Exhibit 10.1

 

EXECUTION COPY

 

JOINDER AND FIRST AMENDMENT TO THE
  RECEIVABLES FINANCING AGREEMENT

 

This JOINDER AND FIRST AMENDMENT TO THE RECEIVABLES FINANCING AGREEMENT (this “Amendment”), dated as of May 31, 2018, is entered into by and among the following parties:

 

(i)                                     PRA RECEIVABLES LLC, as Borrower (the “Borrower”);

 

(ii)                                  PRA HOLDINGS, INC., as initial Servicer (the “Servicer”);

 

(iii)                               THE TORONTO-DOMINION BANK (“TD”), as Lender; and

 

(iv)                              PNC BANK, NATIONAL ASSOCIATION (“PNC”), as Lender and Administrative Agent (in such capacity, the “Administrative Agent”).

 

Capitalized terms used but not otherwise defined herein (including such terms used above) have the respective meanings assigned thereto in the Receivables Financing Agreement described below.

 

BACKGROUND

 

A.                                    The parties hereto (other than TD) and PNC Capital Markets LLC (the “Structuring Agent”) have entered into a Receivables Financing Agreement, dated as of March 22, 2016 (as amended, restated, supplemented or otherwise modified through the date hereof, the “Receivables Financing Agreement”).

 

B.                                    Concurrently herewith, the Borrower, PNC, TD and the Structuring Agent are entering into an Amended and Restated Fee Letter, dated as of the date hereof (the “Fee Letter”).

 

C.                                    Concurrently herewith, the Borrower, the various parties listed on the signature pages thereto as originators, the Servicer, PNC and TD are entering into a First Amendment to the Purchase and Sale Agreement, dated as of the date hereof (the “PSA Amendment”).

 

D.                                    The parties hereto desire to amend the Receivables Financing Agreement as set forth herein.

 

NOW, THEREFORE, with the intention of being legally bound hereby, and in consideration of the mutual undertakings expressed herein, each party to this Amendment hereby agrees as follows:

 

SECTION 1.                            Joinder of TD.

 

(a)                                 TD as a Lender.  Effective as of the date hereof, TD shall be a Lender party to the Receivables Financing Agreement for all purposes thereof and of the other Transaction Documents as if TD were an original party to the Receivables Financing Agreement in such capacity, and TD assumes all related rights and agrees to be bound by

 











 

all of the terms and provisions applicable to Lenders contained in the Receivables Financing Agreement and the other Transaction Documents.

 

(b)                                 Credit Decision.  TD (i) confirms to the Administrative Agent and each Credit Party that it has received a copy of the Receivables Financing Agreement, the other Transaction Documents, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Amendment and (ii) agrees that it will, independently and without reliance upon the Administrative Agent and any Credit Party or any of its Affiliates, based on such documents and information as TD shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Receivables Financing Agreement and any other Transaction Document.  The Administrative Agent and each Credit Party make no representation or warranty and assumes no responsibility with respect to (x) any statements, warranties or representations made in or in connection with the Receivables Financing Agreement, any other Transaction Document or any other instrument or document furnished pursuant thereto or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Receivables Financing Agreement or the Receivables, any other Transaction Document or any other instrument or document furnished pursuant thereto or (y) the financial condition of any of the Borrower, the Servicer, the Performance Guarantor or the Originators or the performance or observance by any of the Borrower, the Servicer, the Performance Guarantor or the Originators of any of their respective obligations under the Receivables Financing Agreement, any other Transaction Document, or any instrument or document furnished pursuant thereto.

 

(c)                                  Consents.  The parties hereto hereby acknowledge and consent to the joinder of TD as a party to the Receivables Financing Agreement in the capacities of a Lender, and any otherwise applicable conditions precedent thereto under the Receivables Financing Agreement and the other Transactions Documents (other than as set forth herein) are hereby waived.

 

SECTION 2.                            Non-Ratable Loan; Consent.

 

(a)                                 Non-Ratable Loan.  Notwithstanding the requirements set forth in Section 2.01 of the Receivables Financing Agreement that on the terms and subject to the conditions set forth in the Receivables Financing Agreement each applicable Lender make Loans from the Borrower ratably in accordance with its applicable Percentage and the joinder of TD as a Lender to the Receivables Financing Agreement effective as of the date hereof, otherwise on the terms and subject to the conditions set forth in the Receivables Financing Agreement, TD hereby makes a non-ratable loan on the date hereof in the applicable amount set forth on Exhibit B hereto.  Each of the Borrower and TD hereby acknowledge and agree that the Interest Rate with respect to such Loan shall initially be LMIR.

 

(b)                                 Capital.  After giving effect to the foregoing Loan by TD, the aggregate outstanding Capital funded by PNC will be $157,500,000 and the aggregate outstanding Capital funded by TD will be $22,500,000.

 

2











 

(c)                                  Conditions of Loan.  Notwithstanding the foregoing, and for the avoidance of doubt, TD shall not be required to make or fund the Loan set forth above unless all the conditions precedent thereto set forth in the Receivables Financing Agreement (including, without limitation, those set forth in Article V of the Receivables Financing Agreement ) have been satisfied; provided, however, that the provision of Section 2.02 of the Receivables Financing Agreement requiring the delivery of a Loan Request in connection with each Loan is hereby waived solely with respect to the TD purchase to occur on the date hereof.

 

(d)                                 Consent.  Each of the parties hereto consents to the foregoing non-ratable Loan to be funded by TD on a one-time basis, on the terms set forth in this Section 2.

 

SECTION 3.                            Amendment to the Receivables Financing Agreement.  The Receivables Financing Agreement is hereby amended to incorporate the changes shown on the marked pages of the Receivables Financing Agreement attached hereto as Exhibit A.

 

SECTION 4.                            Representations and Warranties of the Borrower and Servicer.  The Borrower and the Servicer hereby represent and warrant to each of the parties hereto as of the date hereof as follows:

 

(a)                                 Representations and Warranties.  The representations and warranties made by it in the Receivables Financing Agreement and each of the other Transaction Documents to which it is a party are true and correct as of the date hereof.

 

(b)                                 Enforceability.  The execution and delivery by it of this Amendment, and the performance of its obligations under this Amendment, the Receivables Financing Agreement (as amended hereby) and the other Transaction Documents to which it is a party are within its organizational powers and have been duly authorized by all necessary action on its part, and this Amendment, the Receivables Financing Agreement (as amended hereby) and the other Transaction Documents to which it is a party are (assuming due authorization and execution by the other parties thereto) its valid and legally binding obligations, enforceable in accordance with its terms.

 

(c)                                  No Event of Default.  No Event of Default or Unmatured Event of Default has occurred and is continuing, or would occur as a result of this Amendment or the transactions contemplated hereby.

 

SECTION 5.                            Effect of Amendment; Ratification.  All provisions of the Receivables Financing Agreement and the other Transaction Documents, as expressly amended and modified by this Amendment, shall remain in full force and effect.  After this Amendment becomes effective, all references in the Receivables Financing Agreement (or in any other Transaction Document) to “this Receivables Financing Agreement”, “this Agreement”, “hereof”, “herein” or words of similar effect referring to the Receivables Financing Agreement shall be deemed to be references to the Receivables Financing Agreement as amended by this Amendment. This Amendment shall not be deemed, either expressly or impliedly, to waive, amend or supplement any

 

3











 

provision of the Receivables Financing Agreement other than as set forth herein.  The Receivables Financing Agreement, as amended by this Amendment, is hereby ratified and confirmed in all respects.

 

SECTION 6.                            Effectiveness.  This Amendment shall become effective as of the date hereof, subject to the satisfaction of each of the following conditions precedent:

 

(a)                                 receipt by the Administrative Agent of counterparts of this Amendment (whether by facsimile or otherwise) executed by each of the parties hereto;

 

(b)                                 receipt by the Administrative Agent of counterparts of the Fee Letter (whether by facsimile or otherwise) executed by each of the parties hereto;

 

(c)                                  receipt by the Administrative Agent of counterparty of the PSA Amendment (whether by facsimile or otherwise) executed by each of the parties hereto;

 

(d)                                 receipt by the Administrative Agent of (i) standard corporate enforceability opinion (covering no-conflicts with material agreements) addressed to the Administrative Agent and each Lender covering such matters as the Administrative Agent may reasonably request and (ii) reliance letters addressed to TD making them addressees of, with the right to rely on, the various opinions of counsel to the PRA Parties previously delivered to the Lenders in connection with the Transaction Documents, in each case, in form and substance satisfactory to TD and the Administrative Agent;

 

(e)                                  evidence received by the Administrative Agent that (i) the “Amendment Fee” under and as defined in the Fee Letter and (ii) each other fee or other amount owing by the Borrower on the date hereof under any Transaction Document or in connection with this Amendment or the transactions contemplated hereby, in each case, have been paid in fully in accordance with the terms of the Fee Letter or such other document to which such fee or amount is payable; and

 

(f)                                   receipt by the Administrative Agent of such other documents and instruments as the Administrative Agent may reasonably request prior to the date hereof.

 

SECTION 7.                            Severability.  Any provisions of this Amendment which are prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

SECTION 8.                            Transaction Document.  This Amendment shall be a Transaction Document for purposes of the Receivables Financing Agreement.

 

SECTION 9.                            Counterparts.  This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute but one and the same instrument.  Delivery of an executed counterpart hereof

 

4











 

by facsimile or other electronic means shall be equally effective as delivery of an originally executed counterpart.

 

SECTION 10.                     GOVERNING LAW AND JURISDICTION.

 

(a)                                 THIS AMENDMENT, INCLUDING THE RIGHTS AND DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BUT WITHOUT REGARD TO ANY OTHER CONFLICTS OF LAW PROVISIONS THEREOF).

 

(b)                                 EACH PARTY HERETO HEREBY IRREVOCABLY SUBMITS TO (I) WITH RESPECT TO THE BORROWER AND THE SERVICER, THE EXCLUSIVE JURISDICTION, AND (II) WITH RESPECT TO EACH OF THE OTHER PARTIES HERETO, THE NON-EXCLUSIVE JURISDICTION, IN EACH CASE, OF ANY NEW YORK STATE OR FEDERAL COURT SITTING IN NEW YORK CITY, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AMENDMENT, AND EACH PARTY HERETO HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING (I) IF BROUGHT BY THE BORROWER, THE SERVICER OR ANY AFFILIATE THEREOF, SHALL BE HEARD AND DETERMINED, AND (II) IF BROUGHT BY ANY OTHER PARTY TO THIS AMENDMENT, MAY BE HEARD AND DETERMINED, IN EACH CASE, IN SUCH NEW YORK STATE COURT OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT.  NOTHING IN THIS SECTION 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 COURTS OF OTHER JURISDICTIONS.  EACH OF THE BORROWER AND THE SERVICER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING.  THE PARTIES HERETO AGREE THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.

 

SECTION 11.                     Section Headings.  The various headings of this Amendment are included for convenience only and shall not affect the meaning or interpretation of this Amendment, the Receivables Financing Agreement or any provision hereof or thereof.

 

SECTION 12.                     Reaffirmation of Performance Guaranty.  After giving effect to this Amendment and each of the other transactions contemplated hereby, all of the provisions of the Performance Guaranty shall remain in full force and effect and Performance Guarantor hereby ratifies and affirms the Performance Guaranty and acknowledges that the Performance Guaranty has continued and shall continue in full force and effect in accordance with its terms.

 

5











 

[SIGNATURE PAGES FOLLOW]

 

6











 

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

 


	
 
    	
 
    	
PRA RECEIVABLES LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Michael Bonello
    
	
 
    	
 
    	
Name:
    	
Michael Bonello
    
	
 
    	
 
    	
Title:
    	
Executive Vice President,   Chief Financial Officer, Secretary and Treasurer
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
PRA HOLDINGS, INC.
   as the Servicer
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Michael Bonello
    
	
 
    	
 
    	
Name:
    	
Michael Bonello
    
	
 
    	
 
    	
Title:
    	
Executive Vice President,   Chief Financial Officer, Secretary and Treasurer
    




 


	
 
    	
 
    	
PRA: First Amendment to
    Receivables Financing Agreement
    




 

S-1











 


	
 
    	
 
    	
PNC   BANK, NATIONAL ASSOCIATION,
   as Administrative Agent
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Eric Bruno
    
	
 
    	
 
    	
Name:
    	
Eric   Bruno
    
	
 
    	
 
    	
Title:
    	
Senior   Vice President
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
PNC   BANK, NATIONAL ASSOCIATION,
   as Administrative Agent
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Eric Bruno
    
	
 
    	
 
    	
Name:
    	
Eric   Bruno
    
	
 
    	
 
    	
Title:
    	
Senior   Vice President
    




 


	
 
    	
 
    	
PRA: First Amendment to
    Receivables Financing Agreement
    




 

S-2











 


	
 
    	
 
    	
THE   TORONTO-DOMINION BANK,
   as Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Bradley Purkis
    
	
 
    	
 
    	
Name:
    	
Bradley   Purkis
    
	
 
    	
 
    	
Title:
    	
Managing   Director
    




 


	
 
    	
 
    	
PRA: First Amendment to
    Receivables Financing Agreement
    




 

S-3











 

ACKNOWLEDGED AND AGREED:

 

 

PRA HEALTH SCIENCES, INC.,
 as Performance Guarantor

 

 


	
By:
    	
/s/   Michael Bonello
    	
 
    	
 
    
	
Name:
    	
Michael   Bonello
    	
 
    	
 
    
	
Title:
    	
Executive   Vice President, Chief
   Financial Officer, Secretary and
   Treasurer
    	
 
    	
 
    




 


	
 
    	
 
    	
PRA: First Amendment to
    Receivables Financing Agreement
    




 

S-4











 

EXHIBIT A

 

Amendment to Receivables Financing Agreement

 












 

Exhibit A to First Amendment to the Receivables Financing Agreement,

dated as of May 31, 2018

EXECUTION VERSION

 

 

RECEIVABLES FINANCING AGREEMENT

 

Dated as of March 22, 2016

 

by and among

 

PRA RECEIVABLES LLC,

as Borrower,

 

THE PERSONS FROM TIME TO TIME PARTY HERETO,

as Lenders,

 

PNC BANK, NATIONAL ASSOCIATION,

as Administrative Agent,

 

PRA HOLDINGS, INC.,

as initial Servicer,

 

and

 

PNC CAPITAL MARKETS LLC,

as Structuring Agent

 











 

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
    	
34
    
	
 
    	
 
    	
 
    
	
SECTION 2.04.
    	
Records of Loans
    	
34
    
	
 
    	
 
    	
 
    
	
SECTION 2.05.
    	
Selection of Interest   Rates and Tranche Periods
    	
34
    
	
 
    	
 
    	
 
    
	
SECTION 2.06.
    	
Defaulting Lenders
    	
35
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE III
    	
SETTLEMENT PROCEDURES   AND PAYMENT PROVISIONS
    	
35
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 3.01.
    	
Settlement Procedures
    	
35
    
	
 
    	
 
    	
 
    
	
SECTION 3.02.
    	
Payments and   Computations, Etc.
    	
38
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE IV
    	
INCREASED COSTS;   FUNDING LOSSES; TAXES; ILLEGALITY AND SECURITY INTEREST
    	
39
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 4.01.
    	
Increased Costs
    	
39
    
	
 
    	
 
    	
 
    
	
SECTION 4.02.
    	
Funding Losses
    	
40
    
	
 
    	
 
    	
 
    
	
SECTION 4.03.
    	
Taxes
    	
41
    
	
 
    	
 
    	
 
    
	
SECTION 4.04.
    	
Inability to Determine   Adjusted LIBOR or LMIR; Change in Legality
    	
45
    
	
 
    	
 
    	
 
    
	
SECTION 4.05.
    	
Successor Adjusted   LIBOR or LMIR
    	
45
    
	
 
    	
 
    	
 
    
	
SECTION 4.06.
    	
Security Interest
    	
46
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE V
    	
CONDITIONS to   Effectiveness and CREDIT EXTENSIONS
    	
47
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 5.01.
    	
Conditions Precedent to   Effectiveness and the Initial Credit Extension
    	
47
    
	
 
    	
 
    	
 
    
	
SECTION 5.02.
    	
Conditions Precedent to   All Credit Extensions
    	
48
    
	
 
    	
 
    	
 
    
	
SECTION 5.03.
    	
Conditions Precedent to   All Releases
    	
48
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE VI
    	
REPRESENTATIONS AND   WARRANTIES
    	
49
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 6.01.
    	
Representations and   Warranties of the Borrower
    	
49
    
	
 
    	
 
    	
 
    
	
SECTION 6.02.
    	
Representations and   Warranties of the Servicer
    	
54
    


 

i











 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE VII
    	
COVENANTS
    	
58
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 7.01.
    	
Covenants of the   Borrower
    	
58
    
	
 
    	
 
    	
 
    
	
SECTION 7.02.
    	
Covenants of the   Servicer
    	
66
    
	
 
    	
 
    	
 
    
	
SECTION 7.03.
    	
Separate Existence of   the Borrower
    	
71
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE VIII
    	
ADMINISTRATION AND   COLLECTION OF RECEIVABLES
    	
75
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 8.01.
    	
Appointment of the   Servicer
    	
75
    
	
 
    	
 
    	
 
    
	
SECTION 8.02.
    	
Duties of the Servicer
    	
76
    
	
 
    	
 
    	
 
    
	
SECTION 8.03.
    	
Collection Account Arrangements
    	
77
    
	
 
    	
 
    	
 
    
	
SECTION 8.04.
    	
Enforcement Rights
    	
77
    
	
 
    	
 
    	
 
    
	
SECTION 8.05.
    	
Responsibilities of the   Borrower
    	
79
    
	
 
    	
 
    	
 
    
	
SECTION 8.06.
    	
Servicing Fee
    	
79
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE IX
    	
EVENTS OF DEFAULT
    	
79
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 9.01.
    	
Events of Default
    	
79
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE X
    	
THE ADMINISTRATIVE   AGENT
    	
83
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 10.01.
    	
Authorization and   Action
    	
83
    
	
 
    	
 
    	
 
    
	
SECTION 10.02.
    	
Administrative Agent’s   Reliance, Etc.
    	
83
    
	
 
    	
 
    	
 
    
	
SECTION 10.03.
    	
Administrative Agent   and Affiliates
    	
84
    
	
 
    	
 
    	
 
    
	
SECTION 10.04.
    	
Indemnification of   Administrative Agent
    	
84
    
	
 
    	
 
    	
 
    
	
SECTION 10.05.
    	
Delegation of Duties
    	
84
    
	
 
    	
 
    	
 
    
	
SECTION 10.06.
    	
Action or Inaction by   Administrative Agent
    	
84
    
	
 
    	
 
    	
 
    
	
SECTION 10.07.
    	
Notice of Events of   Default; Action by Administrative Agent
    	
85
    
	
 
    	
 
    	
 
    
	
SECTION 10.08.
    	
Non-Reliance on   Administrative Agent and Other Parties
    	
85
    
	
 
    	
 
    	
 
    
	
SECTION 10.09.
    	
Successor   Administrative Agent
    	
85
    
	
 
    	
 
    	
 
    
	
SECTION 10.10.
    	
Structuring Agent
    	
86
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE XI
    	
INDEMNIFICATION
    	
86
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 11.01.
    	
Indemnities by the   Borrower
    	
86
    
	
 
    	
 
    	
 
    
	
SECTION 11.02.
    	
Indemnification by the   Servicer
    	
89
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE XII
    	
MISCELLANEOUS
    	
90
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 12.01.
    	
Amendments, Etc.
    	
90
    
	
 
    	
 
    	
 
    
	
SECTION 12.02.
    	
Notices, Etc.
    	
91
    


 

ii











 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
SECTION 12.03.
    	
Assignability; Addition   of Lenders
    	
92
    
	
 
    	
 
    	
 
    
	
SECTION 12.04.
    	
Costs and Expenses
    	
94
    
	
 
    	
 
    	
 
    
	
SECTION 12.05.
    	
No Proceedings;   Limitation on Payments
    	
95
    
	
 
    	
 
    	
 
    
	
SECTION 12.06.
    	
Confidentiality
    	
95
    
	
 
    	
 
    	
 
    
	
SECTION 12.07.
    	
GOVERNING LAW
    	
96
    
	
 
    	
 
    	
 
    
	
SECTION 12.08.
    	
Execution in Counterparts
    	
96
    
	
 
    	
 
    	
 
    
	
SECTION 12.09.
    	
Integration; Binding   Effect; Survival of Termination
    	
97
    
	
 
    	
 
    	
 
    
	
SECTION 12.10.
    	
CONSENT TO JURISDICTION
    	
97
    
	
 
    	
 
    	
 
    
	
SECTION 12.11.
    	
WAIVER OF JURY TRIAL
    	
97
    
	
 
    	
 
    	
 
    
	
SECTION 12.12.
    	
Ratable Payments
    	
98
    
	
 
    	
 
    	
 
    
	
SECTION 12.13.
    	
Limitation of Liability
    	
98
    
	
 
    	
 
    	
 
    
	
SECTION 12.14.
    	
Intent of the Parties
    	
98
    
	
 
    	
 
    	
 
    
	
SECTION 12.15.
    	
USA Patriot Act
    	
99
    
	
 
    	
 
    	
 
    
	
SECTION 12.16.
    	
Right of Setoff
    	
99
    
	
 
    	
 
    	
 
    
	
SECTION 12.17.
    	
Severability
    	
99
    
	
 
    	
 
    	
 
    
	
SECTION 12.18.
    	
Mutual Negotiations
    	
99
    
	
 
    	
 
    	
 
    
	
SECTION 12.19.
    	
Captions and Cross References
    	
99
    
				


 

iii











 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
EXHIBITS
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
EXHIBIT A
    	
—
    	
Form of Loan   Request
    
	
EXHIBIT B
    	
—
    	
Form of Reduction   Notice
    
	
EXHIBIT C
    	
—
    	
Form of Assignment   and Acceptance Agreement
    
	
EXHIBIT D
    	
—
    	
Credit and Collection   Policy
    
	
EXHIBIT E
    	
—
    	
Form of Monthly   Report
    
	
EXHIBIT F
    	
—
    	
Form of Compliance   Certificate
    
	
EXHIBIT G
    	
—
    	
Closing Memorandum
    
	
EXHIBIT H
    	
—
    	
Form of Interim   Report
    
	
EXHIBIT I
    	
—
    	
U.S. Tax Compliance   Certificate
    
	
 
    	
 
    	
 
    
	
SCHEDULES
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
SCHEDULE I
    	
—
    	
Commitments
    
	
SCHEDULE II
    	
—
    	
Lock-Boxes, Collection   Accounts and Collection Account Banks
    
	
SCHEDULE III
    	
—
    	
Notice   Addresses
    
				


 

iv












 

This RECEIVABLES FINANCING AGREEMENT (as amended, restated, supplemented or otherwise modified from time to time, this “Agreement”) is entered into as of March 22, 2016 by and among the following parties:

 

(i)                                     PRA 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;

 

(v)                                 PRA HOLDINGS, INC., a Delaware, Corporation, in its individual capacity (“Holdings”) and as initial Servicer (in such capacity, together with its successors and assigns in such capacity, the “Servicer”); and

 

(vi)                              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):

 

“Adjusted LIBOR” means with respect to any Tranche Period, the interest rate per annum determined by the applicable Lender 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 such Lender 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. 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 such Lender 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
    
	
 
    	
 
    	
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 applicable Lender 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 otherwise be less than zero percent (0.00%) per annum, such rate shall be deemed to be zero percent (0.00%) per annum for all 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 X or Section 12.03(f).

 

“Adverse Claim” means any Lien, except any Permitted Lien.

 

“Advisors” has the meaning set forth in Section 12.06(c).

 

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

 

“Affiliate” shall mean, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with such Person. A Person shall be deemed to control another Person if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such other Person, whether through the ownership of voting securities, by contract 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

 

2











 

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 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.

 

“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 the Administrative Agent or its Affiliate as its “reference rate” or “prime rate”, as applicable.  Such “reference rate” or “prime rate” is set by the Administrative Agent 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 11.01(a).

 

“Borrower Indemnified Party” has the meaning set forth in Section 11.01(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;

 

3











 

(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 collectibility 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).

 

“Borrower’s Net Worth” means, at any time of determination,  an amount equal to (i) the 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 of all Subordinated Notes at such time, plus (E) the aggregate accrued and unpaid interest on all Subordinated Notes 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 3.01(a).

 

“Breakage Fee” means (i) for any Interest Period for which Interest is computed by reference to LMIR or Adjusted LIBOR and a reduction of Capital is made for any reason on any day other than a Settlement Date 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

 

4











 

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 3.01; provided, that if such Capital shall have been reduced by any distribution and thereafter all or a portion of such distribution is rescinded or must otherwise be returned for any reason, such 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)                                 Pharmaceutical Research Associates, Inc. ceases to own, directly, 100% of the issued and outstanding Capital Stock and all other equity interests of the Borrower free and clear of all Adverse Claims;

 

(b)                                 the Parent ceases to own, directly or indirectly, 100% of the issued and outstanding Capital Stock and all other equity interests of any Originator or Holdings free and clear of all Adverse Claims;

 

(c)                                  any Subordinated Note shall at any time cease to be owned by an Originator, free and clear of all Adverse Claims; or

 

(d)                                 with respect to the Parent:

 

5











 

(i)                                     the Permitted Holders shall at any time not own, in the aggregate, directly or indirectly, beneficially and of record, at least thirty-five percent (35%) of the voting power of the outstanding Voting Stock of Holdings;

 

(ii)                                  any “person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act), other than the Permitted Holders, becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of thirty-five percent (35%) or more of the Voting Stock of the Parent, unless the Permitted Holders have, at such time, the right or the ability by voting power, contract or otherwise to elect or designate for election at least a majority of the board of directors of the Parent; or

 

(iii)                               at any time, a Change of Control (as defined in the Senior Notes Indenture (as defined in the Credit Agreement)) shall have occurred.

 

“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 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 March 22, 2016.

 

“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 4.06(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 a Collection Account Control Agreement for the purpose of receiving Collections.

 

6











 

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

 

“Collection Account Control Agreement” means each agreement, in form and substance satisfactory to the Administrative Agent, among the Borrower, the Administrative Agent and a Collection Account Bank, governing the terms of the related Collection Accounts, that, among other things, provides the Administrative Agent with control within the meaning of the UCC over the deposit accounts subject to such agreement, as the same may be amended, restated, supplemented or otherwise modified from time to time.

 

“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 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.

 

“Commitment” means, with respect to any Lender, the maximum aggregate amount 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 12.03 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.

 

“Concentration Percentage” means (i) for any Group AA Obligor, 25.0%, (ii) for any Group A Obligor, 25.0%, (iii) for any Group B Obligor, 15.0%, (iv) for any Group C Obligor, 10.0% and (v) for any Group D Obligor, 7.5% ; provided, however, that the Administrative Agent (with the prior written consent of each Lender) may approve higher “Concentration Percentages” for selected Obligors; provided, further, that the Administrative Agent may, upon not less than five (5) Business Days’ notice to the Borrower, decrease the then applicable “Concentration Percentage” of any such Obligor which has been increased pursuant to the immediately preceding proviso to a percentage satisfactory to it at such time, which such decrease shall not result in the applicable “Concentration Percentage” for such Obligor being lower than the related “Concentration Percentage” set forth in clauses (i) - (v) above.

 

“Concentration Reserve Percentage” means, at any time of determination, the greater of (i) 15.0% and (ii) largest of: (a) the sum of the five (5) largest Obligor Percentages of the Group D Obligors, (b) the sum of the three (3) largest Obligor Percentages of the Group C Obligors, (c) the sum of the two (2) largest Obligor Percentages of the Group B Obligors and (d) the largest Obligor Percentage of the Group A 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

 

7











 

that evidence such Receivable or under which an Obligor becomes or is obligated to make payment in respect of such Receivable.

 

“Controlled Group” means all members of a controlled group of corporations or other business entities and all trades or businesses (whether or not incorporated) under common control which, together with the Parent or any of its Subsidiaries, are treated as a single employer under Section 414 of the Code.

 

“Covered Entity” means (a) each of Borrower, the Servicer, each Originator, the Parent and each of 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 power to direct or cause the direction of the management and policies of such Person whether by ownership of equity interests, contract, proxy or otherwise.

 

“Credit Agreement” means that certain Credit Agreement, dated as of September 23, 2013 (as amended, restated, amended and restated or otherwise modified from time to time), by and among Holdings, Pinnacle Holdco Parent, Inc., the lenders time to time party thereto, UBS AG, Stamford Branch, as administrative agent, collateral agent and letter of credit issuer, UBS Loan Finance LLC, as swingline lender, and UBS Securities LLC, Jefferies Finance LLC, Credit Suisse Securities (USA) LLC, KKR Capital Markets LLC, and Citigroup Global Markets Inc., as joint lead arrangers and 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 D, 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) 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 (a) accounts payable incurred

 

8











 

in the ordinary course of such Person’s business payable on terms customary in the trade, (b) prepaid or deferred revenue arising in the ordinary course of business and (c) purchase price holdbacks arising in the ordinary course of business in respect of a portion of the purchase price of an asset to satisfy warrants or other unperformed obligations of the seller of such asset), (v) all net obligations of such Person in respect of interest rate or currency hedges or (vi) without duplication, any Guaranty of any such Debt.

 

“Deemed Collections” has the meaning set forth in Section 3.01(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 (other than Unbilled Receivables) that became Defaulted Receivables during such Fiscal Month, by (b) the aggregate initial Outstanding Balance of all Pool Receivables generated by the Originators during the month that is six (6) Fiscal Months before such Fiscal Month.

 

“Defaulted Receivable” means a Receivable:

 

(a)                                 as to which any payment, or part thereof, remains unpaid for more than 150 days from the original due date for such payment;

 

(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 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

 

9











 

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 more than 90 days from the original due date for such payment; provided, however, that such amount shall be calculated without giving effect to any netting of credits that have not been matched to a particular Receivable for the purposes of aged trial balance reporting.

 

“Dilution Horizon Ratio” means, for any Fiscal Month, the ratio (expressed as a percentage and rounded to the nearest 1/100th of 1%, with 5/1000th of 1% rounded upward) computed as of the last day of such Fiscal Month by dividing:  (a) the aggregate initial Outstanding Balance of all Pool Receivables (other than Unbilled Receivables) generated by the Originators during the two most recently ended Fiscal Months, 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 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 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:  (a) 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 (b) the aggregate initial Outstanding Balance of all Pool Receivables (other than Unbilled Receivables) generated by the Originators during the Fiscal Month that is one month prior to such Fiscal Month.

 

“Dilution Reserve Percentage” means, on any day, the product 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 most recent Fiscal Months and (ii) the Dilution Volatility Component.

 

10












 

“Dilution Volatility Component” means, for any Fiscal Month, the product (expressed as a percentage) of:

 

(a)                                 the positive difference, if any, between:  (i) the highest arithmetic average of the Dilution Ratios for any two consecutive Fiscal Months during the twelve most recent consecutive Fiscal Months and (ii) the arithmetic average of the Dilution Ratios for such twelve consecutive months times

 

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

 

“Dollar Equivalent” means, on any date on which a determination thereof is to be made, with respect to any amount denominated in any currency other than Dollars, the Dollar equivalent of such amount of such currency determined by reference to the Spot Rate determined as of such determination date.

 

“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 Currency” means the lawful currency of a country (other than the United States of America) or monetary union of countries that is either (a) a member of the Organization for Economic Co-Operation and Development, and (b) approved as an “Eligible Foreign Currency” in writing by the Administrative Agent (in its sole discretion).  As of the Closing Date, Euros have been approved by the Administrative Agent pursuant to clause (b) above.

 

“Eligible A-Rated Foreign Obligor” means an Obligor that (i) is not an Eligible UK Foreign Obligor, and (ii) is organized in or that has a head office (domicile), registered office, and chief executive office located in a country (other than the United States of America) that has a long-term sovereign foreign currency rating of at least “A” by S&P or “A2” by Moody’s.

 

“Eligible Foreign Obligor” means an Eligible A-Rated Foreign Obligor, an Eligible UK Foreign Obligor or an Eligible OECD Foreign Obligor.

 

“Eligible OECD Foreign Obligor” means an Obligor that (i) is not an Eligible A-Rated Obligor or Eligible UK Foreign Obligor, and (ii) is organized in or that has a head office (domicile), registered office, and chief executive office located in a country (other than the United States of America) that is a member of the Organization for Economic Co-Operation and Development.

 

“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

 

11











 

to any Insolvency Proceeding; (v) not an Affiliate of the Borrower, the Servicer, the Parent 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)                                 that is denominated and payable in Dollars or an Eligible Foreign Currency, in either case, 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 or the Cayman Islands;

 

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

 

(d)                                 that arises under a Contract for the sale of goods or services in the ordinary course of the applicable Originator’s business;

 

(e)                                  that arises under a Contract that is in full force and effect and that 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;

 

(f)                                   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;

 

(g)                                  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);

 

(h)                                 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 by, effected or given to 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;

 

(i)                                     that is not subject to any existing dispute, right of rescission, right of set-off, counterclaim, any other defense against the applicable Originator (or any assignee of such Originator) or Adverse Claim; provided that only the portion of such Pool Receivable subject to such dispute, right of rescission, right of set-off, counterclaim, defense or Adverse Claim shall be ineligible;

 

(j)                                    that satisfies all applicable requirements of the Credit and Collection Policy;

 

12











 

(k)                                 that, together with the Contract related thereto, has not been modified, waived or restructured since its creation, except as permitted pursuant to Section 8.02 of this Agreement;

 

(l)                                     in which the Borrower owns good and marketable title, free and clear of any Adverse Claims, and that is freely assignable (including without any consent of the related Obligor or any Governmental Authority) unless such consent has been obtained;

 

(m)                             for which the Administrative Agent (on behalf of the Secured Parties) has a valid and enforceable first priority perfected security interest therein and in the Related Security and Collections with respect thereto in which a security interest may be perfected by the filing of a financing statement under the UCC, in each case, free and clear of any Adverse Claim;

 

(n)                                 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 define in the UCC);

 

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

 

(p)                                 for which no Originator, the Borrower, the Parent or the Servicer has established any offset or netting arrangements with the related Obligor in connection with the ordinary course of payment of such Receivable;

 

(q)                                 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;

 

(r)                                    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;

 

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

 

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

 

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

 

13











 

“Eligible UK Foreign Obligor” means an Obligor that is organized in or that has a head office (domicile), registered office, and chief executive office located in the United Kingdom.

 

“Eligible Unbilled Receivable” means, (a) at any time when a Ratings Event shall not have occurred and be continuing, any Unbilled Receivable with respect to which not more than ninety (90) days have expired since the date such Unbilled Receivable arose and (b) during the occurrence of a Ratings Event, any Unbilled Receivable with respect to which not more than thirty (30) days have expired since the date such Unbilled Receivable arose.

 

“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”).

 

“Euros” means the single currency of participating member states of the European Monetary Union.

 

“Event of Default” has the meaning specified in Section 9.01.  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 12.01.

 

“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; plus

 

(b)                                 the excess (if any) of (i) the aggregate Outstanding Balance of all Eligible Receivables that are Unbilled Receivables, over (ii) the product of (x) 30.00%, multiplied by (y) the aggregate Outstanding Balance of all Receivables; plus

 

(c)                                  the excess (if any) of (i) the aggregate Outstanding Balance of all Eligible Receivables that are Unbilled Receivables for which 60 or more days have elapsed since they arose, over (ii) the product of (x) 7.50%, multiplied by (y) the aggregate Outstanding Balance of all Receivables; plus

 

(d)                                 the excess (if any) of (i) the aggregate Outstanding Balance of all Eligible Receivables the Obligors of which are Eligible A-Rated Foreign Obligors, over (ii) the

 

14











 

product of (x) 10.00%, multiplied by (y) the aggregate Outstanding Balance of all Receivables then in the Receivables Pool; plus

 

(e)                                  the excess (if any) of (i) the aggregate Outstanding Balance of all Eligible Receivables the Obligors of which are Eligible OECD Foreign Obligors, over (ii) the product of (x) 2.50%, multiplied by (y) the aggregate Outstanding Balance of all Receivables then in the Receivables Pool; plus

 

(f)                                   the excess (if any) of (i) the aggregate Outstanding Balance of all Eligible Receivables the Obligors of which are Eligible UK Foreign Obligors, over (ii) the product of (x) 15.00%, multiplied by (y) the aggregate Outstanding Balance of all Receivables then in the Receivables Pool; plus

 

(g)                                  the excess (if any) of (i) the aggregate Outstanding Balance of all Eligible Receivables denominated or payable in an Eligible Foreign Currency, over (ii) the product of (x) 2.50%, multiplied by (y) the aggregate Outstanding Balance of all Receivables then in the Receivables Pool; plus

 

(h)                                 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 after the original invoice date of such Receivable, over (ii) the product of (x) 10.00%, 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 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 a Loan 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, (c) Taxes attributable to a Lender’s failure to comply with Section 4.03(f) and (d) any U.S. federal withholding Taxes imposed pursuant to FATCA.

 

“Facility Limit” means $200,000,000 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.

 

15











 

“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 agreement entered into pursuant to Section 1471(b)(1) of the Code, and any laws, regulations, rules or practices adopted pursuant to any intergovernmental agreement entered into with respect to the foregoing.

 

“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 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 Scheduled Termination Date or (ii) such earlier date on which the Loans become due and payable pursuant to Section 9.01.

 

“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 Covenant Event” shall be deemed to have occurred if, at any time during the Compliance Period, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio as of the last day of any Test Period ending during any Compliance Period is greater than 7.50 to 1.00.  As used in this definition, “Compliance Period,” “Consolidated Senior Secured Debt to Consolidated EBITDA Ratio” and “Test Period” (and any defined term constituting a component of such terms) have the meanings assigned to such terms in the Credit Agreement as in effect on the Closing Date without giving effect to any amendment, restatement, waiver or supplement thereto unless otherwise agreed to in writing by the Administrative Agent in its sole discretion. If at any time following the Closing Date, the Credit Agreement is amended, restated, waived,

 

16











 

supplemented or otherwise modified to directly or indirectly modify the covenant, or any defined term constituting a component thereof, set forth in Section 10.7 of the Credit Agreement (as in effect on the Closing Date), the Administrative Agent may unilaterally (in its sole discretion) by written notice to the Borrower and each Lender modify this definition and/or Section 9.01(u) to conform to the Credit Agreement as so amended, restated, waived, supplemented or otherwise modified.

 

“Financial Officer” of any Person means, the president, the chief executive officer, the chief financial officer, the chief accounting officer, the principal accounting officer, the controller, the treasurer, the assistant treasurer, vice president-finance or any other senior officer of such Person designated as such in writing to the Administrative Agent by such person.

 

“Fiscal Month” means each calendar month.

 

“Foreign Currency Collections” means any Collections with respect to a Pool Receivable that are denominated in any currency other than Dollars.

 

“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).

 

“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, however, 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 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” and clause (i) 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.

 

17











 

“Group AA 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 “AA-” 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, and (b) “P-1” by Moody’s, or if such Obligor does not have a short-term rating from Moody’s, “Aa3” 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, however, 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 deemed to be a Group A Obligor if it otherwise satisfies the definition of “Group AA Obligor”.  Notwithstanding the foregoing, any Obligor that is a Subsidiary of an Obligor that satisfies the definition of “Group AA Obligor” shall be deemed to be a Group AA Obligor and shall be aggregated with the Obligor that satisfies such definition for the purposes of determining the “Concentration Reserve Percentage” and clause (i) of the definition of “Excess Concentration” for such Obligors, unless such deemed Obligor separately satisfies the definition of “Group AA Obligor”, “Group A Obligor”, “Group B Obligor”, or “Group C Obligor”, in which case such Obligor shall be separately treated as a Group AA Obligor, 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, however, 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 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” and clause (i) 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 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)

 

18











 

“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, however, 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 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” and clause (i) 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” of any Person means 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.

 

“Holdings” 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.

 

“Independent Director” has the meaning set forth in Section 7.03(c).

 

“Initial Investors” means Kohlberg Kravis Roberts & Co. L.P., KKR Associates North America Fund XI L.P., KKR North America Fund XI ESC L.P., KKR North America Fund XI SBS L.P., KKR Partners III, L.P., KKR CIS Global Investor L.P., CPS Managers Master Fund L.P., KKR Reference Fund Investments LP, KKR North America Coinvest Fund I LP, KKR Principal Opportunities Partnership (Domestic) L.P., KKR Principal Opportunities Partnership (Offshore) L.P. and each of their respective Affiliates but not including, however, any portfolio companies of any of the foregoing.

 

“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

 

19











 

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.

 

“Intended Tax Treatment” has the meaning set forth in Section 12.14.

 

“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 or Capital thereof):

 

(a)                                 subject to Section 4.04 and so long as no Event of Default has occurred and is continuing on such day, LMIR or Adjusted LIBOR, as determined pursuant to Section 2.05, 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

 

(b)                                 for any day while an Event of Default has occurred and is continuing, an interest rate per annum equal 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; and provided, further, 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 H.

 

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

 

20












 

“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).

 

“Lender’s Account” means, with respect to any Lender the account(s) from time to time designated in writing by such Lender to the Borrower and the Servicer for purposes of receiving payments to or for the account of such Lender and its Affiliates hereunder.

 

“Lenders” means PNC and each other Person that becomes a party to this Agreement in the capacity of a “Lender.”

 

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

 

“LIBOR Termination Date” has the meaning set forth in Section 4.05(a).

 

“Lien” 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).

 

“LMIR” means for any day during any Interest Period, the interest rate per annum determined by the applicable Lender (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 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 (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.

 

21











 

“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 a Collection 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, at any time of determination, the ratio (expressed as a percentage and rounded to the nearest 1/100 of 1%, with 5/1000th of 1% rounded upward) computed 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 the eight (8) most recent Fiscal Months, plus (ii) the product of (x) the sum of the Loss Horizon Unbilled Component and the Loss Horizon Terms Component, multiplied by (y) the aggregate initial Outstanding Balance of all Pool Receivables (other than Unbilled Receivables) originated by the Originators during the ninth (9th) most recent Fiscal Month; by

 

(b)                                 the Net Receivables Pool Balance as of such date.

 

“Loss Horizon Terms Component” means, at any time of determination, the greater of (i) 0.0% and (ii) the percentage determined pursuant to the following formula:

 

1.0 x WACT – 60

60

 

where WACT equals the Weighted Average Credit Terms of the most recent Fiscal Month.

 

“Loss Horizon Unbilled Component” means 0.45.

 

“Loss Reserve Percentage” means, at any time of determination, the product of (a) the Stress Factor times (b) the highest average of the Default Ratios for any three consecutive Fiscal Months during the twelve most recent Fiscal Months, times (c) the Loss Horizon Ratio.

 

“Majority Lenders” means one or more Lenders that, individually or in the aggregate, hold more than 50% of the aggregate Commitments of all Lenders (or, if the Commitments have been terminated, hold Loans with more than 50% of the Aggregate Capital).

 

“Material Adverse Effect” means a circumstance or condition that would, individually or in the aggregate, materially adversely affect:

 

(a)                                 the assets, operations, business or financial condition of the Parent and its Subsidiaries, taken as a whole;

 

22











 

(b)                                 the ability of the Servicer, the Performance Guarantor or any Originator, taken as a whole, 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, or the validity, enforceability, value or collectibility 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, on any day, the product of (a) the average of the Dilution Ratios for the twelve most recent Fiscal Months multiplied by (b) the Dilution Horizon Ratio.

 

“Minimum Funding Threshold” means, at any time of determination, an amount equal to the lesser of (a) eighty-five percent (85.0%) of the Facility Limit at such time and (b) the Borrowing Base at such time.

 

“Monthly Report” means a report, in substantially the form of Exhibit E.

 

“Monthly Settlement Date” means the 20th calendar day of each calendar month (or if such day is not a Business Day, the next occurring Business Day).

 

“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 or any of their respective ERISA Affiliates (other than one considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the Code) 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 Eligible Receivables, 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 its Pool Receivables and (b) the

 

23











 

denominator of which is the aggregate Outstanding Balance of all Eligible Receivables at such time.

 

“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 similar excise or property Taxes, charges or 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.  The Outstanding Balance (or any portion thereof) of any Receivable (or portion thereof) denominated or payable in a currency other than Dollars shall be expressed as the applicable Dollar Equivalent thereof in accordance with Section 3.02(e).

 

“Parent” means PRA Health Sciences, Inc., a Delaware corporation.

 

“Parent Group” has the meaning set forth in Section 7.03(c).

 

“Participant” has the meaning set forth in Section 12.03(d).

 

“Participant Register” has the meaning set forth in Section 12.03(e).

 

“PATRIOT Act” has the meaning set forth in Section 12.15.

 

“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 with respect to which any Originator, the Borrower or any other member of the Controlled Group 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

 

24











 

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 such Lender 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.

 

“Performance Guarantor” means the Parent in its capacity as guarantor under the Performance Guaranty.

 

“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 Holders” means each of (i) the Initial Investors and their respective Affiliates (other than any portfolio company of an Initial Investor) and members of management of Holdings (or its direct or indirect parent) who were holders of Capital Stock of Holdings (or its direct or indirect parent company) on September 23, 2013 and any “group” (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) of which any of the foregoing are members; provided that, in the case of such group and without giving effect to the existence of such group or any other group, such Initial Investors, their respective Affiliates and members of management, collectively, have beneficial ownership of more than 50% of the total Voting Stock of Holdings or any other direct or indirect parent company of Holdings and (ii) any direct or indirect parent of Holdings formed not in connection with, or in contemplation of, a transaction that, assuming such parent was not formed, after giving effect thereto would constitute a Change of Control.

 

“Permitted Lien” means (a) the interests of the Borrower, the Administrative Agent and each of the other Secured Parties under 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, (d) any lien in favor of, or assigned to, the Administrative Agent (for the benefit of the Secured Parties) and (e) any Lien on the Capital Stock or other equity interests of the Originators or Holdings (excluding, for the avoidance of doubt, any Lien on the Capital Stock of the Borrower) granted in connection with the Credit Agreement (or any refinancing thereof) in favor of the secured parties thereunder.

 

“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.

 

25











 

“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” shall be deemed to have occurred on any day when the Parent does not have at least one of: (i) a rating of “B” or better by S&P on the Parent’s long-term senior unsecured and uncredit-enhanced debt securities or (ii) a rating of “B2” or better by Moody’s on the Parent’s long-term senior unsecured and uncredit-enhanced debt securities.

 

“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.  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.

 

“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 12.03(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;

 

26











 

(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; and

 

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

 

“Release” has the meaning set forth in Section 3.01(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 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 (other than a Pension Plan maintained by an ERISA Affiliate which is considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the Code).

 

“Representatives” has the meaning set forth in Section 12.06(c).

 

“Required Capital Amount” means $25,000,000.

 

“Restricted Payments” has the meaning set forth in Section 7.01(r).

 

“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 comprehensive countrywide or territory-wide sanctions program maintained under any Anti-Terrorism Law.

 

“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,

 

27











 

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 May 31, 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.

 

“Securities Act” means the Securities Act of 1933, as amended or otherwise modified from time to time.

 

“Servicer” has the meaning set forth in the preamble to this Agreement, including any successor Servicer pursuant to Section 8.01.

 

“Servicer Indemnified Amounts” has the meaning set forth in Section 11.02(a).

 

“Servicer Indemnified Party” has the meaning set forth in Section 11.02(a).

 

“Servicer’s Account” means the deposit account with an account number ending in 2458 maintained by the Servicer at Wells Fargo Bank, National Association.

 

“Servicing Fee” means the fee referred to in Section 8.06(a).

 

“Servicing Fee Rate” means the rate referred to in Section 8.06(a).

 

“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.

 

“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

 

28











 

capital after giving due consideration to the prevailing practice in the industry in which such Person is engaged.

 

“Spot Rate” means, on any day, for the purpose of determining the Dollar Equivalent of any amount denominated in a currency other than Dollars, the exchange rate at which such currency may be exchanged into Dollars as set forth at approximately 11:00 a.m. New York City time, on such day as published on the Bloomberg Key Cross-Currency Rates Page for such currency.  In the event that such rate does not appear on any Bloomberg Key Cross Currency Rates Page, the Spot Rate shall be determined by reference to such other publicly available service for displaying exchange rates as may be selected by the Administrative Agent or, in the absence of such a selection or publicly available service, such Spot Rate shall instead be the arithmetic average of the spot rates of exchange of the Administrative Agent in the market where its foreign currency exchange operations in respect of such currency are then being conducted, at or about 11:00 a.m. New York time, on such date for the purchase of Dollars with the applicable currency for delivery two (2) Business Days later; provided that if at the time of any such determination, for any reason, no such spot rate is being quoted, the Administrative Agent may use any reasonable method it deems appropriate to determine such rate, and such determination shall be conclusive absent manifest error.

 

“Stress Factor” means (a) at any time when a Ratings Event has not occurred and is continuing, 2.25 and (b) during the occurrence of a Ratings Event, 2.5.

 

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

 

“Subject Obligor” means Takeda Pharmaceutical Company Ltd. or any Affiliate thereof.

 

“Subject Obligor Delinquency Trigger” shall have occurred and be continuing 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, constitute Delinquent Receivables as of such date.

 

“Subordinated Note” has the meaning set forth in the Purchase and Sale Agreement.

 

“Sub-Servicer” has the meaning set forth in Section 8.01(d).

 

“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.

 

“Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority and all interest, penalties or additions to tax with respect thereto.

 

29











 

“TD” means The Toronto-Dominion Bank.

 

“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 9.01, (c) the date selected by the Borrower on which all Commitments have been reduced to zero pursuant to Section 2.02(e) and (d) 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 for Receivables and Related Rights pursuant to Section 3.2 of the Purchase and Sale Agreement.

 

“Total Reserves” means, at any time of determination, an amount equal to the product of (a) the sum of:  (i) the Yield Reserve Percentage, plus (ii) the greater of (x) the sum of the Concentration Reserve Percentage plus the Minimum Dilution Reserve Percentage and (y) the sum of the Loss Reserve Percentage plus the Dilution Reserve Percentage, times (b) 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 include) 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 Collection Account Control Agreements, the Fee Letter, each Subordinated Note, 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.

 

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

 

“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 therefor.

 

“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.

 

30












 

“U.S. Person” means a “United States person” within the meaning of Section 7701(a)(30) of the Code.

 

“U.S. Tax Compliance Certificate” has the meaning set forth in Section 4.03(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.

 

“Voting Stock” means, with respect to any Person as of any date, the Capital Stock of such Person that is at the time entitled to vote in the election of the board of directors, managing member or similar Person(s) acting as the governing or managing body of such Person.

 

“Weighted Average Credit Terms” means for any Fiscal Month, the weighted average (weighted based on Outstanding Balance) payment terms (computed in days and calculated based on the difference between the original invoice date and the stated due date for payment) of invoices for all Receivables (other than Delinquent Receivables) in the Receivables Pool as of the last day of such Fiscal Month.

 

“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;
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
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 Section, Schedule or Exhibit are references to

 

31











 

Sections, Schedules and Exhibits in or to such agreement (or the certificate or other document in which the reference is made), and references to any paragraph, subsection, clause or other subdivision within any Section or definition refer to such paragraph, subsection, clause or other subdivision of such Section or definition; (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.

 

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, the Lenders 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 noon (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 $1,000,000 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).

 

32











 

(b)                                 No later than 2:30 p.m. (New York City time) 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 V 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 prepayment of the outstanding Capital of the Lenders to the extent required under Section 3.01 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 E; provided, however, that (i) each such prepayment shall be in a minimum aggregate amount of $1,000,000 and shall be an integral multiple of $100,000 in excess thereof; 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, (ii) any accrued Interest and Fees in respect of such prepaid Capital shall be paid on the immediately following Settlement Date and (iii) it shall be a condition precedent to any such prepayment of Capital prior to the Termination Date that after giving effect to such prepayment, the Capital would not be less than an amount equal to the Minimum Funding Threshold.

 

(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 $75,000,000.  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 (A) repay the Capital of each Lender such that its Capital will not exceed its Commitment as so reduced and (B) pay 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

 

33











 

Administrative Agent shall apply such amounts first to the reduction of the outstanding 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 3.01, 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”). Commitment 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.

 

(b)                                 Each Loan of each Lender and the Capital thereof (without duplication) 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 3.01.

 

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 12.03(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 noon (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 three (3) 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

 

34











 

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 an 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.

 

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

 

(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 12.01); provided, that, 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 in accordance with its Pro Rata Percentage; 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

 

SETTLEMENT PROCEDURES AND PAYMENT PROVISIONS

 

SECTION 3.01.  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

 

35











 

precedent set forth in Section 5.03 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 the Subordinated Notes (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);

 

(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 any Lender and other Credit Party for the immediately preceding Interest Period (including any additional amounts or indemnified amounts payable under Sections 4.03 and 11.01 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 4.03 and 11.01 in respect of such payments) payable for any prior Interest Period to the extent such amount has not been distributed to any Lender or Credit Party;

 

(iii)                               third, as set forth in clause (x) or (y) 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 (1) the amount necessary to reduce the Borrowing Base Deficit to zero ($0) Dollars or (2) at the election of the Borrower, such greater amount in accordance with Section 2.02(d); or

 

(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;

 

(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.

 

36











 

(b)                                 Notwithstanding anything to the contrary set forth in this Section 3.01, the Administrative Agent shall have no obligation to distribute or pay any amount under this Section 3.01 except to the extent actually received by the Administrative Agent.

 

(c)                                  Notwithstanding anything contained herein to the contrary, if and to the extent that for any reason any payment by or on behalf of any Person of any amount owed hereunder is rescinded or must otherwise be restored by the Administrative Agent, any Credit Party, any Affected Person or any Borrower Indemnified Party, whether as a result of any proceedings in bankruptcy or reorganization or otherwise, 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 3.01:

 

(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, if an Event of Default or Unmatured Event of Default exists or if the Purchase and Sale Termination Date has occurred and, in each case, if an Originator has made a related payment in cash to the Borrower pursuant to Section 3.2(c) of the Purchase and Sale Agreement, shall immediately pay (or cause the applicable Originator to pay pursuant to Section 3.3 of the Purchase and Sale Agreement) 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 3.01(a); provided that if a Receivable’s “Purchase Price” has been reduced by the full Outstanding Balance thereof pursuant to Section 3.3(a) of the Purchase and Sale Agreement and such reduction has been made in accordance with Section 3.3(c) of the Purchase and Sale Agreement, then the Borrower shall deliver to the applicable Originator any payments thereafter received by the Borrower on account of such Receivable’s Outstanding Balance in accordance with the Borrower’s obligations under the proviso to Section 3.3(a) of the Purchase and Sale Agreement;

 

(ii)                                  if on any day any of the representations or warranties in Section 6.01 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, if an Event of Default or Unmatured Event of Default exists or if the Purchase and Sale Termination Date shall have occurred and, in each case, if an Originator has made a related payment in cash to the Borrower pursuant to Section 3.2(c) of the Purchase and Sale Agreement, 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 3.01(a)

 

37











 

(Collections deemed to have been received pursuant to Section 3.01(d) are hereinafter sometimes referred to as “Deemed Collections”);

 

(iii)                               except as provided in clauses (i) 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.

 

SECTION 3.02.  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 Lender’s Account.

 

(b)                                 Each of the Borrower and the Servicer shall, to the extent permitted by Applicable Law, pay interest on any amount other than Capital (which Capital shall accrue Interest) 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.

 

(d)                                 If any Foreign Currency Collections are not converted into Dollars by the Lock-Box Bank into which such Foreign Currency Collections were initially deposited within two (2) Business Days (or such longer period as may be agreed in writing by the Administrative Agent in its sole discretion) following such date of initial deposit, the Servicer shall solicit offer quotations from at least two (2) foreign exchange dealers (or such lesser number as may be agreed in writing by the Administrative Agent in its sole discretion) reasonably acceptable to the Administrative Agent for effecting such exchange and shall select the quotation which provides for the best exchange rate.  The Servicer on behalf of the Borrower shall affect such exchange no later than two (2) Business Days (or such longer period as may be agreed in writing by the Administrative Agent in its sole discretion) following receipt of such quotation(s).

 

38











 

(e)                                  On any day when any computation or calculation hereunder requires the aggregation of amounts denominated in more than one currency, all amounts that are denominated in any currency other than Dollars shall be deemed to be the Dollar Equivalent thereof on such day for purposes of such computation or calculation.

 

(f)                                   Without limiting the generality of the foregoing, for the purpose of calculating the terms set out below on any day, all Receivables or other amounts that are denominated in any currency other than Dollars will be deemed to be the Dollar Equivalent thereof on such day:

 

(i)                                     Deemed Collections;

 

(ii)                                  Net Receivables Pool Balance; and

 

(iii)                               Outstanding Balance.

 

ARTICLE IV

 

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

 

SECTION 4.01.  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 Indemnified Taxes or Excluded 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 with respect to the transactions contemplated hereby, (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 (or its related Lender), 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.

 

39











 

(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 (or its related Lender), 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 (or its related Lender on its behalf) 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 3.01, 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 4.02.  Funding Losses.

 

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

 

(b)                                 A certificate of a Lender (or its related Lender on its behalf) 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 3.01, 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.

 

40












 

SECTION 4.03.  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 an applicable withholding agent) requires the deduction or withholding of any Tax from any such payment to an Affected Person, then the applicable withholding agent 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 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 it 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 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.  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.

 

(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 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 Affiliates that are Affected Persons to comply with Section 12.03(e) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, or any of its 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 Affiliates that are Affected Persons under any Transaction Document or otherwise payable by the Administrative Agent to such Lender or any of its

 

41











 

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 4.03, 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 4.03(f)(ii)(A), 4.03(f)(ii)(B) and 4.03(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)                               a Lender that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a party to this Agreement and from time to time upon the reasonable request of the Borrower or the Administrative Agent, executed originals of Internal Revenue Service Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax;

 

(B)                               any Lender 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) on or prior to the date on which such Lender becomes a party to this Agreement and 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 a Lender 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,

 

42











 

executed originals of Internal Revenue Service Form W-8BEN or Internal Revenue Service Form W-8BEN-E 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 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 a Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate in substantially the form of Exhibit I hereto to the effect that such Lender 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; or

 

(4)                                 to the extent such Lender 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, Internal Revenue Service Form W-8BEN-E 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 Lender is a partnership and one or more direct or indirect partners of such Lender are claiming the portfolio interest exemption, such Lender may provide a U.S. Tax Compliance Certificate on behalf of each such direct and indirect partner; and

 

(C)                               any Lender 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), on or prior to the date on which such Lender becomes a party to this Agreement and 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.

 

43











 

(g)                                  Documentation Required by FATCA.  If a payment made to a Credit Party under any Transaction Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Credit Party were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Credit Party 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 Credit Party 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 4.03 (including by the payment of additional amounts pursuant to this Section 4.03), 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 4.03 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 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 4.03 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Credit Party, 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 Credit Party agrees that if any form or certification it previously delivered pursuant to this Section 4.03 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.

 

44











 

SECTION 4.04.  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 the applicable Affected Person (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 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 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 Affected Person with any Change in Law, shall make it unlawful or impossible for such Affected Person 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 the applicable 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 for any outstanding Portions of Capital with respect to such Lender then funded at Adjusted LIBOR or LMIR shall automatically and immediately be converted to the Base Rate.

 

SECTION 4.05.  Successor Adjusted LIBOR or LMIR.

 

(a)                                 If the Administrative Agent determines (which determination shall be final and conclusive, absent manifest error) that either (a) (i) the circumstances set forth in Section 4.04 have arisen and are unlikely to be temporary, or (ii) the circumstances set forth in Section 4.04 have not arisen but the applicable supervisor or administrator (if any) of the interest rate used to calculate 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 the Adjusted LIBOR or LMIR Rate shall no longer be used for determining interest rates for loans (either such date, a “LIBOR Termination Date”), or (b) a rate other than the interest rate used to calculate 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 the 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 rate based on the replacement index will be substantially equivalent to the all-in Interest based on Adjusted LIBOR or LMIR in effect prior to its replacement.

 

45











 

(b)                                 In connection with a LIBOR Termination Date, 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 12.01), 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 day ten (10) Business Days after the date a draft of the amendment is provided to the Lenders, unless the Administrative Agent receives, on or before the end of such ten (10) Business-Day period, a written notice from the Majority Lenders stating that such 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 the interest rate used to calculate Adjusted LIBOR or LMIR to a replacement index-based rate, and (ii) may also reflect adjustments to account for (x) the effects of the transition from the interest rate used to calculate Adjusted LIBOR or LMIR, as applicable, to the replacement index and (y) yield- or risk-based differences between the interest rate used to calculate Adjusted LIBOR or LMIR, as applicable, and the replacement index.

 

(d)                                 Until an amendment reflecting a new replacement index in accordance with this Section 4.05 is effective, each advance, conversion and renewal of a Loan under 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.

 

SECTION 4.06.  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

 

46











 

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 (i) the Final Payout Date or (ii) the repurchase of any Receivable as set forth in Section 3.3(a) of the Purchase and Sale Agreement, the Collateral, in the case of clause (i), or the applicable Receivable and any Related Security solely with respect to such Receivable, in the case of clause (ii), 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 deliver to the Borrower written authorization for the Borrower to file (or have filed on its behalf) UCC-3 termination statements and such other documents as the Borrower shall reasonably request to evidence such termination.

 

ARTICLE V

 

CONDITIONS TO EFFECTIVENESS AND CREDIT EXTENSIONS

 

SECTION 5.01.  Conditions Precedent to Effectiveness and the Initial Credit Extension.  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 G 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.

 

47











 

SECTION 5.02.  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 Monthly Reports and Interim Reports required to be delivered hereunder;

 

(c)                                  the conditions precedent to such Credit Extension specified in Section 2.01 shall be satisfied;

 

(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 6.01 and 6.02 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.

 

SECTION 5.03.  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 (after giving effect to such Release and the Borrower’s related purchase of Receivables pursuant to the Purchase and Sale Agreement on the date of such Release) 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

 

48











 

(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 6.01 and 6.02 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; and

 

(iv)                              the Termination Date has not occurred.

 

ARTICLE VI

 

REPRESENTATIONS AND WARRANTIES

 

SECTION 6.01.  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 on which a Credit Extension shall have occurred:

 

(a)                                 Organization and Good Standing.  The Borrower is a limited liability company and validly existing in good standing under the laws of the State of Delaware and has full power and authority 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 Borrower is duly qualified to do business, is in good standing as a foreign entity 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 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 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

 

49











 

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, 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, 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 Receivables 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 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

 

50











 

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 located at 4130 ParkLake Avenue, Suite 400, Raleigh, NC 27612.  The legal name of the Borrower is PRA 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 an exemption from the definition of “investment company” set forth in Section 3(c)(5) of the Investment Company Act, although other exemptions from the definition of “investment company” set forth in the Investment Company Act may be also be available.

 

(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 Monthly Reports, Interim Reports, Loan Requests, certificates, reports, statements, documents and other written 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 or any 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.

 

(n)                                 Anti-Money Laundering/International Trade Law Compliance.  No Covered Entity is a Sanctioned Person.  No Covered Entity, either in its own right or knowingly 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 material 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

 

51











 

perfected and is enforceable against creditors of and purchasers from the Borrower (in the case of the Related Security, in only that portion of the Related Security in which a security interest may be perfected by the filing of a financing statement under the UCC) and (B) will be free of all 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 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.

 

(vi)                              Notwithstanding any other provision of this Agreement or any other Transaction Document, the representations contained in this Section 6.01(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 Collection Account Control Agreement relating to each Lock-Box and Collection Account.  The Administrative Agent has “control” (as defined in Section 9-104 of the UCC) over each Collection Account.

 

52












 

(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.

 

(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 and (ii) is not and will not at any relevant time become an association (or publicly traded partnership) taxable as a corporation for U.S. federal income tax purposes.

 

(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.

 

53











 

(z)                                  No Linked Accounts.  Except for the Servicer’s Account, there are no “Linked Accounts” (as defined in the Collection Account Control Agreements with Wells Fargo Bank, National Association) with respect to any Collection Account.  There are no “Linked Accounts” (as defined in the Collection Account Control Agreements with Wells Fargo Bank, National Association) with respect to the Collection Accounts with account numbers ending in “1186” and “4268.”

 

(aa)                          Reaffirmation of Representations and Warranties.  On the date of each Credit Extension, on the date of each Release, on each Settlement Date and on the date each Monthly Report, Interim Report or other report is delivered to the Administrative Agent or any Lender hereunder, the Borrower shall be deemed to have certified that (i) all representations and warranties of the Borrower hereunder are true and correct in all material respects on and as of such day as though made on and as of such day, except for representations and warranties which apply as to an earlier date (in which case such representations and warranties shall be true and correct in all material respects as of such date) and (ii) no Event of Default or an Unmatured Event of Default has occurred and is continuing or will result from such Credit Extension or Release.

 

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 6.02.  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 on which a Credit Extension 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, is in good standing as a foreign entity 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 power and authority to (i) execute and deliver this Agreement and the other 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.

 

54











 

(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 such other Transaction Documents and the fulfillment of the terms of this Agreement and such 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, loan agreement, 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 or the failure of which to obtain could not reasonably be expected to have a Material Adverse Effect.

 

(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.

 

55











 

(i)                                     Accuracy of Information.  All Monthly Reports, Interim Reports, Loan Requests, certificates, reports, statements, documents and other written 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 or any 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.

 

(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 4130 ParkLake Avenue, Suite 400, Raleigh, NC 27612.

 

(k)                                 Credit and Collection Policy.  The Servicer has complied in all material respects with the Credit and Collection Policy in connection with its servicing of the Pool Receivables 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)                                 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.

 

(o)                                 No Material Adverse Effect.  Since December 31, 2015 there has been no Material Adverse Effect on the Servicer.

 

(p)                                 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.

 

(q)                                 Anti-Money Laundering/International Trade Law Compliance.  No Covered Entity is a Sanctioned Person.  No Covered Entity, either in its own right or knowingly 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 material dealings or transactions prohibited by any Anti-Terrorism Law.

 

56











 

(r)                                    Financial Condition.  The consolidated balance sheets of the Servicer and its consolidated Subsidiaries as of December 31, 2015 and the related statements of income and shareholders’ equity of the Servicer 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 the Servicer and its consolidated Subsidiaries for the period ended on such date, all in accordance with GAAP.

 

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

 

(t)                                    Taxes.  The Servicer 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 the failure to file or pay could not reasonably be expected to have a Material Adverse Effect.

 

(u)                                 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.

 

(v)                                 No Linked Accounts.  Except for the Servicer’s Account, there are no “Linked Accounts” (as defined in the Collection Account Control Agreements with Wells Fargo Bank, National Association) with respect to any Collection Account.  There are no “Linked Accounts” (as defined in the Collection Account Control Agreements with Wells Fargo Bank, National Association) with respect to the Collection Accounts with account numbers ending in “1186” and “4268.”

 

(w)                               Reaffirmation of Representations and Warranties.  On the date of each Credit Extension, on the date of each Release, on each Settlement Date and on the date each Monthly Report, Interim Report or other report is delivered to the Administrative Agent or any Lender hereunder, the Servicer shall be deemed to have certified that (i) all representations and warranties of the Servicer hereunder are true and correct in all material respects on and as of such day as though made on and as of such day, except for representations and warranties which apply as to an earlier date (in which case such representations and warranties shall be true and correct in all material respects as of such date) and (ii) no Event of Default or an Unmatured Event of Default has occurred and is continuing or will result from such Credit Extension or Release.

 

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

 

57











 

ARTICLE VII

 

COVENANTS

 

SECTION 7.01.  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)                                  Monthly Reports and Interim Reports.  As soon as available and in any event not later than two (2) Business Days prior to each Settlement Date, a Monthly Report as of the most recently completed Fiscal Month; provided, that, at any time, upon five (5) Business Days’ prior written notice from the Administrative Agent, the Borrower shall furnish or cause to be furnished to the Administrative Agent and each Lender on each Business Day thereafter an Interim Report with respect to the Pool Receivables with data as of the close of business on the Business Day preceding the date on which such Interim Report is delivered; and, provided, further, that at any time after the occurrence and during the continuance of an Unmatured Event of Default or an Event of Default, 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 each Business Day an Interim Report with respect to the Pool Receivables with data as of the close of business on the immediately preceding Business Day.

 

(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.

 

58











 

(iv)                              Quarterly Financial Statements of Parent.  As soon as available and in any event within five (5) days after the date on which such financial statements are required to be filed with the SEC (after giving effect to any permitted extensions) (or, if such financial statements are not required to be filed with the SEC, 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), (i) the unaudited consolidated balance sheet and statements of income of Parent and its consolidated Subsidiaries (including the Borrower, the Servicer and each Originator) 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 (ii) to the extent required to be filed with the SEC, management’s discussion and analysis of the important operational and financial developments during such fiscal quarter.

 

(v)                                 Annual Financial Statements of Parent.  As soon as available and in any event within five (5) days after the date on which such financial statements are required to be filed with the SEC (after giving effect to any permitted extensions) (or, if such financial statements are not required to be filed with the SEC, on or before the date that is 90 days after the close of each of Parent’s fiscal years, the consolidated balance sheet of Parent and its consolidated Subsidiaries (including the Borrower, the Servicer and each Originator) 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 a “going concern” or like qualification or exception) 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

 

59











 

(but in no event later than four (4) Business Days after) a Financial Officer or other officer learning of the occurrence thereof, 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.

 

(ii)                                  Litigation.  The institution of any litigation, arbitration proceeding or governmental proceeding on the Servicer, the Parent or any Originator, which could reasonably be expected to have a Material Adverse Effect, or the institution of any litigation, arbitration proceeding or governmental proceeding on the Borrower.

 

(iii)                               Adverse Claim.  (A) Any Person shall obtain an 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.

 

(iv)                              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 filed against the Borrower or any Originator.

 

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

 

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

 

(vii)                           Material Adverse Change.  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 and will do all things necessary to remain duly organized, validly existing and in good standing as a domestic organization in its jurisdiction of organization and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted.

 

60











 

(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 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 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, employees 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 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 7.02(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 Lender 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 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 a Collection Account Control Agreement (or an amendment thereto) from the applicable Collection Account Bank.  The Borrower shall only terminate a Collection Account Bank or

 

61











 

close a Collection Account (or a related Lock-Box) with the prior written consent of the Administrative Agent.

 

(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 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 8.02, 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.

 

(k)                                 Change in Credit and Collection Policy.  The Borrower will not make any change in the Credit and Collection Policy that would be reasonably 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 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.  The Borrower shall provide the Administrative Agent with at least 30 days’ prior written notice before making any change in the Borrower’s name or location or making 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; each notice to the Administrative Agent and the Lenders pursuant to this sentence shall set forth the applicable change and the proposed effective date thereof.

 

(m)                             Books and Records.  The Borrower shall maintain and implement (it being understood and agreed that the Servicer may maintain and implement on the Borrower’s behalf) 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 (it being understood and agreed that the Servicer may keep and maintain on the Borrower’s behalf) 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: identify (it being understood and agreed that the Servicer may identify on the Borrower’s behalf) its master data processing

 

62











 

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.

 

(o)                                 Change in Payment Instructions to Obligors.  The Borrower shall not (and shall not instruct or encourage 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 Collection Account Control Agreement (or amendment thereto) with respect to such new Collection Accounts (or any related Lock-Box), in each case (x) in form and substance reasonably satisfactory to the Administrative Agent and (y) in accordance with the terms hereof and, if applicable, such Collection Account Control Agreement.

 

(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 Receivables and that portion of the Collateral in which an ownership or security interest may be created under the UCC and perfected by the filing of a financing statement under the UCC, in each case free and clear of any 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 (if necessary) 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 and that portion of the Related Security and Collections in which a security interest may be perfected by the filing of a financing statement under the UCC.  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 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”

 

63











 

(as such term is used in the Borrower’s Certificate of Formation and Limited Liability Company Agreement).

 

(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 Loans 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 Subordinated Notes 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 Section 3.01 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 Subordinated Notes 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 Subordinated Notes), (ii) the payment of accrued and unpaid interest on the Subordinated Notes 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,

 

64











 

that may be necessary, or that the Administrative Agent may reasonably request, to perfect, protect or evidence any of the foregoing.

 

(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.  A photocopy or other reproduction of this Agreement shall be sufficient as a financing statement where permitted by law.

 

(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 use the proceeds of any Credit Extension for the purpose of funding any operations in, financing any investments or activities in, or, making any payments to, a Sanctioned Country or Sanctioned Person in material violation of any Anti-Terrorism Law.  The funds used to repay each Credit Extension will not be derived from any activity made unlawful by the Anti-Terrorism Laws.  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 for the purpose of funding any operations in, financing any investments or activities in or making any payments to, a Sanctioned Person or a Sanctioned Country. The Borrower shall provide to the Administrative Agent and each Lender such information and documentation as may reasonably be requested by the Administrative Agent and such Lender from time to time for purposes of compliance by the Administrative Agent and 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 and such Lender to comply therewith

 

(w)                               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). 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.

 

65












 

(x)                                 Linked Accounts.  Except for the Servicer’s Account, the Borrower shall not permit any “Linked Account” (as defined in the Collection Account Agreements with Wells Fargo Bank, National Association) 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, 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.  The Borrower shall not permit any “Linked Account” (as defined in the Collection Account Control Agreements with Wells Fargo Bank, National Association) to exist with respect to the Collection Accounts with account numbers ending in “1186” and “4268.”

 

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

 

SECTION 7.02.  Covenants of the Servicer.  At all times from the Closing Date until the Final Payout Date:

 

(a)                                 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 the Parent and in no event later than 90 days after the close of the Parent’s fiscal year (or, if later, in the manner and period set forth in Section 7.01(c)(v)), in form and substance substantially similar to Exhibit F 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 and (b) within 45 days after the close of each fiscal quarter of the Servicer (or, if later, in the manner set forth in Section 7.01(c)(iv)), a compliance certificate in form and substance substantially similar to Exhibit F 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)                                  Monthly Reports and Interim Reports.  As soon as available and in any event not later than two (2) Business Days prior to each Settlement Date, a Monthly Report as of the most recently completed Fiscal Month; provided, that at any time, upon five (5) Business Days’ prior written notice from the Administrative Agent, the Servicer shall furnish or cause to be furnished to the Administrative Agent and each Lender on each Business Day thereafter an Interim Report with respect to the Pool Receivables with data as of the close of business on the Business Day preceding the date on which such Interim Report is delivered; and, provided, further, that at any time after the occurrence and during the continuance of an Unmatured Event of Default or an Event of Default, 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 each Business Day an Interim Report with respect to the Pool Receivables with data as of the close of business on the immediately preceding Business Day.

 

66











 

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

 

(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, 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)                                  Litigation.  The institution of any litigation, arbitration proceeding or governmental proceeding which could reasonably be expected to be determined adversely and, if so determined, could reasonably be expected to have a Material Adverse Effect.

 

(iii)                               Adverse Claim.  (A) Any Person shall obtain an 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.

 

(iv)                              Name Changes.  At least thirty (30) days before any change in the Borrower’s name or any other change requiring the amendment of UCC financing statements filed against the Borrower, a notice setting forth such changes and the effective date thereof.

 

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

 

(vi)                              Termination Event.  The occurrence of a Purchase and Sale Termination Event.

 

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

 

67











 

(c)                                  Conduct of Business.  The Servicer will carry on and conduct its business in substantially the same manner and in substantially the same fields, or fields complimentary or ancillary thereto, of enterprise as it is presently conducted, and will do all things necessary to remain duly organized, validly existing and in good standing as a domestic corporation in its jurisdiction of organization and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted if the failure to have such authority could reasonably be expected to have a Material Adverse Effect.

 

(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 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 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 7.01(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 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 receipt) remit such funds into a Collection Account.  The Servicer shall not permit funds other than Collections on Pool Receivables and other Collateral to be 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

 

68











 

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 a Collection Account Control Agreement (or an amendment thereto) 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.

 

(g)                                  Extension or Amendment of Pool Receivables.  Except as otherwise permitted in Section 8.02, 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 (if any), 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 be reasonably 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).

 

(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 Collection Account Control Agreement (or an amendment thereto) with respect to such new Collection Accounts (or any related Lock-Box) in each case (x) in form and substance reasonably satisfactory to the Administrative Agent and (y)

 

69











 

in accordance with the terms hereof and, if applicable, such Collection Account Control Agreement.

 

(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 Receivables and that portion of the Collateral in which a security interest may be created under the UCC and perfected by the filing of a financing statement under the UCC, in each case free and clear of any 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 (if necessary) 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 and that portion of the Related Security and Collections in which a security interest may be perfected by the filing of a financing statement under the UCC.  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 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 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 (with such request being hereby deemed to be an authorization as to such filing by 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 desirable, or that the Administrative Agent may reasonably request (with such request being hereby deemed to be an authorization as to such filing by the Administrative Agent), to perfect, protect or evidence any of the foregoing.

 

70











 

(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 use the proceeds of any Credit Extension for the purpose of funding any operations in, financing any investments or activities in, or, making 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 activity made unlawful by the Anti-Terrorism Laws.  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.  The Servicer shall provide to the Administrative Agent and each Lender such information and documentation as may reasonably be requested by the Administrative Agent and such Lender from time to time for purposes of compliance by the Administrative Agent and 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 and such Lender to comply therewith

 

(o)                                 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.

 

(p)                                 Linked Accounts.  Except for the Servicer’s Account, the Servicer shall not permit any “Linked Account” (as defined in the Collection Account Agreements with Wells Fargo Bank, National Association) 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, 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 not permit any “Linked Account” (as defined in the Collection Account Control Agreements with Wells Fargo Bank, National Association) to exist with respect to the Collection Accounts with account numbers ending in “1186” and “4268.”  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” (as defined in the Collection Account Agreements with Wells Fargo Bank, National Association) of all “Settlement Items” (as defined in the Collection Account Agreement with Wells Fargo Bank, National Association) 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.

 

SECTION 7.03.  Separate Existence of the Borrower.  Each of the Borrower and the Servicer hereby acknowledges that the Credit Parties 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 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

 

71











 

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) acquiring from the Originators, owning, holding, collecting or granting security 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 (i) has never been, and shall at no time be, an equityholder, director, officer, manager, member, partner, officer, employee or associate, or any immediate 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) is not a material 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 facilitating the securitization of, financial assets of any member or members of the Parent Group), and (iii) 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; provided that the term Parent Group shall not include any Person or relationship which exists solely as a result of direct or indirect ownership of, or control by, one or more common Initial Investors.  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,

 

72











 

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 immediate 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.

 

(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 7.01(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 employees as the Servicer (or any other Affiliate thereof), the salaries and expenses relating to providing benefits to such 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 employees.  The Borrower will not engage any agents other than its attorneys, auditors and other professionals, and a servicer and any other

 

73











 

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 contributions of the Receivables and Related Rights from 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

 

74











 

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 immediately correct any known misrepresentation with respect to the foregoing, and they will not operate or purport to operate as an integrated single economic unit with respect to each other or in their dealing with any other entity.

 

(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, the Borrower shall pay a fair and appropriate allocation of overhead costs between it and them, and the Borrower shall bear its fair share of such expenses, which may be paid through the Servicing Fee or otherwise.

 

ARTICLE VIII

 

ADMINISTRATION AND COLLECTION
 OF RECEIVABLES

 

SECTION 8.01.  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 8.01.  Until the Administrative Agent gives notice to Holdings (in accordance with this Section 8.01) of the designation of a new Servicer, Holdings 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 Holdings 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, Holdings 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

 

75











 

of such activities to the new Servicer, and Holdings 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)                                  Holdings acknowledges that, in making its decision to execute and deliver this Agreement, the Administrative Agent and each Lender have relied on Holdings’ agreement to act as Servicer hereunder. Accordingly, Holdings 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.

 

SECTION 8.02.  Duties of the Servicer.

 

(a)                                 The Servicer shall take or cause to be taken all such action as may be necessary 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 Secured Party, the amount of Collections to which each such Secured Party is entitled in accordance with Article III 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 Secured Party), in accordance with their respective interests, all records and documents (including computer tapes or disks) with respect to each Pool Receivable.

 

76












 

(b)                                 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 Holdings 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 Holdings 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.

 

(c)                                  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 8.03.  Collection Account Arrangements.  Prior to the Closing Date, the Borrower shall have entered into Collection 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 a Ratings Event, an Unmatured Event of Default or an Event of Default, the Administrative Agent may (with the consent of the Majority Lenders) and shall (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 Collection 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 Collection 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 8.04.  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

 

77











 

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 to collect the Pool Receivables and the Related Security, and transfer or license to a successor Servicer the use of all software necessary 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;

 

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

 

(v)                                 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

 

78











 

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 8.05.  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 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)                                 Holdings 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, Holdings shall conduct the data-processing functions of the administration of the Receivables and the Collections thereon in substantially the same way that Holdings conducted such data-processing functions while it acted as the Servicer.  In connection with any such processing functions, the Borrower shall pay to Holdings its reasonable out-of-pocket costs and expenses from the Borrower’s own funds (subject to the priority of payments set forth in Section 3.01).

 

SECTION 8.06.  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 3.01.

 

(b)                                 If the Servicer ceases to be Holdings 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 IX

 

EVENTS OF DEFAULT

 

SECTION 9.01.  Events of Default.  If any of the following events (each an “Event of Default”) shall occur:

 

79











 

(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) Holdings 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 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 a Monthly Report or an Interim Report 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;

 

(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 any Originator, the Performance Guarantor or the Servicer (but not instituted by such Person), either such proceeding is not controverted within thirty (30) days after commencement of such proceeding or 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)                                   (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;

 

80











 

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

 

(i)                                     (i) the Borrower, any Originator 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 any of its Debt that is outstanding in a principal amount of at least $40,000,000 in the aggregate 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 other event shall occur or condition shall exist under any agreement, mortgage, indenture or instrument relating to any such Debt (as referred to in clause (i) of this paragraph and shall continue after the applicable grace period (not to exceed 30 days), if any, specified in such agreement, mortgage, indenture or instrument (whether or not such failure shall have been waived under the related agreement), 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) of this paragraph) or to terminate the commitment of any lender thereunder, or (iii) any such Debt (as referred to in clause (i) 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)                                    any “Event of Default” (as defined in the Credit Agreement) shall occur under 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 7.03(c) 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 7.03(c);

 

(m)                             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 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;

 

(n)                                 (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

 

81











 

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 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 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 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 or any of their respective ERISA Affiliates (pursuant to Section 4975 of the Code); (ix) the occurrence or existence of any other similar event or condition with respect to a Pension Plan or a Multiemployer Plan, 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;

 

(o)                                 a Material Adverse Effect shall occur and remain unremedied for ten (10) Business Days or a Borrower Material Adverse Effect shall occur;

 

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

 

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

 

(r)                                    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;

 

(s)                                   one or more judgments or decrees shall be entered against the Borrower, any Originator, the Performance Guarantor or the Servicer, or any Affiliate of any of the foregoing 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 $40,000,000 (or solely with respect to the Borrower, $15,325); or

 

(t)                                    a Financial Covenant Event shall occur;

 

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

 

82











 

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 9.01 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 3.01.

 

ARTICLE X

 

THE ADMINISTRATIVE AGENT

 

SECTION 10.01.  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 10.02.  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 8.01), 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 for any statements, warranties or representations (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

 

83











 

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 10.03.  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 10.04.  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 10.05.  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 10.06.  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 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 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) may be taken by the Administrative Agent alone or without any advice or concurrence of any Lender, then the

 

84











 

Administrative Agent may take action based upon the advice or concurrence of the Majority Lenders.

 

SECTION 10.07.  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 10.08.  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 10.09.  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.  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 appointed by the 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.

 

85











 

(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 X and Article XI shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Administrative Agent.

 

SECTION 10.10.  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 XI

 

INDEMNIFICATION

 

SECTION 11.01.  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 portion of such Borrower Indemnified Amounts resulted from the bad faith, gross negligence or willful misconduct by the Borrower Indemnified Party seeking indemnification and (b) Taxes other than as described in clause (xiv) below or Taxes that represent losses, claims or damages arising from any non-Tax claim.  Without limiting or being limited by the foregoing, the Borrower shall pay on 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 3.01), 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 resulting from any of the following (but excluding Borrower Indemnified Amounts and Taxes described in clause (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;

 

86












 

(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 Monthly 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 Lien;

 

(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;

 

(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;

 

87











 

(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 Collection Account Control Agreement or any amounts payable by the Administrative Agent to a Collection Account Bank under any Collection Account Control Agreement;

 

(xvi)                       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 in each case 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;

 

(xvii)                    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;

 

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

 

(xix)                       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)                                 Notwithstanding anything to the contrary in this Agreement, solely for purposes of the Borrower’s indemnification obligations in clauses (ii), (iii), (vii) and (xi) of this Article XI, any representation, warranty or covenant qualified by the occurrence or non-occurrence of a material adverse effect or similar concepts of materiality shall be deemed to be not so qualified.

 

(c)                                  If for any reason the foregoing indemnification is unavailable (other than pursuant to the exclusions contained in Section 11.01(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,

 

88











 

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.

 

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

 

SECTION 11.02.  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 portion of such Servicer Indemnified Amounts resulted from the bad faith, gross negligence or willful misconduct by the Servicer Indemnified Party seeking indemnification, (ii) Taxes other than Taxes that represent losses, claims or damages 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 on demand, to each Servicer Indemnified Party any and all amounts necessary to indemnify such Servicer Indemnified Party 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 Monthly Report or any other written information or written 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;

 

89











 

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

 

(v)                                 the existence of any “Linked Account” (as defined in the Collection Account Agreements with Wells Fargo Bank, National Association) with respect to any Collection Account (including any such “Linked Account” permitted hereunder) and any debit from or other charge 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; or

 

(vi)                              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 11.02(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.

 

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

 

ARTICLE XII

 

MISCELLANEOUS

 

SECTION 12.01.  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

 

90











 

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, Borrowing Base Deficit, Concentration Percentage, Concentration Reserve Percentage, Defaulted Receivable, Delinquent Receivable, Eligible Receivable, Eligible Unbilled Receivable, Excess Concentration, Facility Limit, Final Maturity Date, Net Receivables Pool Balance, Stress Factor or Total Reserves (or any definitions contained therein) 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 12.01 or the definition of “Majority Lenders”; or

 

(vii)                           change the order of priority in which Collections are applied pursuant to Section 3.01.

 

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 or consent shall reduce any Fees payable by the Borrower to any Lender or delay the dates on which any such Fees are payable, in either case, without the consent of such Lender and (C) no consent with respect to any amendment, waiver or other modification of this Agreement shall be required of any Defaulting Lender, except in accordance with the terms set forth in Section 2.06(b).  For the avoidance of doubt and notwithstanding the foregoing, the definition of “Financial Covenant Event” and Section 9.01(u) may be modified by the Administrative Agent from time to time in accordance with the terms set forth in the definition of “Financial Covenant Event.”

 

SECTION 12.02.  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

 

91











 

shall be followed by hard copy sent by regular mail), and notices and communications sent by other means shall be effective when received.

 

SECTION 12.03.  Assignability; Addition of Lenders.

 

(a)                                 Assignment by Lenders.  Each Lender may assign to any Eligible Assignee 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 or an Unmatured 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).

 

(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 may treat each Person whose

 

92











 

name is recorded in the Register as a Lender under this Agreement for all purposes of this Agreement.  The Register shall be available for inspection by the Borrower, the Servicer and 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.

 

(e)                                  Participant Register.  Each Lender that sells a participation shall, acting solely for this purpose as an 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 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, so long as no Event of Default or Unmatured Event of

 

93











 

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 8.01, 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 or other central bank having jurisdiction over such Lender, 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 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 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.

 

SECTION 12.04.  Costs and Expenses.  In addition to the rights of indemnification granted under Section 11.01 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.

 

94











 

SECTION 12.05.  No Proceedings; Limitation on Payments.  Each of the Servicer and 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 12.05 shall survive any termination of this Agreement.

 

SECTION 12.06.  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 or the identity of the Administrative Agent or any other Credit Party), 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, Representatives, the Initial Investors and the Permitted Holders , (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 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; and provided, further, that no such press release shall name or otherwise identify the Administrative Agent, any other Credit Party or any of their respective Affiliates without such Person’s prior written consent (such consent not to be unreasonably withheld, conditioned or delayed).  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,

 

95











 

(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 (vi) 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 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.

 

SECTION 12.07.  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 12.08.  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.

 

96












 

SECTION 12.09.  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 4.01, 4.02, 4.03, 10.04, 10.06, 11.01, 11.02, 12.04, 12.05, 12.06, 12.09, 12.11 and 12.13 shall survive any termination of this Agreement.

 

SECTION 12.10.  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 12.10 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 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 12.02.  NOTHING IN THIS SECTION 12.10 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 12.11.  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

 

97











 

ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT.

 

SECTION 12.12.  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 12.13.  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 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 12.14.  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.

 

98











 

SECTION 12.15.  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 12.16.  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 12.17.  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.

 

SECTION 12.18.  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 12.19.  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]

 

99











 

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.

 

	
 
    	
PRA   RECEIVABLES LLC,
    
	
 
    	
as   the Borrower
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
PRA   HOLDINGS, INC.,
    
	
 
    	
as   the Servicer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    


 

Receivables Financing Agreement

 

S-1











 

	
 
    	
PNC   BANK, NATIONAL ASSOCIATION,
    
	
 
    	
as   Administrative Agent
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
PNC   BANK, NATIONAL ASSOCIATION,
    
	
 
    	
as   a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    


 

Receivables Financing Agreement

 

S-2











 

	
 
    	
THE   TORONTO-DOMINION BANK,
    
	
 
    	
as   a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    


 

Receivables Financing Agreement

 

S-3












 

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 March 22, 2016 among PRA Receivables LLC (the “Borrower”), PRA Holdings, Inc., as Servicer (the “Servicer”), the Lenders party thereto, and PNC Bank, National Association, as Administrative Agent (in such capacity, the “Administrative 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 amount of [$       ] to be made on [     , 20  ].  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 6.01 and 6.02 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;

 

(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; and

 

Exhibit A-1











 

(v)                                 the Termination Date has not occurred.

 

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,
    
	
 
    	
 
    
	
 
    	
PRA 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 March 22, 2016 among PRA Receivables LLC, as borrower (the “Borrower”), PRA Holdings, Inc., as Servicer (the “Servicer”), the Lenders party thereto, and PNC Bank, National Association, as Administrative Agent (in such capacity, the “Administrative 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 6.01 and 6.02 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; and

 

(iv)                              the Termination Date has not occurred.

 

Exhibit B-1











 

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

 

	
 
    	
Very   truly yours,
    
	
 
    	
 
    
	
 
    	
PRA   RECEIVABLES LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
  Name:
    
	
 
    	
  Title:
    


 

Exhibit B-2











 

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 12.03(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 March 22, 2016 among PRA Receivables LLC, as Borrower, PRA Holdings, Inc., as Servicer, the Lenders party thereto, and PNC Bank, National Association, as Administrative Agent (as amended, supplemented or otherwise modified from time to time, the “Agreement”).

 

(Signature Pages Follow)

 

Exhibit B-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:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
,
    	
 
    	
 
    
	
as Borrower
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:]
    	
 
    	
 
    
						


 

Exhibit B-2











 

EXHIBIT D
 Credit and Collection Policy

 

(Attached)

 











 

EXHIBIT E

Form of Monthly Report

 

(Attached)

 












 

EXHIBIT F

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 March 22, 2016 among PRA Receivables LLC (the “Borrower”), PRA Holdings, Inc., as Servicer (the “Servicer”), the Lenders party thereto, and PNC Bank, National Association, as Administrative Agent (in such capacity, the “Administrative 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.

 

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 the 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 F-1











 

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

 

	
PRA   RECEIVABLES LLC
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    


 

Exhibit F-2











 

SCHEDULE I TO COMPLIANCE CERTIFICATE

 

A.                                    Schedule of Compliance as of                                         , 20      with Section 7.02(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 the Parent and its Subsidiaries for the period ending on                                   , 20    , are attached hereto:

 

Exhibit F-3











 

EXHIBIT G

Closing Memorandum

 

(Attached)

 











 

EXHIBIT H

Form of Interim Report

 











 

EXHIBIT I

[FORM OF U.S. TAX COMPLIANCE CERTIFICATE]

 

(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is hereby made to that certain Receivables Financing Agreement, dated as of March 22, 2016 among PRA Receivables LLC (the “Borrower”), PRA Holdings, Inc., as Servicer (the “Servicer”), the Lenders party thereto, PNC Capital Markets LLC, as Structuring Agent, and PNC Bank, National Association, as Administrative Agent (in such capacity, the “Administrative 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.

 

Pursuant to the provisions of Section 4.03(f) of the Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Loan(s) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished the Administrative Agent and the Borrower with a certificate of its non-U.S. Person status on IRS Form W-8BEN or IRS Form W-8BEN-E. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

	
[NAME   OF LENDER]
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
Date:                                       , 20[  ]
    	
 
    


 

Exhibit I-1











 

[FORM OF U.S. TAX COMPLIANCE CERTIFICATE]

 

(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is hereby made to that certain Receivables Financing Agreement, dated as of March 22, 2016 among PRA Receivables LLC (the “Borrower”), PRA Holdings, Inc., as Servicer (the “Servicer”), the Lenders party thereto, PNC Capital Markets LLC, as Structuring Agent, and PNC Bank, National Association, as Administrative Agent (in such capacity, the “Administrative 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.

 

Pursuant to the provisions of Section 4.03(f) of the Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished its participating Lender with a certificate of its non-U.S. Person status on IRS Form W-8BEN or IRS Form W-8BEN-E. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing, and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

	
[NAME   OF LENDER]
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Date:                                       , 20[  ]
    	
 
    


 

Exhibit I-2











 

[FORM OF U.S. TAX COMPLIANCE CERTIFICATE]

 

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is hereby made to that certain Receivables Financing Agreement, dated as of March 22, 2016 among PRA Receivables LLC (the “Borrower”), PRA Holdings, Inc., as Servicer (the “Servicer”), the Lenders party thereto, PNC Capital Markets LLC, as Structuring Agent, and PNC Bank, National Association, as Administrative Agent (in such capacity, the “Administrative 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.

 

Pursuant to the provisions of Section 4.03(f) of the Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such participation, (iii) with respect such participation, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished its participating Lender with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or IRS Form W-8BEN-E or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or IRS Form W-8BEN-E from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

	
[NAME   OF LENDER]
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
Date:                                       , 20[  ]
    	
 
    


 

Exhibit I-3











 

[FORM OF U.S. TAX COMPLIANCE CERTIFICATE]

 

(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is hereby made to that certain Receivables Financing Agreement, dated as of March 22, 2016 among PRA Receivables LLC (the “Borrower”), PRA Holdings, Inc., as Servicer (the “Servicer”), the Lenders party thereto, PNC Capital Markets LLC, as Structuring Agent, and PNC Bank, National Association, as Administrative Agent (in such capacity, the “Administrative 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.

 

Pursuant to the provisions of Section 4.03(f) of the Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Loan(s) in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such Loan(s), (iii) with respect to the extension of credit pursuant to the Agreement or any other Transaction Document, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished the Administrative Agent and the Borrower with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or IRS Form W-8BEN-E or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or IRS Form W-8BEN-E from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

	
[NAME   OF LENDER]
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
Date:                                       , 20[  ]
    	
 
    


 

Exhibit I-4











 

SCHEDULE I
 Commitments

 

	
Party
    	
 
    	
Capacity
    	
 
    	
Commitment
    	
 
    
	
PNC
    	
 
    	
Lender
    	
 
    	
$
    	
175,000,000
    	
 
    
	
TD
    	
 
    	
Lender
    	
 
    	
$
    	
25,000,000
    	
 
    


 











 

SCHEDULE II
 Lock-Boxes, Collection Accounts and Collection Account Banks

 

	
Collection Account Bank
    	
 
    	
Collection Account Number
    	
 
    	
Associated Lock-Box (if any)
    	
 
    
	
Wells Fargo   Bank, National Association
    	
 
    	
4185444926
    	
 
    	
200072
    	
 
    
	
Wells Fargo   Bank, National Association
    	
 
    	
4128435427
    	
 
    	
205205
    	
 
    
	
Wells Fargo Bank,   National Association
    	
 
    	
7775021186
    	
 
    	
N/A
    	
 
    
	
Wells Fargo   Bank, National Association
    	
 
    	
7772004268
    	
 
    	
N/A
    	
 
    


 

Schedule II-1











 

SCHEDULE III
 Notice Addresses

 

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

 

PRA Receivables LLC
 4130 ParkLake Avenue
 Suite 400
 Raleigh, NC 27612
 Telephone:  (919) 786-8200
 Facsimile:  (919) 786-8201
 Attention:  Chief Financial Officer

 

with a copy to:

 

PRA Health Sciences, Inc.
 4130 ParkLake Avenue
 Suite 400
 Raleigh, NC 27612
 Telephone:  (919) 786-8200
 Facsimile:  (919) 786-8201
 Attention:  General Counsel

 

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

 

PRA Holdings, Inc.
 4130 ParkLake Avenue
 Suite 400
 Raleigh, NC 27612
 Telephone:  (919) 786-8200
 Facsimile:  (919) 786-8201

 

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

 

PNC Bank, National Association

Three PNC Plaza

225 Fifth Avenue

Pittsburgh, PA 15222

Telephone:  (412) 768-3090

Facsimile:  (412) 762-9184

Attention:  Robyn Reeher

 

(D)                               in the case of TD, at the following address:

 

The Toronto-Dominion Bank

77 King Street West

 











 

TD North Tower, 25th Floor

Toronto, Canada  M5K 1A2
 Telephone:  416-308-9628

Facsimile:  416-983-1761

Attention:  Annie Tang

 

(E)                                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.

 











 

EXHIBIT B

 

NON-RATABLE LOAN

 

PART I:

 

	
Lender
    	
 
    	
Purchase Price
    	
 
    
	
The   Toronto-Dominion Bank
    	
 
    	
$
    	
22,500,000
    	
 
    
					


 

PART II:

 

Wiring Instructions with respect to amounts payable to Borrower:

 

Bank: Wells Fargo Bank, N.A.
  ABA: 121000248
 Acct No: 4185444926