Exhibit 10.1

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

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TABLE OF CONTENTS

 

         Page  

ARTICLE I

 

DEFINITIONS

     1  

SECTION 1.01.

 

Certain Defined Terms

     1  

SECTION 1.02.

 

Other Interpretative Matters

     31  

ARTICLE II

 

TERMS OF THE LOANS

     32  

SECTION 2.01.

 

Loan Facility

     32  

SECTION 2.02.

 

Making Loans; Repayment of Loans

     32  

SECTION 2.03.

 

Interest and Fees

     33  

SECTION 2.04.

 

Records of Loans

     34  

SECTION 2.05.

 

Selection of Interest Rates and Tranche Periods

     34  

SECTION 2.06.

 

Defaulting Lenders

     34  

ARTICLE III

 

[Reserved]

     35  

ARTICLE IV

 

SETTLEMENT PROCEDURES AND PAYMENT PROVISIONS

     35  

SECTION 4.01.

 

Settlement Procedures

     35  

SECTION 4.02.

 

Payments and Computations, Etc

     38  

ARTICLE V

 

INCREASED COSTS; FUNDING LOSSES; TAXES; ILLEGALITY AND SECURITY INTEREST

     38  

SECTION 5.01.

 

Increased Costs

     38  

SECTION 5.02.

 

Funding Losses

     39  

SECTION 5.03.

 

Taxes

     40  

SECTION 5.04.

 

Inability to Determine Adjusted LIBOR or LMIR; Change in Legality

     44  

SECTION 5.05.

 

Security Interest

     45  

SECTION 5.06.

 

Successor Adjusted LIBOR or LMIR

     45  

ARTICLE VI

 

CONDITIONS to Effectiveness and CREDIT EXTENSIONS

     47  

SECTION 6.01.

 

Conditions Precedent to Effectiveness and the Initial Credit Extension

     47  

SECTION 6.02.

 

Conditions Precedent to All Credit Extensions

     48  

SECTION 6.03.

 

Conditions Precedent to All Releases

     49  

ARTICLE VII

 

REPRESENTATIONS AND WARRANTIES

     49  

SECTION 7.01.

 

Representations and Warranties of the Borrower

     49  

SECTION 7.02.

 

Representations and Warranties of the Servicer

     54  

 

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TABLE OF CONTENTS

(continued)

 

         Page  

ARTICLE VIII

 

COVENANTS

     58  

SECTION 8.01.

 

Covenants of the Borrower

     58  

SECTION 8.02.

 

Covenants of the Servicer

     66  

SECTION 8.03.

 

Separate Existence of the Borrower

     73  

ARTICLE IX

 

ADMINISTRATION AND COLLECTION OF RECEIVABLES

     77  

SECTION 9.01.

 

Appointment of the Servicer

     77  

SECTION 9.02.

 

Duties of the Servicer

     78  

SECTION 9.03.

 

Collection Account Arrangements

     78  

SECTION 9.04.

 

Enforcement Rights

     79  

SECTION 9.05.

 

Responsibilities of the Borrower

     80  

SECTION 9.06.

 

Servicing Fee

     81  

ARTICLE X

 

EVENTS OF DEFAULT

     81  

SECTION 10.01.

 

Events of Default

     81  

ARTICLE XI

 

THE ADMINISTRATIVE AGENT

     85  

SECTION 11.01.

 

Authorization and Action

     85  

SECTION 11.02.

 

Administrative Agent’s Reliance, Etc

     85  

SECTION 11.03.

 

Administrative Agent and Affiliates

     86  

SECTION 11.04.

 

Indemnification of Administrative Agent

     86  

SECTION 11.05.

 

Delegation of Duties

     86  

SECTION 11.06.

 

Action or Inaction by Administrative Agent

     86  

SECTION 11.07.

 

Notice of Events of Default; Action by Administrative Agent

     87  

SECTION 11.08.

 

Non-Reliance on Administrative Agent and Other Parties

     87  

SECTION 11.09.

 

Successor Administrative Agent

     87  

SECTION 11.10.

 

Structuring Agent

     88  

ARTICLE XII

 

[RESERVED]

     88  

ARTICLE XIII

 

INDEMNIFICATION

     88  

SECTION 13.01.

 

Indemnities by the Borrower

     88  

SECTION 13.02.

 

Indemnification by the Servicer

     91  

 

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TABLE OF CONTENTS

(continued)

 

         Page  

ARTICLE XIV

 

MISCELLANEOUS

     93  

SECTION 14.01.

 

Amendments, Etc

     93  

SECTION 14.02.

 

Notices, Etc

     94  

SECTION 14.03.

 

Assignability; Addition of Lenders

     94  

SECTION 14.04.

 

Costs and Expenses

     97  

SECTION 14.05.

 

No Proceedings

     97  

SECTION 14.06.

 

Confidentiality

     97  

SECTION 14.07.

 

GOVERNING LAW

     99  

SECTION 14.08.

 

Execution in Counterparts

     99  

SECTION 14.09.

 

Integration; Binding Effect; Survival of Termination

     99  

SECTION 14.10.

 

CONSENT TO JURISDICTION

     99  

SECTION 14.11.

 

WAIVER OF JURY TRIAL

     100  

SECTION 14.12.

 

Ratable Payments

     100  

SECTION 14.13.

 

Limitation of Liability

     100  

SECTION 14.14.

 

Intent of the Parties

     101  

SECTION 14.15.

 

USA Patriot Act

     101  

SECTION 14.16.

 

Right of Setoff

     101  

SECTION 14.17.

 

Severability

     101  

SECTION 14.18.

 

Mutual Negotiations

     102  

SECTION 14.19.

 

Captions and Cross References

     102  

 

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TABLE OF CONTENTS

(continued)

 

EXHIBITS

EXHIBIT A

  –     

Form of Loan Request

EXHIBIT B

  –     

Form of Reduction Notice

EXHIBIT C

  –     

Form of Assignment and Acceptance Agreement

EXHIBIT D

  –     

[Reserved]

EXHIBIT E

  –     

[Reserved]

EXHIBIT F

  –     

Credit and Collection Policy

EXHIBIT G

  –     

Form of Information Package

EXHIBIT H

  –     

Form of Compliance Certificate

EXHIBIT I

  –     

Closing Memorandum

EXHIBIT J

  –     

Form of Interim Report

SCHEDULES

SCHEDULE I

  –     

Commitments

SCHEDULE II

  –     

Lock-Boxes, Collection Accounts and Collection Account Banks

SCHEDULE III

  –     

Notice Addresses

 

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This RECEIVABLES FINANCING AGREEMENT (as amended, restated, supplemented or
otherwise modified from time to time, this “Agreement”) is entered into as of
June 29, 2018 by and among the following parties:

(i)    SYNEOS HEALTH RECEIVABLES LLC, a Delaware limited liability company, as
Borrower (together with its successors and assigns, the “Borrower”);

(ii)    the Persons from time to time party hereto as Lenders;

(iii)    PNC BANK, NATIONAL ASSOCIATION (“PNC”), as Administrative Agent;

(iv)    INC RESEARCH, LLC, a Delaware limited liability company, in its
individual capacity (“INC Research”) and as initial Servicer (in such capacity,
together with its successors and assigns in such capacity, the “Servicer”); and

(v)    PNC CAPITAL MARKETS LLC, a Pennsylvania limited liability company, as
Structuring Agent.

PRELIMINARY STATEMENTS

The Borrower has acquired, and will acquire from time to time, Receivables from
the Originator(s) pursuant to the Purchase and Sale Agreement. The Borrower has
requested that the Lenders make Loans from time to time to the Borrower, on the
terms, and subject to the conditions set forth herein, secured by, among other
things, the Receivables.

In consideration of the mutual agreements, provisions and covenants contained
herein, the sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01. Certain Defined Terms. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):

“Account Control Agreement” means each agreement, in form and substance
satisfactory to the Administrative Agent, among the Borrower, the Servicer (if
applicable), the Administrative Agent and a Collection Account Bank, governing
the terms of the related Collection Accounts that (i) provides the
Administrative Agent with control within the meaning of the UCC over the deposit
accounts subject to such agreement and (ii) by its terms, may not be terminated
or canceled by the related Collection Account Bank without the written consent
of the Administrative Agent or upon no less than thirty (30) days prior written
notice to the Administrative Agent, as the same may be amended, restated,
supplemented or otherwise modified from time to time.

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“Adjusted LIBOR” means with respect to any Tranche Period, the interest rate per
annum determined by the Administrative Agent by dividing (the resulting quotient
rounded upwards, if necessary, to the nearest 1/100th of 1% per annum) (i) the
rate of interest determined by the Administrative Agent in accordance with its
usual procedures (which determination shall be conclusive absent manifest error)
to be the rate per annum for deposits in Dollars as reported by Bloomberg
Finance L.P. and shown on US0001M Screen as the composite offered rate for
London interbank deposits for such Tranche Period (or on any successor or
substitute page of such service, or any successor to or substitute for such
service, providing rate quotations comparable to those currently provided on
such page of such service, as determined by the Administrative Agent from time
to time for purposes of providing quotations of interest rates applicable to
dollar deposits in the London interbank market) at or about 11:00 a.m. (London
time) on the Business Day which is two (2) Business Days prior to the first day
of such Tranche Period for an amount comparable to the Portion of Capital to be
funded at Adjusted LIBOR during such Tranche Period, by (ii) a number equal to
1.00 minus the Euro-Rate Reserve Percentage; provided, however, that with
respect to the initial Tranche Period for a Loan that is not advanced on a
Monthly Settlement Date, Adjusted LIBOR shall be the interest rate per annum
equal to LMIR for each day during such initial Tranche Period from the date that
such Loan is made pursuant to Section 2.01 until the next occurring Monthly
Settlement Date. The calculation of Adjusted LIBOR may also be expressed by the
following formula:

 

     

Composite of London interbank offered rates shown on

Bloomberg Finance L.P. Screen US0001M or appropriate successor

Adjusted LIBOR    =                                         
                                                           1.00 - Euro-Rate
Reserve Percentage

Adjusted LIBOR shall be adjusted on the effective date of any change in the
Euro-Rate Reserve Percentage as of such effective date. The Administrative Agent
shall give prompt notice to the Borrower of Adjusted LIBOR as determined or
adjusted in accordance herewith (which determination shall be conclusive absent
manifest error). Notwithstanding the foregoing, if Adjusted LIBOR as determined
herein would be less than zero (0.00), such rate shall be deemed to be zero
percent (0.00%) for purposes of this Agreement.

“Administrative Agent” means PNC, in its capacity as contractual representative
for the Credit Parties, and any successor thereto in such capacity appointed
pursuant to Article XI or Section 14.03(f).

“Advent” means Advent International Corporation and its Affiliates.

“Adverse Claim” means any ownership interest or claim, mortgage, deed of trust,
pledge, lien, security interest, hypothecation, charge or other encumbrance or
security arrangement of any nature whatsoever, whether voluntarily or
involuntarily given, including, but not limited to, any conditional sale or
title retention arrangement, and any assignment, deposit arrangement or lease
intended as, or having the effect of, security and any filed financing statement
or other notice of any of the foregoing (whether or not a lien or other
encumbrance is created or exists at the time of the filing); it being understood
that any of the foregoing in favor of, or assigned to, the Administrative Agent
(for the benefit of the Secured Parties) shall not constitute an Adverse Claim.

 

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“Advisors” has the meaning set forth in Section 14.06(c).

“Affected Person” means each Credit Party and each of their respective
Affiliates.

“Affiliate” means, as to any Person: (a) any other Person that, directly or
indirectly, is in control of, is controlled by or is under common control with
such Person or (b) who is a director or officer: (i) of such Person or (ii) of
any Person described in clause (a). For purposes of this definition, control of
a Person shall mean the power, direct or indirect: (x) to vote 35% or more of
the securities having ordinary voting power for the election of directors or
managers of such Person or (y) to direct or cause the direction of the
management and policies of such Person, in either case whether by ownership of
securities, contract, proxy or otherwise.

“Aggregate Capital” means, at any time of determination, the aggregate
outstanding Capital of all Lenders at such time.

“Aggregate Interest” means, at any time of determination, the aggregate accrued
and unpaid Interest on the Loans of all Lenders at such time.

“Agreement” has the meaning set forth in the preamble to this Agreement.

“Anti-Terrorism Laws” means any Applicable Law relating to terrorism financing,
trade sanctions programs and embargoes, import/export licensing, money
laundering or bribery, and any regulation, order, or directive promulgated,
issued or enforced pursuant to such Applicable Laws, all as amended,
supplemented or replaced from time to time.

“Applicable Law” means, with respect to any Person, (x) all provisions of law,
statute, treaty, constitution, ordinance, rule, regulation, ordinance,
requirement, restriction, permit, executive order, certificate, decision,
directive or order of any Governmental Authority applicable to such Person or
any of its property and (y) all judgments, injunctions, orders, writs, decrees
and awards of all courts and arbitrators in proceedings or actions in which such
Person is a party or by which any of its property is bound. For the avoidance of
doubt, FATCA shall constitute an “Applicable Law” for all purposes of this
Agreement.

“Assignment and Acceptance Agreement” means an assignment and acceptance
agreement entered into by a Lender, an Eligible Assignee and the Administrative
Agent, and, if required, the Borrower, pursuant to which such Eligible Assignee
may become a party to this Agreement, in substantially the form of Exhibit C
hereto.

“Attorney Costs” means and includes all reasonable fees, costs, expenses and
disbursements of any law firm or other external counsel and all disbursements of
internal counsel.

“Bankruptcy Code” means the United States Bankruptcy Reform Act of 1978 (11
U.S.C. § 101, et seq.), as amended from time to time.

 

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“Base Rate” means, for any day and any Lender, a fluctuating interest rate per
annum as shall be in effect from time to time, which rate shall be at all times
equal to the higher of:

(a)    the rate of interest in effect for such day as publicly announced from
time to time by such Lender or its Affiliate as its “reference rate” or “prime
rate”, as applicable. Such “reference rate” or “prime rate” is set by the
applicable Lender or its Affiliate based upon various factors, including such
Person’s costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which may be
priced at, above or below such announced rate, and is not necessarily the lowest
rate charged to any customer; and

(b)    0.50% per annum above the latest Federal Funds Rate.

“Borrower” has the meaning specified in the preamble to this Agreement.

“Borrower Indemnified Amounts” has the meaning set forth in Section 13.01(a).

“Borrower Indemnified Party” has the meaning set forth in Section 13.01(a).

“Borrower Material Adverse Effect” means a material adverse effect on any of the
following:

(a)    the assets, operations, business or financial condition of the Borrower;

(b)    the ability of the Borrower to perform its obligations under this
Agreement or any other Transaction Document to which it is a party;

(c)    the validity or enforceability of this Agreement or any other Transaction
Document to which the Borrower is a party, or the validity, enforceability,
value or collectability of any material portion of the Pool Receivables;

(d)    the status, perfection, enforceability or priority of the Administrative
Agent’s security interest in the Collateral; or

(e)    the rights and remedies of any Credit Party under the Transaction
Documents or associated with its respective interest in the Collateral.

“Borrower Obligations” means all present and future indebtedness, reimbursement
obligations, and other liabilities and obligations (howsoever created, arising
or evidenced, whether direct or indirect, absolute or contingent, or due or to
become due) of the Borrower to any Credit Party, Borrower Indemnified Party
and/or any Affected Person, arising under or in connection with this Agreement
or any other Transaction Document or the transactions contemplated hereby or
thereby, and shall include, without limitation, all Capital and Interest on the
Loans, all Fees and all other amounts due or to become due under the Transaction
Documents (whether in respect of fees, costs, expenses, indemnifications or
otherwise), including, without limitation, interest, fees and other obligations
that accrue after the commencement of any Insolvency Proceeding with respect to
the Borrower (in each case whether or not allowed as a claim in such
proceeding).

 

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“Borrower’s Net Worth” means, at any time of determination, an amount equal to
(i) the aggregate Outstanding Balance of all Pool Receivables at such time,
minus (ii) the sum of (A) the Aggregate Capital at such time, plus (B) the
Aggregate Interest at such time, plus (C) the aggregate accrued and unpaid Fees
at such time, plus (D) the aggregate outstanding principal balance owing under
each Intercompany Loan Agreement at such time, plus (E) the aggregate accrued
and unpaid interest owing under each Intercompany Loan Agreement at such time,
plus (F) without duplication, the aggregate accrued and unpaid other Borrower
Obligations at such time.

“Borrowing Base” means, at any time of determination, the amount equal to the
lesser of (a) the Facility Limit and (b) the amount equal to (i) the Net
Receivables Pool Balance at such time, minus (ii) the Total Reserves at such
time.

“Borrowing Base Deficit” means, at any time of determination, the amount, if
any, by which (a) the Aggregate Capital at such time, exceeds (b) the sum of
(i) the Borrowing Base at such time plus (ii) the aggregate amount of
Collections (if any) then being held by, and under the exclusive control of, the
Administrative Agent, solely to the extent such Collections (x) have been
applied to reduce the Outstanding Balance of the related Receivables for
purposes of calculating the Borrowing Base in clause (i) above and (y) have not
been applied in reduction of the Aggregate Capital or otherwise in accordance
with the priorities for payment specified in Section 4.01(a).

“Breakage Fee” means (i) for any Interest Period for which Interest is computed
by reference to Adjusted LIBOR and a reduction of Capital is made for any reason
on any day other than the last day of the related Tranche Period or (ii) to the
extent that the Borrower shall for any reason, fail to borrow on the date
specified by the Borrower in connection with any request for funding pursuant to
Article II of this Agreement, the amount, if any, by which (A) the additional
Interest (calculated without taking into account any Breakage Fee or any
shortened duration of such Interest Period pursuant to the definition thereof)
which would have accrued during such Interest Period on the reductions of
Capital relating to such Interest Period had such reductions not been made (or,
in the case of clause (ii) above, the amounts so failed to be borrowed or
accepted in connection with any such request for funding by the Borrower),
exceeds (B) the income, if any, received by the applicable Lender from the
investment of the proceeds of such reductions of Capital (or such amounts failed
to be borrowed by the Borrower). A certificate as to the amount of any Breakage
Fee (including the computation of such amount) shall be submitted by the
affected Lender to the Borrower and shall be conclusive and binding for all
purposes, absent manifest error.

“Business Day” means any day (other than a Saturday or Sunday) on which:
(a) banks are not authorized or required to close in Pittsburgh, Pennsylvania,
or New York City, New York and (b) if this definition of “Business Day” is
utilized in connection with Adjusted LIBOR or LMIR, dealings are carried out in
the London interbank market.

“Capital” means, with respect to any Lender, the aggregate amounts paid to, or
on behalf of, the Borrower in connection with all Loans made by such Lender
pursuant to Article II, as reduced from time to time by Collections distributed
and applied on account of such Capital pursuant to Section 4.01; provided, that
if such Capital shall have been reduced by any

 

5

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distribution and thereafter all or a portion of such distribution is rescinded
or must otherwise be returned for any reason, such Capital shall be increased by
the amount of such rescinded or returned distribution as though it had not been
made.

“Capital Stock” means, with respect to any Person, any and all common shares,
preferred shares, interests, participations, rights in or other equivalents
(however designated) of such Person’s capital stock, partnership interests,
limited liability company interests, membership interests or other equivalent
interests and any rights (other than debt securities convertible into or
exchangeable for capital stock), warrants or options exchangeable for or
convertible into such capital stock or other equity interests.

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

(a)    INC Research ceases to own, directly, 100% of the issued and outstanding
Capital Stock of the Borrower free and clear of all Adverse Claims;

(b)    Parent ceases to own, directly or indirectly, 100% of the issued and
outstanding Capital Stock of any Originator or the Servicer;

(c)    any Adverse Claim should exist with respect to any Intercompany Loan
Agreement or any Intercompany Loan;

(d)    the acquisition by any Person or group (within the meaning of
Section 13(d)(3) or Section 14(d)(2) of the Exchange Act), including any group
acting for the purpose of acquiring, holding or disposing of Securities (within
the meaning of Rule 13d-5(b)(1) under the Exchange Act, but excluding any
employee benefit plan and/or Person acting as the trustee, agent or other
fiduciary or administrator therefor), other than one or more Permitted Holders,
of Capital Stock representing more than the greater of (x) 35% of the total
voting power of all of the outstanding voting Capital Stock of Parent and
(y) the percentage of the total voting power of all of the outstanding voting
Capital Stock of Parent owned, directly or indirectly, beneficially by the
Permitted Holders; or

(e)    the occurrence of a “change of control” (or similar event, however
defined) under the Credit Agreement (or any refinancing thereof).

“Change in Law” means the occurrence, after the Closing Date, of any of the
following: (a) the adoption or taking effect of any law, rule, regulation or
treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation, implementation or application thereof by any
Governmental Authority or (c) the making or issuance of any request, rule,
guideline or directive (whether or not having the force of law) by any
Governmental Authority; provided that notwithstanding anything herein to the
contrary, (w) the final rule titled Risk-Based Capital Guidelines; Capital
Adequacy Guidelines; Capital Maintenance: Regulatory Capital; Impact of
Modifications to Generally Accepted Accounting Principles; Consolidation of
Asset-Backed Commercial Paper Programs; and Other Related Issues, adopted by the
United States bank regulatory agencies on December 15, 2009, (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

 

6

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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” (as amended, supplemented or
otherwise modified or replaced from time to time), shall in each case be deemed
to be a “Change in Law”, regardless of the date enacted, adopted or issued.

“Closing Date” means June 29, 2018.

“Code” means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.

“Collateral” has the meaning set forth in Section 5.05(a).

“Collection Account” means each account listed on Schedule II to this Agreement
(as such schedule may be modified from time to time in connection with the
closing or opening of any Collection Account in accordance with the terms
hereof) (in each case, in the name of the Borrower) and maintained at a bank or
other financial institution acting as a Collection Account Bank pursuant to an
Account Control Agreement for the purpose of receiving Collections.

“Collection Account Bank” means any of the banks or other financial institutions
holding one or more Collection Accounts.

“Collections” means, with respect to any Pool Receivable: (a) all funds that are
received by any Originator, the Borrower, the Servicer or any other Person on
their behalf in payment of any amounts owed in respect of such Pool Receivable
(including purchase price, service charges, finance charges, interest, fees and
all other charges), or applied to amounts owed in respect of such Pool
Receivable (including insurance payments, proceeds of drawings under supporting
letters of credit and net proceeds of the sale or other disposition of
repossessed goods or other collateral or property of the related Obligor or any
other Person directly or indirectly liable for the payment of such Pool
Receivable and available to be applied thereon), (b) all Deemed Collections,
(c) all proceeds of all Related Security with respect to such Pool Receivable
and (d) all other proceeds of such Pool Receivable.

“Commencement Date” means the date, if any, identified as the “Commencement
Date” in a writing delivered by the Borrower to the Administrative Agent;
provided, however, that the “Commencement Date” shall be deemed to be the date
of the initial Credit Extension if not previously identified as a date on or
prior to the date of the initial Credit Extension.

“Commitment” means, with respect to any Lender, the maximum aggregate amount of
Capital which such Person is obligated to lend or pay hereunder on account of
all Loans, on a combined basis, as set forth on Schedule I or in such other
agreement pursuant to which it became a Lender, as such amount may be modified
in connection with any subsequent assignment pursuant to Section 14.03 or in
connection with a reduction in the Facility Limit pursuant to Section 2.02(e).
If the context so requires, “Commitment” also refers to a Lender’s obligation to
make Loans hereunder in accordance with this Agreement.

 

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“Concentration Percentage” means (i) for any Group A Obligor, 25.0%, (ii) for
any Group B Obligor, 15.0%, (iii) for any Group C Obligor, 10.0% and (iv) for
any Group D Obligor, 5.0%.

“Concentration Reserve Percentage” means, at any time of determination, the
largest of: (a) the sum of the four (4) largest Obligor Percentages of the Group
D Obligors, (b) the sum of the two (2) largest Obligor Percentages of the Group
C Obligors and (c) the largest Obligor Percentage of the Group B Obligors.

“Contract” means, with respect to any Receivable, any and all contracts,
instruments, agreements, leases, invoices, notes or other writings pursuant to
which such Receivable arises or that evidence such Receivable or under which an
Obligor becomes or is obligated to make payment in respect of such Receivable.

“Covered Entity” means (a) each of Borrower, the Servicer, each Originator, the
Parent and each of the Parent’s Subsidiaries and (b) each Person that, directly
or indirectly, is in control of a Person described in clause (a) above. For
purposes of this definition, control of a Person shall mean the direct or
indirect (x) ownership of, or power to vote, 35% or more of the issued and
outstanding equity interests having ordinary voting power for the election of
directors of such Person or other Persons performing similar functions for such
Person, or (y) power to direct or cause the direction of the management and
policies of such Person whether by ownership of equity interests, contract or
otherwise.

“Credit Agreement” means that certain Credit Agreement, dated as of August 1,
2017, as amended, by and among Syneos Health, Inc. f/k/a INC Research Holdings,
Inc., as the administrative borrower, the other borrowers party thereto, the
financial institutions party thereto as lenders, Credit Suisse AG, Cayman
Islands Branch, as administrative agent, the other financial institutions party
thereto, as joint lead arrangers and joint bookrunners.

“Credit and Collection Policy” means, as the context may require, those
receivables credit and collection policies and practices of the Originators in
effect on the Closing Date and described in Exhibit F, as modified in compliance
with this Agreement.

“Credit Extension” means the making of any Loan.

“Credit Party” means each Lender and the Administrative Agent.

“Days’ Sales Outstanding” means, for any Fiscal Month, an amount computed as of
the last day of such Fiscal Month equal to: (a) the average of the Outstanding
Balance of all Pool Receivables (other than Unbilled Receivables) as of the last
day of each of the three most recent Fiscal Months ended on the last day of such
Fiscal Month, divided by (b) (i) the aggregate initial Outstanding Balance of
all Pool Receivables (other than Unbilled Receivables) generated by the
Originators during the three most recent Fiscal Months ended on the last day of
such Fiscal Month, divided by (ii) 90.

“Debt” means, as to any Person at any time of determination, any and all
indebtedness, obligations or liabilities (whether matured or unmatured,
liquidated or unliquidated, direct or indirect, absolute or contingent, or joint
or several) of such Person for or in respect of: (i)

 

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borrowed money, (ii) amounts raised under or liabilities in respect of any
bonds, debentures, 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 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 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
Agreement (unless such writing or public statement indicates that such position
is based on such

 

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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
sum of (i) the aggregate initial Outstanding Balance of all Pool Receivables
(other than Unbilled Receivables) generated by the Originators during such
Fiscal Month, plus (ii) the aggregate initial Outstanding Balance of all Pool
Receivables (other than Unbilled Receivables) generated by the Originators
during the preceding Fiscal Month, by (b) the Net Receivables Pool Balance as of
the last day of such Fiscal Month. 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 (ii) the aggregate initial Outstanding Balance of all Pool Receivables (other
than Unbilled Receivables) generated by the Originators during the Fiscal Month
that is one (1) month prior to such Fiscal Month.

 

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“Dilution 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 Dilution Horizon Ratio, multiplied by
(b) the sum of (i) the Stress Factor times the average of the Dilution Ratios
for the twelve (12) most recent Fiscal Months, plus (ii) the Dilution Volatility
Component.

“Dilution Volatility Component” means, for any Fiscal Month, 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 positive difference, if any, between: (i) the highest Dilution Ratio
for any Fiscal Month during the twelve (12) most recent Fiscal Months and
(ii) the arithmetic average of the Dilution Ratios for such twelve (12) Fiscal
Months; multiplied by

(b)    the quotient of (i) the highest Dilution Ratio for any Fiscal Month
during the twelve (12) most recent Fiscal Months, divided by (ii) the arithmetic
average of the Dilution Ratios for such twelve (12) Fiscal Months.

“Dollars” and “$” each mean the lawful currency of the United States of America.

“Eligible Assignee” means (i) any Lender or any of its Affiliates, (ii) any
Person managed by a Lender or any of its Affiliates and (iii) any other
financial or other institution.

“Eligible Foreign Obligor” means an Obligor with respect to any Receivable that
is organized in or that has a head office (domicile), registered office, and
chief executive office located in an OECD Country (other than the United
States).

“Eligible Receivable” means, at any time of determination, a Pool Receivable:

(a)    the Obligor of which is: (i) either a U.S. Obligor or an Eligible Foreign
Obligor; (ii) not a Governmental Authority; (iii) not a Sanctioned Person;
(iv) not subject to any Insolvency Proceeding; (v) not an Affiliate of the
Borrower, the Servicer, the Parent, the Performance Guarantor or any Originator;
(vi) not the Obligor with respect to Delinquent Receivables with an aggregate
Outstanding Balance exceeding 50% of the aggregate Outstanding Balance of all
such Obligor’s Pool Receivables; (vii) not a natural person and (viii) not a
material supplier to any Originator or an Affiliate of a material supplier;

(b)    for which an Insolvency Proceeding shall not have occurred with respect
to the Obligor thereof or any other Person obligated thereon or owning any
Related Security with respect thereto;

(c)    that is denominated and payable only in Dollars in the United States of
America, and the Obligor with respect to which has been instructed to remit
Collections in respect thereof directly to a Lock-Box or Collection Account in
the United States of America;

 

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(d)    that does not have a due date which is 120 days or more after the
original invoice date of such Receivable;

(e)    that (i) arises under a Contract for the sale of goods or services in the
ordinary course of the applicable Originator’s business and (ii) does not
constitute a loan or other similar financial accommodation being provided by the
applicable Originator;

(f)    that arises under a duly authorized Contract that (i) is in full force
and effect, (ii) is a legal, valid and binding obligation of the related
Obligor, enforceable against such Obligor in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors’
rights generally and by general principles of equity regardless of whether
enforceability is considered in a proceeding in equity or at law and (iii) the
payments thereunder are free and clear of, or increased to account for, any
applicable withholding Taxes;

(g)    that has been transferred by an Originator to the Borrower pursuant to
the Purchase and Sale Agreement with respect to which transfer all conditions
precedent under the Purchase and Sale Agreement have been met;

(h)    that, together with the Contract related thereto, conforms in all
material respects with all Applicable Laws (including any applicable laws
relating to usury, truth in lending, fair credit billing, fair credit reporting,
equal credit opportunity, fair debt collection practices and privacy);

(i)    with respect to which all consents, licenses, approvals or authorizations
of, or registrations or declarations with or notices to, any Governmental
Authority or other Person required to be obtained, effected or given by an
Originator in connection with the creation of such Receivable, the execution,
delivery and performance by such Originator of the related Contract or the
assignment thereof under the Purchase and Sale Agreement have been duly
obtained, effected or given and are in full force and effect;

(j)    that is not subject to any existing dispute, right of rescission,
set-off, counterclaim, any other defense against the applicable Originator (or
any assignee of such Originator) or Adverse Claim (other than a Permitted
Adverse Claim), and the Obligor of which holds no right as against the
applicable Originator to cause such Originator to repurchase the goods or
merchandise, the sale of which shall have given rise to such Receivable;
provided that only the portion of such Pool Receivable subject to such dispute,
right of rescission, set-off, counterclaim, defense or Adverse Claim (other than
a Permitted Adverse Claim) shall be ineligible;

(k)    that satisfies all applicable requirements of the Credit and Collection
Policy in all material respects;

 

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(l)    that, together with the Contract related thereto, has not been modified,
waived or restructured since its creation, except as permitted pursuant to
Section 9.02 of this Agreement;

(m)    in which the Borrower owns good and marketable title, free and clear of
any Adverse Claims (other than Permitted Adverse Claims), and that is freely
assignable (including without any consent of the related Obligor or any
Governmental Authority), and the payments thereon are free and clear of any, or
increased to account for any applicable, withholding Taxes;

(n)    for which the Administrative Agent (on behalf of the Secured Parties)
shall have a valid and enforceable first priority perfected security interest
therein and in the Related Security and Collections with respect thereto, in
each case free and clear of any Adverse Claim (other than a Permitted Adverse
Claim);

(o)    that (x) constitutes an “account” or “general intangible” (as defined in
the UCC), (y) is not evidenced by instruments or chattel paper and (z) does not
constitute, or arise from the sale of, as-extracted collateral (as defined in
the UCC);

(p)    that is neither a Defaulted Receivable nor a Delinquent Receivable;

(q)    for which no Originator, the Borrower, the Parent, the Performance
Guarantor or the Servicer has established any offset or netting arrangements
(including customer deposits and advance payments (including payments relating
to unearned revenues)) with the related Obligor in connection with the ordinary
course of payment of such Receivable; provided that only the portion of such
Pool Receivable in an amount equal to such customer deposits or advance payments
shall be ineligible;

(r)    that represents amounts earned and payable by the Obligor that are not
subject to the performance of additional services by the Originator thereof or
by the Borrower and the related goods or merchandise shall have been shipped
and/or services performed, other than, in the case of an Eligible Unbilled
Receivable, the billing or invoicing of such Receivable; provided, that if such
Receivable is subject to the performance of additional services, only the
portion of such Receivable attributable to such additional services shall be
ineligible;

(s)    which (i) does not arise from a sale of accounts made as part of a sale
of a business or constitute an assignment for the purpose of collection only,
(ii) is not a transfer of a single account made in whole or partial satisfaction
of a preexisting indebtedness or an assignment of a right to payment under a
contract to an assignee that is also obligated to perform under the contract and
(iii) is not a transfer of an interest in or an assignment of a claim under a
policy of insurance;

(t)    which does not relate to the sale of any consigned goods or finished
goods which have incorporated any consigned goods into such finished goods;

(u)    for which the related Originator has recognized the related revenue on
its financial books and records in accordance with GAAP;

 

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(v)    for which the related invoice does not include any Excluded Receivable;

(w)    for which neither the related Originator nor any Affiliate thereof is
holding any deposits received by or on behalf of the related Obligor; provided
that only the portion of such Pool Receivable in an amount equal to such
deposits shall be ineligible; and

(x)    that, if such Receivable is an Unbilled Receivable, is an Eligible
Unbilled Receivable.

“Eligible Unbilled Receivable” means, at any time, any Unbilled Receivable that
satisfies each of the following: (a) the related Originator has recognized the
related revenue on its financial books and records under GAAP and (b) if the
Outstanding Balance of such Unbilled Receivable were included in the definition
of Modified Days’ Sales Outstanding, Modified Days’ Sales Outstanding would not
exceed the Maximum Term; provided, however, for purposes of exclusion of any
Unbilled Receivable pursuant to this clause (b), Unbilled Receivables shall be
excluded in order based on the Outstanding Balance (with the smallest amount
excluded first). For purposes of this definition of “Eligible Unbilled
Receivable”, “Maximum Term” means 105 days.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any rule or regulation issued thereunder.

“ERISA Affiliate” means, with respect to any Person, any corporation, trade or
business which together with the Person is a member of a controlled group of
corporations or a controlled group of trades or businesses and would be deemed a
“single employer” within the meaning of Sections 414(b), (c), (m) of the Code or
Section 4001(b) of ERISA.

“Euro-Rate Reserve Percentage” means, the maximum effective percentage in effect
on such day as prescribed by the Board of Governors of the Federal Reserve
System (or any successor) for determining the reserve requirements (including
without limitation, supplemental, marginal, and emergency reserve requirements)
with respect to eurocurrency funding (currently referred to as “Eurocurrency
Liabilities”).

“Event of Default” has the meaning specified in Section 10.01. For the avoidance
of doubt, any Event of Default that occurs shall be deemed to be continuing at
all times thereafter unless and until waived in accordance with Section 14.01.

“Excess Concentration” means the sum of the following amounts, without
duplication:

(a)    the sum of the amounts calculated for each of the Obligors equal to the
excess (if any) of (i) the aggregate Outstanding Balance of the Eligible
Receivables of such Obligor, over (ii) the product of (x) such Obligor’s
Concentration Percentage, multiplied by (y) the aggregate Outstanding Balance of
all Eligible Receivables then in the Receivables Pool; plus

(b)    the excess (if any) of (i) the aggregate Outstanding Balance of all
Eligible Receivables that are Eligible Unbilled Receivables, over (ii) the
product of (x) (A) so

 

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long as a Ratings Event has not occurred and is continuing, 50.0% or (B) if a
Ratings Event has occurred and is continuing, 25.0%, multiplied by (y) the
aggregate Outstanding Balance of all Receivables then in the Receivables Pool;
plus

(c)    the excess (if any) of (i) the aggregate Outstanding Balance of all
Eligible Receivables, the Obligors of which are Eligible Foreign Obligors, over
(ii) the product of (x) 10.0%, multiplied by (y) the aggregate Outstanding
Balance of all Receivables then in the Receivables Pool; plus

(d)    the excess (if any) of (i) the aggregate Outstanding Balance of all
Eligible Receivables that have a due date which is more than 90 days but less
than 121 days after the original invoice date of such Receivable, over (ii) the
product of (x) 10.0%, multiplied by (y) the aggregate Outstanding Balance of all
Receivables then in the Receivables Pool.

“Exchange Act” means the Securities Exchange Act of 1934, as amended or
otherwise modified from time to time.

“Excluded Receivable” means any Receivable (without giving effect to the proviso
to the definition thereto) the Obligor of which is Pfizer Inc. or any Subsidiary
thereof.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
an Affected Person or required to be withheld or deducted from a payment to an
Affected Person: (a) Taxes imposed on or measured by net income (however
denominated), franchise Taxes and branch profits Taxes, in each case,
(i) imposed as a result of such Affected Person being organized under the laws
of, or having its principal office or, in the case of any Lender, its applicable
lending office located in, the jurisdiction imposing such Tax (or any political
subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of
a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for
the account of such Lender with respect to an applicable interest in the Loans
or Commitment pursuant to a law in effect on the date on which (i) such Lender
makes a Loan or its Commitment or (ii) such Lender changes its lending office,
except in each case to the extent that amounts with respect to such Taxes were
payable either to such Lender’s assignor immediately before such Lender became a
party hereto or to such Lender immediately before it changed its lending office
and (c) any U.S. federal withholding Taxes imposed pursuant to FATCA.

“Facility Limit” means $250,000,000 as reduced from time to time pursuant to
Section 2.02(e). References to the unused portion of the Facility Limit shall
mean, at any time of determination, an amount equal to (x) the Facility Limit at
such time, minus (y) the Aggregate Capital at such time.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof, any agreements entered into
pursuant to Section 1471(b)(1) of the Code, any applicable intergovernmental
agreement entered into between the United States and any other Governmental
Authority in connection with the implementation of the foregoing and any fiscal
or regulatory legislation, rules or official practices adopted pursuant to any
such intergovernmental agreement.

 

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“Federal Funds Rate” means, for any day, the per annum rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Board (including any such
successor, “H.15(519)”) for such day opposite the caption “Federal Funds
(Effective).” If on any relevant day such rate is not yet published in H.
15(519), the rate for such day will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by the Federal
Reserve Bank of New York (including any such successor, the “Composite 3:30 p.m.
Quotations”) for such day under the caption “Federal Funds Effective Rate.” If
on any relevant day the appropriate rate is not yet published in either
H.15(519) or the Composite 3:30 p.m. Quotations, the rate for such day will be
the arithmetic mean as determined by the Administrative Agent of the rates for
the last transaction in overnight Federal funds arranged before 9:00 a.m. (New
York City time) on that day by each of three leading brokers of Federal funds
transactions in New York City selected by the Administrative Agent.

“Federal Reserve Board” means the Board of Governors of the Federal Reserve
System, or any entity succeeding to any of its principal functions.

“Fee Letter” has the meaning specified in Section 2.03(a).

“Fees” has the meaning specified in Section 2.03(a).

“Final Maturity Date” means the date that (i) is one hundred eighty (180) days
following the Termination Date or (ii) such earlier date on which the Aggregate
Capital becomes due and payable pursuant to Section 10.01.

“Final Payout Date” means the date on or after the Termination Date when (i) the
Aggregate Capital and Aggregate Interest have been paid in full, (ii) all
Borrower Obligations shall have been paid in full, (iii) all other amounts owing
to the Credit Parties and any other Borrower Indemnified Party or Affected
Person hereunder and under the other Transaction Documents have been paid in
full and (iv) all accrued Servicing Fees have been paid in full.

“Financial Officer” of any Person means, the chief executive officer, the chief
financial officer, the senior vice president of finance, the chief accounting
officer, the principal accounting officer, the controller, the treasurer or the
assistant treasurer of such Person.

“Fiscal Month” means each calendar month.

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

 

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“Group A Obligor” means any Obligor (or its parent or majority owner, as
applicable, if such Obligor is not rated) with a short-term rating of at least:
(a) “A-1” by S&P, or if such Obligor does not have a short-term rating from S&P,
a rating of “A+” or better by S&P on such Obligor’s, its parent’s, or its
majority owner’s (as applicable) long-term senior unsecured and
uncredit-enhanced debt securities, or (b) “P-1” by Moody’s, or if such Obligor
does not have a short-term rating from Moody’s, “Al” or better by Moody’s on
such Obligor’s, its parent’s or its majority owner’s (as applicable) long-term
senior unsecured and uncredit-enhanced debt securities; provided, that if an
Obligor (or its parent or majority owner, as applicable, if such Obligor is not
rated) receives a split rating from S&P and Moody’s, then such Obligor (or its
parent or majority owner, as applicable) shall be deemed to have only the higher
of the two ratings for purposes of determining whether such rating satisfies
clauses (a) or (b) above; provided, further, that if the Subject Obligor
Delinquency Trigger shall have occurred and be continuing and the Administrative
Agent shall elect, in its sole discretion, by providing notice thereof to the
Borrower, the Subject Obligor shall be deemed to be a Group B Obligor if it
otherwise satisfies the definition of “Group A Obligor”. Notwithstanding the
foregoing, any Obligor that is a Subsidiary of an Obligor that satisfies the
definition of “Group A Obligor” shall be deemed to be a Group A Obligor and
shall be aggregated with the Obligor that satisfies such definition for the
purposes of determining the “Concentration Reserve Percentage”, the
“Concentration Reserve” and clause (a) of the definition of “Excess
Concentration” for such Obligors, unless such deemed Obligor separately
satisfies the definition of “Group A Obligor”, “Group B Obligor”, or “Group C
Obligor”, in which case such Obligor shall be separately treated as a Group A
Obligor, a Group B Obligor or a Group C Obligor, as the case may be, and shall
be aggregated and combined for such purposes with any of its Subsidiaries that
are Obligors.

“Group B Obligor” means an Obligor (or its parent or majority owner, as
applicable, if such Obligor is not rated) that is not a Group A Obligor, with a
short-term rating of at least: (a) “A-2” by S&P, or if such Obligor does not
have a short-term rating from S&P, a rating of “BBB+” to “A” by S&P on such
Obligor’s, its parent’s or its majority owner’s (as applicable) long-term senior
unsecured and uncredit-enhanced debt securities, or (b) “P-2” by Moody’s, or if
such Obligor does not have a short-term rating from Moody’s, “Baal” to “A2” by
Moody’s on such Obligor’s, its parent’s or its majority owner’s (as applicable)
long-term senior unsecured and uncredit-enhanced debt securities; provided, that
if an Obligor (or its parent or majority owner, as applicable, if such Obligor
is not rated) receives a split rating from S&P and Moody’s, then such Obligor
(or its parent or majority owner, as applicable) shall be deemed to have only
the higher of the two ratings for purposes of determining whether such rating
satisfies clauses (a) or (b) above; provided, further, that if the Subject
Obligor Delinquency Trigger shall have occurred and be continuing and the
Administrative Agent shall elect, in its sole discretion, by providing notice
thereof to the Borrower, the Subject Obligor shall be deemed to be a Group C
Obligor if it otherwise satisfies the definition of “Group B Obligor”.
Notwithstanding the foregoing, any Obligor that is a Subsidiary of an Obligor
that satisfies the definition of “Group B Obligor” shall be deemed to be a Group
B Obligor and shall be aggregated with the Obligor that satisfies such
definition for the purposes of determining the “Concentration Reserve
Percentage”, the “Concentration Reserve” and clause (a) of the definition of
“Excess Concentration” for such

 

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Obligors, unless such deemed Obligor separately satisfies the definition of
“Group A Obligor”, “Group B Obligor”, or “Group C Obligor”, in which case such
Obligor shall be separately treated as a Group A Obligor, a Group B Obligor or a
Group C Obligor, as the case may be, and shall be aggregated and combined for
such purposes with any of its Subsidiaries that are Obligors.

“Group C Obligor” means an Obligor (or its parent or majority owner, as
applicable, if such Obligor is not rated) that is not a Group A Obligor or a
Group B Obligor, with a short-term rating of at least: (a) “A-3” by S&P, or if
such Obligor does not have a short-term rating from S&P, a rating of “BBB-” to
“BBB” by S&P on such Obligor’s, its parent’s or it’s majority owner’s (as
applicable) long-term senior unsecured and uncredit-enhanced debt securities, or
(b) “P-3” by Moody’s, or if such Obligor does not have a short-term rating from
Moody’s, “Baa3” to “Baa2” by Moody’s on such Obligor’s, its parent’s or its
majority owner’s (as applicable) long-term senior unsecured and
uncredit-enhanced debt securities; provided, that if an Obligor (or its parent
or majority owner, as applicable, if such Obligor is not rated) receives a split
rating from S&P and Moody’s, then such Obligor (or its parent or majority owner,
as applicable) shall be deemed to have only the higher of the two ratings for
purposes of determining whether such rating satisfies clauses (a) or (b) above;
provided, further, that if the Subject Obligor Delinquency Trigger shall have
occurred and be continuing and the Administrative Agent shall elect, in its sole
discretion, by providing notice thereof to the Borrower, the Subject Obligor
shall be deemed to be a Group D Obligor if it otherwise satisfies the definition
of “Group C Obligor”. Notwithstanding the foregoing, any Obligor that is a
Subsidiary of an Obligor that satisfies the definition of “Group C Obligor”
shall be deemed to be a Group C Obligor and shall be aggregated with the Obligor
that satisfies such definition for the purposes of determining the
“Concentration Reserve Percentage”, the “Concentration Reserve” and clause
(a) of the definition of “Excess Concentration” for such Obligors, unless such
deemed Obligor separately satisfies the definition of “Group A Obligor”, “Group
B Obligor”, or “Group C Obligor”, in which case such Obligor shall be separately
treated as a Group A Obligor, a Group B Obligor or a Group C Obligor, as the
case may be, and shall be aggregated and combined for such purposes with any of
its Subsidiaries that are Obligors.

“Group D Obligor” means any Obligor that is not a Group A Obligor, Group B
Obligor or Group C Obligor; provided, that any Obligor (or its parent or
majority owner, as applicable, if such Obligor is unrated) that is not rated by
both Moody’s and S&P shall be a Group D Obligor.

“Guaranty” means, with respect to any Person, any obligation of such Person
guarantying or in effect guarantying any Debt, liability or obligation of any
other Person in any manner, whether directly or indirectly, including any such
liability arising by virtue of partnership agreements, including any agreement
to indemnify or hold harmless any other Person, any performance bond or other
suretyship arrangement and any other form of assurance against loss, except
endorsement of negotiable or other instruments for deposit or collection in the
ordinary course of business.

“INC Research” has the meaning specified in the preamble to this Agreement.

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of the
Borrower or any of its Affiliates under any Transaction Document and (b) to the
extent not otherwise described in clause (a) above, Other Taxes.

 

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“Independent Director” has the meaning set forth in Section 8.03(c).

“Information Package” means a report, in substantially the form of Exhibit G.

“Insolvency Proceeding” means (a) any case, action or proceeding before any
court or other Governmental Authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of
debtors or (b) any general assignment for the benefit of creditors of a Person,
composition, marshaling of assets for creditors of a Person, or other, similar
arrangement in respect of its creditors generally or any substantial portion of
its creditors, in each of clauses (a) and (b) undertaken under U.S. Federal,
state or foreign law, including the Bankruptcy Code.

“Intercompany Loan” has the meaning set forth in the Purchase and Sale
Agreement.

“Intercompany Loan Agreement” has the meaning set forth in the Purchase and Sale
Agreement.

“Intended Tax Treatment” has the meaning set forth in Section 14.14.

“Interest” means, for each Loan for each day during any Interest Period (or
portion thereof), the amount of interest accrued on the Capital of such Loan
during such Interest Period (or portion thereof) in accordance with
Section 2.03(b).

“Interest Period” means, with respect to each Loan, (a) before the Termination
Date: (i) initially, the period commencing on the date such Loan is made
pursuant to Section 2.01 (or in the case of any fees payable hereunder,
commencing on the Closing Date) and ending on (but not including) the next
Monthly Settlement Date and (ii) thereafter, each period commencing on such
Monthly Settlement Date and ending on (but not including) the next Monthly
Settlement Date and (b) on and after the Termination Date, such period
(including a period of one day) as shall be selected from time to time by the
Administrative Agent (with the consent or at the direction of the Majority
Lenders) or, in the absence of any such selection, each period of 30 days from
the last day of the preceding Interest Period.

“Interest Rate” means, for any day in any Interest Period for any Loan (or any
portion of Capital thereof):

(a)    subject to Sections 5.04 and 5.06 and so long as no Event of Default has
occurred and is continuing on such day, LMIR or solely to the extent determined
pursuant to Section 2.05, Adjusted LIBOR; provided, however, that the Interest
Rate applicable to any LIBOR Loan that is not advanced on a Monthly Settlement
Date shall be LMIR for each day during the initial Interest Period applicable to
such Loan from the date such Loan is made pursuant to Section 2.01 until the
next occurring Monthly Settlement Date; or

 

19

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(b)    for any day while an Event of Default has occurred and is continuing, an
interest rate per annum equal to the sum of 2.50% per annum plus the greater of
(i) the interest rate per annum determined for such Loan and such day pursuant
to clause (a) above, and (ii) the Base Rate in effect on such day;

provided, however, that no provision of this Agreement shall require the payment
or permit the collection of Interest in excess of the maximum permitted by
Applicable Law; provided, further, however, that Interest for any Loan shall not
be considered paid by any distribution to the extent that at any time all or a
portion of such distribution is rescinded or must otherwise be returned for any
reason.

“Interim Report” means a report, in substantially the form of Exhibit J.

“Investment Company Act” means the Investment Company Act of 1940, as amended or
otherwise modified from time to time.

“Investors” means (a) the Sponsors and (b) the Management Investors.

“LCR Security” means any commercial paper or security (other than equity
securities issued to Parent or any Originator that is a consolidated subsidiary
of Parent under GAAP) within the meaning of Paragraph __.32(e)(viii) of the
final rules titled Liquidity Coverage Ratio: Liquidity Risk Measurement
Standards, 79 Fed. Reg. 197, 61440 et seq. (October 10, 2014).

“Lenders” means each Person that is a party to this Agreement in the capacity of
a “Lender”.

“Liberty Lane” means Liberty Lane IH LLC and its Affiliates.

“LIBOR Loan” means any Loan accruing Interest at Adjusted LIBOR.

“LIBOR Termination Date” has the meaning set forth in Section 5.06(a).

“Linked Account” means any controlled disbursement account, controlled balance
account or other deposit account maintained by a Collection Account Bank for the
Parent, the Performance Guarantor, the Servicer, any Originator or any Affiliate
thereof and linked to any Collection Account by a zero balance account
connection or other automated funding mechanism or controlled balance
arrangement.

“LMIR” means for any day during any Interest Period, the interest rate per annum
determined by the Administrative Agent (which determination shall be conclusive
absent manifest error) by dividing (i) the one-month Eurodollar rate for Dollar
deposits as reported by Bloomberg Finance L.P. and shown on US0001M Screen or
any other service or page that may replace such page from time to time for the
purpose of displaying offered rates of leading banks for London interbank
deposits in Dollars, as of 11:00 a.m. (London time) on such day, or if such day
is not a Business Day, then the immediately preceding Business Day (or if not so
reported, then as determined by the Administrative Agent from another recognized
source for interbank quotation), in each case, changing when and as such rate
changes, by (ii) a number equal to 1.00

 

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minus the Euro-Rate Reserve Percentage on such day. The calculation of LMIR may
also be expressed by the following formula:

 

      One-month Eurodollar rate for Dollars shown on Bloomberg US0001M Screen
or appropriate successor    LMIR    =   

 

         1.00 - Euro-Rate Reserve Percentage   

LMIR shall be adjusted on the effective date of any change in the Euro-Rate
Reserve Percentage as of such effective date. Notwithstanding the foregoing, if
LMIR as determined herein would be less than zero percent (0.00%), such rate
shall be deemed to be zero percent (0.00%) for purposes of this Agreement.

“Loan” means any loan made by a Lender pursuant to Section 2.02.

“Loan Request” means a letter in substantially the form of Exhibit A hereto
executed and delivered by the Borrower to the Administrative Agent and the
Lenders pursuant to Section 2.02(a).

“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 seven (7) most recent Fiscal Months plus (y) 50% 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 Net Receivables Pool Balance as of such date.

“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.

 

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“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;

(c)    the validity or enforceability of this Agreement or any other Transaction
Document, or the validity, enforceability, value or collectability of any
material portion of the Pool Receivables;

(d)    the status, perfection, enforceability or priority of the Administrative
Agent’s security interest in the Collateral; or

(e)    the rights and remedies of any Credit Party under the Transaction
Documents or associated with its respective interest in the Collateral.

“Minimum Dilution 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 average of the Dilution Ratios
for the twelve (12) most recent Fiscal Months, multiplied by (b) the Dilution
Horizon Ratio.

“Minimum Funding Threshold” means, on any day, an amount equal to the lesser of
(a) the product of (i) 85.00% times (ii) the Facility Limit at such time and
(b) the Borrowing Base at such time.

“Modified Days’ Sales Outstanding” means, for any Fiscal Month, an amount
computed as of the last day of such Fiscal Month equal to: (a) the average of
the Outstanding Balance of all Pool Receivables as of the last day of each of
the three most recent Fiscal Months ended on the last day of such Fiscal Month,
divided by (b) (i) the aggregate initial Outstanding Balance of all Pool
Receivables originated by the Originators during the three most recent Fiscal
Months ended on the last day of such Fiscal Month, divided by (ii) 90.

“Monthly Settlement Date” means the 28th day of each calendar month (or if such
day is not a Business Day, the next occurring Business Day).

 

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“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto that
is a nationally recognized statistical rating organization.

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA to which the Borrower, the Servicer, any Originator, the Parent, the
Performance Guarantor or any of their respective ERISA Affiliates is making or
accruing an obligation to make contributions, or has within any of the preceding
five plan years made or accrued an obligation to make contributions.

“Net Receivables Pool Balance” means, at any time of determination: (a) the
aggregate Outstanding Balance of all Eligible Receivables then in the
Receivables Pool, minus (b) the Excess Concentration.

“Obligor” means, with respect to any Receivable, the Person obligated to make
payments pursuant to the Contract relating to such Receivable.

“Obligor Percentage” means, at any time of determination, for each Obligor, a
fraction, expressed as a percentage, (a) the numerator of which is the aggregate
Outstanding Balance of the Eligible Receivables of such Obligor less the amount
(if any) then included in the calculation of the Excess Concentration with
respect to such Obligor and (b) the denominator of which is the aggregate
Outstanding Balance of all Eligible Receivables at such time.

“OECD Country” means a country which is a member of the Organization for
Economic Cooperation and Development.

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

“Originator” and “Originators” have the meaning set forth in the Purchase and
Sale Agreement, as the same may be modified from time to time by adding new
Originators or removing Originators, in each case with the prior written consent
of the Administrative Agent.

“Other Connection Taxes” means, with respect to any Affected Person, Taxes
imposed as a result of a present or former connection between such Affected
Person and the jurisdiction imposing such Tax (other than connections arising
from such Affected Person 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 Loan
or Transaction Document).

“Other Taxes” means any and all present or future stamp or documentary Taxes or
any other excise or property Taxes, charges or similar levies or fees arising
from any payment made hereunder or from the execution, delivery, filing,
recording or enforcement of, or otherwise in respect of, this Agreement, the
other Transaction Documents and the other documents or agreements to be
delivered hereunder or thereunder except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment.

“Outstanding Balance” means, at any time of determination, with respect to any
Receivable, the then outstanding principal balance thereof.

 

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“Parent” means Syneos Health, Inc., a Delaware corporation.

“Parent Company” means any Person of which Parent is a direct or indirect
Wholly-Owned Subsidiary.

“Parent Group” has the meaning set forth in Section 8.03(c).

“Participant” has the meaning set forth in Section 14.03(d).

“Participant Register” has the meaning set forth in Section 14.03(e).

“PATRIOT Act” has the meaning set forth in Section 14.15.

“PBGC” means the Pension Benefit Guaranty Corporation, or any successor thereto.

“Pension Plan” means a pension plan as defined in Section 3(2) of ERISA that is
subject to Title IV of ERISA or Section 412 of the Code and with respect to
which any Originator, the Borrower, the Servicer, the Parent, the Performance
Guarantor or any of their respective ERISA Affiliates may have any liability,
contingent or otherwise.

“Percentage” means, at any time of determination, with respect to any Lender, a
fraction (expressed as a percentage), (a) the numerator of which is (i) prior to
the termination of all Commitments hereunder, its Commitment at such time or
(ii) if all Commitments hereunder have been terminated, the aggregate
outstanding Capital of all Loans being funded by the Lenders at such time and
(b) the denominator of which is (i) prior to the termination of all Commitments
hereunder, the aggregate Commitments of all Lenders at such time or (ii) if all
Commitments hereunder have been terminated, the Aggregate Capital at such time.

“Performance Guarantor” means Parent.

“Performance Guaranty” means the Performance Guaranty, dated as of the Closing
Date, by the Performance Guarantor in favor of the Administrative Agent for the
benefit of the Secured Parties, as such agreement may be amended, restated,
supplemented or otherwise modified from time to time.

“Permitted Adverse Claims” means (a) liens created or arising in favor of the
Administrative Agent for the benefit of the Credit Parties pursuant to the
Transaction Documents; (b) any inchoate liens for current taxes, assessments,
levies, fees and other government and similar charges not yet due and payable or
the amount or validity of which is being contested in good faith by appropriate
proceedings and with respect to which adequate reserves have been established in
accordance with GAAP, but only so long as foreclosure with respect to such lien
is not imminent and the use and value of the property to which the liens attach
are not impaired during the pendency of such proceedings; (c) liens arising out
of any judgment or award against any Originator with respect to which (i) an
appeal or proceeding for review is being taken in good faith and with respect to
which there shall have been secured a bond pending such appeal or proceeding for
review and (ii) such judgment or award does not constitute an Event of Default;
and (d) mechanics’, workers’, materialmen’s or other like liens arising in the
ordinary course of an Originator’s business with respect to obligations which
are not due and payable.

 

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“Permitted Holders” means (a) the Investors and (b) any Person with which one or
more Investors form a “group” (within the meaning of Section 14(d) of the
Exchange Act) so long as, in the case of this clause (b), the relevant Investors
beneficially own more than 50% of the relevant voting stock beneficially owned
by the group.

“Person” means an individual, partnership, corporation (including a business
trust), joint stock company, trust, unincorporated association, joint venture,
limited liability company or other entity, or any Governmental Authority.

“PNC” has the meaning set forth in the preamble to this Agreement.

“Pool Receivable” means a Receivable in the Receivables Pool.

“Portion of Capital” means, with respect to any Lender and its related Capital,
the portion of such Capital being funded or maintained by such Lender by
reference to a particular interest rate basis.

“Purchase and Sale Agreement” means the Purchase and Sale Agreement, dated as of
the Closing Date, among the Servicer, the Originators and the Borrower, as such
agreement may be amended, supplemented or otherwise modified from time to time.

“Purchase and Sale Termination Event” has the meaning set forth in the Purchase
and Sale Agreement.

“Ratings Event” means, at any time of determination, one or more of the
following events has occurred and is continuing: (i) both of (x) Parent’s Long
Term Corporate Rating by S&P is below BB- and (y) Parent’s Long Term Corporate
Family Rating by Moody’s is below Ba3, (ii) both of (x) Parent’s Long Term
Corporate Rating by S&P is below BB- and (y) Parent does not have a Long Term
Corporate Family Rating by Moody’s, (iii) both of (x) Parent does not have a
Long Term Corporate Rating by S&P and (y) Parent’s Long Term Corporate Family
Rating by Moody’s is below Ba3 or (iv) both of (x) Parent does not have a Long
Term Corporate Rating by S&P and (y) Parent does not have a Long Term Corporate
Family Rating by Moody’s.

“Receivable” means any right to payment of a monetary obligation, whether or not
earned by performance, owed to any Originator or the Borrower (as assignee of an
Originator), whether constituting an account, chattel paper, payment intangible,
instrument or general intangible, in each instance arising in connection with
the sale of goods that have been or are to be sold or for services rendered or
to be rendered, and includes, without limitation, the obligation to pay any
service charges, finance charges, interest, fees and other charges with respect
thereto; provided that Excluded Receivables shall not constitute Receivables.
Any such right to payment arising from any one transaction, including, without
limitation, any such right to payment represented by an individual invoice or
agreement, shall constitute a Receivable separate from a Receivable consisting
of any such right to payment arising from any other transaction.

 

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“Receivables Pool” means, at any time of determination, all of the then
outstanding Receivables transferred (or purported to be transferred) to the
Borrower pursuant to the Purchase and Sale Agreement prior to the Termination
Date.

“Register” has the meaning set forth in Section 14.03(b).

“Related Rights” has the meaning set forth in Section 1.1 of the Purchase and
Sale Agreement.

“Related Security” means, with respect to any Receivable:

(a)    all of the Borrower’s and each Originator’s interest in any goods
(including Returned Goods), and documentation of title evidencing the shipment
or storage of any goods (including Returned Goods), the sale of which gave rise
to such Receivable;

(b)    all instruments and chattel paper that may evidence such Receivable;

(c)    all other security interests or liens and property subject thereto from
time to time purporting to secure payment of such Receivable, whether pursuant
to the Contract related to such Receivable or otherwise, together with all UCC
financing statements or similar filings relating thereto;

(d)    all of the Borrower’s and each Originator’s rights, interests and claims
under the related Contracts and all guaranties, indemnities, insurance and other
agreements (including the related Contract) or arrangements of whatever
character from time to time supporting or securing payment of such Receivable or
otherwise relating to such Receivable, whether pursuant to the Contract related
to such Receivable or otherwise;

(e)    all books and records of the Borrower and each Originator to the extent
related to any of the foregoing, and all rights, remedies, powers, privileges,
title and interest (but not obligations) in and to each Lock-Box and all
Collection Accounts, into which any Collections or other proceeds with respect
to such Receivables may be deposited, and any related investment property
acquired with any such Collections or other proceeds (as such term is defined in
the applicable UCC);

(f)    all of the Borrower’s rights, interests and claims under the Purchase and
Sale Agreement and the other Transaction Documents; and

(g)    all Collections and other proceeds (as defined in the UCC) of any of the
foregoing.

“Release” has the meaning set forth in Section 4.01(a).

“Reportable Compliance Event” means that any Covered Entity becomes a Sanctioned
Person, or is charged by indictment, criminal complaint or similar charging
instrument, arraigned, or custodially detained in connection with any
Anti-Terrorism Law or any predicate

 

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crime to any Anti-Terrorism Law, or has knowledge of facts or circumstances to
the effect that it is reasonably likely that any aspect of its operations is in
actual or probable violation of any Anti-Terrorism Law.

“Reportable Event” means any reportable event as defined in Section 4043(c) of
ERISA or the regulations issued thereunder with respect to a Pension Plan.

“Representatives” has the meaning set forth in Section 14.06(c).

“Required Capital Amount” means, as of any date of determination, an amount
equal to the product of (i) the Loss Reserve Percentage at such time times
(ii) the Net Receivables Pool Balance at such time.

“Restricted Payments” has the meaning set forth in Section 8.01(r).

“Returned Goods” means all right, title and interest in and to returned,
repossessed or foreclosed goods and/or merchandise the sale of which gave rise
to a Receivable; provided that such goods shall no longer constitute Returned
Goods after a Deemed Collection has been deposited in a Collection Account with
respect to the full Outstanding Balance of the related Receivables.

“S&P” means Standard & Poor’s Rating Services, a Standard & Poor’s Financial
Services LLC business, and any successor thereto that is a nationally recognized
statistical rating organization.

“Sanctioned Country” means a country subject to a sanctions program maintained
under any Anti-Terrorism Law, including any such country 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

“Sanctioned Person” (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, (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, or (iii) any
individual person, group, regime, entity or thing listed or otherwise recognized
as a specially designated, prohibited, sanctioned or debarred person, group,
regime, entity or thing, or subject to any limitations or prohibitions
(including but not limited to the blocking of property or rejection of
transactions), under any Anti-Terrorism Law.

“Scheduled Termination Date” means June 29, 2021.

“SEC” means the U.S. Securities and Exchange Commission or any governmental
agencies substituted therefor.

“Secured Parties” means each Credit Party, each Borrower Indemnified Party and
each Affected Person.

 

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“Servicer” has the meaning set forth in the preamble to this Agreement.

“Servicer’s Account” means the deposit account with an account number ending in
XXXX maintained by the Servicer or its Affiliate at Bank of America, N.A.

“Servicer Indemnified Amounts” has the meaning set forth in Section 13.02(a).

“Servicer Indemnified Party” has the meaning set forth in Section 13.02(a).

“Servicing Fee” means the fee referred to in Section 9.06(a) of this Agreement.

“Servicing Fee Rate” means the rate referred to in Section 9.06(a) of this
Agreement.

“Settlement Date” means with respect to any Portion of Capital for any Interest
Period or any Interest or Fees, (i) prior to the Termination Date and so long as
no Event of Default has occurred and is continuing, the Monthly Settlement Date
and (ii) on and after the Termination Date or if an Event of Default has
occurred and is continuing, each day selected from time to time by the
Administrative Agent (with the consent or at the direction of the Majority
Lenders) (it being understood that the Administrative Agent (with the consent or
at the direction of the Majority Lenders) may select such Settlement Date to
occur as frequently as daily), or, in the absence of such selection, the Monthly
Settlement Date.

“Settlement Item” means (i) each check or other payment order drawn on or
payable against any Linked Account, which any Collection Account Bank takes for
deposit or value, cashes or exchanges for a cashier’s check or official check in
the ordinary course of business, and which is presented for settlement against
any Collection Account, (ii) each check or other payment order drawn on or
payable against any Collection Account, which any Collection Account Bank takes
for deposit or value, assures payment pursuant to a banker’s acceptance, cashes
or exchanges for a cashier’s check or official check in the ordinary course of
business, (iii) each ACH credit entry initiated by any Collection Account Bank,
as originating depository financial institution, on behalf of Borrower, as
originator and (iv) any other payment order drawn on or payable against any
Collection Account.

“Settlement Item Amounts” means the face amount of each Settlement Item.

“Solvent” means, with respect to any Person and as of any particular date,
(i) the present fair market value (or present fair saleable value) of the assets
of such Person is not less than the total amount required to pay the probable
liabilities of such Person on its total existing debts and liabilities
(including contingent liabilities) as they become absolute and matured,
(ii) such Person is able to realize upon its assets and pay its debts and other
liabilities, contingent obligations and commitments as they mature and become
due in the normal course of business, (iii) such Person is not incurring debts
or liabilities beyond its ability to pay such debts and liabilities as they
mature and (iv) such Person is not engaged in any business or transaction, and
is not about to engage in any business or transaction, for which its property
would constitute unreasonably small capital after giving due consideration to
the prevailing practice in the industry in which such Person is engaged.

 

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“Sponsors” means, collectively, Advent, THL and Liberty Lane, their respective
controlled Affiliates and funds managed or advised by any of them or any of
their respective controlled Affiliates (in each case, other than any portfolio
company).

“Stress Factor” means, at any time of determination, (i) if a Ratings Event has
occurred and is continuing, 2.50 and (ii) otherwise, 2.00.

“Structuring Agent” means PNC Capital Markets LLC, a Pennsylvania limited
liability company.

“Sub-Servicer” has the meaning set forth in Section 9.01(d).

“Subject Obligor” means Takeda Pharmaceutical Company Ltd.

“Subject Obligor Delinquency Trigger” shall have occurred as of any date of
determination if 30% or more of the aggregate Outstanding Balance of all Pool
Receivables, the Obligor of which is the Subject Obligor or any Affiliate
thereof, constitute Delinquent Receivables as of such date.

“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.

“THL” means Thomas H. Lee Partners, L.P. and its Affiliates.

“Threshold Amount” means $150,000,000.

 

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“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.

“Tranche Period” means, with respect to any LIBOR Loan, a period of one, two,
three or six months selected by the Borrower pursuant to Section 2.05. Each
Tranche Period shall commence on a Monthly Settlement Date and end on (but not
including) the Monthly Settlement Date occurring one, two, three or six calendar
months thereafter, as selected by the Borrower pursuant to Section 2.05;
provided, however, that if the date any Loan made pursuant to Section 2.01 is
not a Monthly Settlement Date, the initial Tranche Period for such Loan shall
commence on the date such Loan is made pursuant to Section 2.01 and end on the
next Monthly Settlement Date occurring after the day in the applicable
succeeding calendar month which corresponds numerically to the beginning day of
such initial Tranche Period; provided, further, that if any Tranche Period would
end after the Termination Date, such Tranche Period (including a period of one
day) shall end on the Termination Date.

“Transaction Documents” means this Agreement, the Purchase and Sale Agreement,
the Account Control Agreements, the Fee Letter, each Intercompany Loan
Agreement, the Performance Guaranty and all other certificates, instruments, UCC
financing statements, reports, notices, agreements and documents executed or
delivered under or in connection with this Agreement, in each case as the same
may be amended, supplemented or otherwise modified from time to time in
accordance with this Agreement.

“UCC” means the Uniform Commercial Code as from time to time in effect in the
applicable jurisdiction.

“Unbilled Receivable” means, at any time, any Receivable as to which the invoice
or bill with respect thereto has not yet been sent to the Obligor thereof.

“Unmatured Event of Default” means an event that but for notice or lapse of time
or both would constitute an Event of Default.

“U.S. Obligor” means an Obligor that is a corporation or other business
organization and is organized under the laws of the United States of America (or
of a United States of America territory, district, state, commonwealth, or
possession, including, without limitation, Puerto Rico and the U.S. Virgin
Islands) or any political subdivision thereof.

“U.S. Tax Compliance Certificate” has the meaning set forth in
Section 5.03(f)(ii)(B)(3).

“Volcker Rule” means Section 13 of the U.S. Bank Holding Company Act of 1956, as
amended, and the applicable rules and regulations thereunder.

“Wholly-Owned Subsidiary” of any Person means a subsidiary of such Person, 100%
of the Capital Stock of which (other than directors’ qualifying shares or shares
required by Requirements of Law to be owned by a resident of the relevant
jurisdiction) shall be owned by such Person or by one or more Wholly-Owned
Subsidiaries of such Person.

 

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“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 Reserve Percentage” means at any time of determination:

1.50 x DSO x (BR + SFR)

360

where:

 

     

BR

   =    the Base Rate at such time; DSO    =    the Days’ Sales Outstanding for
the most recently ended Fiscal Month; and SFR    =    the Servicing Fee Rate.

SECTION 1.02. Other Interpretative Matters. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP. All
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. Unless otherwise
expressly indicated, all references herein to “Article,” “Section,” “Schedule”,
“Exhibit” or “Annex” shall mean articles and sections of, and schedules,
exhibits and annexes to, this Agreement. For purposes of this Agreement, the
other Transaction Documents and all such certificates and other documents,
unless the context otherwise requires: (a) references to any amount as on
deposit or outstanding on any particular date means such amount at the close of
business on such day; (b) 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); (c) references to any Article,
Section, Schedule, Exhibit or Annex are references to Articles, Sections,
Schedules, Exhibits and Annexes 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; (d) the term “including” means “including without limitation”; (e)
references to any Applicable Law refer to that Applicable Law as amended from
time to time and include any successor Applicable Law; (f) references to any
agreement refer to that agreement as from time to time amended, restated or
supplemented or as the terms of such agreement are waived or modified in
accordance with its terms; (g) references to any Person include that Person’s
permitted successors and assigns; (h) headings are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof; (i) 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”; (j)
terms in one gender include the parallel terms in the neuter and opposite
gender; (k) references to any amount as on deposit or outstanding on any
particular date means such amount at the close of business on such day and
(l) the term “or” is not exclusive.

 

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ARTICLE II

TERMS OF THE LOANS

SECTION 2.01. Loan Facility. Upon a request by the Borrower pursuant to
Section 2.02, and on the terms and subject to the conditions hereinafter set
forth, each Lender shall, ratably in accordance with their respective
Commitments, severally and not jointly, make Loans to the Borrower from time to
time during the period from the Closing Date to the Termination Date. Under no
circumstances shall any Lender be obligated to make any such Loan if, after
giving effect to such Loan:

(i)    the Aggregate Capital would exceed the Facility Limit at such time;

(ii)    the aggregate outstanding Capital of such Lender would exceed its
Commitment; or

(iii)    the Aggregate Capital would exceed the Borrowing Base at such time.

SECTION 2.02. Making Loans; Repayment of Loans. (a) Each Loan hereunder shall be
made on at least one (1) Business Day’s prior written request from the Borrower
to the Administrative Agent and each Lender in the form of a Loan Request
attached hereto as Exhibit A. Each such request for a Loan shall be made no
later than 1:00 p.m. (New York City time) on a Business Day (it being understood
that any such request made after such time shall be deemed to have been made on
the following Business Day) and shall specify (i) the amount of the Loan(s)
requested (which shall not be less than $100,000 and shall be an integral
multiple of $100,000 in excess thereof), (ii) the allocation of such amount
among the Lenders (which shall be ratable based on the Commitments), (iii) the
account to which the proceeds of such Loan shall be distributed and (iv) the
date such requested Loan is to be made (which shall be a Business Day).

(b)    On the date of each Loan specified in the applicable Loan Request, the
Lenders shall, upon satisfaction of the applicable conditions set forth in
Article VI and pursuant to the other conditions set forth in this Article II,
make available to the Borrower in same day funds an aggregate amount equal to
the amount of such Loans requested, at the account set forth in the related Loan
Request.

(c)    Each Lender’s obligation shall be several, such that the failure of any
Lender to make available to the Borrower any funds in connection with any Loan
shall not relieve any other Lender of its obligation, if any, hereunder to make
funds available on the date such Loans are requested (it being understood, that
no Lender shall be responsible for the failure of any other Lender to make funds
available to the Borrower in connection with any Loan hereunder).

(d)    The Borrower shall repay in full the outstanding Capital of each Lender
on the Final Maturity Date. Prior thereto, the Borrower shall, on each
Settlement Date, make a

 

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prepayment of the outstanding Capital of the Lenders to the extent required
under Section 4.01 and otherwise in accordance therewith. Notwithstanding the
foregoing, the Borrower, in its discretion, shall have the right to make a
prepayment, in whole or in part, of the outstanding Capital of the Lenders on
any Business Day upon one (1) Business Day’s prior written notice thereof to the
Administrative Agent and each Lender in the form of a Reduction Notice attached
hereto as Exhibit B; provided, however, that (i) each such prepayment shall be
in a minimum aggregate amount of $100,000 and shall be an integral multiple of
$100,000 in excess thereof, (ii) the Borrower shall not provide any Reduction
Notice, and no such Reduction Notice shall be effective, if after giving effect
thereto, the Aggregate Capital at such time would be less than an amount equal
to the Minimum Funding Threshold and (iii) any accrued Interest and Fees in
respect of the portion(s) of Capital so reduced shall be paid in full on the
immediately following Settlement Date; provided, however that notwithstanding
the foregoing, a prepayment may be in an amount necessary to reduce any
Borrowing Base Deficit existing at such time to zero.

(e)    The Borrower may, at any time upon at least fifteen (15) days’ prior
written notice to the Administrative Agent and each Lender, terminate the
Facility Limit in whole or ratably reduce the Facility Limit in part. Each
partial reduction in the Facility Limit shall be in a minimum aggregate amount
of $5,000,000 or integral multiples of $1,000,000 in excess thereof, and no such
partial reduction shall reduce the Facility Limit to an amount less than
$100,000,000. In connection with any partial reduction in the Facility Limit,
the Commitment of each Lender shall be ratably reduced.

(f)    In connection with any reduction of the Commitments, the Borrower shall
remit to the Administrative Agent (i) instructions regarding such reduction and
(ii) for payment to the Lenders, cash in an amount sufficient to pay (A) Capital
of each Lender in excess of the Commitment of such Lender and (B) all other
outstanding Borrower Obligations with respect to such reduction (determined
based on the ratio of the reduction of the Commitments being effected to the
amount of the Commitments prior to such reduction or, if the Administrative
Agent reasonably determines that any portion of the outstanding Borrower
Obligations is allocable solely to that portion of the Commitments being reduced
or has arisen solely as a result of such reduction, all of such portion)
including, without duplication, any associated Breakage Fees. Upon receipt of
any such amounts, the Administrative Agent shall apply such amounts first to the
reduction of the Aggregate Capital, and second to the payment of the remaining
outstanding Borrower Obligations with respect to such reduction, including any
Breakage Fees, by paying such amounts to the Lenders.

SECTION 2.03. Interest and Fees.

(a)    On each Settlement Date, the Borrower shall, in accordance with the terms
and priorities for payment set forth in Section 4.01, pay to each Lender, the
Administrative Agent and the Structuring Agent certain fees (collectively, the
“Fees”) in the amounts set forth in the fee letter agreements from time to time
entered into, among the Borrower, the Lenders and/or the Administrative Agent
(each such fee letter agreement, as amended, restated, supplemented or otherwise
modified from time to time, collectively being referred to herein as the “Fee
Letter”). Undrawn Fees (as defined in the Fee Letter) shall cease to accrue on
the unfunded portion of the Commitment of such Defaulting Lender as provided in
Section 2.06.

 

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(b)    Each Loan of each Lender and the Capital thereof shall accrue interest on
each day when such Capital remains outstanding at the then applicable Interest
Rate for such Loan. The Borrower shall pay all Interest (including, for the
avoidance of doubt, all Interest accrued on LIBOR Loans during an Interest
Period regardless of whether the applicable Tranche Period has ended), Fees and
Breakage Fees accrued during each Interest Period on each Settlement Date in
accordance with the terms and priorities for payment set forth in Section 4.01.

SECTION 2.04. Records of Loans. Each Lender shall record in its records, the
date and amount of each Loan made by such Lender hereunder, the Interest Rate
with respect thereto, the Interest accrued thereon and each repayment and
payment thereof. Subject to Section 14.03(b), such records shall be conclusive
and binding absent manifest error. The failure to so record any such information
or any error in so recording any such information shall not, however, limit or
otherwise affect the obligations of the Borrower hereunder or under the other
Transaction Documents to repay the Capital of each Lender, together with all
Interest accruing thereon and all other Borrower Obligations.

SECTION 2.05. Selection of Interest Rates and Tranche Periods.

(a)    Subject to the following sentence, each Loan made on any day other than a
Monthly Settlement Date shall bear interest initially at LMIR. Thereafter or,
for each Loan made on a Monthly Settlement Date, at any time, so long as no
Event of Default has occurred and is continuing, the Borrower may from time to
time elect to change or continue the type of Interest Rate and/or Tranche Period
borne by each Loan or, subject to the minimum amount requirement for each
outstanding Loan set forth in Section 2.02, a portion thereof by notice to the
Administrative Agent not later than 11:00 a.m. (New York City time), one
(1) Business Day prior to the expiration of any Tranche Period or Interest
Period or the making of such Loan on a Monthly Settlement Date, as applicable;
provided, that there shall not be more than six (6) LIBOR Loans outstanding
hereunder at any one time; provided, further that for the avoidance of doubt,
any change from LMIR to Adjusted LIBOR and/or any change to a Tranche Period
applicable to a Loan shall not be effective until the Monthly Settlement Date
occurring after the date of such request. Any such notices requesting the
continuation or conversion of a Loan to the Administrative Agent may be given by
telephone, telecopy, or other telecommunication device acceptable to the
Administrative Agent (which notice shall be irrevocable once given and, if by
telephone, shall be promptly confirmed in writing in a manner acceptable to the
Administrative Agent).

(b)    If, by the time required in Section 2.05(a), the Borrower fails to select
a Tranche Period or Interest Rate for any Loan, such Loan shall automatically be
deemed to be a continuation of the type of Interest Rate and, if applicable,
Tranche Period.

SECTION 2.06. Defaulting Lenders. Notwithstanding any provision of this
Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the
following provisions shall apply for so long as such Lender is a Defaulting
Lender:

(a)    Undrawn Fees (as defined in the Fee Letter) shall cease to accrue on the
unfunded portion of the Commitment of such Defaulting Lender.

 

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(b)    The Commitment and Capital of such Defaulting Lender shall not be
included in determining whether the Majority Lenders have taken or may take any
action hereunder (including any consent to any amendment, waiver or other
modification pursuant to Section 14.01); provided, that, except as otherwise
provided in Section 14.01, this clause (b) shall not apply to the vote of a
Defaulting Lender in the case of an amendment, waiver or other modification
requiring the consent of such Lender or each Lender directly affected thereby
(if such Lender is directly affected thereby).

(c)    In the event that the Administrative Agent, the Borrower and the Servicer
each agrees in writing that a Defaulting Lender has adequately remedied all
matters that caused such Lender to be a Defaulting Lender, then on such date
such Lender shall purchase at par such of the Loans of the other Lenders as the
Administrative Agent shall determine may be necessary in order for such Lender
to hold such Loans ratably in accordance with its applicable Commitment;
provided, that no adjustments shall be made retroactively with respect to fees
accrued or payments made by or on behalf of the Borrower while such Lender was a
Defaulting Lender, and provided, further, that except to the extent otherwise
agreed by the affected parties, no change hereunder from Defaulting Lender to
Lender that is not a Defaulting Lender will constitute a waiver or release of
any claim of any party hereunder arising from that Lender having been a
Defaulting Lender.

ARTICLE III

[RESERVED]

ARTICLE IV

SETTLEMENT PROCEDURES AND PAYMENT PROVISIONS

SECTION 4.01. Settlement Procedures.

(a)    The Servicer shall set aside and hold in trust for the benefit of the
Secured Parties (or, if so requested by the Administrative Agent, segregate in a
separate account designated by the Administrative Agent, which shall be an
account maintained and controlled by the Administrative Agent unless the
Administrative Agent otherwise instructs in its sole discretion), for
application in accordance with the priority of payments set forth below, all
Collections on Pool Receivables that are received by the Servicer or the
Borrower or received in any Lock-Box or Collection Account; provided, however,
that so long as each of the conditions precedent set forth in Section 6.03 are
satisfied on such date, the Servicer may release to the Borrower from such
Collections the amount (if any) necessary to pay (i) the purchase price for
Receivables purchased by the Borrower on such date in accordance with the terms
of the Purchase and Sale Agreement or (ii) amounts owing by the Borrower to the
Originators under any Intercompany Loan Agreement (each such release, a
“Release”). On each Settlement Date, the Servicer (or, following its assumption
of control of the Collection Accounts, the Administrative Agent) shall,
distribute such Collections in the following order of priority:

(i)    first, to the Servicer for the payment of the accrued Servicing Fees
payable for the immediately preceding Interest Period (plus, if applicable, the
amount of Servicing Fees payable for any prior Interest Period to the extent
such amount has not been distributed to the Servicer);

 

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(ii)    second, to the Administrative Agent for distribution to each Lender and
other Credit Party (ratably, based on the amount then due and owing), all
accrued and unpaid Interest, Fees and Breakage Fees due to such Lender and other
Credit Party for the immediately preceding Interest Period (including any
additional amounts or indemnified amounts payable under Sections 5.03 and 13.01
in respect of such payments), plus, if applicable, the amount of any such
Interest, Fees and Breakage Fees (including any additional amounts or
indemnified amounts payable under Sections 5.03 and 13.01 in respect of such
payments) payable for any prior Interest Period to the extent such amount has
not been distributed to such Lender or Credit Party;

(iii)    third, as set forth in clause (x), (y) or (z) below, as applicable:

(x)    prior to the occurrence of the Termination Date, to the extent that a
Borrowing Base Deficit exists on such date, to the Administrative Agent for
distribution to the Lenders (ratably, based on the aggregate outstanding Capital
of each Lender at such time) for the payment of a portion of the outstanding
Aggregate Capital at such time, in an aggregate amount equal to the amount
necessary to reduce the Borrowing Base Deficit to zero ($0);

(y)    on and after the occurrence of the Termination Date, to the
Administrative Agent for distribution to each Lender (ratably, based on the
aggregate outstanding Capital of each Lender at such time) for the payment in
full of the aggregate outstanding Capital of such Lender at such time; or

(z)    prior to the occurrence of the Termination Date, at the election of the
Borrower and in accordance with Section 2.02(d), to the Administrative Agent for
distribution to the payment of all or any portion of the outstanding Capital of
the Lenders at such time (ratably, based on the aggregate outstanding Capital of
each Lender at such time);

(iv)    fourth, to the Credit Parties, the Affected Persons and the Borrower
Indemnified Parties (ratably, based on the amount due and owing at such time),
for the payment of all other Borrower Obligations then due and owing by the
Borrower to the Credit Parties, the Affected Persons and the Borrower
Indemnified Parties; and

(v)    fifth, the balance, if any, to be paid to the Borrower for its own
account.

(b)    Notwithstanding anything to the contrary set forth in this Section 4.01,
the Administrative Agent shall have no obligation to distribute or pay any
amount under this Section 4.01 except to the extent actually received by the
Administrative Agent.

 

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(c)    If and to the extent the Administrative Agent, any Credit Party, any
Affected Person or any Borrower Indemnified Party shall be required for any
reason to pay over to any Person (including any Obligor or any trustee,
receiver, custodian or similar official in any Insolvency Proceeding) any amount
received on its behalf hereunder, such amount shall be deemed not to have been
so received but rather to have been retained by the Borrower and, accordingly,
the Administrative Agent, such Credit Party, such Affected Person or such
Borrower Indemnified Party, as the case may be, shall have a claim against the
Borrower for such amount.

(d)    For the purposes of this Section 4.01:

(i)    if on any day the Outstanding Balance of any Pool Receivable is reduced
or adjusted as a result of any defective, rejected, returned, repossessed or
foreclosed goods or services, or any revision, cancellation, allowance, rebate,
credit memo, discount or other adjustment made by the Borrower, any Originator,
the Servicer or any Affiliate of the Servicer, or any setoff, counterclaim or
dispute between the Borrower or any Affiliate of the Borrower, an Originator or
any Affiliate of an Originator, or the Servicer or any Affiliate of the
Servicer, and an Obligor, the Borrower shall be deemed to have received on such
day a Collection of such Pool Receivable in the amount of such reduction or
adjustment and shall immediately pay any and all such amounts in respect thereof
to a Collection Account (or as otherwise directed by the Administrative Agent at
such time) for the benefit of the Credit Parties for application pursuant to
Section 4.01(a);

(ii)    if on any day any of the representations or warranties in Section 7.01
is not true with respect to any Pool Receivable, the Borrower shall be deemed to
have received on such day a Collection of such Pool Receivable in full and shall
immediately pay the amount of such deemed Collection to a Collection Account (or
as otherwise directed by the Administrative Agent at such time) for the benefit
of the Credit Parties for application pursuant to Section 4.01(a) (Collections
deemed to have been received pursuant to Section 4.01(d) are hereinafter
sometimes referred to as “Deemed Collections”);

(iii)    except as provided in clauses (i) or (ii) above or otherwise required
by Applicable Law or the relevant Contract, all Collections received from an
Obligor of any Receivable shall be applied to the Receivables of such Obligor in
the order of the age of such Receivables, starting with the oldest such
Receivable, unless such Obligor designates in writing its payment for
application to specific Receivables; and

(iv)    if and to the extent the Administrative Agent, any Credit Party, any
Affected Person or any Borrower Indemnified Party shall be required for any
reason to pay over to an Obligor (or any trustee, receiver, custodian or similar
official in any Insolvency Proceeding) any amount received by it hereunder, such
amount shall be deemed not to have been so received by such Person but rather to
have been retained by the Borrower and, accordingly, such Person shall have a
claim against the Borrower for such amount, payable when and to the extent that
any distribution from or on behalf of such Obligor is made in respect thereof.

 

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SECTION 4.02. Payments and Computations, Etc. (a) All amounts to be paid by the
Borrower or the Servicer to the Administrative Agent, any Credit Party, any
Affected Person or any Borrower Indemnified Party hereunder shall be paid no
later than noon (New York City time) on the day when due in same day funds to
the applicable party to which such amounts are due.

(b)    Each of the Borrower and the Servicer shall, to the extent permitted by
Applicable Law, pay interest on any amount not paid or deposited by it when due
hereunder, at an interest rate per annum equal to 2.50% per annum above the Base
Rate, payable on demand.

(c)    All computations of interest under subsection (b) above and all
computations of Interest, Fees and other amounts hereunder shall be made on the
basis of a year of 360 days (or, in the case of amounts determined by reference
to the Base Rate, 365 or 366 days, as applicable) for the actual number of days
(including the first but excluding the last day) elapsed. Whenever any payment
or deposit to be made hereunder shall be due on a day other than a Business Day,
such payment or deposit shall be made on the next succeeding Business Day and
such extension of time shall be included in the computation of such payment or
deposit.

ARTICLE V

INCREASED COSTS; FUNDING LOSSES; TAXES; ILLEGALITY AND SECURITY INTEREST

SECTION 5.01. Increased Costs.

(a)    Increased Costs Generally. If any Change in Law shall:

(i)    impose, modify or deem applicable any reserve, special deposit,
liquidity, compulsory loan, insurance charge or similar requirement against
assets of, deposits with or for the account of, or credit extended or
participated in by, any Affected Person;

(ii)    subject any Affected Person to any Taxes (except to the extent such
Taxes are (A) Indemnified Taxes, (B) Taxes described in clause (b) or (c) of the
definition of Excluded Taxes or (C) Other Connection Taxes that are imposed on
or measured by net income (however denominated) or that are franchise Taxes or
branch profits Taxes) on its loans, loan principal, letters of credit,
commitments or other obligations, or its deposits, reserves, other liabilities
or capital attributable thereto; or

(iii)    impose on any Affected Person any other condition, cost or expense
(other than Taxes) (A) affecting the Collateral, this Agreement, any other
Transaction Document, any Loan or any participation therein or (B) affecting its
obligations or rights to make Loans;

and the result of any of the foregoing shall be to increase the cost to such
Affected Person of (A) acting as the Administrative Agent or a Lender hereunder,
(B) funding or maintaining any Loan or (C) maintaining its obligation to fund or
maintain any Loan, or to reduce the amount of any sum received or receivable by
such Affected Person hereunder, then, upon request of such Affected Person, the
Borrower shall pay to such Affected Person such additional amount or amounts as
will compensate such Affected Person for such additional costs incurred or
reduction suffered.

 

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(b)    Capital and Liquidity Requirements. If any Affected Person determines
that any Change in Law affecting such Affected Person or any lending office of
such Affected Person or such Affected Person’s holding company, if any,
regarding capital or liquidity requirements, has or would have the effect of
(x) increasing the amount of capital required to be maintained by such Affected
Person or Affected Person’s holding company, if any, (y) reducing the rate of
return on such Affected Person’s capital or on the capital of such Affected
Person’s holding company, if any, or (z) causing an internal capital or
liquidity charge or other imputed cost to be assessed upon such Affected Person
or Affected Person’s holding company, if any, in each case, as a consequence of
(A) this Agreement or any other Transaction Document, (B) the commitments of
such Affected Person hereunder or under any other Transaction Document, (C) the
Loans made by such Affected Person, or (D) any Capital, to a level below that
which such Affected Person or such Affected Person’s holding company could have
achieved but for such Change in Law (taking into consideration such Affected
Person’s policies and the policies of such Affected Person’s holding company
with respect to capital adequacy and liquidity), then from time to time, upon
request of such Affected Person, the Borrower will pay to such Affected Person
such additional amount or amounts as will compensate such Affected Person or
such Affected Person’s holding company for any such increase, reduction or
charge.

(c)    Certificates for Reimbursement. A certificate of an Affected Person
setting forth the amount or amounts necessary to compensate such Affected Person
or its holding company, as the case may be, as specified in clause (a) or (b) of
this Section and delivered to the Borrower, shall be conclusive absent manifest
error. The Borrower shall, subject to the priorities of payment set forth in
Section 4.01, pay such Affected Person the amount shown as due on any such
certificate on the first Settlement Date occurring after the Borrower’s receipt
of such certificate.

(d)    Delay in Requests. Failure or delay on the part of any Affected Person to
demand compensation pursuant to this Section shall not constitute a waiver of
such Affected Person’s right to demand such compensation; provided that the
Borrower shall not be required to compensate an Affected Person pursuant to this
Section for any increased costs incurred or reductions suffered more than nine
months prior to the date that such Affected Person notifies the Borrower of the
Change in Law giving rise to such increased costs or reductions and of such
Affected Person’s intention to claim compensation therefor (except that, if the
Change in Law giving rise to such increased costs or reductions is retroactive,
then the nine month period referred to above shall be extended to include the
period of retroactive effect thereof).

SECTION 5.02. Funding Losses.

(a)    The Borrower will pay each Lender all Breakage Fees.

(b)    A certificate of a Lender setting forth the amount or amounts necessary
to compensate such Lender, as specified in clause (a) above and delivered to the
Borrower, shall be conclusive absent manifest error. The Borrower shall, subject
to the priorities of payment set forth in Section 4.01, pay such Lender the
amount shown as due on any such certificate on the first Settlement Date
occurring after the Borrower’s receipt of such certificate.

 

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SECTION 5.03. Taxes.

(a)    Payments Free of Taxes. Any and all payments by or on account of any
obligation of the Borrower under any Transaction Document shall be made without
deduction or withholding for any Taxes, except as required by Applicable Law. If
any Applicable Law (as determined in the good faith discretion of the applicable
Credit Party or Affected Person requires the deduction or withholding of any Tax
from any such payment to a Credit Party or Affected Person, then the applicable
Credit Party or Affected Person shall be entitled to make such deduction or
withholding and shall timely pay the full amount deducted or withheld to the
relevant Governmental Authority in accordance with Applicable Law, and, if such
Tax is an Indemnified Tax, then the sum payable by the Borrower shall be
increased as necessary so that after such deduction or withholding has been made
(including such deductions and withholdings applicable to additional sums
payable under this Section), the applicable Credit Party or Affected Person
receives an amount equal to the sum it would have received had no such deduction
or withholding been made.

(b)    Payment of Other Taxes by the Borrower. The Borrower shall timely pay to
the relevant Governmental Authority in accordance with Applicable Law, or, at
the option of the Administrative Agent, timely reimburse the Administrative
Agent for the payment of, any Other Taxes.

(c)    Indemnification by the Borrower. The Borrower shall indemnify each
Affected Person, within ten days after demand therefor, for the full amount of
any (I) Indemnified Taxes (including Indemnified Taxes imposed or asserted on or
attributable to amounts payable under this Section) payable or paid by such
Affected Person or required to be withheld or deducted from a payment to such
Affected Person and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority
and (II) Taxes that arise because a Loan is not treated for U.S. federal, state,
local or franchise tax consistently with the Intended Tax Treatment (such
indemnification will include any U.S. federal, state or local income and
franchise taxes necessary to make such Affected Person whole on an after-tax
basis taking into account the taxability of receipt of payments under this
clause (II) and any reasonable expenses (other than Taxes) arising out of,
relating to, or resulting from the foregoing). Promptly upon having knowledge
that any such Indemnified Taxes have been levied, imposed or assessed, and
promptly upon notice by the Administrative Agent or any Affected Person, the
Borrower shall pay such Indemnified Taxes directly to the relevant taxing
authority or Governmental Authority (or to the Administrative Agent or such
Affected Person if such Taxes have already been paid to the relevant taxing
authority or Governmental Authority); provided that neither the Administrative
Agent nor any Affected Person shall be under any obligation to provide any such
notice to the Borrower. A certificate as to the amount of such payment or
liability delivered to the Borrower by an Affected Person (with a copy to the
Administrative Agent), or by the Administrative Agent on its own behalf or on
behalf of an Affected Person, shall be conclusive absent manifest error.

 

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(d)    Indemnification by the Lenders. Each Lender shall severally indemnify the
Administrative Agent, within ten days after demand therefor, for (i) any
Indemnified Taxes attributable to such Lender or any of its respective
Affiliates that are Affected Persons (but only to the extent that the Borrower
has not already indemnified the Administrative Agent for such Indemnified Taxes
and without limiting any obligation of the Borrower to do so), (ii) any Taxes
attributable to the failure of such Lender or any of its respective Affiliates
that are Affected Persons to comply with Section 14.03(e) relating to the
maintenance of a Participant Register and (iii) any Excluded Taxes attributable
to such Lender or any of its respective Affiliates that are Affected Persons, in
each case, that are payable or paid by the Administrative Agent in connection
with any Transaction Document, and any reasonable expenses arising therefrom or
with respect thereto, whether or not such Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability delivered to any Lender by the
Administrative Agent shall be conclusive absent manifest error. Each Lender
hereby authorizes the Administrative Agent to set off and apply any and all
amounts at any time owing to such Lender or any of its respective Affiliates
that are Affected Persons under any Transaction Document or otherwise payable by
the Administrative Agent to such Lender or any of its respective Affiliates that
are Affected Persons from any other source against any amount due to the
Administrative Agent under this clause (d).

(e)    Evidence of Payments. As soon as practicable after any payment of Taxes
by the Borrower to a Governmental Authority pursuant to this Section 5.03, the
Borrower shall deliver to the Administrative Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment,
a copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.

(f)    Status of Affected Persons. (i) Any Affected Person 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 Borrower and the
Administrative Agent, at the time or times reasonably requested by the Borrower
or the Administrative Agent, such properly completed and executed documentation
reasonably requested by the Borrower or the Administrative Agent as will permit
such payments to be made without withholding or at a reduced rate of
withholding. In addition, any Affected Person, if reasonably requested by the
Borrower or the Administrative Agent, shall deliver such other documentation
prescribed by Applicable Law or reasonably requested by the Borrower or the
Administrative Agent as will enable the Borrower or the Administrative Agent to
determine whether or not such Affected Person is subject to backup withholding
or information reporting requirements. Notwithstanding anything to the contrary
in the preceding two sentences, the completion, execution and submission of such
documentation (other than such documentation set forth in Sections
5.03(f)(ii)(A), 5.03(f)(ii)(B) and 5.03(g)) shall not be required if, in the
Affected Person’s reasonable judgment, such completion, execution or submission
would subject such Affected Person to any material unreimbursed cost or expense
or would materially prejudice the legal or commercial position of such Affected
Person.

(ii)    Without limiting the generality of the foregoing:

(A)    an Affected Person that is a U.S. Person shall deliver to the Borrower
and the Administrative Agent from time to time upon the

 

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reasonable request of the Borrower or the Administrative Agent, executed
originals of Internal Revenue Service Form W-9 certifying that such Affected
Person is exempt from U.S. federal backup withholding tax;

(B)    any Affected Person that is not a U.S. Person shall, to the extent it is
legally entitled to do so, deliver to the Borrower and the Administrative Agent
(in such number of copies as shall be requested by the recipient) from time to
time upon the reasonable request of the Borrower or the Administrative Agent,
whichever of the following is applicable:

(1)    in the case of such an Affected Person claiming the benefits of an income
tax treaty to which the United States is a party, (x) with respect to payments
of interest under any Transaction Document, executed originals of Internal
Revenue Service Form W-8BEN or Internal Revenue Service Form W-8BEN-E, as
applicable, establishing an exemption from, or reduction of, U.S. federal
withholding Tax pursuant to the “interest” article of such tax treaty and
(y) with respect to any other applicable payments under any Transaction
Document, Internal Revenue Service Form W-8BEN or Internal Revenue Service Form
W-8BEN-E, as applicable, establishing an exemption from, or reduction of, U.S.
federal withholding Tax pursuant to the “business profits” or “other income”
article of such tax treaty;

(2)    executed originals of Internal Revenue Service Form W-8ECI;

(3)    in the case of such an Affected Person claiming the benefits of the
exemption for portfolio interest under Section 881(c) of the Code, (x) a
certificate to the effect that such Affected Person is not a “bank” within the
meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the
Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a
“controlled foreign corporation” described in Section 881(c)(3)(C) of the Code
(a “U.S. Tax Compliance Certificate”) and (y) executed originals of Internal
Revenue Service Form W-8BEN or Internal Revenue Service Form W-8BEN-E, as
applicable; or

(4)    to the extent such Affected Person is not the beneficial owner, executed
originals of Internal Revenue Service Form W-8IMY, accompanied by Internal
Revenue Service Form W-8ECI, Internal Revenue Service Form W-8BEN or Internal
Revenue Service Form W-8BEN-E, as applicable, a U.S. Tax Compliance Certificate,
Internal Revenue Service Form W-9, and/or other certification documents from
each beneficial owner, as applicable; provided that, if such Affected Person is
a

 

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partnership and one or more direct or indirect partners of such Affected Person
are claiming the portfolio interest exemption, such Affected Person may provide
a U.S. Tax Compliance Certificate on behalf of each such direct and indirect
partner; and

(C)    any Affected Person that is not a U.S. Person shall, to the extent it is
legally entitled to do so, deliver to the Borrower and the Administrative Agent
(in such number of copies as shall be requested by the recipient), from time to
time upon the reasonable request of the Borrower or the Administrative Agent,
executed originals of any other form prescribed by Applicable Law as a basis for
claiming exemption from or a reduction in U.S. federal withholding Tax, duly
completed, together with such supplementary documentation as may be prescribed
by Applicable Law to permit the Borrower or the Administrative Agent to
determine the withholding or deduction required to be made.

(g)    Documentation Required by FATCA. If a payment made to an Affected Person
under any Transaction Document would be subject to U.S. federal withholding Tax
imposed by FATCA if such Affected Person 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 Person
shall deliver to the Borrower and the Administrative Agent at the time or times
prescribed by Applicable Law and at such time or times reasonably requested by
the Borrower or the 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 Borrower or the
Administrative Agent as may be necessary for the Borrower and the Administrative
Agent to comply with their obligations under FATCA and to determine that such
Affected Person has complied with such Affected Person’s obligations under FATCA
or to determine the amount to deduct and withhold from such payment. Solely for
purposes of this clause (g), “FATCA” shall include any amendments made to FATCA
after the date of this Agreement.

(h)    Treatment of Refunds. If any party determines, in its sole discretion
exercised in good faith, that it has received a refund of any Taxes as to which
it has been indemnified pursuant to this Section 5.03 (including by the payment
of additional amounts pursuant to this Section 5.03), it shall pay to the
indemnifying party an amount equal to such refund (but only to the extent of
indemnity payments made under this Section 5.03 with respect to the Taxes giving
rise to such refund), net of all out-of-pocket expenses (including Taxes) of
such indemnified party and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund). Such indemnifying
party, upon the request of such indemnified party, shall repay to such
indemnified party the amount paid over pursuant to this clause (h) (plus any
penalties, interest or other charges imposed by the relevant Government
Authority) in the event such indemnified party is required to repay such refund
to such Governmental Authority. Notwithstanding anything to the contrary in this
clause (h), in no event will the indemnified party be required to pay any amount
to an indemnifying party pursuant to this clause (h) the payment of which would
place the indemnified party in a less favorable net after Tax position than the
indemnified party would have been in if the Tax subject to indemnification and
giving rise to such refund had not been deducted, withheld or otherwise

 

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imposed and the indemnification payments or additional amounts with respect to
such Tax had never been paid. This paragraph shall not be construed to require
any indemnified party to make available its Tax returns (or other information
relating to its Taxes that it deems confidential) to the indemnifying party or
any other Person.

(i)    Survival. Each party’s obligations under this Section 5.03 shall survive
the resignation or replacement of the Administrative Agent or any assignment of
rights by, or the replacement of, a Credit Party or any other Affected Person,
the termination of the Commitments and the repayment, satisfaction or discharge
of all the Borrower Obligations and the Servicer’s obligations hereunder.

(j)    Updates. Each Affected Person agrees that if any form or certification it
previously delivered pursuant to this Section 5.03 expires or becomes obsolete
or inaccurate in any respect, it shall update such form or certification or
promptly notify the Borrower and the Administrative Agent in writing of its
legal inability to do so.

SECTION 5.04. Inability to Determine Adjusted LIBOR or LMIR; Change in Legality.

(a)    If any Lender shall have determined (which determination shall be
conclusive and binding upon the parties hereto absent manifest error) on any
day, by reason of circumstances affecting the interbank Eurodollar market,
either that: (i) dollar deposits in the relevant amounts and for the relevant
Interest Period or day, as applicable, are not available, (ii) adequate and
reasonable means do not exist for ascertaining Adjusted LIBOR or LMIR for such
Interest Period or day, as applicable, or (iii) Adjusted LIBOR or LMIR
determined pursuant hereto does not accurately reflect the cost to such Lender
(as conclusively determined by such Lender) of maintaining any Portion of
Capital during such Interest Period or day, as applicable, such Lender shall
promptly give telephonic notice of such determination, confirmed in writing, to
the Administrative Agent and the Borrower on such day. Upon delivery of such
notice: (i) no Portion of Capital with respect to such Lender shall be funded
thereafter at Adjusted LIBOR or LMIR unless and until such Lender shall have
given notice to the Administrative Agent and the Borrower that the circumstances
giving rise to such determination no longer exist and (ii) with respect to any
outstanding Portion of Capital with respect to such Lender then funded at
Adjusted LIBOR or LMIR, such Interest Rate shall automatically and immediately
be converted to the Base Rate.

(b)    If on any day any Lender shall have been notified by any Affected Person
that such Affected Person has determined (which determination shall be final and
conclusive absent manifest error) that any Change in Law, or compliance by such
Lender with any Change in Law, shall make it unlawful or impossible for such
Lender to fund or maintain any Portion of Capital at or by reference to Adjusted
LIBOR or LMIR, such Lender shall notify the Borrower and the Administrative
Agent thereof. Upon receipt of such notice, until such Lender notifies the
Borrower and the Administrative Agent that the circumstances giving rise to such
determination no longer apply, (i) no Portion of Capital with respect to such
Lender shall be funded at or by reference to Adjusted LIBOR or LMIR and (ii) the
Interest Rate for any outstanding Portion of Capital with respect to such Lender
then funded at Adjusted LIBOR or LMIR shall automatically and immediately be
converted to the Base Rate.

 

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SECTION 5.05. Security Interest.

(a)    As security for the performance by the Borrower of all the terms,
covenants and agreements on the part of the Borrower to be performed under this
Agreement or any other Transaction Document, including the punctual payment when
due of the Aggregate Capital and all Interest in respect of the Loans and all
other Borrower Obligations, the Borrower hereby grants to the Administrative
Agent for its benefit and the ratable benefit of the Secured Parties, a
continuing security interest in, all of the Borrower’s right, title and interest
in, to and under all of the following, whether now or hereafter owned, existing
or arising (collectively, the “Collateral”): (i) all Pool Receivables, (ii) all
Related Security with respect to such Pool Receivables, (iii) all Collections
with respect to such Pool Receivables, (iv) the Lock-Boxes and Collection
Accounts and all amounts on deposit therein, and all certificates and
instruments, if any, from time to time evidencing such Lock-Boxes and Collection
Accounts and amounts on deposit therein, (v) all rights (but none of the
obligations) of the Borrower under the Purchase and Sale Agreement, (vi) all
other personal and fixture property or assets of the Borrower of every kind and
nature including, without limitation, all goods (including inventory, equipment
and any accessions thereto), instruments (including promissory notes),
documents, accounts, chattel paper (whether tangible or electronic), deposit
accounts, securities accounts, securities entitlements, letter-of-credit rights,
commercial tort claims, securities and all other investment property, supporting
obligations, money, any other contract rights or rights to the payment of money,
insurance claims and proceeds, and all general intangibles (including all
payment intangibles) (each as defined in the UCC) and (vii) all proceeds of, and
all amounts received or receivable under any or all of, the foregoing.

The Administrative Agent (for the benefit of the Secured Parties) shall have,
with respect to all the Collateral, and in addition to all the other rights and
remedies available to the Administrative Agent (for the benefit of the Secured
Parties), all the rights and remedies of a secured party under any applicable
UCC. The Borrower hereby authorizes the Administrative Agent to file financing
statements describing as the collateral covered thereby as “all of the debtor’s
personal property or assets” or words to that effect, notwithstanding that such
wording may be broader in scope than the collateral described in this Agreement.

Immediately upon the occurrence of the Final Payout Date, the Collateral shall
be automatically released from the lien created hereby, and this Agreement and
all obligations (other than those expressly stated to survive such termination)
of the Administrative Agent, the Lenders and the other Credit Parties hereunder
shall terminate, all without delivery of any instrument or performance of any
act by any party, and all rights to the Collateral shall revert to the Borrower;
provided, however, that promptly following written request therefor by the
Borrower delivered to the Administrative Agent following any such termination,
and at the expense of the Borrower, the Administrative Agent shall execute and
deliver to the Borrower UCC-3 termination statements and such other documents as
the Borrower shall reasonably request to evidence such termination.

SECTION 5.06.    Successor Adjusted LIBOR or LMIR

(a)    If the Administrative Agent determines (which determination shall be
final and conclusive, absent manifest error) that either (i) (A) the
circumstances set forth in Section 5.04

 

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have arisen and are unlikely to be temporary, or (B) the circumstances set forth
in Section 5.04 have not arisen but the applicable supervisor or administrator
(if any) of Adjusted LIBOR or LMIR or a Governmental Authority having
jurisdiction over the Administrative Agent has made a public statement
identifying the specific date after which Adjusted LIBOR or LMIR shall no longer
be used for determining interest rates for loans (either such date, a “LIBOR
Termination Date”), or (ii) a rate other than Adjusted LIBOR or LMIR, as
applicable, has become a widely recognized benchmark rate for newly originated
loans in Dollars in the U.S. market, then the Administrative Agent may (in
consultation with the Borrower) choose a replacement index for Adjusted LIBOR or
LMIR, as applicable, and make adjustments to applicable margins and related
amendments to this Agreement as referred to below such that, to the extent
practicable, the all-in Interest based on the replacement index will be
substantially equivalent to the all-in Interest based on Adjusted LIBOR or LMIR,
as applicable, in effect prior to its replacement.

(b)    The Administrative Agent and the Borrower shall enter into an amendment
to this Agreement to reflect the replacement index, the adjusted margins and
such other related amendments as may be appropriate, in the discretion of the
Administrative Agent, for the implementation and administration of the
replacement index-based rate. Notwithstanding anything to the contrary in this
Agreement or the other Transaction Documents (including, without limitation,
Section 14.01), such amendment shall become effective without any further action
or consent of any other party to this Agreement at 5:00 p.m. New York City time
on the tenth (10th) Business Day after the date a draft of the amendment is
provided to the Lenders, unless the Administrative Agent receives, on or before
such tenth (10th) Business Day, a written notice from the Majority Lenders
stating that such Majority Lenders object to such amendment.

(c)    Selection of the replacement index, adjustments to the applicable
margins, and amendments to this Agreement (i) will be determined with due
consideration to the then-current market practices for determining and
implementing a rate of interest for newly originated loans in the United States
and loans converted from a rate based on Adjusted LIBOR or LMIR to a replacement
index-based rate, and (ii) may also reflect adjustments to account for (A) the
effects of the transition from Adjusted LIBOR or LMIR, as applicable, to the
replacement index and (B) yield- or risk-based differences between Adjusted
LIBOR or LMIR, as applicable, and the replacement index.

(d)    Until an amendment reflecting a new replacement index in accordance with
this Section 5.06 is effective, each Portion of Capital accruing Interest with
reference to Adjusted LIBOR or LMIR will continue to bear interest with
reference to Adjusted LIBOR or LMIR, as applicable; provided however, that if
the Administrative Agent determines (which determination shall be final and
conclusive, absent manifest error) that a LIBOR Termination Date has occurred,
then following the LIBOR Termination Date, each Portion of Capital that would
otherwise accrue Interest with reference to Adjusted LIBOR or LMIR shall
automatically begin accruing Interest with reference to the Base Rate until such
time as an amendment reflecting a replacement index and related matters as
described above is implemented.

(e)    Notwithstanding anything to the contrary contained herein, if at any time
the replacement index is less than zero, at such times, such index shall be
deemed to be zero for purposes of this Agreement.

 

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ARTICLE VI

CONDITIONS TO EFFECTIVENESS AND CREDIT EXTENSIONS

SECTION 6.01. Conditions Precedent to Effectiveness and the Initial Credit
Extension.

(a)    This Agreement shall become effective as of the Closing Date when (a) the
Administrative Agent shall have received each of the documents, agreements (in
fully executed form), opinions of counsel, lien search results, UCC filings,
certificates and other deliverables listed on the closing memorandum attached as
Exhibit I hereto, in each case, in form and substance acceptable to the
Administrative Agent and (b) all fees and expenses payable by the Borrower on
the Closing Date to the Credit Parties have been paid in full in accordance with
the terms of the Transaction Documents.

(b)    In addition to the conditions set forth in Section 6.02 below, the
initial Credit Extension under this Agreement shall be subject to the conditions
precedent that:

(i)    the conditions in Section 6.01(a) have been satisfied;

(ii)    the Administrative Agent shall have received a fully executed copy of an
Account Control Agreement with respect to each Collection Account set forth on
Schedule II hereto, in each case, in form and substance acceptable to the
Administrative Agent;

(iii)    the Administrative Agent shall have received such historical
receivables data with respect to the Originators, as reasonably requested by the
Administrative Agent and in such format as is acceptable to the Administrative
Agent;

(iv)    the Administrative Agent shall have received satisfactory results of an
audit or field exam (performed by representatives of the Administrative Agent)
of the Servicer’s and each Originator’s collection, operating and reporting
systems, the Credit and Collection Policy and historical receivables data;

(v)    each amendment to this Agreement and each other Transaction Document
reasonably requested by the Administrative Agent on or after the Closing Date in
connection with the audit or field exam results referenced in clause (iv) above
and the historical receivables data referenced in clause (iii) above, in each
case, shall have become effective; such amendments may include, but shall not be
limited to, amendments to the definitions of “Concentration Percentage”,
“Defaulted Receivable”, “Delinquent Receivable”, “Eligible Unbilled Receivable”,
“Eligible Receivable” and “Excess Concentration” contained in this Agreement and
amendments to Section 10.01(f);

(vi)    the Administrative Agent shall have received such documents, reports,
agreements, opinions of counsel, certificates, resolutions and other
deliverables, in each case, in form and substance acceptable to the
Administrative Agent as may be reasonably requested by the Administrative Agent
in connection with the items referenced in clauses (iii) through (v) above;

 

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(vii)    receipt by each of the Lenders of customary internal credit approvals
and bank authorizations for their entry into the amendments contemplated in
clause (v) above;

(viii)    the Borrower shall have identified the “Commencement Date” in a
writing delivered to the Administrative Agent and such “Commencement Date” is on
or prior to the date of such initial Credit Extension; and

(ix)    the Servicer shall have delivered to the Administrative Agent (A) an
Information Package as of the most recently completed Fiscal Month and (B) if a
Ratings Event has occurred and is continuing, an Interim Report as of the last
day of the immediately preceding calendar week.

SECTION 6.02. Conditions Precedent to All Credit Extensions. Each Credit
Extension hereunder on or after the Closing Date shall be subject to the
conditions precedent that:

(a)    the Borrower shall have delivered to the Administrative Agent and each
Lender a Loan Request for such Loan, in accordance with Section 2.02(a);

(b)    the Servicer shall have delivered to the Administrative Agent and each
Lender all Information Packages and Interim Reports, if any, required to be
delivered hereunder;

(c)    the conditions precedent to such Credit Extension specified in
Section 2.01(i) through (iii), shall be satisfied; and

(d)    on the date of such Credit Extension the following statements shall be
true and correct (and upon the occurrence of such Credit Extension, the Borrower
and the Servicer shall be deemed to have represented and warranted that such
statements are then true and correct):

(i)    the representations and warranties of the Borrower and the Servicer
contained in Sections 7.01 and 7.02 are true and correct in all material
respects on and as of the date of such Credit Extension as though made on and as
of such date unless such representations and warranties by their terms refer to
an earlier date, in which case they shall be true and correct in all material
respects on and as of such earlier date;

(ii)    no Event of Default or Unmatured Event of Default has occurred and is
continuing, and no Event of Default or Unmatured Event of Default would result
from such Credit Extension;

(iii)    no Borrowing Base Deficit exists or would exist after giving effect to
such Credit Extension; and

(iv)    the Termination Date has not occurred.

 

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SECTION 6.03. Conditions Precedent to All Releases. Each Release hereunder on or
after the Closing Date shall be subject to the conditions precedent that:

(a)    after giving effect to such Release, the Servicer shall be holding in
trust for the benefit of the Secured Parties an amount of Collections sufficient
to pay the sum of (x) all accrued and unpaid Servicing Fees, Interest, Fees and
Breakage Fees, in each case, through the date of such Release, (y) the amount of
any Borrowing Base Deficit and (z) the amount of all other accrued and unpaid
Borrower Obligations through the date of such Release;

(b)    the Borrower shall use the proceeds of such Release solely to pay the
purchase price for Receivables purchased by the Borrower in accordance with the
terms of the Purchase and Sale Agreement and amounts owing by the Borrower to
the Originators under the Intercompany Loan Agreements; and

(c)    on the date of such Release the following statements shall be true and
correct (and upon the occurrence of such Release, the Borrower and the Servicer
shall be deemed to have represented and warranted that such statements are then
true and correct):

(i)    the representations and warranties of the Borrower and the Servicer
contained in Sections 7.01 and 7.02 are true and correct in all material
respects on and as of the date of such Release as though made on and as of such
date unless such representations and warranties by their terms refer to an
earlier date, in which case they shall be true and correct in all material
respects on and as of such earlier date;

(ii)    no Event of Default has occurred and is continuing, and no Event of
Default would result from such Release;

(iii)    no Borrowing Base Deficit exists or would exist after giving effect to
such Release;

(iv)    the Termination Date has not occurred; and

(v)    the Aggregate Capital exceeds the Minimum Funding Threshold.

ARTICLE VII

REPRESENTATIONS AND WARRANTIES

SECTION 7.01. Representations and Warranties of the Borrower. The Borrower
represents and warrants to each Credit Party as of the Closing Date, on each
Settlement Date and on each day that a Credit Extension or Release shall have
occurred:

(a)    Organization and Good Standing. The Borrower is a limited liability
company duly organized and validly existing in good standing under the laws of
the State of Delaware and has full power and authority under its constitutional
documents and under the laws of its jurisdiction to own its properties and to
conduct its business as such properties are currently owned and such business is
presently conducted.

 

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(b)    Due Qualification. The Borrower is duly qualified to do business as a
limited liability company, is in good standing as a foreign limited liability
company and has obtained all necessary licenses and approvals in all
jurisdictions in which the conduct of its business requires such qualification,
licenses or approvals, except where the failure to do so could not reasonably be
expected to have a Borrower Material Adverse Effect.

(c)    Power and Authority; Due Authorization. The Borrower (i) has all
necessary limited liability company power and authority to (A) execute and
deliver this Agreement and the other Transaction Documents to which it is a
party, (B) perform its obligations under this Agreement and the other
Transaction Documents to which it is a party and (C) grant a security interest
in the Collateral to the Administrative Agent on the terms and subject to the
conditions herein provided and (ii) has duly authorized by all necessary limited
liability company action such grant and the execution, delivery and performance
of, and the consummation of the transactions provided for in, this Agreement and
the other Transaction Documents to which it is a party.

(d)    Binding Obligations. This Agreement and each of the other Transaction
Documents to which the Borrower is a party constitutes legal, valid and binding
obligations of the Borrower, enforceable against the Borrower in accordance with
their respective 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.

(e)    No Conflict or Violation. The execution, delivery and performance of, and
the consummation of the transactions contemplated by, this Agreement and the
other Transaction Documents to which the Borrower is a party, and the
fulfillment of the terms hereof and thereof, will not (i) conflict with, result
in any breach of any of the terms or provisions of, or constitute (with or
without notice or lapse of time or both) a default under its organizational
documents or any indenture, sale agreement, credit agreement (including the
Credit Agreement), loan agreement, security agreement, mortgage, deed of trust,
or other agreement or instrument to which the Borrower is a party or by which it
or any of its properties is bound, (ii) result in the creation or imposition of
any Adverse Claim upon any of the Collateral pursuant to the terms of any such
indenture, credit agreement (including the Credit Agreement), loan agreement,
security agreement, mortgage, deed of trust, or other agreement or instrument
other than this Agreement and the other Transaction Documents or (iii) conflict
with or violate any Applicable Law.

(f)    Litigation and Other Proceedings. (i) There is no action, suit,
proceeding or investigation pending or, to the best knowledge of the Borrower,
threatened, against the Borrower before any Governmental Authority and (ii) the
Borrower is not subject to any order, judgment, decree, injunction, stipulation
or consent order of or with any Governmental Authority that, in the case of
either of the foregoing clauses (i) and (ii), (A) asserts the invalidity of this
Agreement or any other Transaction Document, (B) seeks to prevent the grant of a
security interest in any Collateral by the Borrower to the Administrative Agent,
the ownership or acquisition by the Borrower of any Pool Receivable or other
Collateral or the consummation of any of the transactions contemplated by this
Agreement or any other Transaction Document, (C) seeks any determination or
ruling that could materially and adversely affect the performance by

 

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the Borrower of its obligations under, or the validity or enforceability of,
this Agreement or any other Transaction Document or (D) individually or in the
aggregate for all such actions, suits, proceedings and investigations could
reasonably be expected to have a Borrower Material Adverse Effect.

(g)    Governmental Approvals. Except where the failure to obtain or make such
authorization, consent, order, approval or action could not reasonably be
expected to have a Borrower Material Adverse Effect, all authorizations,
consents, orders and approvals of, or other actions by, any Governmental
Authority that are required to be obtained by the Borrower in connection with
the grant of a security interest in the Collateral to the Administrative Agent
hereunder or the due execution, delivery and performance by the Borrower of this
Agreement or any other Transaction Document to which it is a party and the
consummation by the Borrower of the transactions contemplated by this Agreement
and the other Transaction Documents to which it is a party have been obtained or
made and are in full force and effect.

(h)    Margin Regulations. The Borrower is not engaged, principally or as one of
its important activities, in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meanings of Regulations T, U and
X of the Board of Governors of the Federal Reserve System).

(i)    Solvency. After giving effect to the transactions contemplated by this
Agreement and the other Transaction Documents, the Borrower is Solvent.

(j)    Offices; Legal Name. The Borrower’s sole jurisdiction of organization is
the State of Delaware and such jurisdiction has not changed within four months
prior to the date of this Agreement. The office of the Borrower is set forth on
Schedule III hereto. The legal name of the Borrower is Syneos Health Receivables
LLC.

(k)    Investment Company Act; Volcker Rule. The Borrower (i) is not, and is not
controlled by, an “investment company” registered or required to be registered
under the Investment Company Act and (ii) is not a “covered fund” under the
Volcker Rule. In determining that the Borrower is not a “covered fund” under the
Volcker Rule, the Borrower relies on, and is entitled to rely on, the exemption
from the definition of “investment company” set forth in Section 3(c)(5) of the
Investment Company Act.

(l)    No Material Adverse Effect. Since the date of formation of the Borrower
there has been no Borrower Material Adverse Effect.

(m)    Accuracy of Information. All Information Packages, Interim Reports, Loan
Requests, certificates, reports, statements, documents and other information
furnished to the Administrative Agent or any other Credit Party by or on behalf
of the Borrower pursuant to any provision of this Agreement or any other
Transaction Document, or in connection with or pursuant to any amendment or
modification of, or waiver under, this Agreement or any other Transaction
Document, is, at the time the same are so furnished, complete and correct in all
material respects on the date the same are furnished to the Administrative Agent
or such other Credit Party, and does not contain any material misstatement of
fact or omit to state a material fact necessary to make the statements contained
therein not misleading; provided, that with respect to projected financial
information, if any, such representation is made only that such information was
prepared in good faith based upon assumptions believed to be reasonable at the
time.

 

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(n)    Anti-Money Laundering/International Trade Law Compliance. No Covered
Entity is a Sanctioned Person. No Covered Entity, either in its own right or
through any third party, (i) has any of its assets in a Sanctioned Country or in
the possession, custody or control of a Sanctioned Person in violation of any
Anti-Terrorism Law; (ii) does business in or with, or derives any of its income
from investments in or transactions with, any Sanctioned Country or Sanctioned
Person in violation of any Anti-Terrorism Law; or (iii) engages in any dealings
or transactions prohibited by any Anti-Terrorism Law.

(o)    Perfection Representations.

(i)    This Agreement creates a valid and continuing security interest (as
defined in the applicable UCC) in the Borrower’s right, title and interest in,
to and under the Collateral which (A) security interest has been perfected and
is enforceable against creditors of and purchasers from the Borrower and
(B) will be free of all Adverse Claims (other than Permitted Adverse Claims) in
such Collateral.

(ii)    The Receivables constitute “accounts” or “general intangibles” within
the meaning of Section 9-102 of the UCC.

(iii)    The Borrower owns and has good and marketable title to the Collateral
free and clear of any Adverse Claim (other than a Permitted Adverse Claim) of
any Person.

(iv)    All appropriate financing statements, financing statement amendments and
continuation statements have been filed in the proper filing office in the
appropriate jurisdictions under Applicable Law in order to perfect (and continue
the perfection of) the sale and contribution of the Receivables and Related
Security from each Originator to the Borrower pursuant to the Purchase and Sale
Agreement and the grant by the Borrower of a security interest in the Collateral
to the Administrative Agent pursuant to this Agreement.

(v)    Other than the security interest granted to the Administrative Agent
pursuant to this Agreement, the Borrower has not pledged, assigned, sold,
granted a security interest in, or otherwise conveyed any of the Collateral
except as permitted by this Agreement and the other Transaction Documents. The
Borrower has not authorized the filing of and is not aware of any financing
statements filed against the Borrower that include a description of collateral
covering the Collateral other than any financing statement (i) in favor of the
Administrative Agent or (ii) that has been terminated. The Borrower is not aware
of any judgment lien, ERISA lien or tax lien filings against the Borrower.

 

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(vi)    Notwithstanding any other provision of this Agreement or any other
Transaction Document, the representations contained in this Section 7.01(o)
shall be continuing and remain in full force and effect until the Final Payout
Date.

(p)    The Lock-Boxes and Collection Accounts.

(i)    Nature of Collection Accounts. Each Collection Account constitutes a
“deposit account” within the meaning of the applicable UCC.

(ii)    Ownership. Each Lock-Box and Collection Account is in the name of the
Borrower, and the Borrower owns and has good and marketable title to the
Collection Accounts free and clear of any Adverse Claim.

(iii)    Perfection. The Borrower has delivered to the Administrative Agent a
fully executed Account Control Agreement relating to each Lock-Box and
Collection Account, pursuant to which each applicable Collection Account Bank
has agreed to comply with the instructions originated by the Administrative
Agent directing the disposition of funds in such Lock-Box and Collection Account
without further consent by the Borrower, the Servicer or any other Person. The
Administrative Agent has “control” (as defined in Section 9-104 of the UCC) over
each Collection Account.

(iv)    Instructions. Neither the Lock-Boxes nor the Collection Accounts are in
the name of any Person other than the Borrower. Neither the Borrower nor the
Servicer has consented to the applicable Collection Account Bank complying with
instructions of any Person other than the Administrative Agent.

(q)    Ordinary Course of Business. Each remittance of Collections by or on
behalf of the Borrower to the Credit Parties under this Agreement will have been
(i) in payment of a debt incurred by the Borrower in the ordinary course of
business or financial affairs of the Borrower and (ii) made in the ordinary
course of business or financial affairs of the Borrower.

(r)    Compliance with Law. The Borrower has complied in all material respects
with all Applicable Laws to which it may be subject.

(s)    Bulk Sales Act. No transaction contemplated by this Agreement requires
compliance by it with any bulk sales act or similar law.

(t)    Eligible Receivables. Each Receivable included as an Eligible Receivable
in the calculation of the Net Receivables Pool Balance as of any date is an
Eligible Receivable as of such date.

(u)    Taxes. The Borrower has (i) timely filed all tax returns (federal, state
and local) required to be filed by it and (ii) paid, or caused to be paid, all
taxes, assessments and other governmental charges, if any, other than taxes,
assessments and other governmental charges being contested in good faith by
appropriate proceedings and as to which adequate reserves have been provided in
accordance with GAAP, except in each case to the extent that such failure to
file or pay could not reasonably be expected to have a Borrower Material Adverse
Effect.

 

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(v)    Tax Status. The Borrower (i) is, and shall at all relevant times continue
to be, a “disregarded entity” within the meaning of U.S. Treasury Regulation §
301.7701-3 for U.S. federal income tax purposes that is wholly owned by a
“United States person” (within the meaning of Section 7701(a)(30) of the Code)
and (ii) is not and will not at any relevant time become an association (or
publicly traded partnership) taxable as an association for U.S. federal income
tax purposes. The Borrower is not subject to any Tax in any jurisdiction outside
the United States.

(w)    Opinions. The facts regarding the Borrower, the Servicer, each
Originator, the Performance Guarantor, the Receivables, the Related Security and
the related matters set forth or assumed in each of the opinions of counsel
delivered in connection with this Agreement and the Transaction Documents are
true and correct in all material respects.

(x)    Other Transaction Documents. Each representation and warranty made by the
Borrower under each other Transaction Document to which it is a party is true
and correct in all material respects as of the date when made.

(y)    Liquidity Coverage Ratio. The Borrower has not, does not and will not
during this Agreement issue any LCR Security. The Borrower further represents
and warrants that its assets and liabilities are consolidated with the assets
and liabilities of Parent for purposes of GAAP.

(z)    No Linked Accounts. Except for the Servicer’s Account, there are no
Linked Accounts with respect to any Collection Account.

Notwithstanding any other provision of this Agreement or any other Transaction
Document, the representations and warranties contained in this Section shall be
continuing, and remain in full force and effect until the Final Payout Date.

SECTION 7.02. Representations and Warranties of the Servicer. The Servicer
represents and warrants to each Credit Party as of the Closing Date, on each
Settlement Date and on each day that a Credit Extension or Release shall have
occurred:

(a)    Organization and Good Standing. The Servicer is a duly organized and
validly existing corporation in good standing under the laws of the State of
Delaware, with the power and authority under its organizational documents and
under the laws of Delaware to own its properties and to conduct its business as
such properties are currently owned and such business is presently conducted.

(b)    Due Qualification. The Servicer is duly qualified to do business as a
corporation, is in good standing as a foreign corporation and has obtained all
necessary licenses and approvals in all jurisdictions in which the conduct of
its business or the servicing of the Pool Receivables as required by this
Agreement requires such qualification, licenses or approvals, except where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect.

(c)    Power and Authority; Due Authorization. The Servicer has all necessary
corporate power and authority to (i) execute and deliver this Agreement and the
other

 

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Transaction Documents to which it is a party and (ii) perform its obligations
under this Agreement and the other Transaction Documents to which it is a party
and the execution, delivery and performance of, and the consummation of the
transactions provided for in, this Agreement and the other Transaction Documents
to which it is a party have been duly authorized by the Servicer by all
necessary action.

(d)    Binding Obligations. This Agreement and each of the other Transaction
Documents to which it is a party constitutes legal, valid and binding
obligations of the Servicer, enforceable against the Servicer in accordance with
their respective 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.

(e)    No Conflict or Violation. The execution and delivery of this Agreement
and each other Transaction Document to which the Servicer is a party, the
performance of the transactions contemplated by this Agreement and the other
Transaction Documents and the fulfillment of the terms of this Agreement and the
other Transaction Documents by the Servicer will not (i) conflict with, result
in any breach of any of the terms or provisions of, or constitute (with or
without notice or lapse of time or both) a default under, the organizational
documents of the Servicer or any indenture, sale agreement, credit agreement
(including the Credit Agreement), loan agreement, security agreement, mortgage,
deed of trust or other agreement or instrument to which the Servicer is a party
or by which it or any of its property is bound, (ii) result in the creation or
imposition of any Adverse Claim upon any of its properties pursuant to the terms
of any such indenture, credit agreement (including the Credit Agreement), loan
agreement, security agreement, mortgage, deed of trust or other agreement or
instrument, other than this Agreement and the other Transaction Documents or
(iii) conflict with or violate any Applicable Law, except to the extent that any
such conflict, breach, default, Adverse Claim or violation could not reasonably
be expected to have a Material Adverse Effect.

(f)    Litigation and Other Proceedings. There is no action, suit, proceeding or
investigation pending, or to the Servicer’s knowledge threatened, against the
Servicer before any Governmental Authority: (i) asserting the invalidity of this
Agreement or any of the other Transaction Documents; (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement or any
other Transaction Document; or (iii) seeking any determination or ruling that
could materially and adversely affect the performance by the Servicer of its
obligations under, or the validity or enforceability of, this Agreement or any
of the other Transaction Documents.

(g)    No Consents. The Servicer is not required to obtain the consent of any
other party or any consent, license, approval, registration, authorization or
declaration of or with any Governmental Authority in connection with the
execution, delivery, or performance of this Agreement or any other Transaction
Document to which it is a party that has not already been obtained, except where
the failure to obtain such consent, license, approval, registration,
authorization or declaration could not reasonably be expected to have a Material
Adverse Effect.

 

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(h)    Compliance with Applicable Law. The Servicer (i) shall duly satisfy all
obligations on its part to be fulfilled under or in connection with the Pool
Receivables and the related Contracts, (ii) has maintained in effect all
qualifications required under Applicable Law in order to properly service the
Pool Receivables and (iii) has complied in all material respects with all
Applicable Laws in connection with servicing the Pool Receivables.

(i)    Accuracy of Information. All Information Packages, Interim Reports, Loan
Requests, certificates, reports, statements, documents and other information
furnished to the Administrative Agent or any other Credit Party by the Servicer
pursuant to any provision of this Agreement or any other Transaction Document,
or in connection with or pursuant to any amendment or modification of, or waiver
under, this Agreement or any other Transaction Document, is, at the time the
same are so furnished, complete and correct in all material respects on the date
the same are furnished to the Administrative Agent or such other Credit Party,
and does not contain any material misstatement of fact or omit to state a
material fact necessary to make the statements contained therein not misleading;
provided that, with respect to projected financial information, if any, such
representations is made only that such information was prepared in good faith
based upon assumptions believed to be reasonable at the time.

(j)    Location of Records. The offices where the initial Servicer keeps all of
its records relating to the servicing of the Pool Receivables are located at the
Servicer’s address specified on Schedule III.

(k)    Credit and Collection Policy. The Servicer has complied in all material
respects with the Credit and Collection Policy with regard to each Pool
Receivable and the related Contracts.

(l)    Eligible Receivables. Each Receivable included as an Eligible Receivable
in the calculation of the Net Receivables Pool Balance as of any date is an
Eligible Receivable as of such date.

(m)    Servicing Programs. No material license or approval is required for the
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 Pool
Receivables, other than those which have been obtained and are in full force and
effect.

(n)    Servicing of Pool Receivables. Since the Closing Date there has been no
material adverse change in the ability of the Servicer or any Sub-Servicer to
service and collect the Pool Receivables and the Related Security.

(o)    Other Transaction Documents. Each representation and warranty made by the
Servicer under each other Transaction Document to which it is a party
(including, without limitation, the Purchase and Sale Agreement) is true and
correct in all material respects as of the date when made.

(p)    No Material Adverse Effect. Since December 31, 2017, there has been no
Material Adverse Effect on the Servicer.

 

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(q)    Investment Company Act. The Servicer is not an “investment company,” or a
company “controlled” by an “investment company,” within the meaning of the
Investment Company Act.

(r)    Anti-Money Laundering/International Trade Law Compliance. No Covered
Entity is a Sanctioned Person. No Covered Entity, either in its own right or
through any third party, (i) has any of its assets in a Sanctioned Country or in
the possession, custody or control of a Sanctioned Person in violation of any
Anti-Terrorism Law; (ii) does business in or with, or derives any of its income
from investments in or transactions with, any Sanctioned Country or Sanctioned
Person in violation of any Anti-Terrorism Law; or (iii) engages in any dealings
or transactions prohibited by any Anti-Terrorism Law.

(s)    Financial Condition. The audited consolidated balance sheets of Parent
and its consolidated Subsidiaries as of December 31, 2017 and the related
statements of income and shareholders’ equity of Parent and its consolidated
Subsidiaries for the fiscal year then ended, copies of which have been furnished
to the Administrative Agent and the Lenders, present fairly in all material
respects the consolidated financial position of Parent and its consolidated
Subsidiaries for the period ended on such date, all in accordance with GAAP.

(t)    Bulk Sales Act. No transaction contemplated by this Agreement requires
compliance by it with any bulk sales act or similar law.

(u)    Taxes. The Servicer has (i) timely filed all tax returns (federal, state,
foreign and local) required to be filed by it and (ii) paid, or caused to be
paid, all taxes, assessments and other governmental charges, if any, other than
taxes, assessments and other governmental charges being contested in good faith
by appropriate proceedings and as to which adequate reserves have been provided
in accordance with GAAP, except in each case to the extent that the failure to
file or pay could not reasonably be expected to have a Material Adverse Effect.

(v)    Opinions. The facts regarding the Borrower, the Servicer, each
Originator, the Performance Guarantor, the Receivables, the Related Security and
the related matters set forth or assumed in each of the opinions of counsel
delivered in connection with this Agreement and the Transaction Documents are
true and correct in all material respects.

(w)    Other Transaction Documents. Each representation and warranty made by the
Servicer under each other Transaction Document to which it is a party is true
and correct in all material respects as of the date when made.

(x)    No Linked Accounts. Except for the Servicer’s Account, there are no
Linked Accounts with respect to any Collection Account.

Notwithstanding any other provision of this Agreement or any other Transaction
Document, the representations and warranties contained in this Section shall be
continuing, and remain in full force and effect until the Final Payout Date.

 

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ARTICLE VIII

COVENANTS

SECTION 8.01. Covenants of the Borrower. At all times from the Closing Date
until the Final Payout Date:

(a)    Payment of Principal and Interest. The Borrower shall duly and punctually
pay Capital, Interest, Fees and all other amounts payable by the Borrower
hereunder in accordance with the terms of this Agreement.

(b)    Existence. The Borrower shall keep in full force and effect its existence
and rights as a limited liability company under the laws of the State of
Delaware, and shall obtain and preserve its qualification to do business in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of this Agreement, the other Transaction Documents
and the Collateral.

(c)    Financial Reporting. The Borrower will maintain a system of accounting
established and administered in accordance with GAAP, and the Borrower (or the
Servicer on its behalf) shall furnish to the Administrative Agent and each
Lender:

(i)    Annual Financial Statements of the Borrower. Promptly upon completion and
in no event later than 90 days after the close of each fiscal year of the
Borrower, annual unaudited financial statements of the Borrower certified by a
Financial Officer of the Borrower that they fairly present in all material
respects, in accordance with GAAP, the financial condition of the Borrower as of
the date indicated and the results of its operations for the periods indicated.

(ii)    Information Packages and Interim Reports. Commencing on the Commencement
Date, as soon as available and in any event (a) not later than two (2) Business
Days prior to each Settlement Date, an Information Package as of the most
recently completed Fiscal Month and (b) if a Ratings Event has occurred and is
continuing, upon prior written notice from the Administrative Agent, the
Borrower shall furnish or cause to be furnished to the Administrative Agent and
each Lender on the second Business Day of each calendar week, an Interim Report
with respect to the Pool Receivables with data as of the close of business on
the last day of the immediately preceding calendar week.

(iii)    Other Information. Such other information relating to the Collateral
and the Borrower and the transactions contemplated hereby (including
non-financial information) as the Administrative Agent or any Lender may from
time to time reasonably request.

(iv)    Quarterly Financial Statements of Parent. As soon as available and in no
event later than 45 days following the end of each of the first three fiscal
quarters in each of Parent’s fiscal years, (A) the unaudited consolidated
balance sheet and statements of income of Parent and its consolidated
Subsidiaries as at the end of such fiscal quarter

 

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and the related unaudited consolidated statements of earnings and cash flows for
such fiscal quarter and for the elapsed portion of the fiscal year ended with
the last day of such fiscal quarter, in each case setting forth comparative
figures for the corresponding fiscal quarter in the prior fiscal year, all of
which shall be certified by a Financial Officer of Parent that they fairly
present in all material respects, in accordance with GAAP, the financial
condition of Parent and its consolidated Subsidiaries as of the dates indicated
and the results of their operations for the periods indicated, subject to normal
year-end audit adjustments and the absence of footnotes and (B) management’s
discussion and analysis of the important operational and financial developments
during such fiscal quarter.

(v)    Annual Financial Statements of Parent. Within 90 days after the close of
each of Parent’s fiscal years, the consolidated balance sheet of Parent and its
consolidated Subsidiaries as at the end of such fiscal year and the related
consolidated statements of earnings and cash flows for such fiscal year setting
forth comparative figures for the preceding fiscal year, all reported on by
independent certified public accountants of recognized national standing
(without (x) a “going concern” or like qualification or exception or (y) a
qualification as to the scope of the audit) to the effect that such consolidated
financial statements present fairly in all material respects, in accordance with
GAAP, the financial condition of Parent and its consolidated Subsidiaries as of
the dates indicated and the results of their operations for the periods
indicated.

(vi)    Other Reports and Filings. Promptly (but in any event within ten days)
after the filing or delivery thereof, copies of all financial information, proxy
materials and reports, if any, which Parent or any of its consolidated
Subsidiaries shall publicly file with the SEC.

Notwithstanding anything herein to the contrary, any financial information,
proxy statements or other material required to be delivered pursuant to this
paragraph (c) shall be deemed to have been furnished to each of the
Administrative Agent and each Lender on the date that such report, proxy
statement or other material is posted on the SEC’s website at www.sec.gov.

(d)    Notices. The Borrower (or the Servicer on its behalf) will notify the
Administrative Agent and each Lender in writing of any of the following events
promptly upon (but in no event later than four (4) Business Days after) a
Financial Officer or other officer learning of the occurrence thereof (unless a
different notice period is set forth for the event in the relevant subsections
below), with such notice describing the same, and if applicable, the steps being
taken by the Person(s) affected with respect thereto:

(i)    Notice of Events of Default or Unmatured Events of Default. A statement
of a Financial Officer of the Borrower setting forth details of any Event of
Default or Unmatured Event of Default that has occurred and is continuing and
the action which the Borrower proposes to take with respect thereto.

 

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(ii)    Representations and Warranties. The failure of any representation or
warranty made or deemed to be made by the Borrower under this Agreement or any
other Transaction Document to be true and correct in any material respect when
made.

(iii)    Litigation. The institution of any litigation, arbitration proceeding
or governmental proceeding with respect to the Borrower, the Servicer, the
Performance Guarantor or any Originator, which with respect to any Person other
than the Borrower, could reasonably be expected to have a Borrower Material
Adverse Effect or a Material Adverse Effect.

(iv)    Adverse Claim. (A) Any Person shall obtain an Adverse Claim (other than
a Permitted Adverse Claim) upon the Collateral or any portion thereof, (B) any
Person other than the Borrower, the Servicer or the Administrative Agent shall
obtain any rights or direct any action with respect to any Collection Account
(or related Lock-Box) or (C) any Obligor shall receive any change in payment
instructions with respect to Pool Receivable(s) from a Person other than the
Servicer or the Administrative Agent.

(v)    Name Changes. At least thirty (30) days before any change in any
Originator’s or the Borrower’s name, jurisdiction of organization or any other
change requiring the amendment of UCC financing statements.

(vi)    Change in Accountants or Accounting Policy. Any change in (A) the
external accountants of the Borrower, the Servicer, any Originator, Performance
Guarantor or the Parent, (B) any accounting policy of the Borrower or (C) any
material accounting policy of any Originator that is relevant to the
transactions contemplated by this Agreement or any other Transaction Document
(it being understood that any change to the manner in which any Originator
accounts for the Pool Receivables shall be deemed “material” for such purpose).

(vii)    Termination Event. The occurrence of a Purchase and Sale Termination
Event under the Purchase and Sale Agreement.

(viii)    Material Adverse Effect. Promptly after the occurrence thereof, notice
of any Borrower Material Adverse Effect or Material Adverse Effect.

(e)    Conduct of Business. The Borrower will carry on and conduct its business
in substantially the same manner and in substantially the same fields of
enterprise as it is presently conducted.

(f)    Compliance with Laws. The Borrower will comply with all Applicable Laws
to which it may be subject if the failure to comply could reasonably be expected
to have a Borrower Material Adverse Effect.

(g)    Furnishing of Information and Inspection of Receivables. The Borrower
will furnish or cause to be furnished to the Administrative Agent and each
Lender from time to time such information with respect to the Pool Receivables
and the other Collateral as the Administrative Agent or any Lender may
reasonably request. The Borrower will, at the Borrower’s expense, during regular
business hours with reasonable prior written notice (i) permit

 

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the Administrative Agent and each Lender or their respective agents or
representatives to (A) examine and make copies of and abstracts from all books
and records relating to the Pool Receivables or other Collateral, (B) visit the
offices and properties of the Borrower for the purpose of examining such books
and records and (C) discuss matters relating to the Pool Receivables, the other
Collateral or the Borrower’s performance hereunder or under the other
Transaction Documents to which it is a party with any of the officers,
directors, and/or independent public accountants of the Borrower having
knowledge of such matters and (ii) without limiting the provisions of clause
(i) above, during regular business hours, at the Borrower’s expense, upon
reasonable prior written notice from the Administrative Agent, permit certified
public accountants or other auditors acceptable to the Administrative Agent to
conduct a review of its books and records with respect to such Pool Receivables
and other Collateral; provided, that the Borrower shall be required to reimburse
the Administrative Agent for only one (1) combined review of the Servicer, the
Borrower and the Originators pursuant to Section 8.02(e) and the Borrower
pursuant to clause (ii) above in any twelve-month period, unless an Event of
Default has occurred and is continuing.

(h)    Payments on Receivables, Collection Accounts. The Borrower (or the
Servicer on its behalf) will, and will cause each Originator to, at all times,
instruct all Obligors to deliver payments on the Pool Receivables to a
Collection Account or a Lock-Box. The Borrower (or the Servicer on its behalf)
will, and will cause each Originator to, at all times, maintain such books and
records necessary to identify Collections received from time to time on Pool
Receivables and to segregate such Collections from other property of the
Servicer and the Originators. If any payments on the Pool Receivables or other
Collections are received by the Borrower, the Servicer or an Originator, it
shall hold such payments in trust for the benefit of the Administrative Agent,
the Lenders and the other Secured Parties and promptly (but in any event within
one (1) Business Day after becoming aware of such receipt) remit such funds into
a Collection Account. The Borrower (or the Servicer on its behalf) will use
commercially reasonable efforts to ensure that each Collection Account Bank
complies with the terms of each applicable Account Control Agreement. The
Borrower shall use commercially reasonable efforts to ensure that no funds other
than Collections on Pool Receivables and other Collateral are deposited into any
Collection Account. If such funds are nevertheless deposited into any Collection
Account, the Borrower (or the Servicer on its behalf) will within two
(2) Business Days identify and transfer such funds to the appropriate Person
entitled to such funds. The Borrower will not, and will not permit the Servicer,
any Originator or any other Person to commingle Collections or other funds to
which the Administrative Agent, any Lender or any other Secured Party is
entitled, with any other funds. The Borrower shall only add a Collection Account
(or a related Lock-Box) or a Collection Account Bank to those listed on Schedule
II to this Agreement, if the Administrative Agent has received notice of such
addition and an executed and acknowledged copy of an Account Control Agreement
(or an amendment thereto) in form and substance acceptable to the Administrative
Agent from the applicable Collection Account Bank. The Borrower shall only
terminate a Collection Account Bank or close a Collection Account (or a related
Lock-Box) with the prior written consent of the Administrative Agent. Commencing
on the date that is 30 days following the Closing Date, the Borrower shall
ensure that no disbursements are made from any Collection Account, other than
such disbursements that are made at the direction and for the account of the
Borrower.

 

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(i)    Sales, Liens, etc. Except as otherwise provided herein, the Borrower will
not sell, assign (by operation of law or otherwise) or otherwise dispose of, or
create or suffer to exist any Adverse Claim (other than a Permitted Adverse
Claim) upon (including, without limitation, the filing of any financing
statement) or with respect to, any Pool Receivable or other Collateral, or
assign any right to receive income in respect thereof.

(j)    Extension or Amendment of Pool Receivables. Except as otherwise permitted
in Section 9.02, the Borrower will not, and will not permit the Servicer to,
alter the delinquency status or adjust the Outstanding Balance or otherwise
modify the terms of any Pool Receivable in any material respect, or amend,
modify or waive, in any material respect, any term or condition of any related
Contract. The Borrower shall 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 related to the Pool
Receivables, and timely and fully comply in all material respects with the
Credit and Collection Policy with regard to each Pool Receivable and the related
Contract.

(k)    Change in Credit and Collection Policy. The Borrower will not make any
change in the Credit and Collection Policy that would reasonably be expected to
either (x) have a material adverse effect on the collectability of the Pool
Receivables or (y) have a Borrower Material Adverse Effect or a Material Adverse
Effect, in each case, without the prior written consent of the Administrative
Agent and the Majority Lenders. Promptly following any material change in the
Credit and Collection Policy, the Borrower will deliver a copy of the updated
Credit and Collection Policy to the Administrative Agent and each Lender.

(l)    Fundamental Changes. The Borrower shall not, without the prior written
consent of the Administrative Agent and the Majority Lenders, permit itself
(i) to merge or consolidate with or into, or convey, transfer, lease or
otherwise dispose of (whether in one transaction or in a series of transactions)
all or substantially all of its assets (whether now owned or hereafter acquired)
to, any Person or (ii) to be directly owned by any Person other than an
Originator. The Borrower shall not, without the prior written consent of the
Administrative Agent and the Majority Lenders, make any change in the Borrower’s
name, identity, corporate structure or location or make any other change in the
Borrower’s identity or corporate structure that could impair or otherwise render
any UCC financing statement filed in connection with this Agreement or any other
Transaction Document “seriously misleading” as such term (or similar term) is
used in the applicable UCC.

(m)    Books and Records. The Borrower shall maintain and implement (or cause
the Servicer to maintain and implement) administrative and operating procedures
(including an ability to recreate records evidencing Pool Receivables and
related Contracts in the event of the destruction of the originals thereof), and
keep and maintain (or cause the Servicer to keep and maintain) all documents,
books, records, computer tapes and disks and other information reasonably
necessary or advisable for the collection of all Pool Receivables (including
records adequate to permit the daily identification of each Pool Receivable and
all Collections of and adjustments to each existing Pool Receivable).

(n)    Identifying of Records. The Borrower shall: (i) identify (or cause the
Servicer to identify) its master data processing records relating to Pool
Receivables and related

 

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Contracts with a legend that indicates that the Pool Receivables have been
pledged in accordance with this Agreement and (ii) cause each Originator so to
identify its master data processing records with such a legend.

(o)    Change in Payment Instructions to Obligors. The Borrower shall not (and
shall not permit the Servicer or any Sub-Servicer to) add, replace or terminate
any Collection Account (or any related Lock-Box) or make any change in its (or
their) instructions to the Obligors regarding payments to be made to the
Collection Accounts (or any related Lock-Box), other than any instruction to
remit payments to a different Collection Account (or any related Lock-Box),
unless the Administrative Agent shall have received (i) prior written notice of
such addition, termination or change and (ii) a signed and acknowledged Account
Control Agreement (or amendment thereto) with respect to such new Collection
Accounts (or any related Lock-Box), in form and substance satisfactory to the
Administrative Agent.

(p)    Security Interest, Etc. The Borrower shall (and shall cause the Servicer
to), at its expense, take all action necessary to establish and maintain a valid
and enforceable first priority perfected security interest in the Collateral, in
each case free and clear of any Adverse Claim (other than a Permitted Adverse
Claim), in favor of the Administrative Agent (on behalf of the Secured Parties),
including taking such action to perfect, protect or more fully evidence the
security interest of the Administrative Agent (on behalf of the Secured Parties)
as the Administrative Agent or any Secured Party may reasonably request. In
order to evidence the security interests of the Administrative Agent under this
Agreement, the Borrower shall, from time to time take such action, or execute
and deliver such instruments as may be necessary (including, without limitation,
such actions as are reasonably requested by the Administrative Agent) to
maintain and perfect, as a first-priority interest, the Administrative Agent’s
security interest in the Receivables, Related Security and Collections. The
Borrower shall, from time to time and within the time limits established by law,
prepare and present to the Administrative Agent for the Administrative Agent’s
authorization and approval, all financing statements, amendments, continuations
or initial financing statements in lieu of a continuation statement, or other
filings necessary to continue, maintain and perfect the Administrative Agent’s
security interest as a first-priority interest. The Administrative Agent’s
approval of such filings shall authorize the Borrower to file such financing
statements under the UCC without the signature of the Borrower, any Originator
or the Administrative Agent where allowed by Applicable Law. Notwithstanding
anything else in the Transaction Documents to the contrary, the Borrower shall
not have any authority to file a termination, partial termination, release,
partial release, or any amendment that deletes the name of a debtor or excludes
collateral of any such financing statements filed in connection with the
Transaction Documents, without the prior written consent of the Administrative
Agent.

(q)    Certain Agreements. Without the prior written consent of the
Administrative Agent and the Majority Lenders, the Borrower will not (and will
not permit any Originator or the Servicer to) amend, modify, waive, revoke or
terminate any Transaction Document to which it is a party or any provision of
the Borrower’s organizational documents which requires the consent of the
“Independent Director” (as such term is used in the Borrower’s Certificate of
Formation and Limited Liability Company Agreement).

 

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(r)    Restricted Payments. (i) Except pursuant to clause (ii) below, the
Borrower will not: (A) purchase or redeem any of its membership interests,
(B) declare or pay any dividend or set aside any funds for any such purpose,
(C) prepay, purchase or redeem any Debt (other than any Loan pursuant to this
Agreement), (D) lend or advance any funds or (E) repay any loans or advances to,
for or from any of its Affiliates (the amounts described in clauses (A) through
(E) being referred to as “Restricted Payments”).

(ii)    Subject to the limitations set forth in clause (iii) below, the Borrower
may make Restricted Payments so long as such Restricted Payments are made only
in one or more of the following ways: (A) the Borrower may make cash payments
(including prepayments) on the Intercompany Loans in accordance with their
respective terms and (B) the Borrower may declare and pay dividends if, both
immediately before and immediately after giving effect thereto, the Borrower’s
Net Worth is not less than the Required Capital Amount.

(iii)    The Borrower may make Restricted Payments only out of the funds, if
any, it receives pursuant to Sections 4.01 of this Agreement; provided that the
Borrower shall not pay, make or declare any Restricted Payment (including any
dividend) if, after giving effect thereto, any Event of Default or Unmatured
Event of Default shall have occurred and be continuing.

(s)    Other Business. The Borrower will not: (i) engage in any business other
than the transactions contemplated by the Transaction Documents, (ii) create,
incur or permit to exist any Debt of any kind (or cause or permit to be issued
for its account any letters of credit or bankers’ acceptances other than
pursuant to this Agreement or the Intercompany Loan Agreement or (iii) form any
Subsidiary or make any investments in any other Person.

(t)    Use of Collections Available to the Borrower. The Borrower shall apply
the Collections available to the Borrower to make payments in the following
order of priority: (i) the payment of its obligations under this Agreement and
each of the other Transaction Documents (other than the Intercompany Loan
Agreement), (ii) the payment of accrued and unpaid interest and principal on the
Intercompany Loans and (iii) other legal and valid purposes.

(u)    Further Assurances; Change in Name or Jurisdiction of Origination, etc.
(i) The Borrower hereby authorizes and hereby agrees from time to time, at its
own expense, promptly to execute (if necessary) and deliver all further
instruments and documents, and to take all further actions, that may be
necessary or desirable, or that the Administrative Agent may reasonably request,
to perfect, protect or more fully evidence the security interest granted
pursuant to this Agreement or any other Transaction Document, or to enable the
Administrative Agent (on behalf of the Secured Parties) to exercise and enforce
the Secured Parties’ rights and remedies under this Agreement and the other
Transaction Document. Without limiting the foregoing, the Borrower hereby
authorizes, and will, upon the request of the Administrative Agent, at the
Borrower’s own expense, execute (if necessary) and file such financing
statements or continuation statements, or amendments thereto, and such other
instruments and documents, that may be necessary, or that the Administrative
Agent may reasonably request, to perfect, protect or evidence any of the
foregoing.

 

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(ii)    The Borrower authorizes the Administrative Agent to file financing
statements, continuation statements and amendments thereto and assignments
thereof, relating to the Receivables, the Related Security, the related
Contracts, Collections with respect thereto and the other Collateral without the
signature of the Borrower.

(iii)    The Borrower shall at all times be organized under the laws of the
State of Delaware and shall not take any action to change its jurisdiction of
organization.

(iv)    The Borrower will not change its name, location, identity or corporate
structure unless (x) the Borrower, at its own expense, shall have taken all
action necessary or appropriate to perfect or maintain the perfection of the
security interest under this Agreement (including, without limitation, the
filing of all financing statements and the taking of such other action as the
Administrative Agent may request in connection with such change or relocation)
and (y) if requested by the Administrative Agent, the Borrower shall cause to be
delivered to the Administrative Agent, an opinion, in form and substance
satisfactory to the Administrative Agent as to such UCC perfection and priority
matters as the Administrative Agent may request at such time.

(v)    Anti-Money Laundering/International Trade Law Compliance. The Borrower
will not become a Sanctioned Person. No Covered Entity, either in its own right
or through any third party, will (a) have any of its assets in a Sanctioned
Country or in the possession, custody or control of a Sanctioned Person in
violation of any Anti-Terrorism Law; (b) do business in or with, or derive any
of its income from investments in or transactions with, any Sanctioned Country
or Sanctioned Person in violation of any Anti-Terrorism Law; (c) engage in any
dealings or transactions prohibited by any Anti-Terrorism Law or (d) use the
proceeds of any Credit Extension to fund any operations in, finance any
investments or activities in, or, make any payments to, a Sanctioned Country or
Sanctioned Person in violation of any Anti-Terrorism Law. The funds used to
repay each Credit Extension will not be derived from any unlawful activity. The
Borrower shall comply with all Anti-Terrorism Laws. The Borrower shall promptly
notify the Administrative Agent and each Lender in writing upon the occurrence
of a Reportable Compliance Event. The Borrower has not used and will not use the
proceeds of any Credit Extension to fund any operations in, finance any
investments or activities in or make any payments to, a Sanctioned Person or a
Sanctioned Country.

(w)    Borrower’s Net Worth. The Borrower shall not permit the Borrower’s Net
Worth to be less than the Required Capital Amount.

(x)    Taxes. The Borrower will (i) timely file all tax returns (federal, state
and local) required to be filed by it and (ii) pay, or cause to be paid, all
taxes, assessments and other governmental charges, if any, other than taxes,
assessments and other governmental charges being contested in good faith by
appropriate proceedings and as to which adequate reserves have been provided in
accordance with GAAP, except in each case to the extent that the failure to file
or pay could not reasonably be expected to have a Borrower Material Adverse
Effect.

(y)    Borrower’s Tax Status. The Borrower will remain a wholly-owned subsidiary
of a United States person (within the meaning of Section 7701(a)(30) of the
Code)

 

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and not be subject to withholding under Section 1446 of the Code. No action will
be taken that would cause the Borrower to (i) be treated other than as a
“disregarded entity” within the meaning of U.S. Treasury Regulation § 301.7701-3
for U.S. federal income tax purposes or (ii) become an association taxable as a
corporation or a publicly traded partnership taxable as a corporation for U.S.
federal income tax purposes. The Borrower shall not become subject to any Tax in
any jurisdiction outside the United States.

(z)    Minimum Funding Threshold. The Borrower shall cause the Aggregate Capital
to exceed the Minimum Funding Threshold at all times.

(aa)    Liquidity Coverage Ratio. The Borrower shall not issue any LCR Security.

(bb)    Linked Accounts. Except for the Servicer’s Account, the Borrower shall
not permit any Linked Account to exist with respect to any Collection Account;
provided, however, that if so instructed by the Administrative Agent (in its
sole discretion) at any time if a Ratings Event has occurred and is continuing,
the Borrower shall cause the Servicer’s Account to cease being a Linked Account
promptly, but not later than 2 Business Days following the Borrower’s or the
Servicer’s receipt of such instruction.

(cc)    Other Additional Information. The Borrower will provide to the
Administrative Agent and the Lenders such information and documentation as may
reasonably be requested by the Administrative Agent or any Lender from time to
time for purposes of compliance by the Administrative Agent or such Lender with
applicable laws (including without limitation the PATRIOT Act and other “know
your customer” and anti-money laundering rules and regulations), and any policy
or procedure implemented by the Administrative Agent or such Lender to comply
therewith.

SECTION 8.02. Covenants of the Servicer. At all times from the Closing Date
until the Final Payout Date:

(a)    Existence. The Servicer shall keep in full force and effect its existence
and rights as a corporation or other entity under the laws of the State of
Delaware. The Servicer shall obtain and preserve its qualification to do
business in each jurisdiction in which the conduct of its business or the
servicing of the Pool Receivables as required by this Agreement requires such
qualification, except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect.

(b)    Financial Reporting. The Servicer will maintain a system of accounting
established and administered in accordance with GAAP, and the Servicer shall
furnish to the Administrative Agent and each Lender:

(i)    Compliance Certificates. (a) A compliance certificate promptly upon
completion of the annual report of Parent and in no event later than 90 days
after the close of Parent’s fiscal year, in form and substance substantially
similar to Exhibit H signed by a Financial Officer of the Servicer stating that
no Event of Default or Unmatured Event of Default has occurred and is
continuing, or if any Event of Default or

 

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Unmatured Event of Default has occurred and is continuing, stating the nature
and status thereof and (b) within 45 days after the close of each fiscal quarter
of Parent, a compliance certificate in form and substance substantially similar
to Exhibit H signed by a Financial Officer of the Servicer stating that no Event
of Default or Unmatured Event of Default has occurred and is continuing, or if
any Event of Default or Unmatured Event of Default has occurred and is
continuing, stating the nature and status thereof.

(ii)    Information Packages and Interim Reports. Commencing on the Commencement
Date, as soon as available and in any event (a) not later than two (2) Business
Days prior to each Settlement Date, an Information Package as of the most
recently completed Fiscal Month and (b) if a Ratings Event has occurred and is
continuing, upon prior written notice from the Administrative Agent, the
Servicer shall furnish or cause to be furnished to the Administrative Agent and
each Lender on the second Business Day of each calendar week, an Interim Report
with respect to the Pool Receivables with data as of the close of business on
the last day of the immediately preceding calendar week.

(iii)    Other Information. Such other information relating to the Borrower, the
Servicer, the Originators, the Performance Guarantor and the Collateral
(including non-financial information) as the Administrative Agent or any Lender
may from time to time reasonably request.

(iv)    Quarterly Financial Statements of Parent. As soon as available and in no
event later than 45 days following the end of each of the first three fiscal
quarters in each of Parent’s fiscal years, (A) the unaudited consolidated
balance sheet and statements of income of Parent and its consolidated
Subsidiaries as at the end of such fiscal quarter and the related unaudited
consolidated statements of earnings and cash flows for such fiscal quarter and
for the elapsed portion of the fiscal year ended with the last day of such
fiscal quarter, in each case setting forth comparative figures for the
corresponding fiscal quarter in the prior fiscal year, all of which shall be
certified by a Financial Officer of Parent that they fairly present in all
material respects, in accordance with GAAP, the financial condition of Parent
and its consolidated Subsidiaries as of the dates indicated and the results of
their operations for the periods indicated, subject to normal year-end audit
adjustments and the absence of footnotes and (B) management’s discussion and
analysis of the important operational and financial developments during such
fiscal quarter.

(v)    Annual Financial Statements of Parent. Within 90 days after the close of
each of Parent’s fiscal years, the consolidated balance sheet of Parent and its
consolidated Subsidiaries as at the end of such fiscal year and the related
consolidated statements of earnings and cash flows for such fiscal year setting
forth comparative figures for the preceding fiscal year, all reported on by
independent certified public accountants of recognized national standing
(without (x) a “going concern” or like qualification or exception or (y) a
qualification as to the scope of the audit) to the effect that such consolidated
financial statements present fairly in all material respects, in accordance with
GAAP, the financial condition of Parent and its consolidated Subsidiaries as of
the dates indicated and the results of their operations for the periods
indicated.

 

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(vi)    Other Reports and Filings. Promptly (but in any event within ten days)
after the filing or delivery thereof, copies of all financial information, proxy
materials and reports, if any, which Parent or any of its consolidated
Subsidiaries shall publicly file with the SEC.

Notwithstanding anything herein to the contrary, any financial information,
proxy statements or other material required to be delivered pursuant to this
paragraph (c) shall be deemed to have been furnished to each of the
Administrative Agent and each Lender on the date that such report, proxy
statement or other material is posted on the SEC’s website at www.sec.gov.

(b)    Notices. The Servicer will notify the Administrative Agent and each
Lender in writing of any of the following events promptly upon (but in no event
later than four (4) Business Days after) a Financial Officer or other officer
learning of the occurrence thereof (unless a different notice period is set
forth for the event in the relevant subsections below), with such notice
describing the same, and if applicable, the steps being taken by the Person(s)
affected with respect thereto:

(i)    Notice of Events of Default or Unmatured Events of Default. A statement
of a Financial Officer of the Servicer setting forth details of any Event of
Default or Unmatured Event of Default that has occurred and is continuing and
the action which the Servicer proposes to take with respect thereto.

(ii)    Representations and Warranties. The failure of any representation or
warranty made or deemed made by the Servicer under this Agreement or any other
Transaction Document to be true and correct in any material respect when made.

(iii)    Litigation. The institution of any litigation, arbitration proceeding
or governmental proceeding which could reasonably be expected to have a Material
Adverse Effect or a Borrower Material Adverse Effect.

(iv)    Adverse Claim. (A) Any Person shall obtain an Adverse Claim (other than
a Permitted Adverse Claim) upon the Collateral or any portion thereof, (B) any
Person other than the Borrower, the Servicer or the Administrative Agent shall
obtain any rights or direct any action with respect to any Collection Account
(or related Lock-Box) or (C) any Obligor shall receive any change in payment
instructions with respect to Pool Receivable(s) from a Person other than the
Servicer or the Administrative Agent.

(v)    Name Changes. At least thirty (30) days before any change in any
Originator’s or the Borrower’s name, jurisdiction of organization or any other
change requiring the amendment of UCC financing statements.

(vi)    Change in Accountants or Accounting Policy. Any change in (i) the
external accountants of the Borrower, the Servicer, any Originator, Performance
Guarantor or the Parent, (ii) any accounting policy of the Borrower or (iii) any
material

 

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accounting policy of any Originator that is relevant to the transactions
contemplated by this Agreement or any other Transaction Document (it being
understood that any change to the manner in which any Originator accounts for
the Pool Receivables shall be deemed “material” for such purpose).

(vii)    Termination Event. The occurrence of a Purchase and Sale Termination
Event under the Purchase and Sale Agreement.

(viii)    Material Adverse Effect. Promptly after the occurrence thereof, notice
of any Borrower Material Adverse Effect or Material Adverse Effect.

(c)    Conduct of Business. The Servicer will carry on and conduct its business
in substantially the same manner and in substantially the same fields of
enterprise as it is presently conducted or fields complimentary or ancillary
thereto.

(d)    Compliance with Laws. The Servicer will comply with all Applicable Laws
to which it may be subject if the failure to comply could reasonably be expected
to have a Material Adverse Effect.

(e)    Furnishing of Information and Inspection of Receivables. The Servicer
will furnish or cause to be furnished to the Administrative Agent and each
Lender from time to time such information with respect to the Pool Receivables
and the other Collateral as the Administrative Agent or any Lender may
reasonably request. The Servicer will, at the Servicer’s expense, during regular
business hours with reasonable prior written notice, (i) permit the
Administrative Agent and each Lender or their respective agents or
representatives to (A) examine and make copies of and abstracts from all books
and records relating to the Pool Receivables or other Collateral, (B) visit the
offices and properties of the Servicer for the purpose of examining such books
and records and (C) discuss matters relating to the Pool Receivables, the other
Collateral or the Servicer’s performance hereunder or under the other
Transaction Documents to which it is a party with any of the officers,
directors, employees or independent public accountants of the Servicer (provided
that representatives of the Servicer are present during such discussions) having
knowledge of such matters and (ii) without limiting the provisions of clause
(i) above, during regular business hours, at the Servicer’s expense, upon
reasonable prior written notice from the Administrative Agent, permit certified
public accountants or other auditors acceptable to the Administrative Agent to
conduct a review of its books and records with respect to the Pool Receivables
and other Collateral; provided, that the Servicer shall be required to reimburse
the Administrative Agent for only one (1) combined review of the Borrower
pursuant to Section 8.01(g) and the Servicer, the Borrower and the Originators
pursuant to clause (ii) above in any twelve-month period unless an Event of
Default has occurred and is continuing.

(f)    Payments on Receivables, Collection Accounts. The Servicer will at all
times, instruct all Obligors to deliver payments on the Pool Receivables to a
Collection Account or a Lock-Box. The Servicer will, at all times, maintain such
books and records necessary to identify Collections received from time to time
on Pool Receivables and to segregate such Collections from other property of the
Servicer and the Originators. If any payments on the Pool Receivables or other
Collections are received by the Borrower, the Servicer or an Originator, it

 

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shall hold such payments in trust for the benefit of the Administrative Agent,
the Lenders and the other Secured Parties and promptly (but in any event within
one (1) Business Day after becoming aware of such receipt) remit such funds into
a Collection Account. The Servicer shall instruct (i) all obligors on Excluded
Receivables and (ii) all payors of amounts owing to the Originators or their
Affiliates (which do not constitute Pool Receivables or other Collateral), in
each case, to remit payments with respect thereto to any bank account or other
location that does not constitute a Collection Account or a Lock-Box. The
Servicer shall use commercially reasonable efforts to ensure that no funds other
than Collections on Pool Receivables and other Collateral are deposited into any
Collection Account. If such funds are nevertheless deposited into any Collection
Account, the Servicer will within two (2) Business Days identify and transfer
such funds to the appropriate Person entitled to such funds. The Servicer will
not, and will not permit the Borrower, any Originator or any other Person to
commingle Collections or other funds to which the Administrative Agent, any
Lender or any other Secured Party is entitled, with any other funds. The
Servicer shall only add a Collection Account (or a related Lock-Box), or a
Collection Account Bank to those listed on Schedule II to this Agreement, if the
Administrative Agent has received notice of such addition and an executed and
acknowledged copy of an Account Control Agreement (or an amendment thereto) in
form and substance acceptable to the Administrative Agent from the applicable
Collection Account Bank. The Servicer shall only terminate a Collection Account
Bank or close a Collection Account (or a related Lock-Box) with the prior
written consent of the Administrative Agent. Commencing on the date that is 30
days following the Closing Date, the Servicer shall ensure that no disbursements
are made from any Collection Account, other than such disbursements that are
made at the direction and for the account of the Borrower.

(g)    Extension or Amendment of Pool Receivables. Except as otherwise permitted
in Section 9.02, the Servicer will not alter the delinquency status or adjust
the Outstanding Balance or otherwise modify the terms of any Pool Receivable in
any material respect, or amend, modify or waive, in any material respect, any
term or condition of any related Contract. The Servicer shall 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 related to the Pool Receivables, and timely and fully comply with the
Credit and Collection Policy with regard to each Pool Receivable and the related
Contract.

(h)    Change in Credit and Collection Policy. The Servicer will not make any
change in the Credit and Collection Policy that would reasonably be expected to
either (x) have a material adverse effect on the collectability of the Pool
Receivables or (y) have a Borrower Material Adverse Effect or a Material Adverse
Effect, in each case, without the prior written consent of the Administrative
Agent and the Majority Lenders. Promptly following any material change in the
Credit and Collection Policy, the Servicer will deliver a copy of the updated
Credit and Collection Policy to the Administrative Agent and each Lender.

(i)    Records. The Servicer will maintain and implement administrative and
operating procedures (including an ability to recreate records evidencing Pool
Receivables and related Contracts in the event of the destruction of the
originals thereof), and keep and maintain all documents, books, records,
computer tapes and disks and other information reasonably necessary or advisable
for the collection of all Pool Receivables (including records adequate to permit
the daily identification of each Pool Receivable and all Collections of and
adjustments to each existing Pool Receivable).

 

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(j)    Identifying of Records. The Servicer shall identify its master data
processing records relating to Pool Receivables and related Contracts with a
legend that indicates that the Pool Receivables have been pledged in accordance
with this Agreement.

(k)    Change in Payment Instructions to Obligors. The Servicer shall not (and
shall not permit any Sub-Servicer to) add, replace or terminate any Collection
Account (or any related Lock-Box) or make any change in its instructions to the
Obligors regarding payments to be made to the Collection Accounts (or any
related Lock-Box), other than any instruction to remit payments to a different
Collection Account (or any related Lock-Box), unless the Administrative Agent
shall have received (i) prior written notice of such addition, termination or
change and (ii) a signed and acknowledged Account Control Agreement (or an
amendment thereto) with respect to such new Collection Accounts (or any related
Lock-Box) in form and substance satisfactory to the Administrative Agent.

(l)    Security Interest, Etc. The Servicer shall, at its expense, take all
action necessary to establish and maintain a valid and enforceable first
priority perfected security interest in the Collateral, in each case free and
clear of any Adverse Claim (other than a Permitted Adverse Claim) in favor of
the Administrative Agent (on behalf of the Secured Parties), including taking
such action to perfect, protect or more fully evidence the security interest of
the Administrative Agent (on behalf of the Secured Parties) as the
Administrative Agent or any Secured Party may reasonably request. In order to
evidence the security interests of the Administrative Agent under this
Agreement, the Servicer shall, from time to time take such action, or execute
and deliver such instruments as may be necessary (including, without limitation,
such actions as are reasonably requested by the Administrative Agent) to
maintain and perfect, as a first-priority interest, the Administrative Agent’s
security interest in the Receivables, Related Security and Collections. The
Servicer shall, from time to time and within the time limits established by law,
prepare and present to the Administrative Agent for the Administrative Agent’s
authorization and approval, all financing statements, amendments, continuations
or initial financing statements in lieu of a continuation statement, or other
filings necessary to continue, maintain and perfect the Administrative Agent’s
security interest as a first-priority interest. The Administrative Agent’s
approval of such filings shall authorize the Servicer to file such financing
statements under the UCC without the signature of the Borrower, any Originator
or the Administrative Agent where allowed by Applicable Law. Notwithstanding
anything else in the Transaction Documents to the contrary, the Servicer shall
not have any authority to file a termination, partial termination, release,
partial release, or any amendment that deletes the name of a debtor or excludes
collateral of any such financing statements filed in connection with the
Transaction Documents, without the prior written consent of the Administrative
Agent.

(m)    Further Assurances; Change in Name or Jurisdiction of Origination, etc.
The Servicer hereby authorizes and hereby agrees from time to time, at its own
expense, promptly to execute (if necessary) and deliver all further instruments
and documents, and to take all further actions, that may be necessary or
desirable, or that the Administrative Agent may reasonably request, to perfect,
protect or more fully evidence the security interest granted

 

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pursuant to this Agreement or any other Transaction Document, or to enable the
Administrative Agent (on behalf of the Secured Parties) to exercise and enforce
their respective rights and remedies under this Agreement or any other
Transaction Document. Without limiting the foregoing, the Servicer hereby
authorizes, and will, upon the request of the Administrative Agent, at the
Servicer’s own expense, execute (if necessary) and file such financing
statements or continuation statements, or amendments thereto, and such other
instruments and documents, that may be necessary, or that the Administrative
Agent may reasonably request, to perfect, protect or evidence any of the
foregoing.

(n)    Anti-Money Laundering/International Trade Law Compliance. The Servicer
will not become a Sanctioned Person. No Covered Entity, either in its own right
or through any third party, will (a) have any of its assets in a Sanctioned
Country or in the possession, custody or control of a Sanctioned Person in
violation of any Anti-Terrorism Law; (b) do business in or with, or derive any
of its income from investments in or transactions with, any Sanctioned Country
or Sanctioned Person in violation of any Anti-Terrorism Law; (c) engage in any
dealings or transactions prohibited by any Anti-Terrorism Law or (d) use the
proceeds of any Credit Extension to fund any operations in, finance any
investments or activities in, or, make any payments to, a Sanctioned Country or
Sanctioned Person in violation of any Anti-Terrorism Law. The funds used to
repay each Credit Extension will not be derived from any unlawful activity. The
Servicer shall comply with all Anti-Terrorism Laws. The Servicer shall promptly
notify the Administrative Agent and each Lender in writing upon the occurrence
of a Reportable Compliance Event.

(o)    Taxes. The Servicer will (i) timely file all tax returns (federal, state
and local) required to be filed by it and (ii) pay, or cause to be paid, all
taxes, assessments and other governmental charges, if any, other than taxes,
assessments and other governmental charges being contested in good faith by
appropriate proceedings and as to which adequate reserves have been provided in
accordance with GAAP, except in each case to the extent that such failure to
file or pay could not reasonably be expected to have a Material Adverse Effect.

(p)    Borrower’s Tax Status. The Servicer shall not take or cause any action to
be taken that could result in the Borrower (i) being treated other than as a
“disregarded entity” within the meaning of U.S. Treasury Regulation § 301.7701-3
for U.S. federal income tax purposes or (ii) becoming an association taxable as
a corporation or a publicly traded partnership taxable as a corporation for U.S.
federal income tax purposes.

(q)    Linked Accounts. Except for the Servicer’s Account, the Servicer shall
not permit any Linked Account to exist with respect to any Collection Account;
provided, however, that if so instructed by the Administrative Agent (in its
sole discretion) at any time if a Ratings Event has occurred and is continuing,
the Servicer shall cause the Servicer’s Account to cease being a Linked Account
promptly, but not later than 2 Business Days following the Borrower’s or the
Servicer’s receipt of such instruction. The Servicer shall at all times ensure
that (i) the account balance in the Servicer’s Account is greater than zero and
will exceed the aggregate Settlement Item Amount of all Settlement Items at any
time outstanding with respect to the Servicer’s Account and (ii) no amount will
be debited against any Collection Account as a result of any Settlement Item
that originated in the Servicer’s Account or any account other than a Collection
Account.

 

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(r)    Other Additional Information. The Servicer will provide to the
Administrative Agent and the Lenders such information and documentation as may
reasonably be requested by the Administrative Agent or any Lender from time to
time for purposes of compliance by the Administrative Agent or such Lender with
applicable laws (including without limitation the PATRIOT Act and other “know
your customer” and anti-money laundering rules and regulations), and any policy
or procedure implemented by the Administrative Agent or such Lender to comply
therewith.

SECTION 8.03. Separate Existence of the Borrower. Each of the Borrower and the
Servicer hereby acknowledges that the Secured Parties, the Lenders and the
Administrative Agent are entering into the transactions contemplated by this
Agreement and the other Transaction Documents in reliance upon the Borrower’s
identity as a legal entity separate from any Originator, the Servicer, the
Performance Guarantor and their Affiliates. Therefore, each of the Borrower and
Servicer shall take all steps specifically required by this Agreement or
reasonably required by the Administrative Agent or any Lender to continue the
Borrower’s identity as a separate legal entity and to make it apparent to third
Persons that the Borrower is an entity with assets and liabilities distinct from
those of the Performance Guarantor, the Originators, the Servicer and any other
Person, and is not a division of the Performance Guarantor, the Originators, the
Servicer, its Affiliates or any other Person. Without limiting the generality of
the foregoing and in addition to and consistent with the other covenants set
forth herein, each of the Borrower and the Servicer shall take such actions as
shall be required in order that:

(a)    Special Purpose Entity. The Borrower will be a special purpose company
whose primary activities are restricted in its Limited Liability Company
Agreement to: (i) purchasing or otherwise acquiring from the Originators,
owning, holding, collecting, granting security interests or selling interests in
the Collateral, (ii) entering into agreements for the selling, servicing and
financing of the Receivables Pool (including the Transaction Documents) and
(iii) conducting such other activities as it deems necessary or appropriate to
carry out its primary activities.

(b)    No Other Business or Debt. The Borrower shall not engage in any business
or activity except as set forth in this Agreement nor, incur any indebtedness or
liability other than as expressly permitted by the Transaction Documents.

(c)    Independent Director. Not fewer than one member of the Borrower’s board
of directors (the “Independent Director”) shall be a natural person who (A) for
the five year period prior to his or her appointment as an Independent Director,
has not been, and during the continuation of his or her service as an
Independent Director is not (i) an equityholder, director, officer, manager,
member, partner, officer, employee or associate, or any relative of the
foregoing, of any member of the Parent Group (as hereinafter defined) (other
than his or her service as an Independent Director of the Borrower or an
independent director of any other bankruptcy-remote special purpose entity
formed for the sole purpose of securitizing, or facilitating the securitization
of, financial assets of any member or members of the Parent Group), (ii) a
customer or supplier of any member of the Parent Group (other than his or her
service as an Independent Director of the Borrower or an independent director of
any other bankruptcy-remote special purpose entity formed for the sole purpose
of securitizing, or

 

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facilitating the securitization of, financial assets of any member or members of
the Parent Group), (iii) any member of the immediate family of a person
described in (i) or (ii) above, and (B) has (x) prior experience as an
independent director for a corporation or limited liability company whose
organizational or charter documents required the unanimous consent of all
independent directors thereof before such corporation or limited liability
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 (y) 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. For purposes of this clause (c), “Parent Group” shall mean (i) the
Parent, the Servicer, the Performance Guarantor and each Originator, (ii) each
person that directly or indirectly, owns or controls, whether beneficially, or
as a trustee, guardian or other fiduciary, five percent (5%) or more of the
Capital Stock in the Parent, (iii) each person that controls, is controlled by
or is under common control with the Parent and (iv) each of such person’s
officers, directors, managers, joint venturers and partners. For the purposes of
this definition, “control” of a person means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a person or entity, whether through the ownership of voting
securities, by contract or otherwise. A person shall be deemed to be an
“associate” of (A) a corporation or organization of which such person is an
officer, director, partner or manager or is, directly or indirectly, the
beneficial owner of ten percent (10%) or more of any class of equity securities,
(B) any trust or other estate in which such person serves as trustee or in a
similar capacity and (C) any relative or spouse of a person described in clause
(A) or (B) of this sentence, or any relative of such spouse.

The Borrower shall (A) give written notice to the Administrative Agent of the
election or appointment, or proposed election or appointment, of a new
Independent Director of the Borrower, which notice shall be given not later than
ten (10) Business Days prior to the date such appointment or election would be
effective (except when such election or appointment is necessary to fill a
vacancy caused by the death, disability, or incapacity of the existing
Independent Director, or the failure of such Independent Director to satisfy the
criteria for an Independent Director set forth in this clause (c), in which case
the Borrower shall provide written notice of such election or appointment within
one (1) Business Day) and (B) with any such written notice, certify to the
Administrative Agent that the Independent Director satisfies the criteria for an
Independent Director set forth in this clause (c).

The Borrower’s Limited Liability Company Agreement shall provide that: (A) the
Borrower’s board of directors shall not approve, or take any other action to
cause the filing of, a voluntary bankruptcy petition with respect to the
Borrower unless the Independent Director shall approve the taking of such action
in writing before the taking of such action and (B) such provision and each
other provision requiring an Independent Director cannot be amended without the
prior written consent of the Independent Director.

The Independent Director shall not at any time serve as a trustee in bankruptcy
for the Borrower, the Parent, the Performance Guarantor, any Originator, the
Servicer or any of their respective Affiliates.

 

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(d)    Organizational Documents. The Borrower shall maintain its organizational
documents in conformity with this Agreement, such that it does not amend,
restate, supplement or otherwise modify its ability to comply with the terms and
provisions of any of the Transaction Documents, including, without limitation,
Section 8.01(p).

(e)    Conduct of Business. The Borrower 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’ meetings
appropriate to authorize all company 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, payroll and
intercompany transaction accounts.

(f)    Compensation. Any employee, consultant or agent of the Borrower will be
compensated from the Borrower’s funds for services provided to the Borrower, and
to the extent that Borrower shares the same officers or other employees as the
Servicer (or any other Affiliate thereof), the salaries and expenses relating to
providing benefits to such officers and other employees shall be fairly
allocated among such entities, and each such entity shall bear its fair share of
the salary and benefit costs associated with such common officers and employees.
The Borrower will not engage any agents other than its attorneys, auditors and
other professionals, and a servicer and any other agent contemplated by the
Transaction Documents for the Receivables Pool, which servicer will be fully
compensated for its services by payment of the Servicing Fee.

(g)    Servicing and Costs. The Borrower will contract with the Servicer to
perform for the Borrower all operations required on a daily basis to service the
Receivables Pool. The Borrower will not incur any indirect or overhead expenses
for items shared with the Servicer (or any other Affiliate thereof) that are not
reflected in the Servicing Fee. To the extent, if any, that the Borrower (or any
Affiliate thereof) shares items of expenses not reflected in the Servicing Fee,
such as legal, auditing and other professional services, such expenses will be
allocated to the extent practical on the basis of actual use or the value of
services rendered, and otherwise on a basis reasonably related to the actual use
or the value of services rendered.

(h)    Operating Expenses. The Borrower’s operating expenses will not be paid by
the Servicer, the Parent, the Performance Guarantor, any Originator or any
Affiliate thereof.

(i)    Stationery. The Borrower will have its own separate stationery.

(j)    Books and Records. The Borrower’s books and records will be maintained
separately from those of the Servicer, the Parent, the Performance Guarantor,
the Originators and any of their Affiliates and in a manner such that it will
not be difficult or costly to segregate, ascertain or otherwise identify the
assets and liabilities of the Borrower.

(k)    Disclosure of Transactions. All financial statements of the Servicer, the
Parent, the Performance Guarantor, the Originators or any Affiliate thereof that
are consolidated to include the Borrower will disclose that (i) the Borrower’s
sole business consists of the purchase or acceptance through capital
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the Originators and the subsequent retransfer of or granting of a security
interest in such Receivables and Related Rights to the Administrative Agent
pursuant to this Agreement, (ii) the Borrower is a separate legal entity with
its own separate creditors who will be entitled, upon its liquidation, to be
satisfied out of the Borrower’s assets prior to any assets or value in the
Borrower becoming available to the Borrower’s equity holders and (iii) the
assets of the Borrower are not available to pay creditors of the Servicer, the
Parent, the Performance Guarantor, the Originators or any Affiliate thereof.

(l)    Segregation of Assets. The Borrower’s assets will be maintained in a
manner that facilitates their identification and segregation from those of the
Servicer, the Parent, the Performance Guarantor, the Originators or any
Affiliates thereof.

(m)    Corporate Formalities. The Borrower will strictly observe limited
liability company formalities in its dealings with the Servicer, the Parent, the
Performance Guarantor, the Originators or any Affiliates thereof, and funds or
other assets of the Borrower will not be commingled with those of the Servicer,
the Parent, the Performance Guarantor, the Originators or any Affiliates thereof
except as permitted by this Agreement in connection with servicing the Pool
Receivables. The Borrower shall not maintain joint bank accounts or other
depository accounts to which the Servicer, the Parent, the Performance
Guarantor, the Originators or any Affiliate thereof (other than the Servicer
solely in its capacity as such) has independent access. The Borrower is not
named, and has not entered into any agreement to be named, directly or
indirectly, as a direct or contingent beneficiary or loss payee on any insurance
policy with respect to any loss relating to the property of the Servicer, the
Parent, the Performance Guarantor, the Originators or any Subsidiaries or other
Affiliates thereof. The Borrower will pay to the appropriate Affiliate the
marginal increase or, in the absence of such increase, the market amount of its
portion of the premium payable with respect to any insurance policy that covers
the Borrower and such Affiliate.

(n)    Arm’s-Length Relationships. The Borrower will maintain arm’s-length
relationships with the Servicer, the Parent, the Performance Guarantor, the
Originators and any Affiliates thereof. Any Person that renders or otherwise
furnishes services to the Borrower will be compensated by the Borrower at market
rates for such services it renders or otherwise furnishes to the Borrower.
Neither the Borrower on the one hand, nor the Servicer, the Parent, the
Performance Guarantor, any Originator or any Affiliate thereof, on the other
hand, will be or will hold itself out to be responsible for the debts of the
other or the decisions or actions respecting the daily business and affairs of
the other. The Borrower, the Servicer, the Parent, the Performance Guarantor,
the Originators and their respective Affiliates will promptly 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.

(o)    Allocation of Overhead. To the extent that Borrower, on the one hand, and
the Servicer, the Parent, the Performance Guarantor, 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
the Borrower shall bear its fair share of such expenses, which may be paid
through the Servicing Fee or otherwise.

 

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ARTICLE IX

ADMINISTRATION AND COLLECTION

OF RECEIVABLES

SECTION 9.01. Appointment of the Servicer.

(a)    The servicing, administering and collection of the Pool Receivables shall
be conducted by the Person so designated from time to time as the Servicer in
accordance with this Section 9.01. Until the Administrative Agent gives notice
to INC Research (in accordance with this Section 9.01) of the designation of a
new Servicer, INC Research is hereby designated as, and hereby agrees to perform
the duties and obligations of, the Servicer pursuant to the terms hereof. Upon
the occurrence of an Event of Default, the Administrative Agent may (with the
consent of the Majority Lenders) and shall (at the direction of the Majority
Lenders) designate as Servicer any Person (including itself) to succeed INC
Research or any successor Servicer, on the condition in each case that any such
Person so designated shall agree to perform the duties and obligations of the
Servicer pursuant to the terms hereof.

(b)    Upon the designation of a successor Servicer as set forth in clause
(a) above, INC Research agrees that it will terminate its activities as Servicer
hereunder in a manner that the Administrative Agent reasonably determines will
facilitate the transition of the performance of such activities to the new
Servicer, and INC Research shall cooperate with and assist such new Servicer.
Such cooperation shall include access to and transfer of records (including all
Contracts) related to Pool Receivables and use by the new Servicer of all
licenses (or the obtaining of new licenses), hardware or software necessary or
reasonably desirable to collect the Pool Receivables and the Related Security.

(c)    INC Research acknowledges that, in making its decision to execute and
deliver this Agreement, the Administrative Agent and each Lender have relied on
Syneos’s agreement to act as Servicer hereunder. Accordingly, INC Research
agrees that it will not voluntarily resign as Servicer without the prior written
consent of the Administrative Agent and the Majority Lenders.

(d)    The Servicer may delegate its duties and obligations hereunder to any
subservicer (each a “Sub-Servicer”); provided, that, in each such delegation:
(i) such Sub-Servicer shall agree in writing to perform the delegated duties and
obligations of the Servicer pursuant to the terms hereof, (ii) the Servicer
shall remain liable for the performance of the duties and obligations so
delegated, (iii) the Borrower, the Administrative Agent and each Lender shall
have the right to look solely to the Servicer for performance, (iv) the terms of
any agreement with any Sub-Servicer shall provide that the Administrative Agent
may terminate such agreement upon the termination of the Servicer hereunder by
giving notice of its desire to terminate such agreement to the Servicer (and the
Servicer shall provide appropriate notice to each such Sub-Servicer) and (v) if
such Sub-Servicer is not an Affiliate of the Parent, the Administrative Agent
and the Majority Lenders shall have consented in writing in advance to such
delegation.

 

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SECTION 9.02. Duties of the Servicer.

(a)    The Servicer shall take or cause to be taken all such action as may be
necessary or reasonably advisable to service, administer and collect each Pool
Receivable from time to time, all in accordance with this Agreement and all
Applicable Laws, with reasonable care and diligence, and in accordance with the
Credit and Collection Policy and consistent with the past practices of the
Originators. The Servicer shall set aside, for the accounts of each Credit
Party, the amount of Collections to which each such Credit Party is entitled in
accordance with Article IV hereof. The Servicer may, in accordance with the
Credit and Collection Policy and consistent with past practices of the
Originators, take such action, including modifications, waivers or
restructurings of Pool Receivables and related Contracts, as the Servicer may
reasonably determine to be appropriate to maximize Collections thereof or
reflect adjustments expressly permitted under the Credit and Collection Policy
or as expressly required under Applicable Laws or the applicable Contract;
provided, that for purposes of this Agreement: (i) such action shall not, and
shall not be deemed to, change the number of days such Pool Receivable has
remained unpaid from the date of the original due date related to such Pool
Receivable, (ii) such action shall not alter the status of such Pool Receivable
as a Delinquent Receivable or a Defaulted Receivable or limit the rights of any
Secured Party under this Agreement or any other Transaction Document and
(iii) if an Event of Default has occurred and is continuing, the Servicer may
take such action only upon the prior written consent of the Administrative
Agent. The Borrower shall deliver to the Servicer and the Servicer shall hold
for the benefit of the Administrative Agent (individually and for the benefit of
each Credit Party), in accordance with their respective interests, all records
and documents (including computer tapes or disks) with respect to each Pool
Receivable. The Servicer shall, as soon as practicable following actual receipt
of collected funds, turn over to the Borrower the collections of any
indebtedness that is not a Pool Receivable, less, if INC Research or an
Affiliate thereof is not the Servicer, all reasonable and appropriate
out-of-pocket costs and expenses of such Servicer of servicing, collecting and
administering such collections. The Servicer, if other than INC Research or an
Affiliate thereof, shall, as soon as practicable upon demand, deliver to the
Borrower all records in its possession that evidence or relate to any
indebtedness that is not a Pool Receivable, and copies of records in its
possession that evidence or relate to any indebtedness that is a Pool
Receivable. Notwithstanding anything to the contrary contained herein, if an
Event of Default has occurred and is continuing, the Administrative Agent may
direct the Servicer to commence or settle any legal action to enforce collection
of any Pool Receivable that is a Defaulted Receivable or to foreclose upon or
repossess any Related Security with respect to any such Defaulted Receivable.

(b)    The Servicer’s obligations hereunder shall terminate on the Final Payout
Date. Promptly following the Final Payout Date, the Servicer shall deliver to
the Borrower all books, records and related materials that the Borrower
previously provided to the Servicer, or that have been obtained by the Servicer,
in connection with this Agreement.

SECTION 9.03. Collection Account Arrangements. Prior to the Closing Date, the
Borrower shall have entered into Account Control Agreements with all of the
Collection Account Banks and delivered executed counterparts of each to the
Administrative Agent. Upon the occurrence and during the continuance of an
Unmatured Event of Default or an Event of Default, the Administrative Agent may
(with the consent of the Majority Lenders) and shall

 

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(upon the direction of the Majority Lenders) at any time thereafter give notice
to each Collection Account Bank that the Administrative Agent is exercising its
rights under the Account Control Agreements to do any or all of the following:
(a) to have the exclusive dominion and control of the Collection Accounts
transferred to the Administrative Agent (for the benefit of the Secured Parties)
and to exercise exclusive dominion and control over the funds deposited therein
(for the benefit of the Secured Parties), (b) to have the proceeds that are sent
to the respective Collection Accounts redirected pursuant to the Administrative
Agent’s instructions rather than deposited in the applicable Collection Account
and (c) to take any or all other actions permitted under the applicable Account
Control Agreement. The Borrower hereby agrees that if the Administrative Agent
at any time takes any action set forth in the preceding sentence, the
Administrative Agent shall have exclusive control (for the benefit of the
Secured Parties) of the proceeds (including Collections) of all Pool Receivables
and the Borrower hereby further agrees to take any other action that the
Administrative Agent may reasonably request to transfer such control. Any
proceeds of Pool Receivables received by the Borrower or the Servicer thereafter
shall be sent immediately to, or as otherwise instructed by, the Administrative
Agent.

SECTION 9.04. Enforcement Rights.

(a)    At any time following the occurrence and during the continuation of an
Event of Default:

(i)    the Administrative Agent (at the Borrower’s expense) may direct the
Obligors that payment of all amounts payable under any Pool Receivable is to be
made directly to the Administrative Agent or its designee;

(ii)    the Administrative Agent may instruct the Borrower or the Servicer to
give notice of the Secured Parties’ interest in Pool Receivables to each
Obligor, which notice shall direct that payments be made directly to the
Administrative Agent or its designee (on behalf of the Secured Parties), and the
Borrower or the Servicer, as the case may be, shall give such notice at the
expense of the Borrower or the Servicer, as the case may be; provided, that if
the Borrower or the Servicer, as the case may be, fails to so notify each
Obligor within two (2) Business Days following instruction by the Administrative
Agent, the Administrative Agent (at the Borrower’s or the Servicer’s, as the
case may be, expense) may so notify the Obligors;

(iii)    the Administrative Agent may request the Servicer to, and upon such
request the Servicer shall: (A) assemble all of the records necessary or
desirable to collect the Pool Receivables and the Related Security, and transfer
or license to a successor Servicer the use of all software necessary or
desirable to collect the Pool Receivables and the Related Security, and make the
same available to the Administrative Agent or its designee (for the benefit of
the Secured Parties) at a place selected by the Administrative Agent and
(B) segregate all cash, checks and other instruments received by it from time to
time constituting Collections in a manner reasonably acceptable to the
Administrative Agent and, promptly upon receipt, remit all such cash, checks and
instruments, duly endorsed or with duly executed instruments of transfer, to the
Administrative Agent or its designee;

 

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(iv)    the Administrative Agent may notify the Collection Account Banks that
the Borrower and the Servicer will no longer have any access to the Collection
Accounts;

(v)    the Administrative Agent may (or, at the direction of the Majority
Lenders shall) replace the Person then acting as Servicer; and

(vi)    the Administrative Agent may collect any amounts due from an Originator
under the Purchase and Sale Agreement or the Performance Guarantor under the
Performance Guaranty.

For the avoidance of doubt, the foregoing rights and remedies of the
Administrative Agent upon an Event of Default are in addition to and not
exclusive of the rights and remedies contained herein and under the other
Transaction Documents.

(b)    The Borrower hereby authorizes the Administrative Agent (on behalf of the
Secured Parties), and irrevocably appoints the Administrative Agent as its
attorney-in-fact with full power of substitution and with full authority in the
place and stead of the Borrower, which appointment is coupled with an interest,
to take any and all steps in the name of the Borrower and on behalf of the
Borrower necessary or desirable, in the reasonable determination of the
Administrative Agent, after the occurrence and during the continuation of an
Event of Default, to collect any and all amounts or portions thereof due under
any and all Collateral, including endorsing the name of the Borrower on checks
and other instruments representing Collections and enforcing such Collateral.
Notwithstanding anything to the contrary contained in this subsection, none of
the powers conferred upon such attorney-in-fact pursuant to the preceding
sentence shall subject such attorney-in-fact to any liability if any action
taken by it shall prove to be inadequate or invalid, nor shall they confer any
obligations upon such attorney-in-fact in any manner whatsoever.

(c)    The Servicer hereby authorizes the Administrative Agent (on behalf of the
Secured Parties), and irrevocably appoints the Administrative Agent as its
attorney-in-fact with full power of substitution and with full authority in the
place and stead of the Servicer, which appointment is coupled with an interest,
to take any and all steps in the name of the Servicer and on behalf of the
Servicer necessary or desirable, in the reasonable determination of the
Administrative Agent, after the occurrence and during the continuation of an
Event of Default, to collect any and all amounts or portions thereof due under
any and all Collateral, including endorsing the name of the Servicer on checks
and other instruments representing Collections and enforcing such Collateral.
Notwithstanding anything to the contrary contained in this subsection, none of
the powers conferred upon such attorney-in-fact pursuant to the preceding
sentence shall subject such attorney-in-fact to any liability if any action
taken by it shall prove to be inadequate or invalid, nor shall they confer any
obligations upon such attorney-in-fact in any manner whatsoever.

SECTION 9.05. Responsibilities of the Borrower.

(a)    Anything herein to the contrary notwithstanding, the Borrower shall: pay
when due any taxes, including any sales taxes payable in connection with the
Pool Receivables

 

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and their creation and satisfaction. None of the Credit Parties shall have any
obligation or liability with respect to any Collateral, nor shall any of them be
obligated to perform any of the obligations of the Borrower, the Servicer or any
Originator thereunder.

(b)    INC Research hereby irrevocably agrees that if at any time it shall cease
to be the Servicer hereunder, it shall act (if the then-current Servicer so
requests) as the data-processing agent of the Servicer and, in such capacity,
INC Research shall conduct the data-processing functions of the administration
of the Receivables and the Collections thereon in substantially the same way
that INC Research conducted such data-processing functions while it acted as the
Servicer. In connection with any such processing functions, the Borrower shall
pay to INC Research its reasonable out-of-pocket costs and expenses from the
Borrower’s own funds (subject to the priority of payments set forth in
Section 4.01).

SECTION 9.06. Servicing Fee.

(a)    Subject to clause (b) below, the Borrower shall pay the Servicer a fee
(the “Servicing Fee”) equal to 1.00% per annum (the “Servicing Fee Rate”) of the
daily average aggregate Outstanding Balance of the Pool Receivables. Accrued
Servicing Fees shall be payable from Collections to the extent of available
funds in accordance with Section 4.01.

(b)    If the Servicer ceases to be INC Research or an Affiliate thereof, the
Servicing Fee shall be the greater of: (i) the amount calculated pursuant to
clause (a) above and (ii) an alternative amount specified by the successor
Servicer not to exceed 110% of the aggregate reasonable costs and expenses
incurred by such successor Servicer in connection with the performance of its
obligations as Servicer hereunder.

ARTICLE X

EVENTS OF DEFAULT

SECTION 10.01. Events of Default. If any of the following events (each an “Event
of Default”) shall occur:

(a)    (i) the Borrower, any Originator, the Performance Guarantor or the
Servicer shall fail to perform or observe any term, covenant or agreement under
this Agreement or any other Transaction Document (other than any such failure
which would constitute an Event of Default under clause (ii) or (iii) of this
paragraph (a)), and such failure, solely to the extent capable of cure, shall
continue for ten (10) Business Days, (ii) the Borrower, any Originator, the
Performance Guarantor or the Servicer shall fail to make when due (x) any
payment or deposit to be made by it under this Agreement or any other
Transaction Document and such failure shall continue unremedied for two
(2) Business Days or (iii) INC Research shall resign as Servicer, and no
successor Servicer reasonably satisfactory to the Administrative Agent shall
have been appointed;

(b)    any representation or warranty made or deemed made by the Borrower, any
Originator, the Performance Guarantor or the Servicer (or any of their
respective officers) under or in connection with this Agreement or any other
Transaction Document or any

 

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information or report delivered by the Borrower, any Originator, the Performance
Guarantor or the Servicer pursuant to this Agreement or any other Transaction
Document, shall prove to have been incorrect or untrue in any material respect
when made or deemed made or delivered;

(c)    the Borrower or the Servicer shall fail to deliver an Information Package
or Interim Report at the time required pursuant to this Agreement, and such
failure shall remain unremedied for two (2) Business Days;

(d)    this Agreement or any security interest granted pursuant to this
Agreement or any other Transaction Document shall for any reason cease to
create, or for any reason cease to be, a valid and enforceable first priority
perfected security interest in favor of the Administrative Agent with respect to
the Collateral, free and clear of any Adverse Claim (other than a Permitted
Adverse Claim);

(e)    the Borrower, any Originator, the Performance Guarantor or the Servicer
shall generally not pay its debts as such debts become due, or shall admit in
writing its inability to pay its debts generally, or shall make a general
assignment for the benefit of creditors; or any Insolvency Proceeding shall be
instituted by or against the Borrower, any Originator, the Performance Guarantor
or the Servicer and, in the case of any such proceeding instituted against such
Person (but not instituted by such Person), either such proceeding shall remain
undismissed or unstayed for a period of sixty (60) consecutive days, or any of
the actions sought in such proceeding (including the entry of an order for
relief against, or the appointment of a receiver, trustee, custodian or other
similar official for, it or for any substantial part of its property) shall
occur; or the Borrower, any Originator, the Performance Guarantor or the
Servicer shall take any corporate or organizational action to authorize any of
the actions set forth above in this paragraph;

(f)    on or after the Commencement Date, (i) the average for three consecutive
Fiscal Months of: (A) the Default Ratio shall exceed 2.0%, (B) the Delinquency
Ratio shall exceed 3.0% or (C) the Dilution Ratio shall exceed 7.5% or (ii) the
Days’ Sales Outstanding shall exceed 80 days;

(g)    a Change in Control shall occur;

(h)    a Borrowing Base Deficit shall occur, and shall not have been cured
within two (2) Business Days;

(i)    (i) the Borrower shall fail to pay any principal of or premium or
interest on any of its Debt when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise), and
such failure shall continue after the applicable grace period, if any, specified
in the agreement, mortgage, indenture or instrument relating to such Debt
(whether or not such failure shall have been waived under the related
agreement); (ii) any Originator, the Performance Guarantor or the Servicer, or
any of their respective Subsidiaries, individually or in the aggregate, shall
fail to pay any principal of or premium or interest on (x) any Debt under the
Credit Agreement or (y) any of its other Debt that is outstanding in a principal
amount of at least the Threshold Amount in the aggregate when the same becomes
due and payable (whether by scheduled maturity, required prepayment,

 

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acceleration, demand or otherwise), and such failure shall continue after the
applicable grace period (not to exceed 30 days), if any, specified in the Credit
Agreement or such agreement, mortgage, indenture or instrument relating to such
Debt (whether or not such failure shall have been waived under the related
agreement); (iii) any other event shall occur or condition shall exist under the
Credit Agreement or any other agreement, mortgage, indenture or instrument
relating to any such Debt (as referred to in clause (i) or (ii) of this
paragraph and shall continue after the applicable grace period (not to exceed 30
days), if any, specified in the Credit Agreement or such other agreement,
mortgage, indenture or instrument, if the effect of such event or condition is
to give the applicable debtholders the right (whether acted upon or not) to
accelerate the maturity of such Debt (as referred to in clause (i) or (ii) of
this paragraph) or to terminate the commitment of any lender thereunder, unless
such event or condition shall have been waived under and in accordance with the
related agreement or (iv) any such Debt (as referred to in clause (i) or (ii) of
this paragraph) shall be declared to be due and payable, or required to be
prepaid (other than by a regularly scheduled required prepayment), redeemed,
purchased or defeased, or an offer to repay, redeem, purchase or defease such
Debt shall be required to be made or the commitment of any lender thereunder
terminated, in each case before the stated maturity thereof;

(j)    (i) any “Event of Default” (as defined in the Credit Agreement) shall
occur under the Credit Agreement that relates to the failure to pay any
principal of or premium or interest on any of the Debt thereunder when the same
becomes due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) or (ii) any other “Event of Default” (as
defined in the Credit Agreement) shall occur under the Credit Agreement that has
not been waived under and in accordance with the Credit Agreement (for the
avoidance of doubt, this clause (j) shall not be construed to limit the
preceding clause (i));

(k)    the Performance Guarantor shall fail to perform any of its obligations
under the Performance Guaranty and such failure shall continue unremedied for
two (2) Business Days;

(l)    the Borrower shall fail (x) at any time (other than for ten (10) Business
Days following notice of the death or resignation of any Independent Director)
to have an Independent Director who satisfies each requirement and qualification
specified in Section 8.03(c) of this Agreement for Independent Directors, on the
Borrower’s board of directors or (y) to timely notify the Administrative Agent
of any replacement or appointment of any director that is to serve as an
Independent Director on the Borrower’s board of directors as required pursuant
to Section 8.03(c) of this Agreement;

(m)    [reserved];

(n)    either (i) the Internal Revenue Service shall file notice of a lien
pursuant to Section 6323 of the Code with regard to any assets of the Borrower,
any Originator, the Servicer or the Parent or (ii) the PBGC shall, or shall
indicate its intention to, file notice of a lien pursuant to Section 4068 of
ERISA with regard to any of the assets of the Borrower, the Servicer, any
Originator or the Parent;

 

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(o)    (i) the occurrence of a Reportable Event; (ii) the adoption of an
amendment to a Pension Plan that would require the provision of security
pursuant to Section 401(a)(29) of the Code; (iii) the existence with respect to
any Multiemployer Plan of an “accumulated funding deficiency” (as defined in
Section 431 of the Code or Section 304 of ERISA), whether or not waived;
(iv) the failure to satisfy the minimum funding standard under Section 412 of
the Code with respect to any Pension Plan (v) the incurrence of any liability
under Title IV of ERISA with respect to the termination of any Pension Plan or
the withdrawal or partial withdrawal of any of the Borrower, any Originator, the
Servicer, the Parent, the Performance Guarantor or any of their respective ERISA
Affiliates from any Multiemployer Plan; (vi) the receipt by any of the Borrower,
any Originator, the Servicer, the Parent, the Performance Guarantor or any of
their respective ERISA Affiliates from the PBGC or any plan administrator of any
notice relating to the intention to terminate any Pension Plan or Multiemployer
Plan or to appoint a trustee to administer any Pension Plan or Multiemployer
Plan; (vii) the receipt by the Borrower, any Originator, the Servicer, the
Parent, the Performance Guarantor or any of their respective ERISA Affiliates 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 Title IV of ERISA; (viii) the occurrence of a prohibited transaction
with respect to any of the Borrower, any Originator, the Servicer, the Parent,
the Performance Guarantor or any of their respective ERISA Affiliates (pursuant
to Section 4975 of the Code); or (ix) the occurrence or existence of any other
similar event or condition with respect to a Pension Plan or a Multiemployer
Plan, which, with respect to each of clause (i) through (ix), either
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect or a Borrower Material Adverse Effect;

(p)    a Material Adverse Effect or a Borrower Material Adverse Effect shall
occur;

(q)    a Purchase and Sale Termination Event shall occur under the Purchase and
Sale Agreement;

(r)    the Borrower shall (i) be required to register as an “investment company”
within the meaning of the Investment Company Act or (ii) become a “covered fund”
within the meaning of the Volker Rule;

(s)    any material provision of this Agreement or any other Transaction
Document shall cease to be in full force and effect or any of the Borrower, any
Originator, the Performance Guarantor or the Servicer (or any of their
respective Affiliates) shall so state in writing; or

(t)    one or more judgments or decrees shall be entered against the Borrower,
any Originator, the Performance Guarantor or the Servicer, involving in the
aggregate a liability (not paid or to the extent not covered by a reputable and
solvent insurance company) and such judgments and decrees either shall be final
and non-appealable or shall not be vacated, discharged or stayed or bonded
pending appeal for any period of thirty (30) consecutive days, and the aggregate
amount of all such judgments equals or exceeds the Threshold Amount (or solely
with respect to the Borrower, $15,775);

 

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then, and in any such event, the Administrative Agent may (or, at the direction
of the Majority Lenders shall) by notice to the Borrower (x) declare the
Termination Date to have occurred (in which case the Termination Date shall be
deemed to have occurred), (y) declare the Final Maturity Date to have occurred
(in which case the Final Maturity Date shall be deemed to have occurred) and
(z) declare the Aggregate Capital and all other Borrower Obligations to be
immediately due and payable (in which case the Aggregate Capital and all other
Borrower Obligations shall be immediately due and payable); provided that,
automatically upon the occurrence of any event (without any requirement for the
giving of notice) described in subsection (e) of this Section 10.01 with respect
to the Borrower, the Termination Date shall occur and the Aggregate Capital and
all other Borrower Obligations shall be immediately due and payable. Upon any
such declaration or designation or upon such automatic termination, the
Administrative Agent and the other Secured Parties shall have, in addition to
the rights and remedies which they may have under this Agreement and the other
Transaction Documents, all other rights and remedies provided after default
under the UCC and under other Applicable Law, which rights and remedies shall be
cumulative. Any proceeds from liquidation of the Collateral shall be applied in
the order of priority set forth in Section 4.01.

ARTICLE XI

THE ADMINISTRATIVE AGENT

SECTION 11.01. Authorization and Action. Each Credit Party hereby appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto. The Administrative Agent shall not have any
duties other than those expressly set forth in the Transaction Documents, and no
implied obligations or liabilities shall be read into any Transaction Document,
or otherwise exist, against the Administrative Agent. The Administrative Agent
does not assume, nor shall it be deemed to have assumed, any obligation to, or
relationship of trust or agency with, the Borrower or any Affiliate thereof or
any Credit Party except for any obligations expressly set forth herein.
Notwithstanding any provision of this Agreement or any other Transaction
Document, in no event shall the Administrative Agent ever be required to take
any action which exposes the Administrative Agent to personal liability or which
is contrary to any provision of any Transaction Document or Applicable Law.

SECTION 11.02. Administrative Agent’s Reliance, Etc. Neither the Administrative
Agent nor any of its directors, officers, agents or employees shall be liable
for any action taken or omitted to be taken by it or them as Administrative
Agent under or in connection with this Agreement (including, without limitation,
the Administrative Agent’s servicing, administering or collecting Pool
Receivables in the event it replaces the Servicer in such capacity pursuant to
Section 9.01), in the absence of its or their own gross negligence or willful
misconduct. Without limiting the generality of the foregoing, the Administrative
Agent: (a) may consult with legal counsel (including counsel for any Credit
Party or the Servicer), 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 Credit
Party (whether written or oral) and shall not be responsible to any Credit Party
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(whether written or oral) made by any other party in or in connection with this
Agreement; (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 this
Agreement on the part of any Credit Party or to inspect the property (including
the books and records) of any Credit Party; (d) shall not be responsible to any
Credit Party for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other instrument or
document furnished pursuant hereto; and (e) shall be entitled to rely, and shall
be fully protected in so relying, upon any notice (including notice by
telephone), consent, certificate or other instrument or writing (which may be by
facsimile) believed by it to be genuine and signed or sent by the proper party
or parties.

SECTION 11.03. Administrative Agent and Affiliates. With respect to any Credit
Extension or interests therein owned by any Credit Party that is also the
Administrative Agent, such Credit Party shall have the same rights and powers
under this Agreement as any other Credit Party and may exercise the same as
though it were not the Administrative Agent. The Administrative Agent and any of
its Affiliates may generally engage in any kind of business with the Borrower or
any Affiliate thereof and any Person who may do business with or own securities
of the Borrower or any Affiliate thereof, all as if the Administrative Agent
were not the Administrative Agent hereunder and without any duty to account
therefor to any other Secured Party.

SECTION 11.04. Indemnification of Administrative Agent. Each Lender agrees to
indemnify the Administrative Agent (to the extent not reimbursed by the Borrower
or any Affiliate thereof), ratably according to the respective Percentage of
such Lender, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by, or
asserted against the Administrative Agent in any way relating to or arising out
of this Agreement or any other Transaction Document or any action taken or
omitted by the Administrative Agent under this Agreement or any other
Transaction Document; provided that no Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Administrative
Agent’s gross negligence or willful misconduct.

SECTION 11.05. Delegation of Duties. The 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. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.

SECTION 11.06. Action or Inaction by Administrative Agent. The Administrative
Agent shall in all cases be fully justified in failing or refusing to take
action under any Transaction Document unless it shall first receive such advice
or concurrence of the Majority Lenders and assurance of its indemnification by
the Lenders, as it deems appropriate. The Administrative Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement or any other Transaction Document in accordance with a request or at
the direction of the Majority Lenders, and such request or direction and any
action taken or failure to act pursuant thereto shall be binding upon all Credit
Parties. The Credit Parties and the Administrative Agent agree that unless any
action to be taken by the Administrative Agent under a Transaction Document
(i) specifically requires the advice or concurrence of all Lenders or (ii)

 

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may be taken by the Administrative Agent alone or without any advice or
concurrence of any Lender, then the Administrative Agent may take action based
upon the advice or concurrence of the Majority Lenders.

SECTION 11.07. Notice of Events of Default; Action by Administrative Agent. The
Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Unmatured Event of Default or Event of Default unless the
Administrative Agent has received notice from any Credit Party or the Borrower
stating that an Unmatured Event of Default or Event of Default has occurred
hereunder and describing such Unmatured Event of Default or Event of Default. If
the Administrative Agent receives such a notice, it shall promptly give notice
thereof to each Lender. The Administrative Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, concerning an
Unmatured Event of Default or Event of Default or any other matter hereunder as
the Administrative Agent deems advisable and in the best interests of the
Secured Parties.

SECTION 11.08. Non-Reliance on Administrative Agent and Other Parties. Each
Credit Party expressly acknowledges that neither the Administrative Agent nor
any of its directors, officers, agents or employees has made any representations
or warranties to it and that no act by the Administrative Agent hereafter taken,
including any review of the affairs of the Borrower or any Affiliate thereof,
shall be deemed to constitute any representation or warranty by the
Administrative Agent. Each Credit Party represents and warrants to the
Administrative Agent that, independently and without reliance upon the
Administrative Agent or any other Credit Party 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 Borrower,
each Originator, the Performance Guarantor or the Servicer and the Pool
Receivables and its own decision to enter into this Agreement and to take, or
omit, action under any Transaction Document. Except for items expressly required
to be delivered under any Transaction Document by the Administrative Agent to
any Credit Party, the Administrative Agent shall not have any duty or
responsibility to provide any Credit Party with any information concerning the
Borrower, any Originator, the Performance Guarantor or the Servicer that comes
into the possession of the Administrative Agent or any of its directors,
officers, agents, employees, attorneys-in-fact or Affiliates.

SECTION 11.09. Successor Administrative Agent.

(a)    The Administrative Agent may, upon at least thirty (30) days’ notice to
the Borrower, the Servicer and each Lender, resign as Administrative Agent.
Except as provided below, such resignation shall not become effective until a
successor Administrative Agent is appointed by the Majority Lenders as a
successor Administrative Agent and has accepted such appointment subject to the
prior written consent of the Borrower (such consent not to be unreasonably
withheld, conditioned or delayed) provided such consent shall not be required if
an Event of Default has occurred and is continuing. If no successor
Administrative Agent shall have been so appointed by the Majority Lenders,
within thirty (30) days after the departing Administrative Agent’s giving of
notice of resignation, the departing Administrative Agent may, on behalf of the
Secured Parties, appoint a successor Administrative Agent as successor
Administrative Agent. If no successor Administrative Agent shall have been so
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Majority Lenders within sixty (60) days after the departing Administrative
Agent’s giving of notice of resignation, the departing Administrative Agent may,
on behalf of the Secured Parties, petition a court of competent jurisdiction to
appoint a successor Administrative Agent.

(b)    Upon such acceptance of its appointment as 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 the resigning
Administrative Agent, and the resigning Administrative Agent shall be discharged
from its duties and obligations under the Transaction Documents. After any
resigning Administrative Agent’s resignation hereunder, the provisions of this
Article XI and Article XIII shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was the Administrative Agent.

SECTION 11.10. Structuring Agent. Each of the parties hereto hereby acknowledges
and agrees that the Structuring Agent shall not have any right, power,
obligation, liability, responsibility or duty under this Agreement, other than
the Structuring Agent’s right to receive fees pursuant to Section 2.03. Each
Credit Party acknowledges that it has not relied, and will not rely, on the
Structuring Agent in deciding to enter into this Agreement and to take, or omit
to take, any action under any Transaction Document.

ARTICLE XII

[RESERVED]

ARTICLE XIII

INDEMNIFICATION

SECTION 13.01. Indemnities by the Borrower.

(a)    Without limiting any other rights that the Administrative Agent, the
Credit Parties, the Affected Persons and their respective assigns, officers,
directors, agents and employees (each, a “Borrower Indemnified Party”) may have
hereunder or under Applicable Law, the Borrower hereby agrees to indemnify each
Borrower Indemnified Party from and against any and all claims, losses and
liabilities (including Attorney Costs) (all of the foregoing being collectively
referred to as “Borrower Indemnified Amounts”) arising out of or resulting from
this Agreement or any other Transaction Document or the use of proceeds of the
Credit Extensions or the security interest in respect of any Pool Receivable or
any other Collateral; excluding, however, (a) any portion of Borrower
Indemnified Amounts to the extent a final non-appealable judgment of a court of
competent jurisdiction holds that such Borrower Indemnified Amounts resulted
from the gross negligence or willful misconduct by the Borrower Indemnified
Party seeking indemnification and (b) Taxes that are covered by Section 5.03
(other than any Taxes that represent losses, claims, damages, etc. arising from
any non-Tax claim). Without limiting or being limited by the foregoing, the
Borrower shall pay within 10 days of demand (it being understood that if any
portion of such payment obligation is made from Collections, such payment will
be made at the time and in the order of priority set forth in Section 4.01), to
each Borrower Indemnified Party any and all amounts necessary to indemnify such
Borrower Indemnified Party from and against any and all Borrower Indemnified
Amounts relating to or

 

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resulting from any of the following (but excluding Borrower Indemnified Amounts
and Taxes described in clauses (a) and (b) above):

(i)    any Pool Receivable which the Borrower or the Servicer includes as an
Eligible Receivable as part of the Net Receivables Pool Balance but which is not
an Eligible Receivable at such time;

(ii)    any representation, warranty or statement made or deemed made by the
Borrower (or any of its respective officers) under or in connection with this
Agreement, any of the other Transaction Documents, any Information Package, any
Interim Report or any other information or report delivered by or on behalf of
the Borrower pursuant hereto which shall have been untrue or incorrect when made
or deemed made;

(iii)    the failure by the Borrower to comply with any Applicable Law with
respect to any Pool Receivable or the related Contract; or the failure of any
Pool Receivable or the related Contract to conform to any such Applicable Law;

(iv)    the failure to vest in the Administrative Agent a first priority
perfected security interest in all or any portion of the Collateral, in each
case free and clear of any Adverse Claim;

(v)    the failure to have filed, or any delay in filing, financing statements,
financing statement amendments, continuation statements or other similar
instruments or documents under the UCC of any applicable jurisdiction or other
Applicable Laws with respect to any Pool Receivable and the other Collateral and
Collections in respect thereof, whether at the time of any Credit Extension or
at any subsequent time;

(vi)    any dispute, claim or defense (other than discharge in bankruptcy) of an
Obligor to the payment of any Pool Receivable (including, without limitation, a
defense based on such Pool Receivable or the related Contract not being a legal,
valid and binding obligation of such Obligor enforceable against it in
accordance with its terms), or any other claim resulting from or relating to
collection activities with respect to such Pool Receivable;

(vii)    any failure of the Borrower to perform any of its duties or obligations
in accordance with the provisions hereof and of each other Transaction Document
related to Pool Receivables or to timely and fully comply with the Credit and
Collection Policy in regard to each Pool Receivable;

(viii)    any products liability, environmental or other claim arising out of or
in connection with any Pool Receivable or other merchandise, goods or services
which are the subject of or related to any Pool Receivable;

(ix)    the commingling of Collections of Pool Receivables at any time with
other funds;

 

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(x)    any investigation, litigation or proceeding (actual or threatened)
related to this Agreement or any other Transaction Document or the use of
proceeds of any Credit Extensions or in respect of any Pool Receivable or other
Collateral or any related Contract;

(xi)    any failure of the Borrower to comply with its covenants, obligations
and agreements contained in this Agreement or any other Transaction Document;

(xii)    any setoff with respect to any Pool Receivable;

(xiii)    any claim brought by any Person other than a Borrower Indemnified
Party arising from any activity by the Borrower or any Affiliate of the Borrower
in servicing, administering or collecting any Pool Receivable;

(xiv)    the failure by the Borrower to pay when due any Taxes, including,
without limitation, sales, excise or personal property taxes;

(xv)    any failure of a Collection Account Bank to comply with the terms of the
applicable Account Control Agreement, the termination by a Collection Account
Bank of any Account Control Agreement or any amounts (including in respect of an
indemnity) payable by the Administrative Agent to a Collection Account Bank
under any Account Control Agreement;

(xvi)    the maintenance of any Linked Account with respect to any Collection
Account or the debiting against any Collection Account of amounts as a result of
any Settlement Item that originated in any Linked Account or any other account
other than a Collection Account;

(xvii)    any dispute, claim, offset or defense (other than discharge in
bankruptcy of the Obligor) of the Obligor to the payment of any Pool Receivable
(including, without limitation, a defense based on such Pool Receivable or the
related Contract not being a legal, valid and binding obligation of such Obligor
enforceable against it in accordance with its terms), or any other claim
resulting from the sale of goods or the rendering of services related to such
Pool Receivable or the furnishing or failure to furnish any such goods or
services or other similar claim or defense not arising from the financial
inability of any Obligor to pay undisputed indebtedness;

(xviii)    any action taken by the Administrative Agent as attorney-in-fact for
the Borrower, any Originator or the Servicer pursuant to this Agreement or any
other Transaction Document;

(xix)    the failure or delay to provide any Obligor with an invoice or other
evidence of indebtedness;

(xx)    the use of proceeds of any Credit Extension; or

 

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(xxi)    any reduction in Capital as a result of the distribution of Collections
if all or a portion of such distributions shall thereafter be rescinded or
otherwise must be returned for any reason.

(b)    If for any reason the foregoing indemnification is unavailable (other
than pursuant to the exclusions contained in Section 13.01(a)) to any Borrower
Indemnified Party or insufficient to hold it harmless, then the Borrower shall
contribute to such Borrower Indemnified Party the amount paid or payable by such
Borrower Indemnified Party as a result of such loss, claim, damage or liability
in such proportion as is appropriate to reflect the relative economic interests
of the Borrower and its Affiliates on the one hand and such Borrower Indemnified
Party on the other hand in the matters contemplated by this Agreement as well as
the relative fault of the Borrower and its Affiliates and such Borrower
Indemnified Party with respect to such loss, claim, damage or liability and any
other relevant equitable considerations. The reimbursement, indemnity and
contribution obligations of the Borrower under this Section shall be in addition
to (but without duplication of) any liability which the Borrower may otherwise
have, shall extend upon the same terms and conditions to each Borrower
Indemnified Party, and shall be binding upon and inure to the benefit of any
successors, assigns, heirs and personal representatives of the Borrower and the
Borrower Indemnified Parties.

(c)    Any indemnification or contribution under this Section shall survive the
termination of this Agreement.

SECTION 13.02. Indemnification by the Servicer.

(a)    The Servicer hereby agrees to indemnify and hold harmless the Borrower,
the Administrative Agent, the Credit Parties, the Affected Persons and their
respective assigns, officers, directors, agents and employees (each, a “Servicer
Indemnified Party”), from and against any loss, liability, expense, damage or
injury suffered or sustained by reason of any acts, omissions or alleged acts or
omissions arising out of activities of the Servicer pursuant to this Agreement
or any other Transaction Document, including any judgment, award, settlement,
Attorney Costs and other costs or expenses incurred in connection with the
defense of any actual or threatened action, proceeding or claim (all of the
foregoing being collectively referred to as, “Servicer Indemnified Amounts”);
excluding (i) any portion of Servicer Indemnified Amounts to the extent a final
non-appealable judgment of a court of competent jurisdiction holds that such
Servicer Indemnified Amounts resulted from the gross negligence or willful
misconduct by the Servicer Indemnified Party seeking indemnification, (ii) Taxes
that are covered by Section 5.03 (other than any Taxes that represent losses,
claims, damages, etc. arising from any non-Tax claim) and (iii) Servicer
Indemnified Amounts to the extent the same includes losses in respect of Pool
Receivables that are uncollectible solely on account of the insolvency,
bankruptcy, lack of creditworthiness or other financial inability to pay of the
related Obligor. Without limiting or being limited by the foregoing, the
Servicer shall pay within 10 days of demand, to each Servicer Indemnified Party
any and all amounts necessary to indemnify such Servicer Indemnified Party

 

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from and against any and all Servicer Indemnified Amounts relating to or
resulting from any of the following (but excluding Servicer Indemnified Amounts
described in clauses (i), (ii) and (iii) above):

(i)    any representation, warranty or statement made or deemed made by the
Servicer (or any of its respective officers) under or in connection with this
Agreement, any of the other Transaction Documents, any Information Package, any
Interim Report or any other information or report delivered by or on behalf of
the Servicer pursuant hereto which shall have been untrue or incorrect when made
or deemed made;

(ii)    the failure by the Servicer to comply with any Applicable Law with
respect to any Pool Receivable or the related Contract; or the failure of any
Pool Receivable or the related Contract to conform to any such Applicable Law;

(iii)    the commingling of Collections of Pool Receivables at any time with
other funds;

(iv)    any failure of a Collection Account Bank to comply with the terms of the
applicable Account Control Agreement, the termination by a Collection Account
Bank of any Account Control Agreement or any amounts (including in respect of an
indemnity) payable by the Administrative Agent to a Collection Account Bank
under any Account Control Agreement;

(v)    the maintenance of any Linked Account with respect to any Collection
Account or the debiting against any Collection Account of amounts as a result of
any Settlement Item that originated in any Linked Account or any other account
other than a Collection Account;

(vi)    the failure or delay to provide any Obligor with an invoice or other
evidence of indebtedness; or

(vii)    any failure of the Servicer to comply with its covenants, obligations
and agreements contained in this Agreement or any other Transaction Document.

(b)    If for any reason the foregoing indemnification is unavailable (other
than pursuant to the exclusions contained in Section 13.02(a)) to any Servicer
Indemnified Party or insufficient to hold it harmless, then the Servicer shall
contribute to the amount paid or payable by such Servicer Indemnified Party as a
result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect the relative economic interests of the Servicer and its
Affiliates on the one hand and such Servicer Indemnified Party on the other hand
in the matters contemplated by this Agreement as well as the relative fault of
the Servicer and its Affiliates and such Servicer Indemnified Party with respect
to such loss, claim, damage or liability and any other relevant equitable
considerations. The reimbursement, indemnity and contribution obligations of the
Servicer under this Section shall be in addition to (but without duplication of)
any liability which the Servicer may otherwise have, shall extend upon the same
terms and conditions to Servicer Indemnified Party, and shall be binding upon
and inure to the benefit of any successors, assigns, heirs and personal
representatives of the Servicer and the Servicer Indemnified Parties.

 

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(c)    Any indemnification or contribution under this Section shall survive the
termination of this Agreement.

ARTICLE XIV

MISCELLANEOUS

SECTION 14.01. Amendments, Etc.

(a)    No failure on the part of any Credit Party 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. No amendment or waiver of
any provision of this Agreement or consent to any departure by any of the
Borrower or any Affiliate thereof shall be effective unless in a writing signed
by the Administrative Agent and the Majority Lenders (and, in the case of any
amendment, also signed by the Borrower), and then such amendment, waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that (A) no amendment, waiver or
consent shall, unless in writing and signed by the Servicer, affect the rights
or duties of the Servicer under this Agreement; (B) no amendment, waiver or
consent shall, unless in writing and signed by the Administrative Agent and each
Lender:

(i)    change (directly or indirectly) the definitions of, Borrowing Base
Deficit, Defaulted Receivable, Delinquent Receivable, Eligible Receivable,
Facility Limit, Final Maturity Date, Net Receivables Pool Balance or Total
Reserves contained in this Agreement, or increase the then existing
Concentration Percentage for any Obligor or change the calculation of the
Borrowing Base;

(ii)    reduce the amount of Capital or Interest that is payable on account of
any Loan or with respect to any other Credit Extension or delay any scheduled
date for payment thereof;

(iii)    change any Event of Default;

(iv)    release all or a material portion of the Collateral from the
Administrative Agent’s security interest created hereunder;

(v)    release the Performance Guarantor from any of its obligations under the
Performance Guaranty or terminate the Performance Guaranty;

(vi)    change any of the provisions of this Section 14.01 or the definition of
“Majority Lenders”; or

(vii)    change the order of priority in which Collections are applied pursuant
to Section 4.01.

Notwithstanding the foregoing, (A) no amendment, waiver or consent shall
increase any Lender’s Commitment hereunder without the consent of such Lender,
(B) no amendment, waiver

 

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or consent shall reduce any Fees payable by the Borrower to any Credit Party or
delay the dates on which any such Fees are payable, in either case, without the
consent of such Credit Party and (C) no consent with respect to any amendment,
waiver or other modification of this Agreement shall be required of any
Defaulting Lender, except with respect to any amendment, waiver or other
modification referred to in clauses (i) through (vii) above and then only in the
event such Defaulting Lender shall be directly affected by such amendment,
waiver or other modification.

SECTION 14.02. Notices, Etc. All notices and other communications hereunder
shall, unless otherwise stated herein, be in writing (which shall include
facsimile communication) and faxed or delivered, to each party hereto, at its
address set forth under its name on Schedule III hereto or at such other address
as shall be designated by such party in a written notice to the other parties
hereto. Notices and communications by facsimile shall be effective when sent
(and shall be followed by hard copy sent by regular mail), and notices and
communications sent by other means shall be effective when received.

SECTION 14.03. Assignability; Addition of Lenders.

(a)    Assignment by Lenders. Each Lender may assign to any Eligible Assignee or
to any other Lender all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitment and
any Loan or interests therein owned by it); provided, however that

(i)    except for an assignment by a Lender to either an Affiliate of such
Lender or any other Lender, each such assignment shall require the prior written
consent of the Borrower (such consent not to be unreasonably withheld,
conditioned or delayed; provided, however, that such consent shall not be
required if an Event of Default has occurred and is continuing);

(ii)    each such assignment shall be of a constant, and not a varying,
percentage of all rights and obligations under this Agreement;

(iii)    the amount being assigned pursuant to each such assignment (determined
as of the date of the Assignment and Acceptance Agreement with respect to such
assignment) shall in no event be less than the lesser of (x) $5,000,000 and
(y) all of the assigning Lender’s Commitment; and

(iv)    the parties to each such assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance Agreement.

Upon such execution, delivery, acceptance and recording from and after the
effective date specified in such Assignment and Acceptance Agreement, (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 Assignment and Acceptance Agreement, have the rights and obligations of a
Lender hereunder and (y) the assigning Lender shall, to the extent that rights
and obligations have been assigned by it pursuant to such Assignment and
Acceptance Agreement, relinquish such rights and be released from such
obligations under this Agreement (and, in the case of an Assignment and
Acceptance Agreement covering all or the remaining portion of an assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto).

 

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(b)    Register. The Administrative Agent shall, acting solely for this purpose
as an agent of the Borrower, maintain at its address referred to on Schedule III
of this Agreement (or such other address of the Administrative Agent notified by
the Administrative Agent to the other parties hereto) a copy of each Assignment
and Acceptance Agreement delivered to and accepted by it and a register for the
recordation of the names and addresses of the Lenders, the Commitment of each
Lender and the aggregate outstanding Capital (and stated interest) of the Loans
of each Lender from time to time (the “Register”). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Servicer, the Administrative Agent, the Lenders, and the other
Credit Parties shall treat each Person whose name is recorded in the Register
pursuant to the terms of this Agreement as a Lender under this Agreement for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrower, the Servicer or any Lender at any reasonable time and from time to
time upon reasonable prior notice.

(c)    Procedure. Upon its receipt of an Assignment and Acceptance Agreement
executed and delivered by an assigning Lender and an Eligible Assignee or
assignee Lender, the Administrative Agent shall, if such Assignment and
Acceptance Agreement has been duly completed, (i) accept such Assignment and
Acceptance Agreement, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Borrower and the Servicer.

(d)    Participations. Each Lender may sell participations to one or more
Eligible Assignees (each, a “Participant”) in or to all or a portion of its
rights and/or obligations under this Agreement (including, without limitation,
all or a portion of its Commitment and the interests in the Loans owned by it);
provided, however, that

(i)    such Lender’s obligations under this Agreement (including, without
limitation, its Commitment to the Borrower hereunder) shall remain unchanged,
and

(ii)    such Lender shall remain solely responsible to the other parties to this
Agreement for the performance of such obligations.

The Administrative Agent, the Lenders, the Borrower and the Servicer shall have
the right to continue to deal solely and directly with such Lender in connection
with such Lender’s rights and obligations under this Agreement. The Borrower
agrees that each Participant shall be entitled to the benefits of Sections 5.01
and 5.03 (subject to the requirements and limitations therein, including the
requirements under Section 5.03(f) (it being understood that the documentation
required under Section 5.03(f) shall be delivered to the participating Lender))
to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section; provided that such
Participant shall not be entitled to receive any greater payment under
Section 5.01 or 5.03, with respect to any participation, than its participating
Lender would have been entitled to receive, except to the extent such
entitlement to receive a greater payment results from a Change in Law that
occurs after the Participant acquired the applicable participation.

 

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(e)    Participant Register. Each Lender that sells a participation shall,
acting solely for this purpose as a non-fiduciary agent of the Borrower,
maintain a register on which it enters the name and address of each Participant
and the principal amounts (and stated interest) of each Participant’s interest
in the Loans or other obligations under this Agreement (the “Participant
Register”); provided that no Lender 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
Commitments, Loans or its other obligations under any this Agreement) to any
Person except to the extent that such disclosure is necessary to establish that
such Commitment, Loan 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
Lender 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, the
Administrative Agent (in its capacity as Administrative Agent) shall have no
responsibility for maintaining a Participant Register.

(f)    Assignments by Administrative Agent. This Agreement and the rights and
obligations of the Administrative Agent herein shall be assignable by the
Administrative Agent and its successors and assigns; provided that in the case
of an assignment to a Person that is not an Affiliate of the Administrative
Agent or a Lender, so long as no Event of Default or Unmatured Event of Default
has occurred and is continuing, such assignment shall require the Borrower’s
consent (not to be unreasonably withheld, conditioned or delayed).

(g)    Assignments by the Borrower or the Servicer. Neither the Borrower nor,
except as provided in Section 9.01, the Servicer may assign any of its
respective rights or obligations hereunder or any interest herein without the
prior written consent of the Administrative Agent and each Lender (such consent
to be provided or withheld in the sole discretion of such Person).

(h)    Pledge to a Federal Reserve Bank. Notwithstanding anything to the
contrary set forth herein, (i) any Lender or any of their respective Affiliates
may at any time pledge or grant a security interest in all or any portion of its
interest in, to and under this Agreement (including, without limitation, rights
to payment of Capital and Interest) and any other Transaction Document to secure
its obligations to a Federal Reserve Bank, without notice to or the consent of
the Borrower, the Servicer, any Affiliate thereof or any Credit Party; provided,
however, that that no such pledge shall relieve such assignor of its obligations
under this Agreement.

(i)    Pledge to a Security Trustee. Notwithstanding anything to the contrary
set forth herein, (i) any Credit Party or any of their respective Affiliates may
at any time pledge or grant a security interest in all or any portion of its
interest in, to and under this Agreement (including, without limitation, rights
to payment of Capital and Interest) and any other Transaction Document to a
security trustee in connection with the funding by such Person of Loans, without
notice to or the consent of the Borrower, the Servicer, any Affiliate thereof or
any Credit Party; provided, however, that that no such pledge shall relieve such
assignor of its obligations under this Agreement.

 

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SECTION 14.04. Costs and Expenses. In addition to the rights of indemnification
granted under Section 13.01 hereof, the Borrower agrees to pay on demand all
reasonable out-of-pocket costs and expenses in connection with the preparation,
negotiation, execution, delivery and administration of this Agreement and the
other Transaction Documents (together with all amendments, restatements,
supplements, consents and waivers, if any, from time to time hereto and
thereto), including, without limitation, (i) the reasonable Attorney Costs for
the Administrative Agent and the other Credit Parties and any of their
respective Affiliates with respect thereto and with respect to advising the
Administrative Agent and the other Credit Parties and their respective
Affiliates as to their rights and remedies under this Agreement and the other
Transaction Documents and (ii) reasonable accountants’, auditors’ and
consultants’ fees and expenses for the Administrative Agent and the other Credit
Parties and any of their respective Affiliates incurred in connection with the
administration and maintenance of this Agreement or advising the Administrative
Agent or any other Credit Party as to their rights and remedies under this
Agreement or as to any actual or reasonably claimed breach of this Agreement or
any other Transaction Document. In addition, the Borrower agrees to pay on
demand all reasonable out-of-pocket costs and expenses (including reasonable
Attorney Costs), of the Administrative Agent and the other Credit Parties and
their respective Affiliates, incurred in connection with the enforcement of any
of their respective rights or remedies under the provisions of this Agreement
and the other Transaction Documents.

SECTION 14.05. No Proceedings. Each of the Servicer, each Lender and each
assignee of a Loan or any interest therein, hereby covenants and agrees that it
will not institute against, or join any other Person in instituting against, the
Borrower any Insolvency Proceeding until one year and one day after the Final
Payout Date; provided, that the Administrative Agent may take any such action in
its sole discretion following the occurrence of an Event of Default. The
provisions of this Section 14.05 shall survive any termination of this
Agreement.

SECTION 14.06. Confidentiality.

(a)    Each of the Borrower and the Servicer covenants and agrees to hold in
confidence, and not disclose to any Person, the terms of this Agreement or the
Fee Letter (including any fees payable in connection with this Agreement, the
Fee Letter or any other Transaction Document), except as the Administrative
Agent and each Lender may have consented to in writing prior to any proposed
disclosure; provided, however, that it may disclose such information (i) to its
Advisors and Representatives, (ii) to the extent such information has become
available to the public other than as a result of a disclosure by or through the
Borrower, the Servicer or their Advisors and Representatives or (iii) to the
extent it should be (A) required by Applicable Law, or in connection with any
legal or regulatory proceeding or (B) requested by any Governmental Authority to
disclose such information; provided, that, in the case of clause (iii) above,
the Borrower and the Servicer will use reasonable efforts to maintain
confidentiality and will (unless otherwise prohibited by Applicable Law) notify
the Administrative Agent and the affected Credit Party of its intention to make
any such disclosure prior to making such disclosure. Each of the Borrower and
the Servicer agrees to be responsible for any breach of this Section by its
Representatives and Advisors and agrees that its Representatives and Advisors
will

 

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be advised by it of the confidential nature of such information and shall agree
to comply with this Section. Notwithstanding the foregoing, it is expressly
agreed that each of the Borrower, the Servicer and their respective Affiliates
may publish a press release or otherwise publicly announce the existence and
principal amount of the Commitments under this Agreement and the transactions
contemplated hereby; provided that the Administrative Agent shall be provided a
reasonable opportunity to review such press release or other public announcement
prior to its release and provide comment thereon. Notwithstanding the foregoing,
the Borrower consents to the publication by the Administrative Agent or any
other Credit Party of a tombstone or similar advertising material relating to
the financing transactions contemplated by this Agreement.

(b)    Each of the Administrative Agent and each other Credit Party, severally
and with respect to itself only, agrees to hold in confidence, and not disclose
to any Person, any confidential and proprietary information concerning the
Borrower, the Servicer and their respective Affiliates and their businesses or
the terms of this Agreement (including any fees payable in connection with this
Agreement or the other Transaction Documents), except as the Borrower or the
Servicer may have consented to in writing prior to any proposed disclosure;
provided, however, that it may disclose such information (i) to its Advisors and
Representatives, (ii) to its assignees and Participants and potential assignees
and Participants and their respective counsel if they agree in writing to hold
it confidential, (iii) to the extent such information has become available to
the public other than as a result of a disclosure by or through it or its
Representatives or Advisors, (iv) at the request of a bank examiner or other
regulatory authority or in connection with an examination of any of the
Administrative Agent or any Lender or their respective Affiliates or (v) to the
extent it should be (A) required by Applicable Law, or in connection with any
legal or regulatory proceeding or (B) requested by any Governmental Authority to
disclose such information; provided, that, in the case of clause (v) above, the
Administrative Agent and each Lender will use reasonable efforts to maintain
confidentiality and will (unless otherwise prohibited by Applicable Law) notify
the Borrower and the Servicer of its making any such disclosure as promptly as
reasonably practicable thereafter. Each of the Administrative Agent and each
Lender, severally and with respect to itself only, agrees to be responsible for
any breach of this Section by its Representatives and Advisors and agrees that
its Representatives and Advisors will be advised by it of the confidential
nature of such information and shall agree to comply with this Section.

(c)    As used in this Section, (i) “Advisors” means, with respect to any
Person, such Person’s accountants, attorneys and other confidential advisors and
(ii) “Representatives” means, with respect to any Person, such Person’s
Affiliates, Subsidiaries, directors, managers, officers, employees, members,
investors, financing sources, insurers, professional advisors, representatives
and agents; provided that such Persons shall not be deemed to be Representatives
of a Person unless (and solely to the extent that) confidential information is
furnished to such Person.

(d)    Notwithstanding the foregoing, to the extent not inconsistent with
applicable securities laws, each party hereto (and each of its employees,
representatives or other agents) may disclose to any and all persons, without
limitation of any kind, the tax treatment and tax structure (as defined in
Section 1.6011-4 of the Treasury Regulations) of the transactions contemplated
by the Transaction Documents and all materials of any kind (including opinions
or other tax analyses) that are provided to such Person relating to such tax
treatment and tax structure.

 

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SECTION 14.07. 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
ADMINISTRATIVE AGENT OR ANY LENDER IN THE COLLATERAL IS GOVERNED BY THE LAWS OF
A JURISDICTION OTHER THAN THE STATE OF NEW YORK).

SECTION 14.08. Execution in Counterparts. This Agreement 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 14.09. Integration; Binding Effect; Survival of Termination. This
Agreement and the other Transaction Documents contain the final and complete
integration of all prior expressions by the parties hereto with respect to the
subject matter hereof and shall constitute the entire agreement among the
parties hereto with respect to the subject matter hereof superseding all prior
oral or written understandings. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
permitted assigns. 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; provided, however, that
the provisions of Sections 5.01, 5.02, 5.03, 11.04, 11.06, 13.01, 13.02, 14.04,
14.05, 14.06, 14.09, 14.11 and 14.13 shall survive any termination of this
Agreement.

SECTION 14.10. CONSENT TO JURISDICTION. (a) 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 AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, 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 AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, 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 14.10 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

 

99

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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.

(b)    EACH OF THE BORROWER AND THE SERVICER CONSENTS TO THE SERVICE OF ANY AND
ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH
PROCESS TO IT AT ITS ADDRESS SPECIFIED IN SECTION 14.02. NOTHING IN THIS SECTION
14.10 SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY OTHER CREDIT
PARTY TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

SECTION 14.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT.

SECTION 14.12. Ratable Payments. If any Credit Party, whether by setoff or
otherwise, has payment made to it with respect to any Borrower Obligations in a
greater proportion than that received by any other Credit Party entitled to
receive a ratable share of such Borrower Obligations, such Credit Party agrees,
promptly upon demand, to purchase for cash without recourse or warranty a
portion of such Borrower Obligations held by the other Credit Parties so that
after such purchase each Credit Party will hold its ratable proportion of such
Borrower Obligations; provided that if all or any portion of such excess amount
is thereafter recovered from such Credit Party, such purchase shall be rescinded
and the purchase price restored to the extent of such recovery, but without
interest.

SECTION 14.13. Limitation of Liability.

(a)    No claim may be made by the Borrower or any Affiliate thereof or any
other Person against any Credit Party or their respective Affiliates, members,
directors, officers, employees, incorporators, 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 herewith or
therewith; and each of the Borrower and the Servicer hereby waives, releases,
and agrees not to sue upon any claim for any such damages, whether or not
accrued and whether or not known or suspected to exist in its favor. None of the
Credit Parties and their respective Affiliates shall have any liability to the
Borrower or any Affiliate thereof or any other Person asserting claims on behalf
of or in right of the Borrower or any Affiliate thereof in connection with or as
a result of this Agreement or any other Transaction Document or the transactions
contemplated hereby or thereby, except to the extent that any losses, claims,
damages, liabilities or expenses incurred by the Borrower or any

 

100

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Affiliate thereof result from the breach of contract, gross negligence or
willful misconduct of such Credit Party in performing its duties and obligations
hereunder and under the other Transaction Documents to which it is a party.

(b)    The obligations of the Administrative Agent and each of the other Credit
Parties under this Agreement and each of the Transaction Documents are solely
the corporate obligations of such Person. No recourse shall be had for any
obligation or claim arising out of or based upon this Agreement or any other
Transaction Document against any member, director, officer, employee or
incorporator of any such Person.

SECTION 14.14. Intent of the Parties. The Borrower has structured this Agreement
with the intention that the Loans and the obligations of the Borrower hereunder
will be treated under United States federal, and applicable state, local and
foreign tax law as debt (the “Intended Tax Treatment”). The Borrower, the
Servicer, the Administrative Agent and the other Credit Parties agree to file no
tax return, or take any action, inconsistent with the Intended Tax Treatment
unless required by law. Each assignee and each Participant acquiring an interest
in a Credit Extension, by its acceptance of such assignment or participation,
agrees to comply with the immediately preceding sentence.

SECTION 14.15. USA Patriot Act. Each of the Administrative Agent and each of the
other Credit Parties hereby notifies the Borrower and the Servicer that pursuant
to the requirements of the USA PATRIOT Act, Title III of Pub. L. 107-56 (signed
into law October 26, 2001) (the “PATRIOT Act”), the Administrative Agent and the
other Credit Parties may be required to obtain, verify and record information
that identifies the Borrower, the Originators, the Servicer and the Performance
Guarantor, which information includes the name, address, tax identification
number and other information regarding the Borrower, the Originators, the
Servicer and the Performance Guarantor that will allow the Administrative Agent
and the other Credit Parties to identify the Borrower, the Originators, the
Servicer and the Performance Guarantor in accordance with the PATRIOT Act. This
notice is given in accordance with the requirements of the PATRIOT Act. Each of
the Borrower and the Servicer agrees to provide the Administrative Agent and
each other Credit Parties, from time to time, with all documentation and other
information required by bank regulatory authorities under “know your customer”
and anti-money laundering rules and regulations, including, without limitation,
the PATRIOT Act.

SECTION 14.16. Right of Setoff. Each Credit Party is hereby authorized (in
addition to any other rights it may have), at any time during the continuance of
an Event of Default, 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 Credit Party (including by any
branches or agencies of such Credit Party) to, or for the account of, the
Borrower or the Servicer against amounts owing by the Borrower or the Servicer
hereunder (even if contingent or unmatured); provided that such Credit Party
shall notify the Borrower or the Servicer, as applicable, promptly following
such setoff.

SECTION 14.17. 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.

 

101

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SECTION 14.18. Mutual Negotiations. This Agreement and the other Transaction
Documents are the product of mutual negotiations by the parties thereto and
their counsel, and no party shall be deemed the draftsperson of this Agreement
or any other Transaction Document or any provision hereof or thereof or to have
provided the same. Accordingly, in the event of any inconsistency or ambiguity
of any provision of this Agreement or any other Transaction Document, such
inconsistency or ambiguity shall not be interpreted against any party because of
such party’s involvement in the drafting thereof.

SECTION 14.19. 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, Schedule or Exhibit are to such Section 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.

[Signature Pages Follow]

 

102

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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.

 

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   Receivables Financing Agreement

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

PNC BANK, NATIONAL ASSOCIATION,

as Administrative Agent

By:  

/s/ Eric Bruno

Name:   Eric Bruno Title:   Senior Vice President

PNC BANK, NATIONAL ASSOCIATION,

as a Lender

By:  

/s/ Eric Bruno

Name:   Eric Bruno Title:   Senior Vice President

PNC CAPITAL MARKETS LLC,

as Structuring Agent

By:  

/s/ Eric Bruno

Name:   Eric Bruno Title:   Managing Director

 

  S-2   Receivables Financing Agreement

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

EXHIBIT A

Form of Loan Request

[Letterhead of Borrower]

[Date]

[Administrative Agent]

[Lenders]

 

  Re: Loan Request

Ladies and Gentlemen:

Reference is hereby made to that certain Receivables Financing Agreement, dated
as of June 29, 2018 among Syneos Health Receivables LLC (the “Borrower”), INC
Research, LLC, as Servicer (the “Servicer”), the Lenders party thereto, PNC
Bank, National Association, as Administrative Agent (in such capacity, the
“Administrative Agent”) and PNC Capital Markets LLC, as Structuring Agent (as
amended, supplemented or otherwise modified from time to time, the “Agreement”).
Capitalized terms used in this Loan Request and not otherwise defined herein
shall have the meanings assigned thereto in the Agreement.

This letter constitutes a Loan Request pursuant to Section 2.02(a) of the
Agreement. The Borrower hereby request a Loan in the aggregate amount of
[$        ] to be made on [                    , 20    ] (of which $[        ]
will be funded by PNC and $[        ] will be funded by [                    ]).
[The Borrower hereby requests that such Loan bear interest initially at Adjusted
LIBOR for a Tranche Period of [one, two, three, six] months.]1 The proceeds of
such Loan should be deposited to [Account number], at [Name, Address and ABA
Number of Bank]. After giving effect to such Loan, the Aggregate Capital will be
[$        ].

The Borrower hereby represents and warrants as of the date hereof, and after
giving effect to such Credit Extension, as follows:

(i)    the representations and warranties of the Borrower and the Servicer
contained in Sections 7.01 and 7.02 of the Agreement are true and correct in all
material respects on and as of the date of such Credit Extension as though made
on and as of such date unless such representations and warranties by their terms
refer to an earlier date, in which case they shall be true and correct in all
material respects on and as of such earlier date;

(ii)    no Event of Default or Unmatured Event of Default has occurred and is
continuing, and no Event of Default or Unmatured Event of Default would result
from such Credit Extension;

 

 

1  Applicable solely to the extent that the Loan is made on a Monthly Settlement
Date.

 

  Exhibit A-1  

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

(iii)    no Borrowing Base Deficit exists or would exist after giving effect to
such Credit Extension;

(iv)    the Aggregate Capital will not exceed the Facility Limit;

(v)    the Termination Date has not occurred; and

(vi)    the Aggregate Capital exceeds the Minimum Funding Threshold.

 

  Exhibit A-2  

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

IN WITNESS WHEREOF, the undersigned has executed this letter by its duly
authorized officer as of the date first above written.

 

Very truly yours, SYNEOS HEALTH RECEIVABLES LLC By:  

                                                  

Name:   Title:  

 

  Exhibit A-3  

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

EXHIBIT B

Form of Reduction Notice

[LETTERHEAD OF BORROWER]

[Date]

[Administrative Agent]

[Lenders]

 

  Re: Reduction Notice

Ladies and Gentlemen:

Reference is hereby made to that certain Receivables Financing Agreement, dated
as of June 29, 2018 among Syneos Health Receivables LLC, as borrower (the
“Borrower”), INC Research, LLC, as Servicer (the “Servicer”), the Lenders party
thereto, PNC Bank, National Association, as Administrative Agent (in such
capacity, the “Administrative Agent”) and PNC Capital Markets LLC, as
Structuring Agent (as amended, supplemented or otherwise modified from time to
time, the “Agreement”). Capitalized terms used in this Reduction Notice and not
otherwise defined herein shall have the meanings assigned thereto in the
Agreement.

This letter constitutes a Reduction Notice pursuant to Section 2.02(d) of the
Agreement. The Borrower hereby notifies the Administrative Agent and the Lenders
that it shall prepay the outstanding Capital of the Lenders in the amount of
[$        ] to be made on [            , 201    ]. After giving effect to such
prepayment, the Aggregate Capital will be [$        ].

The Borrower hereby represents and warrants as of the date hereof, and after
giving effect to such reduction, as follows:

(i)    the representations and warranties of the Borrower and the Servicer
contained in Sections 7.01 and 7.02 of the Agreement are true and correct in all
material respects on and as of the date of such prepayment as though made on and
as of such date unless such representations and warranties by their terms refer
to an earlier date, in which case they shall be true and correct in all material
respects on and as of such earlier date;

(ii)    no Event of Default or Unmatured Event of Default has occurred and is
continuing, and no Event of Default or Unmatured Event of Default would result
from such prepayment;

(iii)    no Borrowing Base Deficit exists or would exist after giving effect to
such prepayment;

(iv)    the Termination Date has not occurred; and

 

  Exhibit B-1  

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

(v)    the Aggregate Capital exceeds the Minimum Funding Threshold.

 

  Exhibit B-2  

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

IN WITNESS WHEREOF, the undersigned has executed this letter by its duly
authorized officer as of the date first above written.

 

Very truly yours, SYNEOS HEALTH RECEIVABLES LLC By:  

                                                            
                      

  Name:   Title:

 

  Exhibit B-3  

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

EXHIBIT C

[Form of Assignment and Acceptance Agreement]

Dated as of             , 20    

Section 1.

 

Commitment assigned:

   $ [             ] 

Assignor’s remaining Commitment:

   $ [             ] 

Capital allocable to Commitment assigned:

   $ [             ] 

Assignor’s remaining Capital:

   $ [             ] 

Interest (if any) allocable to Capital assigned:

   $ [             ] 

Interest (if any) allocable to Assignor’s remaining Capital:

   $ [             ] 

Section 2.

Effective Date of this Assignment and Acceptance
Agreement:    [                    ]

Upon execution and delivery of this Assignment and Acceptance Agreement by the
assignee and the assignor and the satisfaction of the other conditions to
assignment specified in Section 14.03(a) of the Agreement (as defined below),
from and after the effective date specified above, the assignee shall become a
party to, and, to the extent of the rights and obligations thereunder being
assigned to it pursuant to this Assignment and Acceptance Agreement, shall have
the rights and obligations of a Lender under that certain Receivables Financing
Agreement, dated as of June 29, 2018 among Syneos Health Receivables LLC, INC
Research, LLC, as Servicer, the Lenders party thereto, PNC Bank, National
Association, as Administrative Agent and PNC Capital Markets LLC, as Structuring
Agent (as amended, supplemented or otherwise modified from time to time, the
“Agreement”).

(Signature Pages Follow)

 

  Exhibit C-1  

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

ASSIGNOR:   [                    ]   By:  

                                                 

  Name:     Title   ASSIGNEE:   [                    ]   By:  

                                                 

  Name:     Title:     [Address]

 

Accepted as of date first above

written:

PNC BANK, NATIONAL ASSOCIATION,

as Administrative Agent

By:  

                                                                               

Name:   Title:  

SYNEOS HEALTH RECEIVABLES LLC,

as Borrower

By:  

                                                                               

Name:   Title:  

 

  Exhibit C-2  

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

EXHIBIT D

[Reserved]

 

  Exhibit D  

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

EXHIBIT E

[Reserved]

 

  Exhibit E  

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

EXHIBIT F

Credit and Collection Policy

(On File with the Administrative Agent)

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

EXHIBIT G

Form of Information Package

(On File with the Administrative Agent)

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

EXHIBIT H

Form of Compliance Certificate

To: PNC Bank, National Association, as Administrative Agent

This Compliance Certificate is furnished pursuant to that certain Receivables
Financing Agreement, dated as of June 29, 2018 among Syneos Health Receivables
LLC (the “Borrower”), INC Research, LLC, as Servicer (the “Servicer”), the
Lenders party thereto, PNC Bank, National Association, as Administrative Agent
(in such capacity, the “Administrative Agent”) and PNC Capital Markets LLC, as
Structuring Agent (as amended, supplemented or otherwise modified from time to
time, the “Agreement”). Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to them in the Agreement.

THE UNDERSIGNED HEREBY CERTIFIES THAT:

1.    I am the duly elected                      of the Servicer and am
delivering this certificate in such capacity as                      of the
Servicer and not in my individual capacity.

2.    I have reviewed the terms of the Agreement and each of the other
Transaction Documents and I have made, or have caused to be made under my
supervision, a detailed review of the transactions and condition of the Borrower
during the accounting period covered by the attached financial statements.

3.    The examinations described in paragraph 2 above did not disclose, and I
have no knowledge of, the existence of any condition or event which constitutes
an Event of Default or an Unmatured Event of Default, as each such term is
defined under the Agreement, during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate[, except as set forth in paragraph 5 below].

4.    Schedule I attached hereto sets forth financial statements of Parent and
its Subsidiaries for the period referenced on such Schedule I.

[5.    Described below are the exceptions, if any, to paragraph 3 above by
listing, in detail, the nature of the condition or event, the period during
which it has existed and the action which Borrower has taken, is taking, or
proposes to take with respect to each such condition or event:]

 

  Exhibit H-1  

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

The foregoing certifications are made and delivered this      day of
            , 20    .

[                    ]

 

By:  

 

Name:  

 

Title:  

 

 

  Exhibit H-2  

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

SCHEDULE I TO COMPLIANCE CERTIFICATE

A.    Schedule of Compliance as of         , 20     with Section 8.02(a) of the
Agreement. Unless otherwise defined herein, the terms used in this Compliance
Certificate have the meanings ascribed thereto in the Agreement.

This schedule relates to the month ended:                     .

B.    The following financial statements of Parent and its Subsidiaries for the
period ending on            , 20    , are attached hereto:

 

  Exhibit H-3  

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

EXHIBIT I

Closing Memorandum

(On File with the Administrative Agent)

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

EXHIBIT J

Form of Interim Report

(On File with the Administrative Agent)

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

SCHEDULE I

Commitments

PNC Bank, National Association

 

Party

   Capacity      Commitment  

PNC Bank, National Association

     Lender      $ 250,000,000  

 

  Schedule I-1  

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

SCHEDULE II

Lock-Boxes, Collection Accounts and Collection Account Banks

 

Collection Account Bank

   Collection Account Number      Associated Lock-Box (if any)  

Bank of America, N.A.

     

Bank of America, N.A.

     

Bank of America, N.A.

     

Wells Fargo Bank, National Association

     

Wells Fargo Bank, National Association

     

 

Schedule II-1

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

SCHEDULE III

Notice Addresses

(A)     in the case of the Borrower, at the following address:

Syneos Health Receivables LLC

c/o Syneos Health, Inc.

3201 Beechleaf Court, Suite 600

Raleigh, NC 27604

Attention: General Counsel

with a copy to:

c/o Syneos Health, Inc.

3201 Beechleaf Court, Suite 600

Raleigh, NC 27604

Attention: General Counsel

(B)     in the case of the Servicer, at the following address:

INC Research, LLC

c/o Syneos Health, Inc.

3201 Beechleaf Court, Suite 600

Raleigh, NC 27604

Attention: General Counsel

(C)     in the case of the Administrative Agent, at the following address:

PNC Bank, National Association

300 Fifth Avenue

Pittsburgh, PA 15222

Telephone: (412) 768-3090

Facsimile: (412) 762-9184

Attention: Robyn Reeher

(D)     in the case of any other Person, at the address for such Person
specified in the other Transaction Documents; in each case, or at such other
address as shall be designated by such Person in a written notice to the other
parties to this Agreement.

 

Schedule III-1