direct loan
(3) Federal reserve programs or facilities (A) Terms and conditions (i) Definition In this paragraph, the term “direct loan” means a loan under a bilateral loan agreement that is — (I) entered into directly with an eligible business as borrower; and (II) not part of a syndicated loan, a loan originated by a financial institution in the ordinary course of business, or a securities or capital markets transaction. (ii) Restrictions The Secretary may make a loan, loan guarantee, or other investment under subsection (b)(4) as part of a program or facility that provides direct loans only if the applicable eligible businesses agree— (I) until the date 12 months after the date on which the direct loan is no longer outstanding, not to repurchase an equity security that is listed on a national securities exchange of the eligible business or any parent company of the eligible business while the direct loan is outstanding, except to the extent required under a contractual obligation that is in effect as of March 27, 2020 ; (II) until the date 12 months after the date on which the direct loan is no longer outstanding, not to pay dividends or make other capital distributions with respect to the common stock of the eligible business; and (III) to comply with the limitations on compensation set forth in section 9043 of this title . (iii) Waiver The Secretary may waive the requirement under clause (ii) with respect to any program or facility upon a determination that such waiver is necessary to protect the interests of the Federal Government. If the Secretary exercises a waiver under this clause, the Secretary shall make himself available to testify before the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives regarding the reasons for the waiver. (B) Federal Reserve Act taxpayer protections and other requirements apply For the avoidance of doubt, any applicable requirements under section 13(3) of the Federal Reserve Act ( 12 U.S.C. 343(3) ), including requirements relating to loan collateralization, taxpayer protection, and borrower solvency, shall apply with respect to any program or facility described in subsection (b)(4). (C) United States businesses A program or facility in which the Secretary makes a loan, loan guarantee, or other investment under subsection (b)(4) shall only purchase obligations or other interests (other than securities that are based on an index or that are based on a diversified pool of securities) from, or make loans or other advances to, businesses that are created or organized in the United States or under the laws of the United States and that have significant operations in and a majority of its employees based in the United States. (D) Assistance for mid-sized businesses (i) In general Without limiting the terms and conditions of the programs and facilities that the Secretary may otherwise provide financial assistance to under subsection (b)(4), the Secretary shall endeavor to seek the implementation of a program or facility described in subsection (b)(4) that provides financing to banks and other lenders that make direct loans to eligible businesses including, to the extent practicable, nonprofit organizations, with between 500 and 10,000 employees, with such direct loans being subject to an annualized interest rate that is not higher than 2 percent per annum. For the first 6 months after any such direct loan is made, or for such longer period as the Secretary may determine in his discretion, no principal or interest shall be due and payable. Any eligible borrower applying for a direct loan under this program shall make a good-faith certification that— (I) the uncertainty of economic conditions as of the date of the application makes necessary the loan request to support the ongoing operations of the recipient; (II) the funds it receives will be used to retain at least 90 percent of the recipient’s workforce, at full compensation and benefits, until September 30, 2020 ; (III) the recipient intends to restore not less than 90 percent of the workforce of the recipient that existed as of February 1, 2020 , and to restore all compensation and benefits to the workers of the recipient no later than 4 months after the termination date of the public health emergency declared by the Secretary of Health and Human Services on January 31, 2020 , under section 247d of title 42 in response to COVID–19; (IV) the recipient is an entity or business that is domiciled in the United States with significant operations and employees located in the United States; (V) the recipient is not a debtor in a bankruptcy proceeding; (VI) the recipient is created or organized in the United States or under the laws of the United States and has significant operations in and a majority of its employees based in the United States; (VII) the recipient will not pay dividends with respect to the common stock of the eligible business, or repurchase an equity security that is listed on a national securities exchange of the recipient or any parent company of the recipient while the direct loan is outstanding, except to the extent required under a contractual obligation that is in effect as of March 27, 2020 ; (VIII) the recipient will not outsource or offshore jobs for the term of the loan and 2 years after completing repayment of the loan; (IX) the recipient will not abrogate existing collective bargaining agreements for the term of the loan and 2 years after completing repayment of the loan; and (X) that the recipient will remain neutral in any union organizing effort for the term of the loan. (ii) Main street lending program Nothing in this subparagraph shall limit the discretion of the Board of Governors of the Federal Reserve System to establish a Main Street Lending Program or other similar program or facility that supports lending to small and mid-sized businesses on such terms and conditions as the Board may set consistent with section 13(3) of the Federal Reserve Act ( 12 U.S.C. 343(3) ), including any such program in which the Secretary makes a loan, loan guarantee, or other investment under subsection (b)(4). (E) Government participants The Secretary shall endeavor to seek the implementation of a program or facility in accordance with subsection (b)(4) that provides liquidity to the financial system that supports lending to States and municipalities.