The Borrower (on behalf of itself and the Obligors): | |||||||||||
PRA Group Europe Holding S.à r.l | |||||||||||
By: /s/ Tom-André Westbø Hansen | |||||||||||
Name: Tom-André Westbø Hansen | |||||||||||
Title: Manager | |||||||||||
The Borrower (on behalf of itself and the Obligors): PRA Group Europe Holding S.à r.l., Luxembourg, Zug Branch By: /s/ Tom-André Westbø Hansen Name: Tom-André Westbø Hansen Title: Authorised Signatory | |||||||||||
As Guarantor: PRA Group Deutschland GmbH | |||||||||||
By: /s/ Godfrey Mbawala | |||||||||||
Name: Godfrey Mbawala Title: Managing Director (Geschäftsführer) | |||||||||||
As Luxembourg Pledgor: PRA Group Europe Holding I S.à.r.l., a private limited liability company (société à responsabilité limitée) incorporated and existing under the laws of Luxembourg, having its registered office at 53, Boulevard Royal L-2449 Luxembourg and registered with the R.C.S.” under number B185154 (the “Luxembourg Pledgor”) | |||||||||||
By: /s/ Tom-André Westbø Hansen | |||||||||||
Name: Tom-André Westbø Hansen Title: Manager | |||||||||||
As Facility Agent, Security Agent and Lender: | |||||
DNB Bank ASA | |||||
By: /s/ Steinar Engelstad /s/ Sverre Woldsund | |||||
Name: Steinar Engelstad Sverre Woldsund | |||||
Title: SVP Client Manager | |||||
As Lender: | |||||
Swedbank AB (publ) | |||||
By: /s/ Thomas Hojem | |||||
Name: Thomas Hojem Title: ifig. fullmakt | |||||
As Lender: | |||||
Nordea Bank Abp, filial i Norge | |||||
By: /s/ Mikkel Andreas Vogt /s/ Ingrid Graff Kvalen | |||||
Name: Mikkel Andreas Vogt Ingrid Graff Kvalen Title: Managing Director Associate Director | |||||
“Acquisition” | by any person, means the acquisition by such person, in a single transaction or in a series of related transactions, of all or any substantial portion of the property of another person or at least a majority of the voting stock of another person, in each case whether or not involving a merger or consolidation with such other person and whether for cash, property, services, assumption of indebtedness, securities or otherwise. For the avoidance of doubt, purchases of debt portfolios in the ordinary course of business shall not be considered Acquisitions. | |||||||
“Administrative Agent” | means Truist Bank (or any of its designated branch offices or affiliates) in its capacity as administrative agent under any loan documents pursuant to which PRA Group, Inc is the borrower, or any successor administrative agent. | |||||||
“Affiliate” | means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. | |||||||
“Attributable Indebtedness” | means, on any date, (a) in respect of any Capital Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, (b) in respect of any Synthetic Lease, the capitalized amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a Capital Lease and (c) in respect of any Securitization Transaction of any Person, the outstanding principal amount of such financing, after taking into account reserve accounts and making appropriate adjustments, determined by the Agent in its reasonable judgment. | |||||||
“Capital Lease” | means, as applied to any Person, any lease of any property by that Person as lessee which, in accordance with GAAP, is required to be accounted for as a capital lease on the balance sheet of that Person; provided, that the subsequent adoption, issuance or effectiveness of any accounting standards after the closing date will not cause any lease that was not or would not have been a Capital Lease on the closing date to be deemed a Capital Lease. For the avoidance of doubt, “Capital Leases” shall not include operating leases or any agreements requiring the payment of rent or other similar provisions (whether entered into prior to or after the closing date) if such lease was or would have been an operating lease on the closing date. | |||||||
“Consolidated EBITDA” | means, for any period, for PRA Group, Inc. and its Subsidiaries on a consolidated basis, an amount equal to Consolidated Net Income for such period plus the following, without duplication, to the extent deducted in calculating such Consolidated Net Income: (a) Consolidated Interest Charges for such period, (b) the provision for federal, state, local and foreign income taxes payable by PRA Group, Inc. and its Subsidiaries for such period, (c) depreciation and amortization expense, (d) Recoveries Applied to Negative Allowance, net of changes in expected recoveries, (e) fees, costs and expenses incurred in respect of the Facility Agreement or in connection with any disposition, incurrence of Consolidated Funded Indebtedness, Acquisition (including amounts paid in connection with such Acquisition for retention of one or more individuals comprising part of a management team retained to manage the acquired business; provided that such payments are made in connection with such Acquisition and are consistent with the customary practice in the industry at the time of such Acquisition), investment or offering of Equity Interests, in each case as permitted under the loan documents, (f) all other non-cash charges for such period, to the extent such charges do not represent a cash charge in such period or any future period, all as determined in accordance with GAAP and (g) indemnification payments received from a Person which is not an Affiliate of any Obligor under any acquisition agreement entered into by such Person which reimburse expenses of an Obligor, to the extent such expenses were deducted in computing Consolidated Net Income. | |||||||
“Consolidated Fixed Charge Coverage Ratio” | means, as of any date of determination, the ratio of (a) Consolidated EBITDA to (b) the sum of (x) scheduled principal payments made on Consolidated Funded Indebtedness during such period plus (y) Consolidated Interest Charges, in each case measured for the period of the four fiscal quarters most recently ended. | |||||||
“Consolidated Funded Indebtedness” | means Funded Indebtedness of PRA Group, Inc. and its Subsidiaries on a consolidated basis determined in accordance with GAAP. | |||||||
“Consolidated Interest Charges” | means, for any period, for PRA Group, Inc. and its Subsidiaries on a consolidated basis, an amount equal to the sum of (i) all interest, premium payments, debt discount, fees, charges and related expenses in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent treated as interest in accordance with GAAP, less interest income for such period, plus (ii) the portion of rent expense with respect to such period under Capital Leases that is treated as interest in accordance with GAAP plus (iii) the implied interest component of Synthetic Leases with respect to such period plus (iv) losses on hedging obligations or other derivative instruments (including Swap Contracts) entered into for the purposes of hedging interest rate risk. | |||||||
“Consolidated Net Income” | means, for any period, for PRA Group, Inc. and its Subsidiaries on a consolidated basis, the net income of PRA Group, Inc. and its Subsidiaries (excluding (i) extraordinary gains or losses, (ii) the effects of discontinued operations and (iii) adjustment for net income attributable to noncontrolling interests) for that period, as determined in accordance with GAAP. | |||||||
“Consolidated Senior Secured Indebtedness” | means, as of any date of determination, all Consolidated Funded Indebtedness that, as of such date, is secured by any Lien on any asset or property of PRA Group, Inc. or any of its Subsidiaries. | |||||||
“Consolidated Senior Secured Leverage Ratio” | means, as of any date of determination, the ratio of (a) (i) Consolidated Senior Secured Indebtedness as of such date less (ii) Qualified Cash as of such date to (b) Consolidated EBITDA for the period of the four fiscal quarters most recently ended. | |||||||
“Consolidated Total Leverage Ratio” | means, as of any date of determination, the ratio of (a) (i) Consolidated Funded Indebtedness as of such date less (ii) Qualified Cash as of such date to (b) Consolidated EBITDA for the period of the four fiscal quarters most recently ended. | |||||||
“Equity Interests” | means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination. | |||||||
“Funded Indebtedness” | means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP: a.the outstanding principal amount of all obligations for borrowed money, whether current or long-term (including the Obligations) and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments; b.all purchase money Indebtedness; c.principal portion of all obligations under conditional sale or other title retention agreements relating to property purchased by PRA Group, Inc. or any Subsidiary (other than customary reservations or retentions of title under agreements with suppliers entered into in the ordinary course of business); d.all obligations arising under unreimbursed draws under letters of credit (including standby and commercial), bank guaranties, surety bonds and similar instruments; e.all obligations in respect of the deferred purchase price of property or services (other than (x) trade accounts payable in the ordinary course of business and (y) such obligations incurred under ERISA) (for the avoidance of doubt, such deferred purchase price of property or services shall not include accrued bonuses or other compensation) including any (I) obligations in respect of earnouts, solely to the extent then due and payable and (II) obligations in respect of seller financing (but excluding any cash holdback retained in lieu of an escrow deposit in connection with a permitted Acquisition, as long as such holdback is paid, settled or otherwise released within 24 months of the consummation o the associated permitted Acquisition; f.the Attributable Indebtedness of Capital Leases, Securitization Transactions and Synthetic Leases; g.all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment on or prior to the 90th day following the Termination Date in respect of any Equity Interests in such Person or any other Person (other than customary put rights or redemption obligations arising as a result of a change of control), valued, in the case of a redeemable preferred interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends; h.all Funded Indebtedness of others secured by (or for which the holder of such Funded Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on, or payable out of the proceeds of production from, property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed; provided that the amount of Funded Indebtedness with respect to such Person who has given such Lien under this clause (h) shall be deemed to be the lesser of the amount of such Indebtedness that is so secured and the fair market value of such property; i.all guarantees with respect to Funded Indebtedness of the types specified in clauses (a) through (h) above of another Person; and j.all Funded Indebtedness of the types referred to in clauses (a) through (i) above of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or joint venturer, except to the extent that Funded Indebtedness is expressly made non-recourse (or such Person is not otherwise liable for such Funded Indebtedness) to such Person. For purposes hereof, the amount of any direct obligation arising under letters of credit (including standby and commercial), bank guaranties, surety bonds and similar instruments shall be the maximum amount available to be drawn thereunder. For the avoidance of doubt, “Funded Indebtedness” shall not include any deferred tax liabilities or Swap Contracts. | |||||||
“Income from Operations” | means, “income from operations” as it appears on PRA Group, Inc.’s financial statements as filed with the SEC, excluding any one-time, non-recurring charges or unusual charges that are presented in accordance with GAAP in the operating income calculation appearing on PRA Group, Inc.’s financial statements as filed with the SEC. | |||||||
“Indebtedness” | means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP: (a) all Funded Indebtedness; (b) the Swap Termination Value of any Swap Contract; (c) all guarantees with respect to outstanding Indebtedness of the types specified in clauses (a) and (b) above of any other Person; and (d) all Indebtedness of the types referred to in clauses (a) through (c) above of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which PRA Group, Inc. or a Subsidiary is a general partner or joint venturer, unless such Indebtedness is expressly made non-recourse to PRA Group, Inc. or such Subsidiary or PRA Group, Inc. or such Subsidiary is not otherwise liable for such Indebtedness For purposes of this definition, the amount of any Indebtedness represented by a guaranty or other similar instrument shall be the lesser of the principal amount of the obligations guaranteed and still outstanding and the maximum amount for which the guaranteeing Person may be liable pursuant to the terms of the instrument embodying such Indebtedness. For the avoidance of doubt, Indebtedness shall not include (a) deferred or prepaid revenue or (b) permitted bond hedge transactions or permitted warrant transactions. | |||||||
“Lien” | means any mortgage, pledge, hypothecation, assignment, encumbrance, lien (statutory or other), charge, assignment by way of security or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing) except for licenses of IP rights owned by any loan party which are granted in the ordinary course of business | |||||||
“Obligations” | means all advances to, and debts, liabilities, obligations, covenants and duties of, any loan party arising under any loan document or otherwise with respect to any loan (including erroneous payment subrogation rights), whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including, without limitation, (i) obligations which, but for the automatic stay under section 362(a) of the US Bankruptcy Code, would become due and (ii) interest and fees that accrue after the commencement by or against any loan party or any affiliate thereof of any proceeding under any debtor relief laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding. | |||||||
“Person” | meaning as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan. | |||||||
“Qualified Cash” | means, at any time of determination, the aggregate balance sheet amount of unrestricted cash and, to the extent readily monetized, cash equivalents included in the consolidated balance sheet of PRA Group, Inc. and its Subsidiaries as of such time that (i) is free and clear of all Liens other than Liens in favor of the Administrative Agent and non-consensual permitted Liens, (ii) may be applied to payment of the Obligations under the Loan Documents without violating any law, contract or other agreement, (iii) is on deposit with one or more financial institutions in the United States or Canada and (iv) maintained in an account with the Administrative Agent or subject to a deposit account control agreement, in form and substance reasonably acceptable to Administrative Agent, in favor of Administrative Agent. | |||||||
“Recoveries Applied to Negative Allowance” | means the measurement of recoveries minus portfolio income in accordance with ASC 326 and pursuant to GAAP. | |||||||
“Securitization Transaction” | means, with respect to any Person, any financing transaction or series of financing transactions (including factoring arrangements) pursuant to which such Person or any Subsidiary of such Person may sell, convey or otherwise transfer, or grant a security interest in, accounts, payments, receivables, rights to future lease payments or residuals or similar rights to payment to a special purpose subsidiary or affiliate of such Person. | |||||||
“Subsidiary” | of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of Voting Stock is at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references in this section (Financial Covenant Definitions) to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of PRA Group, Inc. | |||||||
“Swap Contracts” | means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement. | |||||||
“Swap Termination Contract” | means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s) and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any affiliate of a Lender), in each case, only to the extent representing an obligation of the obligor thereunder. | |||||||
“Synthetic Lease” | means any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing arrangement whereby the arrangement is considered borrowed money indebtedness for tax purposes but is classified as an operating lease or does not otherwise appear on a balance sheet under GAAP. For the avoidance of doubt, “Synthetic Leases” shall not include operating leases. | |||||||
“Voting Stock” | means, with respect to any Person, Equity Interests issued by such Person the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even though the right so to vote has been suspended by the happening of such a contingency. | |||||||