Document:

Exhibit 10.2

 

EXECUTION VERSION

 

PURCHASE AND SALE AGREEMENT

 

Dated as of March 22, 2016

 

among

 

VARIOUS ENTITIES LISTED ON SCHEDULE I HERETO,

as Originators,

 

PRA HOLDINGS, INC.,

as Servicer,

 

and

 

PRA RECEIVABLES LLC,

as Buyer

 

 

CONTENTS

 

	
Clause
    	
 
    	
Subject Matter
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE I
    
	
AGREEMENT TO   PURCHASE AND SELL
    
	
2
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 1.1
    	
 
    	
Agreement To Purchase   and Sell
    	
 
    	
2
    
	
SECTION 1.2
    	
 
    	
Timing of Purchases
    	
 
    	
3
    
	
SECTION 1.3
    	
 
    	
Consideration for   Purchases
    	
 
    	
3
    
	
SECTION 1.4
    	
 
    	
Purchase and Sale   Termination Date
    	
 
    	
3
    
	
SECTION 1.5
    	
 
    	
Intention of the   Parties
    	
 
    	
3
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE II
    
	
PURCHASE REPORT;   CALCULATION OF PURCHASE PRICE
    
	
4
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 2.1
    	
 
    	
Purchase Report
    	
 
    	
4
    
	
SECTION 2.2
    	
 
    	
Calculation of Purchase   Price
    	
 
    	
4
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE III
    
	
CONTRIBUTIONS   AND PAYMENT OF PURCHASE PRICE
    
	
5
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 3.1
    	
 
    	
Initial Contribution of   Receivables and Initial Purchase Price Payment
    	
 
    	
5
    
	
SECTION 3.2
    	
 
    	
Subsequent Purchase   Price Payments
    	
 
    	
5
    
	
SECTION 3.3
    	
 
    	
Settlement as to   Specific Receivables and Dilution
    	
 
    	
7
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE IV
    
	
CONDITIONS OF   PURCHASES; ADDITIONAL ORIGINATORS
    
	
8
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 4.1
    	
 
    	
Conditions Precedent to   Initial Purchase
    	
 
    	
8
    
	
SECTION 4.2
    	
 
    	
Certification as to   Representations and Warranties
    	
 
    	
9
    
	
SECTION 4.3
    	
 
    	
Additional Originators
    	
 
    	
9
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE V
    
	
REPRESENTATIONS   AND WARRANTIES OF THE ORIGINATORS
    
	
10
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 5.1
    	
 
    	
Existence and Power
    	
 
    	
10
    
	
SECTION 5.2
    	
 
    	
Power and Authority;   Due Authorization
    	
 
    	
10
    
	
SECTION 5.3
    	
 
    	
No Conflict or   Violation
    	
 
    	
10
    
	
SECTION 5.4
    	
 
    	
Governmental Approvals
    	
 
    	
11
    
	
SECTION 5.5
    	
 
    	
Valid Sale
    	
 
    	
11
    
	
SECTION 5.6
    	
 
    	
Binding Effect of   Agreement
    	
 
    	
11
    
	
SECTION 5.7
    	
 
    	
Accuracy of Information
    	
 
    	
11
    
	
SECTION 5.8
    	
 
    	
Actions, Suits
    	
 
    	
11
    
	
SECTION 5.9
    	
 
    	
No Material Adverse   Effect
    	
 
    	
12
    
	
SECTION 5.10
    	
 
    	
Names and Location
    	
 
    	
12
    
	
SECTION 5.11
    	
 
    	
Margin Stock
    	
 
    	
12
    
	
SECTION 5.12
    	
 
    	
Eligible Receivables
    	
 
    	
12
    

 

i

 

CONTENTS

 

	
Clause
    	
 
    	
Subject Matter
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 5.13
    	
 
    	
Credit and Collection   Policy
    	
 
    	
12
    
	
SECTION 5.14
    	
 
    	
Investment Company Act
    	
 
    	
12
    
	
SECTION 5.15
    	
 
    	
Anti-Money   Laundering/International Trade Law Compliance
    	
 
    	
12
    
	
SECTION 5.16
    	
 
    	
Financial Condition
    	
 
    	
13
    
	
SECTION 5.17
    	
 
    	
Tax Status
    	
 
    	
13
    
	
SECTION 5.18
    	
 
    	
ERISA
    	
 
    	
13
    
	
SECTION 5.19
    	
 
    	
Bulk Sales
    	
 
    	
14
    
	
SECTION 5.20
    	
 
    	
No Fraudulent   Conveyance
    	
 
    	
14
    
	
SECTION 5.21
    	
 
    	
Ordinary Course of   Business
    	
 
    	
14
    
	
SECTION 5.22
    	
 
    	
Good Title Perfection
    	
 
    	
14
    
	
SECTION 5.23
    	
 
    	
Perfection   Representations
    	
 
    	
14
    
	
SECTION 5.24
    	
 
    	
Reliance on Separate   Legal Identity
    	
 
    	
15
    
	
SECTION 5.25
    	
 
    	
Opinions
    	
 
    	
15
    
	
SECTION 5.26
    	
 
    	
[Reserved]
    	
 
    	
15
    
	
SECTION 5.27
    	
 
    	
Nature of Pool   Receivables
    	
 
    	
16
    
	
SECTION 5.28
    	
 
    	
Compliance with   Applicable Laws
    	
 
    	
16
    
	
SECTION 5.29
    	
 
    	
Servicing Programs
    	
 
    	
16
    
	
SECTION 5.30
    	
 
    	
Adverse Change in   Receivables
    	
 
    	
16
    
	
SECTION 5.31
    	
 
    	
Compliance with   Transaction Documents
    	
 
    	
16
    
	
SECTION 5.32
    	
 
    	
Reaffirmation of   Representations and Warranties by each Originator
    	
 
    	
16
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE VI
    
	
COVENANTS OF THE   ORIGINATORS
    
	
16
    
	
 
    
	
SECTION 6.1
    	
 
    	
Covenants
    	
 
    	
16
    
	
SECTION 6.2
    	
 
    	
Separateness Covenants
    	
 
    	
22
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE VII
    
	
ADDITIONAL   RIGHTS AND OBLIGATIONS IN RESPECT OF RECEIVABLES
    
	
22
    
	
 
    
	
SECTION 7.1
    	
 
    	
Rights of the Buyer
    	
 
    	
22
    
	
SECTION 7.2
    	
 
    	
Responsibilities of the   Originators
    	
 
    	
22
    
	
SECTION 7.3
    	
 
    	
Further Action   Evidencing Purchases
    	
 
    	
23
    
	
SECTION 7.4
    	
 
    	
Application of Collections
    	
 
    	
24
    
	
SECTION 7.5
    	
 
    	
Performance of   Obligations
    	
 
    	
24
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE VIII
    
	
PURCHASE AND   SALE TERMINATION EVENTS
    
	
24
    
	
 
    
	
SECTION 8.1
    	
 
    	
Purchase and Sale   Termination Events
    	
 
    	
24
    
	
SECTION 8.2
    	
 
    	
Remedies
    	
 
    	
25
    

 

ii

 

CONTENTS

 

	
Clause
    	
 
    	
Subject Matter
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE IX
    
	
INDEMNIFICATION
    
	
25
    
	
 
    
	
SECTION 9.1
    	
 
    	
Indemnities by the   Originators
    	
 
    	
25
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE X
    
	
MISCELLANEOUS
    
	
28
    
	
SECTION 10.1
    	
 
    	
Amendments, etc.
    	
 
    	
28
    
	
SECTION 10.2
    	
 
    	
Notices, etc.
    	
 
    	
28
    
	
SECTION 10.3
    	
 
    	
No Waiver; Cumulative   Remedies
    	
 
    	
28
    
	
SECTION 10.4
    	
 
    	
Binding Effect;   Assignability
    	
 
    	
29
    
	
SECTION 10.5
    	
 
    	
Governing Law
    	
 
    	
29
    
	
SECTION 10.6
    	
 
    	
Costs, Expenses and   Taxes
    	
 
    	
29
    
	
SECTION 10.7
    	
 
    	
SUBMISSION TO   JURISDICTION
    	
 
    	
30
    
	
SECTION 10.8
    	
 
    	
WAIVER OF JURY TRIAL
    	
 
    	
30
    
	
SECTION 10.9
    	
 
    	
Captions and Cross   References; Incorporation by Reference
    	
 
    	
30
    
	
SECTION 10.10
    	
 
    	
Execution in   Counterparts
    	
 
    	
31
    
	
SECTION 10.11
    	
 
    	
Acknowledgment and   Agreement
    	
 
    	
31
    
	
SECTION 10.12
    	
 
    	
No Proceeding
    	
 
    	
31
    
	
SECTION 10.13
    	
 
    	
Mutual Negotiations
    	
 
    	
31
    
	
SECTION 10.14
    	
 
    	
Severability
    	
 
    	
31
    

 

SCHEDULES

 

	
Schedule I
    	
 
    	
List and Location of Each Originator
    
	
Schedule II
    	
 
    	
Location of Books and Records of Originators
    
	
Schedule III
    	
 
    	
Trade Names
    
	
Schedule IV
    	
 
    	
Actions/Suits
    
	
Schedule V
    	
 
    	
Notice Addresses
    

 

EXHIBITS

 

	
Exhibit A
    	
 
    	
Form of Purchase   Report
    
	
Exhibit B
    	
 
    	
Form of   Subordinated Note
    
	
Exhibit C
    	
 
    	
Form of Joinder   Agreement
    

 

iii

 

This PURCHASE AND SALE AGREEMENT (as amended, restated, supplemented or otherwise modified from time to time, this “Agreement”), dated as of March 22, 2016 is entered into among PHARMACEUTICAL RESEARCH ASSOCIATES, INC., a Virginia corporation, RESEARCH PHARMACEUTICAL SERVICES, INC., a Delaware corporation, and the VARIOUS OTHER ENTITIES LISTED ON SCHEDULE I HERETO (collectively, the “Originators” and each, an “Originator”), PRA HOLDINGS, INC. , a Delaware corporation (“Holdings”), as initial Servicer (as defined below), and PRA RECEIVABLES LLC, a Delaware limited liability company (the “Buyer”).

 

DEFINITIONS

 

Unless otherwise indicated herein, capitalized terms used and not otherwise defined in this Agreement are defined in Article I of the Receivables Financing Agreement, dated as of the date hereof (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Receivables Financing Agreement”), among the Buyer, as borrower, Holdings, as initial Servicer (in such capacity, the “Servicer”), the Persons from time to time party thereto as Lenders, and PNC Bank, National Association, as Administrative Agent.  The rules of construction, interpretive provisions and other terms set forth in Section 1.02 of the Receivables Financing Agreement apply to this Agreement, mutatis mutandis, as if set forth herein in their entirety.

 

BACKGROUND

 

1.             The Buyer is a special purpose limited liability company, all of the issued and outstanding membership interests of which are owned by Pharmaceutical Research Associates, Inc., a Virginia corporation (“Contributing Originator”).

 

2.             The Originators generate Receivables in the ordinary course of their businesses.

 

3.             The Originators, in order to finance their respective businesses, wish to sell and/or, in the case of Contributing Originator, contribute Receivables and the Related Rights to the Buyer, and the Buyer is willing to purchase and/or accept such Receivables and the Related Rights from the Originators, on the terms and subject to the conditions set forth herein.

 

4.             The Originators and the Buyer intend each such transaction to be a true sale and/or, in the case of Contributing Originator, an absolute contribution and conveyance of Receivables and the Related Rights by each Originator to the Buyer, providing the Buyer with the full benefits of ownership of the Receivables, and the Originators and the Buyer do not intend the transactions hereunder to be characterized as a loan from the Buyer to any Originator.

 

5.             The Buyer intends to pledge the Receivables and the Related Rights to the Administrative Agent pursuant to the Receivables Financing Agreement.

 

NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:

 

Purchase and Sale Agreement

 

 

ARTICLE I
 AGREEMENT TO PURCHASE AND SELL

 

SECTION 1.1  Agreement To Purchase and Sell.  On the terms and subject to the conditions set forth in this Agreement, each Originator, severally and for itself, agrees to sell to the Buyer, and the Buyer agrees to purchase from such Originator, from time to time on or after the Closing Date, but before the Purchase and Sale Termination Date (as defined in Section 1.4), all of such Originator’s right, title and interest in and to:

 

(a)           each Receivable (other than Contributed Receivables as defined in Section 3.1(a)) of such Originator that existed and was owing to such Originator at the closing of such Originator’s business on the Cut-Off Date (as defined below);

 

(b)           each Receivable (other than Contributed Receivables) generated by such Originator from and including the Cut-Off Date to but excluding the Purchase and Sale Termination Date;

 

(c)           all Related Security with respect to each such Receivable;

 

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

 

(e)           all Collections and other proceeds (as defined in the UCC) of any of the foregoing that are or were received by such Originator on or after the Cut-Off Date, including, without limitation, all funds which either are received by such Originator, the Buyer or the Servicer from or on behalf of the Obligors in payment of any amounts owed (including, without limitation, invoice price, finance charges, interest and all other charges) in respect of any of the above Receivables or are applied to such amounts owed by the Obligors (including, without limitation, any insurance payments that such Originator, the Buyer or the Servicer applies in the ordinary course of its business to amounts owed in respect of any of the above Receivables, and net proceeds of sale or other disposition of repossessed goods or other collateral or property of the Obligors in respect of any of the above Receivables or any other parties directly or indirectly liable for payment of such Receivables).

 

Except as provided in Section 3.3, all purchases and contributions hereunder shall be made without recourse, but shall be made pursuant to, and in reliance upon, the representations, warranties and covenants of the Originators set forth in this Agreement.  No obligation or liability to any Obligor on any Receivable is intended to be assumed by the Buyer hereunder, and any such assumption is expressly disclaimed.  The property, proceeds and rights described in clauses (c) through (h) above, including with respect to any Contributed Receivable, are herein referred to as the “Related Rights”, and the Buyer’s foregoing commitment to purchase Receivables and Related Rights is herein called the “Purchase Facility.”

 

As used herein, “Cut-Off Date” means (a) with respect to each Originator party hereto on the date hereof, February 29, 2016, and (b) with respect to any Originator that first becomes a

 

2

 

party hereto after the date hereof, the calendar day prior to the date on which such Originator becomes a party hereto or such other date as the Buyer and such Originator agree to in writing.

 

SECTION 1.2  Timing of Purchases.

 

(a)           Closing Date Purchases.  Effective on the Closing Date, each Originator hereby sells to the Buyer, and the Buyer hereby purchases, such Originator’s entire right, title and interest in, to and under (i) each Receivable (other than Contributed Receivables) that existed and was owing to such Originator at the Cut-Off Date, (ii) each Receivable (other than Contributed Receivables) generated by such Originator from and including the Cut-Off Date, to and including the Closing Date, and (iii) all Related Rights with respect thereto.

 

(b)           Subsequent Purchases.  After the Closing Date, until the Purchase and Sale Termination Date, each Receivable and the Related Rights generated by each Originator shall be, and shall be deemed to have been, sold or contributed, as applicable, by such Originator to the Buyer immediately (and without further action) upon the creation of such Receivable.

 

SECTION 1.3  Consideration for Purchases.  On the terms and subject to the conditions set forth in this Agreement, the Buyer agrees to make Purchase Price payments to the Originators and to reflect all capital contributions in accordance with Article III.

 

SECTION 1.4  Purchase and Sale Termination Date.  The “Purchase and Sale Termination Date” shall be the earlier to occur of (a) the date the Purchase Facility is terminated pursuant to Section 8.2(a) and (b) the Final Payout Date.

 

SECTION 1.5  Intention of the Parties.  It is the express intent of each Originator and the Buyer that each conveyance by such Originator to the Buyer pursuant to this Agreement of the Receivables, including without limitation, all Receivables, if any, constituting general intangibles as defined in the UCC, and all Related Rights be construed as a valid and perfected sale and absolute assignment (without recourse except as provided herein) of such Receivables and Related Rights by such Originator to the Buyer (rather than the grant of a security interest to secure a debt or other obligation of such Originator) and that the right, title and interest in and to such Receivables and Related Rights conveyed to the Buyer be prior to the rights of and enforceable against all other Persons at any time, including, without limitation, lien creditors, secured lenders, purchasers and any Person claiming through such Originator.  However, if, contrary to the mutual intent of the parties, any conveyance of Receivables, including without limitation any Receivables constituting general intangibles as defined in the UCC, and all Related Rights is not construed to be both a valid and perfected sale and absolute assignment of such Receivables and Related Rights, and a conveyance of such Receivables and Related Rights that is prior to the rights of and enforceable against all other Persons at any time, including without limitation lien creditors, secured lenders, purchasers and any Person claiming through such Originator, then, it is the intent of such Originator and the Buyer that (i) this Agreement also shall be deemed to be, and hereby is, a security agreement within the meaning of the UCC and (ii) such Originator shall be deemed to have granted to the Buyer as of the date of this Agreement, and such Originator hereby grants to the Buyer a security interest in, to and under all of such Originator’s right, title and interest in and to: (A) the Receivables and the Related Rights now existing and hereafter created by such Originator transferred or purported to be transferred

 

3

 

hereunder, (B) all monies due or to become due and all amounts received with respect thereto and (C) all books and records of such Originator to the extent related to any of the foregoing.

 

ARTICLE II
 PURCHASE REPORT; CALCULATION OF PURCHASE PRICE

 

SECTION 2.1  Purchase Report.  On the Closing Date and on each date when an Monthly Report is due to be delivered under the Receivables Financing Agreement (each such date, a “Monthly Purchase Report Date”), the Servicer shall deliver to the Buyer and each Originator a report in substantially the form of Exhibit A (each such report being herein called a “Purchase Report”) setting forth, among other things:

 

(a)           Receivables purchased by the Buyer from each Originator, or contributed to the capital of the Buyer by Contributing Originator, on the Closing Date (in the case of the Purchase Report to be delivered on the Closing Date);

 

(b)           Receivables purchased by the Buyer from each Originator, or contributed to the capital of the Buyer by Contributing Originator, during the Fiscal Month immediately preceding such Monthly Purchase Report Date (in the case of each subsequent Purchase Report); and

 

(c)           the calculations of reductions of the Purchase Price for any Receivables as provided in Section 3.3(a) and (b).

 

SECTION 2.2  Calculation of Purchase Price.  The “Purchase Price” to be paid to each Originator in accordance with the terms of Article III for the Receivables and the Related Rights that are purchased hereunder from such Originator shall be determined in accordance with the following formula:

 

	
PP
    	
=
    	
OB x FMVD
    
	
 
    	
 
    	
 
    
	
where:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
PP
    	
=
    	
Purchase Price for each Receivable as calculated   on the relevant Payment Date.
    
	
 
    	
 
    	
 
    
	
OB
    	
=
    	
The Outstanding Balance of such Receivable on the   relevant Payment Date.
    
	
 
    	
 
    	
 
    
	
FMVD
    	
=
    	
Fair Market Value Discount, as measured on such   Payment Date, which is equal to the quotient (expressed as percentage) of   (a) one, divided by (b) the sum of (i) one, plus   (ii) the product of (A) the Prime Rate on such Payment Date, times   (B) a fraction, the numerator of which is the Days’ Sales Outstanding   (calculated as of the last day of the Fiscal Month immediately preceding such   Payment Date) and the denominator of which is 365 or 366, as applicable.
    

 

4

 

“Payment Date” means (i) the Closing Date and (ii) each Business Day thereafter that the Originators are open for business.

 

“Prime Rate” means a per annum rate equal to the “U.S. Prime Rate” as published in the “Money Rates” section of The Wall Street Journal or if such information ceases to be published in The Wall Street Journal, the per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate, or, if such rate is no longer quoted therein, any similar rate quoted therein or any similar release by the Federal Reserve Board.

 

ARTICLE III
 CONTRIBUTIONS AND PAYMENT OF PURCHASE PRICE

 

SECTION 3.1  Initial Contribution of Receivables and Initial Purchase Price Payment.

 

(a)           On the Closing Date, Contributing Originator shall, and hereby does, contribute to the capital of the Buyer Receivables and Related Rights consisting of each Receivable of Contributing Originator that exists and is owing to Contributing Originator on the Closing Date beginning with the oldest of such Receivables and continuing chronologically thereafter such that the equity (taking into account any cash contributions made on or prior to the Closing Date) held by Contributing Originator in the Buyer, after giving effect to such contribution of Receivables (the value of which shall be determined based on the Purchase Price definition), shall be at least equal to the Required Capital Amount.  Each Receivable contributed by Contributing Originator to the capital of the Buyer pursuant to this Section 3.1(a) and Section 3.2 below is herein referred to as a “Contributed Receivable”.

 

(b)           On the terms and subject to the conditions set forth in this Agreement, the Buyer agrees to pay to each Originator the Purchase Price for the purchase to be made from such Originator on the Closing Date (i) to the extent the Buyer has cash available therefor, partially in cash (in an amount to be agreed between the Buyer and such Originator and set forth in the initial Purchase Report) and, solely in the case of Contributing Originator to the extent elected by Contributing Originator in its sole discretion, by accepting a contribution to the Buyer’s capital and (ii) the remainder by issuing a promissory note in the form of Exhibit B to such Originator (each such promissory note, as it may be amended, supplemented, endorsed or otherwise modified from time to time, together with all promissory notes issued from time to time in substitution therefor or renewal thereof in accordance with the Transaction Documents, each being herein called a “Subordinated Note”) with an initial principal amount equal to the remaining Purchase Price payable to such Originator not paid in cash or, in the case of Contributing Originator, contributed to the Buyer’s capital.

 

SECTION 3.2  Subsequent Purchase Price Payments.  On each Payment Date subsequent to the Closing Date, on the terms and subject to the conditions set forth in this Agreement, the Buyer shall pay the Purchase Price to each Originator for the Receivables and the Related Rights generated by such Originator on such Payment Date:

 

5

 

(a)           First, in cash to each other Originator to the extent the Buyer has cash available therefor (and such payment is not prohibited under the Receivables Financing Agreement);

 

(b)           Second, solely in the case of Contributing Originator, to the extent elected by Contributing Originator in its sole discretion, by accepting a contribution of such Receivable and the Related Rights to its capital in an amount equal to such portion of such Purchase Price as elected by the Contributing Originator; and

 

(c)           Third, to the extent of any remaining portion of the Purchase Price, the principal amount outstanding under the applicable Subordinated Note shall be automatically increased by an amount equal to the least of (x) such remaining portion of such Purchase Price, (y) the maximum increase in the principal balance of the applicable Subordinated Note that could be made without rendering the Buyer’s Net Worth less than the Required Capital Amount and (z) the maximum increase in the principal balance of the applicable Subordinated Note that could be made without rendering the aggregate outstanding principal amount of all Subordinated Notes to exceed 30% of the aggregate Outstanding Balance of the Receivables on the date of such increase;

 

provided, however, that if more than one Originator is selling Receivables to the Buyer on the date of such purchase, the Buyer shall make cash payments among the Originators in such a way as to minimize to the greatest extent practicable the aggregate principal amounts outstanding under the Subordinated Notes; provided, further, however, that the foregoing shall not be construed to require Contributing Originator to make any capital contribution to the Buyer.

 

“Net Worth” has the meaning set forth under “Borrower’s Net Worth” in the Receivables Financing Agreement.

 

All amounts paid by the Buyer to any Originator shall be allocated first to the payment of accrued and unpaid interest on the Subordinated Note of such Originator and second to the repayment of the principal outstanding on the Subordinated Note of such Originator to the extent of such outstanding principal thereof as of the date of such payment before such amounts may be allocated for any other purpose.  The Servicer shall make all appropriate record keeping entries with respect to each of the Subordinated Notes to reflect the foregoing payments and payments and reductions made pursuant to Section 3.3, and the Servicer’s books and records shall constitute rebuttable presumptive evidence of the principal amount of, and accrued interest on, each of the Subordinated Notes at any time.  Each Originator hereby irrevocably authorizes the Servicer to mark the Subordinated Notes “CANCELED” and to return such Subordinated Notes to the Buyer upon the final payment thereof after the occurrence of the Purchase and Sale Termination Date.  Notwithstanding any contrary provision of any Transaction Document, default in the payment of principal or interest under any Subordinated Note shall not constitute an Unmatured Event of Default, Event of Default or a Purchase and Sale Termination Event.

 

If, on any Business Day, the Buyer is unable to pay the Purchase Price for Receivables and Related Rights pursuant to this Section 3.2, then the Originators shall on such Business Day provide written notice thereof to the Administrative Agent.

 

6

 

SECTION 3.3  Settlement as to Specific Receivables and Dilution.

 

(a)           If, (i) on the day of purchase of any Receivable from an Originator hereunder, any of the representations or warranties set forth in Sections 5.5, 5.12, 5.20, 5.22, 5.23 or 5.27 are not true with respect to such Receivable or (ii) as a result of any action or inaction (other than solely as a result of the failure to collect such Receivable due to a discharge in bankruptcy or similar insolvency proceeding or other credit related reasons with respect to the relevant Obligor) of such Originator, on any subsequent day, any of such representations or warranties set forth in Sections 5.5, 5.12, 5.20, 5.22, 5.23 or 5.27 is no longer true with respect to such Receivable, then the Buyer shall be entitled to a credit against such Originator in an amount equal to the then Outstanding Balance of such Receivable, which shall be accounted to such Originator as provided in clause (c) below; provided, that if the Buyer thereafter receives payment on account of the Outstanding Balance of such Receivable, the Buyer promptly shall deliver such funds to such Originator.

 

(b)           If, on any day, the Outstanding Balance of any Receivable purchased or contributed hereunder is reduced or canceled as a result of (A) any defective, rejected or returned goods or services, any cash or other discount, or any failure by an Originator to deliver any goods or perform any services or otherwise perform under the underlying Contract or invoice, (B) any change in or cancellation of any of the terms of such Contract or invoice or any other adjustment by an Originator or the Servicer which reduces the amount payable by the Obligor on the related Receivable or (C) any rebates, warranties, allowances or charge-backs or (D) any setoff or credit in respect of any claim by the Obligor thereof against the applicable Originator (whether such claim arises out of the same or a related transaction or an unrelated transaction), or (ii) subject to any specific dispute, offset, counterclaim or defense whatsoever against the applicable Originator (except the discharge in bankruptcy of the Obligor thereof), then the Buyer shall be entitled to a credit against such Originator in an amount of such net reduction or dispute and shall be accounted to such Originator as provided in clause (c) below.

 

(c)           Any credits that the Buyer is entitled to pursuant to clause (a) or (b) above shall be applied as a credit for the account of the Buyer against the Purchase Price of Receivables subsequently purchased by the Buyer from such Originator hereunder; provided, however if there have been no purchases of Receivables from such Originator (or insufficiently large purchases of Receivables) to create a Purchase Price sufficient to so apply such credit against, the amount of such credit:

 

(i)            to the extent of any outstanding principal balance under the Subordinated Note payable to such Originator, shall be deemed to be a payment under, and shall be deducted from the principal amount outstanding under, the Subordinated Note payable to such Originator; and

 

(ii)           after making any deduction pursuant to clause (i) above, shall be paid in cash to the Buyer by such Originator in the manner and for application as described in the following proviso;

 

provided, further, that at any time (x) when an Event of Default or an Unmatured Event of Default exists under the Receivables Financing Agreement or (y) on or after the Purchase and

 

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Sale Termination Date, the amount of any such credit shall be paid by such Originator to the Buyer in cash by deposit of immediately available funds into a Collection Account for application by the Servicer to the same extent as if Collections of the applicable Receivable in such amount had actually been received on such date.

 

ARTICLE IV
 CONDITIONS OF PURCHASES; ADDITIONAL ORIGINATORS

 

SECTION 4.1  Conditions Precedent to Initial Purchase.  The initial purchase hereunder is subject to the condition precedent that the Buyer and the Administrative Agent (as the Buyer’s assignee) shall have received, on or before the Closing Date, the following, each (unless otherwise indicated) dated the Closing Date, and each in form and substance satisfactory to the Buyer and the Administrative Agent (as the Buyer’s assignee):

 

(a)           a copy of the resolutions or unanimous written consent of the board of directors or other governing body of each Originator, approving this Agreement and the other Transaction Documents to be executed and delivered by it and the transactions contemplated hereby and thereby, certified by the Secretary or Assistant Secretary of such Originator;

 

(b)           good standing certificates for each Originator issued as of a recent date acceptable to the Buyer and the Administrative Agent (as the Buyer’s assignee) by the Secretary of State (or similar official) of the jurisdiction of such Originator’s organization or formation and each other jurisdiction where such Originator is required to be qualified to transact business, except where the failure to be so qualified would not reasonably be expected to have a Material Adverse Effect;

 

(c)           a certificate of the Secretary or Assistant Secretary of each Originator, certifying the names and true signatures of the officers authorized on such Person’s behalf to sign this Agreement and the other Transaction Documents to be executed and delivered by it (on which certificate the Servicer, the Buyer, the Administrative Agent (as the Buyer’s assignee) and each Lender may conclusively rely until such time as the Servicer, the Buyer and the Administrative Agent (as the Buyer’s assignee) shall receive from such Person a revised certificate meeting the requirements of this clause (c));

 

(d)           the certificate or articles of incorporation or other organizational document of each Originator (including all amendments and modifications thereto) duly certified by the Secretary of State (or similar official) of the jurisdiction of such Originator’s organization as of a recent date, together with a copy of the by-laws or other governing documents of such Originator (including all amendments and modifications thereto), as applicable, each duly certified by the Secretary, an Assistant Secretary of such Originator;

 

(e)           proper financing statements (Form UCC-1) that have been duly authorized and name each Originator as the debtor/seller and the Buyer as the buyer/assignor (and the Administrative Agent, for the benefit of the Lenders, as secured party/assignee) of the Receivables generated by such Originator as may be necessary under the UCC of all appropriate jurisdictions to perfect the Buyer’s ownership or security interest in such Receivables and that

 

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portion of the Related Rights in which an ownership or security interest may be perfected by the filing of a financing statement under the UCC;

 

(f)            a written search report from a Person satisfactory to the Buyer and the Administrative Agent (as the Buyer’s assignee) listing all effective financing statements that name the Originators as debtors or sellers and that are filed in all jurisdictions in which filings may be made against such Person pursuant to the applicable UCC, together with copies of such financing statements (none of which, except for those described in the foregoing clause (e) (and/or released or terminated, as the case may be, prior to the date hereof), shall cover any Receivable or any Related Rights which are to be sold to the Buyer hereunder), and tax and judgment lien search reports (including, without limitation, liens of the PBGC) from a Person satisfactory to the Buyer and the Administrative Agent (as the Buyer’s assignee) showing no evidence of such liens filed against any Originator;

 

(g)           favorable opinions of counsel to the Originators, in form and substance satisfactory to the Buyer and the Administrative Agent;

 

(h)           a copy of a Subordinated Note in favor of each Originator, duly executed by the Buyer; and

 

(i)            evidence (i) of the execution and delivery by each of the parties thereto of each of the other Transaction Documents to be executed and delivered by it in connection herewith and (ii) that each of the conditions precedent to the execution, delivery and effectiveness of such other Transaction Documents has been satisfied to the Buyer’s and the Administrative Agent’s (as the Buyer’s assignee) satisfaction.

 

SECTION 4.2  [Reserved].

 

SECTION 4.3  Additional Originators.  Additional Persons may be added as Originators hereunder, with the prior written consent of the Buyer and the Administrative Agent (which consents may be granted or withheld in their sole discretion); provided that the following conditions are satisfied or waived in writing by the Administrative Agent on or before the date of such addition:

 

(a)           the Servicer shall have given the Buyer and the Administrative Agent at least thirty days’ prior written notice of such proposed addition and the identity of the proposed additional Originator and shall have provided such other information with respect to such proposed additional Originator as the Buyer, the Administrative Agent or any Lender may reasonably request;

 

(b)           such proposed additional Originator shall have executed and delivered to the Buyer and the Administrative Agent an agreement substantially in the form attached hereto as Exhibit C (a “Joinder Agreement”);

 

(c)           such proposed additional Originator shall have delivered to the Buyer and the Administrative Agent (as the Buyer’s assignee) each of the documents with respect to such Originator described in Section 4.1, in each case in form and substance satisfactory to the Buyer and the Administrative Agent (as the Buyer’s assignee);

 

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(d)           no Purchase and Sale Termination Event or Unmatured Purchase and Sale Termination Event shall have occurred and be continuing; and

 

(e)           no Event of Default or Unmatured Event of Default shall have occurred and be continuing.

 

ARTICLE V
 REPRESENTATIONS AND WARRANTIES OF THE ORIGINATORS

 

In order to induce the Buyer to enter into this Agreement and to make purchases hereunder, each Originator hereby represents and warrants with respect to itself that each representation and warranty concerning it or the Receivables sold by it hereunder that is contained in the Receivables Financing Agreement is true and correct, and hereby makes the representations and warranties set forth in this Article V:

 

SECTION 5.1  Existence and Power.  Such Originator (i) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, (ii) 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 and (iii) 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 Material Adverse Effect.

 

SECTION 5.2  Power and Authority; Due Authorization.  Such Originator (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 Receivables and the Related Rights to the Buyer 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.

 

SECTION 5.3  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 it 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 material indenture, sale agreement, credit agreement, loan agreement, security agreement, mortgage, deed of trust, or other agreement or instrument to which such Originator is a party or by which it or a material portion 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.

 

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SECTION 5.4  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 Material Adverse Effect, all authorizations, consents, orders and approvals of, or other actions by, any Governmental Authority that are required to be obtained by such Originator in connection with the grant of a security interest in the Receivables and the Related Rights to the Buyer hereunder or the due execution, delivery and performance by such Originator of this Agreement or any other Transaction Document to which it is a party and the consummation by such Originator 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.

 

SECTION 5.5  Valid Sale.  Each sale of Receivables and the Related Rights made by such Originator pursuant to this Agreement shall constitute a valid sale, transfer and assignment of Receivables and Related Rights to the Buyer, enforceable against creditors of, and purchasers from, such Originator, 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.

 

SECTION 5.6  Binding Effect of Agreement.  This Agreement and each of the other Transaction Documents to which it is a party constitute legal, valid and binding obligations of such Originator, enforceable against such Originator 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.

 

SECTION 5.7  Accuracy of Information.  All certificates, reports, statements, documents and other written information furnished to the Buyer, the Administrative Agent or any other Credit Party by or on behalf of such Originator 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, complete and correct in all material respects on the date the same are furnished to the Buyer, 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.

 

SECTION 5.8  Actions, Suits.  Except as set forth on Schedule IV, (i)  there is no action, suit, proceeding or investigation pending or, to the best knowledge of such Originator, threatened, against such Originator before any Governmental Authority and (ii) such Originator 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 sale, contribution or grant of a security interest in any Receivable or Related Right by such Originator to the Buyer, the ownership or acquisition by the Buyer of any Receivables or Related

 

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Right 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 such Originator 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 Material Adverse Effect.

 

SECTION 5.9  No Material Adverse Effect.  Since December 31, 2015, there has been no Material Adverse Effect with respect to such Originator.

 

SECTION 5.10  Names and Location.  Except as described in Schedule III, such Originator has not used any corporate names, trade names or assumed names since the date occurring five calendar years prior to the Closing Date other than its name set forth on the signature pages hereto.  Such Originator is “located” (as such term is defined in the applicable UCC) in the jurisdiction specified in Schedule I and since the date occurring five calendar years prior to the Closing Date, has not been “located” (as such term is defined in the applicable UCC) in any other jurisdiction (except as specified in Schedule I).  The office(s) where such Originator keeps its records concerning the Receivables is at the address(es) set forth on Schedule II.

 

SECTION 5.11  Margin Stock.  Such Originator is not engaged, principally or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meanings of Regulations T, U and X of the Board of Governors of the Federal Reserve System), and no Purchase Price payments or proceeds under this Agreement will be used to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock.

 

SECTION 5.12  Eligible Receivables.  Each Receivable sold, transferred or assigned hereunder is an Eligible Receivable on the date of sale, transfer or assignment.

 

SECTION 5.13  Credit and Collection Policy.  Such Originator has complied in all material respects with the Credit and Collection Policy with regard to each Receivable sold by it hereunder and each related Contract.

 

SECTION 5.14  Investment Company Act.  Such Originator is not, and is not controlled by, an “investment company” registered or required to be registered under the Investment Company Act.

 

SECTION 5.15  Anti-Money Laundering/International Trade Law Compliance.  Such Originator is not a Sanctioned Person.  Such Originator, either in its own right or through any third party, (i) does not have any of its assets in a Sanctioned Country or in the possession, custody or control of a Sanctioned Person in violation of any Anti-Terrorism Law; (ii) neither does business in or with, nor  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) does not  engage in any  dealings or transactions prohibited by any Anti-Terrorism Law.

 

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SECTION 5.16  Financial Condition.

 

(a)           The audited consolidated balance sheet of the Parent and its consolidated Subsidiaries as of December 31, 2015, the related audited consolidated statement of operations for the fiscal year then ended and the related audited consolidated statement of equity for the fiscal year then ended, copies of which have been furnished to the Administrative Agent, present fairly in all material respects the consolidated financial position of the Parent and its Subsidiaries for the period ended on such date, all in accordance with GAAP consistently applied except as noted therein.

 

(b)           On the date hereof, and on the date of each purchase hereunder (both before and after giving effect to such purchase), such Originator is, and will be on such date, Solvent and no Insolvency Proceeding with respect to such Originator is, or will be on such date, pending or threatened.

 

SECTION 5.17  Tax Status.  Such Originator has (i) timely filed all material Tax returns (federal, state, foreign and local) and reports required by Applicable Law to have been filed by it and (ii) paid, or caused to be paid, all Taxes, assessments and governmental charges thereby shown to be owing by it, other than any such Taxes, assessments or charges that are being contested in good faith by appropriate proceedings and for which appropriate reserves in accordance with GAAP have been established.

 

SECTION 5.18  ERISA.

 

(a)           Each of the Parent and the ERISA Affiliates is in compliance with the applicable provisions of ERISA and the provisions of the Code relating to Pension Plans and the regulations and published interpretations thereunder and any similar applicable non-U.S. law, except for such noncompliance that would not reasonably be expected to have a Material Adverse Effect.  No Reportable Event has occurred during the past five years other than a Reportable Event that would not reasonably be expected to have a Material Adverse Effect.  The excess of the present value of all benefit liabilities under each Pension Plan of Parent and the ERISA Affiliates (based on the assumptions used to determine required minimum contributions under Section 412 of the Code with respect to such Pension Plan), over the value of the assets of such Pension Plan, determined as of the most recent annual valuation date applicable thereto for which a valuation has been completed, would not reasonably be expected to have a Material Adverse Effect, and the excess of the present value of all benefit liabilities of all underfunded Pension Plans (based on the assumptions used to determine required minimum contributions under Section 412 of the Code with respect to each such Pension Plan), over the value of the assets of all such under funded Pension Plans, determined as of the most recent annual valuation dates applicable thereto for which valuations have been completed, would not reasonably be expected to have a Material Adverse Effect.  None of the Parent or the ERISA Affiliates has received any written notification that any Multiemployer Plan is in reorganization or has been terminated within the meaning of Title IV of ERISA, or has knowledge that any Multiemployer Plan is reasonably expected to be terminated, where such termination has had or would reasonably be expected to have, through increases in the contributions required to be made to such Pension Plan or otherwise, a Material Adverse Effect.

 

(b)           Each of the Parent and the ERISA Affiliates is in compliance (i) with all applicable provisions of law and all applicable regulations and published interpretations

 

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thereunder with respect to any employee pension benefit plan governed by the laws of a jurisdiction other than the United States and (ii) with the terms of any such plan, except, in each case, for such noncompliance that would not reasonably be expected to have a Material Adverse Effect.

 

SECTION 5.19  Bulk Sales.  No transaction contemplated by this Agreement requires compliance by it with any bulk sales act or similar law.

 

SECTION 5.20  No Fraudulent Conveyance.  No sale or contribution hereunder constitutes a fraudulent transfer or conveyance under any United States federal or applicable state bankruptcy or insolvency laws or is otherwise void or voidable under such or similar laws or principles or for any other reason.

 

SECTION 5.21  Ordinary Course of Business.  Each of the Originators represents and warrants as to itself that each remittance of Collections by or on behalf of such Originator to the Buyer under this Agreement will have been (i) in payment of a debt incurred by such Originator in the ordinary course of business or financial affairs of such Originator and (ii) made in the ordinary course of business or financial affairs of such Originator.

 

SECTION 5.22  Good Title Perfection.  Immediately preceding its sale or contribution of each Receivable hereunder, such Originator was the owner of such Receivable sold or contributed or purported to be sold or contributed, as the case may be, free and clear of any Adverse Claims, and each such sale or contribution hereunder constitutes a valid sale, transfer and assignment of all of such Originator’s right, title and interest in, to and under the Receivables sold or contributed by it, free and clear of any Adverse Claims.  On or before the date hereof and before the generation by such Originator of any new Receivable to be sold, contributed or otherwise conveyed hereunder, all financing statements and other documents, if any, required to be recorded or filed in order to perfect and protect the Buyer’s ownership interest in Receivables to be sold or otherwise conveyed hereunder against all creditors of and purchasers from such Originator will have been duly filed in each filing office necessary for such purpose, and all filing fees and taxes, if any, payable in connection with such filings shall have been paid in full.  Upon the creation of each new Receivable sold, contributed or otherwise conveyed or purported to be conveyed hereunder and on the Closing Date for then existing Receivables, the Buyer shall have a valid and perfected first priority ownership or security interest in each Receivable sold to it hereunder, free and clear of any Adverse Claim.

 

SECTION 5.23  Perfection Representations.

 

(a)           This Agreement creates a valid and continuing ownership or security interest (as defined in the applicable UCC) in the Originator’s right, title and interest in, to and under the Receivables and Related Rights which (A) security interest has been perfected (in the case of the Related Rights, in only that portion of the Related Rights in which an ownership or security interest may be perfected by the filing of a financing statement under the UCC) and is enforceable against creditors of and purchasers from such Originator and (B) will be free of all Adverse Claims.

 

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

 

(c)           Prior to their sale or contribution to Buyer pursuant to this Agreement, such Originator owned and had good and marketable title to the Receivables and Related Rights free and clear of any Adverse Claim of any Person.

 

(d)           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 Rights in which a security interest may be perfected by the filing of a financing statement under the UCC from each Originator to the Buyer pursuant to this Agreement.

 

(e)           Other than the ownership or security interest granted to the Buyer pursuant to this Agreement, such Originator has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Receivables or Related Rights except as permitted by this Agreement and the other Transaction Documents.  Such Originator has not authorized the filing of and is not aware of any financing statements filed against such Originator that include a description of collateral covering the Receivables and Related Rights other than any financing statement (i) in favor of the Administrative Agent or (ii) that has been terminated or amended to reflect the release of any security interest in the Receivables and Related Rights.  Such Originator is not aware of any judgment lien, ERISA lien or tax lien filings against such Originator.

 

(f)            Notwithstanding any other provision of this Agreement or any other Transaction Document, the representations contained in this Section 5.23 shall be continuing and remain in full force and effect until the Final Payout Date.

 

SECTION 5.24  Reliance on Separate Legal Identity.  Such Originator acknowledges that each of the Lenders and the Administrative Agent are entering into the Transaction Documents to which they are parties in reliance upon the Buyer’s identity as a legal entity separate from such Originator.

 

SECTION 5.25  Opinions.  The facts regarding such Originator, the Receivables sold by it hereunder, 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.

 

SECTION 5.26  [Reserved].

 

SECTION 5.27  Nature of Pool Receivables.  All Pool Receivables:  (i) were originated by such Originator in the ordinary course of its business, (ii) were sold to Buyer for fair consideration and reasonably equivalent value and (iii) represent all, or a portion of the purchase price of merchandise, insurance or services within the meaning of Section 3(c)(5)(A) of the Investment Company Act.

 

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SECTION 5.28  Compliance with Applicable Laws.  Each Originator is in compliance with the requirements of all laws, rules and regulations applicable to its property or business operations, except in such instance where any failure to comply therewith, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

 

SECTION 5.29  Servicing Programs.  No material license or approval is required for Servicer or Buyer’s use of any software or other computer program used by such Originator in the servicing of the Receivables, other than those that have been obtained and are in full force and effect.

 

SECTION 5.30  Adverse Change in Receivables.  Since December 31, 2015, there has been no material adverse change in either the collectibility or the payment history of the Receivables originated by such Originator.

 

SECTION 5.31  Compliance with Transaction Documents.  Each Originator has complied in all material respects with all of the terms, covenants and agreements contained in the other Transaction Documents to which it is a party.

 

SECTION 5.32  Reaffirmation of Representations and Warranties by each Originator.  On each day that a new Receivable is created, and when sold or contributed to the Buyer hereunder, such Originator shall be deemed to have certified that all representations and warranties set forth in this Article V are true and correct in all material respects (unless such representation or warranty contains a materiality qualification and, in such case, such representation or warranty shall be true and correct as 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 as of such earlier date)).  Notwithstanding any other provision of this Agreement or any other Transaction Document, the representations contained in this Article shall remain in full force and effect until the Final Payout Date.

 

ARTICLE VI
 COVENANTS OF THE ORIGINATORS

 

SECTION 6.1  Covenants.  From the date hereof until the Final Payout Date, each Originator will, unless the Administrative Agent and the Buyer shall otherwise consent in writing, perform the following covenants:

 

(a)           Financial Reporting.  Each Originator will maintain a system of accounting established and administered in accordance with GAAP, and each Originator shall furnish to the Buyer and the Administrative Agent such information as the Buyer, the Administrative Agent or any Lender may from time to time reasonably request relating to such system.

 

(b)           Notices.  Such Originator will notify the Buyer and Administrative Agent in writing of any of the following events promptly upon (but in no event later than five (5) 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:

 

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(i)            Notice of Purchase and Sale Termination Event, Unmatured Purchase and Sale Termination Event, Event of Default or Unmatured Event of Default.  A statement of a Financial Officer of such Originator setting forth details of any Purchase and Sale Termination Event (as defined in Section 8.1), Unmatured Purchase and Sale Termination Event (as defined in Section 8.1), Event of Default or Unmatured Event of Default that has occurred and is continuing and the action that such Originator proposes to take with respect thereto.

 

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

 

(iii)          Adverse Claim.  (A) Any Person shall obtain an Adverse Claim upon Receivables or Related Rights or any portion thereof, (B) any Person other than the Buyer, the Servicer or the Administrative Agent shall obtain any rights or direct any action with respect to any Collection Account (or related Collection) 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.  Any change in such Originator’s name, jurisdiction of organization or any other change requiring the amendment of UCC financing statements filed against such Originator.

 

(v)           Change in Accountants or Accounting Policy.  Any change in (i) the external accountants of such Originator, the Servicer, any other Originator or the Parent or (ii) any material accounting policy of such 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 such Originator accounts for the Receivables shall be deemed “material” for such purpose).

 

(c)           Conduct of Business; Preservation of Existence.  Each Originator will carry on and conduct its business in substantially the same manner and in substantially the same fields of enterprise as it is presently conducted or other fields complimentary or ancillary thereto and will do all things necessary to preserve and keep in full force and effect its existence and, except where the failure to do so would not reasonably be expected to have a Material Adverse Effect, its franchises, authority to do business in each jurisdiction in which its business is conducted, licenses, patents, trademarks, copyrights and other proprietary rights; provided however, that nothing in this paragraph (c) shall prevent any transaction permitted by paragraph (o) below or not otherwise prohibited by this Agreement or any other Transaction Document.

 

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(d)           Compliance with Laws.  Each Originator will comply with all Applicable Laws, except in such instance where any failure to comply therewith, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

 

(e)           Furnishing of Information and Inspection of Receivables.  Each Originator will furnish or cause to be furnished to the Buyer and the Administrative Agent, from time to time, such information with respect to the Pool Receivables as the Buyer, the Administrative Agent or any Lender may reasonably request.  Each Originator will, at such Originator’s expense, during regular business hours upon reasonable prior written notice, permit the Buyer and/or the Administrative Agent or their agents or representatives to (i) examine and make copies of and abstracts from all books and records relating to the Pool Receivables or other Collateral, (ii) visit the offices and properties of such Originator for the purpose of examining such books and records, and (iii) discuss matters relating to the Pool Receivables, other Collateral or such Originator’s performance under hereunder or under the Transaction Documents to which it is a party with any of the officers, directors or employees of such Originator and its independent accountants, in each case, having knowledge of such matters; provided, that unless an Event of Default has occurred and is continuing, (A) the Originators, the Borrower and the Servicer shall be required to reimburse the Buyer and the Administrative Agent, together, for only one (1) combined review of the Originators pursuant to this Section 6.1(e), of the Borrower pursuant to Section 7.01(g) of the Receivables Financing Agreement and of the Servicer pursuant to Section 7.02(e) of the Receivables Financing Agreement in any twelve-month period and (B) the Buyer and the Administrative Agent hereby agree to coordinate their audits.

 

(f)            Payments on Receivables, Collection Accounts.  Each Originator will, at all times, instruct all Obligors to deliver payments on the Pool Receivables, free and clear of and without deduction for any taxes, to a Collection Account or a Collection.  If any payments on the Pool Receivables or other Collections are received by an Originator, the Buyer or the Servicer, it shall hold (or cause such Originator, the Buyer or the Servicer to hold) such payments in trust for the benefit of the Buyer (and the Administrative Agent and the Lenders as the Buyer’s assignees) and promptly (but in any event within two (2) Business Days after becoming aware of such receipt) remit such funds into a Collection Account.  The Originators will cause each Collection Bank to comply with the terms of each applicable Collection Agreement.  The Originators shall use commercially reasonable efforts to ensure that no 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 Originators will cause the Servicer to, within two (2) Business Days, identify and transfer such funds out of the Collection Account to (or pursuant to the instructions of) the Person entitled to such funds.  The Originators will not, and will not permit any other Person, to commingle Collections with any other funds.  The Originators shall only add (or permit the Servicer to add) a Collection Account (or a related Collection), or a Collection Bank to those listed in the Receivables Financing Agreement, if the Administrative Agent has received notice of such addition and an executed and acknowledged copy of a Collection Agreement (or an amendment thereto) in form and substance reasonably acceptable to the Administrative Agent from the applicable Collection Bank.  The Originators shall only terminate (or permit the Servicer to terminate) a Collection Bank or close a Collection Account (or a related Collection) with the prior written consent of the Administrative Agent.

 

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(g)           Sales, Liens, etc.  Except as otherwise provided herein, no Originator will 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 Related Rights, or assign any right to receive income in respect thereof.

 

(h)           Extension or Amendment of Pool Receivables.  Except as otherwise permitted by the Receivables Financing Agreement, no Originator will, or will 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.  Each Originator shall at its expense, timely and fully perform and comply in all material respects with all provisions, covenants and other promises required to be observed by it under the Contracts related to the Pool Receivables, and timely and fully comply with the Credit and Collection Policy with regard to each Pool Receivable and the related Contract.

 

(i)            Fundamental Changes.  Each Originator shall not make any change in such Originator’s name, location or making any other change in such Originator’s identity or corporate structure that could impair or otherwise render any UCC financing statement filed in connection with this Agreement or the Receivables Financing Agreement “seriously misleading” as such term (or similar term) is used in the applicable UCC, in each case, unless the Buyer, the Administrative Agent and each Lender have each (A) received 30 days’ prior notice thereof, (B) received executed copies of all documents, certificates and opinions (including, without limitation, opinions relating to bankruptcy and UCC matters) as the Buyer or the Administrative Agent shall reasonably request and (C) been reasonably satisfied that all other action to perfect and protect the interests of the Buyer and the Administrative Agent, on behalf of the Lenders, in and to the Receivables to be sold by it hereunder and other Related Rights, as reasonably requested by the Buyer or the Administrative Agent shall have been taken by, and at the expense of, such Originator (including the filing of any UCC financing statements, the receipt of certificates and other requested documents from public officials and all such other actions required pursuant to Section 7.3).

 

(j)            Change in Credit and Collection Policy.  No Originator will make, or direct the Servicer to 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 Originator will deliver a copy of the updated Credit and Collection Policy to the Buyer and Administrative Agent (for itself and on behalf of each Lender).

 

(k)           Records.  Each Originator will maintain and implement (or cause to be maintained and implemented) administrative and operating procedures (including an ability to recreate records evidencing Pool Receivables and related Contracts in the event of the destruction of the originals thereof), and keep and maintain (or cause to be kept and maintained) 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

 

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permit the daily identification of each Pool Receivable and all Collections of and adjustments to each existing Pool Receivable).

 

(l)            Ownership Interest, Etc.  Each Originator shall, at its expense, take all action necessary to establish and maintain a valid and enforceable ownership or security interest in the Pool Receivables and that portion of the Related Rights in which an ownership or security interest may be created under the UCC and Collections with respect thereto, and a first priority perfected security interest in (i) the Pool Receivables and (ii) that portion of the Collateral 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, in favor of the Buyer (and the Administrative Agent (on behalf of the Lenders), as the Buyer’s assignee), including taking such action to perfect, protect or more fully evidence the interest of the Buyer (and the Administrative Agent (on behalf of the Lenders), as the Buyer’s assignee) as the Buyer, the Administrative Agent or any Lender may reasonably request.  In order to evidence the security interests of the Administrative Agent under this Agreement, such Originator 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 Rights in which a security interest may be perfected by the filing of a financing statement under the UCC and Collections.  Such Originator 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 such Originator to file such financing statements under the UCC without the signature of such Originator, any other Originator or the Administrative Agent where allowed by Applicable Law.  Notwithstanding anything else in the Transaction Documents to the contrary, such Originator 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.  Each Originator 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 Buyer or the Administrative Agent may reasonably request, to perfect, protect or more fully evidence the purchases and contributions made hereunder or under the Receivables Financing Agreement and/or security interest granted pursuant to the Receivables Financing Agreement or any other Transaction Document, or to enable the Buyer or the Administrative Agent (on behalf of the Lenders) to exercise and enforce their respective rights and remedies hereunder, under the Receivables Financing Agreement or under any other Transaction Document.  Without limiting the foregoing, such Originator hereby authorizes, and will, upon the request of the Buyer or the Administrative Agent, at such Originator’s own expense, execute (if necessary) and file such financing statements or continuation statements, or amendments thereto, and such other instruments and documents, that may be necessary or that the Buyer or Administrative Agent may reasonably request, to perfect, protect or evidence any of the foregoing.

 

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(n)           Mergers, Acquisitions, Sales, etc. No Originator shall (i) be a party to any merger, consolidation or other restructuring, except a merger, consolidation or other restructuring where the Buyer, the Administrative Agent and each Lender have each (A) received 30 days’ prior notice thereof, (B) received executed copies of all documents, certificates and opinions (including, without limitation, opinions relating to bankruptcy and UCC matters) as the Buyer or the Administrative Agent shall reasonably request and (C) been reasonably satisfied that all other action to perfect and protect the interests of the Buyer and the Administrative Agent, on behalf of the Lenders, in and to the Receivables to be sold by it hereunder and that portion of the other Related Rights in which a security interest may be perfected by the filing of a financing statement under the UCC, as reasonably requested by the Buyer or the Administrative Agent  shall have been taken by, and at the expense of, such Originator (including the filing of any UCC financing statements, the receipt of certificates and other requested documents from public officials and all such other actions required pursuant to Section 7.3) or (ii) directly or indirectly sell, transfer, assign, convey or lease (A) whether in one or a series of transactions, all or substantially all of its assets (other than as permitted by, and pursuant to, the Borrower’s Limited Liability Company Agreement and this Agreement) or (B) any Receivables or any interest therein (in each case, other than pursuant to this Agreement).

 

(o)           Frequency of Billing.  Each Originator shall prepare and deliver (or cause to be prepared and delivered) invoices with respect to all Receivables in accordance with the Credit and Collection Policies, but in any event no less frequently than as required under the Contract related to such Receivable.

 

(p)           Receivables Not to Be Evidenced by Promissory Notes or Chattel Paper.  No Originator shall take any action to cause or permit any Receivable created, acquired or originated by it to become evidenced by any “instrument” or “chattel paper” (as defined in the applicable UCC) without the prior written consent of the Buyer and the Administrative Agent.

 

(q)           Anti-Money Laundering/International Trade Law Compliance.  Such Originator will not become a Sanctioned Person.  Such Originator, either in its own right or through any third party, will not use the proceeds from the sale of the Receivables to fund any operations in, finance any investments or activities in, or, make any payments to, a Sanctioned Country or Sanctioned Person in violation of any Anti-Terrorism Law.  Such Originator shall comply with all Anti-Terrorism Laws.  Such Originator shall promptly notify the Administrative Agent and each Lender in writing upon the occurrence of a Reportable Compliance Event.

 

(r)            Each Originator (or the Servicer on its behalf) shall have placed on the most recent, and have taken all steps reasonably necessary to ensure that there shall be placed on each subsequent, data processing report that it generates which are of the type that a proposed purchaser or lender would use to evaluate the Receivables, the following legend (or the substantive equivalent thereof):  “THE RECEIVABLES DESCRIBED HEREIN HAVE BEEN SOLD PURSUANT TO A PURCHASE AND SALE AGREEMENT, DATED AS OF MARCH 22, 2016, AS AMENDED, BETWEEN EACH OF THE ENTITIES LISTED ON SCHEDULE I THERETO, AS ORIGINATORS, PRA HOLDINGS, INC., AS SERVICER AND PRA RECEIVABLES LLC, AS BUYER; AND THE RECEIVABLES DESCRIBED HEREIN HAVE BEEN PLEDGED TO PNC BANK, NATIONAL ASSOCIATION, AS ADMINISTRATIVE AGENT, PURSUANT TO A RECEIVABLES FINANCING AGREEMENT, DATED AS OF

 

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MARCH 22, 2016, AS AMENDED, AMONG PRA RECEIVABLES LLC, AS BORROWER, PRA HOLDINGS, INC., AS SERVICER, THE VARIOUS LENDERS FROM TIME TO TIME PARTY THERETO AND PNC BANK, NATIONAL ASSOCIATION, AS ADMINISTRATIVE AGENT”.

 

(s)            Buyer’s Tax Status.  Neither Holdings nor any Originator shall take or cause any action to be taken that could result in the Buyer (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.

 

(t)            Subordinated Notes, Etc.  Such Originator will not sell, assign (by operation of law or otherwise) or otherwise dispose of, or grant any option with respect to, or create or suffer to exist any Adverse Claim upon (including, without limitation, the filing of any financing statement) or with respect to, any Subordinated Note.

 

SECTION 6.2  Separateness Covenants.  Each Originator hereby acknowledges that this Agreement and the other Transaction Documents are being entered into in reliance upon the Buyer’s identity as a legal entity separate from such Originator and its Affiliates.  Therefore, from and after the date hereof, each Originator shall take all reasonable steps necessary to make it apparent to third Persons that the Buyer is an entity with assets and liabilities distinct from those of such Originator and any other Person, and is not a division of such Originator, 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, such Originator shall take such actions as shall be required in order to ensure that the Buyer is at all times in compliance with Section 7.03 of the Receivables Financing Agreement.

 

ARTICLE VII
 ADDITIONAL RIGHTS AND OBLIGATIONS
 IN RESPECT OF RECEIVABLES

 

SECTION 7.1  Rights of the Buyer.  Each Originator hereby authorizes the Buyer, the Servicer or their respective designees or assignees under the Receivables Financing Agreement (including, without limitation, the Administrative Agent) to take any and all steps in such Originator’s name necessary, in their respective determination, to collect all amounts due under any and all Receivables sold, contributed or otherwise conveyed or purported to be conveyed by it hereunder, including, without limitation, endorsing the name of such Originator on checks and other instruments representing Collections and enforcing such Receivables and the provisions of the related Contracts that concern payment and/or enforcement of rights to payment; provided, however, the Administrative Agent shall not take any of the foregoing actions unless an Event of Default has occurred and is continuing.

 

SECTION 7.2  Responsibilities of the Originators.  Anything herein to the contrary notwithstanding:

 

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(a)           Each Originator shall perform its obligations hereunder, and the exercise by the Buyer or its designee of its rights hereunder shall not relieve such Originator from such obligations.

 

(b)           None of the Buyer, the Lenders or the Administrative Agent shall have any obligation or liability to any Obligor or any other third Person with respect to any Receivables, Contracts related thereto or any other related agreements, nor shall the Buyer, the Lenders or the Administrative Agent be obligated to perform any of the obligations of such Originator thereunder.

 

(c)           Each Originator hereby grants to the Buyer and the Administrative Agent an irrevocable power-of-attorney, with full power of substitution, coupled with an interest, during the occurrence and continuation of an Event of Default to take in the name of such Originator all steps necessary or advisable to endorse, negotiate or otherwise realize on any writing or other right of any kind held or transmitted by such Originator or transmitted or received by the Buyer or the Administrative Agent (whether or not from such Originator) in connection with any Receivable sold, contributed or otherwise conveyed or purported to be conveyed by it hereunder or Related Right.

 

SECTION 7.3  Further Action Evidencing Purchases.  On or prior to the Closing Date, each Originator shall mark its master data processing records evidencing Pool Receivables and Contracts with a legend, acceptable to the Buyer and the Administrative Agent (it being understood and agreed that a legend substantially in the form set forth in Section 6.1(s) is acceptable), evidencing that the Pool Receivables have been transferred in accordance with this Agreement and none of the Originators or Servicer shall change or remove such notation without the consent of the Buyer and the Administrative Agent.  Each Originator agrees that from time to time, at its expense, it will promptly execute (if applicable) and deliver all further instruments and documents, and take all further action that the Buyer, the Servicer, the Administrative Agent or any Lender may reasonably request in order to perfect, protect or more fully evidence the Receivables and that portion of the Related Rights in which a security interest may be perfected by the filing of a financing statement under the UCC that was or will be purchased by or contributed to the Buyer hereunder, or to enable the Buyer to exercise or enforce any of its rights hereunder or under any other Transaction Document.  Without limiting the generality of the foregoing, upon the request of the Buyer, the Administrative Agent or any Lender, such Originator will execute (if applicable), authorize and file such financing or continuation statements, or amendments thereto or assignments thereof, and such other instruments or notices, as may be necessary.

 

Each Originator hereby authorizes the Buyer or its designee or assignee (including, without limitation, the Administrative Agent) to file one or more financing or continuation statements, and amendments thereto and assignments thereof, relative to all or any of the Receivables and Related Rights sold or otherwise conveyed or purported to be conveyed by it hereunder and now existing or hereafter generated by such Originator.  If any Originator fails to perform any of its agreements or obligations under this Agreement, the Buyer or its designee or assignee (including, without limitation, the Administrative Agent) may (but shall not be required to) itself perform, or cause the performance of, such agreement or obligation, and the expenses of the

 

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Buyer or its designee or assignee (including, without limitation, the Administrative Agent) incurred in connection therewith shall be payable by such Originator.

 

SECTION 7.4  Application of Collections.  Any payment by an Obligor in respect of any indebtedness owed by it to any Originator shall, except as otherwise specified by such Obligor or required by Applicable Law and unless otherwise instructed by the Servicer (with the prior written consent of the Administrative Agent) or the Administrative Agent, be applied as a Collection of any Receivable or Receivables of such Obligor to the extent of any amounts then due and payable thereunder (such application to be made starting with the oldest outstanding Receivable or Receivables) before being applied to any other indebtedness of such Obligor.

 

SECTION 7.5  Performance of Obligations.  Each Originator shall (i) perform all of its obligations under the Contracts related to the Receivables generated by such Originator to the same extent as if interests in such Receivables had not been transferred hereunder, and the exercise by the Buyer or the Administrative Agent of its rights hereunder shall not relieve any Originator from any such obligations and (ii) pay when due any taxes, including, without limitation, any sales taxes payable in connection with the Receivables generated by such Originator and their creation and satisfaction.

 

ARTICLE VIII
 PURCHASE AND SALE TERMINATION EVENTS

 

SECTION 8.1  Purchase and Sale Termination Events.  Each of the following events or occurrences described in this Section 8.1 shall constitute a “Purchase and Sale Termination Event” (each event which with notice or the passage of time or both would become a Purchase and Sale Termination Event being referred to herein as an “Unmatured Purchase and Sale Termination Event”):

 

(a)           the Termination Date shall have occurred;

 

(b)           any Originator shall fail to make when due any payment or deposit to be made by it under this Agreement or any other Transaction Document to which it is a party and such failure shall remain unremedied for two (2) Business Days;

 

(c)           any representation or warranty made or deemed to be made by any Originator (or any of its officers) under or in connection with this Agreement, any other Transaction Documents to which it is a party, or any other information or report delivered pursuant hereto or thereto shall prove to have been incorrect or untrue in any material respect when made or deemed made or delivered; provided, that no breach of a representation or warranty set forth in Sections 5.5, 5.12, 5.20, 5.22, 5.23 or 5.27 shall constitute a Purchase and Sale Termination Event pursuant to this clause (c) if credit has been given for a reduction of the Purchase Price, the outstanding principal balance of the applicable Subordinated Note has been reduced or the applicable Originator has made a cash payment to the Buyer, in any case, as required pursuant to Section 3.3(c) with respect to such breach;

 

(d)           any Originator shall fail to perform or observe any other term, covenant or agreement contained in this Agreement or any other Transaction Document to which it is a party

 

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on its part to be performed or observed and such failure shall continue unremedied for ten (10) Business Days after such Originator has knowledge or receives written notice thereof; or

 

(e)           any Insolvency Proceeding shall be instituted against any Originator and such proceeding instituted against any Originator (but not instituted by such Person) is not controverted within thirty (30) days after commencement of such proceeding or not dismissed within sixty (60) days after commencement of such proceeding, 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.

 

SECTION 8.2  Remedies.

 

(a)           Optional Termination.  Upon the occurrence and during the continuation of a Purchase and Sale Termination Event, the Buyer (and not the Servicer), with the prior written consent of the Administrative Agent shall have the option, by notice to the Originators (with a copy to the Administrative Agent and the Lenders), to declare the Purchase Facility terminated.

 

(b)           Remedies Cumulative.  Upon any termination of the Purchase Facility pursuant to Section 8.2(a), the Buyer (and the Administrative Agent as Buyer’s assignee) shall have, in addition to all other rights and remedies under this Agreement, all other rights and remedies provided under the UCC of each applicable jurisdiction and other Applicable Laws, which rights shall be cumulative.

 

ARTICLE IX
 INDEMNIFICATION

 

SECTION 9.1  Indemnities by the Originators.  Without limiting any other rights that the Buyer may have hereunder or under Applicable Law, each Originator, hereby agrees to indemnify the Buyer, each of its officers, directors, employees, agents, employees and respective assigns, the Administrative Agent and each Lender (each of the foregoing Persons being individually called a “Purchase and Sale Indemnified Party”), forthwith on demand, from and against any and all damages, claims, losses, judgments, liabilities, penalties and related reasonable costs and expenses (including Attorney Costs) (all of the foregoing being collectively called “Purchase and Sale Indemnified Amounts”) awarded against or incurred by any of them arising out of, relating to or in connection with:

 

(a)           the breach of any representation or warranty made or deemed made by such Originator (or any employee, officer or agent of such Originator) under or in connection with this Agreement or any of the other Transaction Documents, or any information or report delivered by or on behalf of such Originator pursuant hereto or thereto which shall have been untrue or incorrect when made or deemed made or delivered;

 

(b)           the transfer by such Originator of any interest in any Pool Receivable or Related Right other than the transfer of any Pool Receivable and Related Security to the Buyer pursuant to this Agreement and the grant of a security interest to the Buyer pursuant to this Agreement;

 

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(c)           the failure by such Originator to comply with the terms of any Transaction Document or 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;

 

(d)           the lack of an enforceable ownership interest, or a first priority perfected lien, in the Pool Receivables (and all Related Security) originated by such Originator against all Persons (including any bankruptcy trustee or similar Person), in either case, free and clear of any Adverse Claim;

 

(e)           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 or the Related Rights;

 

(f)            any suit or claim related to the Pool Receivables originated by such Originator (including any products liability or environmental liability claim arising out of or in connection with the property, products or services that are the subject of any Pool Receivable originated by such Originator);

 

(g)           any failure of such Originator to perform any 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;

 

(h)           the commingling of Collections of Pool Receivables by such Originator at any time with other funds;

 

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

 

(j)            any investigation, litigation or proceeding (actual or threatened) with respect to such Originator related to this Agreement or any other Transaction Document or in respect of any Pool Receivable or any Related Rights;

 

(k)           any claim brought by any Person other than a Purchase and Sale Indemnified Party arising from any activity by such Originator or any Affiliate of such Originator in servicing, administering or collecting any Pool Receivable;

 

(l)            the failure by such Originator to pay when due any taxes, including, without limitation, sales, excise or personal property taxes;

 

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

 

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similar claim or defense not arising from the financial inability of any Obligor to pay undisputed indebtedness;

 

(n)           any tax or governmental fee or charge, all interest and penalties thereon or with respect thereto, and all out-of-pocket costs and expenses, including without limitation Attorney Costs in defending against the same, which are required to be paid by reason of the purchase or ownership of the Receivables generated by such Originator or any Related Rights connected with any such Receivables;

 

(o)           any amounts of Indemnified Taxes and/or other amounts paid or payable by the Buyer under Section 4.03 of the Receivables Financing Agreement, in each case without duplication;

 

(p)           any taxes imposed on the Buyer’s income, capital, or revenue, or any liability of the Buyer attributable to Taxes of any Person under Treasury Regulation section 1.1502-6 (or any similar provision of state, local or foreign law), as a transferee or successor, by contract, operation of law or otherwise; or

 

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

 

provided that such indemnity shall not be available to any Purchase and Sale Indemnified Party to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction in a final and nonappealable judgment to have resulted solely from the gross negligence or willful misconduct of a Purchase and Sale Indemnified Party or (y) constitute recourse with respect to a Pool Receivable by reason of the bankruptcy or insolvency, or the financial or credit condition or financial default, of the related Obligor.

 

Notwithstanding anything to the contrary in this Agreement, solely for purposes of such Originator’s indemnification obligations in this Article IX, 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.

 

If for any reason the foregoing indemnification is (other than pursuant to the immediately preceding proviso) unavailable to any Purchase and Sale Indemnified Party or insufficient to hold it harmless, then the Originators, jointly and severally, shall contribute to the amount paid or payable by such Purchase and Sale 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 such Originator and its Affiliates, on the one hand, and such Purchase and Sale Indemnified Party, on the other hand, in the matters contemplated by this Agreement as well as the relative fault of such Originator and its Affiliates and such Purchase and Sale Indemnified Party with respect to such loss, claim, damage or liability and any other relevant equitable considerations.  The reimbursement, indemnity and contribution obligations of such Originator under this Section shall be in addition to (but without duplication of) any liability which such Originator may otherwise have, shall extend upon the same terms and conditions to Purchase and Sale Indemnified Party, and shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of such Originator and the Purchase and Sale Indemnified

 

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Parties.  Any indemnification or contribution under this Section shall survive the termination of this Agreement.

 

ARTICLE X
 MISCELLANEOUS

 

SECTION 10.1  Amendments, etc.

 

(a)           The provisions of this Agreement may from time to time be amended, modified or waived, if such amendment, modification or waiver is in writing and executed by the Buyer, the Servicer and each Originator, with the prior written consent of the Administrative Agent and the Majority Lenders.

 

(b)           No failure or delay on the part of the Buyer, the Servicer, any Originator, the Administrative Agent or any third-party beneficiary in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power or right preclude any other or further exercise thereof or the exercise of any other power or right.  No notice to or demand on the Buyer, the Servicer or any Originator in any case shall entitle it to any notice or demand in similar or other circumstances.  No waiver or approval by the Buyer, the Administrative Agent or the Servicer under this Agreement shall, except as may otherwise be stated in such waiver or approval, be applicable to subsequent transactions.  No waiver or approval under this Agreement shall require any similar or dissimilar waiver or approval thereafter to be granted hereunder.

 

(c)           The Transaction Documents contain a final and complete integration of all prior expressions by the parties hereto with respect to the subject matter thereof and shall constitute the entire agreement among the parties hereto with respect to the subject matter thereof, superseding all prior oral or written understandings.

 

SECTION 10.2  Notices, etc.  All notices and other communications provided for hereunder shall, unless otherwise stated herein, be in writing (including facsimile or electronic mail communication) and shall be delivered or sent by facsimile, electronic mail, or by overnight mail, to the intended party at the mailing or electronic mail address or facsimile number of such party set forth under its name on Schedule V hereof or at such other address or facsimile number as shall be designated by such party in a written notice to the other parties hereto or in the case of the Administrative Agent or any Lender, at their respective address for notices pursuant to the Receivables Financing Agreement.  All such notices and communications shall be effective (i) if delivered by overnight mail, when received, and (ii) if transmitted by facsimile or electronic mail, when sent, receipt confirmed by telephone or electronic means.

 

SECTION 10.3  No Waiver; Cumulative Remedies.  The remedies herein provided are cumulative and not exclusive of any remedies provided by law.  Without limiting the foregoing, Holdings and each Originator hereby authorizes the Buyer, the Administrative Agent and each Lender (collectively, the “Set-off Parties”), at any time and from time to time, to the fullest extent permitted by law, to set off, against any obligations of Holdings or such Originator to such Set-off Party arising in connection with the Transaction Documents (including, without limitation, amounts payable pursuant to Section 9.1) that are then due and payable or that are not

 

28

 

then due and payable but have accrued, any and all deposits (general or special, time or demand, provisional or final) at any time held by, and any and all indebtedness at any time owing by, any Set-off Party to or for the credit or the account of such Originator.

 

SECTION 10.4  Binding Effect; Assignability.  This Agreement shall be binding upon and inure to the benefit of the Buyer and each Originator and their respective successors and permitted assigns.  No Originator may assign any of its rights hereunder or any interest herein without the prior written consent of the Buyer, the Administrative Agent and each Lender, except as otherwise herein specifically provided.  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 such time as the parties hereto shall agree.  The rights and remedies with respect to any breach of any representation and warranty made by any Originator pursuant to Article V and the indemnification and payment provisions of Article IX and Section 10.6 shall be continuing and shall survive any termination of this Agreement.

 

SECTION 10.5  Governing Law.  EXCEPT AS DESCRIBED BELOW, 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 OF A SECURITY INTEREST OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK).

 

SECTION 10.6  Costs, Expenses and Taxes.  In addition to the obligations of the Originators under Article IX, each Originator, severally and for itself alone, agrees to pay on demand:

 

(a)           to the Buyer (and any successor and permitted assigns thereof) and any third-party beneficiary of the Buyer’s rights hereunder all reasonable out-of-pocket costs and expenses in connection with the preparation, negotiation, execution, delivery and administration of this Agreement (together with any Subordinated Note and all amendments, restatements, supplements, consents and waivers, if any, from time to time hereto or thereto), including, without limitation, (i) the reasonable Attorney Costs for the Buyer (and any successor and permitted assigns thereof) and any third-party beneficiary of the Buyer’s rights hereunder or thereunder with respect thereto and with respect to advising any such Person as to their rights and remedies under this Agreement, any Subordinated Note and the other Transaction Documents and (ii) subject to Section 6.1(e), reasonable accountants’, auditors’ and consultants’ fees and expenses for the Buyer (and any successor and permitted assigns thereof) and any third-party beneficiary of the Buyer’s rights hereunder or thereunder incurred in connection with the administration and maintenance of this Agreement or advising any such Person as to their rights and remedies under this Agreement or as to any actual or reasonably claimed breach of this Agreement, any Subordinated Note or any other Transaction Document;

 

(b)           to the Buyer (and any successor and permitted assigns thereof) and any third-party beneficiary of the Buyer’s rights hereunder all reasonable out-of-pocket costs and

 

29

 

expenses (including reasonable Attorney Costs), of any such Person incurred in connection with the enforcement of any of their respective rights or remedies under the provisions of this Agreement, any Subordinated Note and the other Transaction Documents; and

 

(c)           all stamp, franchise and other taxes and fees payable in connection with the execution, delivery, filing and recording of this Agreement, any Subordinated Note or the other Transaction Documents to be delivered hereunder, and agrees to indemnify each Purchase and Sale Indemnified Party against any liabilities with respect to or resulting from any delay in paying or omitting to pay such taxes and fees.

 

SECTION 10.7  SUBMISSION TO JURISDICTION.  (a) EACH PARTY HERETO HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION 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, AND EACH PARTY HERETO HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT.  THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT THEY 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 PARTY HERETO 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 SCHEDULE IV.  NOTHING IN THIS SECTION 10.7 SHALL AFFECT THE RIGHT OF THE PARTIES HERETO TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

 

SECTION 10.8  WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT.

 

SECTION 10.9  Captions and Cross References; Incorporation by Reference.  The various captions (including, without limitation, the table of contents) in this Agreement are included for convenience only and shall not affect the meaning or interpretation of any provision of this Agreement.  References in this Agreement to any underscored Article, Section, Schedule or Exhibit are to such Article, Section, Schedule or Exhibit of this Agreement, as the case may be.  The Schedules and Exhibits hereto are hereby incorporated by reference into and made a part of this Agreement.

 

30

 

SECTION 10.10  Execution in Counterparts.  This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.  Delivery of an executed counterpart hereof by facsimile or other electronic means shall be equally effective as delivery of an originally executed counterpart.

 

SECTION 10.11  Acknowledgment and Agreement.  By execution below, each Originator expressly acknowledges and agrees that all of the Buyer’s rights, title, and interests in, to, and under this Agreement (but not its obligations), shall be assigned by the Buyer to the Administrative Agent (for the benefit of the Lenders) pursuant to the Receivables Financing Agreement, and each Originator consents to such assignment.  Each of the parties hereto acknowledges and agrees that the Lenders and the Administrative Agent are third-party beneficiaries of the rights of the Buyer arising hereunder and under the other Transaction Documents to which any Originator is a party, and notwithstanding anything to the contrary contained herein or in any other Transaction Document, during the occurrence and continuation of an Event of Default under the Receivables Financing Agreement, the Administrative Agent, and not the Buyer, shall have the sole right to exercise all such rights and related remedies.

 

SECTION 10.12  No Proceeding.  Each Originator hereby agrees that it will not institute, or join any other Person in instituting, against the Buyer any Insolvency Proceeding for at least one year and one day following the Final Payout Date.  Each Originator further agrees that notwithstanding any provisions contained in this Agreement to the contrary, the Buyer shall not, and shall not be obligated to, pay any amount in respect of any Subordinated Note or otherwise to such Originator pursuant to this Agreement unless the Buyer has received funds which may, subject to Section 3.01 of the Receivables Financing Agreement, be used to make such payment.  Any amount which the Buyer does not pay pursuant to the operation of the preceding sentence shall not constitute a claim (as defined in §101 of the Bankruptcy Code) against or corporate obligation of the Buyer by such Originator for any such insufficiency unless and until the provisions of the foregoing sentence are satisfied.  The agreements in this Section 10.12 shall survive any termination of this Agreement.

 

SECTION 10.13  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 10.14  Severability.  Any provisions of this Agreement which are prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

[Signature Pages Follow]

 

31

 

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   Buyer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Mike Bonello
    
	
 
    	
Name:   Mike Bonello
    
	
 
    	
Title:   Senior Vice President, Accounting & Corporate Controller
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
PRA   HOLDINGS, INC.,
    
	
 
    	
as   Servicer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Mike Bonello
    
	
 
    	
Name:   Mike Bonello
    
	
 
    	
Title:   Senior Vice President, Accounting & Corporate Controller
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
PHARMACEUTICAL   RESEARCH ASSOCIATES, INC.,
    
	
 
    	
as   an Originator
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Mike Bonello
    
	
 
    	
Name:   Mike Bonello
    
	
 
    	
Title:   Senior Vice President, Accounting & Corporate Controller
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
RESEARCH   PHARMACEUTICAL SERVICES, INC.,
    
	
 
    	
as   an Originator
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Mike Bonello
    
	
 
    	
Name:   Mike Bonello
    
	
 
    	
Title:   Senior Vice President, Accounting & Corporate Controller
    

 

Purchase and Sale Agreement

 

S-1

 

Schedule I

 

LIST AND LOCATION OF EACH ORIGINATOR

 

	
Originator
    	
 
    	
Location
    
	
Pharmaceutical Research Associates, Inc.
    	
 
    	
Virginia
    
	
Research Pharmaceutical Services, Inc.
    	
 
    	
Delaware
    

 

Purchase and Sale Agreement

 

Schedule I-1

 

Schedule II

 

LOCATION OF BOOKS AND RECORDS OF ORIGINATORS

 

	
Originator
    	
 
    	
Location of Books and Records
    
	
Pharmaceutical Research Associates, Inc.
    	
 
    	
4130 ParkLake Avenue
   Suite 400
   Raligh, NC 27612
    
	
Research Pharmaceutical Services, Inc.
    	
 
    	
731 Arbor Way
   Suite 100
   Blue Bell, PA 19422
    

 

Purchase and Sale Agreement

 

Schedule II-1

 

Schedule III

 

TRADE NAMES

 

None.

 

Purchase and Sale Agreement

 

Schedule III-1

 

Schedule IV

 

ACTIONS/SUITS

 

None.

 

Purchase and Sale Agreement

 

Schedule IV-1

 

Schedule V

 

NOTICE ADDRESSES

 

PRA RECEIVABLES LLC

4130 ParkLake Avenue

Suite 400

Raleigh, NC  27612

 

PRA HOLDINGS, INC.

4130 ParkLake Avenue

Suite 400

Raleigh, NC  27612

 

PHARMACEUTICAL RESEARCH ASSOCIATES, INC.

4130 ParkLake Avenue

Suite 400

Raleigh, NC  27612

 

RESEARCH PHARMACEUTICAL SERVICES, INC.

731 Arbor Way

Suite 100

Blue Bell, PA 19422

 

Purchase and Sale Agreement

 

Schedule V-1

 

Exhibit A

 

FORM OF PURCHASE REPORT

 

Originator:                                      [Name of Originator]

 

Purchaser:                                       PRA Receivables LLC

 

Payment Date:                                  , 20   

 

1.                                      Outstanding Balance of Receivables [Purchased] [Contributed to the Capital of Purchaser] [on the Closing Date][during the preceding Fiscal Month]:                                      

 

2.                                      Fair Market Value Discount:                                      

 

	
1/{1 + (Prime Rate x Days’ Sales Outstanding)}
    
	
                                                       365
    

 

Where:

 

Prime Rate   =

 

Days’ Sales Outstanding   =

 

3.                                      Purchase Price  (1 x 2)  =  $           

 

4.                                      Reductions in the Purchase Price  =  $           

 

5.                                      Net Purchase Price  (3 – 4)  =  $           

 

Purchase and Sale Agreement

 

Exhibit A-1

 

Exhibit B

 

FORM OF SUBORDINATED NOTE

 

New York, New York
 [    ], 20[  ]

 

FOR VALUE RECEIVED, the undersigned, PRA Receivables LLC, a Delaware limited liability company (the “Buyer”), promises to pay to [                ], a [              ] (the “Originator”), on the terms and subject to the conditions set forth herein and in the Purchase and Sale Agreement referred to below, the aggregate unpaid Purchase Price of all Receivables purchased by the Buyer from the Originator pursuant to such Purchase and Sale Agreement, as such unpaid Purchase Price is shown in the records of the Servicer.

 

1.                                      Purchase and Sale Agreement.  This Subordinated Note is one of the Subordinated Notes described in, and is subject to the terms and conditions set forth in, that certain Purchase and Sale Agreement dated as of March 22, 2016 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Purchase and Sale Agreement”), among the Buyer, PRA Holdings, Inc., as Servicer, the Originator, and the other originators from time to time party thereto.  Reference is hereby made to the Purchase and Sale Agreement for a statement of certain other rights and obligations of the Buyer and the Originator.

 

2.                                      Definitions.  Capitalized terms used (but not defined) herein have the meanings assigned thereto in the Purchase and Sale Agreement and in Article I of the Receivables Financing Agreement (as defined in the Purchase and Sale Agreement).  In addition, as used herein, the following terms have the following meanings:

 

“Bankruptcy Proceedings” has the meaning set forth in clause (b) of paragraph 9 hereof.

 

“Note Maturity Date” means the Payment Date immediately following the date that falls one year and one day after the Final Payout Date.

 

“Prime Rate” means a per annum rate equal to the “U.S. Prime Rate” as published in the “Money Rates” section of The Wall Street Journal or if such information ceases to be published in The Wall Street Journal, the per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate, or, if such rate is no longer quoted therein, any similar rate quoted therein or any similar release by the Federal Reserve Board.

 

“Senior Interest Holders” means, collectively, the Lenders, the Administrative Agent, the Borrower Indemnified Parties, the Servicer Indemnified Parties and the Affected Persons.

 

“Senior Interests” means, collectively, (i) the Aggregate Interest, (ii) the Aggregate Capital, (iii) the fees referred to in Section 2.03 of the Receivables Financing

 

Purchase and Sale Agreement

 

Exhibit B-1

 

Agreement, (iv) all amounts payable pursuant to Sections 4.01, 4.02, 4.03, 11.01 or 12.04 of the Receivables Financing Agreement and (v) all other obligations of the Buyer and the Servicer that are due and payable, to (a) the Lenders, the Administrative Agent and their respective successors, permitted transferees and assigns arising in connection with the Transaction Documents and (b) any Borrower Indemnified Party, Servicer Indemnified Party or Affected Person arising in connection with the Receivables Financing Agreement or any other Transaction Document, in each case, howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, now or hereafter existing, or due or to become due, together with any and all interest accruing on any such amount after the commencement of any Bankruptcy Proceedings, notwithstanding any provision or rule of law that might restrict the rights of any Senior Interest Holder, as against the Buyer or anyone else, to collect such interest.

 

“Subordination Provisions” means, collectively, clauses (a) through (l) of paragraph 9 hereof.

 

3.                                      Interest.  Subject to the Subordination Provisions set forth below, the Buyer promises to pay interest on this Subordinated Note as follows: to (but excluding) the date on which the entire aggregate unpaid Purchase Price is fully paid, the aggregate unpaid Purchase Price from time to time outstanding shall bear interest at a rate per annum equal to the Prime Rate.

 

4.                                      Interest Payment Dates.  Subject to the Subordination Provisions set forth below, the Buyer shall pay accrued interest on this Subordinated Note on each Monthly Settlement Date, and shall pay accrued interest on the amount of each principal payment made in cash on a date other than a Monthly Settlement Date at the time of such principal payment.

 

5.                                      Basis of Computation.  Interest accrued hereunder shall be computed for the actual number of days elapsed on the basis of a 365- or 366-day year, as the case may be.

 

6.                                      Principal Payment Dates.  Subject to the Subordination Provisions set forth below, payments of the principal amount of this Subordinated Note shall be made as follows:

 

(a)                                 The principal amount of this Subordinated Note shall be reduced by an amount equal to each payment deemed made pursuant to Section 3.3 of the Purchase and Sale Agreement.

 

(b)                                 The entire outstanding principal amount of this Subordinated Note shall be paid on the Note Maturity Date.

 

(c)                                  Subject to the Subordination Provisions set forth below, the principal amount of and accrued interest on this Subordinated Note may be prepaid by, and in the sole discretion of the Buyer, on any Business Day without premium or penalty.

 

7.                                      Payment Mechanics.  All payments of principal and interest hereunder are to be made in lawful money of the United States of America in the manner specified in Article III of the Purchase and Sale Agreement.

 

Exhibit B-2

 

8.                                      Enforcement Expenses.  In addition to and not in limitation of the foregoing, but subject to the Subordination Provisions set forth below and to any limitation imposed by Applicable Law, the Buyer agrees to pay all expenses in accordance with Section 10.6 of the Purchase and Sale Agreement.

 

9.                                      Subordination Provisions. The Buyer covenants and agrees, and the Originator and any other holder of this Subordinated Note (collectively, the Originator and any such other holder are called the “Holder”), by its acceptance of this Subordinated Note, likewise covenants and agrees on behalf of itself and any Holder, that the payment of the principal amount of and interest on this Subordinated Note is hereby expressly subordinated in right of payment to the payment and performance of the Senior Interests to the extent and in the manner set forth in the following clauses of this paragraph 9:

 

(a)                                 No payment or other distribution of the Buyer’s assets of any kind or character, whether in cash, securities, or other rights or property, shall be made on account of this Subordinated Note except to the extent such payment or other distribution is (i) either permitted under the Receivables Financing Agreement or deemed made in accordance therewith or (ii) made pursuant to clause (a) or (b) of paragraph 6 of this Subordinated Note;

 

(b)                                 In the event of any dissolution, winding up, liquidation, readjustment, reorganization or other similar event relating to the Buyer, whether voluntary or involuntary, partial or complete, and whether in bankruptcy, insolvency or receivership proceedings, or upon an assignment for the benefit of creditors, or any other marshalling of the assets and liabilities of the Buyer or any sale of all or substantially all of the assets of the Buyer other than as permitted by the Purchase and Sale Agreement (such proceedings being herein collectively called “Bankruptcy Proceedings”), the Senior Interests shall first be paid and performed in full and in cash before the Originator shall be entitled to receive and to retain any payment or distribution in respect of this Subordinated Note.  In order to implement the foregoing:  (i) all payments and distributions of any kind or character in respect of this Subordinated Note to which the Holder would be entitled except for this clause (b) shall be made directly to the Administrative Agent (for the benefit of the Senior Interest Holders); (ii) the Holder shall promptly file a claim or claims, in the form required in any Bankruptcy Proceedings, for the full outstanding amount of this Subordinated Note, and shall use commercially reasonable efforts to cause said claim or claims to be approved and all payments and other distributions in respect thereof to be made directly to the Administrative Agent (for the benefit of the Senior Interest Holders) until the Senior Interests shall have been paid and performed in full and in cash; and (iii) the Holder hereby irrevocably agrees that the Administrative Agent (acting on behalf of the Lenders), may in the name of the Holder or otherwise, demand, sue for, collect, receive and receipt for any and all such payments or distributions, and file, prove and vote or consent in any such Bankruptcy Proceedings with respect to any and all claims of the Holder relating to this Subordinated Note, in each case until the Senior Interests shall have been paid and performed in full and in cash;

 

Exhibit B-3

 

(c)                                  In the event that the Holder receives any payment or other distribution of any kind or character from the Buyer or from any other source whatsoever, in respect of this Subordinated Note, other than as expressly permitted by the terms of this Subordinated Note, such payment or other distribution shall be received in trust for the Senior Interest Holders and shall be turned over by the Holder to the Administrative Agent (for the benefit of the Senior Interest Holders) upon reasonably detailed request therefor from the Person entitled thereto.  The Holder will mark its books and records so as clearly to indicate that this Subordinated Note is subordinated in accordance with the terms hereof. All payments and distributions received by the Administrative Agent in respect of this Subordinated Note, to the extent received in or converted into cash, may be applied by the Administrative Agent (for the benefit of the Senior Interest Holders) first to the payment of any and all expenses (including Attorney Costs) paid or incurred by the Senior Interest Holders in enforcing these Subordination Provisions, or in endeavoring to collect or realize upon this Subordinated Note, and any balance thereof shall, solely as between the Originator and the Senior Interest Holders, be applied by the Administrative Agent (in the order of application set forth in Section 3.01(a) of the Receivables Financing Agreement) toward the payment of the Senior Interests; but as between the Buyer and its creditors, no such payments or distributions of any kind or character shall be deemed to be payments or distributions in respect of the Senior Interests;

 

(d)                                 Notwithstanding any payments or distributions received by the Senior Interest Holders in respect of this Subordinated Note, while any Bankruptcy Proceedings are pending the Holder shall not be subrogated to the then existing rights of the Senior Interest Holders in respect of the Senior Interests until the Senior Interests have been paid and performed in full and in cash.  If no Bankruptcy Proceedings are pending, the Holder shall only be entitled to exercise any subrogation rights that it may acquire (by reason of a payment or distribution to the Senior Interest Holders in respect of this Subordinated Note) to the extent that any payment arising out of the exercise of such rights would be permitted under Section 7.01(r) of the Receivables Financing Agreement;

 

(e)                                  These Subordination Provisions are intended solely for the purpose of defining the relative rights of the Holder, on the one hand, and the Senior Interest Holders on the other hand.  Nothing contained in these Subordination Provisions or elsewhere in this Subordinated Note is intended to or shall impair, as between the Buyer, its creditors (other than the Senior Interest Holders) and the Holder, the Buyer’s obligation, which is unconditional and absolute, to pay the Holder the principal of and interest on this Subordinated Note as and when the same shall become due and payable in accordance with the terms hereof or to affect the relative rights of the Holder and creditors of the Buyer (other than the Senior Interest Holders);

 

(f)                                   The Holder shall not, until the Senior Interests have been paid and performed in full and in cash, (i) cancel, waive, forgive, transfer or assign, or commence legal proceedings to enforce or collect, or subordinate to any obligation of the Buyer, howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, or now or hereafter existing, or due or to become due, other than the Senior Interests, this Subordinated Note or any rights in respect hereof or (ii) convert this

 

Exhibit B-4

 

Subordinated Note into an equity interest in the Buyer, unless the Holder shall, in either case, have received the prior written consent of the Administrative Agent;

 

(g)                                  The Holder shall not, without the advance written consent of the Administrative Agent and each Lender, commence, or join with any other Person in commencing, any Bankruptcy Proceedings with respect to the Buyer until at least one year and one day shall have passed since the Senior Interests shall have been paid and performed in full and in cash;

 

(h)                                 If, at any time, any payment (in whole or in part) of any Senior Interest is rescinded or must be restored or returned by a Senior Interest Holder (whether in connection with Bankruptcy Proceedings or otherwise), these Subordination Provisions shall continue to be effective or shall be reinstated, as the case may be, as though such payment had not been made;

 

(i)                                     Each of the Senior Interest Holders may, from time to time, at its sole discretion, without notice to the Holder, and without waiving any of its rights under these Subordination Provisions, take any or all of the following actions:  (i) retain or obtain an interest in any property to secure any of the Senior Interests; (ii) retain or obtain the primary or secondary obligations of any other obligor or obligors with respect to any of the Senior Interests; (iii) extend or renew for one or more periods (whether or not longer than the original period), alter or exchange any of the Senior Interests, or release or compromise any obligation of any nature with respect to any of the Senior Interests; (iv) amend, supplement, amend and restate, or otherwise modify any Transaction Document; and (v) release its security interest in, or surrender, release or permit any substitution or exchange for all or any part of any rights or property securing any of the Senior Interests, or extend or renew for one or more periods (whether or not longer than the original period), or release, compromise, alter or exchange any obligations of any nature of any obligor with respect to any such rights or property;

 

(j)                                    The Holder hereby waives:  (i) notice of acceptance of these Subordination Provisions by any of the Senior Interest Holders; (ii) notice of the existence, creation, non-payment or non-performance of all or any of the Senior Interests; and (iii) all diligence in enforcement, collection or protection of, or realization upon, the Senior Interests, or any thereof, or any security therefor;

 

(k)                                 Each of the Senior Interest Holders may, from time to time, on the terms and subject to the conditions set forth in the Transaction Documents to which such Persons are party, but without notice to the Holder, assign or transfer any or all of the Senior Interests, or any interest therein; and, notwithstanding any such assignment or transfer or any subsequent assignment or transfer thereof, such Senior Interests shall be and remain Senior Interests for the purposes of these Subordination Provisions, and every immediate and successive assignee or transferee of any of the Senior Interests or of any interest of such assignee or transferee in the Senior Interests shall be entitled to the benefits of these Subordination Provisions to the same extent as if such assignee or transferee were the assignor or transferor; and

 

Exhibit B-5

 

(l)                                     These Subordination Provisions constitute a continuing offer from the Holder to all Persons who become the holders of, or who continue to hold, Senior Interests; and these Subordination Provisions are made for the benefit of the Senior Interest Holders, and the Administrative Agent may proceed to enforce such provisions on behalf of each of such Persons.

 

10.                               General.  No failure or delay on the part of the Originator in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power or right preclude any other or further exercise thereof or the exercise of any other power or right.  No amendment, modification or waiver of, or consent with respect to, any provision of this Subordinated Note shall in any event be effective unless (i) the same shall be in writing and signed and delivered by the Buyer and the Holder and (ii) all consents required for such actions under the Transaction Documents shall have been received by the appropriate Persons.

 

11.                               Maximum Interest.  Notwithstanding anything in this Subordinated Note to the contrary, the Buyer shall never be required to pay unearned interest on any amount outstanding hereunder and shall never be required to pay interest on the principal amount outstanding hereunder at a rate in excess of the maximum nonusurious interest rate that may be contracted for, charged or received under applicable federal or state law (such maximum rate being herein called the “Highest Lawful Rate”).  If the effective rate of interest which would otherwise be payable under this Subordinated Note would exceed the Highest Lawful Rate, or if the holder of this Subordinated Note shall receive any unearned interest or shall receive monies that are deemed to constitute interest which would increase the effective rate of interest payable by the Buyer under this Subordinated Note to a rate in excess of the Highest Lawful Rate, then (i) the amount of interest which would otherwise be payable by the Buyer under this Subordinated Note shall be reduced to the highest amount allowed by Applicable Law, and (ii) any unearned interest paid by the Buyer or any interest paid by the Buyer in excess of the Highest Lawful Rate shall be refunded to the Buyer.  Without limitation of the foregoing, all calculations of the rate of interest contracted for, charged or received by the Originator under this Subordinated Note that are made for the purpose of determining whether such rate exceeds the Highest Lawful Rate applicable to the Originator (such Highest Lawful Rate being herein called the “Originator’s Maximum Permissible Rate”) shall be made, to the extent permitted by usury laws applicable to the Originator (now or hereafter enacted), by amortizing, prorating and spreading in equal parts during the actual period during which any amount has been outstanding hereunder all interest at any time contracted for, charged or received by the Originator in connection herewith.  If at any time and from time to time (i) the amount of interest payable to the Originator on any date shall be computed at the Originator’s Maximum Permissible Rate pursuant to the provisions of the foregoing sentence and (ii) in respect of any subsequent interest computation period the amount of interest otherwise payable to the Originator would be less than the amount of interest payable to the Originator computed at the Originator’s Maximum Permissible Rate, then the amount of interest payable to the Originator in respect of such subsequent interest computation period shall continue to be computed at the Originator’s Maximum Permissible Rate until the total amount of interest payable to the Originator shall equal the total amount of interest which would have been payable to the Originator if the total amount of interest had been computed without giving effect to the provisions of the foregoing sentence.

 

Exhibit B-6

 

12.                               No Negotiation. This Subordinated Note is not negotiable.

 

13.                               Governing Law.  THIS SUBORDINATED NOTE, 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).

 

14.                               Captions.  Paragraph captions used in this Subordinated Note are for convenience only and shall not affect the meaning or interpretation of any provision of this Subordinated Note.

 

Exhibit B-7

 

IN WITNESS WHEREOF, the Buyer has caused this Subordinated Note to be executed as of the date first written above.

 

	
 
    	
PRA   RECEIVABLES LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Exhibit B-8

 

Exhibit C

 

FORM OF JOINDER AGREEMENT

 

THIS JOINDER AGREEMENT, dated as of            , 20    (this “Agreement”) is executed by          , a                organized under the laws of            (the “Additional Originator”), with its principal place of business located at           .

 

BACKGROUND:

 

A.                                    PRA Receivables LLC, a Delaware limited liability company (the “Buyer”) and the various entities from time to time party thereto, as Originators (collectively, the “Originators”), have entered into that certain Purchase and Sale Agreement, dated as of March 22, 2016 (as amended, restated, supplemented or otherwise modified through the date hereof, and as it may be further amended, restated, supplemented or otherwise modified from time to time, the “Purchase and Sale Agreement”).

 

B.                                    The Additional Originator desires to become an Originator pursuant to Section 4.3 of the Purchase and Sale Agreement.

 

NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Additional Originator hereby agrees as follows:

 

SECTION 1.                            Definitions.  Capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings assigned thereto in the Purchase and Sale Agreement or in the Receivables Financing Agreement (as defined in the Purchase and Sale Agreement).

 

SECTION 2.                            Transaction Documents.  The Additional Originator hereby agrees that it shall be bound by all of the terms, conditions and provisions of, and shall be deemed to be a party to (as if it were an original signatory to), the Purchase and Sale Agreement and each of the other relevant Transaction Documents.  From and after the later of the date hereof and the date that the Additional Originator has complied with all of the requirements of Section 4.3 of the Purchase and Sale Agreement, the Additional Originator shall be an Originator for all purposes of the Purchase and Sale Agreement and all other Transaction Documents. The Additional Originator hereby acknowledges that it has received copies of the Purchase and Sale Agreement and the other Transaction Documents.

 

SECTION 3.                            Representations and Warranties.  The Additional Originator hereby makes all of the representations and warranties set forth in Article V (to the extent applicable) of the Purchase and Sale Agreement as of the date hereof (unless such representations or warranties relate to an earlier date, in which case as of such earlier date), as if such representations and warranties were fully set forth herein.  The Additional Originator hereby represents and warrants that its “location” (as defined in the applicable UCC) is [                    ], and the offices where the Additional Originator keeps all of its books and records concerning the Receivables and Related Security is as follows:

 

Purchase and Sale Agreement

 

Exhibit C-1

 

 

SECTION 4.                            Miscellaneous.  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).  This Agreement is executed by the Additional Originator for the benefit of the Buyer, and its assigns, and each of the foregoing parties may rely hereon.  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.  This Agreement shall be binding upon, and shall inure to the benefit of, the Additional Originator and its successors and permitted assigns.

 

[Signature Pages Follow]

 

Exhibit C-2

 

IN WITNESS WHEREOF, the undersigned has caused this Agreement to be executed by its duly authorized officer as of the date and year first above written.

 

	
 
    	
 
    	
[NAME   OF ADDITIONAL ORIGINATOR]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
Consented to:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
PRA   RECEIVABLES LLC
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Acknowledged by:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
PNC   BANK, NATIONAL ASSOCIATION
    	
 
    	
 
    
	
as   Administrative Agent
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
PNC   BANK, NATIONAL ASSOCIATION
    	
 
    	
 
    
	
as   a Lender
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
PRA   HOLDINGS, INC.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    	
 
    

 

Exhibit C-3

 

	
[EXISTING   ORIGINATORS]
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    	
 
    

 

Exhibit C-4EX-4.4

			
	364	 	Additional information Exhibit 4.4

  

 Exhibit
4.4 
 BOARD
AGREEMENT 
 May 20, 2015 

Between 
 AEGON N.V. 

and 
 ALEXANDER R. WYNAENDTS 

CONTENTS 

Clause 
  

	 	1.	Date of Commencement and Position 

	 	2.	Duration and Termination of The Agreement 

	 	3.	Remuneration 

	 	4.	Vacation 

	 	5.	Additional Benefits, Insurance and Healthcare 

	 	6.	Expenses 

	 	7.	Disability 

	 	8.	Pension 

	 	9.	Confidentiality 

	 	10.	Restraint of Competition 

	 	11.	Documents 

	 	12.	No Employment Relationship 

	 	13.	Termination of The Employment Agreement 

	 	14.	Final Provisions 

	 	15.	Governing Law and Arbitration Tribunal 

 SIGNATORIES 
 THIS AGREEMENT was entered into on May 20, 2015

 THE UNDERSIGNED: 

	 	1.	Aegon N.V., a public limited company (in Dutch: “naamloze vennootschap”), established in The Hague, the Netherlands, represented for this purpose by Mr. R. Routs, in his capacity of chairman of
and acting on behalf of the supervisory board of Aegon N.V., hereinafter the Company; and 

  

	 	2.	ALEXANDER R. WYNAENDTS, born on August 1, 1960, hereinafter the Executive; hereinafter together referred to as the Parties and each a Party, 

WHEREAS: 

	 	(A)	on August 1, 1997, the Executive entered into the employment with a company now belonging to the group of companies of which the Company is the holding company; 

 

	 	(B)	in its meeting on March 5, 2003, the supervisory board of the Company (the Supervisory Board) decided, having heard the general meeting of shareholders of the Company (the General Meeting) to appoint the Executive as
a member of the Executive Board of the Company (the Executive Board), which appointment entered into force on April 17, 2003; 

  

			
	 

	 	 Annual Report on Form 20-F 2015

 365 

 

	 	(C)	on August 6, 2003, the Executive entered into a new employment agreement with the Company effective as per April 17, 2003, superseding previous agreements, including the employment agreement mentioned
under (A) above, which employment agreement was amended on March 1, 2005 (the Employment Agreement); 

  

	 	(D)	in its meeting on May 20, 2015, the General Meeting, after recommendation by the Supervisory Board on March 18, 2015, decided to reappoint the Executive as a member of the Executive Board with effect of May 20,
2015, for a term of four years, notwithstanding the right of the Parties to prematurely terminate the directorship in accordance with the relevant provisions of Dutch company law; 

 

	 	(E)	also against the background of the fact that, with effect from January 1, 2013, board agreements concluded between a Dutch listed company and an executive director can no longer be qualified as an employment
agreement, the Parties have expressed their wish and intention to enter into a services agreement within the meaning of article 7:400 of the Dutch Civil Code (the Agreement); 

 

	 	(F)	the Parties agreed to enter into this Agreement with effect of May 20, 2015 and to terminate the Employment Agreement on May 20, 2015 with mutual consent in acknowledgement of the fact that the Executive is not entitled
to any compensation to be paid by the Company or any of its affiliated companies, including but not limited to any severance payment whether contractual, statutory or otherwise, with regard to the termination of the Employment Agreement;

  

	 	(G)	the Parties desire to set forth the terms and conditions applying to the termination of the Employment Agreement in this Agreement; and 

 

	 	(H)	the Parties desire to set forth, thereby superseding previous employment agreements, the applicable terms and conditions of the engagement of the Executive by the Company in this Agreement. 

DECLARE TO HAVE AGREED AS FOLLOWS: 

 

	 	1.	DATE OF COMMENCEMENT AND POSITION 

	 	1.1	The Executive enters into the Agreement with effect from May 20, 2015, (the Commencement Date). The Executive shall, as of the Commencement Date, continue to hold the position of member of the Executive Board under the
articles of association (in Dutch: “statutair directeur”) and Chief Executive Officer of the Company. 

  

	 	1.2	The Executive has the obligations that have been or will be imposed by law, regulations issued by the regulator, the Dutch Corporate Governance Code, the articles of association of the Company, the regulations for
members of the Executive Board, and such other regulations as such regulations shall apply from time to time. The above-mentioned rules contain, amongst others, provisions relating to the prohibition against trading and inside information and an
arrangement relating to restrictions imposed on private investments. 

  

	 	1.3	The Executive is obliged to do or to refrain from doing all that executive directors in similar positions should do or should refrain from doing. The Executive shall fully devote himself, his time and his energy to
promoting the interest of the Company and its affiliated companies. To that effect, the Executive is expected to spend most of his time in the Netherlands, but also in such other countries as deemed commensurate with prevailing business needs.

  

	 	1.4	The Executive acknowledges and agrees to comply with all policies and procedures that are applicable to the Company and its affiliated companies and procure that such policies and procedures are implemented and observed
in the Company and those affiliated companies within his area of responsibility, as such policies and by-laws shall apply and may be amended from time to time. 

  

	 	1.5	If the Executive is a member of the managing board and/or supervisory board of another company within the same group on the basis of his position as Chief Executive Officer of the Company or member of the Executive
Board (so-called “q.q.-directorships”), or if the Executive is employed in any other position pursuant to his position as Chief Executive Officer of the Company or member of the Executive Board (so-called “q.q.-positions”), he
will pay the income derived therefrom, if any, to the Company, unless the chairman of the Supervisory Board decides otherwise. The Executive will not suffer any tax disadvantage. 

  
 

 

			
	366	 	Additional information Exhibit 4.4

  

	 	2.	DURATION AND TERMINATION OF THE AGREEMENT 

	 	2.1	The Agreement is entered into for a definite period and will terminate by operation of law, without notice being required, on the earlier of (i) the date of the Annual General Meeting in 2019, or (ii) the moment
Executive’s Executive Board membership with the Company is terminated. 

  

	 	2.2	Without prejudice to clause 2.1, the Agreement may be terminated by either Party during its term with due observance of a notice period of three months for the Executive and six months for the Company. If it is the
Executive’s intention to terminate the Agreement, the Executive shall inform the chairman of the Supervisory Board in good time before giving notice of termination. 

 

	 	2.3	If (i) the Company gives notice of termination of the Agreement after the General Meeting has decided to remove the Executive as Chief Executive Officer of the Company and member of the Executive Board in line with the
articles of association of the Company or (ii) the Agreement is terminated at the initiative of the Company, in each case for reasons other than due to an urgent cause or seriously culpable actions or neglect of the Executive in fulfilling his
duties, subject to the applicable notice period as referred to in clause 2.2, a termination fee (the Termination Fee) equal to the Annual Cash Base Fee as defined in clause 3.1 will be made available to the Executive within thirty (30) days of
the date of termination, which expressly does not include payment for variable compensation or other forms of remuneration, including fringe benefits, or insurance scheme, or the reimbursement of expenses for which there shall be no entitlement to
remuneration. This Termination Fee refers to Article 1:125, in particular subsection (2) of the Dutch Financial Supervision Act. 

  

	 	2.4	The Company has the right to terminate this Agreement with immediate effect due to an urgent cause or seriously culpable actions or neglect of the Executive in fulfilling his duties. Such cause may include in particular
a gross breach of duties. In case of a termination for such cause, no entitlement to a Termination Fee exists. The same applies in the event of an voluntary termination of this Agreement by the Executive, in case of failure of the
Company as referred to in article 1:125 of the Dutch Financial Supervision Act, or in case it follows from law or regulations, as in effect from time to time, that no Termination Fee is due, e.g. in case the Termination Fee is seen as reward for
failure. 

  

	 	2.5	The Parties agree that if the Termination Fee is paid, this constitutes a suitable arrangement in the event of a notice of termination by the Company (clause 2.2 of the Agreement) or the dissolution of the
Agreement by the appropriate court or arbitration tribunal. Payment of the Termination Fee shall, in the absolute discretion of the Company, be conditional upon (a) the Executive signing and delivering to the Company not more than 7 days before
payment date a general release of claims for the benefit of the Company in such form as the Company may reasonably request; and (b) the Executive not being dismissed in accordance with clause 2.4 or suspended. The Termination Fee will, where
appropriate, be deducted from any payment awarded by the competent court or a arbitration tribunal, as the case may be, in relation to termination of the Agreement. Any payments already made by the Company to the Executive on the date of
a court or arbitration tribunal decision may be reclaimed as unduly paid and, where necessary, deducted from the amount awarded by the court or arbitration tribunal. 

 

	 	2.6	The Executive is obliged to resign from all positions that are inextricably linked to his position as member of the Executive Board (the so-called “q.q.-directorships” and “q.q.-positions”) upon
termination of this Agreement and with effect from the date on which the Executive ceases activities fulfilling his role as Chief Executive Officer of the Company. 

 

	 	3.	REMUNERATION 

	 	3.1	As of the May 20, 2015, the Executive shall be entitled to a basic annual fee in an amount of EUR 1,154,071 gross per year, which will be paid by the Company to the Executive in cash in twelve equal
instalments at the end of each month (the Annual Cash Base Fee). 

  

	 	3.2	At regular intervals, but at least once a year, the Supervisory Board will review the Annual Cash Base Fee of the Executive. 

  

	 	3.3	The Executive shall be eligible for an annual gross variable compensation (the Variable Compensation) in accordance with the Remuneration Policy, the Aegon Group Global Remuneration Framework (the AGGRF) and the
Executive Board Variable Compensation Plan Rules as amended from time to time. For the avoidance of doubt, the Variable Compensation does not form part of and is in addition to the Annual Cash Base Fee. In line with the current Remuneration Policy,
the Executive Board Variable Compensation Plan Rules and the AGGRF, the Executive can earn a Variable Compensation of up to a maximum of 100% of the Annual Cash Base Fee. The Executive qualifies as Identified Staff as defined in the AGGRF.

  

			
	 

	 	 Annual Report on Form 20-F 2015

 367 

 

	 	4.	VACATION 

	 	4.1	The Executive shall be entitled to 31 working days vacation per year. In taking holidays, the Executive shall consult with the other members of the Executive Board and will take the Company’s interests into account
and agrees to the guiding principle set out in clause 4.2. 

  

	 	4.2	The Executive agrees that each calendar year, any and all accrued holiday rights should be taken at 31 December of such year. The Executive and the Company therefore agree that any vacation days accrued under this
Agreement are deemed to have been taken at the end of each calendar year in which they were accrued. 

  

	 	5.	ADDITIONAL BENEFITS, INSURANCE AND HEALTHCARE 

	 	5.1	The Company shall, at its costs, arrange for 

	 	(1)	a life insurance for the benefit of the Executive; and 

	 	(2)	an additional travel insurance for accidental death, partial disability. 

  

	 	5.2	During the term of this Agreement, the Executive is amongst others entitled to the following benefits in addition to the benefits mentioned in clause 5.1: 

	 	(1)	the Company will provide the Executive with a company car in accordance with the User’s Arrangement as determined from time to time for members of the Executive Board. The company car may be used for private
purposes. Any tax consequences of private usage are on account of the Company which means that there will be a gross up for tax purposes; and 

	 	(2)	the Company will pay to the Executive a special gross allowance of two per cent (2%) of the Annual Cash Base Fee, which shall be paid in twelve equal instalments at the end of each month. 

 

	 	6.	EXPENSES 

	 	6.1	The Company will pay a monthly net expense allowance of EUR 450.00 per month for representation and general costs in accordance with the Expense Policy for the Executive Board as such policy may be amended
from time to time, to be paid simultaneously with the monthly instalments of the Annual Cash Base Fee. 

  

	 	6.2	Any business expenses incurred by the Executive in the execution of his business tasks not covered by the monthly expense allowance as mentioned in clause 6.1 are reimbursed by the Company in accordance with the Expense
Policy for the Executive Board as such policy may be amended from time to time. The costs mentioned above are reimbursed on production of appropriate receipts or other evidence reasonably acceptable to the Company, if required by the Company, and
upon approval by the Supervisory Board. 

  

	 	7.	DISABILITY 

	 	7.1	In the event of absence due to sickness and / or disability of the Executive, the Parties shall mutatis mutandis apply the relevant provisions in the AEGON Nederland Collective Labour Agreement with regard to payments
in case of disability, as arranged in the Collective Labour Agreement from time to time. To calculate the amount of the monthly supplement during the relevant period only the Annual Cash Base Fee will be taken into account. Contrary to the
provisions in the Collective Labour Agreement, the Executive will no longer be eligible for any Variable Compensation related to any performance year following the first year of disability until the Executive – partially or fully – resumes
his duties as Executive Board member. Variable Compensation allocations related to the first year of disability or any subsequent year in which Executive Board member duties would be resumed only partially may be adjusted downwards to reflect the
absence of the Executive during this / these performance year(s), such to be decided by the Supervisory Board. 

  

	 	8.	PENSION 

	 	8.1	Subject to clause 8.4, the Company shall, at its costs, arrange for the following pension schemes for the Executive: 

	 	(1)	a wage tax-facilitated pension scheme implemented with AEGON Levensverzekering N.V., that will arrange for an old age pension for the Executive on the basis of a final pay scheme which will entitle the
Executive to a benefit at the age of 65 of 1,428% of his last earned Annual Cash Base Fee to a maximum of the amount referred to in article 18ga of the Dutch Wage Tax Act 1964 (2015: EUR 100.000) – minus a social security
offset – for every year of service of the Executive with the Company; and 

	 	(2)	a non wage tax-facilitated pension scheme implemented with AEGON Levensverzekering N.V. that will arrange for an old age pension for the Executive on the basis of a final pay scheme which will entitle the
Executive at the age of 60 to a benefit of 70% of his last earned Annual Cash Base Fee, upon deduction of the benefits accrued on the basis of clause 8.1 under (1), and on the basis of the earlier (pre)pension schemes and savings plans that
applied under the Employment Agreement. 

  
 

 

			
	368	 	Additional information Exhibit 4.4

  

	 	8.2	In addition to the pension arrangements in clause 8.1 and during the period of this Agreement, the Executive is entitled to (the net equivalent of) an annual gross amount in cash equal to twenty-eight per cent (28%) of
the Annual Cash Base Fee which will be paid to a blocked account on behalf of the Executive in accordance with the Letter of the Company to the Executive of November 15, 2010. 

 

	 	8.3	The pension schemes referred to in clause 8.1 under (1) and (2) will be specified in an amendment of the pension agreement (“Pensioenovereenkomst”) respectively the supplementary pension agreement
(“Aanvullende pensioenovereenkomst”) between the Company and the Executive dated May 25, 2010. 

  

	 	9.	CONFIDENTIALITY 

	 	9.1	The Executive shall throughout the duration of this Agreement and after this Agreement has ended for whatever reason, refrain from disclosing in any manner to any individual (including other personnel of the Company or
of other companies affiliated with the Company unless such personnel must be informed in connection with their work activities for the Company) any information of a confidential nature concerning the Company or other companies affiliated with
the Company, which has become known to the Executive as a result of he position the Executive holds at the Company and of which the Executive knows or should have known to be of a confidential nature. 

 

	 	9.2	Information of a confidential nature includes, but is not limited to, secret information relating to or comprising lists, plans, reports, controls, documents or details of actual or potential suppliers, agents,
distributors, franchisees, clients, contractors, joint venture or alliance partners, employees or temporary workers or relating to the trade, business, dealings, tenders, technical processes, designs or finances of any of the aforesaid or relating
to know-how, data bases, inventions, concepts or improvements or any other matters connected with the services marketed, provided or obtained by the Company or its subsidiaries or any of their respective clients. 

 

	 	9.3	The duty of this confidentiality provision survives this Agreement and any subsequent agreements, regardless of the reason of termination. 

 

	 	10.	RESTRAINT OF COMPETITION 

	 	10.1	If this Agreement is terminated on the Executive’s initiative within the first two years of the term of this agreement the Executive undertakes for a period of twelve (12) months following the effective date
of termination of the Agreement, not to be employed or involved in any way, directly or indirectly, either for his own account or for the account of others, in or by any company which carries on activities in the majority of its business in life
insurance or pension industry, competing with the activities of the Company or any of its affiliated companies, nor to act as an intermediary thereby in any way, either directly or indirectly. This restraint of competition applies worldwide.

  

	 	10.2	Both Parties acknowledge that the prohibition and restriction contained in this clause 10 are: 

	 	(a)	reasonable as to period, territorial limitation and subject matter; and 

	 	(b)	no more than that which is reasonably required for the protection of the Company’s or any of its relevant affiliated company’s legitimate business interests and of any confidential information the Executive
may have learned or possessed during the term of this Agreement. 

  

	 	10.3	Following a written request with regard to a specific activity or involvement, the Supervisory Board can waive the Executive’s obligations under this clause 10. Such waiver is valid between the Parties
only if it has been granted in writing in a registered letter sent to the Executive, signed by the chairman of the Supervisory Board on behalf of the Supervisory Board. 

 

	 	11.	DOCUMENTS 

	 	11.1	All notes and memoranda concerning the business or finances of the Company and its subsidiaries, their dealings, transactions or affairs, or their suppliers, agents, distributors, franchisees, clients, contractors,
joint venture or alliance partners, employees or temporary workers which shall have been acquired received or made by the Executive during the course of his duties shall be the property of the Company or its subsidiaries (as the case may be) and
shall be surrendered by the Executive to the Company on its behalf immediately, without necessitating the need for any request to be made in this regard, at termination of this Agreement, on suspension of the Executive from active duty for whatever
reason or at the request of the Supervisory Board at any time during the course of his duties under this Agreement. 

  

	 	11.2	The Executive shall not have nor keep in his possession any documents and/or correspondence and/or data carriers and/or copies thereof in any manner whatsoever, which belong to the Company or to affiliated companies,
except insofar as and for as long as necessary for the performance of his work for the Company. The Executive will be obliged to return to the Company immediately, without necessitating the need for any request to be made in this regard, any and all
such documents and/or correspondence and/or data carriers and/or copies thereof at termination of this Agreement, on suspension of the Executive from active duty for whatever reason or at the request of the Supervisory Board at any time during the
course of his duties under this Agreement. 

  

			
	 

	 	 Annual Report on Form 20-F 2015

 369 

 

  

	 	12.	NO EMPLOYMENT RELATIONSHIP 

	 	12.1	Nothing contained in this Agreement shall be construed or have effect as constituting any relationship of employer and employee or partners between the Company on the one hand and the Executive on the other hand.

  

	 	13.	TERMINATION OF THE EMPLOYMENT AGREEMENT 

	 	13.1	The Employment Agreement between the Parties terminates with mutual consent on the date of this agreement and Parties agree that the Executive is not entitled to any compensation to be paid by the Company or any of its
affiliated companies, including but not limited to any severance payment whether contractual, statutory or otherwise, with regard to the termination of the Employment Agreement. 

 

	 	14.	FINAL PROVISIONS 

	 	14.1	Amendments to this Agreement may only be agreed upon in writing and with regard to the Company, solely when a decision to that effect has been taken by the competent body of the Company. 

 

	 	14.2	Parties acknowledge that each has read and understands the whole of this Agreement and voluntarily execute it after having had all opportunities to seek such advice as each may have wished to receive. 

 

	 	14.3	The clauses of this Agreement are severable. If any clause is found by any court or arbitration tribunal of competent jurisdiction to be unreasonable and invalid, that determination shall not affect the enforceability
of the other clauses of this Agreement. 

  

	 	14.4	This Agreement supersedes all previous employment agreements between the Executive and the Company and between the Executive and any affiliated companies and takes their place. After this Agreement becomes effective,
the Executive and the Company can no longer derive any rights from agreements which have been superseded herewith. 

  

	 	15.	GOVERNING LAW AND ARBITRATION TRIBUNAL 

	 	15.1	This Agreement is governed by an construed in exclusive accordance with the laws of the Netherlands. 

  

	 	15.2	Any disputes arising in connection with this Agreement, or further agreements resulting thereof, shall be finally settled in accordance with the Rules of the Netherlands Arbitration Institute in Rotterdam. The
Arbitration Tribunal shall be composed of three arbiters. The place of arbitration shall be The Hague. 

 SIGNATORIES 
 In witness whereof, this
Agreement has been signed and executed in duplicate this May 20, 2015 
 AEGON N.V. 

/s/ Mr. R.J. Routs 
  

			
	  
  

Mr. R.J. Routs
	  	
	 Chairman of the Supervisory Board

 
	  	

  

			
	 Mr. A.R. Wynaendts
  
	  	
	 	  	

 /s/ Mr. A.R. Wynaendts

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