Exhibit 10.3
 

THIRD AMENDMENT TO THE
RECEIVABLES FINANCING AGREEMENT

This THIRD AMENDMENT TO THE RECEIVABLES FINANCING AGREEMENT (this “Amendment”),
dated as of October 25, 2018, is entered into by and among the following
parties:
(i)
SYNEOS HEALTH RECEIVABLES LLC, as Borrower;

(ii)
INC RESEARCH, LLC, as initial Servicer; and

(iii)
PNC BANK, NATIONAL ASSOCIATION (“PNC”), as Administrative Agent and as Lender.

Capitalized terms used but not otherwise defined herein (including such terms
used above) have the respective meanings assigned thereto in the Receivables
Financing Agreement described below.
BACKGROUND
A.    The parties hereto have entered into a Receivables Financing Agreement,
dated as of June 29, 2018 (as amended, restated, supplemented or otherwise
modified through the date hereof, the “Receivables Financing Agreement”).
B.    The parties hereto desire to amend the Receivables Financing Agreement as
set forth herein.
NOW, THEREFORE, with the intention of being legally bound hereby, and in
consideration of the mutual undertakings expressed herein, each party to this
Amendment hereby agrees as follows:
SECTION 1.    Amendments to the Receivables Financing Agreement. The Receivables
Financing Agreement is hereby amended to incorporate the changes shown on the
marked pages of the Receivables Financing Agreement attached hereto as Exhibit
A.
SECTION 2.    Representations and Warranties of the Borrower and Servicer. The
Borrower and the Servicer hereby represent and warrant to each of the parties
hereto as of the date hereof as follows:
(a)    Representations and Warranties. The representations and warranties made
by it in the Receivables Financing Agreement and each of the other Transaction
Documents to which it is a party are true and correct as of the date hereof.
(b)    Enforceability. The execution and delivery by it of this Amendment, and
the performance of its obligations under this Amendment, the Receivables
Financing Agreement (as amended hereby) and the other Transaction Documents to
which it is a party are within its organizational powers and have been duly
authorized by all necessary action on its part, and this Amendment, the
Receivables Financing Agreement (as amended hereby) and the other Transaction
Documents to which it is a party are (assuming due authorization and

1

--------------------------------------------------------------------------------

execution by the other parties thereto) its valid and legally binding
obligations, enforceable in accordance with their terms, except (i) as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors’ rights generally and (ii) as such enforceability may be limited by
general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
(c)    No Event of Default. No Event of Default or Unmatured Event of Default
has occurred and is continuing, or would occur as a result of this Amendment or
the transactions contemplated hereby.
SECTION 3.    Effect of Amendment; Ratification. All provisions of the
Receivables Financing Agreement and the other Transaction Documents, as
expressly amended and modified by this Amendment, shall remain in full force and
effect. After this Amendment becomes effective, all references in the
Receivables Financing Agreement (or in any other Transaction Document) to “this
Receivables Financing Agreement”, “this Agreement”, “hereof”, “herein” or words
of similar effect referring to the Receivables Financing Agreement shall be
deemed to be references to the Receivables Financing Agreement as amended by
this Amendment. This Amendment shall not be deemed, either expressly or
impliedly, to waive, amend or supplement any provision of the Receivables
Financing Agreement other than as set forth herein. The Receivables Financing
Agreement, as amended by this Amendment, is hereby ratified and confirmed in all
respects.
SECTION 4.    Effectiveness. This Amendment shall become effective as of the
date hereof upon the Administrative Agent’s receipt of counterparts to this
Amendment executed by each of the parties hereto.
SECTION 5.    Severability. Any provisions of this Amendment 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 6.    Transaction Document. This Amendment shall be a Transaction
Document for purposes of the Receivables Financing Agreement.
SECTION 7.    Counterparts. This Amendment may be executed in any number of
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 8.    GOVERNING LAW AND JURISDICTION.
(a)    THIS AMENDMENT, 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

2

--------------------------------------------------------------------------------

5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BUT WITHOUT
REGARD TO ANY OTHER CONFLICTS OF LAW PROVISIONS THEREOF).
(b)    EACH PARTY HERETO HEREBY IRREVOCABLY SUBMITS TO (I) WITH RESPECT TO THE
BORROWER AND THE SERVICER, THE EXCLUSIVE JURISDICTION, AND (II) WITH RESPECT TO
EACH OF THE OTHER PARTIES HERETO, THE NON-EXCLUSIVE JURISDICTION, IN EACH CASE,
OF ANY NEW YORK STATE OR FEDERAL COURT SITTING IN NEW YORK CITY, NEW YORK IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AMENDMENT, AND EACH
PARTY HERETO HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION
OR PROCEEDING (I) IF BROUGHT BY THE BORROWER, THE SERVICER OR ANY AFFILIATE
THEREOF, SHALL BE HEARD AND DETERMINED, AND (II) IF BROUGHT BY ANY OTHER PARTY
TO THIS AMENDMENT, MAY BE HEARD AND DETERMINED, IN EACH CASE, IN SUCH NEW YORK
STATE COURT OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. NOTHING
IN THIS SECTION 8 SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY
OTHER CREDIT PARTY TO BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWER OR THE
SERVICER OR ANY OF THEIR RESPECTIVE PROPERTY IN THE COURTS OF OTHER
JURISDICTIONS. EACH OF THE BORROWER AND THE SERVICER HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT
FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING. THE PARTIES HERETO AGREE
THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER
MANNER PROVIDED BY LAW.
SECTION 9.    Section Headings. The various headings of this Amendment are
included for convenience only and shall not affect the meaning or interpretation
of this Amendment, the Receivables Financing Agreement or any provision hereof
or thereof.
[SIGNATURE PAGES FOLLOW]

3

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have executed this Amendment by their
duly authorized officers as of the date first above written.

 
SYNEOS HEALTH RECEIVABLES LLC 
 
By:/s/ Thomas E. Zajkowski    
Name: Thomas E. Zajkowski
Title: President
 
 
 
 
 

 
INC RESEARCH, LLC,
as the Servicer 

 
By:/s/ Jason Meggs    
Name: Jason Meggs
Title: Chief Financial Officer
 
 
 
 
 
 
 
 

S-1

--------------------------------------------------------------------------------

 
PNC BANK, NATIONAL ASSOCIATION,
as Administrative Agent 

 
By:/s/ Christopher Blaney    
Name: Christopher Blaney
Title: Senior Vice President

 
 
 
 
 
PNC BANK, NATIONAL ASSOCIATION,
as a Lender 

 
By: /s/ Christopher Blaney    
Name: Christopher Blaney
Title: Senior Vice President

 
 
 
 
 
 
 
 
 
 
 
 
 

S-2

--------------------------------------------------------------------------------

EXHIBIT A
(attached)

--------------------------------------------------------------------------------

[exhibitatothirdamendment001.jpg]
EXHIBIT A to THIRD AMENDMENT, dated as of October 25, 2018 CONFORMED COPY
INCLUDES FIRST AMENDMENT, dated as of August 1, 2018 SECOND AMENDMENT, dated as
of August 29, 2018 EXECUTION VERSION RECEIVABLES FINANCING AGREEMENT Dated as of
June 29, 2018 by and among SYNEOS HEALTH RECEIVABLES LLC, as Borrower, THE
PERSONS FROM TIME TO TIME PARTY HERETO, as Lenders, PNC BANK, NATIONAL
ASSOCIATION, as Administrative Agent, INC RESEARCH, LLC, as initial Servicer,
and PNC CAPITAL MARKETS LLC, as Structuring Agent 730302054 18569090

--------------------------------------------------------------------------------

 
[exhibitatothirdamendment002.jpg]
notes, note purchase, acceptance or credit facility, or other similar
instruments or facilities, (iii) reimbursement obligations (contingent or
otherwise) under any letter of credit, (iv) any other transaction (including
production payments (excluding royalties), installment purchase agreements,
forward sale or purchase agreements, capitalized leases and conditional sales
agreements) having the commercial effect of a borrowing of money entered into by
such Person to finance its operations or capital requirements (but not including
accounts payable incurred in the ordinary course of such Person’s business
payable on terms customary in the trade), (v) all net obligations of such Person
in respect of interest rate or currency hedges or (vi) any Guaranty of any such
Debt. “Deemed Collections” has the meaning set forth in Section 4.01(d).
“Default Ratio” means the ratio (expressed as a percentage and rounded to the
nearest 1/100 of 1%, with 5/1000th of 1% rounded upward) computed as of the last
day of each Fiscal Month by dividing: (a) the aggregate Outstanding Balance of
all Pool Receivables that became Defaulted Receivables during such Fiscal Month,
by (b) the aggregate initial Outstanding Balance of all Pool Receivables (other
than Unbilled Receivables) generated by the Originators during the month that is
six (6) Fiscal Months (or if the Third Amendment Commencement Date, if any, has
occurred, eight (8) Fiscal Months), before such Fiscal Month. “Defaulted
Receivable” means a Receivable, without duplication: (a) as to which any
payment, or part thereof, remains unpaid for 151 days or more (or if the Third
Amendment Commencement Date, if any, has occurred, 211 days or more) after the
original due date for such Receivable; (b) as to which an Insolvency Proceeding
shall have occurred with respect to the Obligor thereof or any other Person
obligated thereon or owning any Related Security with respect thereto; (c) that
has been written off the applicable Originator’s or the Borrower’s books as
uncollectible; or (d) that, consistent with the Credit and Collection Policy,
should be written off the applicable Originator’s or the Borrower’s books as
uncollectible; provided, however, that in each case above such amount shall be
calculated without giving effect to any netting of credits that have not been
matched to a particular Receivable for the purposes of aged trial balance
reporting. “Defaulting Lender” means any Lender that (a) has failed, within two
(2) Business Days of the date required to be funded or paid, to (i) fund any
portion of its Loans or (ii) pay over to any Credit Party any other amount
required to be paid by it hereunder, unless, in the case of clause (i) above,
such Lender notifies the Administrative Agent in writing that such failure is
the result of such Lender’s good faith determination that a condition precedent
to funding (specifically identified and including the particular default, if
any) has not been satisfied, (b) has notified the Borrower or any Credit Party
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 under this 9
730302054 18569090

--------------------------------------------------------------------------------

 
[exhibitatothirdamendment003.jpg]
Agreement (unless such writing or public statement indicates that such position
is based on such Lender’s good faith determination that a condition precedent
(specifically identified and including the particular default, if any) to
funding a Loan under this Agreement cannot be satisfied) or generally under
other agreements in which it commits to extend credit, (c) has failed, within
three (3) Business Days after request by a Credit Party, acting in good faith,
to provide a certification in writing from an authorized officer of such Lender
that it will comply with its obligations (and is financially able to meet such
obligations) to fund prospective Loans under this Agreement, provided that such
Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon
such Credit Party’s receipt of such certification in form and substance
satisfactory to it and the Administrative Agent, or (d) has become the subject
of an Insolvency Proceeding. “Delinquency Ratio” means the ratio (expressed as a
percentage and rounded to the nearest 1/100 of 1%, with 5/1000th of 1% rounded
upward) computed as of the last day of each Fiscal Month by dividing: (a) the
aggregate Outstanding Balance of all Pool Receivables that were Delinquent
Receivables on such day, by (b) the aggregate Outstanding Balance of all Pool
Receivables on such day. “Delinquent Receivable” means a Receivable as to which
any payment, or part thereof, remains unpaid for 91 days or more from the
original due date for such payment; provided, however, that such amount shall be
calculated without giving effect to any netting of credits that have not been
matched to a particular Receivable for the purposes of aged trial balance
reporting. “Dilution Horizon Ratio” means, for any Fiscal Month, the ratio
(expressed as a percentage and rounded to the nearest 1/100th of 1%, with
5/1000th of 1% rounded upward) computed as of the last day of such Fiscal Month
by dividing: (a) the aggregate initial Outstanding Balance of all Pool
Receivables (other than Unbilled Receivables) generated by the Originators
during such Fiscal Month, by (b) the sum of (x) the Net Receivables Pool Balance
as of the last day of such Fiscal Month plus (y) the aggregate Outstanding
Balance as of the last day of such Fiscal Month of all Receivables and portions
of Receivables that do not constitute Eligible Receivables on such date solely
due to the failure to satisfy clause (r) and/or clause (w) of the definition of
“Eligible Receivable”. Within thirty (30) days of the completion and the receipt
by the Administrative Agent of the results of any annual audit or field exam of
the Receivables and the servicing and origination practices of the Servicer and
the Originators, the numerator of the Dilution Horizon Ratio may be adjusted,
after consultation with the Borrower, by the Administrative Agent upon not less
than five (5) Business Days notice to the Borrower to reflect such number of
Fiscal Months as the Administrative Agent reasonably believes best reflects the
business practices of the Servicer and the Originators and the actual amount of
dilution and Deemed Collections that occur with respect to Pool Receivables
based on the weighted average dilution lag calculation completed as part of such
audit or field exam. “Dilution Ratio” means, for any Fiscal Month, the ratio
(expressed as a percentage and rounded to the nearest 1/100th of 1%, with
5/1000th of 1% rounded upward), computed as of the last day of each Fiscal Month
by dividing: (i) the aggregate amount of Deemed Collections during such Fiscal
Month (other than any Deemed Collections with respect to any Receivables that
were both (x) generated by an Originator during such Fiscal Month and (y)
written off the applicable Originator’s or the Borrower’s books as uncollectible
during such Fiscal Month), by 10 730302054 18569090

--------------------------------------------------------------------------------

 
[exhibitatothirdamendment004.jpg]
“Lock-Box” means each locked postal box with respect to which a Collection
Account Bank has executed an Account Control Agreement pursuant to which it has
been granted exclusive access for the purpose of retrieving and processing
payments made on the Receivables and which is listed on Schedule II (as such
schedule may be modified from time to time in connection with the addition or
removal of any Lock-Box in accordance with the terms hereof). “Loss Horizon
Ratio” means the ratio (expressed as a percentage and rounded to the nearest
1/100 of 1%, with 5/1000th of 1% rounded upward) computed as of the last day of
each Fiscal Month by dividing: (a) the sum of (x) the aggregate initial
Outstanding Balance of all Pool Receivables (other than Unbilled Receivables)
generated by the Originators during the six (6) most recent Fiscal Months plus
(y) 65% of the aggregate initial Outstanding Balance of all Pool Receivables
(other than Unbilled Receivables) generated by the Originators during the eighth
most recent Fiscal Month; by (b) the sum of (x) the Net Receivables Pool Balance
as of such date plus (y) the aggregate Outstanding Balance as of such date of
all Receivables and portions of Receivables that do not constitute Eligible
Receivables on such date solely due to the failure to satisfy clause (r) and/or
clause (w) of the definition of “Eligible Receivable”. “Loss Reserve Percentage”
means, at any time of determination, the product (expressed as a percentage and
rounded to the nearest 1/100th of 1%, with 5/1000th of 1% rounded upward) of (a)
the Stress Factor, multiplied by (b) the highest average of the Default Ratios
for any three (3) consecutive Fiscal Months during the twelve (12) most recent
Fiscal Months, multiplied by (c) the Loss Horizon Ratio. “Management Investors”
means the officers, directors, managers, employees and members of management of
Parent, any Parent Company and/or any subsidiary of Parent. “Majority Lenders”
means Lenders representing more than 50% of the aggregate Commitments of all
Lenders (or, if the Commitments have been terminated, Lenders representing more
than 50% of the aggregate outstanding Capital held by all the Lenders).
“Material Adverse Effect” means relative to any Person (provided that if no
particular Person is specified, “Material Adverse Effect” shall be deemed to be
relative to the Performance Guarantor, the Servicer and the Originators, in the
aggregate) with respect to any event or circumstance, a material adverse effect
on any of the following: (a) the assets, operations, business or financial
condition of such Person or, if no Person is specified, of the Servicer, the
Performance Guarantor and the Originators taken as a whole; (b) the ability of
such Person, or if no Person is specified, of the Servicer, the Performance
Guarantor and any Originators, taken as a whole, to perform its or their
obligations under this Agreement or any other Transaction Document to which it
is or they are a party; 22 730302054 18569090

--------------------------------------------------------------------------------

 
[exhibitatothirdamendment005.jpg]
“Subsidiary” means, as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock of each class or
other interests having ordinary voting power (other than stock or other
interests having such power only by reason of the happening of a contingency) to
elect a majority of the Board of Directors or other managers of such entity are
at the time owned, or management of which is otherwise controlled: (a) by such
Person, (b) by one or more Subsidiaries of such Person or (c) by such Person and
one or more Subsidiaries of such Person. “Syneos Party” means the Borrower, the
Servicer, the Performance Guarantor and each Originator. “Taxes” means any and
all present or future taxes, levies, imposts, duties, deductions, charges,
withholdings (including backup withholding), assessments, fees or other charges
imposed by any Governmental Authority and all interest, penalties, additions to
tax and any similar liabilities with respect thereto. “Termination Date” means
the earliest to occur of (a) the Scheduled Termination Date, (b) the date on
which the “Termination Date” is declared or deemed to have occurred under
Section 10.01, (c) the occurrence of a Purchase and Sale Termination Event under
the Purchase and Sale Agreement, (d) the date selected by the Borrower on which
all Commitments have been reduced to zero pursuant to Section 2.02(e) or (e) the
date (if any) on which the Borrower, the Servicer or any Originator delivers to
the Administrative Agent a written notice that the Borrower is unable to pay the
“Purchase Price” (as defined in the Purchase and Sale Agreement) for Receivables
and Related Rights pursuant to Section 3.2 of the Purchase and Sale Agreement.
“Third Amendment Closing Date” means October 25, 2018. “Third Amendment
Commencement Date” means the date elected by the Borrower as the “Third
Amendment Commencement Date” in a written notice provided by the Borrower (or
the Servicer on its behalf) to the Administrative Agent; provided, that such
date may not occur more than 180 days following the Third Amendment Closing Date
and any election following such date shall be null and void; provided, further,
that neither the Borrower nor the Servicer on its behalf shall provide any
notice of the election of the “Third Amendment Commencement Date” until such
time as the Borrower (or the Servicer on its behalf) has provided such
historical Receivables performance data as may be reasonably requested by the
Administrative Agent on or prior to the Third Amendment Closing Date. “THL”
means Thomas H. Lee Partners, L.P. and its Affiliates. “Threshold Amount” means
$150,000,000. “Total Reserves” means, at any time of determination, an amount
equal to the product of (i) the sum of: (a) the Yield Reserve Percentage, plus
(b) the greater of (I) the sum of the Concentration Reserve Percentage, plus the
Minimum Dilution Reserve Percentage and (II) the sum of the Loss Reserve
Percentage, plus the Dilution Reserve Percentage, times (ii) the Net Receivables
Pool Balance at such time. 30 730302054 18569090

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------