Item 1.01.
|
Entry into a Material Definitive Agreement.
|
On June 29, 2018, subsidiaries of
Syneos Health, Inc. entered into a Receivables Financing Agreement (the RFA), with PNC Bank, National Association (PNC), as administrative agent, PNC Capital Markets, LLC, as structuring agent, and additional persons from
time to time party thereto, as lenders. The Syneos Health subsidiaries that are parties to the RFA are: INC Research, LLC, a Delaware limited liability company (INC LLC), as initial servicer; and Syneos Health Receivables LLC, a Delaware
limited liability company and direct wholly owned subsidiary of INC LLC (Syneos Receivables), as borrower.
In addition, on
that same date, (i) INC LLC and inVentiv Health Clinical, LLC, as originators of receivables (the Originators), (ii) INC LLC, as servicer of the receivables for the Originators, and (iii) Syneos Receivables, entered into a
Purchase and Sale Agreement (the PSA).
Together, the RFA and PSA establish the primary terms and conditions of an accounts
receivable securitization program (the Securitization).
Pursuant to the Securitization, the Originators will transfer and
sell current and future trade receivables to Syneos Receivables, and Syneos Receivables will, in turn, borrow money from PNC, secured by liens on the receivables and other assets of Synoes Receivables. The maximum amount potentially available to
borrow, based on eligibility of the receivables, is $250 million. INC LLC, as servicer, is independently liable for its own customary representations, warranties, covenants and indemnities. In addition, Syneos Health, Inc. has guaranteed the
performance of the obligations of the Originators and INC LLC in INC LLCs capacity as servicer, and will guarantee the obligations of any additional originators or successor servicer that may become party to the Securitization. Syneos
Receivables assets and credit are not available to satisfy the debts and obligations owed to the creditors of Syneos Health, Inc. or its subsidiaries. Syneos Health, Inc. will include Syneos Receivables assets, liabilities and results of
operations in its consolidated financial statements. In connection with these transactions, Syneos Receivables paid structuring fees to PNC Capital Markets, LLC and will pay other customary fees to the lenders.
Loans under the Securitization will accrue interest at a reserve-adjusted LIBOR rate or a base rate equal to the highest of (i) the
applicable lenders prime rate, and (ii) the federal funds rate plus 0.50%. Syneos Receivables may prepay loans upon one business day prior notice and may terminate or reduce the facility limit of the Securitization with 15 days
prior notice.
The Securitization contains various customary representations and warranties and covenants, and default provisions which
provide for the termination and acceleration of the commitments and loans under the Securitization in circumstances including, but not limited to, failure to make payments when due, breach of representations, warranties or covenants, certain
insolvency events or failure to maintain the security interest in the trade receivables, and defaults under other material indebtedness.
The Securitization terminates on June 29, 2021, unless terminated earlier pursuant to its terms.
The foregoing description of the Securitization is qualified in its entirety by reference to the full text of each of the RFA and PSA, copies
of which are respectively attached hereto as Exhibit 10.1 and Exhibit 10.2 and are incorporated herein by reference.