Syneos Health, Inc. (Form: 10-Q, Received: 11/04/2022 06:10:49)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______.

Commission File Number: 001-36730

SYNEOS HEALTH, INC.

(Exact name of registrant as specified in its charter)


Delaware	27-3403111
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1030 Sync Street, Morrisville, North Carolina 27560-5468

(Address of principal executive offices and Zip Code)

(919) 876-9300

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, $0.01 par value per share	SYNH	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 31, 2022, there were approximately 102,904,024 shares of the registrant’s common stock outstanding.

Table of Contents

SYNEOS HEALTH, INC.

FORM 10-Q

TABLE OF CONTENTS


	PART I - FINANCIAL INFORMATION

		Page

Item 1.	Financial Statements	3

	Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2022 and 2021 (unaudited)	3

	Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2022 and 2021 (unaudited)	4

	Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021 (unaudited)	5

	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021 (unaudited)	6

	Condensed Consolidated Statements of Shareholders’ Equity for the three and nine months ended September 30, 2022 and 2021 (unaudited)	7

	Notes to Condensed Consolidated Financial Statements (unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37

Item 4.	Controls and Procedures	37

	PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	38

Item 1A.	Risk Factors	38

Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities	39

Item 5.	Other Information	40

Item 6.	Exhibits	41

	Signature	42

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

SYNEOS HEALTH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
	(in thousands, except per share data)
Revenue	$	1,336,223		$	1,348,230		$	4,033,215		$	3,839,586

Costs and operating expenses:
Direct costs (exclusive of depreciation and amortization)		1,017,784			1,031,887			3,097,113			2,969,718
Selling, general, and administrative expenses		130,355			139,524			409,561			421,507
Restructuring and other costs		8,727			7,209			33,267			18,403
Depreciation		21,797			17,680			63,617			54,285
Amortization		39,717			38,574			121,320			117,618
Total operating expenses		1,218,380			1,234,874			3,724,878			3,581,531
Income from operations		117,843			113,356			308,337			258,055

Total other expense, net:
Interest income		(303	)		76			(342	)		5
Interest expense		22,131			16,698			55,998			62,645
Loss on extinguishment of debt		67			—			67			2,802
Other income, net		(20,737	)		(3,827	)		(21,247	)		(5,856	)
Total other expense, net		1,158			12,947			34,476			59,596
Income before provision for income taxes		116,685			100,409			273,861			198,459
Income tax expense		29,636			22,166			62,892			39,587
Net income	$	87,049		$	78,243		$	210,969		$	158,872

Earnings per share:
Basic	$	0.85		$	0.76		$	2.05		$	1.53
Diluted	$	0.84		$	0.75		$	2.04		$	1.51
Weighted average common shares outstanding:
Basic		102,731			103,562			102,997			103,924
Diluted		103,206			104,785			103,563			105,087

The accompanying notes are an integral part of these condensed consolidated financial statements.

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SYNEOS HEALTH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
	(in thousands)
Net income	$	87,049		$	78,243		$	210,969		$	158,872
Unrealized (loss) gain on derivative instruments, net of income tax (benefit) expense of ($128), $317, $4,899, and $3,926, respectively		(360	)		936			13,808			11,581
Foreign currency translation adjustments, net of income tax expense (benefit) of $200, ($1,102), ($766), and ($1,260), respectively		(85,511	)		(23,687	)		(172,723	)		(19,172	)
Comprehensive income	$	1,178		$	55,492		$	52,054		$	151,281

The accompanying notes are an integral part of these condensed consolidated financial statements.

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SYNEOS HEALTH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


	September 30, 2022			December 31, 2021
	(in thousands, except par value)
ASSETS
Current assets:
Cash, cash equivalents, and restricted cash	$	170,100		$	106,475
Accounts receivable and unbilled services, net		1,647,461			1,524,890
Prepaid expenses and other current assets		145,645			135,091
Total current assets		1,963,206			1,766,456
Property and equipment, net		255,749			222,657
Operating lease right-of-use assets		185,727			209,408
Goodwill		4,850,457			4,956,015
Intangible assets, net		710,637			854,067
Deferred income tax assets		30,622			35,387
Other long-term assets		201,385			193,103
Total assets	$	8,197,783		$	8,237,093

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	118,952		$	107,535
Accrued expenses		653,199			614,441
Deferred revenue		885,013			868,455
Current portion of operating lease obligations		41,123			43,058
Current portion of finance lease obligations		25,053			20,627
Total current liabilities		1,723,340			1,654,116
Long-term debt		2,752,470			2,775,721
Operating lease long-term obligations		180,169			205,798
Finance lease long-term obligations		50,463			34,181
Deferred income tax liabilities		82,284			78,062
Other long-term liabilities		54,996			76,660
Total liabilities		4,843,722			4,824,538

Commitments and contingencies (Note 16)

Shareholders’ equity:
Preferred stock, $0.01 par value; 30,000 shares authorized, 0 shares issued and outstanding as of September 30, 2022 and December 31, 2021		—			—
Common stock, $0.01 par value; 600,000 shares authorized, 102,895 and 103,764 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively		1,029			1,038
Additional paid-in capital		3,449,399			3,474,088
Accumulated other comprehensive loss, net of taxes		(208,533	)		(49,618	)
Retained earnings (accumulated deficit)		112,166			(12,953	)
Total shareholders’ equity		3,354,061			3,412,555
Total liabilities and shareholders’ equity	$	8,197,783		$	8,237,093

The accompanying notes are an integral part of these condensed consolidated financial statements.

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SYNEOS HEALTH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Nine Months Ended September 30,
	2022			2021
	(in thousands)
Cash flows from operating activities:
Net income	$	210,969		$	158,872
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		184,937			171,903
Share-based compensation		46,499			48,891
Provision for doubtful accounts		179			51
Provision for (benefit from) deferred income taxes		8,797			(21,324	)
Foreign currency transaction adjustments		(30,445	)		(6,320	)
Fair value adjustment of contingent obligations		—			(597	)
Loss on extinguishment of debt		67			2,802
Other non-cash items		(8,219	)		6,657
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable, unbilled services, and deferred revenue		(137,124	)		(154,162	)
Accounts payable and accrued expenses		74,466			99,417
Other assets and liabilities		(46,962	)		(41,891	)
Net cash provided by operating activities		303,164			264,299
Cash flows from investing activities:
Payments related to acquisitions of businesses, net of cash acquired		(4,484	)		(226,347	)
Proceeds from notes receivable from divestiture		—			5,000
Purchases of property and equipment		(69,833	)		(29,917	)
Investments in unconsolidated affiliates		(5,230	)		(5,074	)
Loan to unconsolidated affiliate		—			(3,844	)
Net cash used in investing activities		(79,547	)		(260,182	)
Cash flows from financing activities:
Proceeds from issuance of long-term debt, net of discount		—			494,505
Payments of debt financing costs		—			(544	)
Repayments of long-term debt		(25,000	)		(602,277	)
Proceeds from accounts receivable financing agreement		—			65,000
Proceeds from revolving line of credit		130,000			30,000
Repayments of revolving line of credit		(130,000	)		—
Payments of contingent consideration related to acquisitions		(3,082	)		(7,197	)
Payments of finance leases		(4,379	)		(12,748	)
Payments for repurchases of common stock		(149,961	)		(117,521	)
Proceeds from exercises of stock options		23,568			26,223
Payments related to tax withholdings for share-based compensation		(30,633	)		(30,924	)
Net cash used in financing activities		(189,487	)		(155,483	)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash		29,495			1,728
Net change in cash, cash equivalents, and restricted cash		63,625			(149,638	)
Cash, cash equivalents, and restricted cash - beginning of period		106,475			272,173
Cash, cash equivalents, and restricted cash - end of period	$	170,100		$	122,535

The accompanying notes are an integral part of these condensed consolidated financial statements.

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SYNEOS HEALTH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
	(in thousands)
Shareholders’ equity, beginning balance	$	3,329,065		$	3,238,614		$	3,412,555		$	3,242,112

Common stock:
Beginning balance		1,026			1,035			1,038			1,039
Repurchases of common stock		—			—			(19	)		(15	)
Issuances of common stock		3			2			10			13
Ending balance		1,029			1,037			1,029			1,037

Additional paid-in capital:
Beginning balance		3,425,584			3,430,375			3,474,088			3,461,747
Repurchases of common stock		—			—			(64,092	)		(49,595	)
Issuances of common stock		10,840			10,904			(7,096	)		(4,665	)
Share-based compensation		12,975			15,099			46,499			48,891
Ending balance		3,449,399			3,456,378			3,449,399			3,456,378

Accumulated other comprehensive loss:
Beginning balance		(122,662	)		(25,641	)		(49,618	)		(40,801	)
Unrealized (loss) gain on derivative instruments, net of taxes		(360	)		936			13,808			11,581
Foreign currency translation adjustment, net of taxes		(85,511	)		(23,687	)		(172,723	)		(19,172	)
Ending balance		(208,533	)		(48,392	)		(208,533	)		(48,392	)

Retained earnings (accumulated deficit):
Beginning balance		25,117			(167,155	)		(12,953	)		(179,873	)
Repurchases of common stock		—			—			(85,850	)		(67,911	)
Net income		87,049			78,243			210,969			158,872
Ending balance		112,166			(88,912	)		112,166			(88,912	)

Shareholders’ equity, ending balance	$	3,354,061		$	3,320,111		$	3,354,061		$	3,320,111

The accompanying notes are an integral part of these condensed consolidated financial statements.

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SYNEOS HEALTH, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Basis of Presentation

Nature of Operations

Syneos Health, Inc. (the “Company”) is a global provider of end-to-end biopharmaceutical outsourcing solutions. The Company operates under two reportable segments, Clinical Solutions and Commercial Solutions, and derives its revenue through a suite of services designed to enhance its customers’ ability to successfully develop, launch, and market their products. The Company offers its solutions on both a standalone and integrated basis with biopharmaceutical development and commercialization services ranging from Phase I to IV clinical trial services to services associated with the commercialization of biopharmaceutical products. The Company’s customers include small, mid-sized, and large companies in the pharmaceutical, biotechnology, and medical device industries.

Unaudited Interim Financial Information

The Company prepared the accompanying unaudited condensed consolidated financial statements in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information. The significant accounting policies followed by the Company for interim financial reporting are consistent with the accounting policies followed for annual financial reporting.

The unaudited condensed consolidated financial statements, in management’s opinion, include all adjustments of a normal recurring nature necessary for a fair presentation. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (the “2021 Form 10-K”), filed with the Securities and Exchange Commission on February 17, 2022. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for the full year ending December 31, 2022 or any other future period. The unaudited condensed consolidated balance sheet as of December 31, 2021 is derived from the amounts in the audited consolidated balance sheet included in the 2021 Form 10-K.

Reclassification

Certain previously reported amounts have been reclassified to conform to the current year presentation.

Macroeconomic Environment

The Company’s business and operations have been and are expected to continue to be impacted by various risks and uncertainties, including but not limited to, the broad effects of the current macroeconomic environment on the global economy and major financial markets, including interest rate increases, inflation, and the ongoing COVID-19 pandemic, as well as other risks detailed in Part I, Item 1A, “Risk Factors” in the 2021 Form 10-K and Part II, Item 1A “Risk Factors” of this Quarterly Report on Form 10-Q.

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2. Financial Statement Details

Cash, Cash Equivalents, and Restricted Cash

Certain of the Company’s subsidiaries participate in a notional cash pooling arrangement to manage global liquidity requirements. As part of a master netting arrangement, the participants combine their cash balances in pooling accounts at the same financial institution with the ability to offset bank overdrafts of one participant against positive cash account balances held by another participant. Under the terms of the master netting arrangement, the financial institution has the right, ability, and intent to offset a positive balance in one account against an overdrawn amount in another account. Amounts in each of the accounts are unencumbered and unrestricted with respect to use. As such, the net cash balance related to this pooling arrangement is included in cash, cash equivalents, and restricted cash in the condensed consolidated balance sheets.

The Company’s net cash pool position consisted of the following (in thousands):


	September 30, 2022			December 31, 2021
Gross cash position	$	194,166		$	179,160
Less: cash borrowings		(194,713	)		(167,507	)
Net cash position	$	(547	)	$	11,653

The net cash position as of September 30, 2022 is negative due to the foreign exchange rate differential.

Accounts Receivable and Unbilled Services, net

Accounts receivable and unbilled services (including contract assets), net of allowance for doubtful accounts, consisted of the following (in thousands):


	September 30, 2022			December 31, 2021
Accounts receivable billed	$	917,436		$	873,265
Accounts receivable unbilled		240,501			241,799
Contract assets		497,334			417,411
Less: Allowance for doubtful accounts		(7,810	)		(7,585	)
Accounts receivable and unbilled services, net	$	1,647,461		$	1,524,890

Accounts Receivable Factoring Arrangement

The Company has an accounts receivable factoring agreement to sell certain eligible unsecured trade accounts receivable, at its option, without recourse, to an unrelated third-party financial institution for cash. For the nine months ended September 30, 2022 and 2021, the Company factored $94.7 million and $97.5 million, respectively, of trade accounts receivable on a non-recourse basis and received $94.2 million and $97.4 million, respectively, in cash proceeds from the sale. The fees associated with these transactions were insignificant.

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Goodwill

The changes in the carrying amount of goodwill by segment for the nine months ended September 30, 2022 were as follows (in thousands):


	Clinical Solutions (a)			Commercial Solutions (a)			Total
Balance as of December 31, 2021	$	3,448,699		$	1,507,316		$	4,956,015
Acquisitions (b)		1,903			2,924			4,827
Impact of foreign currency translation		(79,351	)		(31,034	)		(110,385	)
Balance as of September 30, 2022	$	3,371,251		$	1,479,206		$	4,850,457

(a) No impairment of goodwill was recorded for the nine months ended September 30, 2022.

(b) Amount represents goodwill recognized in connection with insignificant acquisitions and measurement period adjustments in connection with insignificant 2021 acquisitions during the nine months ended September 30, 2022.

Accumulated Other Comprehensive Loss, Net of Taxes

Accumulated other comprehensive loss, net of taxes, consisted of the following (in thousands):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Beginning balance	$	(122,662	)	$	(25,641	)	$	(49,618	)	$	(40,801	)

Derivative instruments:
Beginning balance		11,547			(8,116	)		(2,621	)		(18,761	)
Other comprehensive income (loss) before reclassifications		2,840			(489	)		16,279			(205	)
Reclassification adjustments		(3,200	)		1,425			(2,471	)		11,786
Ending balance		11,187			(7,180	)		11,187			(7,180	)

Foreign currency translation:
Beginning balance		(134,209	)		(17,525	)		(46,997	)		(22,040	)
Other comprehensive loss before reclassifications		(85,511	)		(23,687	)		(172,723	)		(19,172	)
Ending balance		(219,720	)		(41,212	)		(219,720	)		(41,212	)

Accumulated other comprehensive loss, net of taxes	$	(208,533	)	$	(48,392	)	$	(208,533	)	$	(48,392	)

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Changes in accumulated other comprehensive loss consisted of the following (in thousands):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Unrealized (loss) gain on derivative instruments:
Unrealized gain (loss) during period, before taxes	$	3,848		$	(655	)	$	22,055		$	(275	)
Income tax expense (benefit)		1,008			(166	)		5,776			(70	)
Unrealized gain (loss) during period, net of taxes		2,840			(489	)		16,279			(205	)
Reclassification adjustment, before taxes		(4,336	)		1,908			(3,348	)		15,782
Income tax (benefit) expense		(1,136	)		483			(877	)		3,996
Reclassification adjustment, net of taxes		(3,200	)		1,425			(2,471	)		11,786
Total unrealized (loss) gain on derivative instruments, net of taxes		(360	)		936			13,808			11,581

Foreign currency translation adjustment:
Foreign currency translation adjustment, before taxes		(85,311	)		(24,789	)		(173,489	)		(20,432	)
Income tax expense (benefit)		200			(1,102	)		(766	)		(1,260	)
Foreign currency translation adjustment, net of taxes		(85,511	)		(23,687	)		(172,723	)		(19,172	)

Total other comprehensive loss, net of taxes	$	(85,871	)	$	(22,751	)	$	(158,915	)	$	(7,591	)

Other Income, Net

Other income, net consisted of the following (in thousands):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Net realized foreign currency (gain) loss	$	(1,417	)	$	1,861		$	5,837		$	3,623
Net unrealized foreign currency gain		(21,376	)		(2,757	)		(30,445	)		(6,320	)
Equity investment loss (income)		1,000			—			1,000			(1,100	)
Other, net		1,056			(2,931	)		2,361			(2,059	)
Total other income, net	$	(20,737	)	$	(3,827	)	$	(21,247	)	$	(5,856	)

3. Divestitures and Investments

Divestitures

During the second quarter of 2020, the Company sold its contingent staffing business to a related party in exchange for potential future cash consideration not to exceed $4.0 million. Based on the financial results of the business through May 31, 2022 and 2021, the Company recognized $2.2 million and $1.8 million of contingent consideration in other expense, net in the accompanying condensed consolidated statements of income during the second quarter of 2022 and 2021, respectively, which reflects the maximum amount of future cash consideration.

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Investments

During 2020, the Company made a non-cash investment of $27.3 million to acquire certain intellectual property rights from a customer in lieu of cash payment for services rendered. During the second quarter of 2021, the Company exchanged the intellectual property for an equity method investment in an unconsolidated variable interest entity. The Company provided the entity with $3.8 million in cash, in the form of a loan, during the third quarter of 2021. Based on the hypothetical liquidation book value of its investment as of September 30, 2022 and 2021, the Company recognized $0.7 million and $3.0 million of losses during the three and nine months ended September 30, 2022, respectively, and $1.2 million and $4.0 million of losses during the three and nine months ended September 30, 2021, respectively, to other expense, net in the accompanying condensed and consolidated statements of income. As of September 30, 2022 and December 31, 2021, the book value of the Company’s investment was $10.2 million and $16.2 million, respectively, and was included in other long-term assets in the accompanying condensed consolidated balance sheets, with a maximum exposure to loss of approximately $13.7 million as of September 30, 2022, which includes funding of the loan.

4. Long-Term Debt Obligations

The Company’s debt obligations consisted of the following (in thousands):


	September 30, 2022			December 31, 2021
Secured Debt
Term Loan A - tranche one due March 2024	$	145,926		$	149,195
Term Loan A - tranche two due August 2024		1,615,067			1,636,797
Accounts receivable financing agreement due October 2024		400,000			400,000
Total secured debt		2,160,993			2,185,992
Unsecured Debt
Senior notes due January 2029 (the “Notes”)		600,000			600,000
Total debt obligations		2,760,993			2,785,992
Less: Term loan original issuance discount		(1,564	)		(2,228	)
Less: Unamortized deferred issuance costs		(6,959	)		(8,043	)
Total long-term debt	$	2,752,470		$	2,775,721

Credit Agreement

The Company is party to a credit agreement (as amended, the “Credit Agreement”) that includes a Term Loan A facility (“Term Loan A”) that has two tranches (as detailed in the table above), and a $600.0 million revolving credit facility that matures on August 1, 2024 (the “Revolver”). During the three months ended September 30, 2022, the Company made $25.0 million of voluntary prepayments against Term Loan A that were applied to future mandatory principal payments due. As a result of these and previous voluntary prepayments, the Company is not required to make a mandatory payment against the principal balance of Term Loan A until January 2024. In connection with these prepayments, the Company recorded a $0.1 million loss on extinguishment of debt during the three months ended September 30, 2022. As of September 30, 2022, the interest rate on Term Loan A was 4.37%.

Revolver and Letters of Credit

The Revolver includes letters of credit (“LOCs”) with a sublimit of $150.0 million. As of September 30, 2022, there were no outstanding Revolver borrowings and $13.9 million of LOCs outstanding, leaving $586.1 million of available borrowings under the Revolver, including $136.1 million available for LOCs.

The Notes

The Notes bear interest at a rate of 3.625% per annum, payable semi-annually in arrears that began on July 15, 2021, and will mature on January 15, 2029.

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Accounts Receivable Financing Agreement

The Company has an accounts receivable financing agreement (as amended) with a termination date of October 2024, unless terminated earlier pursuant to its terms. As of September 30, 2022, the Company had $400.0 million of outstanding borrowings under this agreement, which were recorded in long-term debt on the accompanying condensed consolidated balance sheet. There was no remaining borrowing capacity available under this agreement as of September 30, 2022. As of September 30, 2022, the interest rate on the accounts receivable financing agreement was 4.06%.

On October 3, 2022, the Company amended its accounts receivable financing agreement to increase the amount it can borrow from $400.0 million to $550.0 million, and drew down the additional $150.0 million. At the same time, the Company made voluntary prepayments on its Term Loan A totaling $150.0 million; therefore, there was no incremental impact on the Company’s debt balance.

Maturities of Debt Obligations

As of September 30, 2022, the contractual maturities of the Company’s debt obligations (excluding finance leases) were as follows (in thousands):


	Principal
Remainder of 2022	$	—
2023		—
2024		2,160,993
2025		—
2026		—
2027 and thereafter		600,000
Less: Term loan original issuance discount		(1,564	)
Less: Unamortized deferred issuance costs		(6,959	)
Total	$	2,752,470

5. Derivatives

Interest Rate Swaps

The Company has entered into various interest rate swaps to mitigate its exposure to changes in interest rates on its variable rate debt. In March 2020, the Company entered into interest rate swaps with multiple counterparties. The interest rate swaps had an initial aggregate notional value of $549.2 million that increased to $1.42 billion on June 30, 2021, an effective date of March 31, 2020, and will expire on March 31, 2023. As of September 30, 2022, the notional value of these interest rate swaps was $1.03 billion.

Foreign Exchange Forward

On October 30, 2020, the Company entered into a foreign exchange forward in order to minimize monthly foreign currency remeasurement gains or losses on non-functional currency monetary balances. The foreign exchange forward notional value may be adjusted each month as the exposure balance changes. The Company did not designate the derivative as a hedge. All changes in the fair value of the foreign exchange forward are recorded in earnings every month to other (income) expense, net in the accompanying condensed consolidated statements of income. The Company recognized $2.6 million and $10.0 million of realized losses during the three and nine months ended September 30, 2022, respectively, and $2.0 million and $0.5 million of realized losses during the three and nine months ended September 30, 2021, respectively, related to this foreign exchange forward. As of September 30, 2022, the notional value was zero as the Company discontinued the use of this foreign exchange forward during the three months ended September 30, 2022.

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Fair Values

The fair values of the Company’s derivative financial instruments and the line items on the accompanying condensed consolidated balance sheets to which they were recorded were as follows (in thousands):


	Balance Sheet Classification	September 30, 2022		December 31, 2021
Interest rate swaps - current	Prepaid expenses and other current assets	$	17,829	$	—
Interest rate swaps - non-current	Other long-term assets		—		948
Fair value of derivative assets		$	17,829	$	948

Interest rate swaps - current	Accrued expenses	$	—	$	1,827
Fair value of derivative liabilities		$	—	$	1,827

6. Fair Value Measurements

Assets and Liabilities Carried at Fair Value

As of September 30, 2022 and December 31, 2021, the Company’s financial assets and liabilities carried at fair value included cash and cash equivalents, restricted cash, trading securities, accounts receivable, unbilled services (including contract assets), accounts payable, accrued expenses, deferred revenue, contingent obligations, liabilities under the accounts receivable financing agreement, and derivative instruments.

The fair values of cash and cash equivalents, restricted cash, accounts receivable, unbilled services (including contract assets), accounts payable, accrued expenses, deferred revenue, and the liabilities under the accounts receivable financing agreement approximate their respective carrying amounts because of the liquidity and short-term nature of these financial instruments.

Financial Instruments Subject to Recurring Fair Value Measurements

As of September 30, 2022, the fair values of the major classes of the Company’s assets and liabilities measured at fair value on a recurring basis were as follows (in thousands):


	Level 1		Level 2		Level 3		Investments Measured at Net Asset Value		Total
Assets:
Trading securities (a)	$	19,347	$	—	$	—	$	—	$	19,347
Partnership interests (b)		—		—		—		12,906		12,906
Derivative instruments (c)		—		17,829		—		—		17,829
Total assets	$	19,347	$	17,829	$	—	$	12,906	$	50,082

Liabilities:
Contingent obligations related to acquisitions (d)	$	—	$	—	$	16,100	$	—	$	16,100
Total liabilities	$	—	$	—	$	16,100	$	—	$	16,100

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As of December 31, 2021, the fair values of the major classes of the Company’s assets and liabilities measured at fair value on a recurring basis were as follows (in thousands):


	Level 1		Level 2		Level 3		Investments Measured at Net Asset Value		Total
Assets:
Trading securities (a)	$	24,775	$	—	$	—	$	—	$	24,775
Partnership interests (b)		—		—		—		11,176		11,176
Derivative instruments (c)		—		948		—		—		948
Total assets	$	24,775	$	948	$	—	$	11,176	$	36,899

Liabilities:
Derivative instruments (c)	$	—	$	1,827	$	—	$	—	$	1,827
Contingent obligations related to acquisitions (d)		—		—		17,997		—		17,997
Total liabilities	$	—	$	1,827	$	17,997	$	—	$	19,824

(a) Represents the fair value of investments in mutual funds based on quoted market prices that are used to fund the liability associated with the Company’s deferred compensation plan.

(b) The Company has committed to invest $21.5 million as a limited partner in two private equity funds. The private equity funds invest in opportunities in the healthcare and life sciences industry. As of September 30, 2022, the Company’s remaining unfunded commitment in the private equity funds was $9.7 million. The Company holds minor ownership interests (less than 3%) in each of the private equity funds and has determined that it does not exercise significant influence over the private equity funds’ operating and finance activities. As the private equity funds do not have readily determinable fair values, the Company has estimated the fair values using each fund’s Net Asset Value, the amount by which the value of all assets exceeds all debt and liabilities, in accordance with Accounting Standards Codification (“ASC”) Topic 946, Financial Services – Investment Companies.

(d) Represents the fair value of contingent consideration obligations related to acquisitions. The fair values of these liabilities are determined based on the Company’s best estimate of the probable timing and amount of settlement.

The following table presents a reconciliation of changes in the carrying amount of contingent obligations classified as Level 3 for the nine months ended September 30, 2022 (in thousands):


Balance as of December 31, 2021	$	17,997
Additions (a)		1,500
Changes in fair value recognized in earnings		(315	)
Payments (b)		(3,082	)
Balance as of September 30, 2022	$	16,100

(a) Represents obligations in connection with an insignificant acquisition completed during the three months ended September 30, 2022.

(b) The Company made payments to fully settle the obligations in connection with the insignificant acquisition completed during the third quarter of 2021.

During the nine months ended September 30, 2022, there were no transfers of assets or liabilities between Level 1, Level 2, or Level 3 fair value measurements.

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Financial Instruments Subject to Non-Recurring Fair Value Measurements

Certain assets, including goodwill and identifiable intangible assets, are carried on the accompanying condensed consolidated balance sheets at cost and, subsequent to initial recognition, are measured at fair value on a non-recurring basis when certain identified events or changes in circumstances that may have a significant adverse effect on the carrying values of these assets occur. These assets are classified as Level 3 fair value measurements within the fair value hierarchy. Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate a triggering event has occurred. Intangible assets are tested for impairment upon the occurrence of certain triggering events. As of September 30, 2022 and December 31, 2021, assets carried on the condensed consolidated balance sheets and not remeasured to fair value on a recurring basis totaled $5.57 billion and $5.83 billion, respectively.

Fair Value Disclosures for Financial Instruments Not Carried at Fair Value

The estimated fair values of the term loan (based on tranche) and the Notes are determined based on the price that the Company would have had to pay to settle the liabilities. As these liabilities are not actively traded, they are classified as Level 2 fair value measurements. The estimated fair values of the Company’s term loan (based on tranche) and the Notes were as follows (in thousands):


	September 30, 2022				December 31, 2021
	Carrying Value (a)		Estimated Fair Value		Carrying Value (a)		Estimated Fair Value
Term Loan A - tranche one due March 2024	$	145,797	$	143,737	$	149,008	$	148,945
Term Loan A - tranche two due August 2024		1,613,632		1,590,841		1,634,756		1,635,138
Senior notes due January 2029		600,000		486,000		600,000		595,500

(a) The carrying value of the term loan debt is shown net of original issue discounts.

7. Restructuring and Other Costs

During the three and nine months ended September 30, 2022 and 2021, the Company incurred employee severance and benefit costs, facility and lease termination costs, and other costs related to its restructuring activities. These costs were primarily related to the Company’s ForwardBound margin enhancement initiative. We expect to continue to incur costs related to the restructuring of our operations during 2022 and beyond as we continue the ongoing evaluations of our global workforce and facilities infrastructure needs and in light of changing market conditions and customer requirements.

Restructuring and other costs consisted of the following (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Employee severance and benefit costs	$	7,402	$	3,438	$	24,590	$	11,815
Facility and lease termination costs		1,325		3,760		4,677		6,530
Other costs		—		11		4,000		58
Total restructuring and other costs	$	8,727	$	7,209	$	33,267	$	18,403

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Accrued Restructuring Liabilities

The following table summarizes activity related to employee severance and benefit costs within accrued restructuring liabilities for the nine months ended September 30, 2022 (in thousands):


Balance as of December 31, 2021	$	6,657
Expenses incurred (a)		24,590
Payments		(18,443	)
Balance as of September 30, 2022	$	12,804

(a) The amount of expenses incurred for the nine months ended September 30, 2022 excludes $4.0 million of other costs that are included in accounts payable and $4.7 million of facility lease closure and lease termination costs that are reflected as reductions of operating lease right-of-use assets, current portion of operating lease obligations, and operating lease long-term obligations under ASC Topic 842, Leases, on the accompanying condensed consolidated balance sheet.

The Company expects the employee severance and benefit costs accrued as of September 30, 2022 will be paid within the next twelve months and are included within accrued expenses on the accompanying condensed consolidated balance sheet.

8. Shareholders’ Equity

Shares Outstanding

Shares of common stock outstanding were as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022			2021
Common stock shares, beginning balance		102,647		103,473		103,764			103,935
Repurchases of common stock		—		—		(1,929	)		(1,500	)
Issuances of common stock		248		215		1,060			1,253
Common stock shares, ending balance		102,895		103,688		102,895			103,688

Stock Repurchase Programs

On November 17, 2020, the Company’s Board of Directors (the “Board”) authorized the repurchase of up to an aggregate of $300.0 million of the Company’s Class A common stock, par value $0.01 per share, to be executed from time to time in open market transactions effected through a broker at prevailing market prices, in block trades, or through privately negotiated transactions through December 31, 2022 (the “2021 Stock Repurchase Program”). The 2021 Stock Repurchase Program took effect on January 1, 2021.

On May 25, 2022, the Board approved a new stock repurchase program (the “2022 Stock Repurchase Program”) that took effect immediately and replaced the 2021 Stock Repurchase Program. The 2022 Stock Repurchase Program authorizes the Company to repurchase up to $350.0 million of the Company’s Class A common stock, par value $0.01, and will expire on December 31, 2024.

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The 2022 Stock Repurchase Program does not obligate the Company to repurchase any particular amount of the Company’s common stock, and may be modified, extended, suspended, or discontinued at any time. The timing and amount of repurchases will be determined by the Company’s management based on a variety of factors such as the market price of the Company’s common stock, the Company’s corporate cash requirements, and overall market conditions. The 2022 Stock Repurchase Program is subject to applicable legal requirements, including federal and state securities laws and applicable Nasdaq rules. The Company may also repurchase shares of its common stock pursuant to a trading plan meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, which would permit shares of the Company’s common stock to be repurchased when the Company might otherwise be precluded from doing so by law.

During the three months ended September 30, 2022, there were no repurchases under the 2022 Stock Repurchase Program.

The following table sets forth repurchase activity under the 2021 Stock Repurchase Program from inception through the program’s termination on May 25, 2022:


	Total number of shares purchased		Average price paid per share		Approximate dollar value of shares purchased (in thousands)
March 2021		600,000	$	74.18	$	44,505
May 2021		400,000		81.04		32,416
June 2021		500,000		81.20		40,600
February 2022		515,003		78.52		40,439
March 2022		1,413,920		77.46		109,522
Total		3,428,923			$	267,482

The Company immediately retired all of the repurchased common stock and charged the par value of the shares to common stock. The excess of the repurchase price over the par value was applied on a pro rata basis against additional paid-in capital, with the remainder applied to retained earnings (accumulated deficit).

As of September 30, 2022, the Company had remaining authorization to repurchase up to $350.0 million of shares of its common stock under the 2022 Stock Repurchase Program.

9. Earnings Per Share

The following table provides a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations (in thousands, except per share data):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Numerator:
Net income	$	87,049	$	78,243	$	210,969	$	158,872
Denominator:
Basic weighted average common shares outstanding		102,731		103,562		102,997		103,924
Effect of dilutive securities:
Stock options and other awards under deferred share-based compensation programs		475		1,223		566		1,163
Diluted weighted average common shares outstanding		103,206		104,785		103,563		105,087
Earnings per share:
Basic	$	0.85	$	0.76	$	2.05	$	1.53
Diluted	$	0.84	$	0.75	$	2.04	$	1.51

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Potential common shares outstanding that are considered anti-dilutive are excluded from the computation of diluted earnings per share. Potential common shares related to stock options and other awards under share-based compensation programs may be determined to be anti-dilutive based on the application of the treasury stock method. Potential common shares are also considered anti-dilutive in periods when the Company incurs a net loss.

The number of potential shares outstanding that were anti-dilutive and therefore excluded from the computation of diluted earnings per share, weighted for the portion of the period they were outstanding, were 838,177, 128,894, 592,541, and 146,339 for the three and nine months ended September 30, 2022 and 2021, respectively.

10. Income Taxes

Income Tax Expense

For the three and nine months ended September 30, 2022, the Company recorded income tax expense of $29.6 million and $62.9 million, respectively, compared to pre-tax income of $116.7 million and $273.9 million, respectively. Income tax expense for the three months ended September 30, 2022 included discrete tax expense of $3.1 million, primarily related to unrecognized tax benefits. Income tax expense for the nine months ended September 30, 2022 included net discrete tax benefits of $3.3 million, primarily related to excess tax benefits from share-based compensation partially offset by unrecognized tax benefits related to prior year tax positions. The effective tax rates for the three and nine months ended September 30, 2022, excluding discrete items, varied from the United States (“U.S.”) federal statutory income tax rate of 21.0% primarily due to state and local taxes on U.S. income, foreign income inclusions such as the Global Intangible Low-Taxed Income (“GILTI”) provisions, and foreign tax credits.

For the three and nine months ended September 30, 2021, the Company recorded income tax expense of $22.2 million and $39.6 million, respectively, compared to pre-tax income of $100.4 million and $198.5 million, respectively. Income tax expense for the three and nine months ended September 30, 2021 included discrete tax benefits of $0.7 million and $6.5 million, respectively, primarily related to excess tax benefits from share-based compensation. The effective tax rates for the three and nine months ended September 30, 2021, excluding discrete items, varied from the U.S. federal statutory income tax rate of 21.0% primarily due to foreign tax credits, foreign income inclusions such as the GILTI provisions, and state and local taxes on U.S. income.

Unrecognized Tax Benefits

The Company’s gross unrecognized tax benefits, exclusive of associated interest and penalties, were $14.3 million and $12.1 million as of September 30, 2022 and December 31, 2021, respectively. The increase of $2.2 million was primarily due to changes in prior year positions. The Company believes it is reasonably possible that its unrecognized tax benefits may decrease by approximately $1.3 million within the next 12 months as a result of lapses in statutes of limitations.

Tax Returns under Audit

The Company is not currently under any U.S. federal income tax audits, however, income tax returns are under examination by tax authorities in several state and foreign jurisdictions. The Company’s federal and state tax filings are open to investigations in numerous years due to net operating loss carryforwards. Additionally, the Company currently has an ongoing examination for tax years 2014 to 2020 in the United Kingdom. The United Kingdom is the jurisdiction with the Company’s largest foreign operations. The Company believes that its reserve for uncertain tax positions is adequate to cover existing risks or exposures related to all open tax years and jurisdictions.

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11. Revenue from Contracts with Customers

Unsatisfied Performance Obligations

As of September 30, 2022, the total aggregate transaction price allocated to the unsatisfied performance obligations under contracts with contract terms greater than one year and that are not accounted for as a series pursuant to ASC Topic 606, Revenue from Contracts with Customers and all the related amendments was $6.32 billion. This amount includes revenue associated with reimbursable out-of-pocket expenses. The Company expects to recognize revenue over the remaining contract term of the individual projects, with contract terms generally ranging from one to five years. The amount of unsatisfied performance obligations is presented net of any constraints and, as a result, is lower than the potential contractual revenue. The contracts excluded due to constraints include contracts that do not commence within a certain period of time or that require the Company to undertake numerous activities to fulfill these performance obligations, including various activities that are outside of the Company’s control.

Timing of Billing and Performance

During the three and nine months ended September 30, 2022, the Company recognized approximately $363.8 million and $599.5 million, respectively, of revenue that was included in the deferred revenue balance at the beginning of the respective periods. During the three and nine months ended September 30, 2022, there were reductions of approximately $19.7 million and $1.0 million, respectively, in the Company’s revenue recognized related to performance obligations partially satisfied in previous periods. The gross and net amounts of revenue recognized solely from changes in estimates were not material.

12. Segment Information

The Company is managed through two reportable segments: Clinical Solutions and Commercial Solutions. Each reportable segment consists of multiple service offerings that, when combined, create a fully integrated biopharmaceutical services organization. Clinical Solutions offers comprehensive global services for the development of diagnostics, drugs, biologics, devices, and digital therapeutics that span Phases I to IV of clinical development. The segment is organized around clinical pharmacology and bioanalytical services, workforce deployment, full-service clinical studies, real world evidence, and consulting. This segment offers individual services including product development and regulatory consulting, project management, protocol development, investigational site recruitment, clinical monitoring, technology-enabled patient recruitment and engagement, clinical home health services, clinical trial diversity, biometrics, and regulatory affairs; all across a comprehensive range of therapeutic areas. Commercial Solutions provides the pharmaceutical, biotechnology, and healthcare industries with commercialization services, including deployment solutions, communication solutions (public relations, advertising, and medical communications), and consulting services.

The Company’s Chief Operating Decision Maker (the “CODM”) reviews segment performance and allocates resources based upon segment revenue and income from operations. Inter-segment revenue is eliminated from the segment reporting provided to the CODM and is not included in the segment revenue presented in the table below. Certain costs are not allocated to the Company’s reportable segments and are reported as general corporate expenses. These costs primarily consist of share-based compensation, general operating expenses associated with the Board and the Company’s senior leadership, finance, investor relations, and internal audit functions, and transaction and integration-related expenses. The Company does not allocate depreciation, amortization, asset impairment charges, or restructuring and other costs to its segments. Prior period segment results have been recast to conform to insignificant changes to management reporting in 2022. Additionally, the CODM reviews the Company’s assets on a consolidated basis and does not allocate assets to its reportable segments for purposes of assessing segment performance or allocating resources.

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Information about reportable segment operating results was as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenue:
Clinical Solutions	$	1,003,253	$	1,040,067	$	3,047,338	$	2,972,570
Commercial Solutions		332,970		308,163		985,877		867,016
Total revenue		1,336,223		1,348,230		4,033,215		3,839,586
Segment direct costs:
Clinical Solutions		734,934		779,270		2,263,053		2,248,796
Commercial Solutions		274,714		244,201		809,257		695,284
Total segment direct costs		1,009,648		1,023,471		3,072,310		2,944,080
Segment selling, general, and administrative expenses:
Clinical Solutions		88,823		87,907		267,588		264,742
Commercial Solutions		21,117		20,875		63,946		62,164
Total segment selling, general, and administrative expenses		109,940		108,782		331,534		326,906
Segment operating income:
Clinical Solutions		179,496		172,890		516,697		459,032
Commercial Solutions		37,139		43,087		112,674		109,568
Total segment operating income		216,635		215,977		629,371		568,600
Direct costs and operating expenses not allocated to segments:
Share-based compensation included in direct costs		8,136		8,416		24,803		25,638
Share-based compensation included in selling, general, and administrative expenses		4,839		6,683		21,696		23,253
Corporate selling, general, and administrative expenses		15,576		24,059		56,331		71,348
Restructuring and other costs		8,727		7,209		33,267		18,403
Depreciation and amortization		61,514		56,254		184,937		171,903
Total income from operations	$	117,843	$	113,356	$	308,337	$	258,055

13. Operations by Geographic Location

The following table summarizes total revenue by geographic area (in thousands, all intercompany transactions have been eliminated):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenue:
North America (a)	$	816,378	$	821,700	$	2,404,672	$	2,334,929
Europe, Middle East, and Africa		309,940		324,816		1,005,917		969,887
Asia-Pacific		173,204		159,078		506,972		429,768
Latin America		36,701		42,636		115,654		105,002
Total revenue	$	1,336,223	$	1,348,230	$	4,033,215	$	3,839,586

(a) Revenue for the North America region includes revenue attributable to the U.S. of $766.0 million and $775.7 million, or 57.3% and 57.5% of total revenue, for the three months ended September 30, 2022 and 2021, respectively. Revenue for the North America region includes revenue attributable to the U.S. of $2,257.2 million and $2,192.4 million, or 56.0% and 57.1% of total revenue, for the nine months ended September 30, 2022 and 2021, respectively. No other country represented more than 10% of total revenue for any period.

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The following table summarizes long-lived assets by geographic area (in thousands, all intercompany transactions have been eliminated):


	September 30, 2022		December 31, 2021
Property and equipment, net:
North America (a)	$	196,637	$	165,446
Europe, Middle East, and Africa		31,119		37,004
Asia-Pacific		20,488		13,615
Latin America		7,505		6,592
Total property and equipment, net	$	255,749	$	222,657

(a) Long-lived assets for the North America region include property and equipment, net attributable to the U.S. of $190.0 million and $160.0 million as of September 30, 2022 and December 31, 2021, respectively.

14. Concentration of Credit Risk

Financial assets that subject the Company to credit risk primarily consist of cash and cash equivalents, accounts receivable, and unbilled services (including contract assets). The Company’s cash and cash equivalents consist principally of cash and are maintained at several financial institutions with reputable credit ratings. The Company maintains cash depository accounts with several financial institutions worldwide and is exposed to credit risk related to the potential inability to access liquidity in financial institutions where its cash and cash equivalents are concentrated. The Company has not historically incurred any losses with respect to these balances and believes that they bear minimal credit risk.

As of September 30, 2022 and December 31, 2021, substantially all of the Company’s cash and cash equivalents were held within the U.S.

No single customer accounted for greater than 10% of the Company’s revenue for the three and nine months ended September 30, 2022 or 2021.

As of September 30, 2022 and December 31, 2021, no single customer accounted for greater than 10% of the Company’s accounts receivable and unbilled services (including contract assets) balances.

15. Related-Party Transactions

For the three and nine months ended September 30, 2022, the Company had combined revenue of $3.4 million and $7.0 million, respectively, from six customers whose board of directors each included a member who was also a member of the Company’s Board. As of September 30, 2022, the Company had combined receivables of $0.6 million from three customers whose board of directors included a member who was also a member of the Company’s Board.

On February 8, 2022, the Company completed an insignificant acquisition, which was associated with the 2021 acquisition of RxDataScience, Inc., through an arm’s-length transaction. A member of the Company’s management was a minority shareholder of the acquired company. For additional information, refer to “Note 2 – Financial Statements Details – Goodwill.”

For the three and nine months ended September 30, 2021, the Company had combined revenue of $0.9 million and $2.8 million, respectively, and, as of September 30, 2021, combined receivables of $1.5 million from two customers whose board of directors each included a member who was also a member of the Company’s Board.

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16. Commitments and Contingencies

Legal Proceedings

In the opinion of management, the outcome of any existing claims and legal or regulatory proceedings, other than Vaitkuvienë v. Syneos Health, Inc., et al, No. 18-0029 (E.D.N.C.) (the “Vaitkuvienë action”), if decided adversely, is not expected to have a material adverse effect on the Company’s business, financial condition, results of operations, or cash flows. There have been no updates from the description of the Vaitkuvienë action included in “Note 17 – Commitments and Contingencies” to the consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data” in the 2021 Form 10-K.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward Looking Statements

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our unaudited condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q, and with our audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (our “2021 Form 10-K”).

In addition to historical condensed consolidated financial information, this Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect, among other things, our current expectations and anticipated results of operations, all of which are subject to known and unknown risks, uncertainties, and other factors that may cause our actual results, performance or achievements, market trends, or industry results to differ materially from those expressed or implied by such forward-looking statements. Therefore, any statements contained herein that are not statements of historical fact may be forward-looking statements and should be evaluated as such, including statements regarding future financial and operational results, our business strategy, the future impact of macroeconomic trends, such as inflation and increased interest rates, and the COVID-19 pandemic on our business, financial results, and financial condition, benefits of acquisitions, and planned capital expenditures. Without limiting the foregoing, the words “anticipates,” “believes,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “might,” “plans,” “projects,” “should,” “would,” “targets,” “will” and the negative thereof and similar words and expressions are intended to identify forward-looking statements. Unless legally required, we assume no obligation to update any such forward-looking information to reflect actual results or changes in the factors affecting such forward-looking information.

We caution you that any such forward-looking statements are further qualified by important factors that could cause our actual operating results to differ materially from those in the forward-looking statements, including without limitation, regional, national, or global political, economic, business, competitive, market, and regulatory conditions and the following: our potential failure to generate a large number of new business awards and the risk of delay, termination, reduction in scope, or failure to go to contract of our business awards; our potential failure to convert backlog to revenue; risks associated with the COVID-19 pandemic; fluctuations in our operating results and effective income tax rate; the impact of potentially underpricing our contracts, overrunning our cost estimates, or failing to receive approval for or experiencing delays with documentation of change orders; cyber-security and other risks associated with our information systems infrastructure; changes and costs of compliance with regulations related to data privacy; concentration of our customers or therapeutic areas; the risks associated with doing business internationally, including risks related to the war in Ukraine; challenges by tax authorities of our intercompany transfer pricing policies; our potential failure to successfully increase our market share, grow our business, and execute our growth strategies; our ability to effectively upgrade our information systems; our failure to perform our services in accordance with contractual requirements, regulatory standards, and ethical considerations; risks related to the management of clinical trials; the need to hire, develop, and retain key personnel; the impact of unfavorable economic conditions, including the uncertain international economic environment and changes in foreign currency exchange rates; effective income tax rate fluctuations; our ability to protect our intellectual property; risks related to our acquisition strategy, including our ability to realize synergies; our relationships with customers who are in competition with each other; any failure to realize the full value of our goodwill and intangible assets; risks related to restructuring; our compliance with anti-corruption and anti-bribery laws; our dependence on third parties; potential employment liability; the increasing focus on environmental sustainability and social initiatives; our ability to utilize net operating loss carryforwards and other tax attributes; downgrades of our credit ratings; competition in the biopharmaceutical services industry; outsourcing trends and changes in aggregate spending and research and development budgets; the impact of, including changes in, government regulations and healthcare reform; intense competition faced by our customers from lower cost generic products and other competing products; our ability to keep pace with rapid technological

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change; the cost of and our ability to service our substantial indebtedness; and other risks related to ownership of our common stock. For a further discussion of the risks relating to our business, refer to Part I, Item 1A, “Risk Factors” in our 2021 Form 10-K.

Overview of Our Business and Services

We are the only fully integrated biopharmaceutical solutions organization purpose-built to accelerate customer success. We lead with a product development mindset, strategically blending clinical development, medical affairs, and commercial capabilities to address modern market realities for customers in the biopharmaceutical, biotechnology, and healthcare industries. We offer both stand-alone and integrated biopharmaceutical product development solutions ranging from early phase (Phase I) clinical trials to the full commercialization of biopharmaceutical products, with the goal of increasing the likelihood of regulatory approval and commercial success.

Our operations are divided into two reportable segments, Clinical Solutions and Commercial Solutions. Our Clinical Solutions segment offers comprehensive global services for the development of diagnostics, drugs, biologics, devices, and digital therapeutics that span Phases I to IV of clinical development. The segment is organized around clinical pharmacology and bioanalytical services, workforce deployment, full-service clinical studies, real world evidence, and consulting. Our Commercial Solutions segment provides commercialization services, including deployment solutions, communication solutions (public relations, advertising, and medical communications), and consulting services. We integrate our clinical and commercial capabilities into customized solutions by sharing knowledge, data, and insights. This collaboration across the development and commercialization continuum facilitates unique insights into patient populations, therapeutic environments, product timelines, and the competitive landscape. For a further discussion, refer to Part I, Item 1, “Business” in our 2021 Form 10-K.

The current macroeconomic conditions, which include interest rate increases, inflation, and the ongoing COVID-19 pandemic, among others, are expected to continue to impact our business and our operations. We have experienced increased delays in award decisions from the small to mid-sized ("SMID") market and lower flow of requests for proposals in our Clinical Solutions segment. Within our Commercial Solutions segment, we have also experienced lower flow of requests for proposals from the SMID market. This reduced demand for our services, which stems from both current macroeconomic conditions and our ability to win repeat business, among other factors, has resulted, and may continue to result in lower net new business awards, backlog and revenue. Additionally, we continue to experience lower reimbursable out-of-pocket expenses as a percentage of revenue relative to pre-pandemic levels in both of our segments due to reduced travel as the ongoing COVID-19 pandemic accelerated adoption of virtual engagement with sites and patients. For a further discussion of these and other risks relating to our business, refer to Part I, Item 1A, “Risk Factors” in our 2021 Form 10-K and Part II, Item 1A “Risk Factors” of this Quarterly Report on Form 10-Q.

Prior period segment results have been recast to conform to insignificant changes to management reporting in 2022.

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New Business Awards and Backlog

We add new business awards to backlog when we enter into a contract or when we receive a written commitment from the customer selecting us as a service provider, provided that:

•

collection of the award value is probable;

•

the project or projects are expected to commence within a certain period of time from the end of the quarter in which the award was granted;

•

project contingencies such as the outcome of other clinical trials, funding approvals, or other events, are not anticipated to prevent the project or projects from commencing in accordance with the expected timeline;

•

the customer has entered or intends to enter into a comprehensive contract as soon as practicable; and

•

for awards related to deployment solutions and functional service provider offerings, a maximum of twelve months of services are included in the award value.

In addition, we continually evaluate our backlog to determine if any of the previously awarded work is no longer expected to be performed, regardless of whether we have received formal cancellation notice from the customer. If we determine that any previously awarded work is no longer probable of being performed, we remove the value from our backlog based on the risk of cancellation. We recognize revenue from these awards as services are performed, provided we have received proper authorization from the customer.

We report new business awards for our Clinical Solutions and Commercial Solutions segments on a trailing twelve months (“TTM”) basis. Our total backlog represents backlog for our Clinical Solutions segment and the deployment solutions offering within our Commercial Solutions segment. We do not report backlog for the remaining service offerings in the Commercial Solutions segment.

Backlog

Our backlog consists of anticipated future revenue from business awards that either have not started, or that are in process and have not been completed. Our backlog also reflects any cancellation or adjustment activity related to these awards. The average duration of our contracts will fluctuate from period to period based on the contracts comprising our backlog at any given time. The majority of our contracts contain early termination provisions that typically require notice periods ranging from 30 to 90 days.

Our backlog as of September 30 was as follows (in millions):


	2022		2021		Change
Clinical Solutions	$	9,746.7	$	11,284.7	$	(1,538.0	)	(13.6	)%
Commercial Solutions - Deployment Solutions		784.0		732.8		51.2		7.0	%
Total backlog	$	10,530.7	$	12,017.5	$	(1,486.8	)	(12.4	)%

We expect approximately $1.18 billion of our backlog as of September 30, 2022 will be recognized as revenue during the remainder of 2022. We adjust the amount of our backlog each quarter for the effects of fluctuations in foreign currency exchange rates.

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Net New Business Awards

New business awards, net of cancellations, for the TTM periods ended September 30 were as follows (in millions):


	2022		2021
Clinical Solutions	$	2,729.7	$	5,333.3
Commercial Solutions		1,399.9		1,320.0
Total net new business awards	$	4,129.6	$	6,653.3

New business awards have varied and may continue to vary significantly from quarter to quarter. Fluctuations in our net new business award levels often result from the fact that we may receive a small number of relatively large orders in any given reporting period. Because of these large orders, our backlog and net new business awards in a reporting period may reach levels that are not sustainable in subsequent reporting periods.

In our Clinical Solutions segment, we have experienced increased delays in award decisions from the SMID market and lower flow of requests for proposals. These factors have resulted and may continue to result in lower net new business awards and backlog. Additionally, net new business awards and backlog have been, and we expect will continue to be affected by the broad effects of the current macroeconomic environment on the global economy and major financial markets, including but not limited to interest rate increases, inflation, and the ongoing COVID-19 pandemic. We have also started to experience lower flow of requests for proposals from the SMID market in our Commercial Solutions segment, attributable to current macroeconomic conditions, which may negatively impact future net new business awards and backlog in the segment.

We believe that our backlog and net new business awards might not be consistent indicators of future revenue for a variety of reasons, including, but not limited to, the variable size and duration of projects, changes to the scope of work during the course of projects, including the variable size and duration of projects, and our ability to win repeat business. Additionally, projects may be canceled or delayed by the customer or regulatory authorities. We generally do not have a contractual right to the full amount of the awards reflected in our backlog. If a customer cancels an award, we might be reimbursed for the costs we have incurred. As we increasingly compete for and enter into large contracts that are more global in nature, we expect that the rate at which our backlog and net new business awards convert into revenue is likely to decrease, and the duration of projects and the period over which related revenue is recognized to lengthen. For more information about risks related to our net new business awards and backlog see Part I, Item 1A, “Risk Factors – Risks Related to Our Business – Our backlog might not be indicative of our future revenues, and we might not realize all of the anticipated future revenue reflected in our backlog” in our 2021 Form 10-K and “--If we do not generate a large number of new business awards, or if new business awards are delayed, terminated, reduced in scope, or fail to go to contract, our business, financial condition, results of operations, or cash flows may be materially adversely affected” in Part II, Item 1A “Risk Factors” of this Quarterly Report on Form 10-Q.

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Results of Operations

The following table sets forth amounts from our condensed consolidated statements of income along with dollar and percentage changes (in thousands, except percentages):


	Three Months Ended September 30,
	2022		2021		Change
Revenue	$	1,336,223	$	1,348,230	$	(12,007	)	(0.9	)%
Costs and operating expenses:
Direct costs (exclusive of depreciation and amortization)		1,017,784		1,031,887		(14,103	)	(1.4	)%
Selling, general, and administrative expenses		130,355		139,524		(9,169	)	(6.6	)%
Restructuring and other costs		8,727		7,209		1,518		21.1	%
Depreciation and amortization		61,514		56,254		5,260		9.4	%
Total operating expenses		1,218,380		1,234,874		(16,494	)	(1.3	)%
Income from operations		117,843		113,356		4,487		4.0	%
Total other expense, net		1,158		12,947		(11,789	)	(91.1	)%
Income before provision for income taxes		116,685		100,409		16,276		16.2	%
Income tax expense		29,636		22,166		7,470		33.7	%
Net income	$	87,049	$	78,243	$	8,806		11.3	%

	Nine Months Ended September 30,
	2022		2021		Change
Revenue	$	4,033,215	$	3,839,586	$	193,629		5.0	%
Costs and operating expenses:
Direct costs (exclusive of depreciation and amortization)		3,097,113		2,969,718		127,395		4.3	%
Selling, general, and administrative expenses		409,561		421,507		(11,946	)	(2.8	)%
Restructuring and other costs		33,267		18,403		14,864		80.8	%
Depreciation and amortization		184,937		171,903		13,034		7.6	%
Total operating expenses		3,724,878		3,581,531		143,347		4.0	%
Income from operations		308,337		258,055		50,282		19.5	%
Total other expense, net		34,476		59,596		(25,120	)	(42.2	)%
Income before provision for income taxes		273,861		198,459		75,402		38.0	%
Income tax expense		62,892		39,587		23,305		58.9	%
Net income	$	210,969	$	158,872	$	52,097		32.8	%

Revenue

For the three months ended September 30, 2022, our revenue decreased by $12.0 million, or 0.9%, to $1,336.2 million from $1,348.2 million for the three months ended September 30, 2021. This decrease is primarily driven by lower reimbursable out-of-pocket expenses in our Clinical Solutions segment and negative impacts from fluctuations in foreign currency exchange rates, partially offset by growth from increased project start-ups in both our Clinical Solutions and Commercial Solutions segments. For the nine months ended September 30, 2022, our revenue increased by $193.6 million, or 5.0%, to $4,033.2 million from $3,839.6 million for the nine months ended September 30, 2021. This increase is primarily driven by growth from increased project start-ups in both our Clinical Solutions and Commercial Solutions segments partially offset by lower reimbursable out-of-pocket expenses in our Clinical Solutions segment.

No single customer accounted for greater than 10% of our total consolidated revenue for the three and nine months ended September 30, 2022 or 2021. Revenue from our top five customers accounted for approximately 24% and 23% of revenue for the three and nine months ended September 30, 2022, respectively, and 23% and 22% of revenue for the three and nine months ended September 30, 2021, respectively.

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Revenue for each of our segments was as follows (dollars in thousands):


	Three Months Ended September 30,
	2022		% of total			2021		% of total			Change
Clinical Solutions	$	1,003,253		75.1	%	$	1,040,067		77.1	%	$	(36,814	)	(3.5	)%
Commercial Solutions		332,970		24.9	%		308,163		22.9	%		24,807		8.0	%
Total revenue	$	1,336,223				$	1,348,230				$	(12,007	)	(0.9	)%

	Nine Months Ended September 30,
	2022		% of total			2021		% of total			Change
Clinical Solutions	$	3,047,338		75.6	%	$	2,972,570		77.4	%	$	74,768		2.5	%
Commercial Solutions		985,877		24.4	%		867,016		22.6	%		118,861		13.7	%
Total revenue	$	4,033,215				$	3,839,586				$	193,629		5.0	%

Clinical Solutions

For the three months ended September 30, 2022, revenue attributable to our Clinical Solutions segment decreased compared to the same period in the prior year, primarily driven by decreases in revenue from projects related to COVID-19, which generally experience higher reimbursable out-of-pocket expenses, partially offset by increased project start-ups related to large pharmaceutical customers. For the nine months ended September 30, 2022, revenue attributable to our Clinical Solutions segment increased compared to the same period in the prior year, primarily driven by increased project start-ups related to large pharmaceutical customers and, to a lesser extent, the acquisitions of StudyKIK Corporation (“StudyKIK”) and RxDataScience, Inc. This increase was partially offset by decreases in revenue from projects related to COVID-19. For the three and nine months ended September 30, 2022, revenue was negatively impacted by $34.4 million and $69.1 million, respectively, from fluctuations in foreign currency exchange rates compared to the same periods in the prior year.

We have experienced increased delays in award decisions from the SMID market and lower flow of requests for proposals. This reduced demand for our services, which stems from both current macroeconomic conditions and our ability to win repeat business, among other factors, has resulted, and may continue to result in lower net new business awards, backlog, and revenue. Additionally, we also continue to experience lower reimbursable out-of-pocket expenses as a percentage of revenue relative to pre-pandemic levels due to reduced travel as the ongoing COVID-19 pandemic accelerated adoption of virtual engagement with sites and patients.

The war in Ukraine has not had a material impact on our revenue; however, that could change depending on the magnitude of the conflict and the imposition of additional sanctions by the United States (“U.S.”) and other countries. We continue to adapt our strategic approach as the crisis persists and we are continuing our risk assessments in neighboring countries to be proactive about potential future challenges. Banking and economic sanctions imposed on Russia continue to present challenges to clinical trials. We are monitoring these sanctions to ensure we are in compliance and we are adapting our operations to address both the sanctions and the increasing logistical challenges of conducting trials in Russia. At this time, we are continuing to service patients in Ukraine and Russia in existing trials where possible. Any impacts to our revenue are expected to be temporary in nature as we work with customers to explore alternate sources of recruiting new patients, including potentially activating sites in other regions.

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Commercial Solutions

For the three and nine months ended September 30, 2022, revenue attributable to our Commercial Solutions segment increased compared to the same periods in the prior year, primarily driven by increased project start-ups, including new deployments of field teams, and higher reimbursable out-of-pocket expenses. For the three and nine months ended September 30, 2022, revenue was negatively impacted by $7.9 million and $15.4 million, respectively, from fluctuations in foreign currency exchange rates compared to the same periods in the prior year.

We have started to experience lower flow of requests for proposals from the SMID market attributable to current macroeconomic conditions, which may negatively impact future net new business awards, backlog, and revenue. Additionally, we continue to experience lower reimbursable out-of-pocket expenses as a percentage of revenue relative to pre-pandemic levels related to declines in field team visits to healthcare providers and increased virtual investigator meetings.

Direct Costs

Direct costs consist principally of compensation expense and benefits associated with our employees and other employee-related costs, and reimbursable out-of-pocket expenses directly related to delivering on our projects. While we have some ability to manage the majority of these costs relative to the amount of contracted services we have during any given period, direct costs as a percentage of revenue can vary from period to period. Such fluctuations are due to a variety of factors, including, among others: (i) the level of staff utilization on our projects; (ii) adjustments to the timing of work on specific customer contracts; (iii) the experience mix of personnel assigned to projects; (iv) the service mix and pricing of our contracts; and (v) the timing of the incurrence of reimbursable out-of-pocket expenses. Relative to pre-pandemic levels, we continue to experience reduced travel and other reimbursable out-of-pocket expenses related to lower physical monitoring visits for Clinical Solutions, as well as fewer field team visits to healthcare providers and investigator meetings for Commercial Solutions. As discussed above, we expect reimbursable out-of-pocket expenses to remain lower relative to pre-pandemic levels.

Direct costs were as follows (dollars in thousands):


	Three Months Ended September 30,
	2022			2021			Change
Direct costs (exclusive of depreciation and amortization)	$	1,017,784		$	1,031,887		$	(14,103	)	(1.4	)%
% of revenue		76.2	%		76.5	%
Gross margin %		23.8	%		23.5	%

	Nine Months Ended September 30,
	2022			2021			Change
Direct costs (exclusive of depreciation and amortization)	$	3,097,113		$	2,969,718		$	127,395		4.3	%
% of revenue		76.8	%		77.3	%
Gross margin %		23.2	%		22.7	%

For the three months ended September 30, 2022, our direct costs decreased by $14.1 million, or 1.4%, compared to the three months ended September 30, 2021. For the nine months ended September 30, 2022, our direct costs increased by $127.4 million, or 4.3%, compared to the nine months ended September 30, 2021.

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Clinical Solutions

Direct costs for our Clinical Solutions segment, excluding share-based compensation expense, were as follows (dollars in thousands):


	Three Months Ended September 30,
	2022			2021			Change
Direct costs	$	734,934		$	779,270		$	(44,336	)	(5.7	)%
% of segment revenue		73.3	%		74.9	%
Segment gross margin %		26.7	%		25.1	%

	Nine Months Ended September 30,
	2022			2021			Change
Direct costs	$	2,263,053		$	2,248,796		$	14,257		0.6	%
% of segment revenue		74.3	%		75.7	%
Segment gross margin %		25.7	%		24.3	%

For the three months ended September 30, 2022, our Clinical Solutions segment direct costs decreased by $44.3 million, or 5.7%, compared to the three months ended September 30, 2021. This decrease was primarily driven by lower reimbursable out-of-pocket expenses related to COVID-19 projects and positive impacts from fluctuations in foreign currency exchange rates, partially offset by increased billable headcount. For the nine months ended September 30, 2022, our Clinical Solutions segment direct costs increased by $14.3 million, or 0.6%, compared to the nine months ended September 30, 2021. This increase was primarily driven by increased billable headcount to support revenue growth, partially offset by positive impacts from fluctuations in foreign currency exchange rates, lower reimbursable out-of-pocket expenses related to COVID-19 projects, and our ForwardBound margin enhancement initiative.

Gross margins for our Clinical Solutions segment were 26.7% and 25.1% for the three months ended September 30, 2022 and 2021, respectively, and 25.7% and 24.3% for the nine months ended September 30, 2022 and 2021, respectively. Gross margins were higher during the current year periods as compared to the same periods in the prior year primarily due to lower reimbursable out-of-pocket expenses and positive impacts from fluctuations in foreign currency exchange rates, partially offset by increased billable headcount costs and a larger proportion of contract labor.

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Commercial Solutions

Direct costs for our Commercial Solutions segment, excluding share-based compensation expense, were as follows (dollars in thousands):


	Three Months Ended September 30,
	2022			2021			Change
Direct costs	$	274,714		$	244,201		$	30,513	12.5	%
% of segment revenue		82.5	%		79.2	%
Segment gross margin %		17.5	%		20.8	%

	Nine Months Ended September 30,
	2022			2021			Change
Direct costs	$	809,257		$	695,284		$	113,973	16.4	%
% of segment revenue		82.1	%		80.2	%
Segment gross margin %		17.9	%		19.8	%

For the three months ended September 30, 2022, our Commercial Solutions segment direct costs increased by $30.5 million, or 12.5%, compared to the three months ended September 30, 2021. For the nine months ended September 30, 2022, our Commercial Solutions segment direct costs increased by $114.0 million, or 16.4%, compared to the nine months ended September 30, 2021. These increases were primarily driven by increased billable headcount to support revenue growth and higher reimbursable out-of-pocket expenses.

Gross margins for our Commercial Solutions segment were 17.5% and 20.8% for the three months ended September 30, 2022 and 2021, respectively, and 17.9% and 19.8% for the nine months ended September 30, 2022 and 2021, respectively. Gross margins were lower during the current year periods as compared to the same periods in the prior year due to a less favorable revenue mix.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses were as follows (dollars in thousands):


	Three Months Ended September 30,
	2022			2021			Change
Selling, general, and administrative expenses	$	130,355		$	139,524		$	(9,169	)	(6.6	)%
% of total revenue		9.8	%		10.3	%

	Nine Months Ended September 30,
	2022			2021			Change
Selling, general, and administrative expenses	$	409,561		$	421,507		$	(11,946	)	(2.8	)%
% of total revenue		10.2	%		11.0	%

Selling, general, and administrative expenses for the three and nine months ended September 30, 2022 decreased compared to the same periods in 2021 primarily due to lower transaction, integration-related, and other expenses. These decreases were partially offset by increased headcount. Selling, general, and administrative expenses for the three and nine months ended September 30, 2022 included costs resulting from the war in Ukraine, including incremental costs related to impacted employees and ongoing assessment of imposed sanctions.

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Restructuring and Other Costs

Restructuring and other costs were $8.7 million and $7.2 million for the three months ended September 30, 2022 and 2021, respectively, and $33.3 million and $18.4 million for the nine months ended September 30, 2022 and 2021, respectively. The costs incurred were primarily related to our ForwardBound margin enhancement initiative as we continue the ongoing evaluations of our global workforce and facilities infrastructure needs in an effort to streamline the structure of our global operations and processes. During 2022, these ForwardBound initiatives included specific actions primarily focused on 1) streamlining the operations of our Clinical Solutions segment to optimize efficiency and enhance the delivery of customer projects and 2) reducing overcapacity in response to changing market conditions and customer requirements.

Restructuring and other costs consisted of the following (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Employee severance and benefit costs	$	7,402	$	3,438	$	24,590	$	11,815
Facility and lease termination costs		1,325		3,760		4,677		6,530
Other costs		—		11		4,000		58
Total restructuring and other costs	$	8,727	$	7,209	$	33,267	$	18,403

We expect to continue to incur costs related to our ForwardBound initiative, including the restructuring of our operations during 2022 and beyond as we continue the ongoing evaluations of our global workforce and facilities infrastructure needs and in light of changing market conditions and customer requirements.

Depreciation and Amortization Expense

Total depreciation and amortization expense was $61.5 million and $56.3 million for the three months ended September 30, 2022 and 2021, respectively, and $184.9 million and $171.9 million for the nine months ended September 30, 2022 and 2021, respectively. The increases were primarily due to vehicle fleet leases, internal-use software, and intangible assets from acquisitions completed in the second half of 2021.

Total Other Expense, Net

Total other expense, net consisted of the following (dollars in thousands):


	Three Months Ended September 30,
	2022			2021			Change
Interest income	$	(303	)	$	76		$	(379	)	n/m
Interest expense		22,131			16,698			5,433			32.5	%
Loss on extinguishment of debt		67			—			67			100.0	%
Other income, net		(20,737	)		(3,827	)		(16,910	)		(441.9	)%
Total other expense, net	$	1,158		$	12,947		$	(11,789	)		(91.1	)%

	Nine Months Ended September 30,
	2022			2021			Change
Interest income	$	(342	)	$	5		$	(347	)	n/m
Interest expense		55,998			62,645			(6,647	)		(10.6	)%
Loss on extinguishment of debt		67			2,802			(2,735	)		(97.6	)%
Other income, net		(21,247	)		(5,856	)		(15,391	)		(262.8	)%
Total other expense, net	$	34,476		$	59,596		$	(25,120	)		(42.2	)%

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Total other expense, net was $1.2 million and $12.9 million for the three months ended September 30, 2022 and 2021, respectively, and $34.5 million and $59.6 million for the nine months ended September 30, 2022 and 2021, respectively. The increase in interest expense for the three months ended September 30, 2022 compared to the same period in the prior year was primarily due to increased interest rates on variable rate debt. The decrease in interest expense for the nine months ended September 30, 2022 compared to the same period in the prior year was primarily due to reductions in our higher interest rate debt as a result of debt prepayments and refinancing transactions. Other (income) expense, net primarily consists of foreign currency gains and losses that result from exchange rate fluctuations on our monetary asset balances denominated in currencies other than our functional currency, other gains and losses related to investments, and contingent consideration related to divested businesses.

Income Tax Expense

For the three and nine months ended September 30, 2022, we recorded income tax expense of $29.6 million and $62.9 million, respectively, compared to pre-tax income of $116.7 million and $273.9 million, respectively. Income tax expense for the three months ended September 30, 2022 included discrete tax expense of $3.1 million, primarily related to unrecognized tax benefits. Income tax expense for the nine months ended September 30, 2022 included net discrete tax benefits of $3.3 million, primarily related to excess tax benefits from share-based compensation partially offset by unrecognized tax benefits related to prior year tax positions. The effective tax rates for the three and nine months ended September 30, 2022, excluding discrete items, varied from the U.S. federal statutory income tax rate of 21.0% primarily due to state and local taxes on U.S. income, foreign income inclusions such as the Global Intangible Low-Taxed Income (“GILTI”) provisions, and research and development credits.

For the three and nine months ended September 30, 2021, we recorded income tax expense of $22.2 million and $39.6 million, respectively, compared to pre-tax income of $100.4 million and $198.5 million, respectively. Income tax expense for the three and nine months ended September 30, 2021 included discrete tax benefits of $0.7 million and $6.5 million, respectively, primarily related to excess tax benefits from share-based compensation. The effective tax rates for the three and nine months ended September 30, 2021, excluding discrete items, varied from the U.S. federal statutory income tax rate of 21.0% primarily due to foreign tax credits, foreign income inclusions such as the GILTI provisions, and state and local taxes on U.S. income.

We currently maintain a valuation allowance against a portion of our state deferred tax assets and a portion of our foreign deferred tax assets as of September 30, 2022. We intend to continue to maintain a valuation allowance on these deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances.

Liquidity and Capital Resources

Key measures of our liquidity were as follows (in thousands):


	September 30, 2022		December 31, 2021
Balance sheet statistics:
Cash and cash equivalents	$	169,995	$	106,363
Restricted cash		105		112
Working capital (excluding restricted cash)		239,761		112,228

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As of September 30, 2022, we had $170.1 million of cash, cash equivalents, and restricted cash. As of September 30, 2022, substantially all of our cash, cash equivalents, and restricted cash was held within the U.S. In addition, we had $586.1 million (net of $13.9 million in outstanding letters of credit (“LOCs”)) available for borrowing under our revolving credit facility (the “Revolver”), of which $136.1 million was available for LOCs.

We have historically funded our operations and growth, including acquisitions, primarily with our working capital, cash flow from operations, and funds available through various borrowing arrangements. Our principal liquidity requirements are to fund our debt service obligations, capital expenditures, expansion of service offerings, possible acquisitions, integration and restructuring costs, geographic expansion, stock repurchases, working capital, and other general corporate expenses. Cash flow from operations also could be affected by the broad effects of the current macroeconomic environment on the global economy and major financial markets, including but not limited to interest rate increases, inflation, and the ongoing COVID-19 pandemic, as well as various other risks and uncertainties detailed in Part I, Item 1A, “Risk Factors” in our 2021 Form 10-K and in Part II, Item 1A “Risk Factors” of this Quarterly Report on Form 10-Q. Based on past performance and current expectations, we believe our cash and cash equivalents, cash generated from operations, and funds available under the Revolver will be sufficient to meet our working capital needs, capital expenditures, scheduled debt and interest payments, income tax obligations, and other currently anticipated liquidity requirements for at least the next 12 months.

Indebtedness

As of September 30, 2022, we had approximately $2.84 billion of total principal indebtedness (including $75.5 million in finance lease obligations), consisting of $1.76 billion in term loan debt (collectively, “Term Loan A”), $600.0 million of senior notes (the “Notes”), and $400.0 million in borrowings against our accounts receivable financing agreement. See “Note 4 – Long-Term Debt Obligations” of our unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q as well as Part II, Item 7 of our 2021 Form 10-K for additional details regarding our long-term debt arrangements.

During the three months ended September 30, 2022, we made $25.0 million of voluntary prepayments against Term Loan A that were applied to future mandatory principal payments due. As a result of these and previous voluntary prepayments, we are not required to make a mandatory payment against the principal balance of Term Loan A until January 2024. In connection with these prepayments, we recorded a $0.1 million loss on extinguishment of debt during the three months ended September 30, 2022.

On October 3, 2022, we amended our accounts receivable financing agreement to increase the amount we can borrow from $400.0 million to $550.0 million, and drew down the additional $150.0 million. At the same time, we made voluntary prepayments on our term loans totaling $150.0 million; therefore, there was no incremental impact on our debt balance.

Our long-term debt arrangements contain customary restrictive covenants and, as of September 30, 2022, we were in compliance with all applicable debt covenants.

Interest Rates

We have entered into various interest rate swaps to mitigate our exposure to changes in interest rates on our variable rate debt. As of September 30, 2022, the percentage of our total principal debt (excluding finance leases) that is subject to fixed interest rates was approximately 59%. Each quarter-point increase or decrease in the applicable floating interest rate as of September 30, 2022 would change our annual interest expense by approximately $2.8 million.

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Stock Repurchase Programs

During the three months ended September 30, 2022, there were no share repurchases under our repurchase program that authorizes us to repurchase up to $350.0 million of our Class A common stock, par value $0.01, and will expire on December 31, 2024 (the “2022 Stock Repurchase Program”). See “Note 8 – Shareholders’ Equity” of our unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional details.

As of September 30, 2022, we had remaining authorization to repurchase up to $350.0 million of shares of our common stock under the 2022 Stock Repurchase Program.

Cash, Cash Equivalents and Restricted Cash

Our cash flows from operating, investing, and financing activities were as follows (in thousands):


	Nine Months Ended September 30,
	2022			2021			Change
Net cash provided by operating activities	$	303,164		$	264,299		$	38,865
Net cash used in investing activities		(79,547	)		(260,182	)		180,635
Net cash used in financing activities		(189,487	)		(155,483	)		(34,004	)

Cash Flows from Operating Activities

Cash flows provided by operating activities increased by $38.9 million during the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. The increase was primarily due to higher cash-related net income, partially offset by negative changes in operating assets and liabilities relative to the prior year period. Fluctuations in accounts receivable, unbilled services (including contract assets), and deferred revenue occur on a regular basis as we perform services, achieve milestones or other billing criteria, send invoices to customers, and collect outstanding accounts receivable. This activity varies by individual customer and contract. We attempt to negotiate payment terms that provide for payment of services prior to or soon after the provision of services, but the levels of accounts receivable, unbilled services (including contract assets), and deferred revenue can vary significantly from period to period.

Cash Flows from Investing Activities

For the nine months ended September 30, 2022, we used $79.5 million in cash for investing activities, which included $69.8 million for purchases of property and equipment. We continue to closely monitor our capital expenditures while making strategic investments in the development of our information technology infrastructure to meet the needs of our workforce, enable efficiencies, reduce business continuity risks, and conform to changes in governing rules and regulations.

For the nine months ended September 30, 2021, we used $260.2 million in cash for investing activities, which consisted of $226.3 million of payments related to acquisitions, including the acquisition of StudyKIK, $29.9 million for purchases of property and equipment, and $8.9 million of net investments in unconsolidated affiliates, partially offset by proceeds of $5.0 million from notes receivable from a divestiture.

Cash Flows from Financing Activities

For the nine months ended September 30, 2022, we used $189.5 million in cash for financing activities, which consisted primarily of repurchases of our common stock, voluntary prepayments of long-term debt, and payments related to tax withholdings for share-based compensation. These payments were partially offset by proceeds from exercises of stock options.

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For the nine months ended September 30, 2021, we used $155.5 million in cash for financing activities, which consisted primarily of repurchases of our common stock, net repayments of long-term debt, and payments related to tax withholdings for share-based compensation. These payments were partially offset by proceeds from our accounts receivable financing agreement, our Revolver, and exercises of stock options.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses during the period, as well as disclosures of contingent assets and liabilities at the date of the financial statements. We evaluate our estimates on an ongoing basis, including those related to revenue recognition, valuation of goodwill and identifiable intangibles, and tax-related contingencies and valuation allowances. These estimates are based on the information available to management at the time these estimates, judgments, and assumptions are made. Actual results may differ materially from these estimates. There have been no significant changes to our critical accounting policies and estimates from those disclosed in our 2021 Form 10-K. For additional information on all of our critical accounting policies and estimates, refer to Part II – Item 7 – Management’s Discussion and Analysis included in our 2021 Form 10-K.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

There have been no material changes to our quantitative and qualitative disclosures about market risk as compared to the quantitative and qualitative disclosures about market risk described in our 2021 Form 10-K.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our CEO and CFO, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our CEO and CFO have concluded that as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Changes in Internal Controls

There have been no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the period covered by this Quarterly Report on Form 10-Q that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

We are party to legal proceedings incidental to our business. While our management currently believes the ultimate outcome of these proceedings, individually and in the aggregate, will not have a material adverse effect on our consolidated financial statements, litigation is subject to inherent uncertainties. Were an unfavorable ruling to occur, there exists the possibility of a material adverse impact on our financial condition and results of operations.

Item 1A. Risk Factors.

Other than the following risk factor, there have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021. Refer to “Risk Factors” in Part 1, Item 1A of that report for a detailed discussion of risk factors affecting us.

If we do not generate a large number of new business awards, or if new business awards are delayed, terminated, reduced in scope, or fail to go to contract, our business, financial condition, results of operations, or cash flows may be materially adversely affected.

Our business is dependent on our ability to generate new business awards from new and existing customers and maintain existing customer contracts. Our inability to generate new business awards on a timely basis and subsequently enter into contracts for such awards could have a material adverse effect on our business, financial condition, results of operations or cash flows. For example, in our Clinical Solutions segment, we have experienced lower net new business awards, increased delays in award decisions from the SMID market, and lower flow of requests for proposals. These headwinds have been caused by the current macroeconomic conditions and our ability to win repeat business, among other factors.

There is risk of cancelability in both the clinical and commercial businesses. The time between when a clinical study is awarded and when it goes to contract is typically several months, and prior to a new business award going to contract, our customer can cancel the award without notice. Once an award goes to contract, the majority of our customers can terminate the contract without cause with a notice period that generally ranges from 30 to 90 days. Our contracts may be delayed or terminated by our customers or reduced in scope for a variety of reasons, including factors beyond our control, including but not limited to:

•

decisions to forego or terminate a particular trial;

•

budgetary limits or changing priorities;

•

macroeconomic conditions, including but not limited to interest rate increases and inflation;

•

actions by regulatory authorities;

•

production problems resulting in shortages of the candidate drug being tested;

•

failure of products being tested to satisfy safety requirements or efficacy criteria;

•

unexpected or undesired clinical results for products;

•

insufficient patient enrollment in a trial;

•

insufficient principal investigator recruitment;

•

production problems resulting in shortages of the product being tested;

•

the customers’ decision to terminate or scale back the development or commercialization of a product or to end a particular project;

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•

shift of business to a competitor or internal resources; or

•

product withdrawal following market launch.

Our commercial services contracts typically have a significantly shorter wind down period than clinical contracts, particularly within our Deployment Solutions offerings. Furthermore, many of our communications services and consulting services projects are tied to a customer’s annual marketing budget or ad hoc service requests, which can lead to seasonal variability in revenue and less predictability in future revenues. In addition, many of our biopharmaceutical Deployment Solutions service contracts provide our customers with the opportunity to internalize the resources provided under the contract and terminate all or a portion of the services we provide under the contract. Our customers may also decide to shift their business to a competitor. Each of these factors results in less visibility to future revenue and may result in high volatility in future revenue.

Contract terminations, delays and modifications are a regular part of our business across each of our segments. Our full-service offering within our Clinical Solutions business has been, and may continue to be, negatively impacted by project delays, which impact near term revenue disproportionately. In addition, project delays, downsizings and cancellations, particularly within our Deployment Solutions and communications offerings, which are part of our Commercial Solutions business, have impacted our results in the past and might impact them in the future. The loss, reduction in scope or delay of a large project or of multiple projects could have a material adverse effect on our business, results of operations, and financial condition. In addition, we might not realize the full benefits of our backlog if our customers cancel, delay, or reduce their commitments to us.

In the event of termination, our contracts often provide for fees for winding down the project, which include both fees incurred and actual and non-cancellable expenditures and may include a fee to cover a percentage of the remaining professional fees on the project. These fees might not be sufficient for us to maintain our margins, and termination may result in lower resource utilization rates and therefore lower operating margins. In addition, cancellation of a contract or project for the reasons noted above may result in the unwillingness or inability of our customer to satisfy its existing obligations to us such as payments of accounts receivable, which may in turn result in a material impact to our results of operations and cash flow. Historically, cancellations and delays have negatively impacted our operating results, and they might again. In addition, we might not realize the full benefits of our backlog if our customers cancel, delay, or reduce their commitments to us, which may occur if, among other things, a customer decides to shift its business to a competitor or revoke our status as a preferred provider. Thus, the loss or delay of a large business award or the loss or delay of multiple awards could adversely affect our revenues and profitability. Additionally, a change in the timing of a new business award could affect the period over which we recognize revenue and reduce our revenue in any one quarter.

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities.

Recent Sales of Unregistered Securities

Not applicable.

Purchases of Equity Securities by the Issuer

On November 17, 2020, our Board authorized the repurchase of up to an aggregate of $300.0 million of our Class A common stock, par value $0.01 per share, to be executed from time to time in open market transactions effected through a broker at prevailing market prices, in block trades, or through privately negotiated transactions through December 31, 2022 (the “2021 Stock Repurchase Program”). The 2021 Stock Repurchase Program took effect on January 1, 2021.

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On May 25, 2022, our Board approved a new stock repurchase program (the “2022 Stock Repurchase Program”) that took effect immediately and replaced the 2021 Stock Repurchase Program. The 2022 Stock Repurchase Program authorizes the repurchase of up to an aggregate of $350.0 million of our Class A common stock, par value $0.01, and will expire on December 31, 2024. Share repurchases are funded primarily with our working capital, cash flow from operations, and funds available through various borrowing arrangements.

The 2022 Stock Repurchase Program does not obligate us to repurchase any particular amount of our Class A common stock, and may be modified, extended, suspended, or discontinued at any time. The timing and amount of repurchases will be determined by our management based on a variety of factors such as the market price of our Class A common stock, our corporate cash requirements, and overall market conditions. The 2022 Stock Repurchase Program is subject to applicable legal requirements, including federal and state securities laws and applicable Nasdaq rules. We may also repurchase shares of our Class A common stock pursuant to a trading plan meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, which would permit shares of our Class A common stock to be repurchased when we might otherwise be precluded from doing so by law.

During the three months ended September 30, 2022, there were no share repurchases under the 2022 Stock Repurchase Program. As of September 30, 2022, we have remaining authorization to repurchase up to $350.0 million of shares of our Class A common stock under the 2022 Stock Repurchase Program.

Item 5. Other Information.

Not applicable.

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Item 6. Exhibits


		Incorporated by Reference (Unless Otherwise Indicated)
Exhibit Number	Exhibit Description	Form	File No.	Exhibit	Filing Date
4.1	Fifth Supplemental Indenture, dated as of October 3, 2022, among the Guaranteeing Subsidiaries, the Company, the other Guarantors, and Wells Fargo Bank, National Association, as trustee.	—	—	—	Filed herewith
10.1	Separation Agreement and General Release of Claims between Syneos Health, Inc. and Paul Colvin.	—	—	—	Filed herewith
10.2	Supplemental Release between Syneos Health, Inc. and Paul Colvin.	—	—	—	Filed herewith
10.3	Twelfth Amendment to the Receivables Financing Agreement, dated as of October 3, 2022, by and among Syneos Health Receivables LLC, as borrower, Syneos Health, LLC, as initial servicer, Regions Bank, as lender, and PNC Bank, National Association, as administrative agent and as a lender.	—	—	—	Filed herewith
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	—	—	—	Filed herewith
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	—	—	—	Filed herewith
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	—	—	—	Furnished herewith
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	—	—	—	Furnished herewith
101.INS	Inline XBRL Instance Document - the Instance Document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.	—	—	—	Filed herewith
101.SCH	Inline XBRL Taxonomy Extension Schema Document.	—	—	—	Filed herewith
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.	—	—	—	Filed herewith
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.	—	—	—	Filed herewith
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.	—	—	—	Filed herewith
101.PRE	Inline Taxonomy Extension Presentation Linkbase Document.	—	—	—	Filed herewith
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).	—	—	—	Filed herewith

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


		SYNEOS HEALTH, INC.


Date: November 3, 2022	BY:	/s/ Jason Meggs
		Jason Meggs
		Chief Financial Officer (Principal Financial Officer)

Exhibit 4.1

FIFTH SUPPLEMENTAL INDENTURE

Fifth Supplemental Indenture (this “Supplemental Indenture”), dated as of October 3, 2022, among each undersigned Subsidiary (the “Guaranteeing Subsidiary”), each a subsidiary of Syneos Health, Inc. (or its permitted successor), a Delaware corporation (the “Company”), the Company, the other Guarantors (as defined in the Indenture referred to herein) and Wells Fargo Bank, National Association, as trustee under the Indenture referred to below (the “Trustee”).

W I T N E S S E T H

WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture (the “Original Indenture”), dated as of November 24, 2020, a first supplemental indenture, dated as of November 24, 2020 (the “First Supplemental Indenture”), a second supplemental indenture, dated as of May 25, 2021 (the “Second Supplemental Indenture”), a third supplemental indenture, dated as of November 19, 2021 (the “Third Supplemental Indenture”), and a fourth supplemental indenture, dated as of April 5, 2022 (the “Fourth Supplemental Indenture” and, together with the Original Indenture, the First Supplemental Indenture, the Second Supplemental Indenture and the Third Supplemental Indenture, the “Indenture”) providing for the issuance of 3.625% Senior Notes due 2029 (the “Notes”);

WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Company’s Obligations under the Notes and the Indenture on the terms and conditions set forth herein (the “Guarantee”); and

WHEREAS, pursuant to Section 10.01 of the First Supplemental Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

1. Capitalized Terms. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

2. Agreement to Guarantee. The Guaranteeing Subsidiary hereby agrees to provide an unconditional Guarantee on the terms and subject to the conditions set forth in the First Supplemental Indenture including but not limited to Article 9 thereof.

3. No Recourse Against Others. No director, officer, employee, incorporator or stockholder of the Company or any Guarantor, as such, will have any liability for any obligations of the Company or the Guarantors under the Notes, the Indenture, the Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

4. NEW YORK LAW TO GOVERN. THIS SUPPLEMENTAL INDENTURE AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

5. Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

6. Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof.

7. The Trustee. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary and the Company.

8. Miscellaneous. This document is provided by Computershare Trust Company, N.A., or one or more of its affiliates (collectively, “Computershare”), in its named capacity or as agent of or successor to Wells Fargo Bank, N.A., or one or more of its affiliates (“Wells Fargo”), by virtue of the acquisition by Computershare of substantially all the assets of the corporate trust services business of Wells Fargo.

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed and attested, all as of the date first above written.

SYNEOS HEALTH, INC.

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

SYNEOS HEALTH PATIENT SERVICES, LLC

By: /s/ Sara Epstein
Name: Sara Epstein
Title: Director

COMPUTERSHARE TRUST COMPANY, N.A., AS AGENT FOR WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Trustee

By: /s/ Xis Toni Vwj
Name: Xis Toni Vwj
Title: Assistance Vice President

Exhibit 10.1

SEPARATION AGREEMENT

AND GENERAL RELEASE OF CLAIMS

This Separation Agreement and General Release of Claims (“Agreement”) is made and entered into by Paul Colvin (“Employee” or “You” or “Your”) and Syneos Health, Inc., any parent, subsidiary, affiliate, successor, predecessor or otherwise related companies, and the past, present, and future employees, agents, officers, attorneys, directors, shareholders, members, managers and employee benefit programs of any of them, and their agents and insurers (collectively, referred to in this Agreement as “Syneos Health” or the “Company”). This Agreement supersedes all prior employment agreements or arrangements of any kind Employee may have entered into with the Company. This Agreement shall become effective as of the Effective Date defined below.

This Agreement is the product of negotiation and compromise between Employee and the Company. Employee has carefully considered other alternatives to executing this Agreement. In consideration of the severance pay and benefits (“Severance Benefits”) provided to Employee as set forth in the Syneos Health, Inc.’s Executive Severance Plan (the “Severance Plan”) and in more detail below, it is agreed by the parties as follows:

Separation from Employment. You acknowledge and agree that Your employment with the Company will end on September 30, 2022 (the “Separation Date”). Regardless of signing this Agreement, You will be paid for all outstanding wages earned through and including the Separation Date, which will be paid on the next regular payday, or as required by law. You agree to execute a resignation letter stating that effective as of June 30, 2022, or such earlier date as required or requested by the Company, You resign as any officer or director with the Company or any of its Affiliates.

Supplemental Release. A material condition to this Agreement is that Employee signs the Supplemental Release Agreement attached as Exhibit A hereto (“Supplemental Release Agreement”) on or after the Separation Date but before three (3) calendar days after the Separation Date. Without limiting the Company’s other remedies, Employee understands and agrees that Employee’s failure to timely execute and return the Supplemental Release Agreement will require Employee to repay all of the consideration and benefits provided to Employee in this Agreement, except as set forth in Section 5(c) below.

Consideration.

Provided that You timely sign this Agreement and the Supplemental Release Agreement attached as Exhibit A, the Company agrees to provide You with a payment of twelve (12) months of severance at your current salary ($567,000) and one year of target bonus ($396,900), for a total amount of One Million, One Hundred and Five Thousand and Six Hundred and Fifty Dollars ($1,105,650.00), together with the COBRA subsidy payment described in 3(b), if applicable, less applicable taxes and withholdings (the “Payment”). The Payment shall be payable by the Company in equal installments during the twelve (12) months following the Separation Date, consistent with

the company’s regularly scheduled payroll, starting with the next regularly scheduled payroll period after the Effective Date defined in Section 11 below.

As of the Separation Date, You will become ineligible to participate in the Company’s health insurance program subject to Your right, if any, to continuation coverage under COBRA. To the extent You timely elects benefit continuation coverage under COBRA, your Payment will include an amount equal to the aggregate amount of the full premium (i.e., the Your and Company’s portion) for benefit coverage continuation under COBRA as provided under the Company’s group health plans in effect for the You and Your eligible dependents who are participating in the Company’s group health plans as of immediately prior to the Separation Date for a period of twelve (12) months. (For the avoidance of any doubt, the cash amount payable pursuant to this Section shall be includible in the Your income and shall supersede and be in lieu of any amounts payable to the You pursuant to the Your employment agreement or any other arrangement providing for the payment of COBRA continuation coverage for the Participant.)

Release of Claims.

In exchange for the Company providing You with the payments and other benefits set forth in this Agreement, which You acknowledge You would not be entitled to in the absence of this Agreement (and Your execution and non-revocation of the Release of Claims set forth in this Agreement), to the fullest extent allowed by applicable law, You, individually and on behalf of Your heirs, executors, personal representatives, administrators, agents and assigns, forever waive, release, give up and discharge all waivable claims, liabilities and other causes of action, real or perceived, whether now known or unknown, against the Company, its parent, subsidiaries, affiliates, and other related and affiliated companies, their employee benefit plans and trustees, fiduciaries, administrators, sponsors and parties-in-interest of those plans, and all of their past and present employees, managers, directors, officers, administrators, shareholders, members, agents, attorneys, insurers, re-insurers and contractors acting in any capacity whatsoever, and all of their respective predecessors, heirs, personal representatives, successors and assigns (collectively, the “Released Parties” as used throughout this Agreement), which have arisen, occurred or existed at any time prior to the date of this Agreement (or which You may have in the future as a result of acts that occurred prior to the date You sign this Agreement), including, without limitation, any and all claims, liabilities and causes of action arising out of, relating to, or in connection with Your employment with the Company, any terms, conditions or privileges related to Your employment with the Company, the termination of Your employment by the Company, the payment or non-payment of Your salary, bonuses or equity compensation or other incentive compensation by the Company, claims of wrongful discharge, retaliation, defamation, hostile environment, discrimination, personal injury, physical injury, misrepresentation or emotional distress, any change in control of the Company, and all alleged violations of federal, state or local fair employment practices or laws by any of the Released Parties for any reason and under any legal theory including, but not limited to, Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000(e), et seq., the Americans with Disabilities Act, 42 U.S.C. § 12101, et seq., the Age Discrimination in Employment Act, 29 U.S.C. § 621, et seq., the Older Worker Benefits Protection Act, 29 U.S.C. § 626(f), et seq., the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. 1001, et seq., the Civil Rights Act of 1991, 42 U.S.C. §§ 1981, 1983, 1985, 1986 and 1988, the

Family and Medical Leave Act, 29 U.S.C. § 2601, et seq., the Fair Labor Standards Act, 29 U.S.C. § 215(a)(3), et seq., the Equal Pay Act of 1963, 29 U.S.C. § 206, et seq., the Lilly Ledbetter Fair Pay Act of 2009, H.R. 11, the Consolidated Omnibus Budget Reconciliation Act, 29 U.S.C. § 1161, et seq. (“COBRA”), the Occupational Safety and Health Act, 29 U.S.C. 651 et seq., the North Carolina Equal Employment Practices Act, the North Carolina Retaliatory Employment Discrimination Act, the common law of the State of North Carolina, and all other federal or state or local laws, regulations, rules, ordinances, or orders prohibiting employment discrimination or regulating employment or termination of employment, as they may be amended. Without limiting the generality of the foregoing, You also forever waive, release, discharge and give up all claims, real or perceived and now known or unknown, for breach of implied or express contract, including but not limited to breach of promise, breach of the covenant of good faith and fair dealing, misrepresentation, negligence, fraud, estoppel, defamation, libel, misrepresentation, intentional infliction of emotional distress, violation of public policy, wrongful, retaliatory or constructive discharge, assault, battery, false imprisonment, negligence, and all other claims or torts arising under any federal, state, or local law, regulation, ordinance or judicial decision, or under the United States, North Carolina or other applicable state Constitution. This waiver and release is of Your rights to all remedies and damages available to You in law or equity, including but not limited to Your right to compensation, back pay, front pay, non-economic damages, punitive and exemplary damages, statutory damages, attorneys’ fees, injunctive relief and declaratory judgments. Nothing in this Agreement shall be construed to release any claims or waive any substantive rights that cannot be released or waived as a matter of applicable law. You further consciously intend these consequences even as to claims for damages that may exist as of the date this Agreement is executed that You do not know exist, and which, if known, would materially affect Your decision to execute this Agreement, regardless of whether the lack of knowledge is the result of ignorance, oversight, error, negligence or any other cause.

Notwithstanding the release contained in Section 4.a above, You do not waive Your entitlement to receive any 401(k), pension plan benefits, or Company ERISA-covered benefits that shall have vested (if any) as of the date You sign this Agreement to the extent You have any entitlement to those benefits under the terms of the relevant plans.

The release contained in Section 4.a above does not apply to any claims or rights that may arise after the date You sign this Agreement, claims regarding Company expense reporting policies or claims that the controlling law clearly states may not be released by private agreement. You also understand that You are not waiving Your rights to unemployment compensation.

Covenant Not to Sue.

You warrant that You do not have any complaint, charge or grievance against any Released Party pending before any federal, state or local court or administrative or arbitral agency, and You further agree and covenant not to sue, file a lawsuit, or commence any other proceeding, arbitral, administrative or judicial action, against any of the Released Parties in any court of law or equity, or before any arbitral body or administrative agency, with respect to any matter released in Section 4 above; provided, however, that this covenant not to sue does not affect Your right to enforce this Agreement in a court of competent jurisdiction and does not affect Your right to file

a charge with the Equal Employment Opportunity Commission (“EEOC”) or participate in an investigation conducted by the EEOC; however, You expressly waive Your right to monetary or other relief should any administrative agency, including but not limited to the EEOC, pursue any claim on Your behalf. Notwithstanding the foregoing, nothing herein shall limit Your right to receive an award for information provided to the Securities and Exchange Commission.

Nothing in this Agreement prohibits You from reporting possible violations of federal law or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, the Congress, and any Inspector General, or making other disclosures that are protected under the whistleblower provisions of federal law or regulation. You do not need the prior authorization of the Company to make any such reports or disclosures and You are not required to notify the Company that You have made such reports or disclosures.

Should You file a lawsuit with any court concerning any claim, demand, issue, or cause of action waived, released or discharged through this Agreement or otherwise in breach of Section 5.a above, You agree (i) that any amounts payable or paid to You, as applicable, pursuant to Section 3 of this Agreement shall no longer be payable and, if already paid, You agree to repay all but one-hundred ($100) of the Payment made to You; and (ii) to the fullest extent allowed by applicable law, to indemnify the Released Parties for all costs and expenses incurred by them in defending such lawsuit. You further agree that nothing in this Agreement shall limit the right of a court to determine, in its sole discretion, that the Released Parties are entitled to restitution, recoupment or set off of any monies paid should the release of any claims under this Agreement subsequently be found to be invalid.

You agree not to advocate or incite the institution of, or assist or participate in, any suit, unrest, complaint, charge or administrative proceeding by any other person against any of the Released Parties, unless compelled by legal process to do so. Nothing in this Section 5 shall prohibit any Party from lawfully participating or cooperating in an investigative proceeding of any federal, state or local government agency.

Non-Admission of Liability. You agree that this Agreement shall not in any way be construed as an admission that any of the Released Parties owe You any money or have acted wrongfully, unlawfully, or unfairly in any way towards You. In fact, You understand that the Released Parties specifically deny that they have violated any federal, state or local law or ordinance or any right or obligation that they owe or might have owed to You at any time.

Confidentiality of Agreement; Non-Disparagement. You acknowledge and agree that You shall not publicize, communicate, authorize or permit the publication or communication in any form whatsoever of the contents of the Agreement or the events giving rise thereto, except to Your immediate family, Your financial advisors and/or legal counsel, or where required by law. Further, You undertake and agree that You shall not defame, disparage or otherwise speak negatively about the Company, Your employment at the Company or the circumstances surrounding Your separation.

Confidentiality of the Company’s Confidential Information. You acknowledge that due to the position that You occupied and the responsibilities that You held at the Company, You may have received Confidential Information concerning the Company’s products, computer processes, data systems, employment policies, procedures, customers, sales, client lists, prices, personnel, employee relations, internal documents and programs, contracts, and the like. You hereby promise and agree that, unless compelled by legal process, You will not disclose to others and will keep confidential all information You have received while employed by the Company or any entity of which the Company has acquired its assets, concerning products, processes, and procedures, internal capabilities, the identities of customers, sales, prices, personnel, the terms of any contracts with third parties, and any and all proprietary information. You agree that a violation by You of the foregoing obligation to maintain the confidentiality of the Company’s Confidential Information will constitute a material breach of this Agreement. You further agree that all materials, computer and telephone equipment, documents, information, programs, and suggestions provided for the Company by You in connection with Your employment shall be the exclusive property of the Company or its designee. All information contained in any computer databases generated by You in connection with Your employment shall be the property of the Company or its designee, and the Company may use the data in any way it deems appropriate. Any copyrightable work created by You on behalf of the Company shall be considered work made for hire, whether published or unpublished, and all rights therein shall be the property of the Company as author and owner of copyright in such particular work. Notwithstanding the above, the Company acknowledges that You may possess and reserve Your rights in certain inventions, know-how, and improvements that can be clearly substantiated to have been entirely independently developed by You and can be shown to be unrelated to the Company and Your performance for the Company.

Representations and Indemnification.

You represent and affirm that You will abide by the post-employment restrictive covenants provided for in Sections 2 and 3 of your Global Restricted Stock Unit (RSU) Award Agreement dated 18 January 2022 (the “RCA”) at Attachment A, between You and the Company.

You agree that You will indemnify and hold the Released Parties from any loss, cost, damage or expense (including attorneys’ fees) incurred by the Released Parties arising out of Your breach of any portion of this Agreement or any post-employment restrictive covenant. You further acknowledge and agree that if You breach this Agreement or an post-employment restrictive covenant, the Company will be damaged irreparably and the Company shall be entitled to an injunction or injunctions to prevent such breach and to enforce specifically this Agreement and the terms, conditions and provisions hereof, in addition to any other remedy to which it may be entitled, at law or in equity.

You also agree and understand that Your entitlement to and retention of the Payment the Company has agreed to provide to You pursuant to Section 3 of this Agreement is expressly conditioned upon Your fulfillment of Your promises herein and any applicable post-employment restrictive covenants. You agree, to the extent permitted or required by law, that should You breach any portion of this Agreement or any post-employment restrictive covenant (i) that any amounts payable or paid to You, as applicable, pursuant to Section 3 of this Agreement shall no longer be

payable and (ii) to repay all but one-hundred ($100) of the Payment made to You, within seven (7) days of the Company providing You with written notice of Your breach of any provision of this Agreement and any applicable post-employment restrictive covenants. Prior to any demand being made for repayment of any Payment made to You, the Company shall provide You with written notice of the purported breach of this Agreement or any applicable post-employment restrictive covenant and a ten (10) day period to cure any such purported breach or violation. In the event You cure any purported breach or violation within the cure period, the Company shall not demand repayment of the Payment resulting from such purported breach or violation, but reserves the right not to provide any future Payments under Section 3 to You. The Company shall determine whether a breach has occurred in its sole discretion and under any applicable law or regulation.

10.

Miscellaneous.

Governing Law and Venue. This Agreement and its negotiation, execution, performance or non-performance, interpretation, termination, construction and all claims or causes of action (whether in contract or tort) including resolutions of disputes that may be based upon, arise out of or relate to this Agreement, or the negotiation and performance of this Agreement (including any claim or cause of action based upon, arising out of or related to any representation or warranty made or in connection with this Agreement or as an inducement to enter into this Agreement) (each a “proceeding”) shall be governed by, and construed in accordance with, the laws of the State of North Carolina, regardless of laws that might otherwise govern under any applicable conflict of laws principles. Any action relating to this Agreement shall be instituted and prosecuted only in the federal or state courts of Wake County, North Carolina and the Company and Employee hereby consent to the jurisdiction of such courts and waive any right or defense relating to venue and jurisdiction over the person. The language of all parts of this Agreement shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against any of the parties, by virtue of the identity, interest, or affiliation of its preparer.

Severability. Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under such law, such provision shall be ineffective to the extent of such prohibition or invalidity and severed from this Agreement, without invalidating the remainder of such provision or remaining provisions of this Agreement.

Proper Construction. The language of this Agreement shall be construed within the context of the whole Agreement and according to its fair meaning, and not strictly for or against any of the Parties. The section headings used in this Agreement are intended solely for convenience of reference and shall not in any manner amplify, limit, modify or otherwise be used in the interpretation of any of the provisions hereof.

Amendments. This Agreement may be modified, altered or terminated only by an express written agreement between You and the Company, which agreement must be signed by all Parties or their duly authorized agents, and expressly reference and attach a copy of this Agreement to be effective.

Counterparts. This Agreement may be signed in counterparts and said counterparts shall be treated as though signed as one document. In the event that the Parties execute this Agreement by exchange of portable document format or other electronically signed copies or facsimile signed copies, the Parties agree that, upon being signed by all the Parties, this Agreement shall become effective and binding and that such copies shall constitute evidence of the existence of this Agreement.

No Reliance on Representations. You represent and acknowledge that in executing this Agreement that You do not rely and have not relied upon any representation or statement made by any of the Released Parties or by any of the Released Parties’ agents, representatives, or attorneys with regard to the subject matter, basis, or effect of this Agreement or otherwise.

Entire Agreement. This Agreement, together with your RCA, sets forth the entire agreement between the parties hereto, and fully supersedes any prior or contemporaneous agreements or understandings between the parties.

Medicare Representations. You affirm, covenant, and warrant that You are not a Medicare beneficiary and are not currently receiving, have not received in the past, will not have received at the time of payment pursuant to this Agreement, are not entitled to, are not eligible for, and have not applied for or sought Social Security Disability or Medicare benefits. In the event any statement in the preceding sentence is incorrect (for example, but not limited to, if You are a Medicare beneficiary, etc.), the following sentences (i.e., the remaining sentences of this paragraph) apply. You affirm, covenant, and warrant that You have made no claim for illness or injury against, nor are You aware of any facts supporting any claim against, the Released Parties under which the Released Parties could be liable for medical expenses incurred by You before or after the execution of this Agreement. Furthermore, You are aware of no medical expenses that Medicare has paid and for which the Released Parties are or could be liable now or in the future. You agree and affirm that, to the best of Your knowledge, no liens of any governmental entities, including those for Medicare conditional payments, exist. You will indemnify, defend, and hold the Released Parties harmless from Medicare claims, liens, damages, conditional payments, and rights to payment, if any, including attorneys’ fees, and You further agrees to waive any and all future private causes of action for damages pursuant to 42 U.S.C. § 1395y(b)(3)(A), et seq.

11.

Acknowledgment.

You confirm that, to the best of Your knowledge, You have returned to the Company all of its property, including without limitation, computer equipment, software, keys and access cards, credit cards, files and any documents (including computerized data and any copies made of any computerized data or software) containing information concerning the Company, its business or its business relationships. You also commit to deleting and finally purging any duplicates of files or documents that may contain the Company information from any computer or other device that remains Your property after the Termination Date, provided such information is not subject to an ongoing litigation hold.

You acknowledge that this Agreement was presented to You on July 1, 2022. You further acknowledge that You have had at least 21 days after receipt of this Agreement to consider whether to execute this Agreement and that you understand all the provisions of this Agreement.

You acknowledge and understand that after You execute this Agreement, You have seven (7) days to revoke the portion of this Agreement that relates to waiver and release of any claim You might assert under the Age Discrimination in Employment Act (“ADEA”). The parties agree that no payment as set forth in this Agreement will be made until after the seven (7) day revocation period has expired (the eighth day after execution by You being the “Effective Date” of this Agreement). You understand that by signing this Agreement, You are not waiving or releasing any ADEA claims based on actions or omissions that occur after the date of You signing of this Agreement. You agree that any revocation of Your ADEA waiver and release must be made in writing and postmarked on or before the seventh day following the execution of this Agreement and sent by certified mail to:

Jonathan Olefson

General Counsel

Syneos Health, Inc.

1030 Sync Street

Morrisville, NC 27560

jonathan.olefson@syneoshealth.com

You acknowledge that with the exception of any payments and other benefits set forth in this Agreement or any signed retention bonus agreement (if applicable), and of Your final paycheck (to include Your regular wages and any accrued by unused vacation or other paid time off to be delivered by the next regularly scheduled payday or otherwise as required by law), You acknowledge payment of all compensation due to You by the Company.

You acknowledge that You have been advised in writing, as reflected in this Agreement, and have had an opportunity to seek legal counsel concerning the terms of this Agreement. You warrant that You have read this Agreement, are knowingly and voluntarily entering into it and intend to be legally bound by the same, and that Your agreement thereto has not been the result of coercion or duress by the Company. You certify and agree that You are authorized and competent to sign this Agreement, and that You are receiving valuable and adequate consideration under this Agreement.

[signature page follows]

I HAVE READ THIS GENERAL RELEASE THOROUGHLY, UNDERSTAND ITS TERMS AND HAVE SIGNED IT KNOWINGLY AND VOLUNTARILY. I UNDERSTAND THAT THIS GENERAL RELEASE IS A LEGAL DOCUMENT.

IN WITNESS WHEREOF, Employee has executed this Release Agreement as of the date set forth below.

Dated: 8/1/2022

Paul Colvin

/s/ Paul Colvin					

Address: [Redacted]

 
Dated: 7/28/2022

 
Received, Acknowledged and Accepted:
SYNEOS HEALTH, INC.
 
By:	/a/ Jonathan Olefson
Name: 	Jonathan Olefson
Its: 	General Counsel

Exhibit A

SUPPLEMENTAL RELEASE AGREEMENT

By signing this Supplemental Release Agreement where indicated below, I acknowledge and agree that I am hereby extending, through and including the date I sign below, the application of all of my representations, obligations, acknowledgements, and other provisions reflected in the Separation Agreement and General Release of Claims, dated July __, 2022 (the “Agreement”) that I entered into relating to my separation from employment with the Company (as defined in the Agreement), including but not limited to my full and binding release and waiver of all claims against the Company or any of the Released Parties (as defined in the Agreement), to the greatest extent permitted under applicable law.

I understand and agree that, pursuant to the terms of the Agreement, I am only eligible to receive certain consideration payments described therein if I timely execute this Supplemental Release and otherwise satisfy all terms and conditions set forth in the Agreement. I further understand and acknowledge that the consideration given for this waiver and release is in addition to anything of value to which I was already entitled.

I agree that my signature below constitutes my certification that I have returned all documents and other items provided to me by the Company, developed or obtained by me in connection with my employment with the Company, or otherwise belonging to the Company, including, but not limited to, all passwords to any software or other programs or data that I used in performing services for the Company.

I understand that I am not to sign and return this Supplemental Release until my Separation Date (as defined in the Agreement), and no later than three (3) days after the Separation Date. I acknowledge that I have been afforded at least twenty-one (21) days to consider this Supplemental Release and I have seven (7) days after I sign this Supplemental Release to revoke it. In the event that I sign this Supplemental Release and return it to the Company in less than this 21-day period, I hereby acknowledge that I have freely and voluntarily chosen to waive the time period allotted for considering this Supplemental Release. This Supplemental Release will become effective on the eighth (8th) day after I sign this Supplemental Release, so long as I have not revoked it before that date I acknowledge and understand that revocation must be accomplished by a written notification to the Company that is received prior to the end of the revocation period. By signing below, I acknowledge that I have read and understand and agree to all the terms of the Agreement and this Supplemental Release, and intend to be bound thereby.

*NOT TO BE SIGNED UNTIL ON/AFTER THE SEPARATION DATE*

Dated: ___________________________

Paul Colvin

Address:

Exhibit 10.2

Exhibit A

SUPPLEMENTAL RELEASE AGREEMENT

By signing this Supplemental Release Agreement where indicated below, I acknowledge and agree that I am hereby extending, through and including the date I sign below, the application of all of my representations, obligations, acknowledgements, and other provisions reflected in the Separation Agreement and General Release of Claims, dated August 9, 2022 (the “Agreement”) that I entered into relating to my separation from employment with the Company (as defined in the Agreement), including but not limited to my full and binding release and waiver of all claims against the Company or any of the Released Parties (as defined in the Agreement), to the greatest extent permitted under applicable law.

*NOT TO BE SIGNED UNTIL ON/AFTER THE SEPARATION DATE*

Dated: 10/12/2022

Paul Colvin

/s/ Paul Colvin					

Address: [Redacted]

Exhibit 10.3

EXECUTION VERSION

TWELFTH AMENDMENT TO THE

RECEIVABLES FINANCING AGREEMENT

This TWELFTH AMENDMENT TO THE RECEIVABLES FINANCING AGREEMENT (this “Amendment”), dated as of October 3, 2022, is entered into by and among the following parties:

(i)

SYNEOS HEALTH RECEIVABLES LLC, as Borrower;

(ii)

SYNEOS HEALTH, LLC (f/k/a INC RESEARCH, LLC), as initial Servicer;

(iii)

REGIONS BANK (“Regions”), as a Lender;

(iv)

TRUIST BANK (“Truist”), as a Lender; and

(v)

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

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

BACKGROUND

The parties hereto (other than Truist) have entered into a Receivables Financing Agreement, dated as of June 29, 2018 (as amended, restated, supplemented or otherwise modified through the date hereof, the “Receivables Financing Agreement”).

Concurrently herewith, the Borrower, the Administrative Agent, the Lenders and PNC Capital Markets LLC are entering into that certain Amended and Restated Fee Letter dated as of the date hereof (the “Fee Letter”).

Truist desires to become party to the Receivables Financing Agreement on the terms set forth herein.

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

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

SECTION 1. Joinder of Truist and Non-Ratable Loans.

(a)

Joinder. Effective as of the date hereof, Truist hereby becomes a party to the Receivables Financing Agreement and the Fee Letter as a Lender thereunder with all the rights, interests, duties and obligations of a Lender set forth therein. In its capacity as

a Lender, Truist’s Commitment shall be the applicable amount set forth on Exhibit A attached hereto.

(b)

Non-Ratable Loans. The Borrower hereby request that (i) Truist fund a Loan on the date hereof in the initial principal amount of $90,000,000, (ii) PNC fund a Loan on the date hereof in the initial principal amount of $45,000,000 and (iii) Regions fund a Loan on the date hereof in the initial principal amount of $15,000,000. Each such Loan shall be funded by the applicable Lender on the date hereof in accordance with the terms of the Receivables Financing Agreement and upon satisfaction of all conditions precedent thereto specified in the Receivables Financing Agreement.

(c)

Consents. The parties hereto hereby consent to the joinder of Truist as party to the Receivables Financing Agreement and the Fee Letter on the terms set forth in clause

(a) above and the foregoing non-ratable Loans to be funded by the applicable Lenders on the terms set forth in clause (b) above on a one-time basis.

(d)

Credit Decision. Truist (i) confirms to the Administrative Agent and the Lenders, that it has received a copy of the Receivables Financing Agreement, the other Transaction Documents, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Amendment and

(ii) agrees that it will, independently and without reliance upon the Administrative Agent, the Lenders and their respective Affiliates, based on such documents and information as Truist shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Receivables Financing Agreement and any other Transaction Document. None of the Administrative Agent or the Lenders makes or has made any representation or warranty or assumes or has assumed any responsibility with respect to (x) any statements, warranties or representations made in or in connection with the Receivables Financing Agreement, any other Transaction Document or any other instrument or document furnished pursuant thereto or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Receivables Financing Agreement, the Receivables, the Collateral, any other Transaction Document or any other instrument or document furnished pursuant thereto or (y) the financial condition of the Borrower, the Servicer, the Performance Guarantor or the Originators or the performance or observance by any of them any of their respective obligations under the Receivables Financing Agreement, any other Transaction Document or any instrument or document furnished pursuant thereto.

SECTION 2. Amendments to the Receivables Financing Agreement . The Receivables Financing Agreement is hereby amended to incorporate the changes shown on the marked pages of the Receivables Financing Agreement attached hereto as Exhibit A.

SECTION 3. Representations and Warranties of the Borrower and the Servicer. The Borrower and the Servicer each hereby represent and warrant to each of the parties hereto as of the date hereof as follows:

749301255 18569090

(a)

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

(b)

Enforceability. The execution and delivery by it of this Amendment, and the performance of its obligations under this Amendment, Fee Letter, the Receivables Financing Agreement (as amended hereby) and the other Transaction Documents to which it is a party are within its organizational powers and have been duly authorized by all necessary action on its part, and this Amendment, the Fee Letter, the Receivables Financing Agreement (as amended hereby) and the other Transaction Documents to which it is a party are (assuming due authorization and execution by the other parties thereto) its valid and legally binding obligations, enforceable in accordance with their terms, except (i) as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (ii) as such enforceability may be limited by general principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or at law.

(c)

No Event of Default. After giving effect to this Amendment, no Event of Default or Unmatured Event of Default has occurred and is continuing, or would occur as a result of this Amendment, the Fee Letter or the transactions contemplated hereby or thereby.

SECTION 4. Effect of Amendment; Ratification. All provisions of the Receivables Financing Agreement and the other Transaction Documents, as expressly amended and modified by this Amendment, shall remain in full force and effect. After this Amendment becomes effective, all references in the Receivables Financing Agreement (or in any other Transaction Document) to “the Receivables Financing Agreement”, “this Agreement”, “hereof”, “herein” or words of similar effect referring to the Receivables Financing Agreement shall be deemed to be references to the Receivables Financing Agreement as amended by this Amendment. This Amendment shall not be deemed, either expressly or impliedly, to waive, amend or supplement any provision of the Receivables Financing Agreement other than as set forth herein. The Receivables Financing Agreement, as amended by this Amendment, is hereby ratified and confirmed in all respects.

SECTION 5. Effectiveness. This Amendment shall become effective as of the date hereof, subject to the conditions precedent that the Administrative Agent shall have received the following:

(a)

counterparts to this Amendment executed by each of the parties hereto;

(b)

counterparts to the Fee Letter executed by each of the parties thereto;

(c)

evidence that each “Upfront Fee” under and as defined in the Fee Letter has been paid; and

(d)

such other agreements, documents, instruments, UCC financing statements, secretary certificates, lien searches, reliance letters and opinions listed on Annex A hereto or otherwise as the Administrative Agent may reasonably request prior to the date hereof.

749301255 18569090

SECTION 6. Severability. Any provisions of this Amendment which are prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

SECTION 7. Transaction Document. This Amendment shall be a Transaction Document for purposes of the Receivables Financing Agreement.

SECTION 8. Counterparts. This Amendment may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement. Delivery of an executed counterpart hereof by facsimile or other electronic means shall be equally effective as delivery of an originally executed counterpart. The words “execution,” “execute”, “signed,” “signature,” and words of like import in or related to any document to be signed in connection with this Amendment and the transactions contemplated hereby shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by the Administrative Agent, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

SECTION 9. GOVERNING LAW AND JURISDICTION.

(a)

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

(b)

EACH PARTY HERETO HEREBY IRREVOCABLY SUBMITS TO (I) WITH RESPECT TO THE BORROWER AND THE SERVICER, THE EXCLUSIVE JURISDICTION, AND (II) WITH RESPECT TO EACH OF THE OTHER PARTIES HERETO, THE NON-EXCLUSIVE JURISDICTION, IN EACH CASE, OF ANY NEW YORK STATE OR FEDERAL COURT SITTING IN NEW YORK CITY, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AMENDMENT, AND EACH PARTY HERETO HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING (I) IF BROUGHT BY THE BORROWER, THE SERVICER OR ANY AFFILIATE THEREOF, SHALL BE HEARD AND DETERMINED, AND (II) IF BROUGHT BY ANY OTHER PARTY TO THIS AMENDMENT, MAY BE HEARD AND DETERMINED, IN EACH CASE, IN SUCH NEW YORK STATE COURT OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. NOTHING IN THIS SECTION 9 SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY OTHER

749301255 18569090

CREDIT PARTY TO BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWER OR THE SERVICER OR ANY OF THEIR RESPECTIVE PROPERTY IN THE COURTS OF OTHER JURISDICTIONS. EACH OF THE BORROWER AND THE SERVICER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING. THE PARTIES HERETO AGREE THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.

SECTION 10. Section Headings. The various headings of this Amendment are included for convenience only and shall not affect the meaning or interpretation of this Amendment, the Receivables Financing Agreement or any provision hereof or thereof.

SECTION 11. Performance Guaranty Ratification. After giving effect to this Amendment, the Fee Letter and the transactions contemplated by this Amendment and the Fee Letter, all of the provisions of the Performance Guaranty shall remain in full force and effect and the Performance Guarantor hereby ratifies and affirms the Performance Guaranty and acknowledges that the Performance Guaranty has continued and shall continue in full force and effect in accordance with its terms.

[Signature pages follow.]

749301255 18569090

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

SYNEOS HEALTH RECEIVABLES LLC,
as the Borrower
 
By: /s/ Lisa Silverman	 
Name: Lisa Silverman
Title: Treasurer

 
SYNEOS HEALTH, LLC,
as the Servicer
 
By:                           	 
Name: Jason Meggs
Title: Chief Financial Officer

Twelfth Amendment to the Receivables Financing Agreement

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

SYNEOS HEALTH RECEIVABLES LLC,
as the Borrower
 
By:                       	 
Name: Lisa Silverman
Title: Treasurer

 
SYNEOS HEALTH, LLC,
as the Servicer
 
By: /s/ Jason Meggs
Name: Jason Meggs
Title: Chief Financial Officer

Twelfth Amendment to the Receivables Financing Agreement

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

 
PNC BANK, NATIONAL ASSOCIATION,
as a Lender
 
By: /s/ Christopher Blaney
Name: Christopher Blaney
Title:   Senior Vice President

749301255 18569090 S-2 Twelfth Amendment to the Receivables Financing Agreement

REGIONS BANK,
as a Lender
 
By: /s/ Cecil Noble
Name: Cecil Noble
Title:  Managing Director  

74930125518569090 S-3 Twelfth Amendment to the Receivables Financing Agreement

TRUIST BANK,
as a Lender
 
 
By: /s/ Paul Cornely    
Name: Paul Cornely
Title:  Vice President  

749301255 18569090 S-4 Twelfth Amendment to the Receivables Financing Agreement

Acknowledged and agreed:
 
SYNEOS HEALTH, INC.,
as Performance Guarantor
 
By: /s/ Jason Meggs
Name: Jason Meggs
Title:   Chief Financial Officer 

Twelfth Amendment to the Receivables Financing Agreement

EXHIBIT A

AMENDMENTS TO THE RECEIVABLES FINANCING AGREEMENT

(Attached)

Exhibit A

749301255 18569090

EXECUTION VERSION

EXHIBIT A to the ELEVENTHTWELFTH AMENDMENT, dated as of October 133,

20212022

CONFORMED COPY INCLUDES

FIRST AMENDMENT, dated as of August 1, 2018

SECOND AMENDMENT, dated as of August 29, 2018

THIRD AMENDMENT, dated as of October 25, 2018

FOURTH AMENDMENT, dated as of January 2, 2019

FIFTH AMENDMENT, dated as of July 25, 2019

SIXTH AMENDMENT, dated as of September 30, 2019

OMNIBUS AMENDMENT, dated as of January 31, 2020

EIGHTH AMENDMENT, dated as of March 18, 2020

NINTH AMENDMENT, dated as of September 25, 2020

TENTH AMENDMENT, dated as of January 28, 2021

ELEVENTH AMENDMENT, dated as of October 13, 2021

RECEIVABLES FINANCING AGREEMENT

Dated as of June 29, 2018

by and among

SYNEOS HEALTH RECEIVABLES LLC,

as Borrower,

THE PERSONS FROM TIME TO TIME PARTY HERETO,

as Lenders,

PNC BANK, NATIONAL ASSOCIATION,

as Administrative Agent,

SYNEOS HEALTH, LLC,

as initial Servicer,

and

PNC CAPITAL MARKETS LLC,

as Structuring Agent

749303375 18569090

TABLE OF CONTENTS


	Page
ARTICLE I DEFINITIONS	1
SECTION 1.01. Certain Defined Terms	1
SECTION 1.02. Other Interpretative Matters	3538
ARTICLE II TERMS OF THE LOANS	3639
SECTION 2.01. Loan Facility	3639
SECTION 2.02. Making Loans; Repayment of Loans	3639
SECTION 2.03. Interest and Fees	3841
SECTION 2.04. Records of Loans	3842
SECTION 2.05. Selection of Interest Rates and Tranche Periods	39
SECTION 2.06. Defaulting Lenders	3942
ARTICLE III [RESERVED]	4043
ARTICLE IV SETTLEMENT PROCEDURES AND PAYMENT PROVISIONS	4043
SECTION 4.01. Settlement Procedures	4043
SECTION 4.02. Payments and Computations, Etc	4346
ARTICLE V INCREASED COSTS; FUNDING LOSSES; TAXES; ILLEGALITY AND SECURITY INTEREST	4447
SECTION 5.01. Increased Costs	4447
SECTION 5.02. Funding Losses	4548
SECTION 5.03. Taxes	4549
SECTION 5.04. Inability to Determine Adjusted LIBOR or LMIR; Change in Legality	50
SECTION 5.05. Security Interest	5054
SECTION 5.06. Successor Adjusted LIBOR or LMIR	51
ARTICLE VI CONDITIONS TO EFFECTIVENESS AND CREDIT EXTENSIONS	5458
SECTION 6.01. Conditions Precedent to Effectiveness and the Initial Credit Extension	5458
SECTION 6.02. Conditions Precedent to All Credit Extensions	5559
SECTION 6.03. Conditions Precedent to All Releases	5660
ARTICLE VII REPRESENTATIONS AND WARRANTIES	5760
SECTION 7.01. Representations and Warranties of the Borrower	5760
SECTION 7.02. Representations and Warranties of the Servicer	6265

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TABLE OF CONTENTS

(continued)


	Page
ARTICLE VIII COVENANTS	6669
SECTION 8.01. Covenants of the Borrower	6669
SECTION 8.02. Covenants of the Servicer	7578
SECTION 8.03. Separate Existence of the Borrower	8285
ARTICLE IX ADMINISTRATION AND COLLECTION OF RECEIVABLES	8589
SECTION 9.01. Appointment of the Servicer.	8589
SECTION 9.02. Duties of the Servicer.	8690
SECTION 9.03. Collection Account Arrangements	8790
SECTION 9.04. Enforcement Rights	8891
SECTION 9.05. Responsibilities of the Borrower	8993
SECTION 9.06. Servicing Fee	9093
ARTICLE X EVENTS OF DEFAULT	9093
SECTION 10.01. Events of Default	9093
ARTICLE XI THE ADMINISTRATIVE AGENT	9497
SECTION 11.01. Authorization and Action	9497
SECTION 11.02. Administrative Agent’s Reliance, Etc	9497
SECTION 11.03. Administrative Agent and Affiliates	9598
SECTION 11.04. Indemnification of Administrative Agent	9598
SECTION 11.05. Delegation of Duties	9598
SECTION 11.06. Action or Inaction by Administrative Agent	9598
SECTION 11.07. Notice of Events of Default; Action by Administrative Agent	9599
SECTION 11.08. Non-Reliance on Administrative Agent and Other Parties	9699
SECTION 11.09. Successor Administrative Agent	9699
SECTION 11.10. Structuring Agent	97100
SECTION 11.11. LIBORBenchmark Replacement Notification	97100
SECTION 11.12. Erroneous Payments.	97100
ARTICLE XII [RESERVED]	100103
ARTICLE XIII INDEMNIFICATION	100103
SECTION 13.01. Indemnities by the Borrower	100103
SECTION 13.02. Indemnification by the Servicer	103106

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TABLE OF CONTENTS

(continued)


	Page
SECTION 13.03. Currency Indemnity	104108
ARTICLE XIV MISCELLANEOUS	105108
SECTION 14.01. Amendments, Etc	105108
SECTION 14.02. Notices, Etc	106109
SECTION 14.03. Assignability; Addition of Lenders.	106109
SECTION 14.04. Costs and Expenses	109112
SECTION 14.05. No Proceedings	109112
SECTION 14.06. Confidentiality	109113
SECTION 14.07. GOVERNING LAW	111114
SECTION 14.08. Execution in Counterparts	111114
SECTION 14.09. Integration; Binding Effect; Survival of Termination	111115
SECTION 14.10. CONSENT TO JURISDICTION	111115
SECTION 14.11. WAIVER OF JURY TRIAL	112116
SECTION 14.12. Ratable Payments	112116
SECTION 14.13. Limitation of Liability	112116
SECTION 14.14. Intent of the Parties	113116
SECTION 14.15. USA Patriot Act	113117
SECTION 14.16. Right of Setoff	113117
SECTION 14.17. Severability	114117
SECTION 14.18. Mutual Negotiations	114117
SECTION 14.19. Captions and Cross References	114117
SECTION 14.20. Post-Closing Covenant	114118

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-iii-

“Adjusted Daily Simple SOFR Rate” means an interest rate per annum equal to (a) the Daily Simple SOFR Rate, plus (b) 0.10%; provided, that if the Adjusted Daily Simple SOFR Rate as so determined would be less than the Floor, such rate shall be deemed to be equal to the Floor for the purposes of this Agreement.

“Adjusted Term SOFR Rate” means an interest rate per annum equal to (a) the Term SOFR Rate, plus 0.10%; provided, that if the Adjusted Term SOFR Rate as so determined would be less than the Floor, such rate shall be deemed to be equal to the Floor for the purposes of this Agreement.

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

Adjusted LIBOR =       

Composite of London interbank offered rates shown on Bloomberg Finance L.P. Screen US0001M
or appropriate successor

1.00 - Euro-Rate Reserve Percentage

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

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-iii-

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

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

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

“AUD” means the lawful currency of the Commonwealth of Australia.

“Bankruptcy Code” means the United States Bankruptcy Reform Act of 1978 (11 U.S.C.

§ 101, et seq.), as amended from time to time.

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

(a)

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

(b)

0.50% per annum above the latest Overnight Bank Funding Rate.

“Base Rate Loan” means, at any time, any Loan or any related Capital (or portion thereof) on which Interest accrues by reference to the Base Rate.

“Benchmark” means, initially, the Adjusted Term SOFR Rate or the Adjusted Daily Simple SOFR Rate, as applicable; provided that if a Benchmark Transition Event, and the related Benchmark Replacement Date have occurred with respect to such rate or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to clause (b) of Section 5.06.

“Benchmark Replacement” means the sum of: (a) the alternate benchmark rate that has been selected by the Administrative Agent and the Borrower as the replacement for the then-current Benchmark for an interest period having approximately the same length, giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the

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mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement for the then-current Benchmark for syndicated credit facilities denominated in Dollars at such time in the United States and (b) the related Benchmark Replacement Adjustment. If the Benchmark Replacement as determined pursuant to the foregoing definition would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Transaction Documents.

“Benchmark Replacement Adjustment” means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement for any applicable Interest Period for any setting of such Unadjusted Benchmark Replacement, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the Borrower giving due consideration to any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for syndicated credit facilities denominated in Dollars at such time.

“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement and/or any Loan, any technical, administrative or operational changes (including changes to the definition of “Base Rate,” the definition of “Business Day,” the definition of “U.S. Government Securities Business Day,” the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, length of lookback periods, the applicability of breakage provisions, and other technical, administrative or operational matters) that the Administrative Agent decides, in consultation with the Borrower, may be appropriate to reflect the adoption and implementation of such Benchmark and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides, in consultation with the Borrower, that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines, in consultation with the Borrower, that no market practice for the administration of such Benchmark exists, in such other manner of administration as the Administrative Agent decides, in consultation with the Borrower, is reasonably necessary in connection with the administration of this Agreement and the other Transaction Documents).

“Benchmark Replacement Date” means, with respect to any Benchmark, the earliest to occur of the following events with respect to such then-current Benchmark:

(1)

in the case of clause (1) or (2) of the definition of “Benchmark Transition Event,” the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide such Benchmark (or such component thereof) for a tenor of one month; or

(2)

in the case of clause (3) of the definition of “Benchmark Transition Event,” the first date on which such Benchmark (or the published component used in the calculation thereof) has been determined and announced by the regulatory supervisor for the administrator of such

749303375 18569090

Benchmark (or such component thereof) to be no longer representative; provided, that such non-representativeness will be determined by reference to the most recent statement or publication referenced in such clause (c) and even if any tenor of such Benchmark (or such component thereof) continues to be provided on such date.

For the avoidance of doubt, (i) if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination and (ii) the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (1) or (2) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to the one-month tenor for such Benchmark (or the published component used in the calculation thereof).

“Benchmark Transition Event” means, with respect to any Benchmark, the occurrence of one or more of the following events with respect to such then-current Benchmark:

(1)

a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide the one-month tenor for such Benchmark (or such component thereof), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the one-month tenor for such Benchmark (or such component thereof);

(2)

a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Federal Reserve Board, the NYFRB, the CME Term SOFR Administrator, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), in each case, which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide the one-month tenor for such Benchmark (or such component thereof) permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the one-month tenor for such Benchmark (or such component thereof); or

(3)

a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that the one-month tenor for such Benchmark (or such component thereof) is no longer, or as of a specified future date will no longer be, representative.

For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to the one-month tenor for such Benchmark (or the published component used in the calculation thereof).

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“Benchmark Unavailability Period” means, with respect to any Benchmark, the period (if any) (x) beginning at the time that a Benchmark Replacement Date pursuant to clauses (1) or (2) of that definition has occurred if, at such time, no Benchmark Replacement has replaced such then-current Benchmark for all purposes hereunder and under any Transaction Document in accordance with Section 5.06 and (y) ending at the time that a Benchmark Replacement has replaced such then-current Benchmark for all purposes hereunder and under any Transaction Document in accordance with Section 5.06.

“Beneficial Owner” means, for the Borrower, each of the following: (a) each individual, if any, who, directly or indirectly, owns 25% or more of the Borrower’s Capital Stock; and (b) a single individual with significant responsibility to control, manage, or direct the Borrower.

“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230. “Borrower” has the meaning specified in the preamble to this Agreement.

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

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

(a)

the assets, operations, business or financial condition of the Borrower;

(b)

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

(c)

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

(d)

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

(e)

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

“Borrower Obligations” means all present and future indebtedness, reimbursement obligations, and other liabilities and obligations (howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, or due or to become due) of the Borrower to any Credit Party, Borrower Indemnified Party and/or any Affected Person, arising under or in connection with this Agreement or any other Transaction Document or the transactions contemplated hereby or thereby, and shall include, without limitation, all Capital and Interest on the Loans, all Fees and all other amounts due or to become due under the Transaction Documents (whether in respect of fees, costs, expenses, indemnifications or otherwise), including, without limitation, interest, fees and other obligations that accrue after the

749303375 18569090

commencement of any Insolvency Proceeding with respect to the Borrower (in each case whether or not allowed as a claim in such proceeding).

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

“Borrowing Base” means, at any time of determination, the amount equal to the lesser of

(a) the Facility Limit and (b) the amount equal to (i) the Net Receivables Pool Balance at such time, minus (ii) the Total Reserves at such time.

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

“Borrowing Tranche” means specified portions of Loans outstanding as follows: (a) any Loans (or portions of Capital thereof) for which the applicable Interest Rate is determined by reference to the Adjusted Term SOFR Rate and which have the same Interest Period shall constitute one Borrowing Tranche, (b) all Loans (or portions of Capital thereof) for which the applicable Interest Rate is determined by reference to the Adjusted Daily Simple SOFR Rate shall constitute one Borrowing Tranche, and (c) all Loans (or portions of Capital thereof) for which the applicable Interest Rate is determined by reference to Base Rate shall constitute one Borrowing Tranche.

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

749303375 18569090

of such amount) shall be submitted by the affected Lender to the Borrower and shall be conclusive and binding for all purposes, absent manifest error.

“Business Day” means any day (other than a Saturday or Sunday) on which: (a) banks are not authorized or required to close in Pittsburgh, Pennsylvania, or New York City, New York and (b) if this definition of “Business Day” is utilized in connection with Adjusted LIBOR or LMIR, dealings are carried out in the London interbank market; provided that, when used in connection with an amount that bears interest at a rate based on SOFR or any direct or indirect calculation or determination of SOFR, the term “Business Day” means any such day that is also a U.S. Government Securities Business Day.

“CAD” means the lawful currency of Canada.

“Capital” means, with respect to any Lender, the aggregate amounts paid to, or on behalf of, the Borrower in connection with all Loans made by such Lender pursuant to Article II, as reduced from time to time by Collections distributed and applied on account of such Capital pursuant to Section 4.01; provided, that if such Capital shall have been reduced by any distribution and thereafter all or a portion of such distribution is rescinded or must otherwise be returned for any reason, such Capital shall be increased by the amount of such rescinded or returned distribution as though it had not been made.

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

“Certificate of Beneficial Ownership” means, for the Borrower, a certificate in form and substance acceptable to the Administrative Agent (as amended or modified by the Administrative Agent from time to time in its sole discretion), certifying, among other things, the Beneficial Owner of the Borrower.

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

(a)

Syneos Health ceases to own, directly, 100% of the issued and outstanding Capital Stock of the Borrower free and clear of all Adverse Claims;

(b)

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

(c)

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

(d)

the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act), including any group acting for the purpose of acquiring, holding or disposing of Securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act, but excluding any employee benefit plan and/or Person acting as the trustee,

749303375 18569090

agent or other fiduciary or administrator therefor), other than one or more Permitted Holders, of Capital Stock representing more than the greater of (x) 35% of the total voting power of all of the outstanding voting Capital Stock of Parent and (y) the percentage of the total voting power of all of the outstanding voting Capital Stock of Parent owned, directly or indirectly, beneficially by the Permitted Holders; or

(e)

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

“Change in Law” means the occurrence, after the Closing Date, of any of the following:

(a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (w) the final rule titled Risk-Based Capital Guidelines; Capital Adequacy Guidelines; Capital Maintenance: Regulatory Capital; Impact of Modifications to Generally Accepted Accounting Principles; Consolidation of Asset-Backed Commercial Paper Programs; and Other Related Issues, adopted by the United States bank regulatory agencies on December 15, 2009, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to the agreements reached by the Basel Committee on Banking Supervision in “Basel III: A Global Regulatory Framework for More Resilient Banks and Banking Systems” (as amended, supplemented or otherwise modified or replaced from time to time), shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

“CHF” means the lawful currency of Switzerland. “Closing Date” means June 29, 2018.

“CME Term SOFR Administrator” means CME Group Benchmark Administration Limited as administrator of the forward-looking term Secured Overnight Financing Rate (SOFR) (or a successor administrator).

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

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

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

749303375 18569090


Special Obligor	Special Concentration Limit
Otsuka Pharmaceutical Development and Commercialization, Inc.	8.0%
Servier Pharmaceuticals LLC	8.0%

“Concentration Reserve Percentage” means, at any time of determination, the largest of:

(a) the sum of the four (4) largest Obligor Percentages of the Group D Obligors, (b) the sum of the two (2) largest Obligor Percentages of the Group C Obligors and (c) the largest Obligor Percentage of the Group B Obligors.

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

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

“Credit Agreement” means that certain Credit Agreement, dated as of August 1, 2017, as amended, by and among Syneos Health, Inc. f/k/a INC Research Holdings, Inc., as the administrative borrower, the other borrowers party thereto, the financial institutions party thereto as lenders, JPMorgan Chase Bank, N.A. (as successor agent to Credit Suisse AG, Cayman Islands Branch), as administrative agent, and the other financial institutions party thereto, as joint lead arrangers and joint bookrunners, as amended, amended and restated or refinanced from time to time.

“Credit Agreement Replacement Rate” means the alternate rate of interest to the “Eurocurrency Rate” (as defined inClosing Date” means the date on which a credit agreement which amends and restates the Credit Agreement), if any, established in accordance with Section 2.14(b) ofor refinances the debt incurred under the Credit Agreement as in effect on September 25, 2020, is executed.

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

“Credit Extension” means the making of any Loan.

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

749303375 18569090

“Currency Reserve Amount” means, at any time of determination, the product of (a) 7.5%, times (b) the Dollar Equivalent of the aggregate Outstanding Balance of all Eligible Receivables then denominated in an Alternative Currency; provided however that the Administrative Agent may adjust the percentage listed in clause (a) in its sole discretion upon five (5) Business Days’ notice to the Borrower.

“Daily Simple SOFR Rate” means, for any day (a “SOFR Rate Day”), a rate per annum equal to SOFR for the day (such day a “SOFR Determination Date”) that is five (5) U.S. Government Securities Business Days prior to (i) if such SOFR Rate Day is a U.S. Government Securities Business Day, such SOFR Rate Day or (ii) if such SOFR Rate Day is not a U.S. Government Securities Business Day, the U.S. Government Securities Business Day immediately preceding such SOFR Rate Day, in each case, as such SOFR is published by the SOFR Administrator on the SOFR Administrator’s Website. Any change in the Daily Simple SOFR Rate due to a change in SOFR shall be effective from and including the effective date of such change in SOFR without notice to the Borrower.

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

“Debt” means, as to any Person at any time of determination, any and all indebtedness, obligations or liabilities (whether matured or unmatured, liquidated or unliquidated, direct or indirect, absolute or contingent, or joint or several) of such Person for or in respect of: (i) borrowed money, (ii) amounts raised under or liabilities in respect of any bonds, debentures, notes, note purchase, acceptance or credit facility, or other similar instruments or facilities, (iii) reimbursement obligations (contingent or otherwise) under any letter of credit, (iv) any other transaction (including production payments (excluding royalties), installment purchase agreements, forward sale or purchase agreements, capitalized leases and conditional sales agreements) having the commercial effect of a borrowing of money entered into by such Person to finance its operations or capital requirements (but not including accounts payable incurred in the ordinary course of such Person’s business payable on terms customary in the trade), (v) all net obligations of such Person in respect of interest rate or currency hedges or (vi) any Guaranty of any such Debt.

“Deemed Collections” has the meaning set forth in Section 4.01(d).

“Default Ratio” means the ratio (expressed as a percentage and rounded to the nearest 1/100 of 1%, with 5/1000th of 1% rounded upward) computed as of the last day of each Fiscal Month by dividing: (a) the Dollar Equivalent of the aggregate Outstanding Balance of all Pool Receivables that became Defaulted Receivables during such Fiscal Month, by (b) the Dollar Equivalent of the aggregate initial Outstanding Balance of all Pool Receivables (other than Unbilled Receivables) generated by the Originators during the month that is six (6) Fiscal

749303375 18569090

Pool Receivables that were Delinquent Receivables on such day, by (b) the Dollar Equivalent of the aggregate Outstanding Balance of all Pool Receivables on such day.

“Delinquent Receivable” means a Receivable as to which any payment, or part thereof, remains unpaid for 91 days or more from the original due date for such payment; provided, however, that such amount shall be calculated without giving effect to any netting of credits that have not been matched to a particular Receivable for the purposes of aged trial balance reporting.

“Dilution Horizon Ratio” means, for any Fiscal Month, the ratio (expressed as a percentage and rounded to the nearest 1/100th of 1%, with 5/1000th of 1% rounded upward) computed as of the last day of such Fiscal Month by dividing: (a) the Dollar Equivalent of the aggregate initial Outstanding Balance of all Pool Receivables (other than Unbilled Receivables) generated by the Originators during such Fiscal Month, by (b) the sum of (x) the Net Receivables Pool Balance as of the last day of such Fiscal Month plus (y) the aggregate Outstanding Balance as of the last day of such Fiscal Month of all Receivables and portions of Receivables that do not constitute Eligible Receivables on such date solely due to the failure to satisfy clause (r) and/or clause (w) of the definition of “Eligible Receivable”. Within thirty (30) days of the completion and the receipt by the Administrative Agent of the results of any annual audit or field exam of the Receivables and the servicing and origination practices of the Servicer and the Originators, the numerator of the Dilution Horizon Ratio may be adjusted, after consultation with the Borrower, by the Administrative Agent upon not less than five (5) Business Days’ notice to the Borrower to reflect such number of Fiscal Months as the Administrative Agent reasonably believes best reflects the business practices of the Servicer and the Originators and the actual amount of dilution and Deemed Collections that occur with respect to Pool Receivables based on the weighted average dilution lag calculation completed as part of such audit or field exam.

“Dilution Ratio” means, for any Fiscal Month, the ratio (expressed as a percentage and rounded to the nearest 1/100th of 1%, with 5/1000th of 1% rounded upward), computed as of the last day of each Fiscal Month by dividing: (i) the Dollar Equivalent of the aggregate amount of Deemed Collections during such Fiscal Month (other than any Deemed Collections with respect to any Receivables that were both (x) generated by an Originator during such Fiscal Month and

(y) written off the applicable Originator’s or the Borrower’s books as uncollectible during such Fiscal Month), by (ii) the Dollar Equivalent of the aggregate initial Outstanding Balance of all Pool Receivables (other than Unbilled Receivables) generated by the Originators during the Fiscal Month that is one (1) month prior to such Fiscal Month.

“Dilution Reserve Percentage” means, at any time of determination, the product (expressed as a percentage and rounded to the nearest 1/100th of 1%, with 5/1000th of 1% rounded upward) of (a) the Dilution Horizon Ratio, multiplied by (b) the sum of (i) the Stress Factor times the average of the Dilution Ratios for the twelve (12) most recent Fiscal Months, plus (ii) the Dilution Volatility Component.

“Dilution Volatility Component” means, for any Fiscal Month, the product (expressed as a percentage and rounded to the nearest 1/100th of 1%, with 5/1000th of 1% rounded upward) of:

749303375 18569090

directly to a Lock-Box or Collection Account in the United States of America; provided however that if (i) a Ratings Event has occurred and is continuing and (ii) any payment on any Receivable denominated in an Alternative Currency is not transferred to a Collection Account within three

(3) Business Days after receipt by any Syneos Party (any such Receivable, an “Applicable Receivable”), then any Receivable denominated in an Alternative Currency and the Obligor of which is the Obligor of such Applicable Receivable shall not be an Eligible Receivable;

(d)

that does not have a due date which is 120121 days or more after the original invoice date of such Receivable;

(e)

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

(f)

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

(g)

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

(h)

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

(i)

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

(j)

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

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“Erroneous Payment” has the meaning assigned to it in Section 11.12(a).

“Erroneous Payment Deficiency Assignment” has the meaning assigned to it in Section 11.12(d).

“Erroneous Payment Return Deficiency” has the meaning assigned to it in Section 11.12(d).

“Erroneous Payment Subrogation Rights” has the meaning assigned to it in Section 11.12(d).

“Euro” or “€” each mean the single currency of participating member states of the European Monetary Union.

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

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

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

(a)

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

(b)

the excess (if any) of (i) the Dollar Equivalent of the aggregate Outstanding Balance of all Eligible Receivables that are Eligible Unbilled Receivables, over

(ii) the product of (x) (A) so long as a Ratings Event has not occurred and is continuing, 60.0% or (B) if a Ratings Event has occurred and is continuing, 30.0%, multiplied by (y) the Dollar Equivalent of the aggregate Outstanding Balance of all Receivables then in the Receivables Pool; plus

(c)

the excess (if any) of (i) the Dollar Equivalent of the aggregate Outstanding Balance of all Eligible Receivables, the Obligors of which are Eligible OECD Country Obligors, over (ii) the product of (x) 17.5%, multiplied by (y) the Dollar Equivalent of the aggregate Outstanding Balance of all Receivables then in the Receivables Pool; plus

(d)

the excess (if any) of (i) the Dollar Equivalent of the aggregate Outstanding Balance of all Eligible Receivables, the Obligors of which are Eligible Tier I Non-OECD Country Obligors, over (ii) the product of (x) 5.0%, multiplied by (y) the Dollar

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“Excluded Taxes” means any of the following Taxes imposed on or with respect to an Affected Person or required to be withheld or deducted from a payment to an Affected Person:

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

“Facility Limit” means $400,000,000550,000,000 as reduced from time to time pursuant to Section 2.02(e). References to the unused portion of the Facility Limit shall mean, at any time of determination, an amount equal to (x) the Facility Limit at such time, minus (y) the Aggregate Capital at such time.

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

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

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

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

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

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

“Fiscal Month” means each calendar month.

“Floor” means a rate of interest per annum equal to 0.00%.

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

“GBP” means the lawful currency of the United Kingdom.

“Governmental Authority” means the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank). and any group or body charged with setting financial accounting or regulatory capital rules or standards (including the Financial Accounting Standards Board, the Bank for International Settlements or the Basel Committee on Banking Supervision or any successor or similar authority to any of the foregoing).

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

749303375 18569090

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

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

749303375 18569090

a Group C Obligor, as the case may be, and shall be aggregated and combined for such purposes with any of its Subsidiaries that are Obligors.

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

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

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

“Independent Director” has the meaning set forth in Section 8.03(c). “Information Package” means a report, in substantially the form of Exhibit G.

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

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

Agreement.

“Intercompany Loan Ratio” means, at any time of determination, the ratio of (a) the aggregate outstanding principal balance of all Intercompany Loans at such time to (Bb) the aggregate “Purchase Price” (as defined in the Purchase and Sale Agreement) for all outstanding Receivables purchased under the Purchase and Sale Agreement at or prior to such time.

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

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

749303375 18569090

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

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

(a)

subject to Sections 5.04 and 5.06 and so long as no Event of Default has occurred and is continuing on such day, LMIR or solely to the extent determined pursuant to Section 2.05, Adjusted LIBOReither (i) if the Borrower has elected for such Loan (or any portion of Capital thereof) to accrue interest by reference to the Adjusted Term SOFR Rate during such Interest Period in accordance with Section 2.05(a), the Adjusted Term SOFR Rate for such day, or (ii) in any other case (including if no such election has been made), the Adjusted Daily Simple SOFR Rate; provided, however, that the Interest Rate applicable to any LIBORSOFR Loan that is not advanced on a Monthly Settlement Date shall be LMIRthe Adjusted Daily Simple SOFR Rate for each day during the initial Interest Period applicable to such Loan from the date such Loan is made pursuant to Section 2.01 until the next occurring Monthly Settlement Date; or

(b)

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

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

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

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

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

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

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

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

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

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

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


LMIR =	One-month Eurodollar rate for Dollars shown on Bloomberg US0001M Screen or appropriate successor
LMIR =	1.00 - Euro-Rate Reserve Percentage

LMIR shall be adjusted on the effective date of any change in the Euro-Rate Reserve Percentage as of such effective date. Notwithstanding the foregoing, if LMIR as determined herein would be less than 0.00% or any other rate as may be agreed by the Borrower and Administrative Agent in writing, LMIR shall be deemed to be equal to 0.00% or such other rate for purposes of this Agreement.

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

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

“Lock-Box” means each locked postal box with respect to which a Collection Account Bank has executed an Account Control Agreement pursuant to which it has been granted exclusive access for the purpose of retrieving and processing payments made on the Receivables

749303375 18569090

(d)

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

(e)

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

“Minimum Dilution Reserve Percentage” means, at any time of determination, the product (expressed as a percentage and rounded to the nearest 1/100th of 1%, with 5/1000th of 1% rounded upward) of (a) the average of the Dilution Ratios for the twelve (12) most recent Fiscal Months, multiplied by (b) the Dilution Horizon Ratio.

“Minimum Funding Threshold” means, on any day, an amount equal to the lesser of (a) (i) at any time from (and including) October 3, 2022 to (but excluding) November 1, 2022, $400,000,000, and (ii) at any other time, the product of (ix) 85.00% times (iiy) the Facility Limit at such time and (b) the Borrowing Base at such time.

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

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

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

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

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

“Ninth Amendment Closing Date” means September 25, 2020.

“NYFRB” means the Federal Reserve Bank of New York.

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

“Obligor Percentage” means, at any time of determination, for each Obligor, a fraction, expressed as a percentage, (a) the numerator of which is the Dollar Equivalent of the aggregate

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Outstanding Balance of the Eligible Receivables of such Obligor less the amount (if any) then included in the calculation of the Excess Concentration with respect to such Obligor and (b) the denominator of which is the Dollar Equivalent of the aggregate Outstanding Balance of all Eligible Receivables at such time.

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

“OFAC” means the U.S. Department of Treasury’s Office of Foreign Assets Control. “Originator” and “Originators” have the meaning set forth in the Purchase and Sale

Agreement, as the same may be modified from time to time by adding new Originators or removing Originators, in each case with the prior written consent of the Administrative Agent.

“Other Connection Taxes” means, with respect to any Affected Person, Taxes imposed as a result of a present or former connection between such Affected Person and the jurisdiction imposing such Tax (other than connections arising from such Affected Person having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Transaction Document, or sold or assigned an interest in any Loan or Transaction Document).

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

“Overnight Bank Funding Rate” shall mean, for any day, the rate comprised of both overnight federal funds and overnight Eurocurrency borrowings by U.S.-managed banking offices of depository institutions, as such composite rate shall be determined by the Federal Reserve Bank of New York (“NYFRB”), as set forth on its public website from time to time, and as published on the next succeeding Business Day as the overnight bank funding rate by the NYFRB (or by such other recognized electronic source (such as Bloomberg) selected by the Administrative Agent for the purpose of displaying such rate); provided, that if such day is not a Business Day, the Overnight Bank Funding Rate for such day shall be such rate on the immediately preceding Business Day; provided, further, that if such rate shall at any time, for any reason, no longer exist, a comparable replacement rate determined by the Administrative Agent in consultation with the Borrower at such time (which determination shall be conclusive absent manifest error). If the Overnight Bank Funding Rate determined as above would be less than zero, then such rate shall be deemed to be zero. The rate of interest charged shall be adjusted as of each Business Day based on changes in the Overnight Bank Funding Rate without notice to the Borrower.

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

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

“Reference Time” with respect to any setting of the then-current Benchmark means (1) if such Benchmark is the Term SOFR Rate, 5:00 a.m. (Chicago time) on the day that is two (2)

U.S. Government Securities Business Days preceding the date of such setting, or (2) if such Benchmark is Daily Simple SOFR, then four (4) U.S. Government Securities Business Days prior to such setting.

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

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

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

(a)

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

(b)

all instruments and chattel paper that may evidence such Receivable;

(c)

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

(d)

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

(e)

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

(f)

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

(g)

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

foregoing.

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

“Relevant Governmental Body” means the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York or any successor thereto.

“Reportable Compliance Event” means that: (a) any Covered Entity becomes a Sanctioned Person, or is charged by indictment, criminal complaint, or similar charging instrument, arraigned, custodially detained, penalized or the subject of an assessment for a penalty, or enters into a settlement with a Governmental Authority in connection with any Anti-Corruption Law, Sanctions Law or Anti-Terrorism Law, or any predicate crime to any Anti-Terrorism Law, or the Borrower or the Servicer has knowledge of facts or circumstances to the effect that it is reasonably likely that any aspect of such Covered Entity’s operations represents a violation of any Anti-Terrorism Law; (b) any Covered Entity engages in a transaction that has caused or may cause the Lenders or Administrative Agent to be in violation of any Sanctions Laws or Anti-Terrorism Laws; (c) any Collateral becomes Embargoed Property; or (d) the Borrower or the Servicer otherwise violates, or the Borrower or the Servicer reasonably believes that it will violate, any of the representations or covenants set forth in Sections 7.01(bb), 7.02(y), 8.01(v) or 8.01(o) of this Agreement.

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

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

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

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

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

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

“Sanctioned Jurisdiction” means any country, territory, or region that is the subject of comprehensive country-wide or territory-wide sanctions administered by OFAC (at the time of the Agreement, Cuba, Iran, North Korea, Syria and the Crimea region of Ukraine).

“Sanctioned Person” means (a) a Person that is the subject of sanctions administered by OFAC or the U.S. Department of State (“State”), including by virtue of being (i) named on OFAC’s list of “Specially Designated Nationals and Blocked Persons”; (ii) organized under the

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Applicable Laws of, ordinarily resident in, or physically located in a Sanctioned Jurisdiction; (iii) owned or controlled 50% or more in the aggregate, by one or more Persons that are the subject of sanctions administered by OFAC; (b) a Person that is the subject of sanctions maintained by the European Union (“E.U.”), including by virtue of being named on the E.U.’s “Consolidated list of persons, groups and entities subject to E.U. financial sanctions” or other, similar lists; (c) a Person that is the subject of sanctions maintained by the United Kingdom (“U.K.”), including by virtue of being named on the “Consolidated List Of Financial Sanctions Targets in the U.K.” or other, similar lists; or (d) a Person that is the subject of sanctions imposed by any Governmental Authority of a jurisdiction whose Applicable Laws apply to this Agreement.

“Sanctions Laws” means any Applicable Law in force or hereinafter enacted related to economic sanctions, including the International Emergency Economic Powers Act, 50 U.S.C. 1701, et seq., the Trading with the Enemy Act, 50 U.S.C. App. 1, et seq., 18 U.S.C. § 2332d, and 18 U.S.C. § 2339B.

“Scheduled Termination Date” means October 143, 20242025.

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

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

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

“Servicer’s Account” means the deposit account with an account number ending in 4824 maintained by the Servicer or its Affiliate at Bank of America, N.A.

“Servicer Indemnified Amounts” has the meaning set forth in Section 13.02(a). “Servicer Indemnified Party” has the meaning set forth in Section 13.02(a). “Servicing Fee” means the fee referred to in Section 9.06(a) of this Agreement. “Servicing Fee Rate” means the rate referred to in Section 9.06(a) of this Agreement.

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

“Settlement Item” means (i) each check or other payment order drawn on or payable against any Linked Account, which any Collection Account Bank takes for deposit or value, cashes or exchanges for a cashier’s check or official check in the ordinary course of business,

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and which is presented for settlement against any Collection Account, (ii) each check or other payment order drawn on or payable against any Collection Account, which any Collection Account Bank takes for deposit or value, assures payment pursuant to a banker’s acceptance, cashes or exchanges for a cashier’s check or official check in the ordinary course of business,

(iii) each ACH credit entry initiated by any Collection Account Bank, as originating depository financial institution, on behalf of Borrower, as originator and (iv) any other payment order drawn on or payable against any Collection Account.

“Settlement Item Amounts” means the face amount of each Settlement Item. “Sixth Amendment Closing Date” means September 30, 2019.

“SOFR” means a rate per annum equal to the secured overnight financing rate as administered by the SOFR Administrator.

“SOFR Administrator” means the NYFRB (or a successor administrator of the secured overnight financing rate).

“SOFR Administrator’s Website” means the NYFRB’s website, currently at http://www.newyorkfed.org, or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time.

“SOFR Determination Date” has the meaning specified in the definition of “Daily Simple SOFR Rate”.

“SOFR Loan” means, at any time, any Loan or any related Capital (or portion thereof) on which Interest accrues by reference to the Adjusted Term SOFR Rate.

“SOFR Rate Day” has the meaning specified in the definition of “Daily Simple SOFR

Rate”.

“Solvent” means, with respect to any Person and as of any particular date, (i) the present

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

“Special Concentration Limit” has the meaning set forth in the definition of Concentration Percentage.

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“Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, charges, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority and all interest, penalties, additions to tax and any similar liabilities with respect thereto.

“Term SOFR Determination Day” has the meaning assigned to it under the definition of Term SOFR Reference Rate.

“Term SOFR Rate” means, for any Interest Period, the Term SOFR Reference Rate at approximately 5:00 a.m. (Chicago time) two (2) U.S. Government Securities Business Days prior to the commencement of such tenor comparable to the Interest Period, as such rate is published by the CME Term SOFR Administrator.

“Term SOFR Reference Rate” means, for any day and time (such day, the “Term SOFR Determination Day”), for any tenor comparable to the applicable Interest Period, the rate per annum published by the CME Term SOFR Administrator and identified by the Administrative Agent as the forward-looking term rate based on SOFR. If by 5:00 pm (New York City time) on such Term SOFR Determination Day, the “Term SOFR Reference Rate” for the applicable tenor has not been published by the CME Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Rate has not occurred, then, so long as such day is otherwise a U.S. Government Securities Business Day, the Term SOFR Reference Rate for such Term SOFR Determination Day will be the Term SOFR Reference Rate as published in respect of the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate was published by the CME Term SOFR Administrator, so long as such first preceding U.S. Government Securities Business Day is not more than five (5) U.S. Government Securities Business Days prior to such Term SOFR Determination Day.

“Termination Date” means the earliest to occur of (a) the Scheduled Termination Date,

(b) the date on which the “Termination Date” is declared or deemed to have occurred under Section 10.01, (c) the occurrence of a Purchase and Sale Termination Event under the Purchase and Sale Agreement, (d) the date selected by the Borrower on which all Commitments have been reduced to zero pursuant to Section 2.02(e) or (e) the date (if any) on which the Borrower, the Servicer or any Originator delivers to the Administrative Agent a written notice that the Borrower is unable to pay the “Purchase Price” (as defined in the Purchase and Sale Agreement) for Receivables and Related Rights pursuant to Section 3.2 of the Purchase and Sale Agreement.

“Third Amendment Closing Date” means October 25, 2018.

“Third Amendment Commencement Date” means the date elected by the Borrower as the “Third Amendment Commencement Date” in a written notice provided by the Borrower (or the Servicer on its behalf) to the Administrative Agent; provided, that such date may not occur more than 180 days following the Third Amendment Closing Date and any election following such date shall be null and void; provided, further, that neither the Borrower nor the Servicer on its behalf shall provide any notice of the election of the “Third Amendment Commencement Date” until such time as the Borrower (or the Servicer on its behalf) has provided such historical

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Receivables performance data as may be reasonably requested by the Administrative Agent on or prior to the Third Amendment Closing Date.

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

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

“Total Reserves” means, at any time of determination, an amount equal to the sum of (a) the product of (i) the sum of: (a) the Yield Reserve Percentage, plus (b) the greater of (I) the sum of the Concentration Reserve Percentage, plus the Minimum Dilution Reserve Percentage and

(II) the sum of the Loss Reserve Percentage, plus the Dilution Reserve Percentage, times (ii) the Net Receivables Pool Balance at such time, plus (b) the Currency Reserve Amount.

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

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

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

“Unadjusted Benchmark Replacement” means the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.

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

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

“U.S. Government Securities Business Day” means any day except for (i) a Saturday, (ii) a Sunday or (iii) a day on which the Securities Industry and Financial Markets Association

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recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.

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

“U.S. Tax Compliance Certificate” has the meaning set forth in Section 5.03(f)(ii)(B)(3). “Volcker Rule” means Section 13 of the U.S. Bank Holding Company Act of 1956, as

amended, and the applicable rules and regulations thereunder.

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

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

“Yield Reserve Percentage” means at any time of determination:


	1.50 x DSO x (BR + SFR) 360
	where:
	BR		= the Base Rate at such time;
	DSO		= the Days’ Sales Outstanding for the most recently ended Fiscal Month; and
	SFR		= the Servicing Fee Rate.

SECTION 1.02. Other Interpretative Matters. All accounting terms not specifically defined herein shall be construed in accordance with GAAP. All terms used in Article 9 of the UCC in the State of New York and not specifically defined herein, are used herein as defined in such Article 9. Unless otherwise expressly indicated, all references herein to “Article,” “Section,” “Schedule”, “Exhibit” or “Annex” shall mean articles and sections of, and schedules, exhibits and annexes to, this Agreement. For purposes of this Agreement, the other Transaction Documents and all such certificates and other documents, unless the context otherwise requires:

(a) references to any amount as on deposit or outstanding on any particular date means such amount at the close of business on such day; (b) the words “hereof,” “herein” and “hereunder” and words of similar import refer to such agreement (or the certificate or other document in which they are used) as a whole and not to any particular provision of such agreement (or such certificate or document); (c) references to any Article, Section, Schedule, Exhibit or Annex are

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hereto as Exhibit B; provided, however, that (i) each such prepayment shall be in a minimum aggregate amount of $100,000 and shall be an integral multiple of $100,000 in excess thereof,

(ii) the Borrower shall not provide any Reduction Notice, and no such Reduction Notice shall be effective, if after giving effect thereto, the Aggregate Capital at such time would be less than an amount equal to the Minimum Funding Threshold and (iii) any accrued Interest and Fees in respect of the portion(s) of Capital so reduced shall be paid in full on the immediately following Settlement Date; provided, however that notwithstanding the foregoing, a prepayment may be in an amount necessary to reduce any Borrowing Base Deficit existing at such time to zero.

(e)

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

(f)

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

SECTION 2.03. Interest and Fees.

(a)

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

(b)

Each Loan of each Lender and the Capital thereof shall accrue interest on each day when such Capital remains outstanding at the then applicable Interest Rate for such Loan. The Borrower shall pay all Interest (including, for the avoidance of doubt, all Interest accrued on LIBORSOFR Loans during an Interest Period regardless of whether the applicable

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Tranche Period has ended), Fees and Breakage Fees accrued during each Interest Period on each Settlement Date in accordance with the terms and priorities for payment set forth in Section 4.01.

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

SECTION 2.05. Selection of Interest Rates and Tranche PeriodsAdjusted Daily Simple SOFR Rate and Adjusted Term SOFR Rate; Rate Quotations.

(a)

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

(a)

So long as no Event of Default is continuing, the Borrower may, by written notice to the Administrative Agent, elect for all or any portion of the Aggregate Capital to accrue interest by reference to the Adjusted Term SOFR Rate (rather than the Adjusted Daily Simple SOFR Rate) during any Interest Period. Any such notice must specify the amount of the Aggregate Capital subject of such election and must be delivered not later than two (2) Business Days prior to the first day of the affected Interest Period. Any such portion of the Aggregate Capital that is subject to such an election shall be apportioned among the respective Lenders’ Capital ratably. Notwithstanding the foregoing, (x) the Borrower shall not make such an election if, as a result thereof, more than six Borrowing Tranches would exist and (y) each Borrowing Tranche for Loans accruing interest by reference to the Adjusted Term SOFR Rate shall be not be less than $1,000,000 and shall be an integral multiple of $100,000. For the avoidance of doubt, if an Event of Default is then continuing, the Interest Rate for any Loan (and any portion

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of Capital thereof) shall be determined pursuant to the definition of Interest Rate notwithstanding any otherwise applicable election by the Borrower.

(b)

If, by the time required in Section 2.05(a), the Borrower fails to select a Tranche Period or Interest Rate for any Loan, such Loan shall automatically be deemed to be a continuation of the type of Interest Rate and, if applicable, Tranche Period.The Borrower may call the Administrative Agent on or before the date on which a Loan Request is to be delivered to receive an indication of the rates then in effect, but it is acknowledged that such projection shall not be binding on the Administrative Agent or the Lenders nor affect the rate of interest which thereafter is actually in effect when the election is made.

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

(a)

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

(b)

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

(c)

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

ARTICLE III [RESERVED] ARTICLE IV

SETTLEMENT PROCEDURES AND PAYMENT PROVISIONS

SECTION 4.01. Settlement Procedures.

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(a)

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

(i)

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

(ii)

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

(iii)

third, as set forth in clause (xA), (yB) or (zC) below, as applicable:

(A)

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

(B)

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

(C)

prior to the occurrence of the Termination Date, at the election of the Borrower and in accordance with Section 2.02(d), to the Administrative Agent for distribution to the payment of all or any portion of the outstanding Capital of

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Person such additional amount or amounts as will compensate such Affected Person or such Affected Person’s holding company for any such increase, reduction or charge.

(c)

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

(d)

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

SECTION 5.02. Funding Losses.

(a)

The Borrower will pay each Lender all Breakage Fees.

(b)

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

SECTION 5.03. Taxes.

(a)

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

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documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Affected Person has complied with such Affected Person’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (g), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

(h)

Treatment of Refunds. If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 5.03 (including by the payment of additional amounts pursuant to this Section 5.03), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section 5.03 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this clause (h) (plus any penalties, interest or other charges imposed by the relevant Government Authority) in the event such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this clause (h), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this clause (h) the payment of which would place the indemnified party in a less favorable net after Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This paragraph shall not be construed to require any indemnified party to make available its Tax returns (or other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

(i)

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

(j)

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

SECTION 5.04. Inability to Determine Adjusted LIBOR or LMIR; Change in Legality.Adjusted Daily Simple SOFR Rate or Adjusted Term SOFR Rate Unascertainable; Increased Costs; Illegality.

(a)

Unascertainable; Increased Costs. If, on or prior to the first day of an Interest Period:

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(i)

(a) If any Lenderthe Administrative Agent shall have determined (which determination shall be conclusive and binding upon the parties hereto absent manifest error) on any day, by reason of circumstances affecting the interbank Eurodollar market, either that: (i) dollar deposits in the relevant amounts and for the relevant Interest Period or day, as applicable, are not available, (ii) adequate and reasonable means do not exist for ascertaining Adjusted LIBOR or LMIR for such Interest Period or day, as applicable, or (iii) Adjusted LIBOR or LMIR determined pursuant hereto does not accurately reflect the cost to such Lender (as conclusively determined by such Lender) of maintaining any Portion of Capital during such Interest Period or day, as applicable, such Lender shall promptly give telephonic notice of such determination, confirmed in writing, to the Administrative Agent and the Borrower on such day. Upon delivery of such notice: (i) no Portion of Capital with respect to such Lender shall be funded thereafter at Adjusted LIBOR or LMIR unless and until such Lender shall have given notice to the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist and (ii) with respect to any outstanding Portion of Capital with respect to such Lender then funded at Adjusted LIBOR or LMIR, such Interest Rate shall automatically and immediately be converted to the Base Rate.that (x) the Adjusted Daily Simple SOFR Rate or the Adjusted Term SOFR Rate cannot be determined pursuant to the definition thereof; or (y) a fundamental change has occurred with respect to the Adjusted Daily Simple SOFR Rate or the Adjusted Term SOFR Rate (including, without limitation, changes in national or international financial, political or economic conditions); or

(b)

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

(ii) any Lender determines for any reason that the Adjusted Daily Simple SOFR Rate or the Adjusted Term SOFR Rate for any requested Interest Period does not adequately and fairly reflect the cost to such Lender of funding such Lender’s Loans, and such Lender has provided notice of such determination to the Administrative Agent;

then the Administrative Agent shall have the rights specified in Section 5.04(c).

(b)

Illegality. If at any time any Lender shall have determined that the making, maintenance or funding of any Loan accruing interest by reference to the Adjusted Daily Simple SOFR Rate or the Adjusted Term SOFR Rate has been made impracticable or unlawful, by compliance by such Lender in good faith with any Applicable Law or any interpretation or

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application thereof by any Governmental Authority or with any request or directive of any such Governmental Authority (whether or not having the force of law), then the Administrative Agent shall have the rights specified in Section 5.04(c).

(c)

Administrative Agent’s and Lender’s Rights. In the case of any event specified in Section 5.04(a), the Administrative Agent shall promptly so notify the Lenders and the Borrower thereof, and in the case of an event specified in Section 5.04(b), such Lender shall promptly so notify the Administrative Agent and endorse a certificate to such notice as to the specific circumstances of such notice, and the Administrative Agent shall promptly send copies of such notice and certificate to the other Lenders and the Borrower.

Upon such date as shall be specified in such notice (which shall not be earlier than the date such notice is given), the obligation of (i) the Lenders, in the case of such notice given by the Administrative Agent, or (ii) such Lender, in the case of such notice given by such Lender, to allow the Borrower to select, convert to or renew a Loan accruing interest by reference to the Adjusted Daily Simple SOFR Rate or the Adjusted Term SOFR Rate shall be suspended (to the extent of the affected Interest Rate or the applicable Interest Periods) until the Administrative Agent shall have later notified the Borrower, or such Lender shall have later notified the Administrative Agent, of the Administrative Agent’s or such Lender’s, as the case may be, determination that the circumstances giving rise to such previous determination no longer exist.

If at any time the Administrative Agent makes a determination under Section 5.04(a), (A) if the Borrower has delivered a Loan Request for an affected Loan that has not yet been made, such Loan Request shall be deemed to request a Base Rate Loan, (B) any outstanding affected Loans shall be deemed to have been converted into Base Rate Loans at the end of the applicable Interest Period.

If any Lender notifies the Administrative Agent of a determination under Section 5.04(b) above, the Borrower shall, as to any Loan of the Lender to which a Term SOFR Rate applies, on the date specified in such notice either convert such Loan to a Base Rate Loan or prepay such Loan. Absent due notice from the Borrower of conversion or prepayment, such Loan shall automatically be converted to a Base Rate Loan upon such specified date.

SECTION 5.05. Security Interest.

(a)

As security for the performance by the Borrower of all the terms, covenants and agreements on the part of the Borrower to be performed under this Agreement or any other Transaction Document, including the punctual payment when due of the Aggregate Capital and all Interest in respect of the Loans and all other Borrower Obligations, the Borrower hereby grants to the Administrative Agent for its benefit and the ratable benefit of the Secured Parties, a continuing security interest in, all of the Borrower’s right, title and interest in, to and under all of the following, whether now or hereafter owned, existing or arising (collectively, the “Collateral”): (i) all Pool Receivables, (ii) all Related Security with respect to such Pool Receivables, (iii) all Collections with respect to such Pool Receivables, (iv) the Lock-Boxes and Collection Accounts and all amounts on deposit therein, and all certificates and instruments, if any, from time to time evidencing such Lock-Boxes and Collection Accounts and amounts on deposit therein, (v) all rights (but none of the obligations) of the Borrower under the Purchase

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and Sale Agreement, (vi) all other personal and fixture property or assets of the Borrower of every kind and nature including, without limitation, all goods (including inventory, equipment and any accessions thereto), instruments (including promissory notes), documents, accounts, chattel paper (whether tangible or electronic), deposit accounts, securities accounts, securities entitlements, letter-of-credit rights, commercial tort claims, securities and all other investment property, supporting obligations, money, any other contract rights or rights to the payment of money, insurance claims and proceeds, and all general intangibles (including all payment intangibles) (each as defined in the UCC) and (vii) all proceeds of, and all amounts received or receivable under any or all of, the foregoing.

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

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

SECTION 5.06. Successor Adjusted LIBOR or LMIRAlternate Rate of Interest.

(a)

Subject to clauses (b), (c), (d), (e) and (f) of this Section 5.06, if:

(i)

the Administrative Agent determines (which determination shall be conclusive absent manifest error) (A) prior to the commencement of any Interest Period, that adequate and reasonable means do not exist for ascertaining the Adjusted Term SOFR Rate or the Adjusted Daily Simple SOFR Rate (including because the Term SOFR Reference Rate is not available or published on a current basis), for such Interest Period or (B) at any time, that adequate and reasonable means do not exist for ascertaining the applicable Adjusted Daily Simple SOFR Rate; or

(ii)

the Administrative Agent is advised by the Majority Lenders that

(A) prior to the commencement of any Interest Period, the Adjusted Term SOFR Rate or the Adjusted Daily Simple SOFR Rate for such Interest Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or its Loan) accruing interest at such rate for such Interest Period or (B) at any time, the applicable Adjusted Daily Simple SOFR Rate will not adequately and fairly reflect the

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cost to such Lenders (or Lender) of making or maintaining their Loans (or its Loan) accruing interest at such rate;

then the Administrative Agent shall give notice thereof to the Borrower and the Lenders as promptly as practicable thereafter and, until (x) the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist with respect to the relevant Benchmark (1) any Loan Request that requests a Loan that accrues interest by reference to the Adjusted Term SOFR Rate shall be deemed to be a request for loans accruing interest by reference to (x) the Adjusted Daily Simple SOFR Rate, so long as the Adjusted Daily Simple SOFR Rate is not also the subject of Section 5.06(a)(i) or (ii) above or (y) Base Rate, if the Adjusted Daily Simple SOFR Rate also is the subject of Section 5.06(a)(i) or (ii) above and (2) any Loan Request that requests a Loan that accrues interest by reference to the Adjusted Daily Simple SOFR Rate shall instead be deemed to be a Loan Request for a Loan that accrues interest by reference to the Base Rate. Furthermore, if any Loan that accrues interest by reference to the Adjusted Term SOFR Rate or Adjusted Daily Simple SOFR Rate is outstanding on the date of the Borrower’s receipt of the notice from the Administrative Agent referred to in this Section 5.06(a) with respect to the Adjusted Term SOFR Rate or Adjusted Daily Simple SOFR Rate, as applicable, then until (x) the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist with respect to the Adjusted Term SOFR Rate or Adjusted Daily Simple SOFR Rate, as applicable, (1) any loan accruing interest by reference to the Adjusted Term SOFR Rate shall, on the last day of the Interest Period applicable to such Loan, be converted by the Administrative Agent to, and shall constitute, (x) a Loan accruing interest by reference to the Adjusted Daily Simple SOFR Rate so long as the Adjusted Daily Simple SOFR Rate is not also the subject of Section 5.06(a)(i) or (ii) above or (y) a Loan accruing interest by reference to the Base Rate if the Adjusted Daily Simple SOFR Rate also is the subject of Section 5.06(a)(i) or (ii) above, on such day, and (2) any loan accruing interest by reference to the Adjusted Daily Simple SOFR Rate shall on and from such day be converted by the Administrative Agent to, and shall constitute a Loan accruing interest by reference to the Base Rate.

(b)

(a) Benchmark Replacement. Notwithstanding anything to the contrary herein or in any other Transaction Document, upon the occurrence ofif a Benchmark Transition Event or an Early Opt-in Event has occurred, the Administrative Agent and the Borrower may amend this Agreement to replace Adjusted LIBOR or LMIR with aand its related Benchmark Replacement; and any such amendment will become effective at Date have occurred prior to the Reference Time in respect of any setting of the then-current Benchmark, then such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Transaction Document in respect of any Benchmark setting at or after 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the Administrative Agent hasdate notice of such Benchmark Replacement is provided such proposedto the Lenders without any amendment to all Lenders,, or further action or consent of any other party to, this Agreement or any other Transaction Document so long as the Administrative Agent has not received, by such time, written notice of objection to such amendmentBenchmark Replacement from Lenders comprising the Majority Lenders. Until the Benchmark Replacement is effective, each advance, conversion and renewal of a Loan bearing interest by reference to Adjusted LIBOR or LMIR will continue to bear

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interest with reference to Adjusted LIBOR or LMIR, as applicable; provided, however, that during a Benchmark Unavailability Period (i) any pending selection of, conversion to or renewal of a Loan bearing interest by reference to Adjusted LIBOR or LMIR, as applicable, that has not yet gone into effect may be revoked by the Borrower and if not so revoked, shall be deemed to be a selection of, conversion to or renewal of, (A) solely to the extent that PNC is a lender under the Credit Agreement at such time, the Credit Agreement Replacement Rate, if any, and, (B) otherwise, the Base Rate, in each case, with respect to such Loan, and such Loan shall bear interest by reference to the Credit Agreement Replacement Rate or the Base Rate, as applicable (rather than by reference to Adjusted LIBOR or LMIR, as applicable), and (ii) all outstanding Loans bearing interest by reference to Adjusted LIBOR or LMIR, as applicable, shall automatically be converted to bear interest by reference to, (A) solely to the extent that PNC is a lender under the Credit Agreement at such time, the Credit Agreement Replacement Rate, if any, and, (B) otherwise, the Base Rate at the expiration of the existing Interest Period (or sooner, if Administrative Agent cannot continue to lawfully maintain such affected Loan bearing interest by reference to Adjusted LIBOR or LMIR, as applicable).

(c)

(b) Benchmark Replacement Conforming Changes. In connection with the implementation of a Benchmark ReplacementNotwithstanding anything to the contrary herein or in any other Transaction Document, the Administrative Agent will have the right, in consultation with the Borrower, to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Transaction Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Transaction Document.

(d)

(c) Notices; Standards for Decisions and Determinations. The Administrative Agent will promptly notify the Borrower and the Lenders of (i1) any occurrence of a Benchmark Transition Event, (2) the implementation of any Benchmark Replacement, (ii3) the effectiveness of any Benchmark Replacement Conforming Changes, (4) the removal or reinstatement of any tenor of a Benchmark pursuant to clause (f) below and (iii5) the commencement or conclusion of any Benchmark Unavailability Period. Any determination, decision or election that may be made by the Administrative Agent or the, if applicable, any Lender (or group of Lenders) pursuant to this Section 5.06, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its or their solereasonable discretion and without consent from any other party hereto, except, in each case, as expressly required pursuant to this Section 5.06after consultation with the Borrower.

(e)

Notwithstanding anything to the contrary herein or in any other Transaction Document, at any time (including in connection with the implementation of a Benchmark Replacement), (1) if the then-current Benchmark is the Term SOFR Rate and either (a) any tenor for such Benchmark is not displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion or (b) the regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of information announcing that any tenor for such Benchmark is or will be no longer representative, then the Administrative Agent may modify the definition

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of “Interest Period” for any Benchmark settings at or after such time to remove such unavailable or non-representative tenor and (2) if a tenor that was removed pursuant to clause (i) above either (a) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (b) is not, or is no longer, subject to an announcement that it is or will no longer be representative for a Benchmark (including a Benchmark Replacement), then the Administrative Agent may, in consultation with the Borrower, modify the definition of “Interest Period” for all Benchmark settings at or after such time to reinstate such previously removed tenor.

(f)

Upon the Borrower’s receipt of notice of the commencement of a Benchmark Unavailability Period, the Borrower may revoke any request for a Loan accruing interest at the Adjusted Term SOFR Rate or the Adjusted Daily Simple SOFR Rate during such Benchmark Unavailability Period and, failing that, the Borrower will be deemed to have converted any request for (A) a Loan accruing interest at the Adjusted Term SOFR Rate, into a request for a Borrowing of a Loan accruing interest at the Adjusted Daily Simple SOFR Rate so long as the Adjusted Daily Simple SOFR Rate is not the subject of a Benchmark Transition Event or (B) a Loan accruing interest at the Base Rate if the Adjusted Daily Simple SOFR Rate for Dollar Borrowings is the subject of a Benchmark Transition Event. Furthermore, if any Loan accruing interest at the Adjusted Term SOFR Rate or the Adjusted Daily Simple SOFR Rate is outstanding on the date of the Borrower’s receipt of notice of the commencement of a Benchmark Unavailability Period with respect to a Relevant Rate applicable to such Loan, then until such time as a Benchmark Replacement is implemented pursuant to this Section 5.06, (1) any Loan accruing interest at the Adjusted Term SOFR Rate shall on the last day of the Interest Period applicable to such Loan be converted by the Administrative Agent to, and shall constitute, (x) a Loan accruing interest by reference to the Adjusted Daily Simple SOFR Rate so long as the Adjusted Daily Simple SOFR Rate is not the subject of a Benchmark Transition Event or (y) a Loan accruing interest by reference to the Base Rate if the Adjusted Daily Simple SOFR Rate is the subject of a Benchmark Transition Event, on such day and (2) any Loan accruing interest by reference to the Adjusted Daily Simple SOFR Rate shall on and from such day be converted by the Administrative Agent to, and shall constitute a Loan accruing interest by reference to the Base Rate.

(d)

Certain Defined Terms. As used in this Section 5.06:

(i) “Benchmark Replacement” means the sum of: (a) the alternate benchmark rate that has been selected by the Administrative Agent and the Borrower giving due consideration to (i) any selection or recommendation of a replacement rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a rate of interest as a replacement to Adjusted LIBOR or LMIR, as applicable, for Dollar-denominated credit facilities and (b) the Benchmark Replacement Adjustment; provided that, if at any time the Benchmark Replacement as so determined would be less than the Benchmark Replacement Floor, the Benchmark Replacement will be deemed to be the Benchmark Replacement Floor for the purposes of this Agreement.

(ii)

“Benchmark Replacement Adjustment” means, with respect to any replacement of Adjusted LIBOR or LMIR, as applicable, with an alternate benchmark

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rate for each applicable Interest Period, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the Borrower giving due consideration to (a) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of Adjusted LIBOR or LMIR, as applicable, with the applicable Benchmark Replacement (excluding such spread adjustment) by the Relevant Governmental Body or (b) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for such replacement of Adjusted LIBOR or LMIR, as applicable, for Dollar-denominated credit facilities at such time.

(iii)

“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Base Rate,” the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest and other administrative matters) that the Administrative Agent decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of the Benchmark Replacement exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement).

(iv)

Benchmark Replacement Date” means the earlier to occur of the following events with respect to Adjusted LIBOR or LMIR:

(A)

in the case of clause (A) or (B) of the definition of “Benchmark Transition Event,” the later of (x) the date of the public statement or publication of information referenced therein and (y) the date on which the administrator of the London Interbank Offered Rate for interbank deposits in Dollars (“USD LIBOR”) permanently or indefinitely ceases to provide USD LIBOR; or

(B)

in the case of clause (C) of the definition of “Benchmark Transition Event,” the date of the public statement or publication of information referenced therein.

(v)

“Benchmark Replacement Floor” means the minimum rate of interest, if any, specified for Adjusted LIBOR or LMIR, as applicable, or, if no minimum rate of interest is specified, zero.

(vi)

“Benchmark Transition Event” means the occurrence of one or more of the following events with respect to Adjusted LIBOR or LMIR, as applicable:

(A)

a public statement or publication of information by or on behalf of the administrator of USD LIBOR announcing that such administrator has ceased or

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will cease to provide USD LIBOR, permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide USD LIBOR;

(B)

a public statement or publication of information by a Governmental Authority having jurisdiction over the Administrative Agent, the regulatory supervisor for the administrator of USD LIBOR, the U.S. Federal Reserve System, an insolvency official with jurisdiction over the administrator for USD LIBOR, a resolution authority with jurisdiction over the administrator for USD LIBOR or a court or an entity with similar insolvency or resolution authority over the administrator for USD LIBOR, which states that the administrator of USD LIBOR has ceased or will cease to provide USD LIBOR permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide USD LIBOR; or

(C)

a public statement or publication of information by the regulatory supervisor for the administrator of USD LIBOR or a Governmental Authority having jurisdiction over the Administrative Agent announcing that USD LIBOR is no longer representative.

(vii)

“Benchmark Unavailability Period” means, if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to Adjusted LIBOR or LMIR, as applicable, and solely to the extent that Adjusted LIBOR or LMIR, as applicable, (as the case may be) has not been replaced with a Benchmark Replacement, the period (x) beginning at the time that such Benchmark Replacement Date has occurred if, at such time, no Benchmark Replacement has replaced Adjusted LIBOR or LMIR, as applicable, (as the case may be) for all purposes hereunder or under any Transaction Document in accordance with this Section 5.06 and (y) ending at the time that a Benchmark Replacement has replaced Adjusted LIBOR or LMIR, as applicable, (as the case may be) for all purposes hereunder pursuant or under any Transaction Document to this Section 5.06.

(viii)

“Early Opt-in Event” means a determination by the Administrative Agent that Dollar-denominated credit facilities being executed at such time, or that include language similar to that contained in this Section 5.06, are being executed or amended, as applicable, to incorporate or adopt a new benchmark interest rate to replace USD LIBOR.

(ix)

749303375 18569090

(c)

Power and Authority; Due Authorization. The Borrower (i) has all necessary limited liability company power and authority to (A) execute and deliver this Agreement and the other Transaction Documents to which it is a party, (B) perform its obligations under this Agreement and the other Transaction Documents to which it is a party and

(C) grant a security interest in the Collateral to the Administrative Agent on the terms and subject to the conditions herein provided and (ii) has duly authorized by all necessary limited liability company action such grant and the execution, delivery and performance of, and the consummation of the transactions provided for in, this Agreement and the other Transaction Documents to which it is a party.

(d)

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

(i) as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (ii) as such enforceability may be limited by general principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or at law.

(e)

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

(f)

Litigation and Other Proceedings. (i) There is no action, suit, proceeding or investigation pending or, to the best knowledge of the Borrower, threatened, against the Borrower before any Governmental Authority and (ii) the Borrower is not subject to any order, judgment, decree, injunction, stipulation or consent order of or with any Governmental Authority that, in the case of either of the foregoing clauses (i) and (ii), (A) asserts the invalidity of this Agreement or any other Transaction Document, (B) seeks to prevent the grant of a security interest in any Collateral by the Borrower to the Administrative Agent, the ownership or acquisition by the Borrower of any Pool Receivable or other Collateral or the consummation of any of the transactions contemplated by this Agreement or any other Transaction Document, (C) seeks any determination or ruling that could materially and adversely affect the performance by the Borrower of its obligations under, or the validity or enforceability of, this Agreement or any other Transaction Document or (D) individually or in the aggregate for all such actions, suits, proceedings and investigations could reasonably be expected to have a Borrower Material Adverse Effect.

749303375 18569090

its properties and to conduct its business as such properties are currently owned and such business is presently conducted.

(b)

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

(c)

Power and Authority; Due Authorization. The Servicer has all necessary corporate power and authority to (i) execute and deliver this Agreement and the other Transaction Documents to which it is a party and (ii) perform its obligations under this Agreement and the other Transaction Documents to which it is a party and the execution, delivery and performance of, and the consummation of the transactions provided for in, this Agreement and the other Transaction Documents to which it is a party have been duly authorized by the Servicer by all necessary action.

(d)

Binding Obligations. This Agreement and each of the other Transaction Documents to which it is a party constitutes legal, valid and binding obligations of the Servicer, enforceable against the Servicer in accordance with their respective terms, except (i) as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (ii) as such enforceability may be limited by general principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or at law.

(e)

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

(f)

Litigation and Other Proceedings. There is no action, suit, proceeding or investigation pending, or to the Servicer’s knowledge threatened, against the Servicer before any Governmental Authority: (i) asserting the invalidity of this Agreement or any of the other Transaction Documents; (ii) seeking to prevent the consummation of any of the transactions

749303375 18569090

Agent for the Administrative Agent’s authorization and approval, all financing statements, amendments, continuations or initial financing statements in lieu of a continuation statement, or other filings necessary to continue, maintain and perfect the Administrative Agent’s security interest as a first-priority interest. The Administrative Agent’s approval of such filings shall authorize the Borrower to file such financing statements under the UCC without the signature of the Borrower, any Originator or the Administrative Agent where allowed by Applicable Law. Notwithstanding anything else in the Transaction Documents to the contrary, the Borrower shall not have any authority to file a termination, partial termination, release, partial release, or any amendment that deletes the name of a debtor or excludes collateral of any such financing statements filed in connection with the Transaction Documents, without the prior written consent of the Administrative Agent.

(q)

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

(r)

Restricted Payments. (i) Except pursuant to clause (ii) below, the Borrower will not: (A) purchase or redeem any of its membership interests, (B) declare or pay any dividend or set aside any funds for any such purpose, (C) prepay, purchase or redeem any Debt (other than any Loan pursuant to this Agreement), (D) lend or advance any funds or

(E) repay any loans or advances to, for or from any of its Affiliates (the amounts described in clauses (A) through (E) being referred to as “Restricted Payments”).

(ii)

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

(iii)

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

(s)

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

749303375 18569090

relating to such Debt (whether or not such failure shall have been waived under the related agreement); (ii) any Originator, the Performance Guarantor or the Servicer, or any of their respective Subsidiaries, individually or in the aggregate, shall fail to pay any principal of or premium or interest on (x) any Debt under the Credit Agreement (or any refinancing or replacement thereof) or (y) any of its other Debt that is outstanding in a principal amount of at least the Threshold Amount in the aggregate when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period (not to exceed 30 days), if any, specified in the Credit Agreement (or any refinancing or replacement thereof) or such agreement, mortgage, indenture or instrument relating to such Debt (whether or not such failure shall have been waived under the related agreement); (iii) any other event shall occur or condition shall exist under the Credit Agreement (or any refinancing or replacement thereof) or any other agreement, mortgage, indenture or instrument relating to any such Debt (as referred to in clause

(i) or (ii) of this paragraph) and shall continue after the applicable grace period (not to exceed 30 days), if any, specified in the Credit Agreement (or any refinancing or replacement thereof) or such other agreement, mortgage, indenture or instrument, if the effect of such event or condition is to give the applicable debtholders the right (whether acted upon or not) to accelerate the maturity of such Debt (as referred to in clause (i) or (ii) of this paragraph) or to terminate the commitment of any lender thereunder, unless such event or condition shall have been waived under and in accordance with the related agreement or (iv) any such Debt (as referred to in clause

(i) or (ii) of this paragraph) shall be declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment), redeemed, purchased or defeased, or an offer to repay, redeem, purchase or defease such Debt shall be required to be made or the commitment of any lender thereunder terminated, in each case before the stated maturity thereof;

(j)

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

(k)

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

(l)

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

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101

SECTION 11.09. Successor Administrative Agent.

(a)

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

(b)

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

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

SECTION 11.11. LIBORBenchmark Replacement Notification. Section 5.06 (“Successor Adjusted LIBOR or LMIRAlternate Rate of Interest”) provides a mechanism for determining an alternative rate of interest in the event that the Adjusted LIBOR or LMIRTerm SOFR Rate or the Adjusted Daily Simple SOFR Rate is no longer available or in certain other circumstances. The Administrative Agent does not warrant or accept any responsibility for and shall not have any liability with respect to, the administration, submission or any other matter related to the London interbank offered rate or other rates in the definition of Adjusted LIBOR or LMIRTerm SOFR Rate or the Adjusted Daily Simple SOFR Rate, or with respect to any alternative or successor rate thereto, or replacement rate therefor.

SECTION 11.12. Erroneous Payments.

(a)

If the Administrative Agent notifies a Lender, Credit Party or Secured Party, or any Person who has received funds on behalf of a Lender, Credit Party or Secured Party (any such Lender, Credit Party, Secured Party or other recipient, a “Payment Recipient”) that the

749303375 18569090

106

Servicer, affect the rights or duties of the Servicer under this Agreement; (B) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent and each Lender:

(i)

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

(ii)

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

(iii)

change any Event of Default;

(iv)

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

(v)

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

(vi)

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

(vii)

change the order of priority in which Collections are applied pursuant to Section 4.01 or change Section 4.01 in a manner that would alter the pro rata sharing of payments required thereby.

Notwithstanding the foregoing, (A) no amendment, waiver or consent shall increase any Lender’s Commitment hereunder without the consent of such Lender, (B) no amendment, waiver or consent shall reduce any Fees payable by the Borrower to any Credit Party or delay the dates on which any such Fees are payable, in either case, without the consent of such Credit Party and

(C) no consent with respect to any amendment, waiver or other modification of this Agreement shall be required of any Defaulting Lender, except with respect to any amendment, waiver or other modification referred to in clauses (i) through (vii) above and then only in the event such Defaulting Lender shall be directly affected by such amendment, waiver or other modification.

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

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115

Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

(f)

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

(g)

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

(h)

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

(i)

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

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

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118

REGIONS BANK,

as a Lender

By:

Name:

Title:

749303375 18569090

Receivables Financing Agreement

S-3

TRUIST BANK,

as a Lender

By:

Name:

Title:

749303375 18569090

Receivables Financing Agreement

S-4

EXHIBIT A

Form of Loan Request

[Letterhead of Borrower]

[Date]

[Administrative Agent] [Lenders]

Re: Loan Request Ladies and Gentlemen:

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

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

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

(i)

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

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

749303375 18569090

Exhibit A-1

SCHEDULE I

Commitments


PNC Bank, National Association
Party	Capacity	Commitment
PNC Bank, National Association	Lender	$325,000,000370,000,00 0


Regions Bank
Party	Capacity	Commitment
Regions Bank	Lender	$75,000,00090,000,000


Truist Bank
Party	Capacity	Commitment
Truist Bank	Lender	$90,000,000

Schedule I-1

749303375 18569090

SCHEDULE II

Lock-Boxes, Collection Accounts and Collection Account Banks


Collection Account Bank	Collection Account Number	Associated Lock-Box (if any)
Bank of America, N.A.	[redacted]	[redacted]
Bank of America, N.A.	[redacted]	N/A
Bank of America, N.A.	[redacted]	[redacted]
Bank of America, N.A.	[redacted]	N/A
Bank of America, N.A.	[redacted]	N/A
Bank of America, N.A.	[redacted]	N/A
Bank of America, N.A.	[redacted]	N/A
Wells Fargo Bank, National Association	[redacted]	N/A
Wells Fargo Bank, National Association	[redacted]	N/A

Schedule II-1

749303375 18569090

(D)

in the case of Regions Bank, at the following address:

Regions Bank

1180 West Peachtree St. NW Suite 1000

Atlanta, GA 30309 Attention: Cecil Noble Telephone: 404-221-4571 Facsimile: N/A

Email: cecil.noble@regions.com rbcbirmingham@regions.com

(E)

in the case of Truist Bank, at the following address:

Truist Bank

3333 Peachtree Rd. NE, 7th Floor Atlanta, GA 30326

Attention: Paul Cornely Telephone: 404-836-6105 Facsimile: N/A

Email: paul.cornely@truist.com STRH.AFG@truist.com

(F)

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

Schedule III-2

749303375 18569090

Annex A

(attached)

Annex A

749301255 18569090

ANNEX A

SYNEOS HEALTH, LLC (f/k/a INC RESEARCH, LLC)

PNC BANK, NATIONAL ASSOCIATION

Closing Memorandum

FOR

FACILITY UPSIZE,

RENEWAL OF

AND

JOINDER OF TRUIST BANK TO

TRADE RECEIVABLES SECURITIZATION PROGRAM

For October 3, 2022 Closing

Parties and Abbreviations:


Administrative Agent	PNC
BH	Baker & Hostetler LLP, Ohio counsel to the Syneos Parties
BofA	Bank of America, N.A.
Borrower	Syneos Health Receivables LLC, a Delaware limited liability company structured as a typical bankruptcy-remote special purpose entity
Collection Account Banks	Wells and BofA
DLA	DLA Piper LLP, North Carolina counsel to the Syneos Parties
Lenders	PNC, Regions and Truist
JPM	JPMorgan Chase Bank, N.A.
MB	Mayer Brown LLP, counsel to the Lenders
Originators	The Originators set forth on Schedule I
Performance Guarantor	Syneos
PNC	PNC Bank, National Association
Regions	Regions Bank
Servicer	Syneos Health

750108357 18569090


Syneos	Syneos Health, Inc., a Delaware corporation
Syneos Counsel	Latham & Watkins LLP, counsel to the Syneos Parties
Syneos Health	Syneos Health, LLC (f/k/a INC Research, LLC), a Delaware limited liability company
Syneos Parties	Each of the Servicer, the Originators, the Borrower and the Performance Guarantor
Structuring Agent	PNC Capital Markets LLC
Truist	Truist Bank
Wyrick	Wyrick Robbins Yates & Ponton LLP, counsel to the Syneos Parties

750108357 18569090

 
Document

1.	Twelfth Amendment to Receivables Financing Agreement

2.	Amended and Restated Fee Letter

3.	Opinion of counsel to Syneos Health, Syneos and the Borrower re: general corporate matters, enforceability, no-conflicts with organizational documents, material agreements, New York and Federal law and ’40 Act matters

4.	Reliance Letters to Truist re: prior opinions

5.	Reliance Letters to Truist re: prior opinions

6.	Reliance Letters to Truist re: prior opinions

7.	Reliance Letters to Truist re: prior opinions

8.	Pro Forma Information Package

750108357 18569090

Schedule I

Name and Jurisdiction of the Originators


Legal Name	Jurisdiction
Addison Whitney LLC	North Carolina
BIOSECTOR 2 LLC	New York
CADENT MEDICAL COMMUNICATIONS, LLC	Ohio
Chamberlain Communications LLC	Delaware
CHANDLER CHICCO AGENCY, L.L.C.	New York
GERBIG, SNELL/WEISHEIMER ADVERTISING, LLC	Ohio
Syneos Health Medical Communications, LLC	Ohio
NAVICOR GROUP, LLC	Ohio
Palio + Ignite, LLC	Ohio
Syneos Health Communications, Inc.	Ohio
THE SELVA GROUP, LLC	Ohio
Taylor Strategy Partners, LLC	Ohio
Syneos Health, LLC (f/k/a/ INC Research, LLC)	Delaware
inVentiv Health Clinical, LLC	Delaware
inVentiv Commercial Services, LLC	New Jersey

750108357 18569090

Exhibit 31.1

CERTIFICATIONS

I, Michelle Keefe, certify that:

I have reviewed this Quarterly Report on Form 10-Q of Syneos Health, Inc. (the “registrant”);

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 3, 2022

/s/ Michelle Keefe

Michelle Keefe

Chief Executive Officer

(Principal Executive Officer)

Exhibit 31.2

CERTIFICATIONS

I, Jason Meggs, certify that:

I have reviewed this Quarterly Report on Form 10-Q of Syneos Health, Inc. (the “registrant”);

(a)

(b)

(c)

(d)

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 3, 2022

/s/ Jason Meggs

Jason Meggs

Chief Financial Officer

(Principal Financial Officer)

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Michelle Keefe, Chief Executive Officer of Syneos Health, Inc. (the “registrant”), do hereby certify, that to the best of my knowledge:

The registrant’s Quarterly Report on Form 10-Q for the period ended September 30, 2022, (the “Report”), to which this Certification is attached as Exhibit 32.1, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein.

Date: November 3, 2022

/s/ Michelle Keefe

Michelle Keefe

Chief Executive Officer

(Principal Executive Officer)

This certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed “filed” by the registrant for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be incorporated by reference into any filing of the registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of the Report, irrespective of any general incorporation language contained in such filing.

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Jason Meggs, Chief Financial Officer of Syneos Health, Inc. (the “registrant”), do hereby certify, that to the best of my knowledge:

The registrant’s Quarterly Report on Form 10-Q for the period ended September 30, 2022 (the “Report”), to which this Certification is attached as Exhibit 32.2, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein.

Date: November 3, 2022

/s/ Jason Meggs

Jason Meggs

Chief Financial Officer

(Principal Financial Officer)