such earlier date agreed to by the Servicer in writing).

 

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ARTICLE V

CONDITIONS OF PURCHASES

SECTION 5.1 Conditions Precedent to Effectiveness. The effectiveness of this amendment and restatement of the Existing RPA as set forth in this Agreement is subject to the conditions precedent that the Collateral Agent and each Administrative Agent shall have received (unless otherwise waived), each of the following in form and substance reasonably satisfactory to the Collateral Agent, each Administrative Agent and each Purchaser Agent:

(a) a copy of the resolutions or unanimous written consents, as applicable, of the board of directors or managers or member (or any authorized sub-committee), as the case may be, of each of the Sellers, Originators, the Servicer and Sprint Corporation required to authorize the execution, delivery and performance by it of each Transaction Document to be delivered by it hereunder, certified by its secretary or any other authorized person;

(b) good standing certificates (or the equivalent) for each Seller, Originator (if applicable), the Servicer and Sprint Corporation issued by the Secretary of State (or the equivalent) of the jurisdiction in which each such entity is organized;

(c) a certificate of the secretary or assistant secretary of each of the Sellers, Originators, the Servicer and Sprint Corporation certifying the names and true signatures of the officers authorized on its behalf to sign this Agreement and the other Transaction Documents, as applicable, to be delivered by it hereunder (on which certificate the Collateral Agent, each Administrative Agent and each Purchaser may conclusively rely until such time as such party shall have received from Sellers, Originators, Servicer and Sprint Corporation, as the case may be, a revised certificate meeting the requirements of this clause (c));

(d) copies of the certificates of incorporation or formation (or the equivalent) of each of the Sellers, Originators, the Servicer and Sprint Corporation duly certified by the Secretary of State (or the equivalent) of the jurisdiction in which each such entity is organized, together with a copy of the by-laws, limited liability company agreement (or the equivalent), all of the foregoing duly certified by the secretary or an assistant secretary of each such Person;

(e) a search report by a nationally recognized search firm provided in writing to the Collateral Agent and each Administrative Agent by the Servicer listing all financing statements, state and federal tax or ERISA liens and judgments that name any Seller or any Originator as debtor and that are filed in the jurisdictions in which filings were made pursuant to clause (f) and any other jurisdictions that the Collateral Agent or any Administrative Agent shall reasonably request together with copies of such financing statements;

(f) copies of proper financing statements (form UCC-3) (including amendment and termination statements) and release documentation each in form and

 

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substance reasonably satisfactory to the Collateral Agent and each Administrative Agent with respect to any financing statement included in the search report described in clause (e) above, to the extent that any such financing statement set forth therein covers any Pool Receivables, Related Assets, Lease Contracts or Lease Devices, other than financing statements filed pursuant to clauses (e) and (f) of Section 5.1 of the Original RPA or clauses (e) and (f) of Section 5.1 of the Existing RPA;

(g) proper financing statements (form UCC-3) to be filed under the UCC, amending each of the financing statements filed as described in clauses (e) and (f) of Section 5.1 of the Original RPA and in clauses (e) and (f) of Section 5.1 of the Existing RPA, in order to reflect the inclusion of the Lease Receivables;

(h) duly executed copy of the Intercreditor Agreement;

(i) opinions (including with respect to creation and perfection of security interests under the applicable UCC); non-consolidation, non-rejection and true sale matters; and other standard corporate opinions reasonably required by the Collateral Agent and each Administrative Agent;

(j) completion of satisfactory due diligence in respect of the Lease Receivable Pool and the transactions contemplated by the Intercreditor Agreement by Purchasers, Purchaser Agents, the Collateral Agent and the Administrative Agents;

(k) [Reserved];

(l) duly executed copies of the Transaction Documents;

(m) payment by or on behalf of the Sellers of each Purchaser’s, each Purchaser Agent’s, the Collateral Agent’s and each Administrative Agent’s reasonable documented out-of-pocket costs and expenses required to be reimbursed hereunder; and

(n) such other agreements, instruments, certificates, opinions and other documents as the Collateral Agent or any Administrative Agent may reasonably request.

SECTION 5.2 Conditions Precedent to All Purchases and Reinvestments. Each Purchase (including the initial Purchase) and each Reinvestment hereunder in respect of a Receivable Pool shall be subject to the further conditions precedent that on the date of such Purchase or Reinvestment, the following statements shall be true (and the Sellers, by accepting the amount of such Purchase or by receiving the proceeds of such Reinvestment, shall be deemed to have certified that):

(a) each of the representations and warranties contained in this Agreement and in each other Transaction Document are true and correct in all material respects (without duplication as to any materiality modifiers, qualifications, or limitations applicable thereto) on and as of such day as though made on and as of such day and shall be deemed to have been made on such day (except to the extent such representations and warranties explicitly refer solely to an earlier date, in which case they shall be true and correct as of such earlier date);

 

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(b) no event has occurred, or would result from such Purchase or Reinvestment, that constitutes an Event of Termination, an Unmatured Event of Termination, Collection Control Event or Non-Reinvestment Event that remains continuing;

(c) none of the following shall have occurred ( each under, and as defined in, the Intercreditor Agreement): (i) an event that could give rise to an “Enforcement Period” or (ii) any action by the “MLS Collateral Agent” to accelerate payment of the “MLS Claim” or any other obligations and liabilities under any of the “MLS Documents” or foreclose or realize upon or enforce any of its rights with respect to the “MLS Collateral”;

(d) the Purchase Termination Date has not occurred;

(e) no Amdocs Performance Event has occurred and is continuing;

(f) no Amdocs Event has occurred and is continuing unless (i) no Material Adverse Effect could reasonably be expected to occur as a result of such Amdocs Event and (ii) either (x) the Amdocs Sub-Servicing Agreement requires Amdocs to continue servicing and collecting the Pool Receivables on substantially the same terms as in effect prior to such Amdocs Event for a period equal to or exceeding ninety (90) days following the date of such Purchase or Reinvestment or (y) the Servicer or Sprint Corporation has engaged a replacement sub-servicer for Amdocs to service and collect the Pool Receivables, which replacement is a reputable and experienced servicer of similar accounts receivable and is reasonably acceptable to the Collateral Agent and each Administrative Agent and the Required Purchaser Agents; and

(g) in the case of the initial Purchase relating to the Lease Receivable Pool hereunder, the Collateral Agent and each Administrative Agent shall have received (unless otherwise waived), in form and substance reasonably satisfactory to the Collateral Agent, each Administrative Agent and each Purchaser Agent, a pro forma Information Package reflecting the inclusion of the Lease Receivable Pool (such pro forma Information Package, the “Lease Inclusion Pro Forma Information Package”), prepared in respect of the proposed initial Purchase, in form and substance reasonably satisfactory to the Collateral Agent and each Administrative Agent, which shall include, without limitation, the Cap Reserve Amount computed three (3) Business Days prior to the initial Purchase relating to the Lease Receivable Pool hereunder.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

SECTION 6.1 Representations and Warranties of the Sellers. Each Seller represents and warrants, as of the Second Restatement Effective Date and as of each date on which a Purchase or Reinvestment is made, as follows:

(a) Organization and Good Standing. It has been duly organized in, and is validly existing and in good standing under the Laws of its state of organization, with

 

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organizational power and authority to own its properties and to conduct its business as such properties are presently owned and such business is presently conducted.

(b) Due Qualification. It has obtained all necessary licenses, approvals and qualifications, if any, in connection with its execution and delivery of the Transaction Documents to which it is a party and the performance by it of its obligations contemplated in the Transaction Documents, except to the extent that the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

(c) Power and Authority; Due Authorization. It (i) has all necessary power and authority to (A) execute and deliver this Agreement and the other Transaction Documents to which it is a party in any capacity and (B) perform its obligations under the Transaction Documents applicable to it and (ii) has duly authorized by all necessary limited liability company action the execution, delivery and performance of this Agreement and the other Transaction Documents to which it is a party.

(d) Valid Sale; Binding Obligations. This Agreement constitutes an absolute and irrevocable valid sale, transfer, and assignment of each Asset Portfolio to the Collateral Agent (on behalf of Purchasers), or, alternatively, a grant of a valid security interest in each Asset Portfolio and the Lease Contracts to the Collateral Agent (on behalf of Purchasers), enforceable against creditors of and purchasers from the Seller; and this Agreement and each other Transaction Document to which it is a party when duly executed and delivered by it will constitute its legal, valid and binding obligation enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

(e) No Violation. The consummation of the transactions contemplated by this Agreement and the other Transaction Documents and the performance by it of the terms hereof and thereof will not (i) violate or result in a default under, (A) its certificate of formation or limited liability company agreement, or (B) any indenture, agreement or instrument binding on it or any of its properties, (ii) result in the creation or imposition of any Adverse Claim upon any of its assets pursuant to the terms of any such indenture, agreement or instrument to which it is a party or by which it or any of its properties is bound, other than any Adverse Claim created in connection with this Agreement and the other Transaction Documents or (iii) violate in any material respect any Law applicable to it or its assets.

(f) No Proceedings. There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to its actual knowledge, threatened against or affecting it (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect or (ii) seeking to prevent the sale and assignment of any portion of any Asset Portfolio, the pledge of the

 

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Lease Contracts or the consummation of the purposes of this Agreement or of any of the other Transaction Documents.

(g) Bulk Sales Act. No transaction contemplated hereby requires compliance by any Seller with any bulk sales act or similar Law.

(h) Governmental Approvals. No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority is required for its due execution, delivery and performance of this Agreement or any other Transaction Document or the transactions contemplated thereby, except for the filing of the UCC financing statements referred to in Article V and filings with the SEC to the extent required by applicable Law.

(i) Use of Proceeds. The use of all funds obtained by it under this Agreement will not conflict with or contravene any of Regulations T, U and X promulgated by the Board of Governors of the Federal Reserve System.

(j) Quality of Title. It has acquired, for fair consideration and reasonably equivalent value, all of the right, title and interest of its Related Originators in each Lease Device, Lease Contract and Pool Receivable originated by such Related Originators and the Related Assets. Each Lease Device, Lease Contract and Pool Receivable originated by such Related Originators and the Related Assets related thereto, is owned by it free and clear of any Adverse Claim (other than Permitted Adverse Claims and any Adverse Claim arising under any Transaction Document); and upon any Purchase or Reinvestment, as applicable, the Collateral Agent (for the benefit of the Purchasers) shall have acquired and shall at all times thereafter continuously maintain a valid ownership interest or first priority perfected security interest in each Pool Receivable, together with the Related Assets and Lease Contracts, free and clear of any Adverse Claim (other than Permitted Adverse Claims and any Adverse Claim arising under any Transaction Document); and no valid effective financing statement or other instrument similar in effect covering any Lease Device, Lease Contract, Pool Receivable, any interest therein or the Related Assets is on file in any recording office except such as may be filed (i) in favor of any Originator or any Seller in accordance with the Contracts or any Transaction Document (and assigned to the Collateral Agent), (ii) in favor of any Purchaser or the Collateral Agent in accordance with this Agreement or any Transaction Document or (iii) in connection with any Adverse Claim arising solely as the result of any action taken by any Purchaser (or any assignee thereof) or by the Collateral Agent. Without limiting the foregoing, no Chattel Paper evidencing Pool Receivables (x) is in the possession of (or, in the case of electronic Chattel Paper, under the control of) any Person other than the Servicer (for the benefit of the Collateral Agent and applicable Sellers), the Collateral Agent or the Collateral Agent’s designee or (y) has any marks or notations indicating that it has been pledged, assigned or otherwise conveyed to any Person other than a Seller or the Collateral Agent.

(k) Accurate Reports. None of the reports, financial statements, certificates or other information (other than forward-looking statements, projections and statements of a general industry nature, as to which no representation or warranty is made) furnished or

 

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to be furnished by or on behalf of it in writing (including, without limitation, by electronic delivery) to any Administrative Agent, any Purchaser or any Purchaser Agent in connection with this Agreement or any other Transaction Document or any amendment hereto or delivered hereunder or thereunder (as modified or supplemented by other information so furnished) including without limitation, the reports and information provided pursuant to Section 7.5(f) taken together with any information contained in the public filings made by Sprint Corporation with the SEC pursuant to the 1934 Act contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not materially misleading.

(l) UCC Details. Its true legal name as registered in the sole jurisdiction in which it is organized, the jurisdiction of such organization, its organizational identification number, if any, as designated by the jurisdiction of its organization, its federal employer identification number, if any, and the location of its chief executive office and principal place of business are specified in Schedule 6.1(l) and the offices where it keeps all its Records are located at the addresses specified in Schedule 6.1(l) (or at such other locations, notified to the Collateral Agent in accordance with Section 7.1(f)), in jurisdictions where all action required by Section 8.5 has been taken and completed. It has never had any, trade names, fictitious names, assumed names or “doing business as” names and is “located” in Delaware for purposes of Section 9-307 of the UCC. It is organized only in a single jurisdiction.

(m) Lock-Box Accounts. The names and addresses of all of the Lock-Box Banks, together with the account numbers of the Lock-Box Accounts at such Lock-Box Banks, are specified in Schedule 6.1(m) (or have been notified to and approved by the Collateral Agent and each Administrative Agent in accordance with Section 7.3(d)).

(n) Eligible Receivables. Each Pool Receivable relating to a Receivable Pool listed as an Eligible Receivable in any Information Package or included as an Eligible Receivable in the calculation of Net Portfolio Balance for such Receivable Pool on any date is an Eligible Receivable as of the effective date of the information reported in such Information Package or as of the date of such calculation, as the case may be.

(o) Adverse Change. (i) Since January 31, 2015, there has been no material adverse change in the value, validity, collectability or enforceability of all or a material portion of the Pool Receivables relating to any Receivable Pool and (ii) since the Closing Date, there has been no Material Adverse Effect with respect to such Seller.

(p) Credit and Collection Policy. It has engaged the Servicer to service the Pool Receivables relating to a Receivable Pool in accordance with the Credit and Collection Policy and all applicable Law. It has complied with all applicable Law except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

(q) Financial Information. All of its financial statements delivered to any Administrative Agent in accordance with Section 7.2(a) present fairly, in all material

 

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respects, its actual financial position and results of operations as of the date and for the period presented or provided, in each case in accordance with GAAP.

(r) Investment Company Act; Covered Fund. It is not (i) required to register as an “Investment Company” or (ii) “controlled” by an “Investment Company”, in each case, under (and as defined in) the Investment Company Act. It is not a “covered fund” as defined in Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. In making the forgoing determinations, such Seller relies on the exemption from the definition of “investment company’ set forth in Section 3(c)(6) of the Investment Company Act.

(s) No Other Obligations. It does not have outstanding any security of any kind except membership interests (including Preferred Membership Interests) issued to its Related Originators in connection with its organization and has not incurred, assumed, guaranteed or otherwise become directly or indirectly liable for, or in respect of, any Debt (other than Obligations of any other Seller) and no Person has any commitment or other arrangement to extend credit to any Seller, in each case, other than as will occur in accordance with the Transaction Documents.

(t) Representations and Warranties in Other Transactions Documents. It hereby makes for the benefit of the Collateral Agent, each Administrative Agent, each Purchaser Agent and each Purchaser all of the representations and warranties that any Seller makes, in any capacity, in the other Transaction Documents to which any Seller is a party as if such representations and warranties (together with the related and ancillary provisions) were set forth in full herein.

(u) Ordinary Course of Business. Each remittance of Collections by or on behalf of such Seller to the Purchasers (or to the Collateral Agent, any Administrative Agent or any Purchaser Agent on their behalf) under this Agreement will have been (i) in payment of a debt incurred by such Seller in the ordinary course of business or financial affairs of such Seller and (ii) made in the ordinary course of business or financial affairs of such Seller and the Purchasers.

(v) Tax Matters. It has filed all federal income tax returns and all other material tax returns that are required to be filed by it and has paid all taxes due pursuant to such returns or pursuant to any assessment received by it, except (i) for any such taxes or assessments, if any, that are being appropriately contested in good faith by appropriate proceedings and with respect to which adequate reserves in conformity with GAAP have been provided, or (ii) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect. No tax lien has been filed, and, to the actual knowledge of any Seller, no claim is being asserted, with respect to any such tax or assessment.

(w) Tax Status. It has not made, at any time, any entity classification election under Treas. Reg. Sec. 301.7701-3 nor is it otherwise treated as an association or publicly traded partnership taxable as a corporation for U.S. federal income tax purposes. To the knowledge of any Responsible Officer, it has not taken any action that could subject it

 

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nor is it otherwise subject to any material amount of Tax imposed by a state or local taxing authority.

(x) No Event of Termination, Etc. No event has occurred and is continuing, or would result from any Purchase or Reinvestment, that constitutes or would constitute an Event of Termination, Unmatured Event of Termination, Collection Control Event, Non-Reinvestment Event, an event that could give rise to an “Enforcement Period” or any action by the “MLS Collateral Agent” to accelerate payment of the “MLS Claim” or any other obligations and liabilities under any of the “MLS Documents” or foreclose or realize upon or enforce any of its rights with respect to the “MLS Collateral” (each under and as defined in the Intercreditor Agreement).

(y) No Sanctions. It is not a Sanctioned Person. To its knowledge after due inquiry, no Obligor on any Pool Receivables was a Sanctioned Person at the time of origination of any Pool Receivable owing by such Obligor. It and its Affiliates: (i) have less than 15% of their assets in Sanctioned Countries; and (ii) derive less than 15% of their operating income from investments in, or transactions with Sanctioned Persons or Sanctioned Countries. Neither it nor any of its Subsidiaries engage in activities related to Sanctioned Countries except for such activities as are (A) specifically or generally licensed by OFAC, or (B) otherwise in compliance with OFAC’s sanctions regulations.

(z) No Seller holds (or will hold throughout the term of this Agreement) “plan assets” within the meaning of the Department of Labor regulations located at 29 C.F.R. Section 2510.3-101, as modified by Section 3(42) of ERISA.

(aa) No Linked Accounts. There are no “Linked Accounts” (as defined in the Lock-Box Agreement with Wells Fargo Bank, National Association) with respect to any Lock-Box Account maintained at Wells Fargo Bank, National Association. There are no “Linked Accounts” or “Controlled Balance Accounts” (as defined in the Lock-Box Agreement with Bank of America, National Association (“BofA”)) with respect to any Lock-Box Account maintained at BofA, except for (x) other Lock-Box Accounts maintained at BofA in accordance with this Agreement and (y) that certain account of the Servicer maintained at BofA with an account number ending in “4491”.

SECTION 6.2 Representations and Warranties of Sprint Spectrum. Sprint Spectrum, individually and when acting as the Servicer, represents and warrants, as of the Second Restatement Effective Date and as of each date on which a Purchase or Reinvestment is made as follows:

(a) Organization and Good Standing. It has been duly organized and is validly existing as a limited partnership in good standing under the Laws of its jurisdiction of organization, with power and authority to own its properties and to conduct its business as such properties are presently owned and such business is presently conducted.

(b) Due Qualification. It is duly qualified to do business as a foreign corporation in good standing, and has obtained all necessary qualifications, licenses and

 

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approvals, in all jurisdictions in which the ownership or lease of property or the conduct of its business (including the servicing of the Pool Receivables) requires such qualifications, licenses or approvals, except where the failure to be in good standing or to hold any such qualifications, licenses and approvals could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(c) Power and Authority; Due Authorization. It (i) has all necessary power and authority to (A) execute and deliver this Agreement and the other Transaction Documents to which it is a party in any capacity and (B) carry out the terms of and perform its obligations under the Transaction Documents applicable to it and (ii) has duly authorized by all necessary limited partnership action the execution, delivery and performance of this Agreement and the other Transaction Documents to which it is a party.

(d) Binding Obligations. This Agreement constitutes, and each other Transaction Document to be signed by it when duly executed and delivered by it will constitute, a legal, valid and binding obligation of it, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

(e) No Violation. The consummation of the transactions contemplated by this Agreement and the other Transaction Documents and the performance by it of the terms hereof and thereof will not (i) violate or result in a default under, (A) its articles or certificate of incorporation or by-laws, or (B) in the context of the transactions contemplated by this Agreement and the other Transaction Documents, any material indenture, agreement or instrument binding on it, (ii) result in the creation or imposition of any Adverse Claim upon any of its properties pursuant to the terms of any such indenture, agreement or instrument except for any Adverse Claim that could not reasonably be expected to have a Material Adverse Effect or (iii) violate in any material respect any Law applicable to it or any of its properties.

(f) No Proceedings. There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the actual knowledge of the Servicer, threatened against or affecting the Servicer (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect , (ii) seeking to prevent the servicing of the Receivables relating to any Receivable Pool by it or the consummation of the purposes of this Agreement or of any of the other Transaction Documents or (iii) that involve this Agreement or any other Transaction Document.

(g) Governmental Approvals. No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority is required for its due execution, delivery and performance of this Agreement or any other Transaction Document or the transactions contemplated thereby, except for the filing of the UCC

 

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financing statements referred to in Article V and filings with the SEC to the extent required by applicable Law.

(h) Financial Condition. All financial statements of Sprint Corporation and its Subsidiaries (including the notes thereto) delivered to the Collateral Agent, the Administrative Agents and each Purchaser Agent pursuant to Section 7.5(a), present fairly, in all material respects, the actual financial position and results of operations and cash flows of Sprint Corporation and its Subsidiaries as of the dates and for the periods presented or provided (other than in the case of annual financial statements, in each case in accordance with GAAP, subject to year-end audit adjustments and the absence of footnotes in the case of all interim balance sheets of Sprint Corporation.

(i) Accurate Reports. None of the reports, financial statements, certificates or other information (other than forward-looking statements, projections and statements of a general industry nature, as to which it represents only that it acted in good faith and utilized assumptions reasonable at the time made and due care in the preparation of such statement or projection) furnished or to be furnished by or on behalf of it (including Information Packages furnished by the Servicer and each report furnished pursuant to Section 7.5(f)) in writing (including, without limitation, by electronic delivery) to the Collateral Agent, any Administrative Agent, any Purchaser or any Purchaser Agent in connection with this Agreement or any other Transaction Document or any amendment hereto or delivered hereunder or thereunder (as modified or supplemented by other information so furnished) taken together with any information contained in the public filings made by Sprint Corporation with the SEC pursuant to the 1934 Act contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not materially misleading.

(j) Lock-Box Accounts. The names and addresses of all of the Lock-Box Banks, together with the account numbers of the Lock-Box Accounts at such Lock-Box Banks, are specified in Schedule 6.1(m) (or have been notified to and approved by the Collateral Agent and each Administrative Agent in accordance with Section 7.3(d)).

(k) Servicing Programs. No license or approval is required for the Collateral Agent’s or any Administrative Agent’s use of any software or other computer program used by the Servicer, any Originator or any sub-servicer in the servicing of the Receivables, other than under the Amdocs Sub-Servicing Agreement and those which have been obtained and are in full force and effect.

(l) Adverse Change. Since January 31, 2015, (i) there has been no material adverse change in the value, validity, collectability or enforceability of all or a material portion of the Pool Receivables relating to any Receivable Pool and (ii) since the Closing Date, there has been no Material Adverse Effect with respect to Servicer.

(m) Credit and Collection Policy; Law. It has complied with the Credit and Collection Policy in all material respects and such policies have not changed in any material respect since the Second Restatement Effective Date except as permitted under

 

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Sections 7.3(c) and 7.5(g). It has complied with all applicable Law except where the failure to do so, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

(n) Investment Company Act. It is not (i) required to register as an “Investment Company” or (ii) “controlled” by an “Investment Company”, in each case, under (and as defined in) the Investment Company Act.

(o) ERISA. No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect; provided, however, that the occurrence or reasonable expectation of the occurrence of any ERISA Event that could reasonably be expected to result in the imposition of a lien by the PBGC on the assets of any Seller shall be considered as reasonably expected to result in a Material Adverse Effect.

(p) Tax Returns and Payments. It has filed all federal income tax returns and all other material tax returns that are required to be filed by it and has paid all taxes due pursuant to such returns or pursuant to any assessment received by it, except (i) for any such taxes or assessments, if any, that are being appropriately contested in good faith by appropriate proceedings and with respect to which adequate reserves in conformity with GAAP have been provided, or (ii) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect. No tax lien has been filed, and, to the actual knowledge of the Servicer, no claim is being asserted, with respect to any such tax or assessment.

(q) No Event of Termination, Etc. No event has occurred and is continuing, or would result from any Purchase or Reinvestment of Receivables relating to any Receivable Pool, that constitutes or would constitute an Event of Termination, Unmatured Event of Termination, Collection Control Event, Non-Reinvestment Event, event that could give rise to an “Enforcement Period” under and as defined in the Intercreditor Agreement or any action by the “MLS Collateral Agent” to accelerate payment of the “MLS Claim” or any other obligations and liabilities under any of the “MLS Documents” or foreclose or realize upon or enforce any of its rights with respect to the “MLS Collateral” (each under and as defined in the Intercreditor Agreement).

(r) No Sanctions. It is not a Sanctioned Person. To its knowledge after due inquiry, no Obligor on any Pool Receivable relating to any Receivable Pool was a Sanctioned Person at the time of origination of any such Pool Receivable owing by such Obligor. It and its Affiliates: (i) have less than 15% of their assets in Sanctioned Countries; and (ii) derive less than 15% of their operating income from investments in, or transactions with Sanctioned Persons or Sanctioned Countries. Neither it nor any of its Subsidiaries engages in activities related to Sanctioned Countries except for such activities as are (A) specifically or generally licensed by OFAC, or (B) otherwise in compliance with OFAC’s sanctions regulations.

 

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(s) No Linked Accounts. There are no “Linked Accounts” (as defined in the Lock-Box Agreement with Wells Fargo Bank, National Association) with respect to any Lock-Box Account maintained at Wells Fargo Bank, National Association. There are no “Linked Accounts” or “Controlled Balance Accounts” (as defined in the Lock-Box Agreement with BofA) with respect to any Lock-Box Account maintained at BofA, except for (x) other Lock-Box Accounts maintained at BofA in accordance with this Agreement and (y) that certain account of the Servicer maintained at BofA with an account number ending in “4491”.

(t) Cap Reserve Account. The Servicer has on behalf of the Sellers established the Cap Reserve Account and delivered to the Collateral Agent, each Administrative Agent and each Purchaser Agent a copy of a duly executed Control Agreement. Neither the Servicer nor any Seller has granted any interest in the Cap Reserve Account to any Person other than the Collateral Agent (for the benefit of the Affected Parties), and the Collateral Agent will have the right to exercise exclusive ownership and control of the Cap Reserve Account in accordance with the provisions of the Control Agreement.

ARTICLE VII

GENERAL COVENANTS OF SELLERS AND SERVICER

SECTION 7.1 Affirmative Covenants of the Sellers. From the date hereof until the Final Payout Date, each Seller shall:

(a) Compliance with Laws, Etc. Comply with all applicable Laws, its Pool Receivables and each of the related Contracts, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

(b) Preservation of Existence. Preserve and maintain its existence, rights, franchises and privileges in the jurisdiction of its organization, and qualify and remain qualified in good standing in each jurisdiction, except where the failure to qualify or preserve or maintain such existence, rights, franchises or privileges could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(c) Inspections. From time to time, upon reasonable prior notice, upon the reasonable request by an Administrative Agent and during regular business hours, permit the Collateral Agent, the Administrative Agents and the Purchaser Agents, or any of their respective representatives to visit and inspect its properties, to examine and make extracts from its Records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested; provided that, information relating to specific Receivables shall be limited to the Sprint Information and, during the continuance of an Event of Termination or Non-Reinvestment Event, such other information (including Subscriber Confidential Information) that the Collateral Agent or any Administrative Agent determines in good

 

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faith is necessary or desirable to exercise or enforce the Collateral Agent’s, the Administrative Agents’, the Purchasers’ or the Purchaser Agents’ rights and remedies hereunder and in such Receivables; provided further that, unless an Event of Termination, Non-Reinvestment Event, Collection Control Event or Unmatured Event of Termination has occurred and is continuing at the time of such inspection, (i) such Seller shall only be required to reimburse reasonable documented out-of-pocket costs and expenses related to one such inspection during any 12-month period which inspection shall be requested and scheduled by the Administrative Agents acting together and (ii) the Collateral Agent, the Administrative Agents and the Purchaser Agents shall use commercially reasonable efforts to coordinate any such inspection to minimize disruptions to the Sellers and avoid duplication of Sellers’ actions required to comply with such inspection.

(d) Keeping of Records and Books of Account; Delivery. Maintain and implement, or cause to be maintained and implemented, administrative and operating procedures (including an ability to recreate records evidencing its Pool Receivables, Lease Contracts, Lease Devices and Related Assets relating to each Receivable Pool in the event of the destruction of the originals thereof, backing up on at least a daily basis on a separate backup computer from which electronic file copies can be readily produced and distributed to third parties being agreed to suffice for this purpose), and keep and maintain, or cause to be kept and maintained, all documents, books, records and other information necessary or advisable for the collection of its Pool Receivables and Related Assets, relating to each Receivable Pool, the Lease Contracts and the Lease Devices (including records adequate to permit the daily identification of (i) each new Pool Receivable relating to each Receivable Pool and all Collections relating to each Receivable Pool of and adjustments to each existing Pool Receivable relating to each Receivable Pool received, made or otherwise processed on that day, (ii) the portion of the Collections received from each Obligor that represents (x) Collections of an ISC Receivable from such Obligor, (y) Collections of a Lease Receivable from such Obligor and (z) Collections of an SCC Receivable from such Obligor).

(e) Performance and Compliance with Pool Receivables and Contracts. At its expense, timely and fully perform and comply in all material respects with all provisions and covenants required to be observed by it under the Contracts related to the Pool Receivables relating to each Receivable Pool.

(f) Location of Records. Keep its chief place of business and chief executive office, and the offices where it keeps its Records (and any original documents relating thereto), at the address(es) of such Seller referred to in Section 6.1(l) or, upon 30 days’ prior written notice to the Collateral Agent, each Administrative Agent, at such other locations in jurisdictions where all action required by Section 8.5 shall have been taken and completed.

(g) Credit and Collection Policy. Cause the Servicer to service its Pool Receivables, Related Assets, Lease Contracts and Lease Devices in respect of each Receivable Pool in accordance with the Credit and Collection Policy in all material respects and not agree to any material changes thereto except as permitted under Sections 7.3(c) and 7.5(g).

 

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(h) Collections. Instruct, or cause the Servicer to instruct, all Obligors to cause all Collections of its Pool Receivables in respect of each Receivable Pool to be deposited directly in a Lock-Box Account covered by a Lock-Box Agreement. In the event any Seller or its Affiliates receive any Collections, they will promptly (but not later than three (3) Business Days following receipt) deposit such Collections in a Lock-Box Account covered by a Lock-Box Agreement, except to the extent the Servicer is permitted to commingle such Collections with its own funds pursuant to Section 1.3(a)(i).

(i) Right and Title. Hold all right, title and interest in each Pool Receivable in respect of each Receivable Pool, except to the extent that any such right, title or interest has been transferred or granted to the Collateral Agent (on behalf of Purchasers).

(j) Transaction Documents. Without limiting its covenants or agreements set forth herein or in any other Transaction Document, (i) comply with each and every of its covenants and agreements under each Transaction Document to which it is a party in any capacity and its certificate of formation and limited liability company agreement and (ii) take any action reasonably necessary to ensure that each Transaction Document remains enforceable and in effect.

(k) Enforcement of Sale Agreement. On its own behalf and on behalf of Purchasers, Purchaser Agents, the Collateral Agent and the Administrative Agents, shall (x) promptly enforce all covenants and obligations of each Originator contained in the Sale Agreement and (y) deliver to the Collateral Agent and each Administrative Agent all consents, approvals, directions, notices and waivers and take other actions under the Sale Agreement as may be reasonably directed by the Collateral Agent or any Administrative Agent.

(l) Filing of Financing Statements. Seller shall at its expense, as promptly as practical (in any event, within ten (10) Business Days) following such request execute, authorize and deliver all instruments and documents and take all action, necessary or reasonably requested by the Collateral Agent, any Administrative Agent or any Purchaser Agent (including the filing of financing or continuation statements, amendments thereto or assignments thereof) to enable the Collateral Agent to exercise and enforce all of its rights hereunder and to vest and maintain vested in the Collateral Agent a valid, first priority perfected security interest in the Pool Receivables, the Related Assets with respect thereto, the Lease Contracts, the Sale Agreement, the Collections with respect thereto and the other Collateral free and clear of any Adverse Claim. Each Seller hereby authorizes each Administrative Agent and the Collateral Agent to file any continuation statements, amendments thereto and assignments thereof as the Collateral Agent, any Administrative Agent or any Purchaser Agent may from time to time determine to be necessary or desirable to perfect or maintain the perfection or priority of its security interest in the Receivables, the Collections and the Related Assets with respect thereto, the Lease Contracts, the Sale Agreement and the other Collateral.

 

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(m) Location. Maintain at all times its jurisdiction of organization and its chief executive office within a jurisdiction in the United States in which Article Nine of the UCC (2001 or later revision) is in effect.

(n) Tax Matters. Any Seller or the Servicer shall pay all applicable taxes required to be paid by it when due and payable in connection with the transfer of the Pool Receivables and Related Assets by any Seller, and acknowledges that neither the Collateral Agent, any Administrative Agent nor any Purchaser shall have any responsibility with respect thereto. The Sellers or the Servicer shall pay and discharge, or cause the payment and discharge of, all federal income taxes (and all other material taxes) when due and payable, except (i) such as may be paid thereafter without penalty, (ii) such as may be contested in good faith by appropriate proceeding and for which an adequate reserve has been established and is maintained in accordance with GAAP, or (iii) where the failure to do so, individually or in the aggregate, could not reasonably be expected result in a Material Adverse Effect.

(o) Credit Risk Retention. Cooperate with each Purchaser (including by providing such information and entering into or delivering such additional agreements or documents reasonably requested by such Purchaser or its Purchaser Agent) to the extent reasonably necessary to assure such Purchaser that the Originators retain credit risk in the amount and manner required by the Credit Risk Retention Rules and the CRR and to permit such Purchaser to perform its due diligence and monitoring obligations (if any) under the Credit Risk Retention Rules and the CRR; provided however, that none of the Originators or the Sellers shall be required to take actions that could cause a change in the accounting or tax treatment of the transactions contemplated by this Agreement.

(p) Chattel Paper. Each Seller shall cause the Servicer to maintain possession of all Chattel Paper evidencing Pool Receivables as bailee for the Collateral Agent and the applicable Sellers; provided, however, that, if so instructed by the Collateral Agent following the occurrence and during the continuance of an Event of Termination or a Non-Reinvestment Event, each Seller shall cause Servicer to (at Servicer’s sole cost and expense) promptly (but not later than five (5) Business Days following such instruction) deliver all such Chattel Paper (or, in the case of electronic Chattel Paper, control of such Chattel Paper) to the Collateral Agent or the Collateral Agent’s designee. No Seller shall permit any such Chattel Paper to be in the possession of (or, in the case of electronic Chattel Paper, under the control of) any Person other than the Servicer (for the benefit of the Collateral Agent and applicable Sellers), the Collateral Agent or the Collateral Agent’s designee.

(q) Sales of Lease Returned Devices. So long as any Event of Termination, Collection Control Event or Non-Reinvestment Event has occurred and is continuing, (i) no Seller shall (or shall permit the Servicer to) sell, transfer, distribute or otherwise dispose of any Lease Returned Device except with the prior written consent of the Lease Administrative Agent and the Collateral Agent, and (ii) all proceeds from the sale, transfer or other disposition of any Lease Returned Device shall be applied (and the Sellers shall cause such proceeds to be applied) as Collections in accordance with Article III. The Sellers hereby grant to Lease Administrative Agent and the Collateral Agent an

 

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irrevocable power of attorney, with full power of substitution, coupled with an interest, to take, in the name of the Sellers, any and all steps which are necessary or advisable (as determined by the Lease Administrative Agent or the Collateral Agent) to sell, transfer or dispose of Lease Returned Devices and to apply the proceeds thereof as Collections in accordance with Article III at any time when an Event of Termination, Collection Control Event or Non-Reinvestment Event has occurred and is continuing.

SECTION 7.2 Reporting Requirements of the Sellers. From the date hereof until the Final Payout Date, each Seller shall furnish to the Collateral Agent and each Administrative Agent:

(a) Financial Statements. As soon as available and in any event within 75 days after the end of its fiscal year, copies of the unaudited annual income statement and balance sheet of such Seller, prepared in conformity with GAAP.

(b) Events of Termination, Etc. Notice of the occurrence of any Event of Termination, Unmatured Event of Termination, Non-Reinvestment Event, Collection Control Event, Amdocs Performance Event or Amdocs Event, accompanied by a written statement of an appropriate officer of the Sellers setting forth details of such event and the action that any Seller proposes to take with respect thereto, such notice to be provided promptly (but not later than two (2) Business Days) after actual knowledge of such event by any Responsible Officer, and in the case of an Amdocs Event, the period of time, if any, during which the Amdocs Sub-Servicing Agreement requires Amdocs to continue servicing and collecting the Pool Receivables on substantially the same terms as in effect prior to such Amdocs Event. As promptly as practicable following any Reporting Date (but no later than two (2) Business Days after such Reporting Date), notice if the Cap Pool Holdback Amount is less than the then current Cap Reserve Amount as of such Reporting Date, which notice shall specify the amount of such deficiency.

(c) Other Information. Promptly, from time to time, such Records or other information, documents, records or reports respecting the condition or operations, financial or otherwise, of any Seller as the Collateral Agent, any Administrative Agent or any Purchaser Agent may from time to time reasonably request relating to the Sellers, the transactions contemplated hereby and the Pool Receivables, Related Assets, Lease Contracts and Lease Devices in order to protect the interests of the Collateral Agent, any Administrative Agent, any Purchaser Agent or any Purchaser under or as contemplated by this Agreement or any other Transaction Document, to comply with any Law or any regulatory authority or to confirm the Sellers’ and the Servicer’s compliance with the terms of this Agreement; provided that, information relating to specific Receivables shall be limited to the Sprint Information and, during the continuance of an Event of Termination or Non-Reinvestment Event, such other information (including Subscriber Confidential Information) that the Collateral Agent, any Administrative Agent determines in good faith is necessary or desirable to exercise or enforce its, the Purchasers’ and the Purchaser Agents’ rights and remedies hereunder and in such Receivables.

(d) Notices Under Sale Agreement. A copy of each notice received by any Seller from any Originator pursuant to any provision of the Sale Agreement.

 

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(e) ERISA. Written notice of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of any Seller or any of its ERISA Affiliates in an aggregate amount exceeding $200,000,000; provided, however, that the occurrence or reasonable expectation of the occurrence of any ERISA Event that could reasonably be expected to result in the imposition of a lien by the PBGC on the assets of any Seller shall be considered as reasonably expected to result in a Material Adverse Effect.

SECTION 7.3 Negative Covenants of the Sellers. From the date hereof until the Final Payout Date, no Seller shall:

(a) Sales, Adverse Claims, Etc. Except as otherwise explicitly provided herein or in the Sale Agreement, sell, assign or otherwise dispose of, or create or suffer to exist any Adverse Claim (by operation of Law or otherwise) (other than Permitted Adverse Claims) upon or with respect to, any of its assets (including any Pool Receivable or Related Assets relating to any Receivable Pool, any Lease Contract, any Lease Device or any proceeds of any of the foregoing, or any interest therein, the Cap Reserve Account or any Lock-Box Account (except, with respect to any Lock-Box Account, as expressly permitted by the Intercreditor Agreement) to which any Collections of any of the foregoing are sent, or any right to receive income or proceeds from or in respect of any of the foregoing).

(b) Extension or Amendment of Receivables. Except as permitted under Section 8.2(b), extend, amend or otherwise modify the terms of any Pool Receivable relating to any Receivable Pool or amend, modify or waive any term or condition of any related Contract (including without limitation, in respect of any ISC Contract, the Designated Installment Payment Term or the terms of the ISC Upgrade Program and including, in respect of any Lease Contract, the Designated Lease Payment Term or the terms of the Lease Upgrade Program), in each case unless on or prior to the date of any such extension, amendment, or modification, a corresponding Deemed Collection payment in respect of the related Pool Receivable is made in connection therewith. Without limiting the foregoing and notwithstanding any right it may have to do so under the terms of any Lease Contract, no Seller shall discontinue (or permit to be discontinued) the leasing program under which the Lease Receivables were originated if doing so would result in the forgiveness of the remaining payments due under any Lease Contract.

(c) Change in Credit and Collection Policy, Business or Organizational Documents. (i) Make or consent to any change or amendment to the Credit and Collection Policy if such proposed change or amendment could reasonably be expected to materially and adversely affect the value, validity, collectability or enforceability of the Pool Receivables or decrease the credit quality of any newly created Pool Receivables (in each case, taken as a whole) without the prior written consent of the Collateral Agent, each Administrative Agent and each Purchaser Agent or (ii) make any material change in the character of its business or amend or otherwise modify its limited liability company agreement or certificate of formation in any respect without the prior written consent of the Collateral Agent, each Administrative Agent and the Required Purchasers.

 

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(d) Change in Payment Instructions to Obligors. Deposit Collections or cause Collections to be deposited in a Lock-Box Account at any Lock-Box Bank other than those listed in Schedule 6.1(m), unless the Collateral Agent and each Administrative Agent shall have previously received duly executed copies of all Lock-Box Agreements with each such Lock-Box Bank and the Intercreditor Agreement shall have been amended to cover such Lock-Box Account; provided, that a Lock-Box Bank may not be terminated unless the payments from Obligors that are being sent to such Lock-Box Bank will, upon termination of such Lock-Box Bank and at all times thereafter, be deposited in a Lock-Box Account with another Lock-Box Bank covered by a Lock-Box Agreement.

(e) Name Change, Mergers, Acquisitions, Sales, etc. (i) Change its name or the location of any office at which Records are maintained, (ii) be a party to any merger or consolidation, or purchase or otherwise acquire all or substantially all of the assets or any stock of any class of, or any partnership or joint venture interest in, any other Person, or, except in the ordinary course of its business, sell, transfer, convey, contribute or lease all or any substantial part of its assets, or sell or assign with or without recourse any Pool Receivables or any interest therein (other than pursuant hereto and to the Sale Agreement) to any Person or (iii) have any Subsidiaries.

(f) Deposits to Accounts. Subject to Section 7.4(g), deposit or otherwise credit, or cause or permit to be so deposited or credited, or direct any Obligor to deposit or remit, any Collection or proceeds thereof (other than as remitted to Seller pursuant to Section 1.3(a)(ii) hereof) to any account not covered by a Lock-Box Agreement.

(g) Debt and Business Activity. Incur, assume, guarantee or otherwise become directly or indirectly liable for or in respect of any Debt or other obligation, purchase any asset (or make any investment by share purchase loan or otherwise) or engage in any other activity (whether or not pursued for gain or other pecuniary advantage), in any case, other than as will occur in accordance with this Agreement or the other Transaction Documents and as is permitted by its certificate of formation and limited liability company agreement.

(h) Change in Organization, Etc. Change its jurisdiction of organization or its name, identity or corporate structure or make any other change such that any financing statement filed or other action taken to perfect the Collateral Agent’s interests under this Agreement would become seriously misleading or would otherwise be rendered ineffective, unless the Sellers shall have given each Administrative Agent, the Collateral Agent and each Purchaser Agent not less than thirty (30) days’ prior written notice of such change and shall have cured such circumstances. No Seller shall amend or otherwise modify or waive its limited liability company agreement or any of its other organizational documents or any provision thereof without the prior written consent of the Collateral Agent and each Administrative Agent.

(i) Actions Impairing Quality of Title. Take any action that could reasonably be expected to cause any Pool Receivable, together with the Related Assets, relating to any Receivable Pool, the Lease Contracts or any Lease Device not to be owned by it free and clear of any Adverse Claim (other than any Permitted Adverse Claim or Adverse

 

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Claim arising under any Transaction Document or solely as the result of any action taken by any Purchaser (or any assignee thereof), any Purchaser Agent, the Collateral Agent or by the applicable Administrative Agent); or take any action that could cause the Collateral Agent not to have a valid ownership free of any Adverse Claim or first priority perfected security interest in its related Asset Portfolio or the Lease Contracts and all products and proceeds of the foregoing, free and clear of any Adverse Claim (other than any Permitted Adverse Claim or Adverse Claim arising under any Transaction Document) or suffer the existence of any valid effective financing statement or other instrument similar in effect covering any Pool Receivable, any Related Asset, any Lease Contract or any Lease Device on file in any recording office except such as may be filed (i) in favor of any Originator or Seller in accordance with the Contracts or any Transaction Document or (ii) in favor of a Purchaser, the Collateral Agent or any Administrative Agent in accordance with this Agreement or any Transaction document or take any action that could cause the Collateral Agent not to have a valid first priority perfected security interest in each Lock-Box Account listed on Schedule 6.1(m) or for which the Collateral Agent and each Administrative Agent has been notified in accordance with Section 7.3(d) and all amounts or instruments on deposit or credited therein from time to time (other than Permitted Adverse Claims). Except as expressly permitted by the Intercreditor Agreement, no Seller shall encumber, pledge, assign or otherwise transfer, or create or suffer to create a Lien upon, or otherwise finance any other receivable or amount billed on, or otherwise reflected on, the same invoice as an ISC Receivable, a Lease Receivable or an SCC Receivable.

(j) Actions by Originators. Notwithstanding anything to the contrary set forth in the Sale Agreement, no Seller shall consent to (i) any change or removal of any notation required to be made by any Originator pursuant to Section 3.3 of the Sale Agreement, or (ii) any waiver of or departure from any term set forth in Section 5.4 of the Sale Agreement, in each case, without the prior written consent of the Collateral Agent and each Administrative Agent and each Purchaser Agent.

(k) OFAC. No Seller will use the proceeds of any Receivable or any Purchase under this Agreement to fund any operations in, finance any investments or activities in or make any payments to, a Sanctioned Person or a Sanctioned Country.

(l) Tax Status. No Seller shall take (or permit any other Person to take) any action that could (or could reasonably be expected to) cause any Seller to be treated as an association or publicly traded partnership taxable as a corporation for U.S. federal income tax purposes. No Seller shall take (or permit any other Person to take) any action that could, in the reasonable belief of any Responsible Officer, cause any Seller to be subject to any material amount of Tax imposed by a state or local taxing authority.

(m) Linked Accounts. No Seller shall permit any “Linked Account” (as defined in the Lock-Box Agreement with Wells Fargo Bank, National Association) to exist with respect to any Lock-Box Account maintained at Wells Fargo Bank, National Association. No Seller shall permit any “Linked Account” or “Controlled Balance Account” (as defined in the Lock-Box Agreement with BofA) with respect to any Lock-Box Account maintained at BofA, except for (x) other Lock-Box Accounts maintained at

 

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BofA in accordance with this Agreement and (y) that certain account of the Servicer maintained at BofA with an account number ending in “4491”; provided, however, that, at any time during the continuance of a Specified Unmatured Event, an Event of Termination, Collection Control Event or a Non-Reinvestment Event, the Seller shall, if so instructed in writing by the Collateral Agent or any Administrative Agent (in its sole discretion), cause the Servicer’s account described in clause (y) above to cease to be such a “Linked Account” or “Controlled Balance Account” promptly, but not later than two (2) Business Days following the Seller’s or the Servicer’s receipt of such instruction.

SECTION 7.4 Affirmative Covenants of Sprint Spectrum . From the date hereof until the Final Payout Date, Sprint Spectrum, individually and when acting as the Servicer, shall:

(a) Compliance with Laws, Etc. Comply with all applicable Laws, the Pool Receivables, the related Contracts and the servicing and collection thereof, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

(b) Preservation of Corporate Existence. Preserve and maintain its corporate existence, rights, franchises and privileges in the jurisdiction of its incorporation, and qualify and remain qualified in good standing in each jurisdiction except where the failure to preserve or maintain such existence, rights, franchises or privileges or to be so qualified could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(c) Inspections. From time to time, upon reasonable prior notice, upon the reasonable request by an Administrative Agent and during regular business hours, permit the Administrative Agents, the Collateral Agent and the Purchaser Agents, or any of their respective representatives to visit and inspect its properties, to examine and make extracts from its Records, and to discuss its affairs, finances and condition with its officers and independent accountants with respect the Lease Contracts, Lease Devices, Pool Receivables and the Related Assets relating to each Receivable Pool, all at such reasonable times and as often as reasonably requested; provided that, information relating to specific Receivables shall be limited to the Sprint Information and, during the continuance of an Event of Termination, Unmatured Event of Termination, Collection Control Event, or Non-Reinvestment Event, such other information (including Subscriber Confidential Information) that the Collateral Agent or any Administrative Agent determines in good faith is necessary or desirable to exercise or enforce the Collateral Agent’s, the Administrative Agents’, the Purchasers’ or the Purchaser Agents’ rights and remedies hereunder and in such Receivables; provided further that, unless an Event of Termination, Collection Control Event or Non-Reinvestment Event has occurred and is continuing at the time any such inspection, (i) the Servicer shall only be required to reimburse the reasonable documented out-of-pocket costs and expenses related to one such inspection during any 12-month period, which inspection shall be requested and scheduled by the Administrative Agents acting together and (ii) the Collateral Agent, the Administrative Agents and the Purchaser Agents shall use commercially reasonable

 

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efforts to coordinate any such inspection to minimize disruptions to the Servicer and avoid duplication of Servicer’s actions required to comply with such inspection.

(d) Keeping of Records and Books of Account; Delivery; Location of Records. Maintain and implement, or cause to be maintained and implemented, administrative and operating procedures (including an ability to recreate records evidencing the Pool Receivables, Lease Contracts, Lease Devices, Lease Returned Devices and Related Assets relating to each Receivable Pool in the event of the destruction of the originals thereof, backing up on at least a daily basis on a separate backup computer from which electronic file copies can be readily produced and distributed to third parties being agreed to suffice for this purpose), and keep and maintain, or cause to be kept and maintained, all documents, books, records and other information necessary or advisable for the collection of all Pool Receivables, Lease Returned Devices and Related Assets relating to each Receivable Pool, the Lease Contracts and the Lease Devices (including records adequate to permit the daily identification of (i) each new Pool Receivable relating to each Receivable Pool and all Collections relating to each Receivable Pool of and adjustments to each existing Pool Receivable received, made or otherwise processed on that day) and (ii) the portion of the Collections received from each Obligor that represents (x) Collections of an ISC Receivable from such Obligor, (y) Collections of a Lease Receivable from such Obligor and (z) the Collections of an SCC Receivable from such Obligor. In addition, it shall keep its principal place of business and chief executive office, and the offices where it keeps the Records (and any original documents relating thereto), at the address(es) referred to in Annex 1 of the Sale Agreement or at such other address(es) as set forth in the Sale Agreement or, upon thirty (30) days’ prior written notice to the Collateral Agent and each Administrative Agent and each Purchaser Agent, at such other locations in jurisdictions where all action required by Section 8.5 hereof shall have been taken and completed.

(e) Performance and Compliance with Receivables and Contracts. At its expense, timely and fully perform and comply in all material respects with all provisions, covenants and other promises required to be observed by it under the Contracts and the Pool Receivables relating to each Receivable Pool.

(f) Credit and Collection Policy. Comply in all material respects with the Credit and Collection Policy in regard to each Pool Receivable, the related Contract and the other Related Assets in respect of each Receivable Pool, the Lease Devices and the servicing and collection thereof.

(g) Collections. Instruct all Obligors to cause all Collections of Pool Receivables, the Related Assets in respect of each Receivable Pool and the Lease Contracts to be deposited directly in a Lock-Box Account covered by a Lock-Box Agreement. In the event the Servicer or its Affiliates receive any Collections, they will promptly (but not later than three (3) Business Days following receipt) deposit such Collections in a Lock-Box Account covered by a Lock-Box Agreement, except to the extent the Servicer is permitted to commingle such Collections with its own funds pursuant to Section 1.3(a)(i).

 

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(h) Filing of Financing Statements. Cause the financing statements described in Sections 5.1(e), (f) and (h), that have not previously been filed, to be duly filed in the appropriate jurisdictions at its expense, as promptly as practical (and in any event, within ten (10) Business Days) following such request and to execute, authorize and deliver all instruments and documents and take all action, necessary or reasonably requested by the Collateral Agent, any Administrative Agent or any Purchaser Agent (including the filing of financing or continuation statements, amendments thereto or assignments thereof) to enable the Collateral Agent to exercise and enforce all of its rights hereunder and to vest and maintain vested in the Collateral Agent a valid, first priority perfected security interest in the Pool Receivables, the Related Assets with respect thereto, the Lease Contracts, the Sale Agreement, the Collections with respect thereto and the other Collateral free and clear of any Adverse Claim. The Servicer hereby authorizes the Collateral Agent and each Administrative Agent to file any continuation statements, amendments thereto and assignments thereof as the Collateral Agent, any Administrative Agent or any Purchaser Agent may from time to time determine to be necessary or desirable to perfect or maintain the perfection or priority of its security interest in the Receivables, the Collections and the Related Assets with respect thereto, Lease Contracts, the Sale Agreement and the other Collateral.

(i) Frequency of Billing. Prepare and deliver (or cause to be prepared or delivered) invoices with respect to each Pool Receivable in the SCC Receivable Pool no less frequently than as required under the SCC Contract related to such Pool Receivable.

(j) Linked Accounts. The Servicer shall at all times maintain a positive balance in its account maintained at BofA with an account number ending in “4491” and shall not permit any “Settlement Item Amount” (as defined in the Lock-Box Agreement with BofA) with respect to such account to be charged against any Lock-Box Account.

(k) Credit Risk Retention. Include in each Information Package delivered hereunder, a confirmation as to the Originators’ continued compliance with clauses (i), (ii) and (iii) of Section 5.2 of the Sale Agreement. The Servicer shall, and shall cause each Originator to, cooperate with each Purchaser (including by providing such information and entering into or delivering such additional agreements or documents reasonably requested by such Purchaser or its Purchaser Agent) to the extent reasonably necessary to assure such Purchaser that the Originators retain credit risk in the amount and manner required by the Credit Risk Retention Rules and the CRR and to permit such Purchaser to perform its due diligence and monitoring obligations (if any) under the Credit Risk Retention Rules and the CRR; provided however, that none of the Originators or the Sellers shall be required to take actions that could cause a change in the accounting or tax treatment of the transactions contemplated by this Agreement.

(l) Chattel Paper. The Servicer shall maintain possession of all Chattel Paper evidencing Pool Receivables as bailee for the Collateral Agent and the applicable Sellers; provided, however, that, if so instructed by the Collateral Agent following the occurrence and during the continuance of an Event of Termination or a Non-Reinvestment Event, the Servicer shall (at its sole cost and expense) promptly (but not later than five (5) Business Days following such instruction) deliver all such Chattel Paper (or, in the case of

 

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electronic Chattel Paper, control of such Chattel Paper) to the Collateral Agent or the Collateral Agent’s designee. The Servicer shall not permit any such Chattel Paper to be in the possession of (or, in the case of electronic Chattel Paper, under the control of) any Person other than the Servicer (for the benefit of the Collateral Agent and applicable Sellers), the Collateral Agent or the Collateral Agent’s designee.

(m) Sales of Lease Returned Devices. So long as any Event of Termination , Collection Control Event or Non-Reinvestment Event has occurred and is continuing, (i) the Servicer shall not sell, transfer or otherwise dispose of any Lease Returned Device except with the prior written consent of the Lease Administrative Agent and the Collateral Agent, and (ii) all proceeds from the sale, transfer or other disposition of any Lease Returned Device shall be applied (and the Servicer shall cause such proceeds to be applied) as Collections in accordance with Article III. The Servicer hereby grants to Lease Administrative Agent and the Collateral Agent an irrevocable power of attorney, with full power of substitution, coupled with an interest, to take, in the name of the Servicer, any and all steps which are necessary or advisable (as determined by the Lease Administrative Agent or the Collateral Agent) to sell, transfer or dispose of Lease Returned Devices and to apply the proceeds thereof as Collections in accordance with Article III at any time when an Event of Termination, Collection Control Event or Non-Reinvestment Event has occurred and is continuing.

SECTION 7.5 Reporting Requirements of Sprint Spectrum . From the date hereof until the Final Payout Date, Sprint Spectrum, individually and when acting as the Servicer, shall furnish to the Collateral Agent and each Administrative Agent:

(a) (i) Quarterly Financial Statements. Within forty-five (45) days after the close of each of the first three fiscal quarters of each fiscal year of Sprint Corporation, Sprint Corporation’s Form 10-Q as filed with the SEC.

(ii) Annual Financial Statements. Within seventy-five (75) days after the end of each fiscal year of Sprint Corporation, the audited consolidated statements of operations, changes in stockholders’ equity and cash flows of Sprint Corporation and its Subsidiaries for such fiscal year, and the related audited consolidated balance sheet for Sprint Corporation and its Subsidiaries as of the end of such fiscal year, setting forth in each case in comparative form the corresponding figures for the previous fiscal year, all reported on by Deloitte LLP, or other independent public accountants of recognized national standing (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit), to the effect that such audited consolidated financial statements present fairly in all material respects the financial condition and results of operations of Sprint Corporation and its Subsidiaries on a consolidated basis in accordance with GAAP consistently applied.

(iii) Compliance Certificate. Together with the financial statements required hereunder, a compliance certificate in substantially the form of Exhibit 7.5 signed by an authorized officer of Sprint Corporation and dated the date of

 

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such annual financial statement or such quarterly financial statement, as the case may be.

(b) Financial Statements and Other Information. It will furnish to the Collateral Agent and each Administrative Agent and each Purchaser Agent:

(i) promptly after the same become publicly available, copies of all proxy statements, financial statements and regular or special reports which Sprint Corporation files with the SEC or with any national securities exchange or distributed generally to its shareholders, as the case may be;

(ii) promptly following a request therefor, any documentation or other information (including with respect to any Originator, any Seller or Sprint Corporation) that the Collateral Agent, any Administrative Agent or any Purchaser reasonably requests in order to comply with its ongoing obligations under the applicable “know your customer” and anti money laundering rules and regulations, including the USA PATRIOT Act; and

(iii) from time to time such further information regarding the business, affairs and financial condition of the Sellers, Sprint Corporation, Sprint Spectrum and Originators as the Collateral Agent or any Administrative Agent shall reasonably request; provided that, information relating to specific Receivables shall be limited to the Sprint Information and, during the continuance of an Event of Termination or Non-Reinvestment Event, such other information (including Subscriber Confidential Information) that the Collateral Agent or any Administrative Agent determines in good faith is necessary or desirable to exercise or enforce its, the Purchasers’ and the Purchaser Agents’ rights and remedies hereunder and in such Receivables.

Documents and information required to be delivered to the Collateral Agent and the Administrative Agents pursuant to this Section 7.5 (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically to such parties and if so delivered, shall be deemed to have been delivered to such parties on the date (i) on which Sprint Corporation posts such documents, or provides a link thereto, on its website or another relevant website, if any, to which such relevant party has access (whether a commercial, third-party website or whether sponsored by such party). Notwithstanding anything contained herein, in every instance Sprint Spectrum shall be required to provide documents, information, and certificates required by or requested pursuant to Sections 7.5(a)(iii), 7.5(b)(ii) and 7.5(b)(iii) to the Collateral Agent and each Administrative Agent.

(c) Written notice of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the Sprint Corporation, Sprint Spectrum, the Servicer, any Originator, or any of their respective ERISA Affiliates, in an aggregate amount exceeding $200,000,000.

 

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(d) Events of Termination, Etc. Notice of the occurrence of any Event of Termination, Unmatured Event of Termination, Collection Control Event, Non-Reinvestment Event, Amdocs Performance Event, Amdocs Event, any event which could give rise to an “Enforcement Period” under and as defined in the Intercreditor Agreement or any action by the “MLS Collateral Agent” to accelerate payment of the “MLS Claim” or any other obligations and liabilities under any of the “MLS Documents” or foreclose or realize upon or enforce any of its rights with respect to the “MLS Collateral” (each under and as defined in the Intercreditor Agreement), accompanied by a written statement of an appropriate officer of the Servicer setting forth details of such event and the action that it proposes to take with respect thereto, such notice to be provided promptly (but not later than two (2) Business Days) after such event occurs and, in the case of an Amdocs Event, the period of time, if any, during which the Amdocs Sub-Servicing Agreement requires Amdocs to continue servicing and collecting the Pool Receivables on substantially the same terms as in effect prior to such Amdocs Event.

(e) Litigation. As soon as possible, and in any event within two (2) Business Days of actual knowledge of any Responsible Officer thereof, notice of any material litigation, investigation or proceeding initiated against any Seller which has had or could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(f) Agreed Upon Procedures Report. Not later than three (3) months after the end of each fiscal year of the Servicer (at the sole cost and expense of the Servicer), a copy of an agreed upon procedures report of an accounting firm or consulting firm reasonably acceptable to the Collateral Agent and each Administrative Agent, addressed to the Collateral Agent, each Administrative Agent and each Purchaser Agent and setting forth the results of such firm’s performance of agreed upon procedures with respect to the performance of the Servicer for the prior fiscal year or twelve (12) month period, as requested by the Collateral Agent or any Administrative Agent. The scope of the above agreed upon procedures report shall be as reasonably requested by the Collateral Agent and each Administrative Agent. Notwithstanding the foregoing, so long as no Event of Termination, Collection Control Event or Non-Reinvestment Event has occurred and is continuing, the Servicer shall not be required to deliver the foregoing agreed upon procedures report more than once in twelve (12) month period.

(g) Change in Credit and Collection Policy or Business. At least thirty (30) days prior to (i) the effectiveness of any material change in or material amendment to the Credit and Collection Policy, a description or, if available, a copy of the Credit and Collection Policy then in effect and a written notice (A) indicating such change or amendment and (B) if such proposed change or amendment could reasonably be expected to adversely affect the value, validity, collectability or enforceability of the Pool Receivables or decrease the credit quality of any newly created Pool Receivables (in each case, taken as a whole), requesting the Collateral Agent’s, each Administrative Agent’s and each Purchaser Agent’s consent thereto.

 

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(h) Other Information. Promptly, from time to time, such Records or other information, documents, records or reports respecting the condition or operations, financial or otherwise, of the Servicer or Sprint Corporation, as the Collateral Agent, any Administrative Agent or any Purchaser Agent may from time to time reasonably request relating to the Sellers, the transactions contemplated hereby, the Pool Receivables, the Related Assets, the Lease Contracts and Lease Devices in order to protect the interests of the Collateral Agent, the applicable Administrative Agent, any Purchaser Agent or any Purchaser under or as contemplated by this Agreement or any other Transaction Document or to comply with any Law or any regulatory authority; provided that, information relating to specific Receivables shall be limited to the Sprint Information and, during the continuance of an Event of Termination or Non-Reinvestment Event, such other information (including Subscriber Confidential Information) that the Collateral Agent or the applicable Administrative Agent determines in good faith is necessary or desirable to exercise or enforce its, the Purchasers’ and the Purchaser Agents’ rights and remedies hereunder and in such Receivables.

(i) Servicing Programs. If a license or approval is required for the Collateral Agent’s, any Administrative Agent’s or such successor Servicer’s use of any software or other computer program used by Sprint Spectrum in the servicing of the Receivables, then, following delivery of a Successor Notice, Sprint Spectrum shall at its own expense make reasonable efforts to arrange for the Collateral Agent, such Administrative Agent or such successor Servicer to receive any such required license or approval.

SECTION 7.6 Negative Covenants of Sprint Spectrum . From the date hereof until the Final Payout Date, Sprint Spectrum, individually and when acting as the Servicer, shall not:

(a) Extension or Amendment of Receivables. Except as permitted under Section 8.2(b), extend, amend or otherwise modify the terms of any Pool Receivable or amend, modify or waive any term or condition of any related Contract (including without limitation in respect of any ISC Contract, the Designated Installment Payment Term or the terms of the ISC Upgrade Program and including without limitation in respect of any Lease Contract, the Designated Lease Payment Term or the terms of the Lease Upgrade Program), in each case unless on or prior to the date of any such extension, amendment or modification, a corresponding Deemed Collection payment in respect of the related Pool Receivable is made in connection therewith. Without limiting the foregoing and notwithstanding any right it may have to do so under the terms of any Lease Contract, the Servicer shall not discontinue (or permit to be discontinued) the leasing program under which the Lease Receivables were originated if doing so would result in the forgiveness of the remaining payments due under any Lease Contract.

(b) Change in Credit and Collection Policy, Upgrade Policy or Business. (i) Make or consent to any change in the Credit and Collection Policies if such proposed change or amendment could reasonably be expected to adversely affect the value, validity, collectability or enforceability of the Pool Receivables or decrease the credit quality of any newly created Pool Receivables (in each case, taken as a whole), (ii) make or consent to any change in the ISC Upgrade Program (x) if such proposed change or

 

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amendment could reasonably be expected to result in a Material Adverse Effect, or (y) in any manner which could permit an Obligor to elect to have a right to trade in its qualifying ISC Device in satisfaction of such ISC Receivable after the date that such Obligor entered into an ISC Contract, in each case without the prior written consent of the Collateral Agent, each Administrative Agent and each Purchaser Agent, unless prior to making or consenting to such change or amendment, a corresponding Deemed Collection payment in respect of such ISC Receivable has been made, (iii) make or consent to any change in the Lease Upgrade Program (x) if such proposed change or amendment could reasonably be expected to result in a Material Adverse Effect, or (y) in any manner which could permit an Obligor to elect to have a right to return or trade in its qualifying Lease Device in satisfaction of such Lease Receivable after the date that such Obligor entered into an Lease Contract, in each case without the prior written consent of the Collateral Agent, each Administrative Agent and each Purchaser Agent, unless on or prior to the date of making or consenting to such change or amendment, a corresponding Deemed Collection payment in respect of such Lease Receivable has been made, or (iv) make a change in the character of its business that would have or could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, in either case, without the prior written consent of the Collateral Agent, each Administrative Agent and each Purchaser Agent.

(c) Change in Lock-Box Banks. (i) Add any bank or lock-box account not listed on Schedule 6.1(m) as a Lock-Box Bank or Lock-Box Account unless the Collateral Agent and each Administrative Agent shall have previously approved and received duly executed copies of all Lock-Box Agreements and/or amendments thereto covering each such new bank and lock-box account, (ii) terminate any Lock-Box Bank, Lock-Box Agreement or related Lock-Box Account without the prior written consent of the Collateral Agent, each Administrative Agent and, in each case, only if all of the payments from Obligors that were being sent to such Lock-Box Bank will, upon termination of such Lock-Box Bank and at all times thereafter, be deposited in a Lock-Box Account with another Lock-Box Bank covered by a Lock-Box Agreement and (iii) amend, supplement or otherwise modify any Lock-Box Agreement without the prior written consent of the Collateral Agent and each Administrative Agent.

(d) Deposits to Accounts. Deposit or otherwise credit, or cause or permit to be so deposited or credited, or direct any Obligor to deposit or remit, any Collection or proceeds thereof (other than as remitted to Seller pursuant to Section 1.3(a)(ii) hereof) to any account (or related lock-box, if applicable) other than any Lock-Box Account covered by a Lock-Box Agreement.

(e) Mergers, Acquisitions, Sales, Etc. Consolidate or merge with or into any other person or sell, lease or transfer all or substantially all of its property and assets, or agree to do any of the foregoing, unless (i) no Event of Termination, Unmatured Event of Termination, Collection Control Event or Non-Reinvestment Event has occurred and is continuing or would result immediately after giving effect thereto, (ii) if Sprint Spectrum is not the surviving entity or if Sprint Spectrum sells, leases or transfers all or substantially all of its property and assets, the surviving corporation or the Person purchasing or being leased the assets is a Subsidiary of Sprint Corporation and agrees to

 

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be bound by the terms and provisions applicable to Sprint Spectrum hereunder, (iii) no Change of Control shall result, (iv) Sprint Corporation reaffirms in a writing, in form and substance reasonably satisfactory to the Collateral Agent, each Administrative Agent, that its obligations under the Performance Support Agreement shall apply to the surviving entity, (v) no Material Adverse Effect could reasonably be expected to result therefrom, and (vi) the Collateral Agent and each Administrative Agent receives such additional certifications and opinions of counsel as it shall reasonably request.

(f) Sales, Liens, Etc. Except as otherwise provided herein, sell, assign (by operation of Law or otherwise) or otherwise dispose of, or create or suffer to exist any Adverse Claim other than Permitted Adverse Claims, any Adverse Claim arising under any Transaction Document or solely as the result of any action taken by the Collateral Agent, any Purchaser (or any assignee thereof), any Purchaser Agent or by any Administrative Agent) upon or with respect to, any Pool Receivable or related Contract or Related Assets in respect of any Receivable Pool, the Lease Contracts, the Lease Devices, or any interest therein, or any proceeds of any of the foregoing, or the Cap Reserve Account or any Lock-Box Account (except, with respect to any Lock-Box Account, as expressly permitted by the Intercreditor Agreement) to which any Collections of any Pool Receivable are sent, or any right to receive income or proceeds from or in respect of any of the foregoing or purport to do any of the foregoing.

(g) No Linked Accounts. The Servicer shall not permit any “Linked Account” (as defined in the Lock-Box Agreement with Wells Fargo Bank, National Association) to exist with respect to any Lock-Box Account maintained at Wells Fargo Bank, National Association. The Servicer shall not permit any “Linked Account” or “Controlled Balance Account” (as defined in the Lock-Box Agreement with BofA) with respect to any Lock-Box Account maintained at BofA, except for (x) other Lock-Box Accounts maintained at BofA in accordance with this Agreement and (y) that certain account of the Servicer maintained at BofA with an account number ending in “4491”; provided, however, that, at any time during the continuance of a Specified Unmatured Event, an Event of Termination, Collection Control Event or a Non-Reinvestment Event, the Servicer shall, if so instructed in writing by the Collateral Agent or any Administrative Agent (in its sole discretion), cause the Servicer’s account described in clause (y) above to cease to be such a “Linked Account” or “Controlled Balance Account” promptly, but not later than two (2) Business Days following the Seller’s or the Servicer’s receipt of such instruction.

SECTION 7.7 Nature of Obligations. Notwithstanding any limitation on recourse contained herein or in any other Transaction Document: (i) the Sellers have the obligation to pay all Yield and other amounts due under Sections 3.1(b) and 3.4 or under Articles IV or XII in respect of each Receivable Pool (which obligation shall be full recourse general obligations of Sellers), and (ii) all obligations of Sprint Spectrum so specified hereunder shall be full recourse general obligations of Sprint Spectrum.

SECTION 7.8 Corporate Separateness; Related Matters and Covenants. Sprint Spectrum, the Servicer and each Seller covenant to take such actions as shall be necessary in order that:

 

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(a) Special Purpose Entity. Each Seller will be a special purpose limited liability company whose primary activities are restricted in its limited liability company agreement to: (i) purchasing or otherwise acquiring from the Related Originators, owning, holding, granting security interests or selling interests in Pool Receivables, the Related Assets and the Lease Contracts, (ii) acquiring from the Related Originators, owning, holding and assuming any obligations under, Lease Devices and Lease Contracts, (iii) entering into and performing under the agreements for the selling, servicing and financing of the Receivable Pools (including the Transaction Documents), (iv) receiving cash payments of the RPA Deferred Purchase Price and automatically and immediately making cash payments from such amounts to its Related Originators as purchase price in accordance with the Sale Agreement or by declaring and paying dividends and distributions to its Related Originators and (v) conducting such other activities as it deems necessary or appropriate to carry out its primary activities. Each Seller shall maintain (or cause to be maintained) separate company records, books of account and financial statements from those of any of its Affiliates;

(b) Commingling. Except as otherwise expressly permitted by this Agreement, no Seller shall commingle any of its assets or funds with those of any of its Affiliates (other than any other Seller);

(c) Independent Manager. At least one member of each Seller’s board of directors shall be an Independent Manager and the limited liability company agreement of such Seller shall provide: (i) for the same definition of “Independent Manager” as used herein, (ii) that such Seller’s board of directors shall not approve, or take any other action to cause the filing of, a voluntary bankruptcy petition with respect to such Seller unless the Independent Manager shall approve the taking of such action in writing before the taking of such action and (iii) that the provisions required by clauses (i) and (ii) of this sentence cannot be amended except in accordance with this Agreement and without the prior written consent of the Independent Manager, the Collateral Agent, each Administrative Agent and each Purchaser Agent;

(d) Corporate Formalities. Each Seller will strictly observe corporate formalities in its dealings with the Servicer, the Originators and any Affiliates thereof (other than any other Seller). The Sellers shall not maintain joint bank accounts or other depository accounts to which the Servicer, the Originators and any Affiliates (other than any other Seller) thereof has independent access, other than the Servicer’s right to access the Lock-Box Accounts and the Cap Reserve Account in accordance with this Agreement and the Intercreditor Agreement. Each Seller shall maintain its limited liability company agreement and other organizational documents in conformity with this Agreement;

(e) Conduct of Business. Each Seller shall conduct its affairs strictly in accordance with its organizational documents and observe all necessary, appropriate and customary company formalities, including, but not limited to, holding all regular and special members’ and board of directors’ (or managers’) meetings appropriate to authorize all corporate action, keeping separate and accurate minutes of its meetings, passing all resolutions or consents necessary to authorize actions taken or to be taken, and

 

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maintaining accurate and separate books, records and accounts, including, but not limited to, payroll and intercompany transaction accounts;

(f) No Other Business or Debt. No Seller shall engage in any business or activity except as set forth in the Transaction Documents nor, incur any indebtedness or liability other than as expressly permitted by this Agreement.

(g) Books and Records. Each Seller’s books and records will be maintained separately from those of the Servicer, the Originators and any of their Affiliates (other than any other Seller) and in a manner such that it will not be difficult or costly to segregate, ascertain or otherwise identify the assets and liabilities of such Seller from the assets and liabilities of the Servicer, the Originators and any of their Affiliates (other than any other Seller);

(h) Operating Expenses. Each Seller’s operating expenses will not be borne by the Servicer, any Originator or any of their Affiliates (other than any other Seller) except from capital contributions from its members.

(i) Disclosure of Transactions. All financial statements of the Servicer, the Originators, Sprint Spectrum and any of its other Affiliates that are consolidated to include any Seller will disclose that (i) such Seller’s sole business consists of the purchase or acceptance through capital contributions of the Lease Devices, Lease Contracts, Receivables and Related Assets from its Related Originators and the subsequent retransfer of or granting of a security interest in such Receivables, Lease Contracts and Related Assets to certain purchasers party to this Agreement, (ii) such Seller is a separate legal entity with its own separate creditors who will be entitled, upon its liquidation, to be satisfied out of the Seller’s assets prior to any assets or value in the Seller becoming available to the Seller’s equity holders (including holders of Preferred Membership Interests) and (iii) the assets of the Seller are not available to pay creditors of the Servicer, any Originator or any Affiliate thereof (other than any other Seller);

(j) Arm’s-Length Relationships. Each Seller shall maintain an arm’s-length relationship with the Servicer, each Originator, Sprint Spectrum and its other Affiliates. No Seller on the one hand, or the Servicer, any Originator, Sprint Spectrum or any of its other Affiliates on the other hand will be or will hold itself out to be responsible for the debts of the other (other than any other Seller) or the decisions or actions respecting the daily business and affairs of the other. Each Seller, the Servicer, any Originators, Sprint Spectrum and its other Affiliates will immediately correct any known misrepresentation with respect to the foregoing, and they will not operate or purport to operate as an integrated single economic unit with respect to each other or in their dealing with any other entity (other than among the Sellers);

(k) Allocation of Overhead. To the extent that any Seller, on the one hand, and the Servicer, any Originator or any Affiliate thereof, on the other hand, have offices in the same location, there shall be a fair and appropriate allocation of overhead costs between them, and such Seller shall bear its fair share of such expenses, which may be paid through the Servicing Fee or otherwise;

 

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(l) Identification. Each Seller shall at all times hold itself out to the public under such Seller’s own name as a legal entity separate and distinct from its equity holders, members, managers, the Servicer, any Originator or any Affiliate thereof (other than any other Seller);

(m) Capital. Each Seller shall maintain adequate capital in light of its contemplated business operations;

(n) Servicer and each Seller also agree that:

(i) no Seller shall issue any security of any kind except certificates evidencing membership interests (including Preferred Membership Interests) issued to its Related Originators in connection with its formation, or incur, assume, guarantee or otherwise become directly or indirectly liable for or in respect of any obligation other than, (i) with respect to each Seller, such Seller’s liability for and guarantee of each other Seller’s Obligations as contemplated hereby, (ii) as expressly permitted by the Transaction Documents and (iii) ordinary course operating expenses;

(ii) no Seller shall sell, pledge or dispose of any of its assets, except as permitted by, or as provided in, the Transaction Documents and the Intercreditor Agreement;

(iii) no Seller shall purchase any asset (or make any investment, by share purchase, loan or otherwise) except as permitted by, or as provided in, the Transaction Documents;

(iv) no Seller shall make any payment, directly or indirectly, to, or for the account or benefit of, any owner of any Voting Securities, security interest or equity interest in such Seller or any Affiliate of any such owner (except, in each case, as expressly permitted by the Transaction Documents);

(v) no Seller shall make, declare or otherwise commence or become obligated in respect of, any dividend, stock or other security redemption or purchase, distribution or other payment to, or for the account or benefit of, any owner of any Voting Securities, Preferred Membership Interests or other equity interest in such Seller to any such owner or any Affiliate of any such owner other than from funds received by it under Article III and so long as, in any case, the result would not directly or indirectly cause such Seller to be considered insolvent;

(vi) No Seller shall have any employees; and

(vii) Each Seller will provide for not less than ten (10) Business Days’ prior written notice to the Collateral Agent and each Administrative Agent of any removal, replacement or appointment of any director that is currently serving or is proposed to be appointed as an Independent Manager of such Seller, such notice to include the identity of the proposed replacement Independent Manager,

 

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together with a certification that such replacement satisfies the requirements for an Independent Manager set forth in this Agreement and the limited liability company agreement of such Seller.

ARTICLE VIII

ADMINISTRATION AND COLLECTION

SECTION 8.1 Designation of the Servicer.

(a) Sprint Spectrum as the Servicer. The servicing, administering and collection of the Pool Receivables relating to each Receivable Pool on behalf of the Sellers, the Administrative Agents, Purchaser Agents, the Collateral Agent and Purchasers shall be conducted in accordance with this Agreement by the Person designated as the Servicer hereunder (the “Servicer”) from time to time in accordance with this Section 8.1. Until the Collateral Agent (with the consent, or acting at the direction of, the Purchaser Agents) delivers to Sprint Spectrum and the Sellers a Successor Notice in accordance with Section 8.1(b), Sprint Spectrum is hereby designated as, and hereby agrees to perform the duties and obligations of, the Servicer pursuant to the terms hereof. The Servicer shall receive a Servicing Fee in respect of the Receivable Pools, payable as described in Article III, for the performance of its duties hereunder.

(b) Successor Notice. In the event that an Event of Termination or Non-Reinvestment Event has occurred and is continuing, upon the written direction of the Required Purchasers or the Administrative Agents acting jointly, the Collateral Agent shall, by notice to Sprint Spectrum and Sellers, immediately designate a successor Servicer pursuant to the terms hereof (a “Successor Notice”) which such successor shall not be a Competitor and shall be selected by the Administrative Agents acting jointly; it being understood and agreed that, in any event, any Administrative Agent may (but shall not be obligated to) serve as successor Servicer. Upon receipt of a Successor Notice, Sprint Spectrum agrees that it shall terminate its activities as the Servicer hereunder in a manner that the Administrative Agents reasonably believe will facilitate the transition of the performance of such activities to the successor Servicer, and successor Servicer shall assume each and all of Sprint Spectrum’s obligations to service and administer the Pool Receivables, on the terms and subject to the conditions herein set forth, and Sprint Spectrum shall use commercially reasonable efforts to assist such successor Servicer in assuming such obligations. The Collateral Agent shall not give, and the Administrative Agents and the Purchasers shall not instruct the Collateral Agent to give, Sprint Spectrum a Successor Notice except after the occurrence of any Event of Termination or Non-Reinvestment Event that remains continuing.

(c) Subservicers; Subcontracts. Except as provided in clauses (d) and (e) below, the Servicer may not subcontract with any Person or otherwise delegate any of its duties or obligations hereunder except to any of its Affiliates or with the prior written consent of the Collateral Agent and each Administrative Agent (not to be unreasonably withheld, conditioned or delayed); provided, that, notwithstanding any such designation,

 

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delegation or subcontract (including as provided in clauses (d) or (e) below) or any replacement or substitution of Servicer pursuant to clause (a) or (b) above, the Servicer shall remain primarily and directly liable for the performance of all the duties and obligations of the Servicer pursuant to the terms hereof.

(d) Amdocs Sub-Servicing Agreement. The Servicer may delegate its duties and obligations to service and collect the Receivables hereunder to Amdocs pursuant to the terms of the Amdocs Sub-Servicing Agreement; provided, however, that: (i) the Servicer shall remain primarily and directly liable hereunder for the performance of such delegated duties and obligations of the Servicer, and (ii) the Sellers, the Collateral Agent, the Administrative Agents, the Purchaser Agents and the Purchasers shall have the right to look solely to the Servicer for performance of such delegated duties and obligations of the Servicer.

(e) TransCentra Sub-Servicing Agreement. The Servicer may delegate its duties and obligations to process cash, checks, instruments or other remittances received from time to time in the TransCentra Serviced Lock-Boxes to TransCentra pursuant to the terms of the TransCentra Sub-Servicing Agreement; provided, however, that: (i) the Servicer shall remain primarily and directly liable hereunder for the performance of such delegated duties and obligations of the Servicer, and (ii) the Sellers, the Administrative Agents, the Purchaser Agents, the Collateral Agent and the Purchasers shall have the right to look solely to the Servicer for performance of such delegated duties and obligations of the Servicer. Notwithstanding the foregoing and in addition to the Administrative Agents’ and the Collateral Agent’s other rights and remedies hereunder and under applicable law, if an Event of Termination, Non-Reinvestment Event or Collection Control Event has occurred and remains continuing, then, upon the written direction of the Required Purchasers or any Administrative Agent, the Collateral Agent shall instruct the Servicer to, and the Servicer shall promptly (but not later than two Business Days following such instruction) if so instructed, do either of the following, as selected by the Administrative Agents (acting jointly and in their joint discretion): (A) immediately terminate TransCentra’s right to access and control the TransCentra Serviced Lock-Boxes and any cash, checks, instruments or other remittances received from time to time therein and provide the Collateral Agent or its designee with the exclusive right to access and control the TransCentra Serviced Lock-Boxes and any cash, checks, instruments or other remittances received from time to time therein (including by delivering written instructions to such effect to the post office or postmaster maintaining the TransCentra Serviced Lock-Boxes), or (B) deliver to the Collateral Agent and each Administrative Agent a written agreement in form and substance acceptable to the Administrative Agents (in their sole discretion) executed by the Servicer and TransCentra, pursuant to which TransCentra acknowledges and agrees (x) to the Sellers’ and the Collateral Agent’s ownership and security interests in the cash, checks, instruments or other remittances received from time to time in the TransCentra Serviced Lock-Boxes, (y) that TransCentra has no Adverse Claim on, or other right to, any cash, checks, instruments or other remittances received from time to time in the TransCentra Serviced Lock-Boxes and (z) that TransCentra shall follow the Collateral Agent’s instructions under the TransCentra Sub-Servicing Agreement (including, without limitation, with respect to the processing and deposit of such remittances and the

 

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TransCentra Serviced Lock-Boxes), rather than those of the Servicer or its Affiliates. The Sellers and the Servicer shall take any further action that the Collateral Agent or any Administrative Agent may reasonably request to effect the transactions described in the foregoing sentence.

SECTION 8.2 Duties of the Servicer. The Servicer shall take or cause to be taken all such actions as may be necessary or advisable to collect, administer and service each Pool Receivable relating to each Receivable Pool from time to time with reasonable care and diligence and, in any event, with no less care and diligence than it uses in the collection, administration and servicing of its own assets, and in accordance in all material respects with (i) applicable Laws and (ii) the Credit and Collection Policy. The Sellers, the Administrative Agents, the Collateral Agent, Purchasers and Purchaser Agents hereby acknowledge and agree to this appointment of the Servicer.

(a) Allocation of Collections; Segregation. The Servicer shall set aside and hold in trust Collections of Pool Receivables in accordance with Section 1.3. The Servicer shall allocate the amount of each Obligation payable to the Collateral Agent, any Administrative Agent, any Purchaser Agent, any Purchaser, any Indemnified Party or any Affected Party to the Receivable Pool to which such obligation is directly attributable. If the amounts payable in respect of any Obligation are not directly attributable to a single Receivable Pool, the Servicer shall (or, upon the occurrence and continuation of an Event of Termination, Collection Control Event or Non-Reinvestment Event, the Collateral Agent shall) allocate such amounts to each Receivable Pool based upon the respective Allocation Percentage for each such Receivable Pool.

(b) Extension and Modification of Receivables. So long as no Event of Termination, Collection Control Event or Non-Reinvestment Event is continuing, the Servicer, may, in accordance with the Credit and Collection Policy extend, waive, amend or otherwise modify the terms of any Pool Receivables relating to a Receivable Pool, or amend, waive, or otherwise modify in any material respect any term or condition to any Contract related thereto as the Servicer may reasonably determine to be appropriate to maximize Collections thereof; provided, that, (A) after giving effect to such extension, amendment, waiver or other modification, the sum of Purchasers’ Pool Investment and the Required Reserves in respect of such Receivable Pool at such time shall not exceed the Net Portfolio Balance of such Receivable Pool at such time, and (B) no such extension, amendment, waiver or other modification shall make or be deemed to make any such Pool Receivable current or otherwise modify the aging thereof. Notwithstanding the foregoing or any right it may have to do so under the terms of any Lease Contract, the Servicer shall not discontinue (or permit to be discontinued) the leasing program under which the Lease Receivables were originated if doing so would result in the forgiveness of any remaining payments due under any Lease Contract.

(c) Documents and Records. The Sellers shall deliver (and cause each Originator to deliver) to the Servicer, and the Servicer shall hold in trust for the Sellers, each Originator, each Administrative Agent, the Collateral Agent, each Purchaser Agent and each Purchaser, all Records (and any original documents relating thereto) (and after the occurrence of an Event of Termination, Collection Control Event or Non-

 

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Reinvestment Event that remains continuing, shall deliver the same to the Collateral Agent or its designees promptly upon the Collateral Agent’s written request). Upon written request of the Collateral Agent or any Administrative Agent, the Servicer shall provide the Collateral Agent and the Administrative Agents with the location(s) of all Records (and any original documents relating thereto).

(d) Certain Duties of the Servicer and the Sellers. The Servicer shall, as soon as practicable, following receipt of the collections or proceeds of any Receivable that is not a Pool Receivable, or a Related Asset, Lease Contract or any other property included in the grant set forth in Section 9.1, turn over such collection to the Person entitled to such collection. The Servicer, if other than Sprint Spectrum (or any of its Affiliates), shall, as soon as practicable upon demand, deliver to the Sellers (A) all documents, instruments, books, records, purchase orders, agreements, reports and other information (including computer programs, tapes, disks, other information storage media, data processing software and related property and rights) in its possession that evidence or relate to Receivables of the Sellers other than Pool Receivables and the Obligors of such Receivables, and (B) copies of all Records in its possession.

(e) Termination. The Servicer’s authorization as such under this Agreement shall terminate upon the Final Payout Date.

(f) Power of Attorney. The Sellers, each Administrative Agent, each Purchaser Agent, the Collateral Agent and each Purchaser hereby grant to the Servicer an irrevocable power of attorney, with full power of substitution, coupled with an interest, to take in the name of the Sellers any and all steps which are necessary or advisable to endorse, negotiate or otherwise realize on any writing or other right of any kind held or transmitted by the Sellers or transmitted or received by the Sellers in connection with any Pool Receivable or under the related Records.

(g) Resignation of Sprint Spectrum as the Servicer. Sprint Spectrum shall not resign in its capacity as the Servicer hereunder without the prior written consent of the Collateral Agent, each Administrative Agent and each Purchaser Agent, which consent shall be given or withheld in the sole and absolute discretion of the Collateral Agent, each Administrative Agent and each Purchaser Agent.

SECTION 8.3 Rights of the Collateral Agent . In addition to all of its other rights herein including under Articles IX and X, under the other Transaction Documents or at Law or in equity, the Administrative Agents and Collateral Agent shall have the other following rights set forth in this Section 8.3:

(a) Notice to Obligors. At any time during the continuance of any Event of Termination, Collection Control Event or Non-Reinvestment Event, upon the written direction of the Required Purchasers or the Administrative Agents acting jointly, (A) the Collateral Agent shall notify the Obligors of Pool Receivables, or any of them, of its interests in the Asset Portfolios and the Lease Contracts, and instruct them to make payments on the Pool Receivables as instructed by, the Collateral Agent and (B) the Servicer shall (on behalf of the Sellers), at the Sellers’ expense, give notice of the

 

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Collateral Agent’s interest in the Pool Receivables to each said Obligor and instruct them to make payments on the Pool Receivables as instructed in writing by, the Collateral Agent or the Administrative Agents acting jointly.

(b) Notice to Lock-Box Banks and Intercreditor Parties. At any time during the continuance of any Event of Termination, Collection Control Event or Non-Reinvestment Event, the Collateral Agent may (or shall if so directed by the Required Purchasers or any Administrative Agent), and is hereby authorized to, (i) deliver an Enforcement Notice under, and as defined in, the Intercreditor Agreement, and/or (ii) assume exclusive dominion and control over the Lock-Box Accounts, and the Sellers and the Servicer shall take any further action that the Collateral Agent may reasonably request to effect such assumption.

(c) Control. At any time during the continuance of any Event of Termination, Collection Control Event or Non-Reinvestment Event, the Collateral Agent (i) may (or shall if so directed by the Required Purchasers or any Administrative Agent), and is hereby authorized to, assume exclusive dominion and control over the Cap Reserve Account and (ii) if directed by the Required Purchasers, to utilize the amounts on deposit in the Cap Reserve Account to purchase or cause the Servicer to purchase one or more Eligible Interest Rate Caps. The Sellers and the Servicer agree to take all such further actions that the Collateral Agent may reasonably request to effect such assumption and rights contemplated by this Section 8.3(c).

(d) Other Rights. At any time during the continuance of any Event of Termination, Collection Control Event or Non-Reinvestment Event, the Servicer shall, (A) at the Collateral Agent’s request and at the Sellers’ expense, assemble all of the Records and deliver such Records to the Collateral Agent or its designee and (B) at the request of the Collateral Agent or its designee, exercise or enforce any of their respective rights hereunder, under any other Transaction Document, under any Lease Contract, Pool Receivable or under any Related Asset (to the extent permitted hereunder or thereunder). Without limiting the generality of the foregoing, at any time, each of the Servicer and the Sellers shall upon the request of any Administrative Agent or the Collateral Agent or its designee and at the Sellers’ expense:

(I) authorize, execute (if required) and file such financing or continuation statements, or amendments thereto or assignments thereof, and such other instruments or notices, as may be necessary or appropriate; and

(II) mark its master data processing records evidencing that the Pool Receivables have been sold in accordance with this Agreement.

(e) Additional Financing Statements; Performance by the Administrative Agents. Each Seller hereby authorizes the Collateral Agent and each Administrative Agent or their respective designees to file one or more financing or continuation statements, and amendments thereto and assignments thereof, or any similar instruments in any relevant jurisdiction relative to all or any of the Lease Devices, Lease Contracts,

 

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Pool Receivables and Related Assets now existing or hereafter arising in the name of such Seller. Each Seller agrees that a similar filing against it may also be filed for the purposes hereof and to perfect the security interest and transfers created hereby. If any Seller fails to perform any of its agreements or obligations under this Agreement or any other Transaction Document, the Collateral Agent, any Administrative Agent or any of their respective designees may (but shall not be required to) itself perform, or cause performance of, such agreement or obligation, and the expenses of the Collateral Agent or any such Administrative Agent or its designee incurred in connection therewith shall be payable by the Sellers as provided in Section 13.6.

SECTION 8.4 Responsibilities of the Servicer . Anything herein to the contrary notwithstanding:

(a) Contracts. The Servicer shall perform all of its obligations under the Records, so long as it is an Affiliate of any Seller, to the same extent as if the Asset Portfolios had not been sold hereunder and the exercise by the Collateral Agent or its designee of its rights hereunder shall not relieve the Servicer from such obligations.

(b) Limitation of Liability. None of the Collateral Agent, any Administrative Agent, any Purchaser or any Purchaser Agent shall have any obligation or liability with respect to any Lease Device, Lease Contract, Pool Receivables or Related Assets related thereto, nor shall any of them be obligated to perform any of the obligations of the Servicer, any Originator or any Seller thereunder.

SECTION 8.5 Further Action Evidencing Purchases and Reinvestments. Each Seller agrees that from time to time, at its expense, it shall (or cause the Servicer to) promptly execute and deliver all further instruments and documents, and take all further actions, that the Collateral Agent, any Administrative Agent or any of their respective designees may reasonably request or that are reasonably necessary in order to perfect, protect or more fully evidence the transactions contemplated by the other Transaction Documents.

SECTION 8.6 Application of Collections. Unless the Collateral Agent instructs otherwise, any payment by an Obligor in respect of any Pool Receivable shall, except as otherwise specified in writing or otherwise by such Obligor, required by Law or by the underlying Contract, be applied using the same systems, practices and procedures as Servicer uses for the application of payments on all of the receivables serviced by it for itself and its Affiliates whether or not such payments are being made with respect to Pool Receivables.

SECTION 8.7 Collections outside the Lock-Box Accounts. Notwithstanding anything herein or in any other Transaction Document to the contrary, the Servicer and the Sellers shall be permitted to instruct Obligors to cause Collections with respect to Pool Receivables to an account that is not a Lock-Box Account covered by a Lock-Box Agreement and deposit such Collections in an account that is not a Lock-Box Account covered by a Lock-Box Agreement (“Non Lock-Box Receivables”); provided, that the aggregate Unpaid Balance of all Eligible Receivables that are Non Lock-Box Receivables relating to any Receivable Pool does not exceed 8.00% of the aggregate Unpaid Balance of all Eligible Receivables in respect of such Receivable Pool at any time.

 

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SECTION 8.8 Clean-up Call. At any time that the aggregate Purchasers’ Total Investment in respect of all three Receivable Pools is less than 10% of the aggregate Purchasers’ Total Commitment in respect of all three Receivable Pools in effect on the date hereof, the Servicer may, upon ten (10) Business Days’ prior written notice to the Collateral Agent, the Administrative Agents, repurchase all Receivables, Related Security and Collections from the Purchasers relating to the Receivable Pools at a price equal to the outstanding Purchasers’ Total Investment and all Obligations and other amounts owing to the Collateral Agent, the Administrative Agents and the other Affected Parties as of the effective date of such repurchase; provided, however, that no such repurchase shall occur unless, prior thereto, or concurrently therewith, the aggregate Purchasers’ Total Commitment in respect of all three Receivable Pools has been reduced to zero in accordance with Section 3.2(c). Such repurchase price in respect of the Receivables relating to each Receivable Pool shall be paid in cash by deposit to a Lock-Box Account and shall be deemed to be “Collections” for all purposes.

SECTION 8.9 Cap Reserve Account; Cap Pool Hold-Back Amount; Calculation Agents. (a) On and after the Restatement Effective Date, the Servicer shall cause to be maintained, in the name of a Seller and subject to a Control Agreement, a deposit account at an Eligible Bank, bearing a designation clearly indicating that the funds deposited therein are held for the benefit and security of the Collateral Agent for the benefit of the Affected Parties (the “Cap Reserve Account”). If, at any time, the Cap Reserve Account ceases to be maintained with an Eligible Bank, such Seller shall, as promptly as practicable and in any event within thirty (30) days after it, any Originator, any Seller or Sprint Corporation has actual knowledge thereof, (i) establish a new Cap Reserve Account with a depository institution that is an Eligible Bank, (ii) transfer any amounts held in the existing Cap Reserve Account to such new Cap Reserve Account, and (iii) cause such Eligible Bank to enter into a Control Agreement. After the occurrence and during the continuance of an Event of Termination, a Non-Reinvestment Event or a Collection Control Event, the Collateral Agent shall be entitled to deliver a “Notice of Exclusive Control” under and as defined in the Control Agreement, whereupon the Cap Reserve Account shall be in the sole dominion and control of the Collateral Agent for the benefit and security of the Affected Parties. The Collateral Agent shall not deliver a “Notice of Exclusive Control” under and as defined in the Control Agreement except after the occurrence and during the continuation of an Event of Termination, a Non-Reinvestment Event or a Collection Control Event. The Control Agreement shall be effective to give the Collateral Agent “control” of the Cap Reserve Account within the meaning of Section 9-104 of the UCC.

(b) On the Second Restatement Effective Date, the Servicer shall set aside and hold in trust for the Collateral Agent (on behalf of each Purchaser Group) an amount equal to the Cap Reserve Amount (to the extent not previously set aside and being held in trust). On or after the Cap Account Trigger Date, the Servicer shall as promptly as practicable (and in any event within one (1) Business Day) remit to the Cap Reserve Account an amount equal to the Cap Reserve Amount. After the Cap Account Trigger Date, the Servicer shall remit all Cap Deficiency Amounts to the Cap Reserve Account in accordance with clause (iv) of Section 1.3(c). On or after the Cap Account Trigger Date, amounts on deposit in, or to the credit of the Cap Reserve Account shall be used solely to purchase one or more Eligible Interest Rate Caps; provided, that if as of any Reporting Date the amounts on deposit in, or to the credit of the Cap Reserve Account exceed the then current Cap Reserve Amount as reported to the Servicer immediately, prior to such

 

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Reporting Date and no Specified Unmatured Event, Event of Termination, Collection Control Event or Non-Reinvestment Event shall have occurred and be continuing, the Servicer may withdraw from the Cap Reserve Account an amount equal to such excess and apply such funds in accordance with Section 1.3. Except as expressly provided in clauses (iii) and (iv) of Section 1.3(c), amounts set aside and held in trust pursuant to Section 1.3 in respect of the Cap Reserve Amount, the Estimated Cap Deficiency Amount shall be used solely to purchase an Eligible Interest Rate Cap.

(c) If at any time, other than during a Cap Effective Period, the Cap LIBO Rate equals or exceeds the Trigger Rate, the Sellers shall, from the Cap Pool Hold-Back Amount, promptly (and in any event within five (5) Business Days) purchase one or more Eligible Interest Rate Caps from Eligible Counterparties. If the available Cap Pool Hold-Back Amount is not sufficient to purchase such Eligible Interest Rate Cap, the Sellers and the Servicer jointly and severally agree to fund such deficiency.

(d) The Cap Calculation Agents shall provide the Servicer with the Cap LIBO Rate on each Business Day that the Cap LIBO Rate is in excess of 0.40%. For the avoidance of doubt, any Administrative Agent, in performing such duties shall be acting in its capacity as an Administrative Agent, for all purposes of this Agreement, including without limitation, Article XI and Article XII.

(e) The Sellers agree that any Cap Calculation Agent, other than the ISC Administrative Agent or the Lease Administrative Agent acting in such capacity, shall enter into an agreement, in form and substance reasonably satisfactory to the Administrative Agents, for the benefit of the Parties to this Agreement to undertake the responsibilities of a Cap Calculation Agent set forth in this Agreement.

(f) The Sellers and the Servicer agree that, on or prior the designation of any Cap Calculation Agent in accordance with the definition thereof (or, (x) in the case of the ISC Administrative Agent acting in that capacity, on or prior to the date which is the three month anniversary of the Restatement Effective Date or (y) in the case of the Lease Administrative Agent acting in that capacity, on or prior to the initial Purchase relating to the Lease Receivable Pool hereunder), the Sellers shall have (i) entered into an ISDA Master Agreement with one or more Eligible Counterparties that are, or are Affiliates of, such Cap Calculation Agent, and (ii) agreed with such Eligible Counterparties upon a form of a confirmation (together with a schedule, if applicable) under such ISDA Master Agreement for each Eligible Interest Rate Cap to be purchased from each such Eligible Counterparties, which shall be in form and substance reasonably satisfactory to the Administrative Agents.

(g) The Sellers hereby grant to the ISC Administrative Agent, the Lease Administrative Agent and the Collateral Agent an irrevocable power of attorney, with full power of substitution, coupled with an interest, to take, in the name of the Sellers, any and all steps which are necessary or advisable (as determined by the ISC Administrative Agent, the Lease Administrative Agent and the Collateral Agent, acting jointly) to purchase one or more Eligible Interest Rate Caps from Eligible Counterparties using the Cap Pool Hold-Back Amount in accordance with this Section 8.9 at any time when an

 

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Event of Termination, Collection Control Event or Non-Reinvestment Event has occurred and is continuing or when the Sellers shall have otherwise failed to purchase or maintain an Eligible Interest Rate Cap when required pursuant to this Section 8.9. If the available Cap Pool Hold-Back Amount is not sufficient to purchase such Eligible Interest Rate Cap, the Sellers and the Servicer jointly and severally agree to fund such deficiency or indemnify the ISC Administrative Agent, the Lease Administrative Agent and the Collateral Agent, as applicable for any amounts funded in connection therewith.

ARTICLE IX

SECURITY INTEREST

SECTION 9.1 Grant of Security Interest. Without limiting Section 1.2(c) or (d), to secure all Obligations of the Sellers and all other amounts owing to any Affected Party under or in connection with this Agreement and each other Transaction Document, whether now or hereafter existing, due or to become due, direct or indirect, or absolute or contingent, including, all Indemnified Amounts, payments on account of Collections received or deemed to be received and fees and expenses, in each case pro rata according to the respective amounts thereof, each Seller hereby assigns and pledges to the Collateral Agent, for the benefit of the Affected Parties, and hereby grants to the Collateral Agent, for the benefit of the Affected Parties, a security interest in all of the following: all of such Seller’s right, title and interest now or hereafter existing in, to and under the following of such Seller’s assets, whether now owned or existing or hereafter acquired, and wherever located (whether or not in the possession or control of such Seller), and all proceeds of the foregoing (collectively, and together with the Asset Portfolios relating to the Receivable Pools, the “Collateral”): (I) all Receivables comprising each Receivable Pool; (II) the Related Assets in respect of each Receivable Pool; (III) the Collections in respect of each Receivable Pool; (IV) all Accounts in respect of each Receivable Pool; (V) all Chattel Paper in respect of each Receivable Pool; (VI) all Contracts (including, without limitation, Lease Contracts, notwithstanding anything to the contrary in Sections 1.2(c) or 1.2(d)); (VII) all Deposit Accounts; (VIII) all Documents in respect of each Receivable Pool; (IX) all Payment Intangibles in respect of each Receivable Pool; (X) all General Intangibles in respect of each Receivable Pool; (XI) all Instruments in respect of each Receivable Pool; (XII) all Inventory in respect of each Receivable Pool; (XIII) all Investment Property in respect of each Receivable Pool; (XIV) all letter of credit rights and supporting obligations in respect of each Receivable Pool; (XV) the Sale Agreement and all rights and remedies of such Seller thereunder; (XVI) all Eligible Interest Rate Caps entered into by the Sellers, the right to receive all Cap Payments and all other rights and remedies in respect thereof, (XVII), all other assets in the Asset Portfolio relating to each Receivable Pool; (XVIII) all rights, interests, remedies and privileges of such Seller relating to any of the foregoing (including the right to sue for past, present or future infringement of any or all of the foregoing; and (XIX) to the extent not otherwise included, all products and Proceeds (each capitalized term in clauses (I) through (XIX) not otherwise defined in this Agreement, as defined in the UCC) of each of the foregoing clauses (I) through (XVIII) and all accessions to, substitutions and replacements for, and rents, profits and products of each of the foregoing (including insurance proceeds), and all distributions (whether in money, securities or other property) and collections from or with respect to any of the foregoing. Notwithstanding the foregoing, the Collateral shall not include the Lease Devices, but this sentence shall not derogate from any right the Collateral Agent, the Administrative

 

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Agents, the Purchasers or the Purchaser Agents may have (under Applicable Law or otherwise) to seek or obtain an involuntary Lien (including, without limitation, a judgment lien) on any Lease Device now owned or hereafter acquired by any Seller.

Each Seller hereby authorizes the filing of financing statements, including those filed under Section 8.3(d), describing the collateral covered thereby as “all of debtor’s personal property and assets other than the Lease Devices” or words to that effect, notwithstanding that such wording may be broader in scope than the collateral described in this Section 9.1. This Agreement shall constitute a security agreement under applicable Law.

SECTION 9.2 Remedies; Waiver. Upon, or at any time after, the declaration or automatic occurrence of the Purchase Termination Date pursuant to this Section 9.2, no Purchases or Reinvestments in respect of any Receivable Pool thereafter will be made. Upon the declaration or automatic occurrence of the Purchase Termination Date pursuant to this Section 9.2, the Collateral Agent, on behalf of the Purchasers, shall have, in addition to all other rights and remedies under this Agreement, any other Transaction Document or under applicable Law, all other rights and remedies provided under the UCC of each applicable jurisdiction and other applicable Laws (including all the rights and remedies of a secured party upon default under the UCC (including the right to sell any or all of the Collateral subject hereto)), all of which rights shall be cumulative. To the fullest extent it may lawfully so agree, each Seller agrees that it will not at any time insist upon, claim, plead, or take any benefit or advantage of any appraisal, valuation, stay, extension, moratorium, redemption or similar Law now or hereafter in force in order to prevent, delay, or hinder the enforcement hereof or the absolute sale of any part of the Collateral; each Seller for itself and all who claim through it, so far as it or they now or hereafter lawfully may do so, hereby waives the benefit of all such Laws and all right to have the Collateral marshaled upon any foreclosure hereof, and agrees that any court having jurisdiction to foreclose this Agreement may order the sale of the Collateral in its entirety. Without limiting the generality of the foregoing, each Seller hereby waives and releases any and all right to require the Collateral Agent or any Administrative Agent to collect any of such obligations from any specific item or items of the Collateral or from any other party liable as guarantor or in any other manner in respect of any of such obligations or from any collateral for any of such obligations. Upon, or anytime after, the occurrence of an Event of Termination (other than an Event of Termination described in Section 10.1(c)) or Non-Reinvestment Event that remains continuing, the Collateral Agent or any Administrative Agent shall, at the request, or may with the consent, of the Required Purchasers, by notice to the Servicer (on the Sellers’ behalf) declare the Purchase Termination Date to have occurred and the Liquidation Period to have commenced and shall have all of the remedies set forth in Section 9.2 or otherwise herein. Upon the occurrence of an Event of Termination described in Section 10.1(c), the Purchase Termination Date shall occur and the Liquidation Period shall commence automatically.

ARTICLE X

EVENTS OF TERMINATION

SECTION 10.1 Events of Termination. The following events shall be “Events of Termination” hereunder:

 

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(a) Any of the following events:

(i) any Seller, Servicer, any Originator or Sprint Corporation shall fail to perform or observe any covenant or agreement as and when required hereunder or under any other Transaction Document (other than any covenant or agreement referred to in clause (a)(ii) below) and such failure remains unremedied for thirty (30) days after the earlier of the date (A) such Person receives notice of such failure from the Collateral Agent or any Administrative Agent or (B) a Responsible Officer obtains actual knowledge of such failure;

(ii) any of the following shall occur: any Seller, Servicer, any Originator or Sprint Corporation shall fail to make any payment or deposit or transfer of monies required to be made by it hereunder or under any other Transaction Document as and when due and such failure is not remedied within three (3) Business Days after the earlier of the date (A) such Person receives notice of such failure from the Collateral Agent, any Administrative Agent or any Purchaser Agent or (B) a Responsible Officer obtains actual knowledge of such failure;

(iii) the Servicer shall fail to deliver any Information Package when due pursuant to Section 3.1(a) and such failure is not remedied within two (2) Business Days;

(b) any representation or warranty made or deemed to be made by any Seller, the Servicer, any Originator or Sprint Corporation under or in connection with any Transaction Document shall prove to have been false or incorrect in any material respect when made or deemed to be made (without duplication as to any materiality modifiers, qualifications, or limitations applicable thereto) for a period of ten (10) days after the earlier of the date (i) such Person receives notice thereof from the Collateral Agent or any Administrative Agent, or (ii) a Responsible Officer obtains actual knowledge thereof (unless such representation or warranty relates solely to one or more specific Pool Receivables and Seller makes a Deemed Collection payment with respect to such Pool Receivable if and as required pursuant to Section 3.2(a));

(c) an Event of Bankruptcy shall have occurred with respect to any Seller, the Servicer, Sprint Corporation, any Originator or Sprint Corporation;

(d) a Change of Control shall occur;

(e) (A) The Collateral Agent, for the benefit of the Purchasers, fails at any time to have a valid ownership interest or first priority perfected security interest in the Pool Receivables, Lease Contracts and any Related Assets (or any portion thereof) and all identifiable cash proceeds of any of the foregoing, in each case, free and clear of any Adverse Claim (other than any Permitted Adverse Claim) or (B) the Collateral Agent shall fail to have a valid first priority perfected security interest in each Lock-Box Account;

 

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(f) An ERISA Event shall have occurred that is reasonably expected to result in a Material Adverse Effect; provided, however, that the occurrence of any ERISA Event that results in or is reasonably expected to result in the imposition of a lien by the PBGC on the assets of any Seller shall be considered as reasonably expected to result in a Material Adverse Effect.

(g) any of Servicer, Sprint Corporation, any Seller or any Originator, shall be (i) required to register as an “investment company” or (ii) “controlled” by an “Investment Company”, in each case, under (and as defined in) the Investment Company Act;

(h) any material provision of this Agreement, the Sale Agreement, the Fee Letters, the Lock-Box Agreements, the Intercreditor Agreement or the Performance Support Agreement shall cease to be the valid and binding obligation enforceable against the Servicer, Sprint Corporation, any Seller or any Originator;

(i) any Seller shall fail to pay in full all of its Obligations to the Collateral Agent, any Administrative Agent or any Purchaser hereunder on or prior to the Legal Final;

(j) one or more final judgments for the payment of money in an aggregate amount in excess of $250,000,000 (or, in the case of a judgment rendered against any Seller, individually, $15,325) shall be rendered against Sprint Corporation (or any Significant Subsidiary) and the same shall remain undischarged for a period of 60 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of Sprint Corporation (or any Significant Subsidiary) to enforce any such judgment; or

(k) the Performance Support Agreement is canceled, rescinded, amended or modified without the prior written consent of the Collateral Agent, each Administrative Agent and each Purchaser Agent; or

(l) the occurrence of any of the following (under, and as defined in, the Intercreditor Agreement): (i) an event that could give rise to an “Enforcement Period” or (ii) any action by the “MLS Collateral Agent” to accelerate payment of the “MLS Claim” or any other obligations and liabilities under any of the “MLS Documents” or foreclose or realize upon or enforce any of its rights with respect to the “MLS Collateral”.

An Event of Termination shall be deemed to be continuing until waived in writing by each Administrative Agent, the Collateral Agent and the Required Purchasers.

ARTICLE XI

PURCHASER AGENTS; COLLATERAL AGENT;

ADMINISTRATIVE AGENTS;

CERTAIN RELATED MATTERS

SECTION 11.1 Limited Liability of Purchasers, Purchaser Agents, Collateral Agent and the Administrative Agents. The obligations of the Collateral Agent, each

 

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Administrative Agent, each Purchaser and each Purchaser Agent under the Transaction Documents are solely the corporate obligations of such Person. Except with respect to any claim arising out of the willful misconduct or gross negligence of such Person, no claim may be made by any Seller, any Originator, the Servicer, Sprint Spectrum or Sprint Corporation against the Collateral Agent, any Administrative Agent, any Purchaser or any Purchaser Agent or their respective Affiliates, directors, members, managers, officers, employees, attorneys or agents for any special, indirect, consequential or punitive damages in respect of any claim for breach of contract or any other theory of liability arising out of or related to the transactions contemplated by this Agreement or any other Transaction Document, or any act, omission or event occurring in connection therewith; and each Seller and the Servicer hereby waives, releases, and agrees not to sue upon any claim for any such damages not expressly permitted by this Section 11.1, whether or not accrued and whether or not known or suspected to exist in its favor. Notwithstanding any provision of this Agreement or any other Transaction Document to the contrary: (i) in no event shall the Collateral Agent, any Administrative Agent or any Purchaser Agent ever be required to take any action which exposes it to personal liability or which is contrary to the provision of any Transaction Document or applicable Law and (ii) neither the Collateral Agent, any Administrative Agent nor any Purchaser Agent shall have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with any party hereto or any other Person, and no implied covenants, functions, responsibilities, duties, obligations or liabilities on the part of the Collateral Agent, any Administrative Agent or any Purchaser Agent shall be read into this Agreement or the other Transaction Documents or otherwise exist against the Collateral Agent, any Administrative Agent or any Purchaser Agent. In performing its functions and duties hereunder, the Collateral Agent and each Administrative Agent shall act solely as the agent of the Purchasers and the Purchaser Agents, as applicable, and does not assume nor shall be deemed to have assumed any obligation or relationship of trust or agency with or for any Seller, any Originator, the Servicer, Sprint Spectrum, Sprint Corporation or any other Person.

SECTION 11.2 Authorization and Action of each Purchaser Agent. By its execution hereof, in the case of each Conduit Purchaser and Committed Purchaser, and by accepting the benefits hereof, each Enhancement Provider and Liquidity Provider, each such party hereby designates and appoints its related Purchaser Agent to take such action as agent on its behalf and to exercise such powers as are delegated to such Purchaser Agent by the terms hereof, together with such powers as are reasonably incidental thereto. Each Purchaser Agent reserves the right, in its sole discretion, to take any actions and exercise any rights or remedies, in each case, authorized or provided for under this Agreement or any other Transaction Document and any related agreements and documents.

SECTION 11.3 Authorization and Action of each Administrative Agent and Collateral Agent.

(a) By its execution hereof, in the case of each Conduit Purchaser, Committed Purchaser and Purchaser Agent, each such party hereby designates and appoints each of BTMUNY, Mizuho and SMBCSI as an Administrative Agent and Mizuho as Collateral Agent to take such action as agent on its behalf and to exercise such powers as are delegated to such party by the terms hereof, together with such powers as are reasonably incidental thereto. Each Administrative Agent and the Collateral Agent reserves the

 

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right, in its sole discretion, to take any actions and exercise any rights or remedies, in each case, authorized or provided for under this Agreement or any other Transaction Document and any related agreements and documents. To the extent any provision of any Transaction Document requires the mutual agreement of the Administrative Agents and/or the Collateral Agent in order for one or all of the Administrative Agents and/or the Collateral Agent to take any action, and a mutual agreement cannot be reached between the Administrative Agents, the course of action selected in writing by the Required Purchasers shall control. If any provision of any Transaction Document permits the Collateral Agent or an Administrative Agent to take any action in its discretion, this paragraph shall not limit such discretionary right.

(b) Each Conduit Purchaser, each Committed Purchaser and each Purchaser Agent that is or that becomes a party hereto acknowledges and agrees that it (i) has received and reviewed a copy of the Intercreditor Agreement, (ii) has instructed the Administrative Agents and the Collateral Agent to enter into the Intercreditor Agreement, and (iii) has consented to and will comply with the terms of the Intercreditor Agreement. Each Administrative Agent the Collateral Agent (in each case, acting individually or collectively) is hereby authorized to deliver an Enforcement Notice under, and as defined in, the Intercreditor Agreement at any time during the continuance of any Event of Termination, Collection Control Event or Non-Reinvestment Event.

SECTION 11.4 Delegation of Duties of each Purchaser Agent . Each Purchaser Agent may execute any of its duties through agents or attorneys in fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. No Purchaser Agent shall be responsible to any Purchaser in its Purchaser Group for the negligence or misconduct of any agents or attorneys in fact selected by it with reasonable care.

SECTION 11.5 Delegation of Duties of each Administrative Agent and the Collateral Agent. The Collateral Agent and each Administrative Agent may execute any of its duties through agents or attorneys in fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. Neither the Collateral Agent nor any Administrative Agent shall be responsible to any Purchaser, any Purchaser Agent or any other Person for the negligence or misconduct of any agents or attorneys in fact selected by it with reasonable care.

SECTION 11.6 Successor Administrative Agent and Collateral Agent. (a) An Administrative Agent may, upon at least thirty (30) days’ notice to the Servicer (on the Sellers’ behalf), the other Administrative Agent and each Purchaser Agent, resign as an Administrative Agent. Such resignation shall not become effective until a successor agent (which may be the other Administrative Agent) (i) is appointed by the Required Purchasers and so long as no Event of Termination, Collection Control Event or Non-Reinvestment Event has occurred and is continuing, by the Servicer (on the Sellers’ behalf) (such consent not to be unreasonably withheld, conditioned or delayed), and (ii) has accepted such appointment. Upon such acceptance of its appointment as an Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall succeed to and become vested with all the rights and duties of such retiring Administrative Agent, and such retiring Administrative Agent shall be discharged from its duties and obligations under the Transaction Documents.

 

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(b) The Collateral Agent may, upon at least thirty (30) days’ notice to the Servicer (on the Sellers’ behalf), the Administrative Agents and each Purchaser Agent, resign as Collateral Agent. Such resignation shall not become effective until a successor Collateral Agent (which shall be an Administrative Agent prior to the occurrence of an Event of Termination) (i) is appointed by the Required Purchasers and so long as no Event of Termination, Collection Control Event or Non-Reinvestment Event has occurred and is continuing, by the Servicer (on the Sellers’ behalf) (such consent not to be unreasonably withheld, conditioned or delayed), and (ii) has accepted such appointment. Upon such acceptance of its appointment as the Collateral Agent hereunder by a successor Collateral Agent, such successor Collateral Agent shall succeed to and become vested with all the rights and duties of such retiring Collateral Agent, and such retiring Collateral Agent shall be discharged from its duties and obligations under the Transaction Documents.

SECTION 11.7 Indemnification. Each Committed Purchaser shall indemnify and hold harmless the Collateral Agent (including when acting as “Directing Agent” under and as defined in the Intercreditor Agreement) and each Administrative Agent and their respective officers, directors, employees, representatives and agents (to the extent not reimbursed by the Sellers or the Servicer and without limiting the obligation of the Sellers or the Servicer to do so), ratably in accordance with its aggregate Pool Commitments from and against any and all liabilities, obligations, losses, damages, penalties, judgments, settlements, costs, expenses and disbursements of any kind whatsoever (including in connection with any investigative or threatened proceeding, whether or not such Person is designated a party thereto) that may at any time be imposed on, incurred by or asserted against the Collateral Agent or any such Administrative Agent for such Person as a result of, or related to, any of the transactions contemplated by the Transaction Documents or the execution, delivery or performance of the Transaction Documents or any other document furnished in connection therewith (but excluding any such liabilities, obligations, losses, damages, penalties, judgments, settlements, costs, expenses or disbursements to the extent resulting solely from the gross negligence or willful misconduct of such Person as finally determined by a court of competent jurisdiction).

SECTION 11.8 Reliance, etc. Without limiting the generality of Section 11.1, the Collateral Agent, each Administrative Agent and each Purchaser Agent: (a) may consult with legal counsel, independent certified public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (b) makes no warranty or representation to any Purchaser or any other holder of any interest in Pool Receivables and shall not be responsible to any Purchaser or any such other holder for any statements, warranties or representations made by other Persons in or in connection with any Transaction Document; (c) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of any Transaction Document on the part of the Sellers or to inspect the property (including the books and records) of the Sellers; (d) shall not be responsible to any Purchaser or any other holder of any interest in Pool Receivables for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of any Transaction Document; and (e) shall incur no liability under or in respect of this Agreement or any other Transaction Document by acting upon any notice (including notice by telephone), consent, certificate or other instrument or writing (which may be by facsimile or telex) believed by it to be genuine and signed or sent by the proper party or parties.

 

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SECTION 11.9 Purchasers and Affiliates. Each of the Purchasers, the Purchaser Agents, the Collateral Agent, the Administrative Agents and any of their respective Affiliates may generally engage in any kind of business with any Seller, any Originator, the Servicer, Sprint Corporation or any Obligor, any of their respective Affiliates and any Person who may do business with or own securities of any Seller, any Originator, the Servicer, Sprint Corporation or any Obligor or any of their respective Affiliates. Notwithstanding anything to the contrary herein or in any other Transaction Document, the failure of the representation and warranty set forth in Section 6.1(u) with respect to the business and financial affairs of the Purchasers to be true or correct shall not (x) constitute a default, Event of Termination or Unmatured Event of Termination or (y) require the Sellers or Servicer to indemnify or otherwise reimburse any Affected Party for any losses related thereto.

SECTION 11.10 Sharing of Recoveries. Each Purchaser agrees that if it receives any recovery, through set-off, judicial action or otherwise, on any amount payable or recoverable hereunder in a greater proportion than should have been received hereunder or otherwise inconsistent with the provisions hereof, then the recipient of such recovery shall purchase for cash an interest in amounts owing to the other Purchasers (as return of Investment or otherwise), without representation or warranty except for the representation and warranty that such interest is being sold by each such other Purchaser free and clear of any Lien created or granted by such other Purchaser, in the amount necessary to create proportional participation by the Purchaser in such recovery. If all or any portion of such amount is thereafter recovered from the recipient, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest.

SECTION 11.11 Non-Reliance. Each Purchaser expressly acknowledges that none of the Collateral Agent, the Administrative Agents, the Purchaser Agents nor any of their respective officers, directors, members, partners, certificateholders, employees, agents, attorneys-in-fact or Affiliates has made any representations or warranties to it and that no act by the Collateral Agent, any Administrative Agent, or any Purchaser Agent hereafter taken, including any review of the affairs of any Seller, the Servicer or any Originator, shall be deemed to constitute any representation or warranty by the Collateral Agent, any Administrative Agent or any Purchaser Agent. Each Purchaser represents and warrants to the Collateral Agent, each Administrative Agent and each Purchaser Agent that, independently and without reliance upon the Collateral Agent, any Administrative Agent, any Purchaser Agent or any other Purchaser and based on such documents and information as it has deemed appropriate, it has made and will continue to make its own appraisal of and investigation into the business, operations, property, prospects, financial and other conditions and creditworthiness of the Sellers, the Servicer, the Originators, and the Receivables and its own decision to enter into this Agreement and to take, or omit, action under any Transaction Document. Without limiting the foregoing, the Purchasers and the Purchasers Agents acknowledge and agree that (i) the Administrative Agents have made certain of their own analytics, credit evaluations, models and/or projections regarding the performance and expected performance of the Receivable Pools available to certain Purchasers and/or Purchaser Agents, (ii) such information was made available to it solely as an accommodation by the applicable Administrative Agent and that such party has made its own independent credit analysis and investigation regarding the performance and expected performance of the applicable Receivable Pool, and (iii) no Administrative Agent shall have any responsibility or liability for the accuracy or completeness of any such information. Except for

 

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items specifically required to be delivered hereunder, neither the Collateral Agent nor any Administrative Agent shall have any duty or responsibility to provide any Purchaser Agent or Purchaser with any information concerning the Sellers, the Servicer or the Originators or any of their Affiliates that comes into its possession or any of its officers, directors, members, partners, certificateholders, employees, agents, attorneys-in-fact or Affiliates.

ARTICLE XII

INDEMNIFICATION

SECTION 12.1 Indemnities by the Sellers.

(a) General Indemnity. Without limiting any other rights which any such Person may have hereunder or under applicable Law, the Sellers agree to indemnify and hold harmless the Collateral Agent (including, without limitation, the Collateral Agent when acting in its capacity as “Directing Agent” under and as defined in the Intercreditor Agreement), each Administrative Agent, each Purchaser, each Purchaser Agent and each other Affected Party and each of their respective Affiliates, and all members, managers, directors, shareholders, officers, employees and attorneys or agents of any of the foregoing (each an “Indemnified Party”), forthwith on demand, from and against any and all damages, losses, claims, liabilities and related costs and expenses, including reasonable and documented attorneys’ fees and disbursements but excluding Taxes (indemnification for which shall be governed by Section 3.3(e)) (all of the foregoing being collectively referred to as “Indemnified Amounts”) awarded against or incurred by any of them arising out of, relating to or in connection with the Transaction Documents, any of the transactions contemplated thereby, or the ownership, maintenance or funding, directly or indirectly, of any Asset Portfolio (or any part thereof) or otherwise arising out of or relating to or resulting from the actions or inactions of any Seller, Servicer, Sprint Spectrum, any Originator or Sprint Corporation, provided, however, notwithstanding anything to the contrary in this Article XII, excluding Indemnified Amounts solely to the extent (x) resulting from the gross negligence or willful misconduct on the part of such Indemnified Party as determined by a final non-appealable judgment by a court of competent jurisdiction or (y) resulting from a claim brought by any Seller against an Indemnified Party for breach of such Indemnified Party’s obligations under any Transaction Document as determined by a final non-appealable judgment by a court of competent jurisdiction. Without limiting the foregoing, the Sellers shall indemnify, subject to the express limitations set forth in this Section 12.1, and hold harmless each Indemnified Party for any and all Indemnified Amounts arising out of, relating to or resulting from:

(i) the transfer by any Seller of any interest in any Lease Device or Lease Contract to any Person, or of any Pool Receivable or Related Asset other than the transfer or pledge of any Lease Contract, Pool Receivable and Related Assets to the Collateral Agent on behalf of the Purchasers pursuant to this Agreement, the transfer by any Originator to any Seller pursuant to the Sale Agreement and the grant of a security interest to the Collateral Agent pursuant to this Agreement and to any Seller pursuant to the Sale Agreement;

 

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(ii) any representation or warranty made by any Seller under or in connection with any Transaction Document, any Information Package or any other information or report delivered by or on behalf of any Seller pursuant hereto, which shall have been untrue, false or incorrect when made or deemed made;

(iii) the failure of any Seller to comply with the terms of any Transaction Document or any applicable Law (including with respect to any Lease Device, Lease Contract, Pool Receivable or Related Assets), or the nonconformity of any Lease Device, Lease Contract, Pool Receivable or Related Assets with any such Law;

(iv) the lack of an enforceable ownership interest, or a first priority perfected security interest, in the Lease Devices, Lease Contracts, Pool Receivables (and all Related Assets) in respect of any Receivable Pool against all Persons (including any bankruptcy trustee or similar Person);

(v) the failure to file, or any delay in filing of, financing statements or other similar instruments or documents under the UCC of any applicable jurisdiction or under any other applicable Laws with respect to any Pool Receivable whether at the time of any Purchase or Reinvestment or at any time thereafter;

(vi) any suit or claim related to the Pool Receivables or any Transaction Document (including any products liability or environmental liability claim arising out of or in connection with merchandise or services that are the subject of any Pool Receivable);

(vii) failure by any Seller to comply with the “bulk sales” or analogous Laws of any jurisdiction;

(viii) any loss arising, directly or indirectly, as a result of the imposition of sales or similar transfer type taxes or the failure by any Seller to timely collect and remit to the appropriate authority any such taxes;

(ix) any commingling of any Collections by any Seller, any Originator, Sprint Corporation or the Servicer relating to the Pool Receivables with any of their funds or the funds of any other Person;

(x) the failure or delay to provide any Obligor with an invoice or other evidence of indebtedness; or

(xi) any inability of any Originator or any Seller to assign any Lease Device, Lease Contract, Pool Receivable or Related Asset as contemplated under the Transaction Documents; or the violation or breach by any Seller of any confidentiality provision, or of any similar covenant of non-disclosure, with respect to any Contract, or any other Indemnified Amount with respect to or resulting from any such violation or breach.

 

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(b) Contribution. If for any reason the indemnification provided above in this Section 12.1 is unavailable to an Indemnified Party or is insufficient to hold an Indemnified Party harmless, then Sellers shall contribute to the amount paid or payable by such Indemnified Party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect not only the relative benefits received by such Indemnified Party on the one hand and Sellers on the other hand but also the relative fault of such Indemnified Party as well as any other relevant equitable considerations.

SECTION 12.2 Indemnity by the Servicer. Without limiting any other rights which any such Person may have hereunder or under applicable Law, the Servicer agrees to indemnify and hold harmless each Indemnified Party from any and all Indemnified Amounts incurred by any of them and arising out of, relating to or resulting from: (i) any breach by it (in any capacity) of any of its obligations or duties under this Agreement or any other Transaction Document; (ii) the untruth or inaccuracy of any representation or warranty made by it (in any capacity) hereunder or under any other Transaction Document; (iii) the failure of any information contained in an Information Package to be true and correct, or the failure of any other information provided to any such Indemnified Party by, or on behalf of, the Servicer (in any capacity) to be true and correct; (iv) any negligence or willful misconduct on its (in any capacity) part arising out of, relating to, in connection with, or affecting any transaction contemplated by the Transaction Documents, any Lease Device, Lease Contract, Pool Receivable or any Related Asset; (v) the failure by the Servicer (in any capacity) to comply with any applicable Law, rule or regulation with respect to any Pool Receivable or the related Contract or its servicing thereof; (vi) any commingling of any funds by it (in any capacity) relating to any Asset Portfolio with any of its funds or the funds of any other Person or (vii) the Intercreditor Agreement, including any commingling of funds contemplated thereby; provided, however, notwithstanding anything to the contrary in this Article XII, excluding Indemnified Amounts solely to the extent (x) resulting from the gross negligence or willful misconduct on the part of such Indemnified Party as determined by a final non-appealable judgment by a court of competent jurisdiction, (y) resulting from a claim brought by Servicer against an Indemnified Party for breach of such Indemnified Party’s obligations under any Transaction Document as determined by a final non-appealable judgment by a court of competent jurisdiction or (z) they constitute recourse with respect to a Lease Device, Lease Contract, Pool Receivable and the Related Assets by reason of bankruptcy or insolvency, or the financial or credit condition or financial default, of the related Obligor.

ARTICLE XIII

MISCELLANEOUS

SECTION 13.1 Amendments, Etc. No amendment, modification or waiver of any provision of this Agreement or consent to any departure by any Seller or the Servicer therefrom shall in any event be effective unless the same shall be in writing and signed by the Sellers, the Servicer, the Collateral Agent, the Administrative Agent and the Required Purchasers, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, waiver or modification shall (i) decrease the outstanding amount of, or extend the repayment of or any scheduled payment date for the payment of, any Yield in respect of the Purchasers’ Pool

 

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Investment in respect of any Receivable Pool or any fees owed to any Purchaser, the Collateral Agent, any Purchaser Agent or any Administrative Agent without the prior written consent of such Person; (ii) forgive or waive or otherwise excuse any repayment of the Purchasers’ Pool Investment in respect of any Receivable Pool without the prior written consent of each Purchaser and the related Purchaser Agent affected thereby; (iii) increase the Pool Commitment in respect of any Receivable Pool of any Purchaser without its prior written consent; (iv) amend or modify the ratable share of any Committed Purchaser’s Pool Commitment in respect of any Receivable Pool or its percentage of the Purchasers’ Pool Commitment relating to any Receivable Pool without such Committed Purchaser’s prior written consent; (v) amend or modify the provisions of this Section 13.1, or the definition of “Delinquent Receivable”, “Defaulted Receivable”, “Eligible Receivable”, “Event of Termination”, “Specified Unmatured Event”, “Unmatured Event of Termination”, “Collection Control Event”, “Non-Reinvestment Event”, “Required Purchasers”, “Net Portfolio Balance”, “Purchase Termination Date” (other than pursuant to an extension thereof in accordance with Section 3.5), “Required Reserves” or “Yield Period” (or any of the definitions used in any such preceding definition in a manner that would circumvent the intention of the restrictions set forth in this Section 13.1), in each case, without the prior written consent of each affected Purchaser and Purchaser Agent or (vi) release all or any material part of any Asset Portfolio or Lease Contract from the security interest granted by any Seller to the Collateral Agent hereunder without the prior written consent of each Purchaser and Purchaser Agent; provided, further, that (i) the consent of Sprint Spectrum shall not be required for the effectiveness of any amendment which modifies on a prospective basis, the representations, warranties, covenants or responsibilities of the Servicer at any time when the Servicer is not an Affiliate of Sprint Corporation and (ii) the consent of the Seller, the Servicer or Sprint Spectrum shall not be required for the effectiveness of any amendment which modifies on a prospective basis the Lease Advance Rate or Lease Advance Matrix in accordance with the last paragraph of Section 4.5; provided, further, that no waiver of a Non-Reinvestment Event pursuant to Section 4.5(e) or Section 4.5(f) of this Agreement shall be effective unless the ISC Advance Rate Matrix shall have been amended taking into account the performance of the ISC Receivable Pool as of such date; provided, further, that no waiver of a Non-Reinvestment Event pursuant to Section 4.5(g) or Section 4.5(h) of this Agreement shall be effective unless the Lease Advance Rate Matrix shall have been amended taking into account the performance of the Lease Receivable Pool as of such date. Notwithstanding anything in any Transaction Document to the contrary, none of Sellers or Servicer shall (and shall not permit Sprint Corporation to) amend, waive or otherwise modify any other Transaction Document, or consent to any such amendment or modification, without the prior written consent of the Collateral Agent, each Administrative Agent and the Required Purchasers.

SECTION 13.2 Notices, Etc . 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 or email, to the intended party at the address, facsimile number or email address of such party set forth in Schedule 13.2 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 receipt is confirmed by telephonic or electronic means.

 

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SECTION 13.3 Successors and Assigns; Participations; Assignments.

(a) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Except as otherwise provided herein, the Sellers and the Servicer may not assign or transfer any of their rights or delegate any of their duties hereunder or under any Transaction Document without the prior consent of the Collateral Agent, each Administrative Agent and each Purchaser Agent.

(b) Participations. Any Purchaser may sell to one or more Persons (each a “Participant”) participating interests in the interests of such Purchaser hereunder; provided, however, that no Purchaser shall grant any participation under which the Participant shall have rights to approve any amendment to or waiver of this Agreement or any other Transaction Document. Such Purchaser shall remain solely responsible for performing its obligations hereunder, and each Seller, the Servicer, the Collateral Agent, each Purchaser Agent and each Administrative Agent shall continue to deal solely and directly with such Purchaser in connection with such Purchaser’s rights and obligations hereunder. Each Participant shall be subject to the requirements under Section 3.3(e)(v) as if such Participant were a Purchaser, it being understood that the documentation required under such section shall be delivered to the participating Purchaser. A Purchaser shall not agree with a Participant to restrict such Purchaser’s right to agree to any amendment hereto, except amendments that require the consent of all Purchasers or all Purchaser Agents. Each Purchaser that sells a participation shall, acting solely for this purpose as an agent of the Sellers, maintain a register on which it enters the name and address of each Participant and the Purchases (and Yield, fees, and other similar amounts under this Agreement) of each Participant’s interest in the interests of such Purchaser under the Transaction Documents (the “Participant Register”); provided that no Purchaser shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any Pool Receivables or Related Assets or other obligations under any Transaction Document) to any Person except to the extent that such disclosure is necessary to establish that such interest or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Purchaser shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, neither the Collateral Agent nor any Administrative Agent (in its capacity as an Administrative Agent) shall have any responsibility for maintaining a Participant Register.

(c) Assignment by Conduit Purchasers. This Agreement and each Conduit Purchaser’s rights and obligations under this Agreement (including its interest in the Asset Portfolio) or any other Transaction Document shall be freely assignable in whole or in part by such Conduit Purchaser and its successors and permitted assigns to any Eligible Assignee without the consent of the Servicer (on the Sellers’ behalf) or any Seller except to the extent such consent may be required solely in accordance with clause (iv) of the definition of Eligible Assignee. Each assignor of all or a portion of its interest in the

 

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Asset Portfolios shall notify the Collateral Agent, the Administrative Agents, the related Purchaser Agent and the Servicer (on the Sellers’ behalf) of any such assignment. Each assignor of all or a portion of its interest in the Asset Portfolios may, in connection with such assignment and subject to Section 13.8, disclose to the assignee any information relating to the Asset Portfolios, furnished to such assignor by or on behalf of the Sellers, the Servicer, the Collateral Agent or the Administrative Agents. Notwithstanding anything to the contrary set forth in this Agreement, any assignment by a Conduit Purchaser of its rights and obligations under this Agreement (including its interest in each of the Asset Portfolios) shall be made on a pro rata basis with respect to its interest in each Receivable Pool. Furthermore, notwithstanding anything to the contrary set forth herein (other than Section 13.3(f)), each Conduit Purchaser may at any time pledge, grant a security interest in or otherwise transfer all or any portion of its interest in the Asset Portfolios or under this Agreement to a Collateral Trustee, in each case without notice to or the consent of the Sellers or the Servicer, but such pledge grant or transfer shall not relieve any Person from its obligations hereunder.

(d) Assignment by Committed Purchasers. (i) Each Committed Purchaser may freely assign to any Eligible Assignee without the consent of Seller except as required pursuant to clause (iv) of the definition of Eligible Assignee all or a portion of its rights and obligations under this Agreement or in any other Transaction Document (including all or a portion of its Commitment and its interest in each of the Asset Portfolios) in each case, with prior written consent (such consent not to be unreasonably withheld) of the Collateral Agent, each Administrative Agent, the related Purchaser Agent and prior written notice to Seller; provided, however that the parties to each such assignment shall execute and deliver to the Collateral Agent, the Administrative Agents and to Seller, for its recording in the Register, a duly executed and enforceable joinder to this Agreement (“Joinder”). Notwithstanding anything to the contrary set forth in this Agreement, any assignment by a Committed Purchaser of its rights and obligations under this Agreement (including its Commitment and its interest in each of the Asset Portfolios) shall be made on a pro rata basis with respect to its interest in each Receivable Pool.

(ii) From and after the effective date specified in such Joinder, (x) the assignee thereunder shall be a party to this Agreement and, to the extent that rights and obligations under this Agreement have been assigned to it pursuant to such Joinder, have the rights and obligations of a Committed Purchaser thereunder and (y) the assigning Committed Purchaser shall, to the extent that rights and obligations have been assigned by it pursuant to such Joinder, relinquish such rights and be released from such obligations under this Agreement. In addition, any Committed Purchaser may assign all or any portion of its rights (including its interest in each of the Asset Portfolios) under this Agreement to any Federal Reserve Bank without notice to or consent of Seller, the Servicer, any other Committed Purchaser, Conduit Purchaser, the Collateral Agent or the Administrative Agents.

(e) Register.

(i) Each Administrative Agent (on behalf of the Sellers) shall in respect of its related Receivable Pool maintain a register for the recordation of the

 

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names and addresses of the Purchasers, and the Purchases (and Yield, fees and other similar amounts under this Agreement) pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive absent manifest error, and the Sellers, the Administrative Agents, the Collateral Agent and the Purchasers shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Purchaser solely for U.S. federal income Tax purposes. The Register shall be available for inspection by any Seller and any Purchaser, at any reasonable time and from time to time upon reasonable prior notice.

(ii) Each Administrative Agent shall also maintain in the Register each assignee’s interest or obligations under the Transaction Documents with respect to each assignment pursuant to Section 13.3(c) or 13.3(d) and shall record such assignment upon notice from the applicable Purchaser. The entries in the Register shall be conclusive absent manifest error.

(f) Status of Receivables. Notwithstanding the foregoing, unless disposed of or assigned by the Servicer or the Collateral Agent in accordance with the terms of this Agreement (including pursuant to Section 9.2), each Purchaser’s interest in an Asset Portfolio and the Lease Contracts shall remain subject to the provisions of this Agreement, including the provisions relating to the re-conveyance of Receivables to the Sellers or the Servicer, notwithstanding any sale or assignment of such interest by such Purchaser.

(g) Status of Conduit Purchasers. So long as any Conduit Purchaser holds any Investment, such Conduit Purchaser shall be a multi-seller asset-backed commercial paper conduit.

SECTION 13.4 No Waiver; Remedies; Set-Off. No failure on the part of the Collateral Agent, any Administrative Agent, any Liquidity Provider, any Enhancement Provider, any Affected Party, any Purchaser, any Purchaser Agent or any Indemnified Party to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies provided by Law. Any waiver of this Agreement shall be effective only in the specific instance and for the specific purpose for which given. Without limiting the foregoing, each Purchaser, each Purchaser Agent, the SCC Administrative Agent, Mizuho, the Collateral Agent, the ISC Administrative Agent, SMBCSI, the Lease Administrative Agent, each Enhancement Provider, each Liquidity Provider, each Affected Party, and any of their Affiliates (each a “Set-off Party”) are each hereby authorized at any time during the continuance of an Event of Termination, Collection Control Event or Non-Reinvestment Event (in addition to any other rights it may have) to setoff, appropriate and apply (without presentment, demand, protest or other notice which are hereby expressly waived) any deposits and any other indebtedness held or owing by such Set-off Party (including by any branches or agencies of such Set-off Party) to, or for the account of, the Sellers against amounts owing by the Sellers hereunder (even if contingent

 

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or unmatured). For the avoidance of doubt, the applicable Set-off Party shall not set off against any deposits of the Servicer with respect to any obligations of the Sellers.

SECTION 13.5 Binding Effect; Survival.

(a) This Agreement shall be binding upon and inure to the benefit of the Sellers, Sprint Spectrum, the Collateral Agent, each Administrative Agent, each Purchaser, and the provisions of Section 4.2 and Article XII shall inure to the benefit of the Affected Parties and Indemnified Parties, respectively, and their respective successors and assigns.

(b) Each Liquidity Provider, each Enhancement Provider and each other Affected Party are express third party beneficiaries hereof. Subject to clause (i) of Section B of Appendix A hereto, this Agreement shall not confer any rights or remedies upon any other Person, other than the third party beneficiaries specified in this Section 13.5(b).

(c) This Agreement shall create and constitute the continuing obligations of the parties hereto in accordance with its terms, and shall remain in full force and effect until the Final Payout Date. The rights and remedies with respect to any breach of any representation and warranty made by the Sellers pursuant to Article VI and the indemnification and payment provisions of Article XII and Sections 1.2(e), 1.5, 3.2, 3.3, 4.1, 4.2, 4.3, 11.7, 13.4, 13.5, 13.6, 13.7, 13.8, 13.11, 13.12, 13.13 and 13.14 shall be continuing and shall survive any termination of this Agreement.

SECTION 13.6 Costs and Expenses. The Sellers shall pay on demand all reasonable and documented out-of-pocket costs and expenses incurred by or on behalf of the Collateral Agent, each Administrative Agent, each Purchaser and each Purchaser Agent in connection with:

(a) the negotiation, preparation, execution and delivery of this Agreement and the other Transaction Documents and any amendment of or consent or waiver under any of the Transaction Documents (whether or not consummated), or the enforcement of, or any actual or reasonably claimed breach of, this Agreement or any of the other Transaction Documents, including reasonable and documented accountants’, auditors’, consultants’ and attorneys’ fees and expenses to any of such Persons and the fees and charges of any nationally recognized statistical rating agency or any independent accountants, auditors, consultants or other agents incurred in connection with any of the foregoing or in advising such Persons as to their respective rights and remedies under any of the Transaction Documents in connection with any of the foregoing; and

(b) subject only to the limitations in Sections 7.1(c) and 7.4(c), the administration (including periodic auditing as provided for herein) of this Agreement and the other Transaction Documents and the transactions contemplated thereby, including all reasonable and documented expenses and accountants’, consultants’ and attorneys’ fees incurred in connection with the administration and maintenance of this Agreement and the other Transaction Documents and the transactions contemplated thereby;

 

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provided, however, that so long as no Unmatured Event of Termination, Event of Termination, Collection Control Event or Non-Reinvestment Event has occurred and remains continuing, the Sellers’ obligation under this Section 13.6 to pay the reasonable and documented attorneys’ fees and expenses incurred by the Collateral Agent and each Administrative Agent, the Purchasers and the Purchaser Agents shall be limited to paying the reasonable and documented fees and expenses of three (two if the Collateral Agent is also an Administrative Agent) law firms, each one selected by the Collateral Agent and each Administrative Agent in its sole discretion; provided, further, however, that, for the avoidance of doubt, such limitation shall not apply to any reasonable and documented attorneys’ fees and expenses incurred by the Collateral Agent and each Administrative Agent, any Purchaser or any Purchaser Agent during the continuance of an Unmatured Event of Termination, Event of Termination, Collection Control Event or Non-Reinvestment Event even if such event subsequently ceases to be continuing.

SECTION 13.7 No Proceedings.

(a) Each Seller, the Servicer, the Collateral Agent, each Administrative Agent, each Purchaser and each Purchaser Agent, each hereby agrees that it will not institute against any Conduit Purchaser, or join any other Person in instituting against any Conduit Purchaser, any proceeding of the type referred to in the definition of Event of Bankruptcy from the Closing Date until one year plus one day following the last day on which all Commercial Paper Notes and other publicly or privately placed indebtedness of such Conduit Purchaser shall have been indefeasibly paid in full. The foregoing shall not limit any such Person’s right to file any claim in or otherwise take any action with respect to any insolvency proceeding that was instituted by any Person other than such parties.

(b) The Servicer, the Collateral Agent, each Administrative Agent, each Purchaser and each Purchaser Agent, each hereby agrees that it will not institute against any Seller, or join any other Person in instituting against any Seller, any proceeding of the type referred to in the definition of Event of Bankruptcy; provided, however, that the Collateral Agent or any Administrative Agent, with the prior consent of the Required Purchasers, may, or shall at the direction of the Required Purchasers institute or join any other Person in instituting any such proceeding against any Seller. The foregoing shall not limit any such Person’s right to file any claim in or otherwise take any action with respect to any insolvency proceeding that was instituted by any Person other than such parties.

SECTION 13.8 Confidentiality.

(a) Each party hereto acknowledges that the Collateral Agent, each Administrative Agent, each Purchaser and each Purchaser Agent regards the terms of the transactions contemplated by this Agreement to be proprietary and confidential, and each such party severally agrees that:

(i) it will not disclose without the prior consent of the Collateral Agent, each Administrative Agent (other than to its Collateral Trustee (if any) and

 

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its and its Affiliates’ directors, officers, employees and agents, accountants, auditors, counsel or other advisors (collectively, “representatives”) of such party, each of whom shall be informed by such party of the confidential nature of the Program Information (as defined below) and of the terms of this Section 13.8), (1) any information regarding the pricing terms in, or copies of, this Agreement, any other Transaction Document (other than the Intercreditor Agreement and any Lock-Box Agreement) or any transaction contemplated hereby or thereby, (2) any information regarding the organization, business or operations of any Purchaser generally or the services performed by the Collateral Agent or any Administrative Agent for any Purchaser, or (3) any information which is furnished by the Collateral Agent or an Administrative Agent to such party and is designated by the Collateral Agent or such Administrative Agent to such party in writing as confidential (the information referred to in clauses (1), (2) and (3) is collectively referred to as the “Program Information”); provided that such party may disclose any such Program Information: (A) to any other party to this Agreement (and any representatives so long as they are informed that such information is confidential and agree to keep such information confidential) for the purposes contemplated hereby, (B) to the extent requested by any regulatory authority or by applicable Laws, (C) as may be required by any Governmental Authority having jurisdiction over such party, (x) in order to comply with any Law applicable to such party or (y) subject to subsection (c), in the event such party is legally compelled (by interrogatories, requests for information or copies, subpoena, civil investigative demand or similar process) to disclose any such Program Information, (D) to any permitted assignee of such party’s rights and obligations hereunder to the extent they agree to be bound by this Section 13.8, (E) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder or (F) to any nationally recognized statistical rating organization as contemplated by Section 17g-5 of the 1934 Act or in connection with obtaining or monitoring a rating on any Commercial Paper Notes;

(ii) it, and any Person to which it discloses such information, will use the Program Information solely for the purposes of evaluating, administering, performing and enforcing the transactions contemplated by this Agreement and making any necessary business judgments with respect thereto; and

(iii) it, and any Person to which it discloses such information, will, upon written demand from the Collateral Agent or an Administrative Agent, return (and cause each of its representatives to return) to the Collateral Agent or such Administrative Agent or destroy, all documents or other written material received from the Collateral Agent or such Administrative Agent, as the case may be, pursuant to clauses (2) or (3) of subsection (i) above and all copies thereof made by such party which contain all Program Information; provided however that it may retain one copy of such document or material and any Program Information incorporated into any of its credit review documentation, or as it otherwise deem necessary in order to comply with ordinary and customary retention requirements of financial institutions, sound banking practices and audit

 

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and examination requirements or as otherwise may be required by applicable Law. Any Person required to maintain the confidentiality of any information as provided in this Section 13.8(a) shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such information as such Person would accord to its own confidential information.

(b) Availability of Confidential Information. This Section 13.8 shall be inoperative as to such portions of the Program Information which are or become generally available to the public or such party on a nonconfidential basis from a source other than the Collateral Agent or an Administrative Agent or were known to such party on a nonconfidential basis prior to its disclosure by the Collateral Agent or such an Administrative Agent.

(c) Legal Compulsion to Disclose. In the event that any party or anyone to whom such party or its representatives transmits the Program Information is requested or becomes legally compelled (by interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process) to disclose any of the Program Information, to the extent permitted by applicable Law and if practical to do so under the circumstances, such party shall provide the Collateral Agent, each Administrative Agent, each Purchaser Agent and Sprint Spectrum with prompt written notice so that the Collateral Agent or an Administrative Agent may at the expense of Sprint Spectrum seek a protective order or other appropriate remedy and/or if it so chooses, agree that such party may disclose such Program Information pursuant to such request or legal compulsion. In the event that such protective order or other remedy is not obtained, or the Collateral Agent and the Administrative Agents waive compliance with the provisions of this Section 13.8(c), such party will furnish only that portion of the Program Information which (in such party’s good faith judgment) is legally required to be furnished and will exercise commercially reasonable efforts to obtain reliable assurance that confidential treatment will be accorded the Program Information.

(d) Disclosure of Tax Treatment and Structure. Notwithstanding anything herein to the contrary, each party (and each employee, representative or other agent of each party) hereto may disclose to any and all Persons, without limitation of any kind, any information with respect to the United States federal income “tax treatment” and “tax structure” (in each case, within the meaning of U.S. Treasury Regulation Section 1.6011-4) of the transactions contemplated hereby and all materials of any kind (including opinions or other Tax analyses) that are provided to such parties (or their representatives) relating to such tax treatment and tax structure; provided, that with respect to any document or similar item that in either case contains information concerning the tax treatment or tax structure of the transaction as well as other information, this sentence shall only apply to such portions of the document or similar item that relate to the United States federal income tax treatment or tax structure of the transactions contemplated hereby.

(e) Confidentiality of the Collateral Agent, the Administrative Agents and Purchasers. The Collateral Agent, each Administrative Agent, each Purchaser, each

 

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Purchaser Agent, each Affected Party and their successors and assigns agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (i) to its Collateral Trustee (if any) and its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and be instructed and agree or be otherwise bound to keep such Information confidential), (ii) to the extent requested by any regulatory authority or by applicable Laws, (iii) to the extent required by any subpoena or similar legal process, provided, however, to the extent permitted by applicable Law and if practical to do so under the circumstances, that the Person relying on this clause (iii) shall provide the Servicer (on the Sellers’ behalf) with prompt notice of any such required disclosure so that the Sellers may seek a protective order or other appropriate remedy, and in the event that such protective order or other remedy is not obtained, such Person will furnish only that portion of the Information which is legally required, (iv) to any other Affected Party, (v) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder, (vi) subject to an agreement containing provisions substantially the same as those of this Section 13.8, (vii) to any prospective participant or assignee provided such person agrees to be bound by this Section 13.8(e), (viii) with the consent of the Sellers, (ix) to the extent such Information (1) becomes publicly available other than as a result of a breach of this Section 13.8 or any agreement contemplated by this Section 13.8 or (2) becomes available to such Person on a nonconfidential basis from a source other than the Servicer or its Subsidiaries (and not in breach of this Section 13.8 or any agreement contemplated by this Section 13.8) or (x) to any nationally recognized statistical rating organization as contemplated by Section 17g-5 of the 1934 Act or in connection with obtaining or monitoring a rating on any Commercial Paper Notes. For the purposes of this Section, “Information” means all information received from Servicer or any Affiliate relating to Servicer or any Affiliate or their business, other than any such information that is available to such Person on a nonconfidential basis prior to disclosure by Servicer or any Affiliate. Any Person required to maintain the confidentiality of Information as provided in this Section 13.8 shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information. Notwithstanding the foregoing, to the extent Information contains Subscriber Confidential Information, any request for Subscriber Confidential Information shall be subject to disclosure restrictions and security requirements as reasonably agreed by Servicer and the Collateral Agent, each Administrative Agent, each Purchaser and each Purchaser Agent, as applicable, and as required by applicable Laws and government arrangements.

SECTION 13.9 Captions and Cross References. The various captions (including the table of contents) in this Agreement are provided solely for convenience of reference and shall not affect the meaning or interpretation of any provision of this Agreement. Unless otherwise indicated, references in this Agreement to any Section, Appendix, Schedule or Exhibit are to such Section of or Appendix, Schedule or Exhibit to this Agreement, as the case may be, and references in any Section, subsection, or clause to any subsection, clause or subclause are to such subsection, clause or subclause of such Section, subsection or clause.

 

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SECTION 13.10 Integration . This Agreement, together with the other Transaction Documents, contains a final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire understanding among the parties hereto with respect to the subject matter hereof, superseding all prior oral or written understandings.

SECTION 13.11 Governing Law. 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, EXCEPT TO THE EXTENT THAT THE PERFECTION, THE EFFECT OF PERFECTION OR PRIORITY OF THE INTERESTS OF THE COLLATERAL AGENT, ANY ADMINISTRATIVE AGENT OR ANY PURCHASER IN THE POOL RECEIVABLES, LEASE CONTRACTS OR RELATED ASSETS IS GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK).

SECTION 13.12 Waiver of Jury Trial. 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 DOCUMENT 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 DOCUMENT AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT A JURY.

SECTION 13.13 Consent to Jurisdiction; Waiver of Immunities. EACH PARTY HERETO HEREBY ACKNOWLEDGES AND AGREES THAT:

(a) 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 CITY, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OTHER TRANSACTION DOCUMENT, (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.

(b) 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

 

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IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER OR IN CONNECTION WITH THIS AGREEMENT.

SECTION 13.14 Execution in Counterparts. This Agreement may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same Agreement. Delivery of an executed counterpart hereof by facsimile or other electronic means shall be equally effective as delivery of an originally executed counterpart.

SECTION 13.15 Pledge to a Federal Reserve Bank. Notwithstanding anything to the contrary set forth herein (including in Section 13.3), (i) each Committed Purchaser or any assignee or participant thereof or (ii) in the event that any Conduit Purchaser assigns any of its interest in, to and under the Asset Portfolios to any Liquidity Provider or Enhancement Provider, any such Person, may at any time pledge, grant a security interest in or otherwise transfer all or any portion of its interest in the Asset Portfolios or under this Agreement to secure the obligations of such Person to a Federal Reserve Bank or otherwise to any other federal Governmental Authority or special purpose entity formed or sponsored by any such federal Governmental Authority, in each case without notice to or the consent of the Sellers or the Servicer, but such pledge, grant or transfer shall not relieve any Person from its obligations hereunder

SECTION 13.16 Severability. 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.

SECTION 13.17 No Party Deemed Drafter. Sprint Spectrum, Servicer, each Seller, the Collateral Agent, each Purchaser and each Administrative Agent agree that no party hereto shall be deemed to be the drafter of this Agreement.

SECTION 13.18 Excluded Originator. The Servicer may designate any Originator as an “Excluded Originator” following any Unmatured Event of Termination or Event of Termination, but not later than the third Business Day following any Event of Termination, that has occurred and results solely from an event or circumstance affecting such Originator by written notice to the Collateral Agent and each Administrative Agent, specifying the effective date of such designation (the “Exclusion Effective Date” for such Excluded Originator) if all of the following conditions are then satisfied:

(a) such Unmatured Event of Termination or Event of Termination, as the case may be, would not have occurred if such Originator had not been a party to the Sale Agreement as an Originator thereunder at the time it occurred;

(b) no other Unmatured Event of Termination, Event of Termination, Collection Control Event or Non-Reinvestment Event has occurred and is continuing or would occur as a result of such designation;

 

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(c) (i) the Servicer shall have prepared and forwarded to the Collateral Agent, each Administrative Agent a pro forma Information Package for the immediately preceding Reporting Date, which pro forma Information Package shall be prepared excluding the Receivables relating to such Originator from the Pool Receivables and the Net Portfolio Balance relating to each Receivable Pool for all purposes, and (ii) such pro forma Information Package does not report any Unmatured Event of Termination, Event of Termination, Collection Control Event or Non-Reinvestment Event on a pro forma basis (giving effect to any reduction of the Purchaser Group Investments to occur concurrently with such designation);

(d) the aggregate Unpaid Balances of Receivables originated by such Originator reflected in the most recently delivered Information Package, (i) when added to the aggregate Unpaid Balances of Receivables that were excluded from the Net Portfolio Balance in respect of all three Receivable Pools by the designation of any other Excluded Originators pursuant to this Section 13 during the twelve (12) most recently completed calendar months (measured at the time of their respective Exclusion Effective Dates ), is less than 1.00% of the average monthly aggregate Unpaid Balances of the Pool Receivables in respect of all three Receivable Pools during the twelve (12) most recently completed calendar months, and (ii) when added to the aggregate Unpaid Balances of Receivables that were excluded from the Net Portfolio Balance of all three Receivable Pools by the designation of any other Excluded Originators pursuant to this Section 13.18 at any time (measured at the time of their respective Exclusion Effective Dates), is less than 3.00% of the average monthly aggregate Unpaid Balance of all Receivables during the twelve (12) most recently completed calendar months; and

(e) on its Exclusion Effective Date, (x) such Excluded Originator ceases to hold any membership or other equity interest (including a Preferred Membership Interest) in any Seller and no Change of Control would result therefrom (provided, that any such change in ownership in a Seller shall not be deemed to be a Change of Control if one or more Originators own 100% of the Voting Securities of such Seller immediately following the Exclusion Effective Date), (y) any debts or amounts owing by the Sellers to such Excluded Originator under the Sale Agreement and otherwise have been paid in full and (z) such Excluded Originator has ceased to be a party to the Sale Agreement in accordance with the terms thereof.

Any pro forma Information Package provided pursuant to this Section 13.18 shall be subject to the representations, warranties and indemnifications contained in herein and the other Transaction Documents on the same basis as any other Information Package. The representations, covenants and provisions of this Agreement applicable to an Originator shall no longer be applicable to an Excluded Originator after the Exclusion Effective Date for such Excluded Originator. The parties hereto shall work together in good faith to effectuate any actions as may be appropriate in connection with the designation of an Originator as an Excluded Originator. For the avoidance of doubt, any Pool Receivables originated by an Excluded Originator prior to its related Exclusion Effective Date shall continue to constitute Pool Receivables for all purposes after such Exclusion Effective Date.

 

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SECTION 13.19 Restatement; No Novation. (a) Effective as of the Second Restatement Effective Date, the Existing RPA is amended and restated as set forth in this Agreement. It is the intent of the parties hereto that this Agreement (i) shall re-evidence the Obligations under the Existing RPA, (ii) is entered into in substitution for, and not in payment of, the Obligations under the Existing RPA, and (iii) is in no way intended to constitute a novation of any of the Obligations which was evidenced by the Existing RPA or any of the other Transaction Document (as defined in the Existing RPA).

(b) As of the Second Restatement Effective Date, the portion of each Pool Receivable (as defined in the Existing RPA) and Related Assets (as defined in the Existing RPA) purchased by the SCC Administrative Agent or the ISC Administrative Agent on behalf of the Purchasers on or prior to the Second Restatement Effective Date shall for all purposes of this Agreement be deemed to have been sold by the applicable Sellers to the Collateral Agent on behalf of the Purchasers in accordance with this Agreement.

[SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.

 

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				Second Amended and Restated Receivables Purchase Agreement
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				Second Amended and Restated Receivables Purchase Agreement
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				Second Amended and Restated Receivables Purchase Agreement
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APPENDIX A

DEFINITIONS

This is Appendix A to the Second Amended and Restated Receivables Purchase Agreement, dated as of November 19, 2015, among Sprint Spectrum L.P., a Delaware limited partnership, as Servicer, the Persons party thereto as Sellers, the various Conduit Purchasers, Committed Purchasers and Purchaser Agents from time to time party thereto, and each of Mizuho Bank, Ltd. (“Mizuho”), SMBC Nikko Securities America, Inc. and The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as administrative agent on behalf of the Affected Parties, and Mizuho, as Collateral Agent.

A. Defined Terms.

As used in this Agreement, unless the context requires a different meaning, the following terms have the meanings indicated herein below:

“1934 Act” means the Securities Exchange Act of 1934.

“Administrative Agents” mean the SCC Administrative Agent, the ISC Administrative Agent and the Lease Administrative Agent. The “applicable” Administrative Agent means (i) in respect of the SCC Receivable Pool or the related Asset Portfolio, the SCC Administrative Agent, (ii) in respect of the ISC Receivable Pool or the related Asset Portfolio, the ISC Administrative Agent, and (iii) in respect of the Lease Receivable Pool or the related Asset Portfolio, the Lease Administrative Agent.

“Adverse Claim” means any claim of ownership or any Lien.

“Affected Party” means the Collateral Agent, each Administrative Agent, each Purchaser, each Purchaser Agent, each Liquidity Provider, each Enhancement Provider and each Program Administrator.

“Affiliate” when used with respect to a Person means any other Person controlling, controlled by, or under common Control with, such Person; provided that Affiliate shall not include SoftBank or any of its Affiliates other than Sprint Corporation and any of its direct and indirect Subsidiaries. “Affiliated” has the meaning correlative to “Affiliate”.

“Aged Receivable” is defined in Section 1.4(c).

“Agreement” is defined in the preamble.

“Allocation Percentage” means, in respect of any Receivable Pool as of any date of determination a fraction, expressed as a percentage, (x) the numerator of which is the Unpaid Balance of the Pool Receivables in such Receivable Pool as of such date of determination, and (y) the denominator of which is the Unpaid Balance of the Pool Receivables in all three Receivable Pools as of such date.

 

Appendix A-1

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“Amdocs” means Amdocs Software Systems Limited.

“Amdocs Event” means the occurrence of any of the following: (i) the Amdocs Sub-Servicing Agreement or the material terms thereof applicable to the servicing and collection of the Pool Receivables terminate for any reason or (ii) any party to the Amdocs Sub-Servicing Agreement delivers written notice to any other such party of its intent to cause such a termination.

“Amdocs Performance Event” means the occurrence of any of the following: Amdocs fails to perform, or makes any public statement or delivers any notice to the Servicer or its Affiliates that it cannot or does not intend to perform, its obligations under the Amdocs Sub-Servicing Agreement with respect to the servicing and collecting the Pool Receivables relating to any Receivable Pool and such failure to perform could reasonably be expected to result in a Material Adverse Effect.

“Amdocs Sub-Servicing Agreement” means the Customer Care and Billing Services Agreement, dated October 1, 2012, between Sprint/United Management Company and Amdocs, as amended, restated, supplemented or otherwise modified from time to time.

“Applicable Cooling Off Period” means, in respect of an ISC Receivable or a Lease Receivable, the period of time after origination thereof set forth in the related Contract giving rise to such Receivable during which the Obligor shall have the right to cancel or terminate such Contract without fee, premium or penalty.

“Asset Portfolio” is defined in Section 1.2(c).

“Atlantic Asset” means Atlantic Asset Securitization LLC.

“Available Pool Deficiency Amount” is defined in Section 3.1(c)(ii).

“Bank Rate” for any day falling in a particular Yield Period with respect to any Rate Tranche and any Purchaser Group means an interest rate per annum equal to the applicable LIBO Rate for such Yield Period.

“Bankruptcy Code” means Title 11 of the United States Code.

“Base Rate” means, with respect to any Purchaser, as of any date of determination, a fluctuating rate of interest per annum equal to the highest of:

 

(a)

the applicable Prime Rate for such date; and

 

(b)

the Federal Funds Rate for such date, plus 0.50%.

“BTMU” means The Bank of Tokyo-Mitsubishi UFJ, Ltd., Chicago Branch.

“BTMUNY” is defined in the preamble.

 

Appendix A-2

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“Business Day” means a day other than Saturday or Sunday on which commercial banks in New York City, New York are not authorized or required to be closed for business; provided, that, when used with respect to a Yield Rate or associated Rate Tranche based on the applicable LIBO Rate, “Business Day” also means any day on which banks are open for domestic and international business (including dealings in U.S. Dollar deposits) in London, England.

“CACIB” means Crédit Agricole Corporate and Investment Bank.

“Cap Account Trigger Date” means the earlier to occur of (i) the first day upon which the Collateral Agent or any Administrative Agent shall have requested that the Servicer not commingle the amounts being set aside and held in trust by the Servicer in respect of the Cap Reserve Amount during the continuance of any Specified Unmatured Event, Event of Termination, Collection Control Event or Non-Reinvestment Event, and (ii) the first day that the Cap LIBO Rate equals or exceeds 0.50% per annum.

“Cap Calculation Agent” means each Eligible Counterparty or Affiliate of an Eligible Counterparty designated in writing by the Servicer to the other parties hereto that has agreed to perform the obligations of a “Cap Calculation Agent” hereunder. As of the Second Restatement Date, the ISC Administrative Agent and the Lease Administrative Agent are each Cap Calculation Agents.

“Cap Deficiency Amount” means the amount, if any, by which the Cap Pool Hold-Back Amount is less than the current Cap Reserve Amount; provided, however, that during any Cap Effective Period, the Cap Deficiency Amount shall be deemed to be an amount, determined on the second (2^nd) Business Day immediately preceding each Reporting Date, which is equal to the amount of the one (1) month installment payment which, if made in equal monthly installments on each of the remaining Reporting Dates during such Cap Effective Period, would on the last Reporting Date during such Cap Effective Period result in the amount of the Cap Pool Hold-Back Amount being equal to the then current Cap Reserve Amount.

“Cap Effective Period” means the period from the Cap Purchase Date for one or more Eligible Interest Rate Caps through the date upon which each such Eligible Interest Rate Cap is in full force and effect for the term covered thereby.

“Cap LIBO Rate” means the interest rate per annum for a period of one month that appears on the Reuters Screen LIBO Page (or on any successor or substitute page of such service, or any successor to or substitute or replacement for such service, providing rate quotations comparable to those currently provided on such page of such service, as determined by each Cap Calculation Agent from time to time for purposes of providing quotations of interest rates applicable to U.S. Dollar deposits in the London interbank market) or (b) if a rate cannot be determined under the foregoing clause, an annual rate provided by each Cap Calculation Agent equal to the average (rounded upwards if necessary to the nearest 1/100th of 1%) of the rates per annum at which deposits in U.S. Dollars with a duration of one month in a principal amount substantially equal to the principal amount of the applicable Rate Tranche are offered to the principal London office of such Cap Calculation Agent by three London banks, selected by such Cap Calculation Agent in good faith; provided, that, if the Cap LIBO Rate is determined

 

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pursuant to clause (b) above by more than one Cap Calculation Agent, the Cap LIBO Rate shall be the highest rate provided by any such Cap Calculation Agent.

“Cap Payment Account” means a non-interest bearing account of the Collateral Agent designated in writing by the Collateral Agent to the other parties hereto.

“Cap Payments” means all payments remitted to the Cap Payment Account by an Eligible Counterparty which represent payments made by such Eligible Counterparty under the terms of any Eligible Interest Rate Cap entered into with such Eligible Counterparty.

“Cap Purchase Date” means the date upon which the Sellers, in accordance with Section 8.9(c) or the Collateral Agent pursuant to Section 8.3(c), purchase one or more Eligible Interest Rate Caps.

“Cap Reserve Account” is defined in Section 8.9.

“Cap Reserve Amount” means the amount equal to the sum of (a) the product of (i) the estimated cost to purchase an Eligible Interest Rate Cap in respect of the ISC Exposure Amount, as determined by each Cap Calculation Agent in its reasonable discretion, within two (2) Business Days prior to (x) in respect of the period prior to the first Reporting Date after the Restatement Effective Date, the Restatement Effective Date, and (y) thereafter, each Reporting Date, and (ii) 115% and (b) the product of (i) the estimated cost to purchase an Eligible Interest Rate Cap in respect of the Lease Exposure Amount, as determined by each Cap Calculation Agent in its reasonable discretion, within two (2) Business Days prior to (x) in respect of the period prior to the first Reporting Date after the Second Restatement Effective Date, the Second Restatement Effective Date, and (y) thereafter, each Reporting Date, and (ii) 115%; provided, that, if more than one Cap Calculation Agent determines the Cap Reserve Amount, the Cap Reserve Amount for all purposes of this Agreement shall be the highest amount determined by a Cap Calculation Agent. The Cap Reserve Amount “relating” to the ISC Receivable Pool or the Lease Receivable Pool, respectively, shall be the amount determined pursuant to clause (a) or clause (b) of the preceding sentence, respectively.

“Change in Law” means the occurrence, after the Closing Date, of any of the following: (a) the adoption of any law, rule, regulation or treaty or (b) any change in any law, rule, regulation or treaty or in the official administration, interpretation, implementation or application thereof by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to the agreements reached by the Basel Committee on Banking Supervision in “Basel III: A Global Regulatory Framework for More Resilient Banks and Banking Systems”, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

“Change of Control” means the occurrence of any of the following:

 

Appendix A-4

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(a) SoftBank ceases to own (directly or indirectly) more than 50% of the Voting Securities of Sprint Corporation;

(b) the occurrence of any of the following: (i) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of Sprint Corporation and its Subsidiaries’ properties or assets, taken as a whole, to any “person” (as that term is used in Section 13(d)(3) of the 1934 Act) other than one or more Permitted Holders or (ii) the adoption of a plan relating to the Sprint Corporation’s liquidation or dissolution;

(c) Sprint Corporation shall cease to own (directly) 100% of the Voting Securities of SCI;

(d) SCI shall cease to own (directly or indirectly) 100% of the Voting Securities of Sprint Spectrum and each Originator; or

(e) the applicable Related Originators shall cease to directly own 100% of the Voting Securities of any Related Seller.

“Chattel Paper” has the meaning of “chattel paper” set forth in Section 9-102 of the UCC.

“Closing Date” means May 16, 2014.

“Code” means the Internal Revenue Code of 1986, as amended.

“Collateral” is defined in Section 9.1.

“Collateral Agent” means Mizuho, in its capacity as Collateral Agent, together with its successors and assigns.

“Collateral Trustee” means, with respect to any Conduit Purchaser, a collateral trustee for the benefit of the holders of the Commercial Paper Notes of such Conduit Purchaser appointed pursuant to such entity’s program documents.

“Collection Control Event” means the occurrence of any of the following: (i) Sprint Corporation or any of its Subsidiaries shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable, and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Material Indebtedness or (ii) any event or condition occurs that results in any Material Indebtedness becoming due (not including voluntary redemptions or other voluntary early payments of debt) prior to its scheduled maturity or enables or permits (with or without the giving of notice, but without any further lapse of time) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided, however, that “Collection Control Event” shall not include any breach, default, termination event or similar event or circumstance under any Sprint Financing, which satisfies all of the following criteria: (A) does not result in the occurrence of (each under, and as defined in, the Intercreditor

 

Appendix A-5

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Agreement): (i) an event that could give rise to an “Enforcement Period” or (ii) any action by the “MLS Collateral Agent” to accelerate payment of the “MLS Claim” or any other obligations and liabilities under any of the “MLS Documents” or foreclose or realize upon or enforce any of its rights with respect to the “MLS Collateral”, (B) arises solely and directly from the value or performance of the accounts receivable, installment sales contracts, leases, inventory or similar financial assets subject to such Sprint Financing, (C) does not arise from, or relate to, the breach by Sprint Corporation or any of its Subsidiaries of any of its representations, warranties, covenants or agreements under such Sprint Financing, (D) does not result in Sprint Corporation or any of its Subsidiaries (other than Sprint Subsidiaries) being liable for the payment of any Material Indebtedness, and (E) could not reasonably be expected to give rise to a Material Adverse Effect. A Collection Control Event that occurs shall be deemed to be continuing until waived in writing by the Collateral Agent and the Required Purchasers.

“Collections” means, with respect to any Pool Receivable, all funds which either (a) are received by any Seller, any Originator, the Servicer or Affiliate of any of the foregoing from or on behalf of the related Obligors in payment of any amounts owed (including purchase prices, finance charges, interest and all other charges) in respect of such Pool Receivable, or applied to such other charges in respect of such Pool Receivable, or applied to such amounts owed by such Obligors, (b) Deemed Collections and (c) any amounts paid by the Seller pursuant to Section 1.4. For the avoidance of doubt, Cap Payments do not constitute “Collections”.

“Commercial Paper Notes” means short-term promissory notes issued or to be issued by a Conduit Purchaser to fund its investments in accounts receivable or other financial assets.

“Committed Purchaser” means each Person listed as such as set forth on the signature pages of this Agreement or in any Joinder, other than any such Person that ceases to be a party hereto pursuant to such Joinder.

“Competitor” means any Person that is principally engaged in the business of providing cellular communications services and constitutes a material competitor of Sprint Corporation and its Subsidiaries in such business. For the avoidance of doubt, the parties hereto acknowledge and agree that neither Amdocs nor TransCentra shall constitute a Competitor.

“Concentration Limit” means in respect of a Receivable Pool, as of any date of determination, for any Obligor, the product of (i) 1.00%, and (ii) the aggregate Unpaid Balance of the Eligible Receivables in such Receivable Pool at the time of determination; provided that, in the case of an Obligor with one or more Affiliated Obligors, the Concentration Limit for such Obligor shall be calculated as if such Obligor and its Affiliated Obligors were one Obligor.

“Conduit Purchaser” means each multi-seller asset-backed commercial paper conduit listed as such as set forth on the signature pages of this Agreement or in any Joinder, other than any such Person that ceases to be a party hereto pursuant to such Joinder.

“Contract” means an SCC Contract, an ISC Contract or a Lease Contract. A “related” Contract with respect to a Pool Receivable means a Contract which is relevant to the collection or enforcement of such Pool Receivable.

 

Appendix A-6

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“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise, and “Controlling” and “Controlled” have meanings correlative thereto.

“Control Agreement” means the Deposit Account Control Agreement, dated as of the Restatement Effective Date, among the Servicer, the Seller maintaining the applicable account, the Collateral Agent and the Eligible Bank party thereto, in substantially the form of Schedule VI hereto or such other form as shall be approved of in writing by the Collateral Agent and the Purchaser Agents.

“CP Rate” means, for any period and with respect to any Rate Tranche funded by Commercial Paper Notes of any Conduit Purchaser, the per annum rate equivalent to the weighted average cost (as determined by the applicable Purchaser Agent for such Conduit Purchaser and which shall include commissions and fees of placement agents and dealers, incremental carrying costs incurred with respect to Commercial Paper Notes maturing on dates other than those on which corresponding funds are received by such Conduit Purchaser, other borrowings by such Conduit Purchaser (other than under any Liquidity Agreement) and any other costs and expenses associated with the issuance of Commercial Paper Notes) of or related to the issuance of Commercial Paper Notes that are allocated, in whole or in part, by such Conduit Purchaser or the applicable Purchaser Agent to fund or maintain such Rate Tranche (and which may be also allocated in part to the funding of other assets of such Conduit Purchaser (determined in the case of Commercial Paper Notes issued on a discount by converting the discount to an interest equivalent rate per annum); provided, that notwithstanding anything in this Agreement or the other Transaction Documents to the contrary, each Seller agrees that any amounts payable to the applicable Conduit Purchaser in respect of Yield for any Yield Period with respect to any Rate Tranche funded by such Conduit Purchaser at the CP Rate shall include an amount equal to the portion of the face amount of the outstanding Commercial Paper Notes issued by such Conduit Purchaser to fund or maintain such Rate Tranche that corresponds to the portion of the proceeds of such Commercial Paper Notes that was used to pay the interest component of maturing Commercial Paper Notes issued by such Conduit Purchaser to fund or maintain such Rate Tranche, to the extent that such Conduit Purchaser had not received payments of interest in respect of such interest component prior to the maturity date of such maturing Commercial Paper Notes (for purposes of the foregoing, the “interest component” of Commercial Paper Notes equals the excess of the face amount thereof over the net proceeds received by such Conduit Purchaser from the issuance of Commercial Paper Notes, except that if such Commercial Paper Notes are issued on an interest-bearing basis its “interest component” will equal the amount of interest accruing on such Notes through maturity).

“Credit and Collection Policy” means the Servicer’s credit and collection policies and practices, as applicable, relating to Contracts and Receivables, a copy of which is attached as Schedule III hereto, as they may modified from time to time after the Second Restatement Effective Date in compliance with this Agreement.

“Credit Risk Retention Rules” means Regulation (EU) No. 575/2013 of the European Parliament and the Council of June 26, 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No. 648/2012, together with the related

 

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implementing technical standards and regulatory technical standards and any related regulatory guidance.

“CRR” means (i) Section 15G of the Securities Exchange Act of 1934, as amended, together with the rules and regulations thereunder.

“Cut-Off Date” means the last day of each Settlement Period.

“Days Sales Outstanding” means in respect of an SCC Receivable Pool, with respect to any Settlement Period, an amount equal to the product of (a) 30 and (b) the amount obtained by dividing (i) the aggregate Unpaid Balance of the Pool Receivables in such SCC Receivable Pool as of the Cut-Off Date for such Settlement Period by (ii) the aggregate Unpaid Balance of Pool Receivables in such SCC Receivable Pool which were originated during the immediately preceding Settlement Period.

“Debt” means, at any time, indebtedness of any Person at any time, without duplication, all obligations for money borrowed or raised, all obligations (other than accounts payable and other similar items arising in the ordinary course of business) for the deferred payment of the purchase price of property, and all capital lease obligations or other obligations which, in each case, in accordance with GAAP, would be included in determining total liabilities as shown on the liability side of the balance sheet of such Person and all guarantees (whether contingent or otherwise) of such Person guaranteeing the Debt of any other Person, whether directly or indirectly (other than endorsements for collection or deposit in the ordinary course of business).

“Deemed Collections” is defined in Section 3.2(a).

“Defaulted Receivable” means a Pool Receivable: (a) as to which any payment, or part thereof, remains unpaid for more than (x) with respect to any SCC Pool Receivable, 90 days from the original due date for such payment with respect to such SCC Pool Receivable, (y) with respect to any ISC Pool Receivable, 60 days from the original due date for such payment with respect to such ISC Pool Receivable, and (z) with respect to any Lease Pool Receivable, 60 days from the original due date for such payment with respect to such Lease Pool Receivable, (b) any Seller, the Servicer or any Originator has knowledge or notice that the Obligor thereof is subject to an Event of Bankruptcy and the related bankruptcy case, action or proceeding has not been dismissed by the applicable court, and such Obligor’s obligations with respect to such Receivable have not been reaffirmed by such Obligor with the approval of the applicable court or (c) which, consistent with the Credit and Collection Policy, is or should have been written off as uncollectible.

“Defaulting Committed Purchaser” means any Committed Purchaser that has (a) failed, within two Business Days of the date required to be funded or paid hereunder, to fund any portion of a Purchase hereunder, unless such Committed Purchaser notifies each Administrative Agent in writing that such failure is the result of such Committed Purchaser’s good faith determination that a condition precedent to funding (specifically identified and with supporting facts) has not been satisfied; (b) notified the Sellers, the Servicer or any Administrative Agent in writing, or has made a public statement, to the effect that it does not intend or expect to comply with any of its funding obligations hereunder (unless such writing or public statement states that

 

Appendix A-8

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such position is based on such Committed Purchaser’s good faith determination that a condition precedent to funding a Purchase under this Agreement cannot be met) or generally under other agreements in which it commits to extend credit, (c) failed, within three Business Days after request by the Sellers, the Servicer or an Administrative Agent, acting in good faith, to provide a certification in writing from an authorized officer of such Committed Purchaser in the jurisdiction of such Committed Purchaser’s lending office that it will comply with its obligations to fund prospective Purchases hereunder, provided that such Committed Purchaser shall cease to be a Defaulting Committed Purchaser pursuant to this clause (c) upon such Committed Purchaser’s delivery of such certification to the Sellers, the Servicer or the Administrative Agents, as applicable, or (d) become the subject of an Event of Bankruptcy.

“Delayed Purchase Date” means, with respect to any Purchase in respect of a Receivable Pool requested by the Sellers pursuant to Section 1.2(a), the thirty-fifth (35th) day following the date the Sellers deliver a notice requesting such Purchase pursuant to Section 1.2(a) (or if such day is not a Business Day, then the next succeeding Business Day).

“Delayed Purchase Notification” is defined in Section 1.2(i).

“Delinquent Receivable” means a Pool Receivable that is not a Defaulted Receivable (a) as to which any payment, or part thereof, (i) with respect to any SCC Pool Receivable, remains unpaid for more than 60 days from the original due date for such payment, (ii) with respect to any ISC Pool Receivable, is in collections under the Credit and Collection Policy, and (iii) with respect to any Lease Pool Receivable, is in collections under the Credit and Collection Policy; or (b) which, consistent with the Credit and Collection Policy, is or should have been classified as delinquent or past due by the applicable Originator or the Servicer; provided, that once a Pool Receivable has been written off as uncollectible it shall no longer be a Delinquent Receivable.

“Designated Financial Officer” means, at any time, the treasurer, assistant treasurer or controller of Sprint Spectrum or Sprint Corporation.

“Designated Installment Payment Term” means, in respect of any ISC Contract relating to an ISC Receivable, a term with either 12 or 24 total required equal monthly installment payments, which installment payments are not subject to reduction, cancellation, termination or set-off, except in the case of an ISC Upgrade Receivable, for the ability of the related Obligor to terminate the ISC Contract giving rise to such ISC Upgrade Receivable after such Obligor has fully paid the Required Monthly Installment Payments under such ISC Contract.

“Designated Lease Payment Term” means, in respect of any Lease Contract relating to Lease Receivable, a term with either 12 or 24 total required equal monthly lease payments, which lease payments are not subject to reduction, cancellation, termination or set-off, except in the case of a Lease Upgrade Receivable, for the ability of the related Obligor to terminate the Lease Contract giving rise to such Lease Upgrade Receivable after such Obligor has fully paid the Required Monthly Lease Payments under such Lease Contract.

“Dilution” means, as of any date of determination, with respect to any Pool Receivable, the amount by which the Unpaid Balance of such Pool Receivable is either (a) reduced or canceled as a result of (i) any defective, rejected or returned merchandise or services, any cash

 

Appendix A-9

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discount, or any failure by the Originators to deliver any merchandise or services or otherwise perform under the underlying contract or invoice, (ii) any change in or cancellation of any of the terms of such contract or invoice or any other adjustment by the Originators which reduces the amount payable by the Obligor on the related Receivable, or (iii) any setoff in respect of any claim by the Obligor thereof (whether such claim arises out of the same or a related transaction or an unrelated transaction) or (b) subject to any specific dispute, offset, counterclaim or defense whatsoever between the Obligor and any Seller, any Originator, Servicer, Sprint Spectrum, Sprint Corporation or any Affiliate thereof, in each case, other than solely and directly arising from the credit-worthiness of the related Obligor or as a result of discharge in bankruptcy with respect to such Obligor.

“DSO Factor” means in respect of the SCC Receivable Pool, as of any date of determination, the quotient of (a) the sum of (x) the Days Sales Outstanding divided by 30, plus (y) one (1.00), divided by (b) four (4.00).

“Eligible Assignee” means (i) any Administrative Agent, any Purchaser Agent, any Purchaser or any of their respective Affiliates that are financial institutions or banks, (ii) any Liquidity Provider, any Program Administrator or any Enhancement Provider, (iii) any commercial paper conduit or similar entity that is managed by any Administrative Agent, any Purchaser or any Purchaser Agent or any of their respective Affiliates, (iv) any other financial or other institution that is acceptable to each Administrative Agent, and solely with respect to this clause (iv) so long as no Event of Termination, Collection Control Event or Non-Reinvestment Event has occurred and is continuing, any Seller (such consent not to be unreasonably withheld, conditioned or delayed) and (v) a collateral agent, trustee or similar party which holds the assets of a Conduit Purchaser on behalf of the holders of the Commercial Paper Notes issued by such Conduit Purchaser.

“Eligible Bank” means a financial institution which has a senior short-term unsecured debt rating (or where such financial institution does not have such a rating, the senior short-term unsecured debt rating of the parent of such financial institution) from both Moody’s and S&P of at least P-2 and A-2 respectively or the long-term unsecured debt rating equivalent thereof (which, for the avoidance of doubt, is a long-term unsecured debt rating of at least Baa1, in the case of Moody’s, and at least BBB+, in the case of S&P.

“Eligible Contract” means a Contract governed by the law of the United States of America or of any State thereof that contains an obligation to pay a specified sum of money and that has been duly authorized by each party thereto and that (i) does not require the Obligor thereunder to consent to any transfer, sale or assignment thereof or of the related Receivable or any proceeds thereof, (ii) is not subject to a confidentiality provision or similar covenant of non-disclosure that would restrict the ability of the applicable Administrative Agent or any Purchaser to fully exercise or enforce its rights under the Transaction Documents (including any rights thereunder assigned or originated to them hereunder), (iii) if such Contract relates to an SCC Receivable or ISC Receivable, is not Chattel Paper, (iv) has not been modified, extended or rewritten in any manner (except for expressly permitted hereunder) and (v) remains in full force and effect.

 

Appendix A-10

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“Eligible Counterparty” means (i) a Committed Purchaser or an Affiliate of a Committed Purchaser, designated in writing by the Servicer to each of the other parties hereto as an “Eligible Counterparty”, or (ii) to the extent each Committed Purchaser shall have declined to enter into an interest rate cap in accordance with the terms of this Agreement, another financial institution designated in writing by the Servicer to each of the other parties hereto as an “Eligible Counterparty”; provided, that an Eligible Counterparty must at the time it enters into an Eligible Interest Rate Cap have a rating of at least A- by S&P or A3 by Moody’s, or the equivalent rating from another nationally recognized statistical rating organization (the “Required Rating”) or be fully guaranteed by an entity that has the Required Rating.

“Eligible Interest Rate Cap” means as of any date of determination, one or more interest rate caps purchased by the Sellers from Eligible Counterparties in order to cap the LIBO Rate to accrue on a principal amount equal to the sum of (i) the ISC Exposure Amount during a period equal to the ISC Weighted Average Term as of such date of determination at 1.00% per annum and (ii) the Lease Exposure Amount during a period equal to the Lease Weighted Average Term as of such date of determination at 1.00% per annum, and which requires that all Cap Payments be made directly to the Cap Payment Account, as applicable, by such Eligible Counterparties, the form of which has been approved of in writing by the Administrative Agents.

“Eligible Receivable” means, as of any date of determination, a Receivable:

(a) (i) which represents all or part of the sales price of goods or services, sold by an Originator, or represents rent for the lease of goods, and in each case is billed to the related Obligor in the ordinary course of such Originator’s business, and which Receivable has been sold or contributed to the Related Seller pursuant to the Sale Agreement, (ii) in respect of any SCC Receivable, with respect to which, either (x) all obligations of the Originator in connection with which have been fully performed or (y) not more than 31 days have passed since such Receivable was billed to the related Obligor, (iii) no portion of which is in respect of any amount as to which the related Obligor is permitted to withhold payment until the occurrence of a specified event or condition (including “guaranteed” or “conditional” sales or any performance by an Originator), (iv) which is not owed to any Originator or any Seller as a bailee or consignee for another Person, (v) which is not issued under cash-in-advance or cash-on-account terms and (vi) in respect of any SCC Receivable, with payment terms of less than 45 days from the original billing date;

(b) which (x) if an SCC Receivable or ISC Receivable, constitutes an “account” (as defined in Section 9-102(a) of the UCC), or (y) if a Lease Receivable, constitutes Chattel Paper or an “account” (as defined in Section 9-102(a) of the UCC);

(c) in respect of any SCC Receivable, the Obligor of which has an aggregate Unpaid Balance of Defaulted Receivables included in the Receivable Pools that is not more than 10.00% of the aggregate Unpaid Balance of all Pool Receivables owed by such Obligor;

(d) which is not a Defaulted Receivable;

 

Appendix A-11

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(e) with regard to which the representations of each Seller in Section 6.1(j) are true and correct;

(f) the sale or contribution of which pursuant to the Sale Agreement and this Agreement does not violate or contravene any Law or the related Contract;

(g) which is denominated and payable only in U.S. Dollars in the United States and the Obligor has been instructed to make payments to a Lock-Box Account at a Lock-Box Bank that is subject to a Lock-Box Agreement, except as otherwise provided in Section 8.7;

(h) the Obligor of which is domiciled or organized in the United States of America;

(i) which arises under an Eligible Contract that, together with such Receivable, (i) is in full force and effect and constitutes the legal, valid and binding obligation of the related Obligor to pay such Receivable enforceable against such Obligor in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or similar laws relating to and limiting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or in law), (ii) is not subject to any dispute, offset, netting, litigation, counterclaim or defense whatsoever (including defenses arising out of violations of usury Laws) (other than potential discharge in a bankruptcy of the related Obligor) and (iii) is not subject to any offset, counterclaim, defense or Adverse Claim;

(j) that together with the Contract related thereto, does not contravene any Law applicable thereto (including Laws relating to usury, consumer protection, truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy) in any respect which could, individually or in the aggregate, reasonably be expected to have a material adverse effect on the validity, collectability or enforceability of the related Receivable or would or could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect and with respect to which the origination thereof did not violate any such Law in any such respect;

(k) which (i) was originated by the applicable Originator in the ordinary course of its business, (ii) satisfies the requirements of the Credit and Collection Policy in all material respects and (iii) has been acquired by the applicable Seller from its Related Originators pursuant to and in accordance with the terms of the Sale Agreement;

(l) the purchase of which by a Seller under the Sale Agreement, or by the related Purchaser under this Agreement, does not constitute a Security;

(m) the Obligor of which is not, Sprint Corporation, the Servicer, Sprint Spectrum, any Seller, any Originator or SoftBank or an Affiliate or employee of any of them;

(n) the Obligor of which is not a Sanctioned Person;

 

Appendix A-12

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(o) the Obligor of which is required to make payments no less frequently than monthly under the related Contract;

(p) the Originator that originated such Receivable is not an Excluded Originator;

(q) which, in the case of an SCC Receivable or an ISC Receivable, represents the sales price of goods or services within the meaning of Section 3(c)(5) of the Investment Company Act;

(r) in respect of an ISC Receivable or a Lease Receivable, the Obligor is (i) either (x) a customer of an Originator or any of its Affiliates in good standing and is a Prime Obligor, or (y) a customer of an Originator or any of its Affiliates in good standing and is a Near Prime Obligor and, solely in respect of an ISC Receivable, such Near Prime Obligor has a maximum of 12 months of history being a customer of such Originator or any of its Affiliates and (iii) not an Obligor in respect of any Defaulted Receivable;

(s) in the case of an ISC Receivable or a Lease Receivable, as of the date of Purchase such Receivable does not constitute a Delinquent Receivable;

(t) in the case of an ISC Receivable, arose under an ISC Contract which (i) is substantially in the form of Schedule IV hereto; (ii) (A) relates to a qualifying ISC Device which is compatible with market technology and service platforms, and/or (B) relates to an accessory sold to a Prime Obligor, and (iii) provides for a Designated Installment Payment Term (including after giving effect to any election by the related Obligor to participate in the ISC Upgrade Program);

(u) in the case of a Lease Receivable, arose under a Lease Contract which (i) is substantially in the form of Schedule VIII hereto; (ii) relates to a qualifying Lease Device which is compatible with market technology and service platforms, (iii) does not relate to any accessory and (iv) provides for a Designated Lease Payment Term (including after giving effect to any election by the related Obligor to participate in the Lease Upgrade Program);

(v) in the case of an ISC Upgrade Receivable, the right of the Obligor to trade in its qualifying ISC Device in satisfaction of such ISC Upgrade Receivable under the ISC Upgrade Program is not yet exercisable;

(w) in the case of a Lease Upgrade Receivable, the right of the Obligor to trade in its qualifying Lease Device in satisfaction of such Lease Upgrade Receivable under the Lease Upgrade Program is not yet exercisable;

(x) in the case of an ISC Receivable (other than an ISC Upgrade Receivable), the Obligor does not have the right to trade in its qualifying ISC Device in satisfaction of such ISC Receivable or to otherwise terminate the ISC Contract giving rise to such ISC Receivable under the ISC Upgrade Program or otherwise and the ISC Contract giving rise to such ISC Receivable does not permit such Obligor to elect to have a right to trade

 

Appendix A-13

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in its qualifying ISC Device in satisfaction of such ISC Receivable or to otherwise terminate such ISC Receivable;

(y) in the case of a Lease Receivable (other than a Lease Upgrade Receivable), the Obligor does not have the right to trade in its qualifying Lease Device in satisfaction of such Lease Receivable or to otherwise terminate the Lease Contract giving rise to such Lease Receivable under the Lease Upgrade Program or otherwise and the Lease Contract giving rise to such Lease Receivable does not permit such Obligor to elect to have a right to trade in its qualifying Lease Device in satisfaction of such Lease Receivable or to otherwise terminate such Lease Receivable unless the Obligor is required to make all remaining lease payments due, and that would otherwise become due, under such Lease Contact;

(z) in the case of an ISC Receivable or a Lease Receivable, has been fully earned by performance on the part of the applicable Originator, and no further action is required to be performed by such Originator or any other Person with respect thereto other than payment thereon by the applicable Obligor;

(aa) in the case of an ISC Receivable or a Lease Receivable, the Obligor of which is an active paying subscriber of Sprint Spectrum’s or any of its Affiliates’ wireless services;

(bb) in the case of an ISC Receivable, (i) that has been outstanding beyond the later of (a) the Applicable Cooling Off Period, and (b) the date that is fourteen (14) days after the effective date of the related ISC Contract, and (ii) the Unpaid Balance of which is not subject to reduction, cancellation, setoff, special refunds or credits for any reason, including without limitation as a result of defective or rejected goods or, with respect to any ISC Upgrade Receivable, the ISC Upgrade Program;

(cc) in respect of a Lease Receivable, (i) that has been outstanding beyond the later of (a) the Applicable Cooling Off Period, and (b) if the related Obligor has less than or equal to 12 months of history being a customer of the related Originator or any of its Affiliates, the later of (x) 14 days after the effective date of the related Lease Contract and (y) the date on which the related Obligor has made the first scheduled monthly payment due under the related Lease Contract (excluding any down-payment or deposit), and (ii) the Unpaid Balance of which is not subject to reduction, cancellation, setoff, special refunds or credits for any reason, including without limitation as a result of defective or rejected goods or, with respect to any Lease Upgrade Receivable, the Lease Upgrade Program;

(dd) in the case of an ISC Receivable, the Obligor of which was not required to make a deposit in connection with its ISC Contract;

(ee) in the case of an ISC Receivable, the related Obligor can only participate in the ISC Upgrade Program if the original terms of the ISC Contract giving rise to such ISC Receivable provides that such ISC Upgrade Program is available to such Obligor in respect of such ISC Receivable;

 

Appendix A-14

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(ff) in the case of a Lease Receivable, the related Obligor can only participate in the Lease Upgrade Program if the original terms of the Lease Contract giving rise to such Lease Receivable provides that such Lease Upgrade Program is available to such Obligor in respect of such Lease Receivable;

(gg) in the case of an ISC Receivable, all sales taxes to be paid in connection with the sale of the related ISC Device have been fully paid;

(hh) in the case of a Lease Receivable, all sales taxes (if any) to be paid in connection with the lease of the related Lease Device have been fully paid;

(ii) in the case of a Lease Receivable, the Obligor of which is in possession, or controls the possession, of the Lease Device subject to the related Lease Contract; and

(jj) in the case of a Lease Receivable, the related Lease Device contains no network block, barring or password protection and the Leases Devices may be unlocked for use on a wireless network.

“Enhancement Agreement” means any agreement between a Conduit Purchaser and any other Person(s), entered into to provide (directly or indirectly) credit enhancement to such Conduit Purchaser’s commercial paper facility.

“Enhancement Provider” means any Person providing credit support to a Conduit Purchaser under an Enhancement Agreement, including pursuant to an unfunded commitment, or any similar entity with respect to any permitted assignee of such Conduit Purchaser.

“ERISA” means the U.S. Employee Retirement Income Security Act of 1974.

“ERISA Affiliate” means, with respect to any Person, any trade or business (whether or not incorporated) that, together with such Person, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414(m) of the Code.

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043(c) of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period referred to in Section 4043(a) is waived), (b) any failure by any Plan to satisfy the minimum funding standards (within the meaning of Sections 412 or 430 of the Code or Section 302 of ERISA) applicable to such Plan, whether or not waived, (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan, (d) the incurrence by Sprint Corporation, the Servicer, Sprint Corporation, any Originator, any Seller or any ERISA Affiliate thereof of any liability under Title IV of ERISA with respect to the termination of any Plan, (e) the receipt by any Sprint Corporation, the Servicer, Sprint Corporation, any Originator, any Seller or any ERISA Affiliate thereof from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan under Section 4042 of ERISA, (f) the incurrence by Sprint Corporation, the Servicer, Sprint Corporation, any Originator, any Seller or any ERISA Affiliate thereof of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan, or (g) the

 

Appendix A-15

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receipt by Sprint Corporation, the Servicer, any Originator, any Seller or any ERISA Affiliate thereof of any notice, or the receipt by any Multiemployer Plan from Sprint Corporation, the Servicer, any Originator, any Seller or any ERISA Affiliate thereof of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent within the meaning of Section 4245 of ERISA, or is in reorganization within the meaning of Section 4241 of ERISA, or in endangered or critical status (within the meaning of Section 432 of the Code or Section 305 or Title IV of ERISA).

“Estimated Cap Deficiency Amount” means an amount equal to the product of (x) the then current Cap Reserve Amount (or Cap Reserve Amount relating to a Receivable Pool, as applicable), and (y) 5.00%.

“Event of Bankruptcy” shall be deemed to have occurred with respect to a Person if either:

(a) (i) a case or other proceeding shall be commenced, without the application or consent of such Person, in any court, seeking the liquidation, reorganization, debt arrangement, dissolution, winding up, or composition or readjustment of debts of such Person, the appointment of a trustee, receiver, custodian, liquidator, assignee, sequestrator (or other similar official) for such Person or all or substantially all of its assets, or any similar action with respect to such Person under any Law relating to bankruptcy, insolvency, reorganization, winding up or composition or adjustment of debts, and such case or proceeding shall continue unstayed or undismissed for a period of sixty (60) days (or, for purposes of Section 10.1(c), if such case or proceeding is in respect of any Seller, zero (0) days); or (ii) an order for relief in respect of such Person shall be entered in an involuntary case under federal bankruptcy laws or other similar Laws now or hereafter in effect; or

(b) such Person (i) shall commence a voluntary case or other proceeding under any applicable bankruptcy, insolvency, reorganization, debt arrangement, dissolution or other similar Law now or hereafter in effect, (ii) shall consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) for, such Person or for any substantial part of its property, or (iii) shall make any general assignment for the benefit of creditors, or shall fail to, or admit in writing its inability to, pay its debts generally as they become due, or, if a corporation or similar entity, its board of directors (or any board or Person holding similar rights to control the activities of such Person) shall vote to implement any of the foregoing.

“Event of Termination” is defined in Section 10.1.

“Excess Deferred Receivables Concentration Amount” means in respect of the SCC Receivable Pool, as of any date of determination, the amount (if any) by which (a) the aggregate Unpaid Balance of all Eligible Receivables (and any portions thereof) relating to the SCC Receivable Pool representing all or a part of the sales price of goods or services that have not yet been fully performed or delivered, exceeds (b) 50.00% of the aggregate Unpaid Balance of all Eligible Receivables relating to the SCC Receivable Pool at such time.

 

Appendix A-16

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“Excess Early Origination Concentration Amount” means in respect of the ISC Receivable Pool, as of any date of determination, the amount (if any) by which (a) the aggregate Unpaid Balance of all Eligible Receivables in the ISC Receivable Pool, which were originated prior to August 1, 2014, exceeds (b) 30.00% of the aggregate Unpaid Balance of all Eligible Receivables in the ISC Receivable Pool at such time.

“Excess Governmental Obligor Concentration Amount” means in respect of any Receivable Pool, as of any date of determination, the amount (if any) by which (a) the aggregate Unpaid Balance of all Eligible Receivables in such Receivable Pool, the Obligors of which are Governmental Authorities, exceeds (b) 5.00% of the aggregate Unpaid Balance of all Eligible Receivables in such Receivable Pool at such time; provided that, in the case of an Obligor with one or more Affiliated Obligors, the Concentration Limit for such Obligor shall be treated as if such Obligor and its Affiliated Obligors were one Obligor.

“Excess Large Lease Obligor Concentration Amount” means in respect of the Lease Receivable Pool, as of any date of determination, the aggregate of the amounts determined for each Obligor by which the aggregate Unpaid Balance of all Eligible Receivables that are Lease Receivables in the Lease Receivable Pool owed by such Obligor or an Affiliate of such Obligor at such time, exceeds $100,000.

“Excess Near Prime ISC Obligor Concentration Amount” means in respect of the ISC Receivable Pool, as of any date of determination, the amount (if any) by which (a) the aggregate Unpaid Balance of all Eligible Receivables in the ISC Receivable Pool, the Obligors of which are Near Prime Obligors, exceeds (b) 25.00% of the aggregate Unpaid Balance of all Eligible Receivables in the ISC Receivable Pool at such time; provided that, in the case of an Obligor with one or more Affiliated Obligors, the Concentration Limit for such Obligor shall be treated as if such Obligor and its Affiliated Obligors were one Obligor.

“Excess Near Prime Lease Obligor Concentration Amount” means in respect of the Lease Receivable Pool, as of any date of determination, the amount (if any) by which (a) the aggregate Unpaid Balance of all Eligible Receivables in the Lease Receivable Pool, the Obligors of which are Near Prime Obligors, exceeds (b) 25.00% of the aggregate Unpaid Balance of all Eligible Receivables in the Lease Receivable Pool at such time; provided that, in the case of an Obligor with one or more Affiliated Obligors, the Concentration Limit for such Obligor shall be treated as if such Obligor and its Affiliated Obligors were one Obligor.

“Excess Non Lock-Box Concentration Amount” means in respect of any Receivable Pool, as of any date of determination, the aggregate amount (if any) by which (a) the aggregate Unpaid Balance of all Eligible Receivables in such Receivable Pool that are Non Lock-Box Receivables, exceeds (b) 6.00% of the aggregate Unpaid Balance of all Eligible Receivables in such Receivable Pool; provided, that, at any time during the continuance of a Specified Unmatured Event, an Event of Termination, Collection Control Event or a Non-Reinvestment Event, upon two (2) Business Days’ prior written notice to the Servicer, the applicable Administrative Agent, in its sole discretion, may (or shall if so directed by the Required Purchasers) reduce to zero the percentage set forth in this clause (b).

 

Appendix A-17

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“Excess Prime Accessories Concentration Amount” means in respect of the ISC Receivable Pool, as of any date of determination, the amount (if any) by which (a) the aggregate Unpaid Balance of all Eligible Receivables related to accessories sold to Prime Obligors in the ISC Receivable Pool, exceeds (b) 5.00% of the aggregate Unpaid Balance of all Eligible Receivables in the ISC Receivable Pool at such time; provided that, in the case of an Obligor with one or more Affiliated Obligors, the Concentration Limit for such Obligor shall be treated as if such Obligor and its Affiliated Obligors were one Obligor.

“Excess Obligor Concentration Amount” means in respect of any Receivable Pool, as of any date of determination, the aggregate of the amounts determined for each Obligor by which (a) the aggregate Unpaid Balance of all Eligible Receivables in such Receivable Pool owed by such Obligor or an Affiliate of such Obligor at such time, exceeds (b) the Concentration Limit in respect of such Receivable Pool for such Obligor at such time.

“Excluded Originator” is defined in Section 13.18.

“Excluded Lease Receivable” means any right to payment or other indebtedness arising from the lease of (but not a retail installment contract for) an iPhone 6, iPhone 6 Plus, iPhone 6s or iPhone 6s Plus or any later model of wireless smart-phone device manufactured by Apple Inc. or its subsidiaries.

“Excluded Taxes” means (i) any Taxes based upon, or measured by, any Affected Party’s net income, net receipts, net profits, net worth or capital (including franchise or similar Taxes imposed in lieu of such Taxes), but only to the extent such Taxes are imposed by a taxing authority (a) in a jurisdiction (or political subdivision thereof) in which such Affected Party has its principal office or under the laws of which such Affected Party is organized or incorporated, (b) in a jurisdiction (or political subdivision thereof) in which such Affected Party does business, or (c) in a jurisdiction (or political subdivision thereof) in which such Affected Party maintains a lending office (or branch), (ii) any franchise Taxes, branch Taxes or branch profits Taxes imposed by the United States or any similar Taxes imposed by any jurisdiction (or political subdivision thereof) described in clause (i) or in which any of each Seller or the Servicer is located, (iii) with regard to any Affected Party, any withholding Tax to the extent it is (a) imposed on amounts payable to such Affected Party because such Affected Party designates a new lending office, except to the extent that such Affected Party was entitled, at the time of designation of a new lending office, to receive amounts in respect of such Taxes from any of each Seller or the Servicer, as applicable, pursuant to Section 3.3, (b) attributable to such Affected Party’s failure to comply with Section 3.3(e)(v), or (c) imposed on amounts payable to such Affected Party with respect to an applicable interest in Pool Receivables or Related Assets pursuant to a law in effect on the date on which such Affected Party acquires such interest, except to the extent that, in the case of an assignment to such Affected Party, such Affected Party’s assignor was entitled, immediately before the time of such assignment, to receive amounts in respect of such Taxes from any Seller or the Servicer, as applicable, pursuant to Section 3.3, (iv) any Tax that is found in a final, non-appealable judgment by a court of competent jurisdiction to have been imposed solely as a result of any Affected Party’s gross negligence or willful misconduct, and (v) any FATCA Withholding Tax.

“Exclusion Effective Date” is defined in Section 13.18.

 

Appendix A-18

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“Exiting Purchaser” is defined in Section 3.5.

“Extension Request” is defined in Section 3.5.

“FATCA” means Sections 1471 through 1474 of the Code and the current or future U.S. Treasury Regulations issued thereunder, as the same may be amended, modified or supplemented from time to time (so long as any future, amended, modified, supplemented or successor version is substantively comparable and not materially more onerous to comply with), corresponding provisions of successor Law, official interpretations thereof, and any agreements entered into pursuant to Section 1471(b) of the Code and any published intergovernmental agreements entered into in connection with the implementation of such Sections of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any such intergovernmental agreement (but only to the extent not materially more onerous to comply with than Sections 1471 through 1474 of the Internal Revenue Code, any regulations thereunder, intergovernmental agreements or any fiscal or regulatory legislation pursuant to such intergovernmental agreement in force or otherwise in effect as of the Second Restatement Effective Date).

“FATCA Withholding Tax” means any withholding Tax imposed under FATCA.

“Federal Funds Rate” means, for any period, a fluctuating interest rate per annum, determined by the SCC Administrative Agent, equal (for each day during such period) to:

(a) the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York; or

(b) if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the applicable Liquidity Provider or Purchaser Agent from three federal funds brokers of recognized standing selected by it.

“Federal Reserve Bank” means the Board of Governors of the Federal Reserve System, or any successor thereto or to the functions thereof.

“Fee Letters” means any fee letter among any of the Sellers, Sprint Spectrum, the Administrative Agents, the Collateral Agent or the Purchaser Agents setting out the fees and expenses payable in connection with this Agreement or other Transaction Documents.

“Fees” means all fees payable by the Sellers pursuant to any Fee Letter (including the Funded Fees and the Unfunded Fees).

“Final Payout Date” means the date following the Purchase Termination Date on which Purchasers’ Total Investment shall have been reduced to zero and all other amounts then accrued or payable to any of the Affected Parties under the Transaction Documents shall have been paid in full in cash.

“Funded Fee” has the meaning set forth in the Fee Letters.

 

Appendix A-19

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“Funding Advance Rate” is defined in Section 1.4(c).

“GAAP” means generally accepted accounting principles in the United States of America as consistently applied.

“Governmental Authority” means the government of the United States of America or any other nation, or of any political subdivision thereof, whether state, regional or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

“Hedging Agreement” means any interest rate protection agreement, foreign currency exchange agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement.

“Indemnified Amounts” is defined in Section 12.1(a).

“Indemnified Party” is defined in Section 12.1(a).

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made or deemed made by or on account of any obligation of any Seller (or the Servicer on behalf of the Sellers) under any Transaction Document and (b) Other Taxes.

“Independent Manager” means a natural person who (I) is not at the time of initial appointment, or at any time while serving as Independent Manager of a Seller, and has not been at any time during the preceding five (5) years: (a) a stockholder, member, director, manager (with the exception of serving as independent manager of any Seller), officer, employee, partner, attorney or counsel of Sprint Corporation or any of their respective Affiliates (other than the Sellers); (b) a supplier or other Person who derives any of its purchases or revenues from its activities with such Seller or Sprint Corporation or any of their respective Affiliates (except in such person’s capacity as an independent manager or independent director of any Seller); or (c) a member of the immediate family of any such supplier, stockholder, member, director, manager, officer, employee, partner, attorney, counsel or other Person described in clauses (a) or (b) above and (II) (1) has prior experience as an independent manager for a company whose charter documents required the unanimous consent of all independent managers thereof before such company could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy and (2) has at least three years of employment experience with one or more entities that provide, in the ordinary course of their respective businesses, advisory, management or placement services to issuers of securitization or structured finance instruments, agreements or securities.

“Information” is defined in Section 13.8(e).

“Information Package” is defined in Section 3.1(a).

“Initial Cash Purchase Price” is defined in Section 1.1.

 

Appendix A-20

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“Intercreditor Agreement” means the Intercreditor Agreement, dated as of November 19, 2015, among (i) the Administrative Agents, (ii) the Collateral Agent, (iii) Mizuho Bank, Ltd, as MLS collateral agent, (iv) the Subsidiaries of Sprint Corporation party thereto as transferors, originators and lessees, and (v) Sprint Spectrum, as servicer and originator, as amended from time to time.

“Investment” means in respect of any Receivable Pool, as of any date of determination, with respect to any Purchaser, the aggregate of the amounts paid to, or for the account of, the Sellers in connection with all Purchases of Receivables relating to such Receivable Pool funded by such Purchaser pursuant to Section 1.1, as reduced from time to time by Collections distributed to such Purchaser (or to its Purchaser Agent for such Purchaser’s account) in respect of such Receivable Pool and applied on account of such Purchaser’s Investment in respect of such Receivable Pool pursuant to Sections 1.3 and 2.2; provided, that if such Purchaser’s Investment in respect of such Receivable Pool shall have been reduced by any distribution and thereafter all or a portion of such distribution is rescinded or must otherwise be returned for any reason, such Purchaser’s Investment in respect of such Receivable Pool shall be increased by the amount of such rescinded or returned distribution as though it had not been made.

“Investment Company Act” means the Investment Company Act of 1940.

“ISC” means installment sales contract.

“ISC Administrative Agent” means Mizuho, in its capacity as administrative agent for the Affected Parties in connection with the ISC Receivable Pool and the Related Assets as set forth herein and in the other Transaction Documents.

“ISC Advance Rate” means as of any date of determination, in respect of any ISC Receivable, the applicable “Advance Rate” set forth in the ISC Advance Rate Matrix corresponding to such ISC Receivable as of such date of determination, based upon the Unpaid Balance of such ISC Receivable.

“ISC Advance Rate Matrix” means the ISC Advance Rate Matrix attached as Schedule V to this Agreement as may be amended from time to time with the consent of all Purchasers.

“ISC Conditional DPP” means, in respect of any ISC Pool Receivable which constitutes an ISC Upgrade Receivable, as of any date of determination, the portion of the RPA Deferred Purchase Price in respect of the ISC Receivable Pool which relates to the ISC Conditional Unpaid Balance for such ISC Upgrade Receivable as of such date.

“ISC Conditional Unpaid Balance” means, as of any time, with respect to any ISC Upgrade Receivable, all remaining unpaid monthly installment payments under the ISC Contract giving rise to such ISC Upgrade Receivable which are not included in the computation of the Unpaid Balance of such ISC Upgrade Receivable.

“ISC Contract” means, with respect to any ISC Receivable, any retail installment agreement, contract or other document (including any purchase order or invoice), between an Originator and an Obligor, pursuant to which such ISC Receivable arises or which evidences

 

Appendix A-21

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such ISC Receivable. A “related” ISC Contract with respect to an ISC Pool Receivable means an ISC Contract which is relevant to the collection or enforcement of such ISC Pool Receivable.

“ISC Delinquency Ratio” means, with respect to the ISC Receivable Pool, as of any date of determination, for any Settlement Period, a fraction (expressed as a percentage) (a) the numerator of which is the aggregate number of ISC Contracts, the Obligor of which is a Prime Obligor or a Near Prime Obligor, which such ISC Contracts are related to a Delinquent Receivable in the ISC Receivable Pool as of the Cut-Off Date of such Settlement Period and (b) the denominator of which is the aggregate number of ISC Contracts related to all of the Receivables in the ISC Receivable Pool on the Cut-Off Date of such Settlement Period, the Obligor of which is a Prime Obligor or a Near Prime Obligor.

“ISC Device” means a wireless communication device, including mobile phone handsets or tablets, subject to an ISC Contract.

“ISC Exposure Amount” means as of any date of determination, an amount equal to the aggregate ISC Pool Commitments (without giving effect to any termination of such Pool Commitments following the Purchase Termination Date).

“ISC Loss Ratio” means, with respect to the ISC Receivable Pool, as of any date of determination, for any Settlement Period, a fraction (expressed as a percentage) (a) the numerator of which is the aggregate number of ISC Contracts, the Obligor of which is a Prime Obligor or a Near Prime Obligor, which such ISC Contracts are related to a Defaulted Receivable in the ISC Receivable Pool as of the Cut-Off Date for such Settlement Period, and (b) the denominator of which is the aggregate number of ISC Contracts related to all of the Receivables in the ISC Receivable Pool on the Cut-Off Date of such Settlement Period, the Obligor of which is a Prime Obligor or a Near Prime Obligor.

“ISC Loss Reserve” means in respect of the ISC Receivable Pool, as of any date of determination, the product of (a) the result of (i) one (1) minus (ii) the Weighted Average Advance Rate for the ISC Receivable Pool as of such day multiplied by (b) the Net Portfolio Balance for the ISC Receivable Pool on such day.

“ISC Pool Commitment” means in respect of the ISC Receivable Pool, with respect to each Committed Purchaser, the maximum amount which such Committed Purchaser is obligated to pay hereunder on account of any Purchase in respect of the ISC Receivable Pool, as set forth as its “ISC Pool Commitment” opposite its name on Schedule VII to this Agreement, as reduced from time to time in connection with reductions of the Purchasers’ Total Commitment pursuant to Section 3.2(c).

“ISC Pool Receivable” means an ISC Receivable in the ISC Receivable Pool.

“ISC Receivable” means any right to payment from a Person, whether constituting an account, chattel paper, instrument or a general intangible (as such terms are defined under the UCC), arising from the sale of ISC Devices by any Originator pursuant to an ISC Contract, including any payment obligations of such Person with respect thereto; provided, however that no right to payment or other indebtedness owing by a Sanctioned Person shall (i) constitute an

 

Appendix A-22

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ISC Receivable, (ii) be deemed to have been sold or contributed to the Sellers by the Originators pursuant to the Sale Agreement or (iii) sold or pledged hereunder by the Sellers.

“ISC Receivable Pool” means at any time all of the outstanding ISC Receivables sold, purported to be sold or contributed to the Sellers pursuant to the Sale Agreement.

“ISC Surrendered Device” is defined in Section 1.2(j).

“ISC Surrendered Device Return Requirement” means the obligation of the Servicer pursuant to Section 1.2(j) to return all ISC Surrendered Devices to the applicable Seller or its designee.

“ISC Upgrade Program” means, the program offered by the Originators or the Servicer pursuant to which the Obligor of an ISC Upgrade Receivable may, if such Obligor has agreed to participate in such program upon entering into the related ISC Contract, upon the making of specified minimum monthly installment payments in respect of the related ISC Contract, elect to trade in an ISC Device for an upgraded device whereupon such ISC Contract will terminate and no installments payments will be required to be made after the date of such termination in respect of such ISC Contract.

“ISC Upgrade Receivable” means any ISC Receivable, with respect to which, pursuant to the ISC Upgrade Program, the Obligor thereunder has the right (whether or not exercised) to trade in or return its qualifying ISC Device in satisfaction of such ISC Upgrade Receivable without having paid all monthly installment payments that would have been due under the terms of the related ISC Contract had such right not been exercised.

“ISC Weighted Average Term” means as of any date of determination with respect to the ISC Receivable Pool for all ISC Receivables which are Eligible Receivables, the number of months following such date of determination obtained by summing the products obtained by:

(a) multiplying (i) the number of remaining unpaid monthly installment payments at such time in respect of each ISC Pool Receivable due from the applicable Obligor under the ISC Contract which payments give rise to such ISC Receivable, which cannot be terminated or cancelled in connection with the ISC Upgrade Program, by (ii) the Unpaid Balance of such ISC Pool Receivable;

and dividing such sum by:

(b) the aggregate Unpaid Balance at such time of all ISC Pool Receivables which are Eligible Receivables.

“ISC Yield and Fee Reserve” means in respect of the ISC Receivable Pool, as of any date of determination, the sum of:

(a) the amount equal to the interest that would accrue on an amount equal to (x) the Net Portfolio Balance in respect of the ISC Receivable Pool as of such date of determination minus (y) the ISC Loss Reserve as of such date of determination, at a rate equal to 1.00% per annum during a period equal to the ISC Weighted Average Term; plus

 

Appendix A-23

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(b) the amount of the ISC Receivable Pool’s Pro Rata Share of the Servicing Fees and Fees that would accrue in respect of the ISC Receivable Pool during the period equal to the ISC Weighted Average Term assuming that the aggregate Unpaid Balance and the aggregate Investments relating to each of the ISC Receivable Pool and the SCC Receivable Pool as of such date of determinations remained the same during such period; plus

(c) the accrued and unpaid Yield, the ISC Receivable Pool’s Pro Rata Share of the Servicing Fees and Fees in respect of the ISC Receivable Pool.

“Joinder” is defined in Section 13.3(d).

“Law” means any law (including common law), constitution, statute, treaty, regulation, rule, ordinance, order, injunction, writ, decree, judgment, award or similar item of or by a Governmental Authority or any interpretation, implementation or application thereof.

“Lease Administrative Agent” means SMBCSI, in its capacity as administrative agent for the Affected Parties in connection with the Lease Receivable Pool and the Related Assets as set forth herein and in the other Transaction Documents.

“Lease Advance Rate” means as of any date of determination, in respect of any Lease Receivable, the applicable “Advance Rate” set forth in the Lease Advance Rate Matrix corresponding to such Lease Receivable as of such date of determination, based upon the Unpaid Balance of such Lease Receivable.

“Lease Advance Rate Matrix” means the Lease Advance Rate Matrix attached as Schedule IX to this Agreement as may be amended from time to time with the consent of all Purchasers.

“Lease Conditional DPP” means, in respect of any Lease Pool Receivable which constitutes a Lease Upgrade Receivable, as of any date of determination, the portion of the RPA Deferred Purchase Price in respect of the Lease Receivable Pool which relates to the Lease Conditional Unpaid Balance for such Lease Upgrade Receivable as of such date.

“Lease Conditional Unpaid Balance” means, as of any time, with respect to any Lease Upgrade Receivable, all remaining unpaid monthly lease payments under the Lease Contract giving rise to such Lease Upgrade Receivable which are not included in the computation of the Unpaid Balance of such Lease Upgrade Receivable.

“Lease Contract” means, with respect to any Lease Receivable, any lease, contract or other document (including any purchase order or invoice), between an Originator and an Obligor, pursuant to which such Lease Receivable arises or which evidences such Lease Receivable. A “related” Lease Contract with respect to a Lease Pool Receivable means a Lease Contract which is relevant to the collection or enforcement of such Lease Pool Receivable.

“Lease Delinquency Ratio” means, with respect to the Lease Receivable Pool, as of any date of determination, for any Settlement Period, a fraction (expressed as a percentage) (a) the numerator of which is the aggregate number of Lease Contracts, the Obligor of which is a Prime

 

Appendix A-24

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Obligor or a Near Prime Obligor, which such Lease Contracts are related to a Delinquent Receivable in the Lease Receivable Pool as of the Cut-Off Date of such Settlement Period and (b) the denominator of which is the aggregate number of Lease Contracts related to all of the Receivables in the Lease Receivable Pool on the Cut-Off Date of such Settlement Period, the Obligor of which is a Prime Obligor or a Near Prime Obligor.

“Lease Device” means a wireless communication device, including mobile phone handsets or tablets, subject to a Lease Contract.

“Lease Exposure Amount” means as of any date of determination, an amount equal to the aggregate Lease Pool Commitments (without giving effect to any termination of such Pool Commitments following the Purchase Termination Date).

“Lease Inclusion Pro Forma Information Package” has the meaning set forth in Section 5.2(g).

“Lease Loss Ratio” means, with respect to the Lease Receivable Pool, as of any date of determination, for any Settlement Period, a fraction (expressed as a percentage) (a) the numerator of which is the aggregate number of Lease Contracts, the Obligor of which is a Prime Obligor or a Near Prime Obligor, which such Lease Contracts are related to a Defaulted Receivable in the Lease Receivable Pool as of the Cut-Off Date for such Settlement Period, and (b) the denominator of which is the aggregate number of Lease Contracts related to all of the Receivables in the Lease Receivable Pool on the Cut-Off Date of such Settlement Period, the Obligor of which is a Prime Obligor or a Near Prime Obligor.

“Lease Loss Reserve” means in respect of the Lease Receivable Pool, as of any date of determination, the product of (a) the result of (i) one (1) minus (ii) the Weighted Average Advance Rate for the Lease Receivable Pool as of such day multiplied by (b) the Net Portfolio Balance for the Lease Receivable Pool on such day.

“Lease Pool Commitment” means in respect of the Lease Receivable Pool, with respect to each Committed Purchaser, the maximum amount which such Committed Purchaser is obligated to pay hereunder on account of any Purchase in respect of the Lease Receivable Pool, as set forth as its “Lease Pool Commitment” opposite its name on Schedule VII to this Agreement, as reduced from time to time in connection with reductions of the Purchasers’ Total Commitment pursuant to Section 3.2(c).

“Lease Pool Receivable” means a Lease Receivable in the Lease Receivable Pool.

“Lease Purchase Option Proceeds” means the proceeds arising from the sale of a Lease Device to an Obligor upon such Obligor’s exercise of its option to purchase a Lease Device pursuant to a Lease Contract at the end of the lease term; for the avoidance of doubt, Lease Purchase Option Proceeds shall not include any scheduled monthly payments on the related Lease Contract (including scheduled monthly or other periodic payments relating to the Lease Conditional Unpaid Balance).

“Lease Receivable” means any right to payment from a Person, whether constituting an account, chattel paper, instrument or a general intangible (as such terms are defined under the

 

Appendix A-25

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UCC), arising from the lease of a Lease Device, by any Originator pursuant to a Lease Contract, including any payment obligations of such Person with respect thereto; provided, however that (a) no right to payment or other indebtedness owing by a Sanctioned Person shall (i) constitute a Lease Receivable, (ii) be deemed to have been sold or contributed to the Sellers by the Originators pursuant to the Sale Agreement or (iii) sold or pledged hereunder by the Sellers and (b) Excluded Lease Receivables shall not constitute Lease Receivables.

“Lease Receivable Pool” means at any time all of the outstanding Lease Receivables sold, purported to be sold or contributed to the Sellers pursuant to the Sale Agreement.

“Lease Returned Device” has the meaning set forth in Section 1.2(k).

“Lease Returned Device Return Requirement” means the obligation of the Servicer pursuant to Section 1.2(k) to return all Lease Returned Devices to the applicable Seller or its designee.

“Lease Upgrade Program” means, the program offered by the Originators or the Servicer pursuant to which the Obligor of a Lease Upgrade Receivable may, if such Obligor has agreed to participate in such program upon entering into the related Lease Contract, upon the making of Required Lease Payments in respect of the related Lease Contract, elect to return a Lease Device in exchange for an upgraded device whereupon such Lease Contract will terminate and no additional payments will be required to be made after the date of such termination in respect of such Lease Contract.

“Lease Upgrade Receivable” means any Lease Receivable, with respect to which, pursuant to the Lease Upgrade Program, the Obligor thereunder has the right (whether or not exercised) to trade in or return its qualifying Lease Device in satisfaction of such Lease Upgrade Receivable without having made any purchase price payments or paid any monthly lease payments that would have been due under the terms of the related Lease Contract had such right not been exercised.

“Lease Weighted Average Term” means as of any date of determination with respect to the Lease Receivable Pool for all Lease Receivables which are Eligible Receivables, the number of months following such date of determination obtained by summing the products obtained by:

(a) multiplying (i) the number of remaining unpaid monthly rental payments at such time in respect of each Lease Pool Receivable due from the applicable Obligor under the Lease Contract which payments give rise to such Lease Receivable, which cannot be terminated or cancelled in connection with the Lease Upgrade Program, by (ii) the Unpaid Balance of such Lease Pool Receivable;

and dividing such sum by:

(b) the aggregate Unpaid Balance at such time of all Lease Pool Receivables which are Eligible Receivables.

“Lease Yield and Fee Reserve” means in respect of the Lease Receivable Pool, as of any date of determination, the sum of:

 

Appendix A-26

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(a) the amount equal to the interest that would accrue on an amount equal to (x) the Net Portfolio Balance in respect of the Lease Receivable Pool as of such date of determination minus (y) the Lease Loss Reserve as of such date of determination, at a rate equal to 1.00% per annum during a period equal to the Lease Weighted Average Term; plus

(b) the amount of the Lease Receivable Pool’s Pro Rata Share of the Servicing Fees and Fees that would accrue in respect of the Lease Receivable Pool during the period equal to the Lease Weighted Average Term assuming that the aggregate Unpaid Balance and the aggregate Investments relating to each of the Lease Receivable Pool and the Lease Receivable Pool as of such date of determinations remained the same during such period; plus

(c) the accrued and unpaid Yield, the Lease Receivable Pool’s Pro Rata Share of the Servicing Fees and Fees in respect of the Lease Receivable Pool.

“Legal Final” means the one-year anniversary of the occurrence of the Purchase Termination Date.

“Liberty Street” means Liberty Street Funding LLC.

“LIBO Rate” means for any Yield Period, (a) the interest rate per annum designated as the LIBO Rate by the applicable Purchaser Agent for a period of time comparable to such Yield Period that appears on the Reuters Screen LIBO Page (or on any successor or substitute page of such service, or any successor to or substitute or replacement for such service, providing rate quotations comparable to those currently provided on such page of such service, as determined by such Purchaser Agent from time to time for purposes of providing quotations of interest rates applicable to U.S. Dollar deposits in the London interbank market) as of 11:00 a.m. (London, England time) with respect to such Purchaser Agent or related Committed Purchaser on the second Business Day preceding the first day of such Yield Period or (b) if a rate cannot be determined under the foregoing clause, an annual rate equal to the average (rounded upwards if necessary to the nearest 1/100th of 1%) of the rates per annum at which deposits in U.S. Dollars with a duration comparable to such Yield Period in a principal amount substantially equal to the principal amount of the applicable Rate Tranche are offered to the principal London office of the applicable Purchaser Agent (or its related Committed Purchaser) by three London banks, selected by the SCC Administrative Agent in good faith, at about 11:00 a.m. London time on the second Business Day preceding the first day of such Yield Period.

“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever, including any conditional sale or other title retention agreement and any financing lease having substantially the same economic effect as any of the foregoing.

“Liquidation Fee” means, as of any date of determination, for each Rate Tranche (or portion thereof) relating to a Receivable Pool for each day in any Yield Period or Settlement

 

Appendix A-27

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Period relating to such Receivable Pool (computed without regard to clause (iii) of the proviso of the definition of “Yield Period”) during the Liquidation Period, the amount, if any, by which:

(a) the additional Yield (calculated without taking into account any Liquidation Fee) which would have accrued on the reductions of such Purchaser’s Tranche Investment effected pursuant to Section 1.3(c)(ii) or (iii) with respect to such Rate Tranche for such day during such Yield Period or Settlement Period (as so computed) if such reductions had not been made until the last day of such Yield Period or Settlement Period exceeds,

(b) the income, if any, received for such day during such Yield Period or Settlement Period by the affected Purchaser from investing the proceeds of such reductions of such Purchaser’s Tranche Investment.

“Liquidation Period” means the period commencing on the date on which the conditions precedent to Purchases and Reinvestments in respect of a Receivable Pool set forth in Section 5.2 are not satisfied (or expressly waived by each Purchaser), the Collateral Agent or an Administrative Agent shall have notified Servicer (on Sellers’ behalf) that the Liquidation Period has commenced, and ending on the Final Payout Date.

“Liquidity Advance” means a loan, advance, purchase or other similar action made by a Liquidity Provider pursuant to a Liquidity Agreement.

“Liquidity Agreement” means any agreement entered into, directly or indirectly, in connection with or related to, this Agreement pursuant to which a Liquidity Provider agrees to make loans or advances to, or purchase assets from, a Conduit Purchaser (directly or indirectly) in order to provide liquidity or other enhancement for such Conduit Purchaser’s Commercial Paper Notes or other senior indebtedness.

“Liquidity Provider” means BTMUNY, Scotia, SMBC, CACIB, any of their respective Affiliates or any other lender, credit enhancer or liquidity provider that is at any time party to a Liquidity Agreement or any successor or assign of such lender, credit enhancer or liquidity provider or any similar entity with respect to any permitted assignee of a Conduit Purchaser.

“Lock-Box Accounts” means each of the accounts (and any related lock-box or post office box) specified in Schedule 6.1(m) (or such as have been notified to and approved by the Collateral Agent and each Administrative Agent in accordance with Section 7.3(d)) maintained at a Lock-Box Bank in the name of a Seller.

“Lock-Box Agreement” means each deposit account control agreement or similar agreement, in form and substance satisfactory to the Collateral Agent and each Administrative Agent, among the Sellers, the Servicer, the Collateral Agent and a Lock-Box Bank, governing the terms of the related Lock-Box Accounts, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“Lock-Box Bank” means any of the banks party to a Lock-Box Agreement.

 

Appendix A-28

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“Losses” means the Unpaid Balance (net of recoveries) of any Pool Receivables that have been, or should have been, written-off as uncollectible by the Servicer in accordance with the Credit and Collection Policies.

“Manhattan” means Manhattan Asset Funding Company LLC.

“Material Adverse Effect” means, with respect to any event or circumstance, a material adverse effect on:

(a) (i) if a particular Person is specified, the ability of such Person to perform its obligations under this Agreement or any other Transaction Document or (ii) if a particular Person is not specified, the ability of any Originator, Servicer, any Seller or Sprint Corporation to perform its obligations under this Agreement or any other Transaction Document;

(b) (i) the validity or enforceability of any Transaction Document or (ii) the value, validity, enforceability or collectability of any material portion of Pool Receivables, Lease Contracts or the Related Assets with respect thereto, including if such event or circumstance would increase the days to pay or Dilution with respect to the Pool Receivables or any material portion thereof; or

(c) the status, existence, perfection, priority, enforceability or other rights and remedies of any Purchaser, the Collateral Agent, any Administrative Agent or any other Affected Party associated with its respective interest in the Pool Receivables, Lease Contracts or the Related Assets.

“Material Indebtedness” means Debt or obligations in respect of one or more Hedging Agreements, in either case, of Sprint Corporation or any of its Subsidiaries and in an aggregate principal amount exceeding (i) $225,000,000 or (ii) solely in the case of Debt incurred by any Seller (individually), $15,325. Without limiting the foregoing, Debt or obligations of Sprint Corporation or any of its Subsidiaries under the “MLS Documents” (as defined in the Intercreditor Agreement) shall constitute “Material Indebtedness,” without regard to the outstanding principal amount thereof.]

“Maximum Guaranty Amount” is defined in Section 1.5(i).

“Mizuho” is defined in the preamble.

“Moody’s” means Moody’s Investors Service, Inc.

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

“Near Prime Obligor” means any Obligor under an ISC Contract or a Lease Contract that was not a Prime Obligor as of the date of such Contract, and which (i) has a credit class designation of “Q2”, “H1”, “S5” or “T4”, or any equivalent credit class as set forth in the Credit and Collection Policies, and (ii) if an ISC Contract, is categorized as a “$0 Deposit requirement” by the internal scoring system of the Servicer or an Originator.

 

Appendix A-29

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“Net Portfolio Balance” means, as of any date of determination in respect of a Receivable Pool, an amount equal to the aggregate Unpaid Balance of Pool Receivables in such Receivable Pool that are Eligible Receivables determined at such time, minus (without duplication) the sum of (a) the aggregate Excess Governmental Obligor Concentration Amount in respect of such Receivable Pool at such time, plus (b) the Excess Obligor Concentration Amount in respect of such Receivable Pool at such time, plus (c) in respect of the SCC Receivable Pool, the Excess Deferred Receivables Concentration Amount in respect of such Receivable Pool at such time, plus (d) all cash Collections and security deposits received by the Sellers, the Originators, the Servicer or their respective Affiliates, which have been allocated to the reduction of the Unpaid Balance of such Receivable Pool but have not yet been applied to reduce such Unpaid Balance, plus (e) the Excess Non Lock-Box Concentration Amount in respect of such Receivable Pool at such time, plus (f) in respect of the ISC Receivable Pool, the sum of (i) the Excess Near Prime ISC Obligor Concentration Amount at such time, plus (ii) the Excess Prime Accessories Concentration Amount in respect of the ISC Receivable Pool at such time, plus (iii) the Excess Early Origination Concentration Amount at such time, plus (iv) the sum of (A) the Cap Reserve Amount relating to the ISC Receivable Pool, plus (B) the then current Estimated Cap Deficiency Amount relating to the ISC Receivable Pool, plus (g) in respect of the Lease Receivable Pool, the sum of (i) the Excess Near Prime Lease Obligor Concentration Amount at such time, plus (ii) the Excess Large Lease Obligor Concentration Amount, plus (iii) the sum of (A) the Cap Reserve Amount relating to the Lease Receivable Pool, plus (B) the then current Estimated Cap Deficiency Amount relating to the Lease Receivable Pool.

“Non Lock-Box Receivables” is defined in Section 8.7.

“Non-Reinvestment Event” is defined in Section 4.5.

“Obligations” means any obligation of any Seller to the Collateral Agent, any Administrative Agent, any Purchaser Agent, any Purchaser, any Indemnified Party, any other Affected Party or any account institution party to the Control Agreement arising in connection with the Receivable Pools, this Agreement and each other Transaction Document, whether now or hereafter existing, due or to become due, direct or indirect, or absolute or contingent, including, all Indemnified Amounts.

“Obligor” means a Person obligated to make payments under a Contract with respect to a Receivable, including any guarantor thereof.

“OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets Control.

“Original RPA” means the Receivables Purchase Agreement, dated as of May 16, 2014, among the Sellers, Sprint Spectrum, the SCC Administrative Agent and the Purchasers and Purchaser Agents party thereto.

“Originator” means, each Person from time to time party to the Sale Agreement, as an originator except that no Excluded Originator, starting on the Exclusion Effective Date for such Excluded Originator, shall be an Originator. As of the Second Restatement Effective Date, the parties listed on Schedule II as such are the Originators.

“Other Administrative Agent” is defined in Section 11.3(b).

 

Appendix A-30

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“Other Connection Taxes” means, with respect to an Affected Party, Taxes imposed as a result of a present or former connection between the Affected Party and the jurisdiction imposing such Tax (other than connections arising from the Affected Party having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Transaction Document, or sold or assigned an interest in any Pool Receivables (or Related Assets) or Transaction Document).

“Other Taxes” means all present or future stamp and other similar Taxes payable or determined to be payable in connection with the execution, delivery, filing and recording of this Agreement or the other Transaction Documents, except any such Taxes that are (i) Other Connection Taxes imposed with respect to an assignment or (ii) Excluded Taxes.

“Participant Register” is defined in Section 13.3(b).

“Participant” is defined in Section 13.3(b).

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

“Performance Support Agreement” means the Second Amended and Restated Performance Support Agreement, dated as of the date hereof, among Sprint Corporation the Administrative Agents, the Collateral Agent and the other beneficiaries thereto, in form and substance acceptable to the Collateral Agent and each Administrative Agent in its sole discretion, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“Permitted Adverse Claims” means any Adverse Claim (a) created under the Transaction Documents (including liens created in favor of the Eligible Bank party to the Control Agreement and the Lock-Box Banks to the extent permitted under the terms of the Control Agreement and the Lock-Box Agreements), (b) as to which no enforcement collection, execution, levy or foreclosure proceeding shall have been commenced or threatened and that solely secure the payment of taxes, assessments and/or governmental charges or levies, if and to the extent the same are either (x) not yet due and payable or (y) being contested in good faith and as to which adequate reserves have been provided in accordance with GAAP, but, in any case, only to the extent that such Adverse Claim securing payment of such taxes or assessments or other governmental charges constitutes an inchoate tax lien, and (c) inchoate and unperfected workers’, mechanics’, suppliers’ or similar Adverse Claims arising in the ordinary course of business, in any case, as to which no enforcement collection, execution, levy or foreclosure proceeding shall have been commenced or threatened; provided, however, that no Adverse Claim(s) that could (individually or in the aggregate) reasonably be expected to result in a Material Adverse Effect shall constitute a Permitted Adverse Claim.

“Permitted Holder” means SoftBank and its Affiliates, successors and assigns.

“Person” means a natural individual, partnership, sole proprietorship, corporation (including a business trust), joint stock company, trust, unincorporated association, joint venture, limited liability company, any Governmental Authority or any other entity of whatever nature.

 

Appendix A-31

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“Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which Sprint Corporation, Sprint Spectrum, the Servicer, Sprint Corporation, any Originator, any Seller or any ERISA Affiliate thereof is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“Pool Commitments” means in respect of each Committed Purchaser, its ISC Pool Commitment, its Lease Pool Commitment and its SCC Pool Commitment.

“Pool Deficiency Amount” is defined in Section 3.1(a)(ii).

“Pool Hold-Back Amount” is defined in Section 1.3(a)(i).

“Pool Receivable” means an SCC Pool Receivable, an ISC Pool Receivable or a Lease Pool Receivable.

“Prime Obligor” means any Obligor under an ISC Contract or a Lease Contract that was categorized as “Prime” by the internal scoring system of the Servicer or an Originator as of the date of such Contract or had graduated to Prime Obligor prior the date of any Purchase of a related ISC Receivable or Lease Receivable, as applicable.

“Prime Rate” means a rate per annum equal to the rate of interest quoted in the print edition of The Wall Street Journal, Money Rates Section as the USA “Prime Rate”, as published for such day (or, if such day is not a Business Day, for the preceding Business Day), or, if such rate is not so published for any day which is a Business Day, the rate announced by the SCC Administrative Agent from time to time as its prime rate of interest at its principal office in New York, New York, such rate to change as and when such designated rate changes.

“Program Administration Agreement” means that certain administration agreement between a Conduit Purchaser and Program Administrator governing certain aspects of the administration of such Conduit Purchaser’s commercial paper facility or any other agreement having similar purposes, as in effect from time to time.

“Program Administrator” means, with respect to any Conduit Purchaser, the administrator designated for such Conduit Purchaser under its Program Administration Agreement.

“Pro Rata Share” means, in respect of any Receivable Pool, a fraction, expressed as a percentage, (x) the numerator of which is the aggregate amount of all Pool Commitments in respect of such Receivable Pool, and (y) the denominator of which is the aggregate amount of the Pool Commitments for all Receivable Pools.

“Program Information” is defined in Section 13.8(a)(i).

“Purchase” is defined in Section 1.1.

“Purchase Date” is defined in Section 1.2(b).

 

Appendix A-32

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“Purchase Facility” means the receivables purchase facility evidenced by this Agreement.

“Purchase Termination Date” means the earliest of (a) November 19, 2017, (b) ten (10) Business Days following the date of receipt by each of the other parties to this Agreement of a written notice of termination provided by the Sellers (or the Servicer on their behalf) and (c) the occurrence of an Event of Termination, Collection Control Event or Non-Reinvestment Event.

“Purchaser” means each Conduit Purchaser and each Committed Purchaser, as applicable.

“Purchaser Agent” means each Person acting as agent on behalf of a Purchaser Group and listed as such as set forth on the signature pages of this Agreement or any other Person who becomes a party to this Agreement as a Purchaser Agent in accordance with this Agreement.

“Purchaser Group” means each group consisting of a Purchaser Agent, its related Committed Purchasers, each Conduit Purchaser, if any, administered or represented by such Purchaser Agent and each Liquidity Provider and Enhancement Provider related to any such Conduit Purchaser.

“Purchaser Group Commitment” means in respect of any Receivable Pool, at any time with respect to any Purchaser Group, the aggregate Pool Commitments in respect of such Receivable Pool of all Committed Purchasers at such time in such Purchaser Group.

“Purchaser Group Investment” means in respect of any Receivable Pool, at any time with respect to any Purchaser Group, the aggregate Investments in respect of such Receivable Pool of all Purchasers at such time in such Purchaser Group.

“Purchasers’ Pool Commitment” means, in respect of any Receivable Pool, the aggregate Pool Commitments in respect of such Receivable Pool of all Committed Purchasers at such time.

“Purchasers’ Pool Investment” means, in respect of a Receivable Pool, at any time, the aggregate Investments of all Purchasers in respect of such Receivable Pool.

“Purchasers’ Total Commitment” means, at any time, the aggregate Purchasers’ Pool Commitments in respect of all Receivable Pools of all Committed Purchasers at such time.

“Purchasers’ Total Investment” means, at any time, the aggregate Investments of all Purchasers in all of the Receivable Pools at such time.

“Purchasers’ Tranche Investment” means in relation to any Rate Tranche relating to a Receivable Pool the amount of Purchasers’ Pool Investment in respect of such Receivable Pool allocated by the applicable Administrative Agent to such Rate Tranche pursuant to Section 2.1; provided, that at all times the aggregate amounts allocated to all Rate Tranches in respect of such Receivable Pool shall equal Purchasers’ Pool Investment in respect of such Receivable Pool.

“Ratable Share” means in respect of any Receivable Pool, at any time, for any Purchaser Group, a percentage equal to the quotient of (a) the Purchaser Group Commitment in respect of such Receivable Pool for (or, following the Purchase Termination Date, the aggregate Purchaser

 

Appendix A-33

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Group Investment of) such Purchaser Group in respect of such Receivable Pools at such time, divided by (b) the Purchasers’ Pool Commitment (or, following the Purchase Termination Date, the Purchasers’ Total Investment) at such time.

“Rate Tranche” means at any time a portion of a Purchaser’s Investment relating to a Receivable Pool selected by the applicable Purchaser Agent pursuant to Section 2.1 and designated as a Rate Tranche solely for purposes of computing Yield.

“Receivable” means an SCC Receivable, a Lease Receivable or an ISC Receivable.

“Receivable Pools” means the SCC Receivable Pool, the Lease Receivable Pool and the ISC Receivable Pool.

“Records” means all Contracts and other documents, instruments, books, records, purchase orders, agreements, reports and other information (including computer programs, tapes, disks, other information storage media, data processing software and related property and rights) prepared or maintained by any Originator, Sprint Spectrum, the Servicer, or any Seller, respectively, with respect to, the Lease Devices, Lease Contracts, Pool Receivables, the Related Assets and the Obligors of such Pool Receivables. For the avoidance of doubt, “Records” shall include any Chattel Paper (tangible or electronic) evidencing any Pool Receivables.

“Register” is defined in Section 13.3(e).

“Reinvestment” is defined in Section 1.1.

“Related Assets” means (a) with respect to any Pool Receivable, (x) all 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, including 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, (y) in respect of any ISC Pool Receivable, all interest in any devices (including any such device which is or may become an ISC Surrendered Device in respect of an ISC Pool Receivable which constitutes an ISC Upgrade Receivable) relating to any ISC Contract giving rise to such ISC Pool Receivable and (z) all guarantees, insurance policies and other agreements or arrangements of whatsoever character from time to time supporting of such Receivable whether pursuant to the Contract pursuant to which such Receivable was originated, including any obligation of any party under the Transaction Documents to promptly deposit amounts received in respect of Collections to an account, (b) all Collections in respect of, and other proceeds of, the Pool Receivables, (c) subject to the proviso set forth below, all rights and remedies (but none of the obligations) of the Sellers or any Originator, as applicable, under the Sale Agreement (including the right to terminate such Lease Contract in accordance with the early termination provisions thereof if the Servicer or its Affiliates discontinue the leasing program for the Lease Devices), and the other Transaction Documents and any other rights or assets pledged, sold or otherwise transferred to the Sellers thereunder and (d) all the products and proceeds of any of the foregoing; provided, that, no Lease Device or Lease Contract shall constitute Related Assets.

 

Appendix A-34

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“Related Originators” means, with respect to any Seller, the Originator or Originators, as the case may be, identified as such on Schedule II.

“Related Seller” means, with respect to any Originator, the Seller identified as such on Schedule II.

“Removal Event” means, with respect to any Purchaser Group, the occurrence of any of the following: (i) a Purchaser (or any related Affected Party) in such Purchaser Group requests compensation under Section 4.2, (ii) the Sellers are required to pay any additional amount or Indemnified Taxes to any Purchaser or any Governmental Authority for the account of any Purchaser (or any related Affected Party) in such Purchaser Group pursuant to Section 3.3(e), (iii) the Purchaser Agent for such Purchaser Group has delivered a Delayed Purchase Notification on behalf of its Purchaser Group pursuant to Section 1.2(i), or (iv) any Committed Purchaser in such Purchaser Group becomes a Defaulting Committed Purchaser; provided, however, that if at any time Removal Events would otherwise have occurred and remain continuing with respect to the Required Purchasers’ Purchaser Groups pursuant to clause (i), (ii) or (iii) above, then no Removal Event shall be deemed to have occurred or to remain continuing with respect to any Purchaser Group pursuant to any such clause.

“Reporting Date” is defined in Section 3.1(a).

“Required Monthly Installment Payments” means the first twelve (12) monthly installment payments due under any ISC Contract, or such other number of monthly installment payments as shall be agreed to in writing by the Collateral Agent, the Administrative Agents and each Purchaser Agent.

“Required Monthly Lease Payments” means the first twelve (12) monthly lease payments due under any Lease Contract, or such other number of monthly lease payments as shall be agreed to in writing by the Collateral Agent, the Administrative Agents and each Purchaser Agent.

“Required Purchasers” means, at any time, Committed Purchasers whose aggregate Pool Commitments at such time aggregate more than 50.00% of the Purchasers’ Total Commitment at such time (or, if at such time, the Purchasers’ Total Commitment is zero, the Committed Purchasers whose aggregate Investments in respect of all Receivable Pools at such time aggregate more than 50.00% of the Purchasers’ Total Investment at such time); provided, however, that if at any time there are only two Committed Purchasers, Required Purchasers shall mean both such Committed Purchasers; and provided, further, that if at such time any Committed Purchaser is a Defaulting Committed Purchaser, the Pool Commitments of such Defaulting Committed Purchaser shall be disregarded for purposes of determining the Required Purchasers.

“Required Reserves” means (i) in respect of the SCC Receivable Pool, (x) the SCC Dilution Reserve, (y) the SCC Loss Reserve, and (z) the SCC Yield Reserve, (ii) in respect of the ISC Receivable Pool, (x) the ISC Loss Reserve, and (y) the ISC Yield and Fee Reserve in respect of the ISC Receivable Pool, and (iii) in respect of the Lease Receivable Pool, (x) the Lease Loss Reserve, and (y) the Lease Yield and Fee Reserve in respect of the Lease Receivable Pool.

“Response Date” is defined in Section 3.5.

 

Appendix A-35

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“Responsible Officer” shall mean any Designated Financial Officer or any executive officer, assistant treasurer, treasurer or controller of Sprint Corporation, and any other officer of the Sellers, the Servicer or the Originators responsible for the administration of this Agreement.

“Restatement Effective Date” means April 24, 2015.

“RPA Deferred Purchase Price” means (i) on each Business Day prior to the Final Payout Date in respect of a Receivable Pool, any amounts available after Reinvestments in respect of such Receivable Pool pursuant to Section 1.3(a)(ii) and (ii) on each Business Day on and after such Final Payout Date, any amounts payable to the Sellers under Section 1.2(g) in respect of such Receivable Pool.

“Sanctioned Country” means a country subject to a sanctions program identified on the list maintained by OFAC and available at: http://www.treasury.gov/resource-center/sanctions/Programs/Pages/Programs.aspx, or as otherwise published from time to time.

“Sale Agreement” means the Second Amended and Restated Receivables Sale and Contribution Agreement, dated as of the date hereof, among the Originators, as sellers and contributors, and Sellers, as buyers and transferees.

“Sanctioned Person” means (i) A person named on the list of “Specially Designated Nationals” or “Blocked Persons” maintained by OFAC available at: http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx, or as otherwise published from time to time or (ii) (A) an agency of the government of a Sanctioned Country, (B) an organization controlled by a Sanctioned Country, or (C) a person resident in a Sanctioned Country, to the extent subject to a sanctions program administered by OFAC.

“SCC” means service charge contract.

“SCC Administrative Agent” means The Bank of Tokyo-Mitsubishi UFJ, Ltd., in its capacity as administrative agent for the Affected Parties in connection with the SCC Receivable Pool and the Related Assets as set forth herein and in the other Transaction Documents.

“SCC Adjusted Dilution Ratio” means with respect to the SCC Receivable Pool, as of any date of determination, the average of the SCC Dilution Ratios for such SCC Receivable Pool for the preceding twelve Settlement Periods.

“SCC Contract” means, with respect to any SCC Receivable, any agreement, contract or other document (including any purchase order or invoice), between an Originator and an Obligor, pursuant to which such SCC Receivable arises or which evidences such SCC Receivable. A “related” SCC Contract with respect to an SCC Pool Receivable means an SCC Contract which is relevant to the collection or enforcement of such SCC Pool Receivable.

“SCC Delinquency Ratio” means, with respect to the SCC Receivable Pool, as of any date of determination, for any Settlement Period, a fraction (expressed as a percentage) (a) the numerator of which is the aggregate Unpaid Balance of all Delinquent Receivables relating to the SCC Receivable Pool as of the Cut-Off Date of such Settlement Period and (b) the denominator

 

Appendix A-36

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of which is the aggregate Unpaid Balance of all of the Receivables in the SCC Receivable Pool on the Cut-Off Date of such Settlement Period.

“SCC Dilution Horizon Ratio” means, with respect to the SCC Receivable Pool, as of any date of determination, a fraction (expressed as a percentage), (a) the numerator of which is equal to the aggregate initial Unpaid Balance of all SCC Receivables originated by each Originator during the most recently ended Settlement Period, and (b) the denominator of which is the Net Portfolio Balance for the SCC Receivable Pool as of the Cut-Off Date of the most recently ended Settlement Period.

“SCC Dilution Ratio” means, with respect to the SCC Receivable Pool, as of any date of determination, with respect to any Settlement Period, a fraction (expressed as a percentage), calculated as of the last day of each Settlement Period, (a) the numerator of which is the aggregate amount of all Dilutions in respect of SCC Receivables which occurred during such Settlement Period and (b) the denominator of which is the excess of (i) the aggregate initial Unpaid Balance of all SCC Receivables which were originated by the Originators during the Settlement Period immediately preceding such Settlement Period over (ii) the Excess Deferred Receivables Concentration Amount.

“SCC Dilution Reserve” means, in respect of the SCC Receivable Pool, as of any date of determination, the product of (a) the Net Portfolio Balance for the SCC Receivable Pool on such day and (b) the SCC Dilution Reserve Factor on such date.

“SCC Dilution Reserve Factor” means, in respect of the SCC Receivable Pool, as of any date of determination, an amount equal to:

DHR x {(2.25 x ADR) + DVC}

 

“SCC Dilution Volatility Component” means, in respect of the SCC Receivable Pool, as of any date of determination, the product of (a) the positive difference between (i) the highest average SCC Dilution Ratio for any three consecutive Settlement Periods observed over the preceding twelve Settlement Periods (the “SCC Dilution Spike”), minus (ii) the SCC Adjusted Dilution Ratio, multiplied by (b) the quotient of (i) the SCC Dilution Spike, divided by (ii) the SCC Adjusted Dilution Ratio.

“SCC Liquidation Discount” means (i) in respect of an SCC Receivable Pool, as of any date of determination, a percentage calculated as follows:

NPB x {(PR x 1.50) + SFR} x HDSO

360

 

Appendix A-37

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where:

 

“SCC Loss Horizon Ratio” means, in respect of the SCC Receivable Pool, as of any date of determination, for any Settlement Period, a fraction (expressed as a percentage), (a) the numerator of which is the product of (i) the excess, if any, of (x) the aggregate initial Unpaid Balance of all Receivables relating to the SCC Receivable Pool originated by each Originator during the current Settlement Period and each of the three Settlement Periods then most recently ended over (y) the Excess Deferred Receivables Concentration Amount as of the Cut-Off Date of the most recently ended Settlement Period and each of the three Settlement Periods then most recently ended, times (ii) the DSO Factor, and (b) the denominator of which is the Net Portfolio Balance for the SCC Receivable Pool as of the Cut-Off Date of the most recently ended Settlement Period.

“SCC Loss Ratio” means, with respect to the SCC Receivable Pool, as of any date of determination, for any Settlement Period, a fraction (expressed as a percentage) (a) the numerator of which is the aggregate Unpaid Balance of all Defaulted Receivables relating to the SCC Receivable Pool as of the Cut-Off Date for such Settlement Period, and (b) the denominator of which is the aggregate Unpaid Balance of all Receivables relating to the SCC Receivable Pool on the Cut-Off Date of such Settlement Period.

“SCC Loss Reserve” means, in respect of the SCC Receivable Pool, as of any date of determination, the product of (a) the SCC Loss Reserve Factor on such day multiplied by (b) the Net Portfolio Balance for the SCC Receivable Pool on such day.

“SCC Loss Reserve Factor” means, in respect of the SCC Receivable Pool, as of any date of determination, the greater of (a) 20.00% and (b) the percentage determined pursuant to the following formula:

2.25 x PLR x LHR

 

“SCC Loss-to-Liquidation Ratio” means, as of any date of determination, a fraction (expressed as a percentage) (a) the numerator of which is the Losses in respect of the SCC

 

Appendix A-38

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Receivable Pool during such Settlement Period and (b) the denominator of which is the aggregate amount of Collections (other than Deemed Collections) in respect of the SCC Receivable Pool received during such Settlement Period.

“SCC Peak Loss Ratio” means in respect of the SCC Receivable Pool, as of any date of determination, the highest average SCC Loss Ratio in respect of the SCC Receivable Pool for any three consecutive Settlement Periods during the preceding twelve Settlement Periods.

“SCC Pool Commitment” means in respect of the SCC Receivable Pool, with respect to each Committed Purchaser, the maximum amount which such Committed Purchaser is obligated to pay hereunder on account of any Purchase in respect of the SCC Receivable Pool, as set forth as its “SCC Pool Commitment” opposite its name on Schedule VII to this Agreement, as reduced from time to time in connection with reductions of the Purchasers’ Total Commitment pursuant to Section 3.2(c).

“SCC Pool Receivable” means an SCC Receivable in the SCC Receivable Pool.

“SCC Receivable” means any right to payment from a Person, whether constituting an account, chattel paper, instrument or a general intangible (as such terms are defined under the UCC), arising from the provision of services by any Originator pursuant to an SCC Contract, including the right to payment of any interest, finance charges and other payment obligations of such Person with respect thereto; provided, however that no right to payment or other indebtedness owing by a Sanctioned Person shall (i) constitute an SCC Receivable, (ii) be deemed to have been sold or contributed to the Sellers by the Originators pursuant to the Sale Agreement or (iii) be sold or pledged hereunder by the Sellers. For the avoidance of doubt, no amount payable in respect of an ISC Contract for the purchase price of a telephone, smart-phone, tablet, computer or other wireless device, including the ISC Receivables shall constitute an SCC Receivable.

“SCC Receivable Pool” means at any time all of the outstanding SCC Receivables sold, purported to be sold or contributed to the Sellers pursuant to the Sale Agreement.

“SCC Yield Reserve” means in respect of the SCC Receivable Pool, as of any date of determination, the sum of:

(a) the SCC Liquidation Discount in respect of such Receivable Pool then applicable; and

(b) the sum of the accrued and unpaid Yield in respect of the SCC Receivable Pool, the SCC Receivable Pool’s Pro Rata Share of the Servicing Fees and Fees in respect of the SCC Receivable Pool.

“SCI” means Sprint Communications, Inc.

“Scotia” means The Bank of Nova Scotia.

“SEC” means the Securities and Exchange Commission or any successor governmental authority.

 

Appendix A-39

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“Second Restatement Effective Date” means the first date upon which the conditions precedent specified in Section 5.1 were fully satisfied.

“Securities Act” means the Securities Act of 1933.

“Security” is defined in Section 2(a)(1) of the Securities Act.

“Seller” or “Sellers” means each Person identified as such on Schedule II.

“Servicer” is defined in Section 8.1(a).

“Servicing Fee” means in respect of the Receivable Pools, an amount equal, for each day of a Settlement Period, to, (a) if the Servicer is Sprint Spectrum or an Affiliate of Sprint Corporation, 0.50% per annum of the daily average aggregate Unpaid Balance of all Pool Receivables relating to all Receivable Pools during such Settlement Period, multiplied by 1/360 and (b) if the Servicer is not Sprint Spectrum or an Affiliate of Sprint Corporation, an amount equal 110% of the actual per annum costs incurred by the successor Servicer designated pursuant to Section 8.1(b) for its servicing during such Settlement Period, multiplied by 1/360, in either case, payable in arrears.

“Set-off Party” is defined in Section 13.4.

“Settlement Date” means, with respect to any Settlement Period, the second (2^nd) Business Day following the Reporting Date for such Settlement Period; provided, that the last Settlement Date shall be the last day of the last Settlement Period.

“Settlement Period” means:

(a) the period from, (i) in respect of the SCC Receivable Pool, the Closing Date, (ii) in respect of ISC Receivable Pool, the Restatement Effective Date and (iii) in respect of the Lease Receivable Pool, the Second Restatement Effective Date, to the end of the calendar month immediately succeeding the calendar month in which such date occurs; and

(b) thereafter, each subsequent calendar month;

provided, that the last Settlement Period shall end on the Final Payout Date.

“Significant Subsidiary” means (a) any Subsidiary of SCI that has consolidated assets or revenues greater than or equal to 5.00% of the total consolidated assets or revenues of SCI and its Subsidiaries determined as of the end of (or, with respect to such revenues, for the period of four fiscal quarters ending with) the fiscal quarter or fiscal year most recently ended for which financial statements are available, (b) each Subsidiary of Sprint Corporation that directly or indirectly owns or controls any other Significant Subsidiary and (c) without limiting the foregoing, each Originator, each Seller, Sprint Spectrum and SCI.

“SMBC” means Sumitomo Mitsui Banking Corporation.

 

Appendix A-40

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“SMBCSI” means SMBC Nikko Securities America, Inc.

“SoftBank” means SoftBank Corp., a Japanese kabushiki kaisha.

“S&P” means Standard & Poor’s Ratings Services.

“Specified Unmatured Event” means the occurrence of any event which, with the giving of notice or lapse of time, or both, would become (x) a Non-Reinvestment Event pursuant to Section 4.5(e), (y) an Event of Termination pursuant to Section 10.1(a)(ii) or 10.1(c) or (z) a Collection Control Event.

“Sprint Corporation” means Sprint Corporation, a Delaware corporation.

“Sprint Financing” means any accounts receivable, installment sales contract, lease, inventory or similar financial asset securitization, financing or factoring transaction or series of transactions that may be entered into by Sprint Corporation or any of its Subsidiaries which may, but need not, include transactions pursuant to which (a) Sprint Corporation or any of its Subsidiaries may sell, convey or otherwise transfer to one or more Sprint Subsidiaries in a true sale and (b) such Sprint Subsidiary(ies) may grant a security interest in or sell, any accounts receivable, installment sales contracts or similar financial assets and any assets or rights incidental or related thereto of Sprint Corporation or any of its Subsidiaries, which transaction or series of transactions do not provide for material credit recourse to Sprint Corporation or any of its Subsidiaries (other than Sprint Subsidiaries), except for customary indemnification obligations similar to those provided in the Transaction Documents and customary recourse for breaches of representations, warranties and covenants related to the nature, character and servicing of such accounts receivables, installment sales contracts and other assets and to maintaining such Sprint Subsidiary(ies) as customary bankruptcy-remote special purpose entities.

“Sprint Information” means, with respect to each Receivable sold hereunder from time to time, all information with respect thereto, including without limitation, (a) in respect of any SCC Receivable the related (i) billing account number, (ii) invoice number, (iii) invoice due date, (iv) invoice amount, (v) the Unpaid Balance, (vi) the Lock-Box Account to which Collections in respect of such SCC Receivable are remitted, and (vii) related Originator and Seller, (b) in respect of any ISC Receivable, (i) the Unpaid Balance, (ii) the ISC Conditional Unpaid Balance, (iii) the related Originator and Seller, and (iv) the Lock-Box Account to which Collections in respect of such ISC Receivable are remitted, and (c) in respect of any Lease Receivable, (i) the Unpaid Balance, (ii) the Lease Conditional Unpaid Balance, (iii) the related Originator and Seller, and (iv) the Lock-Box Account to which Collections in respect of such Lease Receivable are remitted; provided, however, that Sprint Information shall not include (x) any Subscriber Confidential Information or (y) any information (other than information listed above) with respect to a Receivables owing by a Governmental Authority that Sprint Spectrum or its Affiliates are prohibited from disclosing hereunder pursuant to a written agreement with a Governmental Authority or pursuant to any applicable law, rule or regulation.

“Sprint Spectrum” is defined in the preamble.

 

Appendix A-41

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“Sprint Subsidiary” means any Subsidiary of Sprint Corporation that is structured as a customary bankruptcy-remote special purpose entity that engages in no activities other than in connection with the securitization or factoring of accounts receivable, installment sales contracts or similar financial assets and any assets or rights incidental or related thereto of Sprint Corporation or any of its Subsidiaries.

“Subscriber Confidential Information” means information of a personal nature relating to a telecommunications subscriber that discloses the address, marital status, financial status, occupation, billing records or other identifying information that is related, unrelated or incidental to the provision of telecommunications services, and includes identifying information and Customer Proprietary Network Information. For the purposes of this definition, “Customer Proprietary Network Information” shall have the definition as provided under 47 U.S.C. Section 222, and its implementing regulations. Notwithstanding the foregoing, the names of the twenty (20) largest Obligors in respect of each Receivable Pool (determined based on the aggregate Unpaid Balances of their respective Pool Receivables) shall not constitute Subscriber Confidential Information.

“Subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent. Unless otherwise noted herein, each reference to “Subsidiary” shall be a reference to a Subsidiary of Sprint Corporation.

“Successor Notice” is defined in Section 8.1(b).

“SuMi Trust” means Sumitomo Mitsui Trust Bank, Limited.

“Taxes” means all income, gross receipts, rental, franchise, excise, stamp, occupational, capital, value added, sales, use, ad valorem (real and personal), property (real and personal) and taxes, fees, levies, imposts, charges or withholdings of any nature whatsoever, together with any assessments, penalties, fines, additions to tax and interest thereon, howsoever imposed, by any Governmental Authority or other taxing authority in the United States or by any foreign government, foreign governmental subdivision or other foreign or international taxing authority.

“Tranche Investment” means in relation to any Rate Tranche in respect of a Receivable Pool and any Purchaser the amount of such Purchaser’s Investment allocated by the related Purchaser Agent to such Rate Tranche pursuant to Section 2.1; provided, that at all times the aggregate amounts allocated to all Rate Tranches of all Purchasers in respect of a Receivable Pool shall equal the Purchasers’ Pool Investment in respect of such Receivable Pool; provided, further, that at all times the aggregate amounts allocated to all Rate Tranches in respect of a Receivable Pool of any Purchaser shall equal the aggregate Investment of such Purchaser in respect of such Receivable Pool.

 

Appendix A-42

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“Transaction Documents” means this Agreement, the Sale Agreement, the Fee Letters, the Lock-Box Agreements, any Eligible Interest Rate Cap, the Control Agreement, Sellers’ limited liability company agreements, the Performance Support Agreement, the Intercreditor Agreement and all other documents, agreements and certificates to be executed and delivered by any Seller, Servicer, any Originator or Sprint Corporation in connection herewith or in connection with any of the foregoing.

“TransCentra” means TransCentra, Inc. or any other Collections processing agent performing similar duties with respect to any TransCentra Serviced Lock-Box engaged by the Servicer in accordance with Section 8.1(c).

“TransCentra Serviced Lock-Boxes” means each of the following post office box addresses: (a) P.O. Box 4191, Carol Stream, IL 60197-4191; (b) P.O. Box 4181, Carol Stream, IL 60197-4181; and (c) P.O. Box 54977, Los Angeles, CA 90054-0977.

“TransCentra Sub-Servicing Agreement” means, collectively, the one or more agreements between TransCentra and Sprint Spectrum (or its Affiliates), pursuant to which TransCentra processes cash, checks, instruments or other remittances received from time to time in the TransCentra Serviced Lock-Boxes.

“Trigger Rate” means the rate equal to 0.75% per annum.

“UCC” means, in respect of each state in the United States of America, the Uniform Commercial Code as from time to time in effect in such state.

“Unfunded Fee” is defined in the Fee Letters.

“Unmatured Event of Termination” means any event which, with the giving of notice or lapse of time, or both, would become an Event of Termination or Non-Reinvestment Event.

“Unpaid Balance” means, as of any time, (i) with respect to any SCC Receivable, the sum of (a) the unpaid amount thereof, plus (b) the unpaid amount of all finance charges, interest payments and other amounts actually accrued thereon at such time, but excluding, in the case of clause (b) above, all late payment charges, delinquency charges, and extension or collection fees, (ii) with respect to any ISC Receivable, an amount equal to the sum of all remaining unpaid monthly installment payments due from the applicable Obligor under the ISC Contracts which payments give rise to such ISC Receivable, which cannot be terminated or cancelled in connection with the ISC Upgrade Program, and which, for the avoidance of doubt, shall not include any additional monthly payments that are required to be made in order for an Obligor to have the right to trade in its qualifying wireless communication device under the ISC Upgrade Program, and (iii) with respect to any Lease Receivable, an amount equal to the sum of all remaining unpaid monthly lease payments due currently or in the future from the applicable Obligor under the related Lease Contract, which payments cannot be terminated or cancelled in connection with the Lease Upgrade Program, and which, for the avoidance of doubt, shall not include any optional purchase price payable in respect of the Lease Device, any lease payments which arise after the relevant Obligor has the right to terminate the Lease Contract or the residual value of the related Lease Device. If at any time an Obligor has not elected to participate in the ISC Upgrade Program or Lease Upgrade Program, as applicable, with respect to an ISC

 

Appendix A-43

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Receivable or Lease Receivable, as applicable, but retains the right to make such election in accordance with the terms of the ISC Upgrade Program or Lease Upgrade Program, as applicable, or the related ISC Contract or Lease Contract, as applicable, such ISC Receivable’s or Lease Receivable’s Unpaid Balance shall be calculated as if such Obligor had elected to participate in the ISC Upgrade Program or Lease Upgrade Program. The “Unpaid Balance” of any ISC Receivable or Lease Receivable that is no longer an Eligible Receivable shall be equal to zero (0).

“U.S. Dollars” means dollars in lawful money of the United States of America.

“Victory” means Victory Receivables Corporation.

“Voting Securities” of any Person means the stock or other ownership or equity interests, of whatever class or classes, the holders of which ordinarily have the power to vote for the election of the members of the board of directors, managers, trustees or other voting members of the governing body of such Person (other than stock or other ownership or equity interests having such power only by reason of the happening of a contingency).

“Weighted Average Advance Rate” means, (a) in respect of the ISC Receivable Pool as of any date of determination, the percentage obtained by (i) multiplying the ISC Advance Rate applicable to each Eligible Receivable in the ISC Receivable Pool with a fraction, (x) the numerator of which is the Unpaid Balance of such Eligible Receivable and (y) the denominator of which is the aggregate Unpaid Balance of all Eligible Receivables in the ISC Receivable Pool and (ii) summing all of the products calculated pursuant to clause (i), and (b) in respect of the Lease Receivable Pool as of any date of determination, the percentage obtained by (i) multiplying the Lease Advance Rate applicable to each Eligible Receivable in the Lease Receivable Pool with a fraction, (x) the numerator of which is the Unpaid Balance of such Eligible Receivable and (y) the denominator of which is the aggregate Unpaid Balance of all Eligible Receivables in the Lease Receivable Pool and (ii) summing all of the products calculated pursuant to clause (i).

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

“Yield” means, for any day with respect to any Rate Tranche for a Receivable Pool:

{(PTI x YR)/360} + LF

 

 

Appendix A-44

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“Yield Period” means (x) with respect to any Rate Tranche relating to a Receivable Pool that is funded or maintained other than through the issuance of Commercial Paper Notes:

(a) the period commencing on the date of the initial Purchase of the Asset Portfolio relating to such Receivable Pool, the making of such Liquidity Advance or funding under such Enhancement Agreement or the creation of such Rate Tranche pursuant to Section 2.1 (whichever is latest) and ending such number of days thereafter as the applicable Purchaser Agent shall select in its sole discretion; and

(b) each period commencing on the last day of the immediately preceding Yield Period for the related Rate Tranche and ending such number of days thereafter as the applicable Purchaser Agent shall select in its sole discretion;

provided, that:

(i) any such Yield Period (other than a Yield Period consisting of one day) which would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day;

(ii) in the case of Yield Periods of one day for any Rate Tranche, (A) the initial Yield Period shall be the date such Yield Period commences as described in clause (a) above; and (B) any subsequently occurring Yield Period which is one day shall, if the immediately preceding Yield Period is more than one day, be the last day of such immediately preceding Yield Period, and if the immediately preceding Yield Period is one day, shall be the next day following such immediately preceding Yield Period; and

(iii) in the case of any Yield Period for any Rate Tranche which commences before the Purchase Termination Date and would otherwise end on a date occurring after the Purchase Termination Date, such Yield Period shall end on the Purchase Termination Date and the duration of each such Yield Period which commences on or after the Purchase Termination Date for such Rate Tranche shall be of such duration as shall be selected by the applicable Purchaser Agent; and

(y) with respect to any Rate Tranche that is funded or maintained through the issuance of Commercial Paper Notes, each Settlement Period.

“Yield Rate” means for any Rate Tranche on any day:

(a) in the case of a Rate Tranche funded by a Conduit Purchaser through the issuance of Commercial Paper Notes, the applicable CP Rate; and

(b) in the case of a Rate Tranche not funded by Commercial Paper Notes, the applicable Bank Rate for such Rate Tranche;

provided, that:

 

Appendix A-45

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(i) on any day as to any Rate Tranche which is not funded by Commercial Paper Notes, the Yield Rate shall equal the applicable Base Rate if (A) the applicable Administrative Agent does not receive notice or determine, by 12:00 noon (New York City time) on the third Business Day prior to the first day of the related Yield Period, that such Rate Tranche shall not be funded by Commercial Paper Notes or (B) the applicable Administrative Agent determines that (I) funding that Rate Tranche on a basis consistent with pricing based on the applicable Bank Rate would violate any applicable Law or (II) that deposits of a type and maturity appropriate to match fund such Rate Tranche based on the applicable Bank Rate are not available; and

(ii) on any day when any Event of Termination, Collection Control Event or Non-Reinvestment Event shall have occurred that remains continuing or the Purchase Termination Date has occurred by virtue of clause (b) of the definition thereof, the applicable Yield Rate for each Rate Tranche means a rate per annum equal to the higher of (A) the applicable Base Rate, plus 2.00% per annum and (B) the rate per annum otherwise applicable to such Rate Tranche during the current Yield Period or Settlement Period, plus 2.00% per annum.

B. Other Interpretive Matters.

All accounting terms defined directly or by incorporation in this Agreement or the Sale Agreement shall have the defined meanings when used in any certificate or other document delivered pursuant thereto unless otherwise defined therein. For purposes of this Agreement, the Sale Agreement and all such certificates and other documents, unless the context otherwise requires: (a) except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; (b) terms defined in Article 9 of the UCC and not otherwise defined in such agreement are used as defined in such Article; (c) references to any amount as on deposit or outstanding on any particular date means such amount at the close of business on such day; (d) the words “hereof,” “herein” and “hereunder” and words of similar import refer to such agreement (or the certificate or other document in which they are used) as a whole and not to any particular provision of such agreement (or such certificate or document); (e) references to any Section, Schedule or Exhibit are references to Sections, Schedules and Exhibits in or to such agreement (or the certificate or other document in which the reference is made), and references to any paragraph, subsection, clause or other subdivision within any Section or definition refer to such paragraph, subsection, clause or other subdivision of such Section or definition; (f) the term “including” means “including without limitation”; (g) references to any Law refer to that Law as amended from time to time and include any successor Law; (h) references to any agreement refer to that agreement as from time to time amended, restated, extended or supplemented or as the terms of such agreement are waived or modified in accordance with its terms; (i) references to any Person include that Person’s permitted successors and assigns; (j) headings are for purposes of reference only and shall not otherwise affect the meaning or interpretation of any provision hereof; (k) unless otherwise provided, in the calculation of time from a specified date to a later specified date, the term “from” means “from and including”, and the terms “to” and “until” each means “to but excluding”; (l) if any calculation to be made hereunder refers to a Settlement Period (or any portion thereof) that would have occurred prior to the Closing Date, the Restatement Effective

 

Appendix A-46

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Date or the Second Restatement Effective Date, such reference shall be deemed to be a reference to a calendar month; (m) terms in one gender include the parallel terms in the neuter and opposite gender; and (n) the term “or” is not exclusive.

 

Appendix A-47

Exhibit 10.7

EXECUTION VERSION

 

 

 

SECOND AMENDED AND RESTATED RECEIVABLES SALE AND CONTRIBUTION AGREEMENT

dated as of November 19, 2015

between

SPRINT SPECTRUM L.P.,

as an Originator and as Servicer

and the

OTHER ORIGINATORS FROM TIME TO TIME PARTY HERETO,

as Originators

and

THE SPES FROM TIME TO TIME PARTY HERETO,

as Buyers and Contributees

 

 

 

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TABLE OF CONTENTS

 

				Page
ARTICLE I     DEFINITIONS AND RELATED MATTERS					1
SECTION 1.1		Defined Terms			1
SECTION 1.2		Other Interpretive Matters			2
ARTICLE II     AGREEMENT TO PURCHASE, SELL AND CONTRIBUTE					2
SECTION 2.1		Purchase, Sale and Contribution			2
SECTION 2.2		Timing of Purchases			3
SECTION 2.3		Purchase Price and Contribution			3
SECTION 2.4		No Recourse or Assumption of Obligations			4
SECTION 2.5		Assignment and Assumption of Related Lease Contract Obligations			4
ARTICLE III     ADMINISTRATION AND COLLECTION					5
SECTION 3.1		Sprint Spectrum to Act as Servicer, Contracts			5
SECTION 3.2		Deemed Collections			5
SECTION 3.3		Actions Evidencing Purchases			7
SECTION 3.4		Application of Collections			8
ARTICLE IV     REPRESENTATIONS AND WARRANTIES					8
SECTION 4.1		Mutual Representations and Warranties			8
SECTION 4.2		Additional Representations and Warranties of the Originators			10
ARTICLE V     GENERAL COVENANTS					13
SECTION 5.1		Mutual Covenants			13
SECTION 5.2		Additional Covenants of the Originators			13
SECTION 5.3		Reporting Requirements			16
SECTION 5.4		Negative Covenants of Each Originator			19
SECTION 5.5		Collections Outside the Lockbox Accounts			21
SECTION 5.6		Excluded Originator			21
ARTICLE VI     TERMINATION OF PURCHASES					23
SECTION 6.1		Voluntary Termination			23
SECTION 6.2		Automatic Termination			23
ARTICLE VII     INDEMNIFICATION					23
SECTION 7.1		Each Originator’s Indemnity			23
SECTION 7.2		Contribution			25

 

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TABLE OF CONTENTS

(continued)

 

Page

 

ARTICLE VIII     MISCELLANEOUS					25
SECTION 8.1		Amendments, etc.			25
SECTION 8.2		No Waiver; Remedies			26
SECTION 8.3		Notices, Etc.			26
SECTION 8.4		Binding Effect; Assignment			26
SECTION 8.5		Survival			27
SECTION 8.6		Costs and Expenses			27
SECTION 8.7		Execution in Counterparts; Integration			27
SECTION 8.8		Governing Law			27
SECTION 8.9		Waiver of Jury Trial			28
SECTION 8.10		Consent to Jurisdiction; Waiver of Immunities			28
SECTION 8.11		Confidentiality			28
SECTION 8.12		No Proceedings			28
SECTION 8.13		No Recourse Against Other Parties			29
SECTION 8.14		Grant of Security Interest			29
SECTION 8.15		Severability			29
SECTION 8.16		Restatement; No Novation			29
ANNEX 1		UCC Details Schedule
ANNEX 2		Notice Information
ANNEX 3		Related Originators; Related SPEs; Initial Capital Contributions

 

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SECOND AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT

This SECOND AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT, dated as of November 19, 2015 (this “Agreement”), is among SPRINT SPECTRUM L.P., a Delaware limited partnership (“Sprint Spectrum”), as an originator and as initial servicer (in such capacity, the “Servicer”), THE PERSONS IDENTIFIED ON THE SIGNATURE PAGES HERETO AS ORIGINATORS (together with Sprint Spectrum, the “Originators” and each, an “Originator”), and THE PERSONS IDENTIFIED ON THE SIGNATURE PAGES HERETO AS SPEs (the “SPEs” and each, a “SPE”). For good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS AND RELATED MATTERS

SECTION 1.1 Defined Terms. In this Agreement, unless otherwise specified: (a) capitalized terms are used as defined in (or by reference in) Appendix A to the Second Amended and Restated Receivables Purchase Agreement, dated as of the date hereof (as amended, restated, modified or otherwise supplemented from time to time, the “Receivables Purchase Agreement”) among the SPEs, as sellers, the Servicer, the Conduit Purchasers, Committed Purchasers and Purchaser Agents from time to time party thereto, Mizuho Bank, Ltd. (“Mizuho”), as the Collateral Agent, Mizuho, as the ISC Administrative Agent, The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as the SCC Administrative Agent, and SMBC Nikko Securities America, Inc. (“SMBCSI”), as Lease Administrative Agent, and (b) as used in this Agreement, unless the context otherwise requires, the following terms have the meanings indicated below:

“Contract” means with respect to a Receivable, a contract (including any purchase order or invoice) between any Originator and an Obligor pursuant to which such Receivable arises or which evidences such Receivable. A “related” Contract with respect to a Receivable means a Contract under which such Receivable arises.

“Excluded Receivable” means any SCC Receivable or Lease Receivable that is (i) more than 90 days past due or (ii) is at risk of imminent write-off as determined by the Servicer in accordance with the Credit and Collection Policy as of the Closing Date.

“Originator Indemnified Party” is defined in Section 7.1.

“Preferred Membership Interest” means the preferred membership interest issued by each SPE to its Related Originators.

“Receivable” has the meaning set forth in the Receivables Purchase Agreement; provided, however that, solely for purposes of this Agreement, no Excluded Receivable shall constitute a “Receivable”.

 

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“Related Assets” means (a) with respect to any Receivable, (i) all 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, including 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, (ii) in respect of any ISC Pool Receivable, all interest in any devices (including any such device which is or may become an ISC Surrendered Device in respect of an ISC Pool Receivable which constituted an ISC Upgrade Receivable) relating to any Contract giving rise to such ISC Pool Receivable, (iii) in respect of any Lease Receivable, all interest in the Lease Contract giving rise to such Lease Receivable including the right to terminate such Lease Contract in accordance with the early termination provisions thereof if the Servicer or its Affiliates discontinue the leasing program for Lease Devices and (iv) all guarantees, insurance policies and other agreements or arrangements of whatsoever character from time to time supporting such Receivable whether in connection with the Contract pursuant to which such Receivable was originated, including any obligation of any party under the Transaction Documents to promptly deposit amounts received in respect of Collections to an account, (b) all Collections in respect of, and other proceeds of, the Receivables, (c) all rights and remedies (but none of the obligations) of the Originators, as applicable, under this Agreement and any other rights or assets pledged, sold or otherwise transferred to the SPEs hereunder and (d) all the products and proceeds of any of the foregoing; provided, however, that Related Assets shall not include the Lease Devices.

“Related Originator” means, with respect to any SPE, the Originator or Originators identified as such on Annex 3.

“Related SPE” means, with respect to any Originator, the SPE identified as such on Annex 3.

SECTION 1.2 Other Interpretive Matters. The interpretation of this Agreement, unless otherwise specified, is subject to part (B) of Appendix A to the Receivables Purchase Agreement.

ARTICLE II

AGREEMENT TO PURCHASE, SELL AND CONTRIBUTE

SECTION 2.1 Purchase, Sale and Contribution. Upon the terms and subject to the conditions set forth in this Agreement, each Originator, severally and for itself, (a) hereby sells or contributes, as applicable, to its Related SPE, and each SPE hereby purchases or acquires from its Related Originator, all of such Related Originator’s right, title and interest in, to and under the Receivables and the Related Assets, in each case whether now existing or hereafter arising, acquired, or originated and (b) hereby absolutely assigns by way of capital contribution to its Related SPE, and each SPE hereby accepts such capital contribution and acquires from its Related Originator, all of such Related Originator’s right, title and interest in, to and under the

 

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Lease Devices. For the avoidance of doubt, the Originators are not hereby selling, contributing, pledging or otherwise assigning any Excluded Receivables,

SECTION 2.2 Timing of Purchases and Contributions. All Receivables existing at the opening of each Originator’s business on the Closing Date are hereby sold or contributed, as applicable, to its Related SPE on such date in accordance with the terms hereof. On and after the Closing Date until the Purchase Termination Date, each Receivable shall be deemed to have been sold or contributed by each Originator to its Related SPE immediately (and without further action by any Person) upon the creation or acquisition of such Receivable. The Related Assets with respect to each Receivable shall be sold or contributed at the same time as such Receivable, whether such Related Assets exist at such time or arise, are acquired or are originated thereafter. The Lease Device with respect to each Lease Receivable shall be contributed at the same time as the sale and/or contribution of the Lease Receivables arising under the related Lease Contract.

SECTION 2.3 Purchase Price and Contribution.

(a) The purchase price (“Purchase Price”) for the Receivables and the Related Assets shall be an amount equal to the fair market value of the Receivables and the Related Assets (taking into account a discount for the time value of money, historic and expected losses and the Originators’ obligations pursuant to Section 3.2), which shall initially be 99.75% of the Unpaid Balance of the Receivables (except with respect to Lease Receivables and Related Assets, for which the Purchase Price shall be 95.00% of the Unpaid Balance of the Lease Receivables), or as otherwise agreed to by each Originator and its Related SPE at the time of the purchase or acquisition. The conveyance of the Lease Devices shall be in the form of a capital contribution. To the extent the value of a Receivable and Related Assets exceeds the Purchase Price, such excess shall be deemed a capital contribution to the equity of the Related SPE by the applicable Originator.

(b) [Reserved]

(c) Each SPE shall pay the Purchase Price due to its Related Originator on any day, in the case of Receivables and Related Assets, in immediately available funds; provided, however, to the extent that an SPE does not have sufficient funds available to pay in full such Purchase Price as of the date of its conveyance hereunder, the remaining portion of the Purchase Price shall be deferred until such time as the SPE obtains such available funds, and the Related Originator’s recourse to SPE for such deferred portion of the Purchase Price shall be limited to such available funds; provided, however, that if any such deferred portion has not been paid by the SPE on the date that is ninety (90) days following the sale of the related Receivables hereunder, the Related Originator shall be deemed to have made a capital contribution to the SPE in the amount of such unpaid deferred portion.

(d) Although the Purchase Price for each Receivable (together with the Related Assets, as applicable) coming into existence after the Closing Date shall be due by the applicable SPE to its Related Originator on the date such Receivable comes into existence, and such Purchase Price shall be made as provided in this Section 2.3, final

 

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settlement of the Purchase Price from each SPE to its Related Originator shall be effected on a monthly basis on each Settlement Date with respect to all Receivables coming into existence during the calendar month preceding such Settlement Date and based on the information contained in the Information Package delivered by Servicer pursuant to the Receivables Purchase Agreement for the calendar month then most recently ended. On each Settlement Date, each SPE and its Related Originator (or the Servicer on their behalf) shall cause a reconciliation to be made in respect of all purchases that shall have been made during the calendar month then most recently ended. Although such reconciliation shall be effected on Settlement Dates, increases or decreases in any contribution of capital by any Originator to its Related SPE made pursuant to this Section shall be deemed to have occurred and shall be effective as of the date that the related Receivables came into existence.

SECTION 2.4 No Recourse or Assumption of Obligations. Except as specifically provided in this Agreement, the purchase and sale or contribution, as applicable, of Receivables, Related Assets and Lease Devices under this Agreement shall be without recourse to any Originator. It is the express intent of each of the parties hereto that the transactions hereunder shall constitute absolute and irrevocable true sales or valid contributions, as applicable, of Receivables, Related Assets and Lease Devices by each Originator to its Related SPE (such that the Receivables, Related Assets and Lease Devices, other than those repurchased by the Originators pursuant to the terms hereof, would not be property of any Originator’s estate in the event of any Originator’s bankruptcy).

Except as set forth below in Section 2.5, none of the SPEs, the Administrative Agents, the Collateral Agent, the Purchasers or the other Affected Parties shall assume any obligation or liability in connection with any Receivables, Related Assets or Lease Devices, nor shall any SPE, any Administrative Agent, the Collateral Agent, any Purchaser or the other Affected Parties have any obligation or liability to any Obligor or other customer or client of any Originator (including any obligation to perform any of the obligations of any Originator under any Receivables, Related Assets or Lease Devices).

SECTION 2.5 Assignment and Assumption of Related Lease Contract Obligations. For the purposes of this Agreement, (x) all contributions of contractual and other rights of Originators in connection with Lease Devices and Lease Contracts shall be deemed to be absolute and irrevocable assignments thereof and (y) all acquisitions of contractual obligations under Lease Contracts by SPEs shall be deemed to be assumptions thereof. Subject to the SPEs’ rights of further assignment under the Receivables Purchase Agreement, from and after each date of conveyance of a Lease Contract hereunder (i) the SPEs shall have assumed the rights and obligations of the Originators under the Lease Contracts as lessors thereunder and (ii) each Originator shall relinquish its rights and be released from its obligations under the Lease Contracts.

 

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ARTICLE III

ADMINISTRATION AND COLLECTION

SECTION 3.1 Sprint Spectrum to Act as Servicer, Contracts. (a) Sprint Spectrum shall be responsible for the servicing, administration and collection of the Receivables, Related Assets and Lease Devices for the benefit of each SPE and for the benefit of each Administrative Agent (as SPEs’ assignee) on behalf of the Purchasers, and the Collateral Agent, all on the terms set out in (and subject to any rights to terminate Sprint Spectrum as Servicer and appoint a successor Servicer pursuant to) the Receivables Purchase Agreement.

(b) Each SPE and each Originator hereby grant to Servicer an irrevocable power of attorney, with full power of substitution, coupled with an interest, to take or cause to be taken in the name of such SPE or such Originator, as the case may be, any and all steps which are necessary or advisable to endorse, negotiate, enforce, or otherwise realize on any Collections and any checks, instruments, writing, other proceeds of the Receivables or other right of any kind held or transmitted by such SPE or such Originator or transmitted or received by such SPE or such Originator in connection with any Receivables, Related Assets and Lease Devices (including under the related Records).

(c) Subject to Section 2.5 with respect to Lease Contracts, each Originator shall perform all of its obligations under the Records to the same extent as if the Receivables had not been sold or contributed, as applicable, hereunder and the exercise by the SPEs, the Servicer, the Collateral Agent, each Administrative Agent or any of their respective designees of its rights hereunder or under the Receivables Purchase Agreement shall not relieve any Originator from such obligations.

(d) The Servicer agrees, on behalf of each SPE but subject to the terms of the Receivables Purchase Agreement, to exercise the rights and obligations of the SPEs as lessor under the Lease Contracts.

SECTION 3.2 Deemed Collections. (a) If on any day:

(i) the Unpaid Balance of any Receivable originated by any Originator is:

(A) reduced or cancelled as a result of Dilution; and

(B) less than the amount included in calculating the Net Portfolio Balance in respect of any Receivable Pool for purposes of any Information Package (for any reason other than as a result of such Receivable becoming a Defaulted Receivable or due to the application of Collections received with respect to such Receivable);

 

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(ii) any Receivable (or the terms of any related Contract governing such Receivable or in respect of any ISC Upgrade Receivable, the ISC Upgrade Program or in respect of any Lease Upgrade Receivable, the Lease Upgrade Program) is extended, amended, waived or otherwise modified (except as expressly permitted under Section 8.2(b) of the Receivables Purchase Agreement);

(iii) the due date for payment of any Pool Receivable is extended to a date that is more than 30 days after such Pool Receivable’s original due date;

(iv) there is discovered a breach of any of the representations or warranties of any Originator set forth in Section 4.2(p) with respect to any Receivable as of the date of its transfer hereunder; or

(v) during a Settlement Period, any SCC Receivable or Lease Receivable becomes an Aged Receivable, but only to the extent that the aggregate Unpaid Balance of all Receivables that became Aged Receivables during such Settlement Period does not exceed 8.00% of the aggregate initial Unpaid Balance of Receivables relating to the SCC Receivable Pool or the Lease Receivable Pool, as applicable, conveyed hereunder during such Settlement Period;

then, on such day, the Originator that originated such Receivable or that made such representation or warranty, as the case may be, (or in the case of (i), (ii) or (iii) above with respect to a Lease Receivable, the Servicer) shall be deemed to have received a Collection of such Receivable:

(1) in the case of clause (i) above, in the amount of such reduction or cancellation or the difference between the actual Unpaid Balance (as determined immediately prior to the applicable event) and the amount included in respect of such Receivable in calculating the applicable Net Portfolio Balance or, with respect to clauses (ii) and (iii) above, in the amount that such extension, amendment, modification or waiver affects the Unpaid Balance of the related Receivable in the sole determination of the applicable Administrative Agent, as applicable;

(2) in the case of clause (iv) above, in the amount of the entire Unpaid Balance of the relevant Receivable or Receivables (as determined immediately prior to the applicable event); or

(3) in the case of clause (v) above, in the amount of the entire Unpaid Balance of the relevant Aged Receivable and the related SPE shall, if so requested by the Originator, convey to the Originator such Aged Receivables on such day and prior to their being written off as uncollectible; provided, however, that no such conveyance by the SPE shall occur unless such Receivable has been repurchased by the SPE from the Collateral Agent pursuant to Section 1.4 of the Receivables Purchase Agreement.

Collections deemed received by any Originator under this Section 3.2(a) are herein referred to as “Deemed Collections”. Notwithstanding anything to the contrary set forth herein or any Transaction Documents (including, without limitation, Sections 3.2(a)(ii), 7.3(b), 7.6(a), 7.6(b)

 

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and 8.2(b) in the Receivables Purchase Agreement), neither the Servicer nor any Originator shall permit any Obligor with respect to an ISC Receivable or a Lease Receivable to extend, amend, terminate, waive or otherwise modify the related ISC Contract, the related Lease Contract, the ISC Upgrade Program or the Lease Upgrade Program in a manner that reduces the Unpaid Balance of such ISC Receivable or such Lease Receivable unless prior to any such extension, amendment, termination, waiver or modification a corresponding Deemed Collection payment equal to the amount of such reduction in respect of the related Pool Receivable is made in connection therewith.

(b) Not later than the first Business Day after any Originator is deemed to have received a Deemed Collection pursuant to Section 3.2(a)(i)-(iv), such Originator shall transfer an amount equal to such Deemed Collection to its Related SPE in immediately available funds for application in accordance with the Receivables Purchase Agreement. Deemed Collections under Section 3.2(a)(v) with respect to Aged Receivables shall be settled on the first Settlement Date to occur after the end of such Settlement Period through a dollar-for-dollar decrease in (i) deferred payments of the Purchase Price otherwise payable hereunder, (ii) distributions in respect of the Originator’s equity in the related SPE and/or (iii) in the cash portion of the Purchase Prices for Receivables sold hereunder.

SECTION 3.3 Actions Evidencing Purchases and Contributions. (a) On and following the Closing Date, each Originator and the Servicer shall mark its accounting records evidencing Receivables, Contracts and Lease Devices in a form acceptable to Related SPE, the Collateral Agent and the Administrative Agents, evidencing that the Receivables, Lease Contracts and Lease Devices have been transferred to the Related SPE in accordance with this Agreement, and none of the Originators or Servicer shall change or remove such mark without the consent of the SPEs, the Collateral Agent and each Administrative Agent. In addition, each Originator agrees that from time to time, at its expense, it will promptly execute and deliver all further instruments and documents, and take all further action that the SPEs, the Collateral Agent, any Administrative Agent or any of their respective designees may reasonably request in order to perfect, protect or more fully evidence the purchases, sales and contributions hereunder, or to enable the SPEs, the Collateral Agent and the Administrative Agents to exercise or enforce any of their respective rights with respect to the Receivables, Related Assets and Lease Devices. Without limiting the generality of the foregoing, each Originator will upon the request of the SPEs, the Collateral Agent or any Administrative Agent: (i) authorize and file such financing or continuation statements, or amendments thereto or assignments thereof, and such other instruments or notices, as may be necessary or appropriate; and (ii) at any time during the continuance of an Event of Termination, Collection Control Event or Non-Reinvestment Event, mark its master data processing records evidencing that the Pool Receivables have been sold in accordance with this Agreement.

(b) Each Originator hereby authorizes the SPEs, the Collateral Agent and each Administrative Agent or their respective designees (i) to file one or more financing or continuation statements, and amendments thereto and assignments thereof, relative to all or any of the Receivables, Related Assets and Lease Devices now existing or hereafter arising in the name of such Originator and (ii) to the extent permitted by

 

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the Receivables Purchase Agreement, to notify Obligors of the assignment of the Receivables, Related Assets and Lease Devices.

(c) Without limiting the generality of clause (a) above, each Originator shall authorize and deliver and file or cause to be filed appropriate continuation statements not earlier than six months and not later than three months prior to the fifth anniversary of the date of filing of the financing statements filed in connection with the Closing Date or any other financing statement filed pursuant to this Agreement, if the Final Payout Date shall not have occurred.

SECTION 3.4 Application of Collections. Unless SPE instructs otherwise, any payment by an Obligor in respect of any Receivable shall, except as otherwise specified in writing or otherwise by such Obligor, required by Law or by the underlying Contract, be applied using the same systems, practices and procedures as Servicer uses for the application of payments on all of the receivables serviced by it for itself and its Affiliates whether or not such payments are being made with respect to Receivables.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

SECTION 4.1 Mutual Representations and Warranties. Each Originator represents and warrants to the SPEs, and each SPE represents and warrants to the Originators, as of the date hereof and as of each date in which a purchase and sale or contribution, as applicable, is made hereunder, as follows:

(a) Organization and Good Standing. It has been duly organized in, and is validly existing as a corporation, partnership or limited liability company, as applicable, in good standing under the Laws of its jurisdiction of organization, with power and authority to own its properties and to conduct its business as such properties are presently owned and such business is presently conducted and will be conducted except to the extent that such failure could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(b) Due Qualification. It is duly qualified to do business as a foreign organization in good standing, if applicable, and has obtained all necessary qualifications, licenses and approvals, in all jurisdictions in which the ownership or lease of property or the conduct of its business requires such qualifications, licenses or approvals, except where the failure to be in good standing or to hold any such qualifications, licenses and approvals could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(c) Power and Authority; Due Authorization. It (i) has all necessary power and authority to (A) execute and deliver this Agreement and the other Transaction Documents to which it is a party in any capacity, and (B) carry out the terms of and perform its obligations under the Transaction Documents applicable to it, and (ii) has duly authorized by all necessary corporate, partnership or limited liability company

 

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action, as applicable, the execution, delivery and performance of this Agreement and the other Transaction Documents to which it is a party.

(d) Binding Obligations. This Agreement constitutes, and each other Transaction Document to be signed by such party when duly executed and delivered will constitute, a legal, valid and binding obligation of such party, enforceable against such party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

(e) No Violation. The consummation of the transactions contemplated by this Agreement and the other Transaction Documents and the performance by it of the terms hereof and thereof will not, (i) violate or result in a default under, (A) its articles or certificate of incorporation, by-laws, certificate of formation, limited liability company agreement, partnership agreement or other organizational documents, as applicable, or (B) in the context of the transactions contemplated by this Agreement and the other Transaction Documents, any material indenture, agreement or instrument binding on it, (ii) result in the creation or imposition of any Adverse Claim upon any of its properties pursuant to the terms of any such indenture, agreement or instrument except for any Adverse Claim that could not reasonably be expected to have a Material Adverse Effect, or (iii) violate in any material respect any Law applicable to it or any of its properties.

(f) Bulk Sales Act. No transaction contemplated hereby requires compliance by it with any bulk sales act or similar Law.

(g) No Proceedings. There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to its actual knowledge, threatened against or affecting it (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect , (ii) seeking to prevent the servicing of the Receivables by it or the consummation of the purposes of this Agreement or of any of the other Transaction Documents or (iii) that involve this Agreement or any other Transaction Document.

(h) Governmental Approvals. No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority is required for its due execution, delivery and performance of this Agreement or any other Transaction Document or the transactions contemplated thereby, except for the filing of the UCC financing statements referred to in such Transaction Documents and filings with the SEC to the extent required by applicable Law.

(i) Ordinary Course of Business. Each remittance of Collections on the Receivables transferred by an Originator to an SPE under this Agreement will have been (i) in payment of a debt incurred by such Originator in the ordinary course of

 

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business or financial affairs of such Originator and such SPE and (ii) made in the ordinary course of business or financial affairs of such Originator and such SPE.

SECTION 4.2 Additional Representations and Warranties of the Originators. Each Originator represents and warrants to SPEs as of the date hereof and as of each date on which a purchase and sale or contribution, as applicable, is made hereunder (except for the representation in clause (k) below, which is made only as of the date hereof), as follows:

(a) Valid Sale or Contribution. This Agreement constitutes a valid sale, transfer and assignment or contribution, as applicable, of the Receivables originated by it and the Related Assets and Lease Devices, to its Related SPE, or alternatively a grant of a valid security interest in such Receivables and Related Assets and Lease Devices, to its Related SPE, enforceable against creditors of, and purchasers from it.

(b) Use of Proceeds. The use of all funds obtained by it under this Agreement will not conflict with or contravene any of Regulations T, U and X promulgated by the Board of Governors of the Federal Reserve System.

(c) Quality of Title. Prior to its sale or contribution to its Related SPE hereunder, each Receivable, together with the Related Assets, and any related Lease Device is owned by it free and clear of any Adverse Claim (other than Permitted Adverse Claims and any Adverse Claims arising under any Transaction Document); when its Related SPE makes a purchase of or acquires such Receivable and Related Assets and any related Lease Device by contribution, such SPE shall have acquired, for fair consideration and reasonably equivalent value, all right, title and interest of such Originator thereto (and such Originator represents and warrants that it has taken all steps under the UCC necessary to transfer such good title and ownership interests in such assets), free and clear of any Adverse Claim (other than Permitted Adverse Claims and any Adverse Claim arising under any Transaction Document); and no valid effective financing statement or other instrument similar in effect covering any Receivable, any interest therein, the Related Assets and any Lease Devices is on file in any recording office, except such as may be filed (i) in favor of such Originator or its Related SPE in accordance with the Contracts or any Transaction Document (and assigned to the Collateral Agent), (ii) in favor of its Related SPE in accordance with this Agreement, (iii) in connection with any Adverse Claim arising solely as the result of any action taken by any Purchaser (or any assignee thereof) or by the Collateral Agent or (iv) in favor of any Purchaser or Administrative Agent in accordance with the Receivables Purchase Agreement or any Transaction Document. Without limiting the foregoing, no Chattel Paper evidencing Receivables (x) is in the possession of (or, in the case of electronic Chattel Paper, under the control of) any Person other than the Servicer (for the benefit of the Collateral Agent and applicable SPE), the Collateral Agent or the Collateral Agent’s designee or (y) has any marks or notations indicating that it has been pledged, assigned or otherwise conveyed to any Person other than an SPE or the Collateral Agent.

(d) Financial Condition. All financial statements of Sprint Corporation and its Subsidiaries (including the notes thereto) delivered to the Collateral Agent, each

 

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Administrative Agent and each Purchaser Agent pursuant to Section 7.5(a) of the Receivables Purchase Agreement, present fairly, in all material respects, the actual financial position and results of operations and cash flows of Sprint Corporation and its Subsidiaries as of the dates and for the periods presented or provided (other than in the case of annual financial statements, in each case in accordance with GAAP, subject to year-end audit adjustments and the absence of footnotes in the case of all interim balance sheets of Sprint Corporation).

(e) Accurate Reports. None of the reports, financial statements, certificates or other information (other than forward-looking statements, projections and statements of a general industry nature, as to which it represents only that it acted in good faith and utilized assumptions reasonable at the time made and due care in the preparation of such statement or projection) furnished or to be furnished by or on behalf of it (including Information Packages furnished by the Servicer and each report furnished pursuant to Section 3.1(a) of the Receivables Purchase Agreement) in writing (including, without limitation, by electronic delivery) to the Collateral Agent, any Administrative Agent, any Purchaser or any Purchaser Agent in connection with the Receivables Purchase Agreement or any other Transaction Document or any amendment thereto or delivered hereunder or thereunder (as modified or supplemented by other information so furnished) taken together with any information contained in the public filings made by Sprint Corporation with the SEC pursuant to the 1934 Act contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not materially misleading.

(f) UCC Details. Its true legal name as registered in the sole jurisdiction in which it is organized and the jurisdiction of such organization are specified in Annex 1 and the offices where it keeps all its Records are located at the addresses specified in Schedule 6.1(l) of the Receivables Purchase Agreement (or at such other locations, notified to the Collateral Agent in accordance with Section 7.1(f) of the Receivables Purchase Agreement), in jurisdictions where all action required by Section 8.5 of the Receivables Purchase Agreement has been taken and completed. Except as described in Annex 1, It has never had any, trade names, fictitious names, assumed names or “doing business as” names and is “located” in the jurisdiction specified in Annex 1 for purposes of Section 9-307 of the UCC. It is organized only in a single jurisdiction.

(g) Lock-Box Accounts. The names and addresses of all Lock-Box Banks, together with the account numbers of the Lock-Box Accounts at such Lock-Box Banks, are specified in Schedule 6.1(m) of the Receivables Purchase Agreement (or have been notified to and approved by the Collateral Agent and each Administrative Agent in accordance with Section 7.3(d) of the Receivables Purchase Agreement).

(h) Servicing Programs. No license or approval is required for the SPEs’, the Collateral Agent’s or any Administrative Agent’s use of any software or other computer program used by such Originator, the Servicer or any sub-servicer in the servicing of the Receivables originated by such Originator, other than under the

 

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Amdocs Sub-Servicing Agreement and those which have been obtained and are in full force and effect.

(i) Adverse Change. (i) Since the Closing Date, there has been no material adverse change in the value, validity, collectability or enforceability of the Receivables originated by such Originator and (ii) Since June 30, 2015, there has been no Material Adverse Effect with respect to such Originator.

(j) Credit and Collection Policies; Law. It has complied with the Credit and Collection Policies in all material respects and such policies have not changed in any material respect since the Second Restatement Effective Date except as permitted under Sections 7.3(c) and 7.5(g) of the Receivables Purchase Agreement. It has complied with all applicable Law except where the failure to do so, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

(k) Investment Company Act. It is not (i) required to register as an “Investment Company” or (ii) “controlled” by an “Investment Company”, in each case, under (and as defined in) the Investment Company Act.

(l) ERISA. No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect; provided, however, that the occurrence or reasonable expectation of the occurrence of any ERISA Event that could reasonably be expected to result in the imposition of a lien by the PBGC on the assets of any SPE shall be considered as reasonably expected to result in a Material Adverse Effect.

(m) Tax Returns and Payments. It has filed all federal income tax returns and all other material tax returns that are required to be filed by it and has paid all taxes due pursuant to such returns or pursuant to any assessment received by it, except (i) for any such taxes or assessments, if any, that are being appropriately contested in good faith by appropriate proceedings and with respect to which adequate reserves in conformity with GAAP have been provided, or (ii) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect. No tax lien has been filed, and, to the actual knowledge of the Servicer, no claim is being asserted, with respect to any such tax or assessment.

(n) No Event of Termination. No event has occurred and is continuing and or would result from the sale, transfer and assignment or contribution of the Receivables originated by such Originator, that constitutes or may reasonably be expected to constitute an Event of Termination, Unmatured Event of Termination, Collection Control Event or Non-Reinvestment Event.

(o) No Sanctions. It is not a Sanctioned Person. To its knowledge after due inquiry, no Obligor was a Sanctioned Person at the time of such Originator’s origination of any Receivable owing by such Obligor. It and its Affiliates: (i) have less than 15% of their assets in Sanctioned Countries; and (ii) derive less than 15% of their operating

 

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income from investments in, or transactions with Sanctioned Persons or Sanctioned Countries. Neither it nor any of its Subsidiaries engages in activities related to Sanctioned Countries except for such activities as are (A) specifically or generally licensed by OFAC, or (B) otherwise in compliance with OFAC’s sanctions regulations.

(p) Eligible Receivables. Each Receivable listed as an Eligible Receivable in any Information Package or included as an Eligible Receivable in the calculation of Net Portfolio Balance for any Receivable Pool on any date is an Eligible Receivable as of the effective date of the information reported in such Information Package or as of the date of such calculation, as the case may be.

ARTICLE V

GENERAL COVENANTS

SECTION 5.1 Mutual Covenants. At all times prior to the Final Payout Date, each SPE and each Originator shall:

(a) Compliance with Laws, Etc. Comply with all applicable Laws, its Receivables and the related Contracts, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

(b) Preservation of Existence. Except as expressly permitted by Section 5.4(e) with respect to the Originators, preserve and maintain its existence, rights, franchises and privileges in the jurisdiction of its organization, and qualify and remain qualified in good standing in each jurisdiction where the failure to qualify or preserve and maintain such existence, rights, franchises, privileges and qualification could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(c) Separateness. Not take any actions inconsistent with the terms of Section 7.8 of the Receivables Purchase Agreement or any SPE’s limited liability company agreement.

SECTION 5.2 Additional Covenants of the Originators. At all times prior to the Final Payout Date, each Originator shall:

(a) Inspections. (i) From time to time, upon reasonable prior notice, upon the reasonable request by any Administrative Agent and during regular business hours permit its Related SPE, the Collateral Agent, any Administrative Agent and the Purchaser Agents, or any of their respective agents or representatives to visit and inspect its properties, to examine and make copies of and abstracts from all Records and to discuss its affairs, finances and condition with its officers and independent accountants with respect to the Pooled Receivables, the Related Assets and Lease Devices, all at such reasonable times and as often as reasonably requested; provided that, information relating to specific Receivables shall be limited to the Sprint Information and, during the continuance of an Event of Termination or Non-

 

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Reinvestment Event, such other information (including Subscriber Confidential Information) that the Collateral Agent or any Administrative Agent determines in good faith is necessary or desirable to exercise or enforce the Collateral Agent’s, the Administrative Agents’, the Purchasers’ or the Purchaser Agents’ rights and remedies hereunder and in such Receivables; provided further that, unless an Event of Termination, Non-Reinvestment Event, Collection Control Event or Unmatured Event of Termination has occurred and is continuing at the time of such audit/inspection, (i) such Originator shall only be required to reimburse reasonable documented out-of-pocket costs and expenses related to one such inspection during any 12-month period, which inspection shall be requested and scheduled by the Administrative Agents acting together and (ii) the Collateral Agent, the Administrative Agents and the Purchaser Agents shall use commercially reasonable efforts to coordinate any such inspection to minimize disruptions to the Originators and avoid duplication of Originators’ actions required to comply with such inspection.

(b) Keeping of Records and Books of Account; Delivery. Maintain and implement, or cause to be maintained and implemented, administrative and operating procedures (including an ability to recreate records evidencing the Receivables, Related Assets and Lease Devices in the event of the destruction of the originals thereof, backing up on at least a daily basis on a separate backup computer from which electronic file copies can be readily produced and distributed to third parties being agreed to suffice for this purpose), and keep and maintain, or cause to be kept and maintained (or transferred to Servicer), all documents, books, records and other information necessary or advisable for (i) the collection of all Receivables, Related Assets and Lease Devices (including records adequate to permit the daily identification of each new Receivable and all Collections of and adjustments to each existing Receivable received, made or otherwise processed on that day), and (ii) the identification of the portion of the Collections received from each Obligor that represent (x) Collections of an ISC Receivable from such Obligor, (y) Collections of an SCC Receivable from such Obligor and (z) Collections of a Lease Receivable from such Obligor.

(c) Performance and Compliance with Receivables and Contracts. At its expense, timely and fully perform and comply in all material respects with all provisions, covenants and other promises required to be observed by it under the Contracts and the Receivables (other than obligations with respect to the Lease Contracts, which have been transferred hereunder). Except as set forth in Section 2.5, no SPE shall assume any obligation or liability with respect to any Receivables, Related Assets or the Lease Devices, nor shall any SPE be obligated to perform any of the obligations of the Originators thereunder.

(d) Location of Records. Keep its chief executive office and principal place of business, and the offices where it keeps its Records (and any original documents relating thereto), at the address of such Originator referred to in Annex 1 or, upon thirty (30) days’ prior written notice to the Collateral Agent, each Administrative Agent, at such other locations in jurisdictions where all action required by Section 8.5 of the Receivables Purchase Agreement shall have been taken and completed.

 

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(e) Credit and Collection Policies. Until such Receivable is sold or contributed to its Related SPE, comply in all material respects with its Credit and Collection Policy in regard to each Receivable, the Related Assets and Lease Devices and not agree to any material changes thereto except as expressly permitted hereunder and under the Receivables Purchase Agreement.

(f) Collections. Except as otherwise permitted under Section 5.5 of this Agreement, instruct all Obligors to cause all Collections of Receivables, the Related Assets and Lease Devices to be deposited directly in a Lock-Box Account covered by a Lock-Box Agreement. In the event such Originator or any of its Affiliates receives any Collections such Person will promptly (but not later than three (3) Business Days following receipt) deposit such Collections in a Lock-Box Account covered by a Lock-Box Agreement, except to the extent Servicer is permitted to commingle such Collections with its own funds pursuant to Section 1.3(a)(i) of the Receivables Purchase Agreement. The Originators shall cooperate with the SPEs and the Servicer in collecting amounts due from Obligors in respect of the Receivables. Each Originator hereby grants to the SPEs and the Servicer an irrevocable power of attorney, with full power of substitution, coupled with an interest, to take or cause to be taken in the name of such Originator all steps necessary or advisable to endorse, negotiate or otherwise realize on any Collections and any checks, instruments or other proceeds of the Receivables held or transmitted by such Originator or transmitted or received by such SPE (whether or not from such Originator) in connection with any Receivable transferred by it hereunder.

(g) Agreed Upon Procedures. Cooperate reasonably with Servicer and the designated accountants for each annual agreed upon procedures report required pursuant to Section 7.5(f) of the Receivables Purchase Agreement.

(h) Frequency of Billing. Prepare and deliver (or cause to be prepared and delivered) invoices with respect to all Receivables no less frequently than as required under the Contract related to such Receivable.

(i) Location. Each Originator shall at all times maintain its jurisdiction of organization and its chief executive office within a jurisdiction in the United States in which Article Nine of the UCC (2001 or later revision) is in effect.

(j) Tax Matters. Each Originator shall pay all applicable taxes required to be paid by it when due and payable in connection with the transfer of the Receivables, Related Assets and Lease Devices, and acknowledges that neither the Collateral Agent, any Administrative Agent nor any Purchaser shall have any responsibility with respect thereto. Each Originator shall pay and discharge, or cause the payment and discharge of, all federal income taxes (and all other material taxes) when due and payable, except (i) such as may be paid thereafter without penalty, (ii) such as may be contested in good faith by appropriate proceeding and for which an adequate reserve has been established and is maintained in accordance with GAAP or (iii) where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

 

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(k) Credit Risk Retention. (i) at all times own a net economic interest in the Pool Receivables sold or contributed by such Originator to its Related SPE hereunder in an amount at least equal to 5% of the Unpaid Balance of such Pool Receivables at such time, in the form of a first loss tranche under paragraph 1(d) of Article 405 of the CRR or in accordance with the Credit Risk Retention Rules, by holding its equity interest in its Related SPE and/or by retaining its right to receive any deferred portion of the Purchase Price for such Pool Receivables as contemplated by Section 2.3(c), (ii) not change the manner in which it retains such net economic interest, except to the extent permitted under paragraph 1 of Article 405(1) of the CRR or the Credit Risk Retention Rules, and (iii) not enter into any credit risk mitigation, short position or any other hedge with respect to such net economic interest, except to the extent permitted under paragraph 1 of Article 405(1) of the CRR or the Credit Risk Retention Rules. Each Originator shall, at all times prior to the Final Payout Date, provide to the Servicer on a monthly basis, a confirmation from such Originator as to continued compliance with the agreements stated in the preceding clauses (i), (ii) and (iii). The Originators shall cooperate with each Purchaser (including by providing such information and entering into or delivering such additional agreements or documents reasonably requested by such Purchaser or its Purchaser Agent) to the extent reasonably necessary to assure such Purchaser that the Originators retain credit risk in the amount and manner required by the CRR and the Credit Risk Retention Rules and to permit such Purchaser to perform its due diligence and monitoring obligations (if any) under the CRR and the Credit Risk Retention Rules; provided however, that none of the Originators or the SPEs shall be required to take actions that could cause a change in the accounting or tax treatment of the transactions contemplated by this Agreement. Each Purchaser and each Purchaser Agent is a third party beneficiary of this Section 5.2(k).

(l) Chattel Paper. Each Originator shall cause the Servicer to maintain possession of all Chattel Paper evidencing Pool Receivables as bailee for the applicable SPEs and the Collateral Agent (as assignee of the applicable SPEs) except as otherwise permitted pursuant to Section 7.1(p) of the Receivables Purchase Agreement. No Originator shall permit any such Chattel Paper to be in the possession of (or, in the case of electronic Chattel Paper, under the control of) any Person other than the Servicer (for the benefit of the applicable SPEs and the Collateral Agent, as assignee of such SPEs), the Collateral Agent or the Collateral Agent’s designee. No Originator (other than Sprint Spectrum, in its capacity as Servicer) shall permit any such Chattel Paper to be in its possession (or, in the case of electronic Chattel Paper, under its control).

SECTION 5.3 Reporting Requirements. From the date hereof until the Final Payout Date, each Originator will furnish (or cause to be furnished) to the SPEs, the Collateral Agent, each Administrative Agent and each Purchaser Agent each of the following, unless the Collateral Agent, each Administrative Agent and the Required Purchasers otherwise consent in writing:

(a) Financial Statements. (i) Quarterly Financial Statements. Within 45 days after the close of each of the first three fiscal quarters of each fiscal year of Sprint Corporation, Sprint Corporation’s Form 10-Q as filed with the SEC.

 

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(ii) Annual Financial Statements. Within 75 days after the end of each fiscal year of Sprint Corporation, the audited consolidated statements of operations, changes in stockholders’ equity and cash flows of Sprint Corporation and its Subsidiaries for such fiscal year, and the related audited consolidated balance sheet for Sprint Corporation and its Subsidiaries as of the end of such fiscal year, setting forth in each case in comparative form the corresponding figures for the previous fiscal year, all reported on by Deloitte LLP, or other independent public accountants of recognized national standing (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit), to the effect that such audited consolidated financial statements present fairly in all material respects the financial condition and results of operations of Sprint Corporation and its Subsidiaries on a consolidated basis in accordance with GAAP consistently applied.

(b) Other Information.

(i) promptly after the same become publicly available, copies of all proxy statements, financial statements and regular or special reports which Sprint Corporation files with the SEC or with any national securities exchange or distributed generally to its shareholders, as the case may be;

(ii) promptly following a request therefor, any documentation or other information (including with respect to any Originator, any Seller or Sprint Corporation) that any SPE, the Collateral Agent, any Administrative Agent or any Purchaser reasonably requests in order to comply with its ongoing obligations under the applicable “know your customer” and anti money laundering rules and regulations, including the USA PATRIOT Act; and

(iii) from time to time such further information regarding the business, affairs and financial condition of Sprint Spectrum, Sprint Corporation and Originators as any SPE, the Collateral Agent, or any Administrative Agent shall reasonably request; provided that, information relating to specific Receivables shall be limited to the Sprint Information and, during the continuance of an Event of Termination or Non-Reinvestment Event, such other information (including Subscriber Confidential Information) that the Collateral Agent or any Administrative Agent determines in good faith is necessary or desirable to exercise or enforce its, the Purchasers’ and the Purchaser Agents’ rights and remedies hereunder and in such Receivables.

Documents and information required to be delivered pursuant to this Section 5.3 (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date on which Sprint Corporation posts such documents, or provides a link thereto, on its website or another relevant website, if any, to which the applicable party has access (whether a commercial, third-party website or whether sponsored by such party). Notwithstanding anything contained herein, in every instance Sprint Spectrum shall be

 

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required to provide documents, information, and certificates required by or requested pursuant to Sections 5.3(b)(ii) and 5.3(b)(iii) to the Collateral Agent and each Administrative Agent.

(c) ERISA. Written notice of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the Sprint Corporation, Sprint Spectrum, the Servicer, any Originator, or any of their respective ERISA Affiliates, in an aggregate amount exceeding $200,000,000.

(d) Events of Termination, Etc. Notice of the occurrence of any Event of Termination, Unmatured Event of Termination, Collection Control Event, Non-Reinvestment Event, Amdocs Performance Event or Amdocs Event not later than two (2) Business Days after such event occurs.

(e) Litigation. As soon as possible, and in any event within two (2) Business Days of actual knowledge of any Responsible Officer thereof, notice of any material litigation, investigation or proceeding initiated against any SPE which has had or could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(f) Credit and Collection Policy. At least thirty (30) days prior to (i) the effectiveness of any material change in or material amendment to such Originator’s Credit and Collection Policy, a description or, if available, a copy of the Credit and Collection Policy then in effect and a written notice (A) indicating such change or amendment and (B) if such proposed change or amendment could reasonably be expected to adversely affect the value, validity, collectability or enforceability of the Receivables or decrease the credit quality of any newly created Receivables (in each case, taken as a whole), requesting the Collateral Agent’s, each Administrative Agent’s and each Purchaser Agent’s consent thereto.

(g) Other Information. Promptly, from time to time, such Records or other information, documents, records or reports respecting the condition or operations, financial or otherwise, of such Originator as any SPE, the Collateral Agent, any Administrative Agent or any Purchaser Agent may from time to time reasonably request relating to the SPEs, the transactions contemplated hereby, the Receivables, the Related Assets and Lease Devices in order to protect the interests of the SPEs, the Collateral Agent, the applicable Administrative Agent, any Purchaser Agent or any Purchaser under or as contemplated by this Agreement or any other Transaction Document or to comply with any Law or any regulatory authority, provided that, information relating to specific Receivables shall be limited to the Sprint Information and, during the continuance of an Event of Termination or Non-Reinvestment Event, such other information (including Subscriber Confidential Information) that the Collateral Agent or the applicable Administrative Agent determines in good faith is necessary or desirable to exercise or enforce its, the Purchasers’ and the Purchaser Agents’ rights and remedies hereunder and in such Receivables.

 

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SECTION 5.4 Negative Covenants of Each Originator. From the date hereof until the Final Payout Date, each Originator shall not:

(a) Sales, Adverse Claims, Etc. Except as otherwise explicitly provided herein and in the other Transaction Documents, sell, assign or otherwise dispose of, or create or suffer to exist any Adverse Claim other than (x) any Permitted Adverse Claim, (y) any Adverse Claim arising under any Transaction Document, and (z) any Adverse Claim arising solely as the result of any action taken by any Purchaser (or any assignee thereof), any Purchaser Agent, the Collateral Agent or by any Administrative Agent upon or with respect to (A) any Receivable, Related Asset, Lease Device or any interest therein, (B) any Lock-Box Account to which any Collections of any of the foregoing are sent, (C) any right to receive income or proceeds (other than the purchase price paid to such Originator hereunder or any proceeds of Collections remitted to such Originator hereunder to the extent such Originator owes no other amounts hereunder) from or in respect of any of the foregoing or (D) prior to the Final Payout Date, its equity interest (if any) in its Related SPE; provided however, that (i) rights of customers under Lease Contracts to use Lease Devices shall not constitute an Adverse Claim, and (ii) subject to the consent of each Administrative Agent and the Collateral Agent, each Originator may pledge its right, title and interest in and to the Preferred Membership Interest issued to it by the Related SPE.

(b) Extension or Amendment of Receivables. Except as permitted by the Servicer pursuant to Section 8.2(b) of the Receivables Purchase Agreement, extend, amend or otherwise modify the terms of any Receivable originated by such Originator or amend, modify or waive any term or condition of any related Contract (including without limitation, in respect of any ISC Contract, the Designated Installment Payment Term or the terms of the ISC Upgrade Program and including, in respect of any Lease Contract, the Designated Lease Payment Term or terms of the Lease Upgrade Program), in each case unless on or prior to any such extension, amendment or modification, a corresponding Deemed Collection payment in respect of the related Receivable is made in connection therewith. Make or consent to any change in the ISC Upgrade Program or the Lease Upgrade Program if such proposed change or amendment could reasonably be expected to result in a Material Adverse Effect or permit an Obligor to elect to have a right to trade in its qualifying wireless communication device in satisfaction of such ISC Receivable or such Lease Receivable after the date that such Obligor entered into an ISC Contract or a Lease Contract, in each case without the prior written consent of the Collateral Agent, each Administrative Agent and each Purchaser Agent, unless a corresponding Deemed Collection payment in respect of the related ISC Receivable or the related Lease Receivable has been made in connection therewith. Without limiting the foregoing (but acknowledging that, having relinquished all rights and obligations under the Lease Contracts, no Originator (other than Sprint Spectrum in its capacity as Servicer) has the right to do so) and notwithstanding any right it may have to do so under the terms of any Lease Contract, no Originator or SPE shall discontinue (or permit to be discontinued) the leasing program under which the Lease Receivables were originated if doing so would result in the forgiveness of the remaining payments due under any Lease Contract.

 

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(c) Change in Credit and Collection Policy or Business. (i) Make or consent to any change in the Credit and Collection Policies if such proposed change or amendment could be reasonably be expected to adversely affect the value, validity, collectability or enforceability of, the Receivables or decrease the credit quality of any newly created Receivables (in each case, taken as a whole) or (ii) make a change in the character of its business that would have or could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, in either case, without the prior written consent of its Related SPE, the Collateral Agent, each Administrative Agent and each Purchaser Agent.

(d) Change in Lock-Boxes. (i) Add any bank or lock-box account not listed on Schedule 6.1(m) of the Receivables Purchase Agreement as a Lock-Box Bank or Lock-Box Account unless the Collateral Agent and each Administrative Agent shall have previously approved and received duly executed copies of all Lock-Box Agreements and/or amendments thereto covering each such new bank and lock-box account and the Intercreditor Agreement shall have been amended or supplemented to cover such Lock-Box Account, (ii) terminate any Lock-Box Bank, Lock-Box Agreement or related Lock-Box Account without the prior written consent of the Collateral Agent and each Administrative Agent and, in each case, only if all of the payments from Obligors that were being sent to such Lock-Box Bank will, upon termination of such Lock-Box Bank and at all times thereafter, be deposited in a Lock-Box Account with another Lock-Box Bank covered by a Lock-Box Agreement and (iii) amend, supplement or otherwise modify any Lock-Box Agreement without the prior written consent of the Collateral Agent and each Administrative Agent.

(e) Mergers, Sales, Etc. Consolidate or merge with or into any other Person or sell, lease or transfer all or substantially all of its property and assets, or agree to do any of the foregoing, unless (i) no Event of Termination, Unmatured Event of Termination, Collection Control Event or Non-Reinvestment Event has occurred and is continuing or would result immediately after giving effect thereto, (ii) if such Originator is not the surviving entity or if such Originator sells, leases or transfers all or substantially all of its property and assets, the surviving entity or the Person purchasing or being leased the assets is a Subsidiary of Sprint Corporation and agrees to be bound by the terms and provisions applicable to such Originator hereunder, (iii) no Change of Control shall result, (iv) Sprint Corporation reaffirms in a writing, in form and substance reasonably satisfactory to the Collateral Agent and each Administrative Agent, that its obligations under the Performance Support Agreement shall apply to the surviving entity and (v) the Collateral Agent and each Administrative Agent receives such additional certifications and opinions of counsel as it shall reasonably request.

(f) Deposits to Accounts. Deposit or otherwise credit, or cause or permit to be so deposited or credited, or direct any Obligor to deposit or remit, any Collection or proceeds thereof to any account (or related lock–box, if applicable) not covered by a Lock-Box Agreement (including any organizational or operational account of any Originator or any of its Affiliates) except in accordance with Section 5.5.

 

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(g) Change in Organization, Etc. Change its jurisdiction of organization or its name, identity or corporate organization structure or make any other change such that any financing statement filed or other action taken to perfect its Related SPE’s or the Collateral Agent’s interests hereunder and under the Receivables Purchase Agreement, as applicable, would become seriously misleading or would otherwise be rendered ineffective, unless such Originator shall have given its Related SPE, the Collateral Agent and each Administrative Agent not less than thirty (30) days’ prior written notice of such change and shall have cured such circumstances.

(h) Actions Impairing Quality of Title. Take any action that could reasonably be expected to cause any Receivable, together with the Related Assets and, if applicable, the related Lease Device, not to be owned by it free and clear of any Adverse Claim (other than any Permitted Adverse Claim or any Adverse Claim arising under or as contemplated by any Transaction Document or solely as the result of any action taken by any Purchaser (or any assignee thereof), any Purchaser Agent, the Collateral Agent or by any Administrative Agent); or take any action that could cause the Collateral Agent not to have a valid ownership free of any Adverse Claim or first priority perfected security interest in the Asset Portfolio and all products and proceeds of the foregoing, free and clear of any Adverse Claim (other than any Permitted Adverse Claim or Adverse Claim arising under any Transaction Document); or suffer the existence of any valid effective financing statement or other instrument similar in effect covering any Receivable, any Related Asset or Lease Device on file in any recording office except such as may be filed (i) in favor of any Originator or Seller in accordance with the Contracts or any Transaction Document or (ii) in favor of a Purchaser, the Collateral Agent or the applicable Administrative Agent in accordance with this Agreement or any Transaction Document or take any action that could cause the Collateral Agent not to have a valid first priority perfected security interest in each Lock-Box Account listed on Schedule 6.1(m) or for which the Collateral Agent and each Administrative Agent has been notified in accordance with Section 7.3(d) and all amounts or instruments on deposit or credited therein from time to time (other than Permitted Adverse Claims). Except as expressly permitted by the Intercreditor Agreement, no Originator shall encumber, pledge, assign or otherwise transfer, or create or suffer to create a Lien upon, or otherwise finance any other receivable or amount billed on, or otherwise reflected on, the same invoice as a Receivable.

SECTION 5.5 Collections Outside the Lockbox Accounts. Notwithstanding anything herein or in any other Transaction Document to the contrary, each Originator and the Servicer shall be permitted to instruct Obligors to cause Collections with respect to Pool Receivables to an account that is not a Lock-Box Account covered by a Lock-Box Agreement and deposit such Collections in an account that is not a Lock-Box Account covered by a Lock-Box Agreement; provided, that the aggregate Unpaid Balance of all Eligible Receivables that are Non Lock-Box Receivables does not exceed 8.00% of the aggregate Unpaid Balance of all Eligible Receivables at any time.

SECTION 5.6 Excluded Originator. The Servicer may designate any Originator as an “Excluded Originator” following any Unmatured Event of Termination or Event of Termination, but not later than the third Business Day following any Event of Termination, that

 

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has occurred and results solely from an event or circumstance affecting such Originator by written notice to the Collateral Agent and each Administrative Agent, specifying the effective date of such designation (the “Exclusion Effective Date” for such Excluded Originator) if all of the following conditions are then satisfied:

(a) such Unmatured Event of Termination or Event of Termination, as the case may be, would not have occurred if such Originator had not been a party to this Agreement as an Originator at the time it occurred;

(b) no other Unmatured Event or Termination, Event of Termination, Collection Control Event or Non-Reinvestment Event has occurred and is continuing or would occur as a result of such designation;

(c) (i) the Servicer shall have prepared and forwarded to the Collateral Agent and each Administrative Agent a pro forma Information Package for the immediately preceding Reporting Date, which pro forma Information Package shall be prepared excluding the Receivables relating to such Originator from the Pool Receivables relating to each Receivable Pool and the Net Portfolio Balance relating to each Receivable Pool for all purposes, and (ii) such pro forma Information Package does not report any Unmatured Event of Termination, Event of Termination, Collection Control Event or Non-Reinvestment Event on a pro forma basis (giving effect to any reduction of the Purchaser Group Investments to occur concurrently with such designation);

(d) the aggregate Unpaid Balance of Receivables relating to each Receivable Pool originated by such Originator reflected in the most recently delivered Information Package, (i) when added to the aggregate Unpaid Balance of Receivables that were excluded from the Net Portfolio Balance in respect of all Receivable Pools by the designation of any other Excluded Originators pursuant to this Section 5.6 during the 12 most recently completed calendar months (measured at the time of their respective Exclusion Effective Dates), is less than 1.00% of the average monthly aggregate Unpaid Balance of the Pool Receivables in respect of all Receivable Pools during the 12 most recently completed calendar months, and (ii) when added to the aggregate Unpaid Balance of Receivables that were excluded from the Net Portfolio Balance in respect of all Receivable Pools by the designation of any other Excluded Originators pursuant to this Section 5.6 at any time (measured at the time of their respective Exclusion Effective Dates), is less than 3.00% of the average monthly aggregate Outstanding Balance of all Receivables during the 12 most recently completed calendar months ; and

(e) on its Exclusion Effective Date, (x) such Excluded Originator ceases to hold any membership or other equity interest in any SPE and no Change of Control would result therefrom (provided that any such change in ownership in an SPE shall not be deemed to be a Change of Control), (y) any debts or amounts owing by the SPEs to such Excluded Originator under this Agreement and otherwise have been paid in full and (z) such Excluded Originator has ceased to be a party to this Agreement in accordance with the terms hereof.

 

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Any pro forma Information Package provided pursuant to this Agreement or Section 13.18 of the Receivables Purchase Agreement shall be subject to the representations, warranties and indemnifications contained herein and the other Transaction Documents on the same basis as any other Information Package. The representations, covenants and provisions of this Agreement and the other Transaction Documents applicable to an Originator shall no longer be applicable to an Excluded Originator after the Exclusion Effective Date for such Excluded Originator. The parties hereto shall work together in good faith to effectuate any actions as may be appropriate in connection with the designation of an Originator as an Excluded Originator. For the avoidance of doubt, any Receivables originated by an Excluded Originator prior to its related Exclusion Effective Date shall continue to be owned by the applicable SPEs and constitute Pool Receivables for all purposes, in each case, after such Exclusion Effective Date.

ARTICLE VI

TERMINATION OF PURCHASES

SECTION 6.1 Voluntary Termination. The sale or contribution by any Originator of Receivables, Related Assets and Lease Devices pursuant to this Agreement may be terminated by any party hereto, upon reasonable notice to the other parties hereto, at any time when the Purchasers’ Total Investment is equal to zero.

SECTION 6.2 Automatic Termination. The sale or contribution by any Originator, as applicable, of Receivables, Related Assets and Lease Devices pursuant to this Agreement shall automatically terminate if an Event of Bankruptcy shall have occurred and remain continuing with respect to such Originator or its Related SPE.

ARTICLE VII

INDEMNIFICATION

SECTION 7.1 Each Originator’s Indemnity. Without limiting any other rights which any such Person may have hereunder or under applicable Law, each Originator severally but not jointly, hereby agrees to indemnify and hold harmless SPEs, SPEs’ Affiliates and all of their respective successors, transferees, participants and assigns, all Persons referred to in Section 8.4 hereof, and all officers, members, managers, directors, shareholders, employees and agents of any of the foregoing (each an “Originator Indemnified Party”), forthwith on demand, from and against any and all damages, losses, claims, liabilities and related costs and expenses, including reasonable and documented attorneys’ fees and disbursements but excluding Taxes (except to the extent provided in clauses (viii) and (ix) below, and provided that no Originator Indemnified Party shall recover more than once for any Tax imposed from any indemnitor under the Transaction Documents) (all of the foregoing being collectively referred to as “Originator Indemnified Amounts”) awarded against or incurred by any of them arising out of the ownership, maintenance or purchasing of the Receivables or in respect of or related to any Receivable, Related Assets or Lease Devices, or arising out of or relating to or resulting from the actions or inactions of the Originators or any Affiliate of any of them; provided, however, notwithstanding anything to the contrary in this Article VII, Originator Indemnified Amounts shall be excluded

 

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solely to the extent (x) resulting from the gross negligence or willful misconduct on the part of such Originator Indemnified Party as determined by a final non-appealable judgment by a court of competent jurisdiction, (y) resulting from a claim brought by any Originator against an Originator Indemnified Party for breach of such Originator Indemnified Party’s obligations under any Transaction Document as determined by a final non-appealable judgment by a court of competent jurisdiction or (z) they constitute recourse with respect to a Pool Receivable, the Related Assets or Lease Devices by reason of bankruptcy or insolvency, or the financial or credit condition or financial default, of the related Obligor. Without limiting the foregoing, each Originator shall indemnify, subject to the limits set forth in this Section 7.1, and hold harmless each Originator Indemnified Party for any and all Originator Indemnified Amounts arising out of, relating to or resulting from:

(i) the transfer by any Originator of any interest in any Receivable other than the sale or contribution, as applicable, of any Receivable, Related Assets and Lease Devices to any SPE pursuant to this Agreement and the grant of a security interest to any SPE pursuant to this Agreement;

(ii) any representation or warranty made by any Originator under or in connection with any Transaction Document, any Information Package or any other information or report delivered by or on behalf of any Originator pursuant hereto, which shall have been untrue, false or incorrect when made or deemed made;

(iii) the failure of any Originator to comply with the terms of any Transaction Document or any applicable Law (including with respect to any Receivable, the Related Assets or Lease Devices), or the nonconformity of any Receivable, Related Assets or Lease Devices with any such Law;

(iv) the lack of an enforceable ownership interest or a first priority perfected security interest in the Receivables (and all Related Assets and Lease Devices) transferred, or purported to be transferred, to any SPE pursuant to this Agreement against all Persons (including any bankruptcy trustee or similar Person);

(v) the failure to file, or any delay in filing of, financing statements or other similar instruments or documents under the UCC of any applicable jurisdiction or other applicable Laws with respect to any Receivable transferred by any Originator, or purported to be transferred by any Originator, to any SPE pursuant to this Agreement whether at the time of any purchase or acquisition, as applicable, or at any time thereafter;

(vi) any suit or claim related to the Receivables transferred, or purported to be transferred, to any SPE pursuant to this Agreement (including any products liability or environmental liability claim arising out of or in connection with merchandise or services that are the subject of any such Receivable);

 

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(vii) failure by any Originator to comply with the “bulk sales” or analogous Laws of any jurisdiction;

(viii) any Taxes (other than Excluded Taxes) imposed upon any Originator Indemnified Party or upon or with respect to the Receivables transferred, or purported to be transferred, to any SPE pursuant to this Agreement and all reasonable costs and expenses related thereto or arising therefrom, which such Taxes or such amounts relating thereto arise by reason of the purchase or ownership, contribution or sale of such Receivables (or of any interest therein), Related Assets or Lease Devices or any goods which secure any such Receivables, Related Asset or Lease Devices;

(ix) any loss arising, directly or indirectly, as a result of the imposition of sales or analogous Taxes or the failure by any Originator or the Servicer to timely collect and remit to the appropriate authority any such Taxes (to the extent not duplicative of clause (viii) above);

(x) any commingling by any Originator or the Servicer of any funds relating to the Receivables with any of its own funds or the funds of any other Person;

(xi) the failure or delay to provide any Obligor with an invoice or other evidence of indebtedness; or

(xii) any inability of any Originator or any SPE to assign any Receivable, other Related Asset or Lease Devices as contemplated under the Transaction Documents; or the violation or breach by any Originator of any confidentiality provision, or of any similar covenant of non-disclosure, with respect to any Contract, or any other Indemnified Amount with respect to or resulting from any such violation or breach.

SECTION 7.2 Contribution. If for any reason the indemnification provided above in this Article VII is unavailable to an Originator Indemnified Party or is insufficient to hold an Originator Indemnified Party harmless, then each Originator shall contribute to the amount paid or payable by such Originator Indemnified Party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect not only the relative benefits received by such Originator Indemnified Party on the one hand and such Originator on the other hand but also the relative fault of such Originator Indemnified Party as well as any other relevant equitable considerations.

ARTICLE VIII

MISCELLANEOUS

SECTION 8.1 Amendments, etc. No amendment or waiver of any provision of this Agreement or consent to any departure by any Originator therefrom shall in any event be effective unless the same shall be in writing and signed by the SPEs, the Collateral Agent, the Administrative Agents, the Required Purchasers and (if an amendment) the Originators, and if

 

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such amendment or waiver affects the obligations of Sprint Corporation, Sprint Corporation consents in writing thereto, and then any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. Each Originator may not amend or otherwise modify any other Transaction Document executed by it without the written consent of the SPEs, the Collateral Agent, the Administrative Agents and the Required Purchasers, and if such amendment or waiver affects the obligations of Sprint Corporation, Sprint Corporation consents in writing thereto.

SECTION 8.2 No Waiver; Remedies. No failure on the part of any SPE or any Originator Indemnified Party to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies provided by Law. Each Originator hereby consents to and agrees to be bound by the specific remedies provisions of Section 9.2 of the Receivables Purchase Agreement as if they were set forth herein mutatis mutandis. Without limiting the foregoing, each Purchaser, each Purchaser Agent, BTMUNY, individually and as the SCC Administrative Agent, Mizuho, individually and as Collateral Agent and ISC Administrative Agent, SMBCSI, individually and as the Lease Administrative Agent, each Liquidity Provider, each Affected Party, and any of their Affiliates (each a “Set-off Party”) are each hereby authorized at any time during the continuance of an Event of Termination, Collection Control Event or Non-Reinvestment Event (in addition to any other rights it may have) to setoff, appropriate and apply (without presentment, demand, protest or other notice which are hereby expressly waived any deposits and any other indebtedness held or owing by such Set-off Party (including by any branches or agencies of such Set-off Party) to, or for the account of the parties hereto amounts owing by such party hereunder (even if contingent and unmatured).

SECTION 8.3 Notices, Etc. All notices and other communications provided for hereunder shall, unless otherwise stated herein, be in writing (including facsimile communication) and shall be personally delivered or sent by express mail or 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 Annex 2 or at such other address or facsimile number 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, when receipt is confirmed by telephone.

SECTION 8.4 Binding Effect; Assignment. Each Originator acknowledges that institutions providing financing (by way of loans or purchases of Receivables or interests therein) pursuant to the Receivables Purchase Agreement may rely upon the terms of this Agreement. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns and shall also, to the extent provided herein, inure to the benefit of the parties to the Receivables Purchase Agreement. Each Originator acknowledges that SPEs’ rights under this Agreement may be assigned to Mizuho, BTMUNY, SMBCSI or another Purchaser or Purchaser Agent under the Receivables Purchase Agreement, consents to such assignment and to the exercise of those rights directly by Mizuho, BTMUNY, SMBCSI or another Purchaser or Purchaser Agent to the extent permitted by the Receivables Purchase

 

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Agreement and acknowledges and agrees that each of Mizuho, BTMUNY and SMBCSI, each individually and as agent, a Committed Purchaser, a Conduit Purchaser and the other Affected Parties and each of their respective successors and assigns are express third party beneficiaries of this Agreement.

SECTION 8.5 Survival. The rights and remedies with respect to any breach of any representation and warranty made by any Originator or any SPE pursuant to Section 3.2, Article IV the indemnification provisions of Article VII, the provisions of Sections 8.4, 8.5, 8.6, 8.8, 8.9, 8.10, 8.11, 8.12 and 8.14 shall survive any termination of this Agreement.

SECTION 8.6 Costs and Expenses. In addition to its obligations under Article VII, each Originator agrees to pay on demand all reasonable and documented out-of-pocket costs and expenses incurred by SPEs and any other Originator Indemnified Party in connection with:

(a) the negotiation, preparation, execution and delivery of this Agreement and any amendment of or consent or waiver under this Agreement (whether or not consummated), or the enforcement of, or any actual or reasonably claimed breach of, this Agreement, including reasonable and documented accountants’, auditors’, consultants’ and attorneys’ fees and expenses to any of such Persons and the fees and charges of any nationally recognized statistical rating agency or any independent accountants, auditors, consultants or other agents incurred in connection with any of the foregoing or in advising such Persons as to their respective rights and remedies under this Agreement in connection with any of the foregoing; and

(b) the administration (including periodic auditing as provided for herein) of this Agreement and the transactions contemplated thereby, including all reasonable and documented expenses and accountants’, consultants’ and attorneys’ fees incurred in connection with the administration and maintenance of this Agreement and the transactions contemplated thereby.

SECTION 8.7 Execution in Counterparts; Integration. This Agreement may be executed in any number of counterparts and by the different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same Agreement. Executed counterparts may be delivered electronically. This Agreement, together with the other Transaction Documents, contains a final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire understanding among the parties hereto with respect to the subject matter hereof, superseding all prior oral or written understandings.

SECTION 8.8 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, BUT WITHOUT REGARD TO ANY OTHER CONFLICTS OF LAW PROVISIONS THEREOF, EXCEPT TO THE EXTENT THAT THE PERFECTION, EFFECT OF PERFECTION OR PRIORITY OF THE INTERESTS OF SPES IN THE RECEIVABLES, RELATED ASSETS OR LEASE DEVICES IS GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK).

 

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SECTION 8.9 Waiver of Jury Trial. EACH ORIGINATOR AND EACH SPE 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 DOCUMENT 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 DOCUMENT AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT A JURY.

SECTION 8.10 Consent to Jurisdiction; Waiver of Immunities. EACH ORIGINATOR AND EACH SPE HEREBY ACKNOWLEDGES AND AGREES THAT:

(a) 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 CITY, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, (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.

(b) 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 8.11 Confidentiality. Each party hereto agrees to comply with, and be bound by, the confidentiality provisions of Section 13.8 of the Receivables Purchase Agreement as if they were set forth herein mutatis mutandis.

SECTION 8.12 No Proceedings. Each Originator agrees, for the benefit of the parties to the Receivables Purchase Agreement, that it will not institute against any SPE, or join any other Person in instituting against any SPE, any proceeding of a type referred to in the definition of Event of Bankruptcy from the Closing Date until one year and one day after no investment, loan or commitment is outstanding under the Receivables Purchase Agreement. In addition, all amounts payable by any SPE to any Originator pursuant to this Agreement shall be payable solely from funds available for that purpose (after each SPE has satisfied all obligations then due and owing under the Receivables Purchase Agreement).

 

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SECTION 8.13 No Recourse Against Other Parties. No recourse under any obligation, covenant or agreement of any SPE contained in this Agreement shall be had against any stockholder, employee, officer, director, member, manager incorporator or organizer of any SPE.

SECTION 8.14 Grant of Security Interest. It is the intention of the parties to this Agreement that the conveyance of each Originator’s right, title and interest in and to the Receivables, the Related Assets, the Lease Devices and all the proceeds of all of the foregoing to SPEs pursuant to this Agreement shall constitute an absolute and irrevocable purchase and sale or capital contribution, as applicable, and not a loan or pledge. As a protective measure in the event that, notwithstanding the foregoing, the conveyance of the Receivables, the Related Assets or Lease Devices to SPEs is characterized by any third party as a loan or pledge, each Originator does hereby grant, to SPEs a security interest to secure such Originator’s obligations hereunder in all of such Originator’s now or hereafter existing right, title and interest in, to and under the Receivables and the Related Assets, the Lease Devices, the Lock-Box Accounts (to the extent of the Receivables, the Related Assets, the Lease Devices and the proceeds of the foregoing) and that this Agreement shall constitute a security agreement under applicable law.

SECTION 8.15 Severability. 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.

SECTION 8.16 Restatement; No Novation. Effective as of the Second Restatement Effective Date, the Amended and Restated Receivables Sale Agreement dated as of April 24, 2015 (the “Existing RSA”) among the parties to this Agreement is amended and restated as set forth in this Agreement. It is the intent of the parties hereto that this Agreement (i) shall re-evidence the obligations and other indebtedness under the Existing RSA, (ii) is entered into in substitution for, and not in payment of, the obligations and other indebtedness under the Existing RSA, and (iii) is in no way intended to constitute a novation of any of the obligations or other indebtedness which was evidenced by the Existing RSA.

[SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.

 

 

		S-1		Second Amended and Restated Receivables Sale Agreement

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		S-2		Second Amended and Restated Receivables Sale Agreement

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		ENTERPRISE COMMUNICATIONS PARTNERSHIP
		as Originator
		By:		SprintCom ECP I, L.L.C.,
		its General Partner
				By:		/s/ Tarek A. Robbiati
				Name:  Tarek A. Robbiati
				Title:    Treasurer
				By:		SprintCom ECP II, L.L.C.,
				its General Partner
				By:		/s/ Tarek A. Robbiati
				Name:  Tarek A. Robbiati
				Title:    Treasurer
		TEXAS UNWIRED
		as Originator
		By:		Louisiana Unwired LLC, as Partner
				By:		/s/ Tarek A. Robbiati
				Name:  Tarek A. Robbiati
				Title:    Treasurer
		By:		US Unwired Inc., as Partner
				By:		/s/ Tarek A. Robbiati
				Name:  Tarek A. Robbiati
				Title:    Treasurer

 

		S-3		Second Amended and Restated Receivables Sale Agreement

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		S-4		Second Amended and Restated Receivables Sale Agreement

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