10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the fiscal year ended April 27, 2024

OR

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

For the transition period from                      to                     

Commission File No. 0-20572

PATTERSON COMPANIES, INC.

(Exact name of registrant as specified in its charter)

Minnesota	41-0886515
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1031 Mendota Heights Road

St. Paul, Minnesota 55120

(Address of principal executive offices including Zip Code)

Registrant’s telephone number, including area code: (651) 686-1600

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

Title of each class	Trading Symbol(s)	Name of exchange on which registered
Common Stock, par value $.01	PDCO	NASDAQ Global Select Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  x    No  ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  x

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  x    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  x    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	x	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 has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.  ☐  

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).  ☐  

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

The aggregate market value of voting common equity held by non-affiliates, computed by reference to the price at which the common equity was last sold as of the last business day of the registrant's most recently completed second fiscal quarter (October 28, 2023) was approximately $2,822,000,000 (For purposes of this calculation all of the registrant’s executive officers and directors are deemed affiliates.)

As of June 10, 2024, there were 87,760,000 shares of Common Stock of the registrant issued and outstanding.

Documents Incorporated By Reference

Portions of the registrant’s definitive proxy statement to be filed pursuant to Regulation 14A within 120 days after the registrant’s fiscal year-end of April 27, 2024 are incorporated by reference into Part III.

FORM 10-K INDEX

		Page
PART I		3
Item 1.	BUSINESS	3
Item 1A.	RISK FACTORS	22
Item 1B.	UNRESOLVED STAFF COMMENTS	35
Item 1C.	CYBERSECURITY	35
Item 2.	PROPERTIES	36
Item 3.	LEGAL PROCEEDINGS	37
Item 4.	MINE SAFETY DISCLOSURES	37
PART II		38
Item 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	38
Item 6.	[RESERVED]	39
Item 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	40
Item 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	47
Item 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	48
Item 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	78
Item 9A.	CONTROLS AND PROCEDURES	78
Item 9B.	OTHER INFORMATION	79
Item 9C.	DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS	80
PART III		81
Item 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	81
Item 11.	EXECUTIVE COMPENSATION	81
Item 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	81
Item 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	81
Item 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	81
PART IV		82
Item 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	82
Item 16.	FORM 10-K SUMMARY	85
SCHEDULE II		86
SIGNATURES		87

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PART I

Item 1. BUSINESS

Forward-Looking Statements

The U.S. Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements to encourage companies to provide prospective information, so long as those statements are identified as forward-looking and are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those disclosed in the statement. Certain information of a non-historical nature contained in Items 1, 2, 3 and 7 of this Form 10-K includes “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, including statements regarding future financial performance, and the objectives and expectations of management. Forward-looking statements often include words such as “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “seeks” or words of similar meaning, or future or conditional verbs, such as “will,” “should,” “could” or “may.” Forward-looking statements are neither historical facts nor assurances of future performance. Instead, such statements, including, but not limited to, our statements regarding business strategy, growth strategy, competitive strengths, productivity and profitability enhancement, competition, new product and service introductions and liquidity and capital resources, are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions, as well as on assumptions made by and information currently available to management, and involve various risks and uncertainties, some of which are beyond our control.

Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not place undue reliance on any of these forward-looking statements. Any number of factors could affect our actual results and cause such results to differ materially from those contemplated by any forward-looking statements. Reference is made to “Risk Factors” in Item 1A and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of this Form 10-K, for a discussion of certain factors that could cause actual operating results to differ materially from those expressed in any forward-looking statements. In light of these risks and uncertainties, there can be no assurance that the forward-looking information will in fact prove to be accurate. The order in which these factors appear should not be construed to indicate their relative importance or priority. We caution that these factors may not be exhaustive, accordingly, any forward-looking statements contained herein should not be relied upon as a prediction of actual results.

You should carefully consider these and other relevant factors and information which may be contained in this Form 10-K and in our other filings with the U.S. Securities and Exchange Commission, or SEC, when reviewing any forward-looking statement. Investors should understand it is impossible to predict or identify all such factors or risks. As such, you should not consider the risks identified in our SEC filings to be a complete discussion of all potential risks or uncertainties.

Any forward-looking statement made in this Form 10-K is based only on information currently available to us and speaks only as of the date on which it is made. We do not undertake any obligation to release publicly any revisions to any forward-looking statements whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

General

Patterson Companies, Inc. is a value-added specialty distributor serving the U.S. and Canadian dental supply markets and the U.S., Canadian and U.K. animal health supply markets. Patterson operates through its two strategic business units, Patterson Dental and Patterson Animal Health, offering similar products and services to different customer bases. Each business has a strong competitive position, serves a highly fragmented market that offers consolidation opportunities and offers relatively low-cost consumable supplies, which makes our value-added business proposition highly attractive to our customers. We believe that we have a strong brand identity as a value-added, full-service distributor with broad product and service offerings, having begun distributing dental supplies in 1877.

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Business Overview

The following table sets forth consolidated net sales (in millions) by segment.

	Fiscal Year Ended
	April 27, 2024		April 29, 2023		April 30, 2022
Dental	$	2,489	$	2,492	$	2,516
Animal Health	4,067		3,965		3,983
Corporate	12		14		—
Consolidated net sales	$	6,568	$	6,471	$	6,499

Our strategically located fulfillment centers enable us to better serve our customers and increase our operating efficiency. This infrastructure, together with broad product and service offerings at competitive prices, and a strong commitment to customer service, enables us to be a single source of supply for our customers’ needs. Our infrastructure also allows us to provide convenient ordering and rapid, accurate and complete order fulfillment.

Electronic commerce solutions have become an integral part of dental and animal health supply and distribution relationships. Our distribution business is characterized by rapid technological developments and intense competition. The continuing advancement of online commerce requires us to cost-effectively adapt to changing technologies, to enhance existing services and to develop and introduce a variety of new services to address the changing demands of consumers and our customers on a timely basis, particularly in response to competitive offerings. We believe that our tradition of reliable service, our name recognition and large customer base built on solid customer relationships, position us well to participate in this significant aspect of the distribution business. We continue to explore methods to improve and expand our Internet presence and capabilities, including our online commerce offerings and our use of various social media outlets.

Patterson became publicly traded in 1992 and is a corporation organized under the laws of the state of Minnesota. We are headquartered in St. Paul, Minnesota. Our principal executive offices are located at 1031 Mendota Heights Road, St. Paul, Minnesota 55120, and our telephone number is (651) 686-1600. Unless the context specifically requires otherwise, the terms the “Company,” “Patterson,” “we,” “us” and “our” mean Patterson Companies, Inc., a Minnesota corporation, and its consolidated subsidiaries.

The Specialty Distribution Markets We Serve

We provide manufacturers with cost effective logistics and high-caliber sales professionals to access a geographically diverse customer base, which is critical to the supply chain for the markets we serve. We provide our customers with an array of value-added services, a dedicated and highly skilled sales team, and a broad selection of products through a single channel, thereby helping them efficiently manage their ordering process. Due in part to the inability of our customers to store and manage large quantities of supplies at their locations, the distribution of supplies and small equipment has been characterized by frequent, small-quantity orders, and a need for rapid, reliable and substantially-complete order fulfillment. Supplies and small equipment are generally purchased from more than one distributor, with one generally serving as the primary supplier.

We believe that consolidation within the industry will continue as distributors, particularly those with limited financial, operating and marketing resources, seek to combine with larger companies that can provide growth opportunities. This consolidation also may continue to result in distributors seeking to acquire companies that can enhance their current product and service offerings or provide opportunities to serve a broader customer base.

Dental Supply Market

The dental supply market we serve consists of geographically dispersed and highly fragmented dental practices. Customers range in size from sole practitioners to large group practices, often called Dental Service Organizations ("DSO's"). According to the American Dental Association and the Canadian Dental Association, there are approximately 202,000 dentists practicing in the U.S. and 25,000 dentists practicing in Canada. We believe the average dental practitioner purchases supplies from more than one supplier.

We believe the North American dental supply market continues to experience growth due to an increasing population, an aging population, advances in dentistry, demand for general, preventive and specialty services, increasing demand for new technologies that allow dentists to increase productivity, demand for infection control products, and insurance coverage by dental plans.

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We support dental professionals through the many stock keeping units (“SKUs”) that we offer, as well as through important value-added services, including equipment and technology installation and service, practice management software, electronic claims processing, financial services, and continuing education, all designed to help make a dental practice more efficient.

Animal Health Supply Market

The animal health supply market is a mix of production animal supply, which primarily serves food producing animals, consisting of beef and dairy cattle, swine and poultry and other species such as sheep and goats, and companion animal supply, which serves pets, primarily dogs, cats and horses. Similar to the dental supply market, the animal health supply market is highly fragmented and diverse. Our production animal customers include large animal veterinarians, beef producers (cow/calf, stocker and feedlots), dairy producers, poultry producers, swine producers and retail customers. Our companion animal customers are primarily small animal and equine veterinary clinics, including independently owned, corporates and groups. According to the American Veterinary Medical Association, there are more than 70,000 veterinarians in private practice in the U.S. and Canada. Furthermore, there are approximately 20,000 veterinarians in the U.K. practicing in veterinary outlets; however, we believe there has been a shift in the U.K. market toward consolidation of veterinary practices. National Veterinary Services Limited, is the market leader in the U.K. veterinary market, with the highest percentage of buying groups and corporations as customers compared to its competitors, and the highest share position in that country overall.

The global animal health supply market continues to experience growth, and we believe that trend will continue for the foreseeable future. We support our animal health customers through the distribution of biologicals, pharmaceuticals, parasiticides, supplies, including our own private label brands, and equipment. We also supply a full portfolio of technologies, software, services and solutions to all segments and channels of our broad customer base. We actively engage in the development, sale and distribution of inventory, accounting and health management systems to enhance customer operating efficiencies and assist our customers in managing risk. Within the companion animal supply market, we anticipate increasing demand for veterinary services due to the following factors: the increasing number of households with companion animals and increased expenditures on animal health and preventative care, an aging pet population, advancements in animal health products and diagnostic testing, and extensive marketing programs sponsored by companion animal nutrition and pharmaceutical companies.

We anticipate the macroeconomic trend of global population growth and corresponding demand for protein will be favorable to the production animal segment in the future. Likewise, the rise in disposable income, especially in developing countries will be a key driver of future growth. However; product sales in the production animal supply market are more likely to be impacted by volatility in the market such as commodity prices, changes in weather patterns, and trends in the general economy. Many factors can influence how long cattle will graze and consequently the number of days an animal is on feed during a finishing phase. Supply and demand dynamics and economic trends can shift the number of animals treated, the timing of when animals are treated, to what extent they are treated and with which products they are treated. Historically, sales in this market have been largely driven by spending on animal health products to improve productivity, weight gain and disease prevention, as well as a growing focus on health and wellness of the animals, safety, and efficiency in livestock production.

Competition

The distribution industry is highly competitive. It consists principally of national, regional and local full-service distributors. Substantially all of the products we sell are available to customers from a number of suppliers. In addition, our competitors could obtain exclusive rights from manufacturers to market particular products. Some manufacturers also sell directly to end-users, thereby eliminating or reducing our role and that of other distributors.

We compete with other distributors, as well as several manufacturers, of dental and animal health products, on the basis of price, breadth of product line, customer service and value-added products and services. To differentiate ourselves from our competition we deploy a strategy of premium customer service with multiple value-added components, a highly qualified and motivated sales force, highly-trained and experienced service technicians, an extensive breadth and mix of products and services, technology solutions allowing customers to easily access our inventory, accurate and timely delivery of product, strategic location of sales offices and fulfillment centers, and competitive pricing.

In the U.S. and Canadian dental supply market, we compete against Henry Schein, Inc., Benco Dental Supply Company, Burkhart Dental Supply and hundreds of distributors that operate on a regional or local level, or online. Also, as noted above, some manufacturers sell directly to end users. With regard to our dental practice

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management software, we compete against numerous offerings, including those from Henry Schein, Inc. and Carestream Dental.

In the U.S. and Canadian animal health supply market, our primary competitors are Cencora/MWI Animal Health and Covetrus, Inc. We also compete against a number of regional and local animal health distributors, some manufacturers that sell direct to end users and several alternative channel market providers that sell through digital platforms to production animal operators, animal health product retailers and veterinarians. Additionally, major U.S. online e-commerce retailers such as Amazon and Chewy.com have become licensed as veterinary mail order pharmacies, which enables them to offer pharmacy products directly to consumers in all 50 U.S. states. In the animal health practice management market, our primary competitors are IDEXX Laboratories, Inc. and Covetrus, Inc. We face significant competition in the animal health supply market in the U.K., where we compete on the basis of price and customer service with several large competitors, including Covetrus, Inc. and Cencora/MWI Animal Health. We also compete directly with pharmaceutical companies who sell certain products or services directly to the customer.

Successful distributors are increasingly providing value-added services in addition to the products they have traditionally provided. We believe that to remain competitive we must continue to add value to the distribution channel, while removing unnecessary costs associated with product movement. Significant price reductions by our competitors could result in competitive harm. Any of these competitive pressures may materially adversely affect our operating results.

Competitive Strengths

We have more than 140 years of experience in distributing products resulting in strong awareness of the Patterson brand. Although further information regarding these competitive strengths is set forth below in the discussion of our two strategic business units, our competitive strengths include:

•Broad product and service offerings at competitive prices. We sell approximately 200,000 SKUs to our customers, including many proprietary branded products. We believe that our proprietary branded products and our competitive pricing strategy have generated a loyal customer base that is confident in our brands. Our product offerings include consumables, equipment, software and various technologies. Our value-added services include practice management software, office design, equipment installation and maintenance, and financing.

•Focus on customer relationships and exceptional customer service. Our sales and marketing efforts are designed to establish and solidify customer relationships through personal visits by field sales representatives, interaction via phone with sales representatives, web-based activities including e-commerce and frequent direct marketing, emphasizing our broad product lines, competitive prices and ease of order placement. We focus on providing our customers with exceptional order fulfillment and a streamlined ordering process.

•Cost-effective purchasing and efficient distribution. We believe that cost-effective purchasing is a key element to maintaining and enhancing our position as a competitive-pricing provider of dental and animal health products. We strive to maintain optimal inventory levels to satisfy customer demand for prompt and complete order fulfillment through our distribution of products from strategically located fulfillment centers.

Business Strategy

Our objective is to continue to expand as a leading value-added distributor of dental and animal health products and services. To accomplish this, we will apply our competitive strengths in executing the following strategies:

•Emphasizing our differentiated, value-added, full-service capabilities. We are positioned to meet virtually all of the needs of dental practitioners, veterinarians, production animal operators and animal health product retailers by providing a broad range of consumable supplies, technology, equipment, software and value-added services. We believe our knowledgeable sales representatives can create customer intimacy and loyalty by providing an informational, consultative approach to our customers, linking them to the industries we serve. Our value-added strategy is further supported by our equipment specialists who offer consultation on design, equipment requirements and financing; our service technicians who perform equipment installation, maintenance and repair services; our business development professionals who provide business tools and educational programs to our customers; and our technology advisors who provide guidance on integrating technology solutions.

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•Using technology to enhance customer service. As part of our commitment to providing superior customer service, we offer our customers easy order placement. Although we offer computerized order entry systems that we believe help establish relationships with new customers and increase loyalty among existing customers, predominant platforms for ordering today include www.pattersondental.com, www.pattersonvet.com and www.animalhealthinternational.com. The use of these methods of ordering enables our sales representatives to spend more time with existing and prospective customers. Our Internet environment includes order entry, customer support for digital and our proprietary products, customer-loyalty program reports and services, and access to articles and manufacturers’ product information. We also provide real-time customer and sales information to our sales force, managers and vendors via the Internet. In addition, the Patterson Technology Center (“PTC”) differentiates Patterson from our competition by providing deep and thorough expertise in practice management software and other advanced equipment and technology clinical solutions. In addition to trouble-shooting through the PTC’s support center, customers can access various service capabilities offered by the PTC, including electronic claims and statement processing and system back-up capabilities.

•Continuing to improve operating efficiencies. We continue to implement programs designed to improve our operating efficiencies and allow for continued sales growth. This strategy includes our continuing investment in management information systems and consolidation and leveraging of fulfillment centers and sales branches between our operating segments. In addition, we have established shared sales branch offices in several locations.

•Growing through internal expansion and acquisitions. We intend to continue to grow by hiring sales representatives, hiring and training sales professionals, opening additional locations as needed, and acquiring other companies in order to enter new, or more deeply penetrate existing, markets, gain access to additional product lines, and expand our customer base. We believe both our operating segments are well positioned to take advantage of expected continued consolidation in our markets.

Dental Segment - Products, Services and Sources of Supply

Patterson Dental, one of the two largest distributors of dental products in North America, has operations in the U.S. and Canada. As a full-service, value-added supplier to over 100,000 dental practices, dental laboratories, educational institutions, and community health centers, Patterson Dental provides consumable products (including infection control, restorative materials, and instruments); basic and advanced technology and dental equipment; and innovative practice optimization solutions, including practice management software, e-commerce, revenue cycle management, patient engagement solutions, and clinical and patient education. Patterson Dental sells approximately 100,000 SKUs, of which approximately 3,500 are private-label products sold under the Patterson brand. Patterson Dental also offers customers a range of related services including software and design services, maintenance and repair, and equipment financing. Net sales and operating income were $2.5 billion and $210 million in fiscal 2024, respectively.

The following table sets forth the percentage of total sales by the principal categories of products and services offered to our dental segment customers:

	Fiscal Year Ended
	April 27, 2024		April 29, 2023		April 30, 2022
Consumable	57	%	55	%	57	%
Equipment	31		33		32
Value-added services and other	12		12		11
	100	%	100	%	100	%

Patterson Dental obtains products from hundreds of vendors, most of which are non-exclusive. While there is generally more than one source of supply for most of the categories of products we sell, the concentration of business with key suppliers is considerable, as consolidation has increased among manufacturers. In fiscal 2024, 2023 and 2022, Patterson Dental's top ten supply vendors accounted for approximately 60%, 58% and 56% of the total cost of sales, respectively. The top vendor accounted for 22%, 24% and 24% of the total cost of sales in fiscal 2024, 2023 and 2022, respectively.

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Animal Health Segment - Products, Services and Sources of Supply

Patterson Animal Health is a leading distributor of animal health products in the U.S., Canada and the U.K. We sell approximately 100,000 SKUs, of which approximately 2,000 are private-label. Products are sourced from over 2,000 manufacturers to over 50,000 customers in the highly fragmented animal health supply market. Products we distribute include pharmaceuticals, vaccines, parasiticides, biologicals, diagnostics, prescription and non-prescription diets, nutritionals, consumable supplies and equipment. We offer a private label portfolio of products to veterinarians, producers, and retailers through our Aspen, First Companion and Patterson Veterinary brands. We also provide a range of value-added services to our customers. Within our companion animal supply market, our principal customers are companion-pet and equine veterinarians, veterinary clinics, public and private institutions, and shelters. In our production animal supply market, our principal customers are large animal veterinarians, production animal operators and animal health product retailers. Consumer demand for alternative means of sourcing product through digital platforms is an evolving dynamic in our industry. We provide home delivery solutions to allow us to evolve with the market. Net sales and operating income were $4.1 billion and $139 million in fiscal 2024, respectively.

The following table sets forth the percentage of total sales by the principal categories of products and services offered to our animal health segment customers:

	Fiscal Year Ended
	April 27, 2024		April 29, 2023		April 30, 2022
Consumable	95	%	96	%	96	%
Equipment	3		3		3
Value-added services and other	2		1		1
	100	%	100	%	100	%

Patterson Animal Health obtains products from over 2,000 vendors globally. While Patterson Animal Health makes purchases from many vendors and there is generally more than one source of supply for most of the categories of products, the concentration of business with key vendors is considerable, as consolidation has increased among manufacturers. In fiscal 2024, 2023 and 2022, Patterson Animal Health’s top 10 manufacturers comprised approximately 66%, 66% and 66% of the total cost of sales, respectively, and the single largest supplier comprised approximately 24%, 24% and 23% in of the total cost of sales 2024, 2023 and 2022, respectively.

Sales, Marketing and Distribution

During fiscal 2024, we sold products or services to over 100,000 customers who made one or more purchases during the year. Our customers include dentists, laboratories, institutions, other healthcare professionals, veterinarians, other animal health professionals, production animal operators and animal health product retailers. No single customer accounted for more than 10% of sales during fiscal 2024, and we are not dependent on any single customer or geographic group of customers.

We have offices throughout the U.S. and Canada so that we can provide a presence in the market and decision-making near the customer. Patterson Animal Health also has a central office in the U.K. Our offices, or sales branches, are staffed with a complete complement of our capabilities, including sales, customer service and technical service personnel, as well as a local manager who has decision-making authority with regard to customer-related transactions and issues.

A primary component of our value-added approach is our professional sales and support organization. Due to the highly-fragmented nature of the markets we serve, we believe that our unique combination of field-based and call-center sales and support teams is critical to reaching potential customers and providing a differentiated customer experience. Our sales representatives play an indispensable and critical role in managing a practice’s supply chain and in introducing new products and technologies.

In the U.S. and Canada, customer service representatives in call centers work in tandem with our sales representatives, providing a dual coverage approach for individual customers. In addition to processing orders, customer service representatives are responsible for assisting customers with ordering, informing customers of monthly promotions, and responding to general inquiries. In the U.K., our customer service team is primarily responsible for handling customer inquiries and resolving issues.

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To assist our customers with their purchasing decisions, we provide a multi-touchpoint shopping experience. From print to digital, this seamless experience is inclusive of products and services information. Patterson offers online and in-print showcases of our expansive merchandise and equipment offerings, including digital imaging and computer-aided design and computer-aided manufacturing ("CAD/CAM") technologies, hand-held and similar instruments, sundries, office design, e-services, repair and support assistance, as well as financial services. We also promote select products and services through publications, including On Target and Advantage in the U.S. and Patterson Post in Canada in our Dental segment, and Insight in the U.S. and The Cube in the U.K. in our Animal Health segment. Additional direct marketing tools that we utilize include customer loyalty programs, social media, and participation in trade shows.

We believe that responsive delivery of quality supplies and equipment is key to customer satisfaction. We ship consumable supplies from our strategically located fulfillment centers in the U.S. and Canada. In the U.K., orders are accepted in a centralized fulfillment center and shipped nationwide to one of our depots located throughout the country at which pre-packed orders are sorted by route for delivery to customers. Orders for consumable supplies can be placed through our sales representatives, customer service representatives or electronically 24 hours a day, seven days a week. Rapid and accurate order fulfillment is another principal component of our value-added approach.

In order to assure the availability of our broad product lines for prompt delivery to customers, we must maintain sufficient inventories at our fulfillment centers. Purchasing of consumables and standard equipment is centralized, and our purchasing department uses a real-time perpetual inventory system to manage inventory levels. Our inventory consists mostly of consumable supply items and pharmaceutical products.

Impacts of COVID-19

The COVID-19 pandemic had a significant impact on our businesses in fiscal 2021 as we implemented cost reduction measures in response to closures and other steps taken by governmental authorities. In response, management adapted our business practices with respect to employee travel, employee work locations, and cancellation of physical participation in meetings, events and conferences. Management also took proactive steps with respect to our liquidity position. Within our Dental segment, supply chain disruptions and an increased demand for PPE initially resulted in back orders of PPE, causing substantial price increases. We had to prepay suppliers in order to obtain PPE for resale to our customers, and as manufacturing caught up to increased demand for PPE, prices dropped, impacting our margins and requiring us to write down certain inventory.

In our markets of the U.S., Canada, and the UK, restrictive measures have now been lifted and the World Health Organization declared an end to the COVID-19 pandemic. Concerns remain that our markets could see a resurgence of COVID-19 cases or the emergence of new wide-spread public health outbreaks, triggering additional impacts on our businesses. There is continued uncertainty around the duration and ultimate impact of COVID-19 and other global health concerns.

Refer to Part I, Item 1A, “Risk Factors,” and Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations,” within this Annual Report for further information on the impacts to our business and results of operations, our dividends, liquidity and debt arrangements, and associated risks and uncertainties.

Geographic Information

For information on revenues and long-lived assets of our segments by geographic area, see Note 14 to the Consolidated Financial Statements.

Seasonality and Other Factors Affecting Our Business and Quarterly Results

Our business in general is not seasonal; however, there are some products that typically sell more often during the winter or summer season. In any given month, unusual weather patterns (e.g., unusually hot or cold weather) could impact the sales volumes of these products, either positively or negatively. In addition, we experience fluctuations in quarterly earnings. As a result, we may fail to meet or exceed the expectations of securities analysts and investors, which could cause our stock price to decline. Quarterly results may be materially adversely affected by a variety of factors, including:

•timing and amount of sales and marketing expenditures;

•timing of pricing changes offered by our suppliers;

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•timing of the introduction of new products and services by our suppliers;

•changes in or availability of supplier contracts or rebate programs;

•supplier rebates based upon attaining certain growth goals;

•changes in the way suppliers introduce or deliver products to market;

•costs of developing new applications and services;

•our ability to correctly identify customer needs and preferences and predict future needs and preferences;

•uncertainties regarding potential significant breaches of data security or disruptions of our information technology systems;

•regulatory actions, or government regulation generally;

•loss of sales representatives;

•costs related to acquisitions and/or integrations of technologies or businesses;

•costs associated with our self-insured insurance programs;

•general market and economic conditions, as discussed in Item 1A: Risk Factors, including macro-economic conditions, increased fuel and energy costs, consumer confidence, as well as conditions specific to the supply and distribution industry and related industries;

•our success in establishing or maintaining business relationships;

•difficulties of manufacturers in developing and manufacturing products;

•product demand and availability, or product recalls by manufacturers;

•exposure to product liability and other claims in the event that the use of the products we sell results in injury;

•increases in shipping costs or service issues with our third-party shippers;

•fluctuations in the value of foreign currencies;

•goodwill impairment;

•changes in interest rates;

•restructuring costs;

•the adoption or repeal of legislation;

•changes in accounting principles; and

•litigation or regulatory judgments, fines, forfeitures, penalties, equitable remedies, expenses or settlements.

Governmental Regulation

We strive to be compliant with the applicable laws, regulations and guidance described below, and believe we have effective compliance programs and other controls in place to ensure substantial compliance. However, compliance is not guaranteed either now or in the future, as certain laws, regulations and guidance may be subject to varying and evolving interpretations that could affect our ability to comply, as well as future changes, additions and enforcement approaches, including political changes. Additionally, our policies and procedures may not always protect us from reckless or criminal acts committed by our employees or our agents. When we discover situations of non-compliance we seek to remedy them and bring the affected area back into compliance.

President Biden’s administration (the “Biden Administration”) has indicated that it will be more aggressive in its pursuit of alleged violations of law, and has revoked certain guidance that would have limited governmental use of informal agency guidance to pursue potential violations, and has stated that it is more prepared to pursue individuals for corporate law violations, including an aggressive approach to anti-corruption activities. Changes to applicable laws, regulations and guidance described below, as well as related administrative or judicial interpretations, may require us to update or revise our operations, services, marketing practices, and compliance programs and controls, and may impose additional and unforeseen costs on us, pose new or previously immaterial risks to us, or may otherwise have a material adverse effect on our business, results of operations and financial condition.

Federal, state and certain foreign governments have also increased enforcement activity in the health care sector, particularly in areas of fraud and abuse, anti-bribery and anti-corruption, controlled substances handling, medical device regulations and data privacy and security standards. Our businesses are generally subject to numerous laws and regulations that could impact our financial performance. Failure to comply with such laws or regulations could be punishable by criminal or civil sanctions, which could materially adversely affect our business.

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Operating, Security and Licensure Standards

Our dental and animal health supply businesses involve the distribution, importation, exportation, marketing and sale of, and third party payment for, pharmaceuticals and medical devices, and in this regard, we are subject to extensive local, state, federal and foreign governmental laws and regulations applicable to the distribution of pharmaceuticals and medical devices.

U.S. Federal Agencies

Certain of our businesses are required to register for permits and/or licenses with, and comply with operating and security standards and regulations of, the U.S. Food and Drug Administration (“FDA”), the U.S. Department of Agriculture (“USDA”), the Environmental Protection Agency (“EPA”), the Food Safety Inspection Service (“FSIS”), the U.S. Drug Enforcement Administration (“DEA”), the Federal Trade Commission (“FTC”), the U.S. Department of Justice ("DOJ"), the Occupational Safety and Health Administration ("OSHA"), and various state boards of pharmacy, state health departments and/or comparable state agencies as well as comparable foreign agencies, and certain accrediting bodies depending on the type of operations and location of product distribution, manufacturing or sale. These businesses include those that distribute, manufacture and/or repackage prescription pharmaceuticals and/or medical devices and/or HCT/P products (as defined below), own pharmacy operations, or install, maintain or repair equipment.

FDA – the regulatory body that is responsible for the regulation of animal-health pharmaceuticals in the U.S. is the Center for Veterinary Medicine (“CVM”) housed within the FDA.

•Generally, all animal-health pharmaceuticals are subject to pre-market review and must be shown to be safe, effective, and produced by a consistent method of manufacture as defined under the Federal Food, Drug and Cosmetic Act, as amended (the “FDC Act”).

•If the drug is for food-producing animals, potential consequences for humans are also considered.

•Animal supplements generally are not required to obtain pre-market approval from the CVM, although they may be treated as food. Any substance that is added to, or is expected to become a component of, animal food must be used in accordance with food-additive regulations, unless it is generally recognized as safe, under the conditions of its intended use. Alternatively, the FDA may consider animal supplements to be drugs. The FDA has agreed to exercise enforcement discretion for such supplements if each such supplement meets certain conditions.

•Additionally, dental and medical devices we sell in the U.S. are generally classified by the FDA into a category that renders them subject to the same controls that apply to all medical devices, including regulations regarding alternation, misbranding, notification, record-keeping and good manufacturing practices.

USDA – the regulatory body in the U.S. for veterinary biologics, such as vaccines.

•The USDA’s Center for Veterinary Biologics is responsible for the regulation of animal-health vaccines, including immunotherapeutics. Marketing of imported veterinary biological products in the U.S. requires a U.S. Veterinary Biological Product Permit. Veterinary biologics are subject to pre-market review and must be shown to be pure, safe, potent, and efficacious, as defined under the Virus Serum Toxin Act. The USDA requires post-licensing monitoring of these products.

EPA – the main regulatory body in the U.S. for veterinary pesticides is the EPA.

•The EPA’s Office of Pesticide Programs is responsible for the regulation of pesticide products applied to animals.

•Animal-health pesticides are subject to pre-market review and must not cause “unreasonable adverse effects to man or the environment” as stated in the Federal Insecticide, Fungicide, and Rodenticide Act.

•Within the U.S., pesticide products that are approved by the EPA must also be approved by individual state pesticide authorities before distribution in that state. Post-approval monitoring of products is required, with reports provided to the EPA and some state regulatory agencies.

FSIS - the public health agency within the USDA.

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•The FDA is authorized to determine the safety of substances (including “generally recognized as safe” substances, food additives and color additives), as well as prescribe their safe conditions of use. However, although the FDA has the responsibility for determining the safety of substances, the FSIS still retains, under the tenets of the Federal Meat Inspection Act and the Poultry Products Inspection Act and their implementing regulations, the authority to determine whether new substances and new uses of previously approved substances are suitable for use in meat and poultry products.

DEA – under the Controlled Substances Act, distributors of controlled substances are required to obtain, and renew annually, registrations for their facilities from the DEA.

•Distributors are also subject to other statutory and regulatory requirements relating to the storage, sale, marketing, handling, and distribution of such drugs, in accordance with the Controlled Substances Act and its implementing regulations, and these requirements have been subject to heightened enforcement activity in recent times.

•Distributors are subject to inspection by the DEA.

FTC – the FTC regulates advertising pursuant to its authority to prevent “unfair or deceptive acts or practices in or affecting commerce” under the Federal Trade Commission Act.

•Advertising and promotion of animal-health products that are not subject to approval by the CVM may be challenged by the FTC, as well as by state attorneys general and by consumers under state consumer protection laws.

•The FTC will find an advertisement to be deceptive if it contains a representation or omission of fact that is likely to mislead consumers acting reasonably under the circumstances, the representation or omission is material, and if the advertiser does not possess and rely upon a reasonable basis, such as competent and reliable evidence, substantiating the claim.

•The FTC may address unfair or deceptive advertising practices through either an administrative adjudication or judicial enforcement action, including preliminary or permanent injunction.

•The FTC may also seek consumer redress from the advertiser in instances of dishonest or fraudulent conduct.

DOJ – the DOJ is the regulatory body tasked with the enforcement of federal law and administration of justice.

OSHA – OSHA, part of the U.S. Department of Labor, is the U.S. regulatory body responsible for ensuring safe and healthy working conditions for employees.

State Registrations – states may require registration of animal-drug distributors and wholesalers.

•Additional requirements may apply when the product is also a controlled substance. States work closely with the Association of American Feed Control Officials (“AAFCO”) in their regulation of animal food.

•AAFCO’s annual official publication contains model animal and pet-food labeling regulations that states may adopt.

•This publication is treated deferentially by the federal and state government agencies that regulate animal food. Many states require registration or licensing of animal-food distributors.

•States may also review and approve animal-food labels prior to sale of the product in their state.

•Our buildings are also subject to local state, county and city fire codes.

We are also subject to foreign trade controls administered by certain U.S. government agencies, including the Bureau of Industry and Security within the Commerce Department, Customs and Border Protection within the Department of homeland Security and the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC).

The DEA, the FDA and state regulatory authorities have broad inspection and enforcement powers, including the ability to suspend or limit the distribution of products by our fulfillment centers, seize or order the recall of products and impose significant criminal, civil and administrative sanctions for violations of these laws and regulations.

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Foreign regulations subject us to similar foreign enforcement powers. Furthermore, compliance with legal requirements has required and may in the future require us to delay product release, sale or distribution, or institute voluntary recalls of, or other corrective action with respect to, products we sell, each of which could result in regulatory and enforcement actions, financial losses and potential reputational harm. Our customers are also subject to significant federal, state, local and foreign governmental regulation, which may affect our interactions with customers, including the design and functionality of the products we distribute.

Agencies Outside the U.S.

Since the U.K. formally left the EU on January 31, 2020, the Veterinary Medicines Directorate (“VMD”) became the main regulatory body in the U.K. responsible for regulating and controlling veterinary pharmaceuticals. The U.K. and the EU reached a trade deal in December 2020, which went into effect in May 2021. The agreement includes regulatory and customs cooperation mechanisms, as well as provisions supporting open and fair competition. The Northern Ireland protocol, which is part of the trade deal, requires that VMD follow EU rules in Northern Ireland. Laws applying to the rest of the U.K. could now diverge but currently remain largely aligned.

Health Canada is the Canadian regulatory body responsible for national health policy. Distributors of medical devices are subject to Health Canada’s regulations.

U.S. Laws

Among the U.S. federal laws applicable to us are the Controlled Substances Act, the FDC Act, Section 361 of the Public Health Service Act, as well as laws regulating the billing of and reimbursement from government programs, such as Medicare and Medicaid, and from commercial payers. We are also subject to comparable foreign regulations.

The FDC Act, the Controlled Substances Act, their implementing regulations, and similar foreign laws generally regulate the introduction, manufacture, advertising, marketing and promotion, sampling, pricing and reimbursement, labeling, packaging, procurement, storage, handling, returning or recalling, reporting, and distribution of, and record keeping for, pharmaceuticals and medical devices shipped in interstate commerce, and states may similarly regulate such activities within the state. Furthermore, Section 361 of the Public Health Service Act, which provides authority to prevent the introduction, transmission, or spread of communicable diseases, serves as the legal basis for the FDA’s regulation of human cells, tissues and cellular and tissue-based products, also known as “HCT/P products.”

The federal Drug Quality and Security Act of 2013 brought about significant changes with respect to pharmaceutical supply chain requirements. Title II of this measure, known as the Drug Supply Chain Security Act (“DSCSA”), was enacted in November 2013 and had a planned “phase in” schedule over a period of 10 years, resulting in a national electronic, interoperable system to identify and trace certain prescription drugs as they are distributed in the U.S., that went into effect on November 27, 2023. Those DSCSA requirements that were scheduled to change on November 27, 2023, and include requiring trading partners to provide, receive and maintain documentation about products and ownership only “electronically” (and not via paper) are now subject to a one-year “stabilization period” announced by the FDA through two guidance documents in late August 2023. The FDA is permitting the stabilization period to accommodate an additional year, until November 27, 2024, to allow trading partners to implement, troubleshoot and mature their electronic (versus paper) interoperable systems, during which time the FDA does not intend to take action to enforce the requirements for the interoperable, electronic, package level product tracing. Additionally, the FDA announced that it does not intend to take action to enforce the portion of the FDC Act with respect to drug product that is introduced in a transaction into commerce by the product’s manufacturer or repackager before November 27, 2024, and for subsequent transactions of such product through the product’s expiry. The FDA states this stabilization period is intended to avoid disruption to the supply chain, and ensure continued patient access to drug products as trading partners move towards full implementation of the DSCSA’s enhanced drug security requirements. The law’s track and trace requirements applicable to manufacturers, wholesalers, third-party logistics providers (e.g., trading partners), repackagers and dispensers (e.g., pharmacies) of prescription drugs took effect in January 2015, and, as stated, continues to be implemented. The DSCSA product tracing requirements replace the former FDA drug pedigree requirements and pre-empt certain state requirements that are inconsistent with, more stringent than, or in addition to, the DSCSA requirements.

The DSCSA also establishes certain requirements for the licensing and operation of prescription drug wholesalers and third party logistics providers (“3PLs”), and includes the eventual creation of national wholesaler and 3PL licenses in cases where states do not license such entities. The DSCSA requires that wholesalers and 3PLs distribute drugs in accordance with certain standards regarding the recordkeeping, storage and handling of

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prescription drugs. The DSCSA requires wholesalers and 3PLs to submit annual reports to the FDA, which include information regarding each state where the wholesaler or 3PL is licensed, the name and address of each facility and contact information. According to FDA guidance, states are pre-empted from imposing any licensing requirements that are inconsistent with, less stringent than, directly related to, or covered by the standards established by federal law in this area. Current state licensing requirements concerning wholesalers will remain in effect until the FDA issues new regulations as directed by the DSCSA. The FDA issued a proposed rule establishing wholesaler and 3PL national standards for licensing and other requirements in February 2022, but that rule has not yet been finalized.

The Food and Drug Administration Amendments Act of 2007 and the Food and Drug Administration Safety and Innovation Act of 2012 amended the FDC Act to require the FDA to promulgate regulations to implement a unique device identification (“UDI”) system for medical devices. The UDI rule phased in the implementation of the UDI regulations, generally beginning with the highest-risk devices (i.e., Class III medical devices) and ending with the lowest-risk devices. Most compliance dates were reached as of September 24, 2018, with a final set of requirements for low-risk devices being reached on September 24, 2022, which completed the phase in. However, in May 2021, the FDA issued an enforcement policy stating that it does not intend to object to the use of legacy identification numbers on device labels and packages for finished devices manufactured and labeled prior to September 24, 2023. The UDI regulations require “labelers” to include unique device identifiers (“UDIs”), with a content and format prescribed by the FDA and issued under a system operated by an FDA-accredited issuing agency, on the labels and packages of medical devices (including, but not limited to, certain software that qualifies as a medical device under FDA rules), and to directly mark certain devices with UDIs. The UDI regulations also require labelers to submit certain information concerning UDI-labeled devices to the FDA, much of which information is publicly available on an FDA database, the Global Unique Device Identification Database. On July 22, 2022, the FDA posted the final guidance regarding the Global Unique Device Identification Database called Unique Device Identification Policy Regarding Compliance Dates for Class I and Unclassified Devices, Direct Marketing, and Global Unique Device Identification Database Requirements for Certain Devices. The UDI regulations and subsequent FDA guidance regarding the UDI requirements provide for certain exceptions, alternatives and time extensions. For example, the UDI regulations include a general exception for Class I devices exempt from the Quality System Regulation (other than record-keeping and complaint files). Regulated labelers include entities such as device manufacturers, repackagers, reprocessors and relabelers that cause a device’s label to be applied or modified, with the intent that the device will be commercially distributed without any subsequent replacement or modification of the label, and include certain of our businesses. In addition, our animal health business is subject to the Pasteurized Milk Ordinance, which is a set of minimum standards established by the FDA for the regulation of the production, processing, and packaging of Grade A Milk.

As a distributor of controlled substances, we are required, under the Controlled Substances Act, to obtain and renew annually registrations for our facilities from the DEA permitting us to handle controlled substances. We are also subject to other statutory and regulatory requirements relating to the storage, sale, marketing, handling and distribution of such drugs, in accordance with the Controlled Substances Act and its implementing regulations, and these requirements have been subject to heightened enforcement activity in recent times. Non-controlled substances can also become subject to these controls. For example, law enforcement agencies are pressing for xylazine, which is an FDA-approved prescription veterinary tranquilizer found in certain analgesic products we distribute, to be listed as a federal controlled substance and several states have already done so, which measures are likely to increase our cost of distributing such products. There have also been increasing efforts by various levels of government globally to regulate the pharmaceutical distribution system in order to prevent the introduction of counterfeit, adulterated or misbranded pharmaceuticals into the distribution system.

In addition, Section 301 of the National Organ Transplant Act, and a number of comparable state laws, impose civil and/or criminal penalties for the transfer of human organs, as defined in the regulations, for valuable consideration, while generally permitting payments for the reasonable costs incurred in their procurement, processing, storage and distribution. We are also subject to foreign government regulation of such products.

Certain of our businesses are subject to various additional federal, state, local and foreign laws and regulations, including with respect to the sale, transportation, importation, storage, handling and disposal of hazardous or potentially hazardous substances; “forever chemicals” such as per- and polyfluoroalkyl substances; and safe working conditions. In addition, certain of our businesses must operate in compliance with a variety of burdensome and complex billing and record keeping requirements in order to substantiate claims for payment under federal, state and commercial healthcare reimbursement programs. In addition, the Toxic Substances Control Act (TSCA) is a law administered by the EPA through which the EPA evaluates potential risks from new and existing chemicals and acts to address any unreasonable risks chemicals may have on human health and the environment. The TSCA

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applies to any business that manufactures, imports, processes, distributes, uses, or disposes of a chemical substance or mixture in commerce.

Proposition 65 (“Prop 65”), also known as the Safe Drinking Water and Toxic Enforcement Act of 1986, protects California’s drinking water sources from contamination by chemicals known to cause cancer, birth defects or other reproductive harm. Prop 65 requires businesses to inform Californians about exposures to such chemicals, which can be found in products purchased, in homes and workplaces, or released into the environment. Prop 65 also prohibits California businesses from knowingly discharging significant amounts of listed chemicals into sources of drinking water.

Certain of our businesses also maintain contracts with governmental agencies and are subject to certain regulatory requirements specific to government contractors.

The Animal Medicinal Drug Use Clarification Act of 1994 (“AMDUCA”) permits veterinarians to prescribe extralabel uses of certain approved new animal drugs and approved human drugs for animals under certain conditions. Extralabel use refers to the use of an approved drug in a manner that is not in accordance with approved label directions. The veterinarians to whom we distribute products generally are subject to the AMDUCA and its implementing regulations.

As disclosed in our prior periodic reports, our subsidiary Animal Health International was the subject of an investigation by the U.S. Attorney’s Office for the Western District of Virginia, which resulted in Animal Health International pleading guilty to a strict-liability misdemeanor offense in connection with its failure to comply with federal law relating to the sales of prescription animal health products, and a total criminal fine and forfeiture of $52.8 million. In addition, Animal Health International and Patterson entered into a non-prosecution agreement for other non-compliant licensing, dispensing, distribution and related sales processes disclosed during the investigation and committed to undertake additional compliance program enhancements and provide compliance certifications through our reporting for fiscal 2023. This matter may continue to divert management's attention and cause us to suffer reputational harm. We also may be subject to other fines or penalties, equitable remedies (including but not limited to the suspension, revocation or non-renewal of licenses) and litigation. The occurrence of any of these events could adversely affect our business, results of operations and financial condition.

Other Regulations

Veterinary compounding pharmacies must comply with state and federal laws that govern the relationship between pharmacies and referral sources. The U.S. Federal Anti-Kickback Statute (“AKS”) imposes criminal penalties against individuals and entities that pay or receive remuneration in return for referring an individual for service paid under a federal health care program. Veterinary compounding pharmacies have historically avoided scrutiny under the AKS because no federal programs are involved in veterinary compounding funding. However, most states have enacted statutes and regulations that mirror the AKS and, in some cases, are even broader than the AKS.

Various states have enacted business and insurance regulations prohibiting referral arrangements that result in the offer or acceptance of any rebate, refund, commission, discount or other consideration as compensation or inducement for referring patients, clients or customers. These regulations often encompass all health-care related professions, including pharmacies and veterinary practices.

Additionally, the promotion of regulated animal health products is controlled by regulations in many countries. These rules generally restrict advertising and promotion to those claims and uses that have been reviewed and endorsed by the applicable agency.

Our buildings are generally subject to the standards established by the National Fire Protection Association, a nonprofit organization established to maintain standards and codes for fire, electrical, and related building safety.

Antitrust and Consumer Protection

The U.S. federal government, most U.S. states and many foreign countries have antitrust laws that prohibit certain types of conduct deemed to be anti-competitive, as well as consumer protection laws that seek to protect consumers from improper business practices. At the U.S. federal level, the Federal Trade Commission oversees enforcement of these types of laws, and states have similar government agencies. Violations of antitrust or consumer protection laws may result in various sanctions, including criminal and civil penalties. Private plaintiffs also may bring, and have brought, civil lawsuits against us in the U.S. for alleged antitrust violations, including claims for treble damages. The Biden Administration has indicated increased antitrust enforcement and has been

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more aggressive in enforcement actions, including investigations and challenging restrictive contractual terms that it believes harm workers and competition.

The U.K. Competition and Markets Authority is the principal competition regulator in the U.K. and promotes competitive business markets by addressing unfair competitive behavior.

Health Care Fraud

Certain of our businesses are subject to federal and state (and similar foreign) health care fraud and abuse, referral and reimbursement laws and regulations with respect to their operations. These laws and regulations govern different interactions, including but not limited to, those:

•prohibiting improper influence of or payments to healthcare professionals and government officials;

•setting out rules for when and how to engage healthcare professionals as vendors;

•requiring price reporting;

•requiring marketing of products within regulatory approval (i.e., on label);

•regulating the import and export of products;

•affecting the operation of our facilities and our distribution of products; and

•requiring disclosure of payments to healthcare professionals and entities.

Some of these laws, referred to as “false claims laws,” prohibit the submission or causing the submission of false or fraudulent claims for reimbursement to federal, state and other health care payers and programs. Other laws, referred to as “anti-kickback laws,” prohibit soliciting, offering, receiving or paying remuneration in order to induce the referral of a patient or ordering, purchasing, leasing or arranging for or recommending ordering, purchasing or leasing, of items or services that are paid for by federal, state and other health care payers and programs. Several states apply their false claims and anti-kickback laws to all payers, including goods and services paid for directly by consumers. Certain additional state and federal laws, such as the federal Physician Self-Referral Law, commonly known as the “Stark Law,” prohibit physicians and other health care professionals from referring a patient to an entity with which the physician (or family member) has a financial relationship, for the furnishing of certain designated health services (for example, durable medical equipment and medical supplies), unless an exception applies. Violations of anti-kickback laws or the Stark Law may be enforced as violations of the federal False Claims Act.

The fraud and abuse laws and regulations have been subject to heightened enforcement activity over the past few years, and significant enforcement activity has been the result of “relators,” who serve as whistleblowers by filing complaints in the name of the U.S. (and, if applicable, particular states) under applicable false claim laws. Under the federal False Claims Act, relators can be entitled to receive up to 30% of the total recoveries. Penalties under fraud and abuse laws may be severe, including treble damages and substantial civil penalties under the federal False Claims Act, as well as potential loss of licenses and the ability to participate in federal and state health care programs, criminal penalties, or imposition of a corporate integrity agreement or corporate compliance monitor which could have a material adverse effect on our business. Also, these measures may be interpreted or applied by a prosecutorial, regulatory or judicial authority in a manner that could require us to make changes in our operations or incur substantial defense and settlement expenses. Even unsuccessful challenges by regulatory authorities or private relators could result in reputational harm and the incurring of substantial costs. Most states have adopted similar state false claims laws, and these state laws have their own penalties which may be in addition to federal False Claims Act penalties, as well as other fraud and abuse laws. With respect to measures of this type, the U.S. government (among others) has expressed concerns about financial relationships between suppliers on the one hand and dentists and other healthcare professionals on the other. As a result, we regularly review and revise our marketing practices as necessary to facilitate compliance. While we believe that we are substantially compliant with applicable fraud and abuse laws and regulations, and have adequate compliance programs and controls in place to ensure substantial compliance, we cannot predict whether changes in applicable law, or interpretation of laws, or changes in our services or marketing practices in response to changes in applicable law or interpretation of laws, or failure to comply with applicable law, could have a material adverse effect on our business.

Affordable Care Act and Other Insurance Reform

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The U.S. Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (as amended, the “ACA”) increased federal oversight of private health insurance plans and included a number of provisions designed to reduce Medicare expenditures and the cost of health care generally, to reduce fraud and abuse, and to provide access to increased health coverage. The ACA also materially expanded the number of individuals in the U.S. with health insurance. The ACA has faced frequent legal challenges, including litigation seeking to invalidate and Congressional action seeking to repeal some of or all of the law or the manner in which it has been implemented. In 2012, the U.S. Supreme Court, in upholding the constitutionality of the ACA and its individual mandate provision requiring that people buy health insurance or else face a penalty, simultaneously limited ACA provisions requiring Medicaid expansion, making such expansion a state-by-state decision. In addition, one of the major political parties in the U.S. remains committed to seeking the ACA's legislative repeal, but legislative efforts to do so have previously failed to pass both chambers of Congress. Under President Trump's administration, a number of administrative actions were taken to materially weaken the ACA, including, without limitation, by permitting the use of less robust plans with lower coverage and eliminating "premium support" for insurers providing policies under the ACA. The Tax Cuts and Jobs Act enacted in 2017 (the "Tax Act"), which contains a broad range of tax reform provisions that impact the individual and corporate tax rates, international tax provisions, income tax add back provisions and deductions, also effectively repealed the ACA's individual mandate by zeroing out the penalty for non-compliance. An ACA lawsuit decided by the federal Fifth Circuit Court of Appeals found the individual mandate to be unconstitutional, and returned the case to the District Court for the Northern District of Texas for consideration of whether the remainder of the ACA could survive the excision of the individual mandate. The Fifth Circuit's decision was appealed to the U.S. Supreme Court. The Supreme Court issued a decision on June 17, 2021. Without reaching the merits of the case, the Supreme Court held that the plaintiffs in the case did not have standing to challenge the ACA. Any outcomes of future cases that change the ACA, in addition to future legislation, regulation, guidance and/or executive orders that do the same, could have a significant impact on the U.S. healthcare industry. For instance, the American Rescue Plan Act of 2021 enhanced premium tax credits, which has resulted in an expansion of the number of people covered under the ACA. These changes were time-limited, with some enhancements in place for 2021 only and others available through the end of 2022. The continued uncertain status of the ACA affects our ability to plan.

An ACA provision, generally referred to as the Physician Payments Sunshine Act or Open Payments Program (the “Sunshine Act”), has imposed reporting and disclosure requirements for drug and device manufacturers and distributors with regard to payments or other transfers of value made to certain practitioners (including physicians, dentists and teaching hospitals), and for such manufacturers and distributors and for group purchasing organizations, with regard to certain ownership interests held by covered recipients in the reporting entity. The Centers for Medicare and Medicaid Services (“CMS”) publishes information from these reports on a publicly available website, including amounts transferred and physician, dentist, teaching hospital and non-practitioner identities.

The Sunshine Act pre-empts similar state reporting laws, although we or our subsidiaries may also be required to report under certain state transparency laws that address circumstances not covered by the Sunshine Act, and some of these state laws, as well as the federal law, can be unclear. We are also subject to foreign regulations requiring transparency of certain interactions between suppliers and their customers. In the U.S., government actions to seek to increase health-related price transparency may also affect our business. Our compliance with these rules imposes additional costs on us.

In addition, recently there has been increased scrutiny on drug pricing and concurrent efforts to control or reduce drug costs by Congress, the President, executive branch agencies and various states, including that several related bills have been introduced at the federal level. Such legislation, if enacted, could have the potential to impose additional costs on our business.

Initiatives sponsored by government agencies, legislative bodies, and the private sector to limit the growth of healthcare expenses generally are ongoing in markets where we do business. It is not possible to predict at this time the long-term impact of such cost containment measures on our future business.

Additionally, the regulation of public and private health insurance and benefit programs can affect our business, and scrutiny of the healthcare delivery and reimbursement systems in the U.S., including those related to the importation and reimportation of certain drugs from foreign markets, can be expected to continue at both the state and federal levels. This process may result in additional legislation and/or regulation governing the production, delivery, or pricing of pharmaceutical products and other healthcare services. In addition, changes in the interpretations of existing regulations may result in significant additional compliance costs or the discontinuation of our ability to

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continue to operate certain of our distribution centers, which may have a material adverse effect on our business, results of operations and financial condition.

As a result of political, economic and regulatory influences, the health care distribution industry in the U.S. is under intense scrutiny and subject to fundamental changes. We cannot predict what further reform proposals, if any, will be adopted, when they may be adopted, or what impact they may have on us.

Regulated Software; Electronic Health Records

The FDA has become increasingly active in addressing the regulation of computer software and digital health products intended for use in health care settings. The 21st Century Cures Act (the “Cures Act”), signed into law in December 2016, among other things, amended the medical device definition to exclude certain software from FDA regulation, including clinical decision support software that meets certain criteria. In September 2019, the FDA issued a guidance document describing the impact of the Cures Act on existing software policies. Concurrently, the FDA issued draft guidance describing the FDA’s approach to clinical decision support software. On September 28, 2022, the FDA issued final guidance that made several changes to the draft guidance and that provides a more restrictive interpretation of exempt clinical decision support software. Certain of our software and related products support practice management, and it is possible that the FDA or foreign government authorities could determine that one or more of our products is a medical device, which could subject us or one or more of our businesses to substantial additional requirements with respect to these products.

In addition, certain of our practice management products include electronic information technology systems that store and process personal health, clinical, financial and other sensitive information of individuals. These information technology systems may be vulnerable to breakdown, wrongful intrusions, data breaches and malicious attack, which could require us to expend significant resources to eliminate these problems and address related security concerns, and could involve claims against us by private parties and/or governmental agencies. For example, we are directly or indirectly subject to numerous and evolving federal, state, local and foreign laws and regulations that protect the privacy and security of such information, such as the privacy and security provisions of the federal Health Insurance Portability and Accountability Act of 1996, as amended, and implementing regulations (“HIPAA”), the Controlling the Assault of Non-Solicited Pornography and Marketing Act, the Telephone Consumer Protection Act of 1991, Section 5 of the Federal Trade Commission Act, the California Privacy Act (“CCPA”), and the California Privacy Rights Act (“CPRA”) that became effective on January 1, 2023. Additionally, nearly all other states have passed, proposed, or are considering comprehensive privacy legislation, and privacy bills have been proposed at the federal level that may result in additional legal requirements that impact our business. Laws and regulations relating to privacy and data protections are continually evolving and subject to potentially differing interpretations. These requirements may not be harmonized, may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another or may conflict with other rules or our practices. Our businesses’ failure to comply with these laws and regulations could expose us to breach of control claims, substantial fines, penalties and other liabilities and expenses, costs for remediation and harm to our reputation. Also, evolving laws and regulations in this area could restrict the ability of our customers to obtain, use or disseminate patient information, or could require us to incur significant additional costs to re-design our products to reflect these legal requirements, which could have a material adverse effect on our operations.

Other health information standards, such as regulations under HIPAA, establish standards regarding electronic health data transmissions and transaction code set rules for specific electronic transactions, such as transactions involving claims submissions to third party payers. Certain of our electronic practice management products must meet these requirements. Failure to abide by these and other electronic health data transmission standards could expose us to breach of contract claims, substantial fines, penalties and other liabilities and expenses, costs for remediation and harm to our reputation.

The Health Information Technology for Economic and Clinical Health Act (“HITECH Act”) strengthened federal privacy and security provisions governing protected health information. Among other things, the HITECH Act expanded certain aspects of the HIPAA privacy and security rules, imposed new notification requirements related to health data security breaches, broadened the rights of the U.S. Department of Health and Human Services (“HHS”) to enforce HIPAA, and directed HHS to publish more specific security standards. In January 2013, the Office for Civil Rights of HHS published the HIPAA omnibus final rule (“HIPAA Final Rule”), which amended certain aspects of the HIPAA privacy, security, and enforcement rules pursuant to the HITECH Act, extending certain HIPAA obligations to business associates and their subcontractors. Certain components of our business act as “business associates” within the meaning of HIPAA and are subject to these additional obligations under the HIPAA Final Rule.

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Also, the European Parliament and the Council of the European Union adopted the pan-European General Data Protection Regulation (“GDPR”), effective from May 2018, which increased privacy rights for individuals (“Data Subjects”), including individuals who are our customers, suppliers, and employees. The GDPR extended the scope of responsibilities for data controllers and data processors, and generally imposes increased requirements and potential penalties on companies that are either established in the EU and process personal data of Data Subjects (regardless the Data Subject location), or that are not established in the EU but that offer goods or services to Data Subjects in the EU or monitor their behavior in the EU. Noncompliance can result in penalties of up to the greater of EUR 20 million, or 4% of global company revenues, and Data Subjects may seek damages. Individual member states may impose additional requirements and penalties regarding certain limited matters such as employee personal data. With respect to the personal data it protects, the GDPR requires, among other things, controller accountability, consents from Data Subjects or another acceptable legal basis to process the personal data, notification within 72 hours of a personal data breach where required, data integrity and security, and fairness and transparency regarding the storage, use or other processing of the personal data. The GDPR also provides rights to Data Subjects relating notably to information, access, rectification and erasure of the personal data and the right to object to the processing.

In the U.S., the CCPA, which increases the privacy protections afforded California residents, became effective in January 2020. The CCPA generally requires companies, such as us, to institute additional protections regarding the collection, use and disclosure of certain personal information of California residents. Compliance with the obligations imposed by the CCPA depends in part on how particular regulators interpret and apply them. Regulations were released in August 2020, there remains some uncertainty about how the CCPA will be interpreted by the courts and enforced by the regulators. If we fail to comply with the CCPA or if regulators assert that we have failed to comply with the CCPA, we may be subject to certain fines or other penalties and litigation, any of which may negatively impact our reputation, require us to expend significant resources, and harm our business. Furthermore, California voters approved the CPRA in November 2020, which amends and expands the CCPA, including by providing consumers with additional rights with respect to their personal information, and creating a new state agency, the California Privacy Protection Agency, to enforce the CCPA and the CPRA. The CPRA came into effect on January 1, 2023, applying to information collected by business on or after January 1, 2022.

As noted above, other states, as well as the federal government, have increasingly considered the adoption of similarly expansive personal privacy laws, backed by significant civil penalties for non-compliance. While we believe we have substantially compliant programs and controls in place to comply with the GDPR, CCPA, CPRA and state law requirements, our compliance with data privacy and cybersecurity laws is likely to impose additional costs on us, and we cannot predict whether the interpretations of the requirements, or changes in our practices in response to new requirements or interpretations of the requirements, could have a material adverse effect on our business.

We also sell products and services that health care providers, such as dentists, use to store and manage patient dental records. These customers, and we, are subject to laws, regulations and industry standards, such as HIPAA and the Payment Card Industry Data Security Standards, which require the protection of the privacy and security of those records, and our products may also be used as part of these customers’ comprehensive data security programs, including in connection with their efforts to comply with applicable privacy and security laws. Perceived or actual security vulnerabilities in our products or services, or the perceived or actual failure by us or our customers who use our products or services to comply with applicable legal or contractual data privacy or security requirements, may not only cause us significant reputational harm, but may also lead to claims against us by our customers and/or governmental agencies and involve substantial fines, penalties and other liabilities and expenses and costs for remediation.

Various federal initiatives involve the adoption and use by health care providers of certain electronic health care records systems and processes. Additionally, effective September 1, 2023, the Office of the Inspector General (“OIG”) for HHS issued a final rule implementing civil money penalties for information blocking as established by the Cures Act. OIG incorporated regulations published by the Office of the National Coordinator for Health Information Technology of HHS as the basis for enforcing information blocking penalties. Each information blocking violation carries up to a $1 million penalty. Moreover, in order to satisfy our customers, and comply with evolving legal requirements, our products may need to incorporate increasingly complex functionality, such as with respect to reporting and information blocking. Although we believe we are positioned to accomplish this, the effort may involve increased costs, and our failure to implement product modifications, or otherwise satisfy applicable standards, could have a material adverse effect on our business.

E-Commerce

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Electronic commerce solutions have become an integral part of traditional health care supply and distribution relationships. Our distribution business is characterized by rapid technological developments and intense competition. The continuing advancement of online commerce requires us to cost-effectively adapt to changing technologies, to enhance existing services and to develop and introduce a variety of new services to address the changing demands of consumers and our customers on a timely basis, particularly in response to competitive offerings.

Through our proprietary, technologically based suite of products, we offer customers a variety of competitive alternatives. We believe that our tradition of reliable service, our name recognition and large customer base built on solid customer relationships, position us well to participate in this significant aspect of the distribution business. We continue to explore ways and means to improve and expand our online presence and capabilities, including our online commerce offerings and our use of various social media outlets.

International Transactions

U.S. and foreign import and export laws and regulations require us to abide by certain standards relating to the importation and exportation of products. We also are subject to certain U.S. and foreign laws and regulations concerning the conduct of our foreign operations, including the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and other anti-bribery laws and laws pertaining to the accuracy of our internal books and records, as well as other types of foreign requirements similar to those imposed in the U.S. These laws and regulations have been the subject of increasing enforcement activity globally in recent years.

The Harmonized Tariff Schedule of the United States sets out tariff rates and statistical categories for merchandise imported into the United States. The Harmonized Tariff Schedule is based on the international Harmonized System, which is the global system of nomenclature applied to most world trade in goods. Generally, goods that we import are subject to the Harmonized Tariff Schedule.

Canada’s Forced and Child Labour in Supply Chains Act, which became effective in January 2024, seeks to prevent forced and child labor by requiring companies to release board-approved reports detailing efforts to prevent and mitigate forced and child labor. The Forced and Child Labour in Supply Chains Act requires supply chain diligence and imposes reporting obligations on certain of our subsidiaries.

There can be no assurance that laws and regulations that impact our business or laws and regulations as they apply to our customers’ practices will not have a material adverse effect on our business. As a result of political, economic and regulatory influences, the health care distribution industry in the U.S. is under intense scrutiny and subject to fundamental changes. We cannot predict what further reform proposals, if any, will be adopted, when they may be adopted, or what impact they may have on us.

See “Item 1A. Risk Factors” for a discussion of additional burdens, risks and regulatory developments that may affect our business results of operations and financial condition.

Proprietary Rights

We hold trademarks relating to the “Patterson®” name and logo, as well as certain other trademarks. Our U.S. trademark registrations have 10-year terms, and may be renewed for additional 10-year terms. We intend to protect our trademarks to the fullest extent practicable.

Human Capital

People are the foundation of who we are. Only with talented employees can we run our business to the highest standard and fulfill our goals for our customers. Our goal is to attract and retain the right people to work at Patterson. We support our people with meaningful benefits, a great culture and career opportunities with the potential for advancement.

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Our culture is driven by our purpose, vision, and values:

As of April 27, 2024, we had approximately 7,600 full-time employees, of which approximately 6,200 were employed in the U.S.

While overall ESG matters are overseen by the Governance and Nominating Committee, the Compensation and Human Capital Committee plays a role in ESG matters related to our human capital practices. Our chief human resources officer leads our talent attraction, diversity and development programs and reports progress – including on opportunities and recruiting metrics – to the Compensation and Human Capital Committee. One recent highlight was the appointment of an inaugural director of diversity, equity and inclusion.

As a people-first organization, the overall well-being of our team is important to us. Our total rewards philosophy is to provide market competitive pay and a range of benefit choices designed to meet our employees’ diverse needs, reward individual and business performance, and drive shareholder value. We support our employees’ health with medical, pharmacy, dental and vision plans, mental health services and wellness programs to encourage healthy lifestyles, and parental leave for new parents. We support our employees’ financial well-being with matching 401(k) contributions, life insurance, company-paid short-term disability insurance, an employee stock purchase plan (ESPP) and personal finance educational tools. In addition, regular employee engagement surveys help us gain insights about how to support talent attraction, engagement and retention.

We believe that a diverse and inclusive workforce strengthens our company in ways that align with our purpose, vision and values. At Patterson, we seek to foster an environment where individuals from all backgrounds feel valued and respected. At a high level, our Code of Conduct expresses our commitment to inclusivity and emphasizes the importance of a workplace that is free of discrimination, harassment, bullying and physical and verbal abuse. We aim to enhance our workplace diversity, equity and inclusion efforts through leadership development programs, employee affinity groups, strategic partnerships, and inclusive policies and processes. Additionally, our talent recruitment program includes seeking to consider candidate pools that include (among other things) individuals from diverse racial and ethnic backgrounds, military personnel (both current and inactive) and early-career employees and students. We also seek to promote equity, inclusion and economic empowerment within our supply chain. By partnering with businesses owned by individuals from diverse racial and ethnic backgrounds, women, veterans, LGBTQ+ individuals and people with disabilities, we believe we can help foster a more diverse and inclusive business ecosystem.

As of April 27, 2024, 41.9% of our U.S. workforce and 41.2% of our management was female. In addition, as of that date, 25.1% of our U.S. workforce and 16.2% of our management was ethnically diverse.

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To support the progression and career development of our employees, we offer training and development opportunities to build our employees’ expertise in leadership, inclusive management and creating business solutions. Such opportunities include on-demand courses, facilitator-led programs, mentoring relationships, tuition reimbursement and leadership development programs. We have implemented targeted development programs for senior leadership as well as emerging leaders in the organization. During fiscal year 2024, we achieved approximately 90% participation (representing over 800 individuals) in our enterprise-wide “Inclusive Leader” program. In addition, we conduct performance reviews for employees every year, achieving an over 90% completion rate in fiscal year 2024.

Keeping employees safe and healthy is essential to putting people first, and we strive to continue to improve our efforts. Our Environmental Health and Safety (EHS) system is designed to manage risks and maintain focus on employee health and safety and includes compliance audits, workplace safety communications and training. In particular, our EHS team promotes employee safety and environmental awareness through foundational systems and activities, such as safety training courses.

Environment

We recognize that environmental issues can impact our business operations, employees and communities and strive to continually track and reduce our environmental impact. Our management strategy leverages internal systems, processes, and tools, as well as third-party expertise, to operate our environmental programs in a planned and documented manner, with a focus on continuous improvement. As a distributor, we work closely with our supply chain partners in an effort to reduce our joint impact on the environment by, for example, minimizing materials used to ship product to us, such as by using thinner, right-sized boxes, and maximizing efficiencies in the packaging of products we ship to our customers, which can help minimize our environmental impact.

Available Information

We make available free of charge through our website, www.pattersoncompanies.com, our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, statements of beneficial ownership of securities on Forms 3, 4 and 5 and amendments to these reports and statements filed or furnished pursuant to Section 13(a) and Section 16 of the Securities Exchange Act of 1934 as soon as reasonably practicable after such materials are electronically filed with, or furnished to, the U.S. Securities and Exchange Commission, or SEC. This material may be accessed by visiting the Investor Relations section of our website.

In addition, the SEC maintains an Internet website at www.sec.gov, where the above information can be viewed.

Information relating to our corporate governance, including our Code of Conduct, and information concerning executive officers, Board of Directors and Board committees, and transactions in Patterson securities by directors and officers, is available on or through our website, www.pattersoncompanies.com in the Investor Relations section.

Information maintained on the website is not being included as part of this Annual Report on Form 10-K.

Item 1A. RISK FACTORS

We believe that the following risks could have a material adverse impact on our business, reputation, financial results, financial condition and/or the trading price of our common stock. In addition, our business operations could be affected by factors that are not presently known to us or that we currently consider not to be material to our operations, so you should not consider the risks disclosed in this section to necessarily represent a complete statement of all risks and uncertainties. The order in which these factors appear does not necessarily reflect their relative importance or priority.

COMPANY RISKS

We are dependent on our suppliers and exposed to the risks of their businesses, because we generally do not manufacture the products we sell.

We obtain substantially all of the products we distribute from third parties. If a supplier is unable to deliver product in a timely and efficient manner, whether due to financial difficulty, natural disaster, pandemic, the failure to comply with applicable government requirements or other reasons, we could experience lost sales. We have experienced, and may continue to experience, disruptions in the supply chains for third-party manufacturing of certain products we distribute, including delays in obtaining or inability to obtain raw materials, inflated price of product inputs, disruptions in operations of logistics service providers and resulting delays in shipments. Customers may be

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unwillingness to accept such delays. The suppliers on which we rely also may be adversely affected by a serious breach of their quality assurance or quality control procedures, deterioration of their quality image, impairment of customer or consumer relationships or failure to adequately protect the relevance of brands, and related litigation, all of which could impair our ability to obtain product in a timely and efficient manner.

Our cost of goods also may be adversely impacted by unanticipated price increases due to factors such as inflation, including wage inflation, or to supply restrictions beyond our control or the control of our suppliers. If current suppliers fail to supply sufficient goods or materials to us on a timely basis, or at all, we could experience inventory shortages and disruptions in our distribution of products.

In addition, there is considerable concentration within our animal health and dental businesses with a few key suppliers. A portion of the products we distribute is sourced, directly or indirectly, from countries outside the U.S. including China. Our ability or the ability of our suppliers to successfully source materials may be adversely affected by changes in U.S. laws, including trade tariffs on the importation of certain products from China as a result trade tensions between the U.S. and China. We may experience a disruption in the flow of imported product from China, or an increase in the cost of those goods attributable to increased tariffs, restrictions on trade, or other changes in laws and policies governing foreign trade. In addition, political or financial instability, currency exchange rates, labor unrest, pandemic or other events could slow distribution activities and adversely affect foreign trade beyond our control.

We generally do not have long-term contracts with our suppliers, so they may be discontinued or changed abruptly. Changes in the structure of purchasing relationships might include changing from a “buy/sell” to an agency relationship (or the reverse), or changing the method in which products are taken to market, including the possibility of manufacturers creating or expanding direct sales forces or otherwise reducing their reliance on third-party distribution channels. We compete with certain manufacturers, including some of our own suppliers, that sell directly to customers as well as to wholesale distributors and online businesses that compete with price transparency. An extended interruption in the supply of products would have an adverse effect on our results of operations, and a reduction in our role as a value-added service provider would result in reduced margins on product sales.

Disruption to our distribution capabilities, including service issues with our third-party shippers, could materially adversely affect our results.

Weather, natural disaster, fire, terrorism, pandemic, strikes, civil unrest, geopolitical events or other reasons could impair our ability to distribute products and conduct our business. If we are unable to manage effectively such events if they occur, there could be an adverse effect on our business, results of operations and financial condition. Similarly, increases in service costs or service issues with our third-party shippers, including strikes or other service interruptions, could cause our operating expenses to rise and adversely affect our ability to deliver products on a timely basis. We ship almost all of our orders through third-party delivery services, and often times bear the cost of shipment. We have recently experienced increases in the cost of shipping, and it is possible that such cost increases could be material in the future. Our ability to provide same-day shipping and next-day delivery is an integral component of our business strategy.

Customer retention and business development depend heavily on our relationships with our sales representatives and service technicians, who interact directly with our customers, and the technological products and services we offer.

The inability to attract or retain qualified employees, particularly sales representatives and service technicians who relate directly with our customers, or our inability to build or maintain relationships with customers in the dental and animal health markets, may have an adverse effect on our business. These individuals develop relationships with our customers that could be damaged if these employees are not retained. We face intense competition for the hiring of these professionals, we have experienced and are likely to continue to experience challenges in recruiting those with technical expertise, and many professionals in the field that may otherwise be attractive candidates for us to hire may be bound by restrictive covenants with our competitors. Any failure on our part to hire, train and retain a sufficient number of qualified professionals would damage our business.

Due to generational and other trends in the dental and animal health industries, our customer base is increasingly interested in having the latest technologies to manage their business. In order to effectively offer solutions that keep pace with rapidly changing technologies and customer expectations, we must acquire, develop or offer new technology products and solutions. If we fail to accurately anticipate and meet our customers’ needs through the acquisition, development or distribution of new products, technologies and service offerings, if we fail to adequately protect our intellectual property rights, if the products we distribute and services we provide are not widely accepted

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or if current or future offerings fail to meet applicable regulatory requirements, we could lose customers to our competitors. Unanticipated safety, quality or efficacy concerns can arise with respect to the products we distribute, whether or not scientifically or clinically supported, which can lead to product recalls, withdrawals or suspended or declining sales, as well as product liability and other claims. In addition, if technology investments do not achieve the intended results, we may write-off the investments, and we face the risk of claims from system users that the systems failed to produce the intended result or negatively affected the operation of our customers’ businesses. Any such claims could be expensive and time-consuming to defend, cause us to lose customers and associated revenue, divert management’s attention and resources, or require us to pay damages.

Sales of private label products entail additional risks, including the risk that such sales could adversely affect our relationships with suppliers.

We distribute certain private label products that are manufactured by our suppliers and are available exclusively from us. Beyond the risks that normally accompany the distribution of products, our sourcing, marketing and selling of private label products subject us to incremental risks, including but not limited to potential product liability risks, mandatory or voluntary product recalls, potential supply chain and distribution chain disruptions, and potential intellectual property infringement risks. In addition, an increase in the sales of our private label products may negatively affect our sales of products owned by our suppliers which, consequently, could adversely impact certain of our supplier relationships. Our ability to locate qualified, economically stable suppliers who satisfy our requirements, and to acquire sufficient products in a timely and effective manner, is critical to ensuring, among other things, that customer confidence is not diminished. As a distribution company, any failure to develop sourcing relationships with a broad and deep supplier base could adversely affect our financial performance and erode customer loyalty. In addition, we are exposed to the risk that our competitors or our customers may introduce their own private label, generic, or low-cost products that compete with our products at lower price points. In the animal health industry, sales of generic products are an increasing percentage of overall animal health sales in certain regions, and generic competition may expand further as a result of changes in industry dynamics, such as channel expansion, customer consolidation, increase in the availability and use of pet insurance and the potential for generic competition by established animal health businesses. Such products could capture significant market share or decrease market prices overall, eroding our sales and margins.

Changes in supplier rebates or other purchasing incentives could negatively affect our business.

The terms on which we purchase or sell products from many suppliers may entitle us to receive a rebate or other purchasing incentive based on the attainment of certain growth goals. Suppliers may reduce or eliminate rebates or incentives offered under their programs, or increase the growth goals or other conditions we must meet to earn rebates or incentives to levels that we cannot achieve. Increased competition either from generic or equivalent branded products could result in reduced margins and failure to earn rebates or incentives that are conditioned upon achievement of growth goals. Also, decreases in the market prices of products that we sell could cause customers to demand lower sales prices from us. These price reductions could further reduce our margins and profitability on sales with respect to the lower-priced products. Additionally, factors outside of our control, such as customer preferences, consolidation of suppliers or supply issues, can have a material impact on our ability to achieve the growth goals established by our suppliers, which may reduce the amount of rebates or incentives we receive.

The products we sell are subject to market and technological obsolescence and our customers’ willingness to replace existing equipment depends upon new product introductions by manufacturers, which are out of our control.

The products we distribute are subject to technological obsolescence outside of our control. We depend on suppliers to regularly develop and pour marketing dollars into the launch of new and enhanced products. For example, during fiscal 2023, one of our primary suppliers of dental equipment did not release any significant product introductions and, as a consequence, customers who may have replaced existing equipment with new equipment, did not do so. If our customers discontinue purchasing a given product, we might have to record expense related to the diminution in value of inventories we have in stock, and depending on the magnitude, that expense could adversely impact our operating results.

Our failure to successfully innovate and develop new and enhanced software and e-services products could negatively affect our business.

Our growth depends on our investment in the development of software and e-services products and the market traction achieved by such offerings. If we fail to accurately predict future customer needs and preferences or fail to

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produce viable software and e-services products, we may invest heavily in product commercialization that does not lead to significant sales, which would adversely affect our profitability. Even if we successfully innovate and develop new and enhanced software and e-services products, we may incur substantial costs in doing so, and our profitability may suffer. Furthermore, our software and e-services products also may contain undetected errors or bugs when introduced, or as new versions are released. Any such defects may result in increased expenses and could adversely affect our reputation and our relationships with the customers using such products. We do not have any patents on our software or e-services products, and rely upon copyright, trademark and trade secret laws, as well as contractual and common-law protections. We cannot provide assurance that such legal protections will be available, adequate or enforceable in a timely manner to protect our software or e-services products. Our software and e-services products may fail to remain competitive and may fail to anticipate market demands for functionality. In addition, the cost to replace defective products may not generate commensurate benefit.

Patterson’s continued success depends on positive perceptions of Patterson’s reputation.

Customers do business with Patterson and employees choose Patterson as a place of employment due to the reputation that Patterson has built over many years. To be successful in the future, Patterson must continue to preserve, grow and leverage the value of Patterson’s brand. Reputational value is based in large part on perceptions of subjective qualities. Even an isolated incident, or the aggregate effect of individually insignificant incidents, can erode trust and confidence, particularly if they result in adverse publicity, governmental investigations or litigation, and as a result, could tarnish Patterson’s brand. In addition, maintaining consistent product quality, competitive pricing, and availability of our private label products is essential to developing and maintaining customer loyalty and brand awareness. These products often have higher margins than national brand products. If one or more of these brands experience a loss of consumer acceptance or confidence, our sales and gross margin could be adversely affected.

Illicit human use of pharmaceutical products we distribute could adversely affect human health and safety, our reputation and our business.

The pharmaceutical products our animal health business sells are approved for use under specific circumstances in specific species. Such products could, if misused or abused by humans, adversely affect human health and safety, our reputation and our business. For instance, xylazine, which is an FDA-approved prescription veterinary tranquilizer found in certain analgesic products we distribute, has been found to be increasingly and illicitly used, knowingly or unknowingly, by humans – frequently in combination with other drugs. As a result, xylazine has become the subject of regulatory, public health, legal and political focus. Law enforcement agencies are pressing for xylazine to be listed as a federal controlled substance and several states have already done so, which measures are likely to increase the cost of distribution of such products. Illicit use of such products may increase the risk of regulatory enforcement and civil litigation.

Risks inherent in acquisitions and dispositions could offset the anticipated benefits, and we may face difficulty in efficiently and effectively integrating acquired businesses.

As a part of our business strategy, we acquire and dispose of assets and businesses in the ordinary course. Maintaining or improving our price-to-earnings ratio, of which the market price of our common stock is commonly thought to be a function, requires effective execution of our growth strategy, including achieving inorganic earnings per share growth. Acquisitions and dispositions can involve a number of risks and challenges, any of which could cause significant operating inefficiencies and adversely affect our growth and profitability, and may not result in the expected benefits.

Acquisition risks and challenges include underperformance relative to our expectations and the price paid for the acquisition; unanticipated demands on our management and operational resources; difficulty in integrating personnel, operations and systems; retention of customers of the combined businesses; assumption of contingent liabilities; acquisition-related earnings charges; and acquisition-related cybersecurity risks. Our ability to continue to make acquisitions will depend upon our success in identifying suitable targets, which requires substantial judgment in assessing their values, strengths, weaknesses, liabilities and potential profitability, as well as the availability of suitable candidates at acceptable prices, whether restrictions are imposed by anti-trust or other regulations, and compliance with the terms and conditions of our credit agreement. Additionally, when we decide to sell assets or a business, we may encounter difficulty in finding buyers or executing alternative exit strategies on acceptable terms in a timely manner, which could delay the accomplishment of our strategic objectives. Alternatively, we may dispose of assets or a business at a price or on terms that are less than we had anticipated. Dispositions may also involve continued financial involvement in a divested business, such as through continuing equity ownership, transition

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service agreements, guarantees, indemnities or other current or contingent financial obligations. Under these arrangements, performance by the acquired or divested business, or other conditions outside our control, could affect our future financial results.

As we operate through two strategic business units, we consolidate the distribution, information technology, human resources, financial and other administrative functions of those business units jointly to meet their needs while addressing distinctions in the individual markets of those segments. We may not be able to do so effectively and efficiently. In addition, if we acquire technology, manufacturing or other businesses ancillary to our core distribution operations, any such newly acquired business may require the investment of additional capital and significant involvement of our senior management to integrate such business with our operations, which could place a strain on our management, other personnel, resources and systems. The acquisition of businesses in which we lack operational and market experience may be more difficult, time-consuming or costly than expected. Further, we may not ultimately strengthen our competitive position or achieve desired synergies as a result of our acquisitions, and they could be viewed negatively by our customers, securities analysts and investors.

Turnover or loss of key personnel or highly skilled employees, including executive officers, could disrupt our operations and any inability to attract and retain personnel could harm our business.

Our future success depends partly on the continued service of our highly qualified and well-trained key personnel, including executive officers. Any unplanned turnover or our failure to develop an adequate succession plan for key positions could reduce our institutional knowledge base and erode our competitive advantage. While our Board of Directors and management actively monitor our succession plans and processes for our executive leadership team, our business could be adversely impacted if we lose key personnel unexpectedly. Competition for senior management is intense and we may not be successful in attracting and retaining key personnel. In addition, reduced employment pools have contributed to increased labor shortages and employee turnover within our organization. These trends have led to, and could in the future lead to, increased costs, such as labor inflation and increased overtime to meet demand.

Risks generally associated with information systems, software products and cybersecurity attacks could adversely affect our results of operations.

We rely on information systems in our business to obtain, rapidly process, analyze and store customer, product, supplier, and employee data to conduct our business, including to, among other things: maintain and manage systems to facilitate the purchase and distribution of inventory items from numerous distribution centers; receive, process and ship orders on a timely basis; manage accurate billing and collections for our customers; process payments to suppliers; provide products and services that maintain certain of our customers’ electronic records; and maintain and manage corporate human resources, compensation and payroll systems. Certain of our information systems store sensitive personal and financial information, such as information related to our employees and our third-party business partners, that is confidential and in some cases subject to privacy laws. Our information systems are vulnerable to natural disasters, power losses, computer viruses, telecommunication failures, cybersecurity threats, and other problems. From time to time, we have had to address non-material security incidents and we expect to experience security incidents in the future. Despite our efforts to ensure the integrity of our systems, as cybersecurity threats evolve and become more difficult to detect and successfully defend against, one or more cybersecurity threats or other events that could impact the security, reliability and availability of our systems might defeat the measures that we or our vendors take to anticipate, detect, avoid or mitigate such threats. In addition, hardware, software or applications developed internally, acquired through acquisitions or procured from third parties may contain defects in design or manufacture or other problems that could unexpectedly compromise information security. We may also incur substantial costs as we update, integrate and enhance our cybersecurity defense systems, and those of acquired entities, to meet evolving challenges.

We take steps designed to detect, mitigate, and remediate vulnerabilities in our information security systems (such as our hardware and/or software, including that of third parties with whom we work), but we may not be able to detect, mitigate, and remediate all such vulnerabilities. For example, we have identified certain vulnerabilities in our information systems, and we are taking steps designed to mitigate the risks associated with known vulnerabilities. Such steps may include increasing monitoring of systems and applying standardized enterprise solutions, controls and process. Despite our efforts, there can be no assurance that these vulnerability mitigation measures will be effective. Moreover, we may also experience delays in developing and deploying remedial measures and patches designed to address any identified vulnerabilities. Vulnerabilities could be exploited and result in a security incident.

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Data breaches and any unauthorized access or disclosure of our information could compromise our intellectual property and expose sensitive business information. Cybersecurity attacks or other similar events that could impact the security, reliability and availability of our systems could also cause us to incur significant remediation costs, disrupt key business operations, adversely impact our financial accounting and reporting of results of operations, divert attention of management, and adversely impact our results of operation. For example, in October 2023, a cybersecurity attack on Henry Schein, Inc., one of our key competitors, disrupted its key business operations, adversely impacted its financial results for the fourth quarter and full year 2023, diverted the attention of its management, caused it to incur significant remediation costs, and resulted in litigation.

Further, our suppliers, our customers, including purchasers of our software products, and other market participants are similarly subject to information system and cybersecurity risk, and a material disruption in their business could result in reduced revenue for us. For example, in February 2024, Change Healthcare, a subsidiary of UnitedHealth Group and the largest clearinghouse for medical claims in the U.S., was the subject of a cyberattack that required it to take offline its computer systems that handle electronic payments and insurance claims. This outage negatively impacted our business in the fourth quarter of fiscal 2024, may continue to affect our business, and has generated litigation. Similar cybersecurity events that disrupt the healthcare system upon which our business relies could adversely affect our business if such disruption is widespread and continues for an extended period of time.

In addition, compliance with evolving privacy and information security laws and standards may result in significant additional expense due to increased investment in technology and the development of new operational processes. We could be subject to liability if we fail to comply with these laws and standards, fail to protect information, or fail to respond appropriately to an incident or misuse of information, including use of information for unauthorized marketing purposes. Cybersecurity attacks in particular are becoming more sophisticated and include, but are not limited to, malicious software, attempts to gain unauthorized access to data, and other electronic security breaches that could lead to disruptions in critical systems, disruption of our customers’ operations, loss or damage to our data delivery systems, corruption of data, and increased costs to prevent, respond to or mitigate cybersecurity events. Cybersecurity attacks against our IT systems or third-party providers’ IT systems, such as cloud-based systems, could result in exposure of confidential information, the modification of critical data, and/or the failure of critical operations. Furthermore, due to geopolitical tensions and remote and hybrid working conditions, the risk of cyber-attacks may be elevated. With artificial intelligence (AI) tools, threat actors may have additional tools to automate breaches or persistent attacks, evade detection or generate sophisticated phishing emails. Our use of AI and the use of AI by our business partners may lead to novel cybersecurity risks. In addition, certain cyber incidents, such as advanced persistent threats, may remain undetected for an extended period. Our technologies, systems and networks, and those of our customers, suppliers and business partners, may become the target of cyberattacks or information security breaches.

Our information systems or the software products we sell may fail for extended period of time. Despite any precautions we take, damage from fire, floods, hurricanes, power loss, telecommunications failures, computer viruses, break-ins and similar events at our various computer facilities could result in interruptions in the flow of data to our servers. We may need to expend additional resources in the future to continue to protect against, or to address problems caused by, any business interruptions or data security breaches. A security breach and/or perceived security vulnerabilities in our information systems, products or services could also cause significant loss of business and reputational harm, and actual or perceived vulnerabilities may lead to claims against us by our customers and/or governmental agencies.

Our growing use of AI systems to automate processes and analyze data poses inherent risks.

We have and are continuing to incorporate AI, including machine learning, in certain of our internal operations and may in the future incorporate AI into certain of our products and services, with the intent to enhance their operation and effectiveness. For example, we have incorporated machine-learning into certain of our software to provide AI analysis of dental patient images designed to enhance a dentist’s own analysis. Flaws, biases or malfunctions in these systems could lead to operational disruptions, data loss, or erroneous decision-making, impacting our operations, financial condition and reputation. Ethical and legal challenges may arise, including biases or discrimination in AI outcomes, non-compliance with data protection regulations, and lack of transparency. The legal and regulatory landscape and industry standards surrounding AI technologies is rapidly evolving and uncertain, and compliance may impose significant operational costs and may limit our ability to develop, deploy or use AI technologies. Furthermore, the deployment of AI systems could expose us to increased cybersecurity threats, such as data breaches and unauthorized access leading to financial losses, legal liabilities, and reputational damage. We also face competitive risks if we fail to adopt AI or other machine-learning technologies in a timely manner.

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Wide-spread public health concerns have, and may in the future, adversely affect our animal health and dental businesses, as we experienced with the COVID-19 pandemic.

Given our dependence on the willingness of dental patients and veterinary customers to seek elective care, our results of operations and financial condition may be negatively impacted by the effects of disease outbreaks, epidemics, pandemics, and similar wide-spread public health concerns. For example, global health concerns relating to the COVID-19 pandemic adversely impacted consumer spending and business spending habits, interrupted operation of industries that use the products we distribute, caused inventory write-downs of personal protective equipment due to demand fluctuations, reduced consumer willingness to be in public, modified business practices leading to cybersecurity risks, and interrupted the manufacturing and distribution of products we distribute, each of which adversely impacted our financial results and the financial results of our customers, suppliers and business partners. We may again experience adverse impacts as a result of the global economic impact of other wide-spread public health concerns, including any recession that may occur in the future, any prolonged period of economic slowdown, or reluctance of customers to seek care. These factors may also exacerbate the effects of other risks we face.

Our business and operations are subject to risks related to climate change.

The long-term effects of global climate change present both physical risks (such as extreme weather conditions or rising sea levels) and transition risks (such as regulatory or technology changes), which are expected to be widespread and unpredictable. These changes could over time affect, for example, the availability and cost of products, commodities and energy (including utilities), which in turn may impact our ability to procure goods or services required for the operation of our business at the quantities and levels we require. In addition, certain of our operations and facilities are in locations that may be impacted by the physical risks of climate change, and we face the risk of losses incurred as a result of physical damage to distribution or fulfillment centers of our third-party suppliers, loss or spoilage of inventory and business interruption caused by such events. Insurance may not be available or cost effective for the coverage limits needed. In addition, the increased focus of federal, state, and local governments on sustainability may result in new legislation or regulations and customer requirements that could negatively affect us as we may incur additional costs or be required to make changes to our operations in order to comply with any new regulations or customer requirements.

New legal or regulatory requirements have and may in the future be enacted to prevent, mitigate, or adapt to the implications of a changing climate and its effects on the environment. These regulations, which may differ across jurisdictions, could result in our businesses being subject to new or expanded carbon pricing or taxes, increased compliance costs, restrictions on greenhouse gas emissions, investment in new technologies, increased greenhouse gas emission disclosure (including costs resulting from mandatory or voluntary reporting, diligence or disclosure) and transparency, recurring investments in data gathering and reporting systems, upgrades of facilities to meet new building codes, and the redesign of utility systems, which could increase our operating costs, including the cost of electricity and energy. Our supply chain would likely be subject to these same transitional risks and would likely pass along any increased manufacturing costs to us. In addition, we are subject to expanding mandatory and voluntary reporting, diligence and disclosure requirements, including the recently enacted legislation in California requiring reporting of greenhouse gas emissions and climate risk, and potentially the SEC’s proposed climate-related reporting requirements and similar regulatory requirements in other jurisdictions. These evolving regulatory requirements are likely to result in increased costs and complexities of compliance in order to collect, measure and report on the relevant climate-related information.

Our credit agreements contain restrictive covenants and additional limits and our other debt instruments contain cross-default provisions, which limit our business and financing activities.

The covenants under our credit agreements impose restrictions on our business and financing activities, subject to certain exceptions or the consent of our lenders, including, among other things, limits on our ability to incur additional debt, create liens, enter into certain merger, acquisition and divestiture transactions, pay dividends and engage in transactions with affiliates. The credit agreements contain certain customary affirmative covenants, including requirements that we maintain a maximum consolidated leverage ratio and a minimum consolidated interest coverage ratio, pursuant to which we may be affected by changes in interest rates, and customary events of default. The terms of agreements governing debt that we may incur in the future may also contain similar covenants.

Our ability to comply with these covenants may be adversely affected by events beyond our control, including economic, financial and industry conditions. A covenant breach may result in an event of default, which could allow

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our lenders to terminate the commitments under the credit agreement, declare all amounts outstanding under the credit agreement, together with accrued interest, to be immediately due and payable, and exercise other rights and remedies, and, through cross-default provisions, would entitle our other lenders to accelerate their loans. If this occurs, we may not be able to refinance the accelerated indebtedness on acceptable terms, or at all, or otherwise repay the accelerated indebtedness.

In addition, borrowings under certain of our debt instruments are made at variable rates of interest and expose us to interest rate volatility. If interest rates increase again in the future, as they did in 2023, our debt service obligations on variable rate indebtedness would again increase.

Our governing documents, other documents to which we are a party, and Minnesota law may discourage takeovers and business combinations that our shareholders might prefer.

Anti-takeover provisions of our articles of incorporation, bylaws, and Minnesota law could diminish the opportunity for shareholders to participate in acquisition proposals at a price above the then-current market price of our common stock. For example, while we have no present plans to issue any preferred stock, our Board of Directors, without further shareholder approval, may issue up to approximately 30 million shares of undesignated preferred stock and fix the powers, preferences, rights and limitations of such class or series, which could adversely affect the voting power of our common stock. Further, as a Minnesota corporation, we are subject to provisions of the Minnesota Business Corporation Act regarding “control share acquisitions” and “business combinations.” We may also, in the future, consider adopting additional anti-takeover measures. In addition, certain equity plans predating our Omnibus Incentive Plan provide for acceleration of awards thereunder upon a change in control or other events of acceleration, as defined in those plans. The foregoing, and any future anti-takeover measures adopted by us, may, in certain circumstances, delay, deter or prevent takeover attempts and other changes in control of our company.

INDUSTRY RISKS

The dental and animal health supply markets are highly competitive, and we may not be able to compete successfully.

Our competitors include national, regional and local full-service distributors, mail-order distributors and Internet-based businesses. Some of our competitors have greater resources than we do, or operate through different sales and distribution models that could allow them to compete more successfully. Our failure to compete effectively and/or pricing pressures resulting from such competition may adversely impact our business, and our expansion into new markets may result in greater-than-expected risks, liabilities and expenses. In addition, most of the products we distribute are available from multiple sources, and our customers tend to have relationships with several different distributors who can fulfill their orders. If any of our competitors are more successful with respect to any key competitive factor such as technological advances or low-cost business models with the ability to operate at high gross margins, our sales and profitability could be adversely affected. Increased competition from any supplier of dental or animal health products or services could adversely impact our financial results. Additional competitive pressure could arise from, among other things, limited demand growth or a significant number of additional competitive products or services being introduced into a particular market, the emergence of new competitors, the unavailability of products, price reductions by competitors, price transparency (which is further promoted by price aggregators), and the ability of competitors to capitalize on their economies of scale. Manufacturers also could increase their efforts to sell directly to end-users and thereby eliminate or reduce the role of distributors. These suppliers could sell their products at lower prices and maintain a higher gross margin on product sales than we can. In addition, our ability to deliver market growth is challenged by an animal health product mix that is weighted toward lower growth, lower margin parts of the value chain.

The dental and animal health supply markets are consolidating, including vertical integration in the production animal market, and we may not be able to compete successfully.

Consolidation has increased among dental and animal health manufacturers and distributors, which could cause the industry to become more competitive as greater economies of scale are achieved by competitors, or as competitors with lower cost business models are able to offer lower prices but retain high gross margin. In addition, the vertical integration we have seen and expect to continue within the production animal business limits the number of purchasing decision-makers we can impact, which could also affect our margins. We also face pricing pressure from branded pharmaceutical manufacturers which could adversely affect our sales and profitability. We may be unable to anticipate and effectively respond to competitive change, and our failure to compete effectively may limit and/or reduce our revenue, profitability and cash flow.

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The formation or expansion of GPOs, provider networks and buying groups may place us at a competitive disadvantage.

In recent years there has also been a trend towards consolidation in the industries that buy the products and services we distribute, including dental practices, veterinary practices and animal producers, and the formation of group purchasing organizations (GPOs), provider networks and buying groups, including dental support organizations (DSOs), designed to leverage volume discounts. The formation or expansion of GPOs, provider networks and buying groups including DSOs may shift purchasing decisions to entities or persons with whom we do not have a historical relationship, and may threaten our ability to compete effectively, which could in turn negatively impact our financial results. In addition, such organizations may establish direct relationships with manufacturers, thereby eliminating or reducing the services historically provided by distributors. We expect further expansion of such groups in the future. Further, as a full-service distributor with business service capabilities, we cannot guarantee that we will be able to successfully compete with price-oriented distribution models that more readily enable the pricing typically demanded by those with significant purchasing power.

Our animal health segment is exposed to the risks of the production animal business, including changes in consumer demand, the cyclical livestock market, weather conditions and the availability of natural resources, and other factors outside our control, as well as risks of the companion animal business, including the possibility of disease adversely affecting the pet population.

Demand for our production animal health products can be negatively influenced by factors including: weather conditions (including those that may be related to climate change), varying weather patterns and weather-related pressures from pests; changes in consumer preferences away from food animal products, including increased promotions and publicity for food products containing plant-based protein; supply chain disruptions including due to cyberattack, or actions by animal rights activists; and outbreaks of diseases affecting animals, any of which could reduce herd sizes or affect consumer preferences, and regulations related to food-producing animals. Reductions in herd size would ultimately decrease the demand for the products we distribute, including micro feed ingredients, animal health products, and dairy sanitation solutions, as well as the development and implementation of systems for feed, health, information and production animal management. In recent years, outbreaks of various diseases, including African Swine Fever, avian influenza, foot-and-mouth disease, bovine spongiform encephalopathy (otherwise known as BSE or mad cow disease) and porcine epidemic diarrhea virus (otherwise known as PEDv), have impacted the animal health business. The discovery of additional cases of any of these, or new diseases may result in additional restrictions on animal proteins, reduced herd sizes, or reduced demand for animal protein.

There has been consumer concern and consumer activism with respect to additives (including, without limitation, antibiotics and growth promotants) used in the production of animal products, including growing consumer sentiment for proteins and dairy products produced without the use of antibiotics or other products intended to increase animal production. These concerns have resulted in increased regulation and changing market demand. If there is an increased public perception that consumption of food derived from animals that utilize additives we distribute poses a risk to human health, there may be a further decline in the production of those food products and, in turn, our sales of those products. Furthermore, regulatory restrictions and bans could result in the removal from market of products in these categories, which would adversely affect our sales. In addition, the market for our animal health products could be negatively impacted by the introduction and/or market acceptance of newly-developed or alternative products, which could include products perceived as “healthy” or “holistic.”

Farm animal producers depend on the availability of natural resources, including large supplies of fresh water. Their animals’ health and their ability to operate could be adversely affected if they experience a shortage of fresh water due to human population growth or floods, droughts or other weather conditions. In the event of adverse weather conditions or a shortage of fresh water, veterinarians or farm animal producers may purchase less of our products. Further, heat waves may cause stress in animals and lead to increased vulnerability to disease, reduced fertility rates and reduced milk production. Droughts may threaten pasture and feed supplies by reducing the quality and amount of forage available to grazing livestock, while climate change may increase the prevalence of parasites and diseases that affect farm animals.

Veterinary hospitals and practitioners depend on visits from the animals under their care. Veterinarians’ patient volume and ability to operate could be adversely affected if there is a reduction in the companion animal population, such as due to disease outbreak. Furthermore, the industry is facing a veterinarian and veterinary technician labor shortage and new regulations permitting non-economic and punitive damages for pet owners in case of wrongful death or injury.

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Our dental segment is exposed to the risks of the health care industry, including changes in demand due to political, economic and regulatory influences, and other factors outside our control.

Aspects of the dental market are impacted by price competition that is driven in part by the consolidation of dental practices, innovation and product advancements, and the price sensitivity of customers. Many dental participants are consolidating to create larger and more integrated provider systems with greater market power. We expect additional consolidation in the dental industry in the future. As consolidation accelerates, the economies of scale of our customers may grow. If a customer experiences sizable growth following consolidation, it may determine that it no longer needs to rely on us and may reduce its demand for our products and services. Some of these large and growing customers may choose to contract directly with suppliers for certain supply categories. In addition, as customers consolidate, these providers may try to use their market power to negotiate price reductions for our products and services. Finally, consolidation may also result in the acquisition or future development by our customers of products and services that compete with our products and services.

Increased OTC and e-commerce sales of products we sell could adversely affect our business.

Dental and companion animal health products are becoming increasingly available to consumers at competitive prices from sources other than traditional health care supply and distribution sources, including human health product pharmacies, Internet pharmacies, big-box retailers and other online e-commerce solutions, and consumers are increasingly seeking such alternative sources of supply. Dental products are readily available from major U.S. online e-commerce retailers such as Amazon and Chewy.com that are licensed as veterinary mail order pharmacies, which enables them to offer pharmacy products directly to consumers in all 50 U.S. states. If federal regulations were to permit veterinarian-client-patient relationships to be established virtually, which is a focus of lobbyists that appears to be gaining traction, we may face additional competitive pressure. Even where prescriptions must be written by a veterinarian, companion animal owners may shift to these services for home delivery. In addition, companion animal owners may substitute human health products for animal-health products if they deem human health products to be acceptable, lower-cost alternatives. Furthermore, decreased emphasis on veterinary visits, and increased consumer choice through e-commerce retailers could reduce demand for veterinarian-based services. The continued advancement of online e-commerce by third parties will require us to cost-effectively adapt to changing technologies, to enhance existing services and to differentiate our business (including with additional value-added services) to address changing demands of consumers and our customers on a timely basis. We may be unable to anticipate and effectively respond to shifts in consumer traffic patterns and direct-to-consumer buying trends.

LITIGATION AND REGULATORY RISKS

We are subject to a variety of litigation and governmental inquiries and investigations.

We are subject to a variety of litigation incidental to our business, including product liability claims, intellectual property claims, employment claims, commercial disputes, putative class actions under the California Labor Code Private Attorneys General Act, and other matters arising out of the ordinary course of our business, including securities litigation. From time to time we are named as a defendant in cases as a result of our distribution of products. Additionally, purchasers of private-label products may seek recourse directly from us, rather than the ultimate product manufacturer, for product-related claims. Another potential risk we face in the distribution of products is liability resulting from counterfeit or tainted products infiltrating the supply chain. In addition, some of the products that we transport and sell are considered hazardous materials. The improper handling of such materials or accidents involving the transportation of such materials could subject us to liability or legal action that could harm our reputation. From time to time, we also receive and respond to governmental inquiries and investigations, including subpoenas for the production of documents. Defending against such claims, and responding to such governmental inquiries and investigations, may divert our resources and management’s attention over lengthy periods of time, may be expensive, and may require that we pay substantial monetary awards or settlements, pay fines or penalties, or become subject to equitable remedies (including but not limited to the revocation of or non-renewal of licenses). We may be subject to claims in excess of available insurance or not covered by insurance or indemnification agreements, or claims that result in significant adverse publicity. Furthermore, the outcome of litigation is inherently uncertain.

If we fail to comply with laws and regulations relating to health care fraud or other laws and regulations, we could suffer penalties or be required to make significant changes to our operations.

We are subject to federal and state (and similar foreign) health care fraud and abuse, referral and reimbursement laws and regulations, including those referred to as “false claims laws” and “anti-kickback” laws. Health care fraud

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measures may implicate, for example, our relationships with pharmaceutical manufacturers, our pricing and incentive programs for physician and dental practices, and our practice management products that offer billing-related functionality. Failure to comply with fraud and abuse laws and regulations could result in significant civil and criminal penalties and costs, including treble damages and substantial civil penalties under the federal False Claims Act as well as potential loss of licenses and the ability to participate in federal and state health care programs, criminal penalties, or imposition of a corporate compliance monitor. Also, these measures may be interpreted or applied by a prosecutorial, regulatory or judicial authority in a manner that could require us to make changes in our operations or incur substantial defense and settlement expenses. Even unsuccessful challenges by regulatory authorities or private regulators could result in reputational harm and the incurring of substantial costs. Most states have adopted similar state false claims laws, and these state laws have their own penalties which may be in addition to federal False Claims Act penalties, as well as other fraud and abuse laws. In addition, many of these laws are vague or indefinite and have not been interpreted by the courts, and have been subject to frequent modification and varied interpretation by prosecutorial and regulatory authorities, increasing the risk of noncompliance.

Change and uncertainty in the health care industry could materially adversely affect our business.

Laws and regulations affecting the health care industry in the U.S., including the ACA, have changed and may continue to change the landscape in which our industry operates. Foreign government authorities may also adopt reforms of their health systems. We cannot predict what further reform proposals, if any, will be adopted, when they may be adopted, or what impact they may have on us. In recent years, there has been increasing scrutiny on drug pricing and concurrent efforts to control or reduce drug costs by Congress, the President, and various states, including several bills that have been introduced on a federal level. Such legislation, if enacted, could have the potential to impose additional costs on our business. One provision of the ACA, the Sunshine Act, requires us to collect and report detailed information regarding certain financial relationships we have with covered recipients, including physicians, dentists, teaching hospitals and certain other non-physician practitioners. We may also be required to report under certain state transparency laws that address circumstances not covered by the Sunshine Act, and some of these state laws, as well as the federal law, can be unclear. We are also subject to foreign regulations requiring transparency of certain interactions between suppliers and their customers. Our compliance with these rules imposes additional costs on us. In the U.S., government actions to seek to increase health-related price transparency may also affect our business.

Failure to comply with existing and future U.S. and foreign laws and regulatory requirements, including those governing the distribution of pharmaceuticals and controlled substances, could subject us to claims or otherwise harm our business.

Our business is subject to requirements under various local, state, federal and international laws and regulations applicable to the sale and distribution of, and third-party payment for, pharmaceuticals and medical devices, and human cells, tissues and cellular and tissue-based products (“HCT/P products”), and animal feed and supplements. Among other things, such laws, and the regulations promulgated thereunder:

•regulate the introduction, manufacture, advertising, marketing and promotion, sampling, pricing and reimbursement, labeling, packaging, procurement, storage, handling, returning or recalling, reporting, and distribution of, and record keeping for drugs, HCT/P products and medical devices, including requirements with respect to unique medical device identifiers and may require reporting of certain pricing data;

•subject us to inspection by the FDA and the DEA and similar state authorities;

•regulate the sale, transportation, importation, storage, handling and disposal of hazardous or potentially hazardous substances;

•regulate the distribution and storage of pharmaceuticals and controlled substances;

•require us to advertise and promote our drugs and devices in accordance with FDA requirements;

•require registration with the FDA and the DEA and various state agencies;

•require record keeping and documentation of transactions involving drug products;

•require us to design and operate a system to identify and report suspicious orders of controlled substances to the DEA;

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•require us to manage returns of products that have been recalled and subject us to inspection of our recall procedures and activities;

•impose on us reporting requirements if a pharmaceutical, HCT/P product or medical device causes serious illness, injury or death;

•require manufacturers, wholesalers, repackagers and dispensers of prescription drugs to identify and trace certain prescription drugs as they are distributed;

•require the licensing of prescription drug wholesalers and third-party logistics providers; and

•mandate compliance with standards for the recordkeeping, storage and handling of prescription drugs, and associated reporting requirements.

If we acquire a manufacturing business, we will be subject to new regulatory risks attendant to manufacturing. For example, animal pharmaceuticals and supplements are subject to regulatory approval and ongoing continuous review by the FDA and other regulatory authorities. Gaining approval for new products may require potentially costly post-marketing follow-up studies to monitor the safety and efficacy of the approved product. Noncompliance or failure to receive or maintain, or delays in receiving, such clearance or approvals may hurt our competitiveness and have other material adverse consequences on our business. In addition, animal pharmaceuticals and supplements are subject to extensive and ongoing regulatory requirements by the FDA and other regulatory authorities with regard to labeling, packaging, adverse event reporting, storage, advertising, promotion and recordkeeping.

There also have been increasing efforts by Congress and state and federal agencies, including state boards of pharmacy, departments of health, and the FDA, to regulate the pharmaceutical distribution system. Any failure to comply with any of these laws and regulations, or new interpretations of existing laws and regulations, or the enactment of any new or additional laws and regulations, could materially adversely affect our business. When we discover situations of non-compliance we seek to remedy them and bring the affected area back into compliance. If it is determined that we have not complied with these laws, we are potentially subject to penalties including warning letters, substantial civil and criminal fines and penalties, mandatory recall of product, seizure of product and injunction, consent decrees, and suspension or limitation of product sale and distribution. If we enter into settlement agreements to resolve allegations of non-compliance, we could be required to make settlement payments or be subject to civil and criminal penalties, including fines and the loss of licenses. Non-compliance with government requirements could also adversely affect our ability to participate in federal and state government health care programs, such as Medicare and Medicaid, and damage our reputation.

In the course of our business, we also may be subject to fines or penalties, equitable remedies (including but not limited to the suspension, revocation or non-renewal of licenses) and litigation. For example, in February 2020, Animal Health International pleaded guilty to a strict liability misdemeanor offense in connection with its failure to comply with federal law relating to the sales of prescription animal health products and was subject to a total criminal fine and forfeiture of $52.8 million. The reoccurrence of any such event may divert management's attention, cause us to suffer reputational harm and adversely affect our business, financial condition and results of operations.

If we fail to comply with evolving laws and regulations relating to confidentiality of sensitive personal information or standards in electronic health records or transmissions, we could be required to make significant product changes, or incur substantial liabilities.

Our practice management products and services include electronic information technology systems that store and process personal health, clinical, financial and other sensitive information of individuals. Both we and our customers are subject to numerous and evolving laws, regulations and industry standards, such as HIPAA and the Payment Card Industry Data Security Standards, which require the protection of the privacy and security of those records. The legal environment surrounding data privacy is demanding with the frequent imposition of new and changing regulatory requirements. Furthermore, our products may be used as part of our customers’ comprehensive data security programs, including in connection with their efforts to comply with applicable privacy and security laws. We are also subject to non-healthcare-specific requirements of the countries and states in which we operate which govern the handling, storage, use and protection of personal information, such as the California Consumer Privacy Act, or CCPA, which is a state statute intended to enhance privacy rights and consumer protection for residents of California, the California Privacy Rights Act, or CPRA, that became effective on January 1, 2023, and the pan-European General Data Protection Regulation, or GDPR. Additionally, nearly all other states have passed, proposed, or are considering comprehensive privacy legislation, and privacy bills have been proposed at the federal level that may result in additional legal requirements that impact our business.

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In addition, the FDA has become increasingly active in addressing the regulation of computer software intended for use in health care settings, and has developed and continues to develop policies on regulating clinical decision support tools and other types of software as medical devices. Certain of our software and related products support practice management, and it is possible that the FDA or foreign government authorities could determine that one or more of our products is a medical device, which could subject us or one or more of our businesses to substantial additional requirements, costs and potential enforcement actions or liabilities for noncompliance with respect to these products.

Both in the U.S. and abroad, these laws and regulations continue to evolve and remain subject to significant change. In addition, the application and interpretation of these laws and regulations are often uncertain. If we fail to comply with such laws and regulations, we could be required to make significant changes to our products or services, or incur substantial fines, penalties, or other liabilities. The costs of compliance with, and the other burdens imposed by, new or existing laws or regulatory actions may prevent us from selling the products or services we distribute, or increase the costs of doing so, and may affect our decision to distribute such products or services. Also, evolving laws and regulations in this area could restrict the ability of our customers to obtain or use patient information, or could require us to incur significant additional costs to conform to these legal requirements.

In addition, the products and services we distribute may be vulnerable to breakdown, wrongful intrusions, data breaches and malicious attack. Perceived or actual security vulnerabilities in these products or services, or the perceived or actual failure by us or our customers who use these products or services to comply with applicable legal or contractual data privacy or security requirements, may not only cause reputational harm and loss of business, but may also lead to claims against us by our customers and/or governmental agencies and involve substantial damages, fines, penalties and other liabilities and expenses and costs for remediation.

Tax legislation could materially adversely affect our financial results and tax liabilities.

We are subject to the tax laws and regulations of the United States federal, state and local governments, as well as foreign jurisdictions which are extremely complex and subject to varying interpretations. From time to time, various legislative initiatives may be proposed that could materially adversely affect our tax positions. Effective for tax years beginning after December 31, 2022, the Inflation Reduction Act of 2022 established a new 15% corporate alternative minimum tax for corporations whose average adjusted net income for any consecutive three-year period beginning after December 31, 2022, exceeds $1.0 billion and a new a 1% excise tax on “net repurchases” of corporate stock. In addition, the Organization for Economic Cooperation and Development (“OECD”) has published a framework to implement a global minimum income tax rate of 15% through its base erosion and profit shifting pillar two project (“BEPS Pillar Two”). Countries around the world are in various stages of adopting these rules, some having enacted or substantively enacted legislation while others are drafting formal legislative proposals. The OECD guidance offers transition and safe harbor rules around the implementation of the BEPS Pillar Two global minimum tax. We continue to evaluate the impact of this new legislation. At this time, we do not expect the impact of this legislation to be material to our effective tax rate. However, there can be no assurance that our future effective tax rate will not be adversely affected by this legislation or any other legislative initiatives. Although we believe that our historical tax positions are sound and consistent with applicable laws, regulations and existing precedent, there can be no assurance that our tax positions will not be challenged by relevant tax authorities or that we would be successful in any such challenge.

Our international operations are subject to inherent risks that could adversely affect our business.

There are a number of risks inherent in foreign operations, including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act, complex regulatory requirements, staffing and management complexities, import and export costs, other economic factors and political considerations, all of which are subject to unanticipated changes. Our foreign operations also expose us to foreign currency fluctuations. Because our financial statements are denominated in U.S. dollars, changes in currency exchange rates between the U.S. dollar and other currencies will have an impact on our income. Currency exchange rate fluctuations may adversely affect our results of operations and financial condition. Furthermore, we generally do not hedge translation exposure with respect to foreign operations.

GENERAL RISKS

Uncertain macro-economic conditions, including inflationary pressure, could materially adversely affect demand for dental and animal health products and services.

We are subject to uncertain macro-economic conditions that affect the economy and the economic outlook of the United States and other parts of the world in which we operate. In particular, recessionary or inflationary conditions

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and depressed levels of consumer and commercial spending may cause dental and animal health customers to reduce, modify, delay or cancel plans to purchase the products we distribute and services we provide, may cause dental and animal health professionals to decrease or stop investing in their practices, and may cause suppliers to reduce their output or change their terms of sale. Increased fuel and energy costs (for example, the price of gasoline) and recent and prospective banking failures may adversely affect consumer confidence and, thereby, reduce dental and veterinary office visits. The impacts of efforts by federal, state and local governments to combat inflation are unpredictable and could have an adverse impact on consumer spending. Current interest rates have also created some tightening in the credit markets. Continued tight credit markets or credit market volatility may cause financing difficulties, which in turn may cause dental and animal health customers to reduce, modify, delay or cancel plans to purchase the products we distribute and services we provide. In addition, the average interest rate in our contract portfolio may not increase at the same rate as interest rate markets, resulting in a reduction of gain on contract sales as compared to the gain that would be realized if the average interest rate in our portfolio were to increase at a rate more similar to the interest rate markets. Tension between the U.S. and China, as well as conflicts involving Russia, Ukraine, Israel and Gaza, and other unrest, also are creating increased global and economic uncertainty, which could adversely affect spending on the dental and animal health products and services we distribute. Global political and/or trade issues also could adversely impact the ability of U.S. producers to export finished protein products to other countries in the world. Furthermore, although inflation did not materially impact our results of operations in fiscal 2024, cost inflation during fiscal 2024, including wage inflation, generally increased our operating costs, including our cost of goods, transportation costs, labor costs and other administrative costs. We may face higher and sustained rates of inflation, with subsequent increases in operational costs that we may be unable to pass through to our dental and animal health customers.

Item 1B. UNRESOLVED STAFF COMMENTS

None.

Item 1C. CYBERSECURITY

Risk management and strategy

Our processes for assessing, identifying, and managing material risks from cybersecurity threats are incorporated into our overall enterprise risk management framework. We take a cross-functional approach to cybersecurity risk, which includes input from information security, information technology, legal, compliance, internal audit, finance, and operations, as appropriate. Under the oversight of our Board, including its Audit and Finance Committee, our senior management, information security team, and our Cybersecurity Risk Committee (comprised of key executive and senior leaders from primary corporate functions) devote resources to cybersecurity and implement risk management processes designed to adapt to the changing cybersecurity landscape, respond to emerging threats and proactively coordinate our people, processes and procedures to respond to cybersecurity incidents. We regularly assess the threat landscape and cybersecurity risks. Our internal audit team reviews enterprise risk management-level cybersecurity risks as part of our overall enterprise risk management framework. In addition, our information security team oversees regular monitoring of our information technology and other operating systems that are designed to detect potential security incidents. We have operationalized a written incident response plan designed to assess, identify and coordinate among various functions the response activities to cyber incidents and determine the impact of any such cybersecurity incidents that may jeopardize the confidentiality, integrity or availability of our information systems or adversely affect our business and information systems. In the event of a significant cybersecurity incident, the incident response plan provides guidance on roles, responsibilities, procedures and reporting processes.

Depending on the environment and system, we have implemented a number of measures and policies designed to enhance the security and resiliency of our network, information and data systems, including but not limited to: encryption standards; antivirus protection; remote access; multifactor authentication; treatment of confidential information and the use of the internet, artificial intelligence, social media, email and wireless devices; user access control management; intrusion monitoring systems; information security continuity measures, including redundant systems and information backups; network segmentation; encryption of certain data; event logging; and implementation of an application patching and update cadence. These measures and policies go through an internal review process and are approved by appropriate members of management.

We have performed simulations and tabletop exercises at a management level. Our employees are required to complete cybersecurity training at least once every year and have access to more frequent cybersecurity trainings online. We also require certain employees to complete additional role-based cybersecurity trainings. Our information

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security team regularly monitors for potential cybersecurity incidents and we have processes in place designed to escalate within the company more serious incidents, as appropriate.

We use consultants and other third parties to assist us from time to time to identify, assess, and manage material risks from cybersecurity threats, including for example, cybersecurity software providers, managed cybersecurity service providers, professional cybersecurity advisors, and penetration testing firms.

Depending on the nature of the services provided, the sensitivity of the systems and data at issue, and the identity of the service provider, we take various measures designed to help manage cybersecurity risk associated with our use of third-party service providers, which may include due diligence; monitoring of cybersecurity threat risks identified through such diligence in connection with our use of third-party service providers; and imposing certain contractual obligations.

While we face a number of cybersecurity risks in connection with our business and from time to time we have had to address non-material security incidents and expect to experience security incidents in the future, we are not aware of any risks from cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition. For more information about the cybersecurity risks we face that may materially affect the Company, see the risk factor entitled “Risks generally associated with information systems, software products and cybersecurity attacks could adversely affect our results of operations” in Item 1A - Risk Factors.

Governance

Our Chief Information Security Officer (CISO) is responsible for developing and implementing our cybersecurity risk management and information security program, including regularly reporting on cybersecurity matters to management and the Audit and Finance Committee. He has a Bachelor of Science degree in Information Technology from Saint Mary’s University of Minnesota and over 25 years of experience covering a wide range of enterprise IT and Information Security programs for large, global corporations. He also has multiple industry certifications, including as a Certified Information Systems Security Professional (CISSP), and participates in various security leadership forums and committees. Our CISO has led our cybersecurity program since joining our company in 2018, and was recently promoted to CISO from Senior Director, Information Security.

Our CISO reports to our Chief Information Officer (CIO), who has held that role for 7 years and oversees our broader information technology program. He has over 30 years of information technology experience, including over 20 years in leadership roles.

Among other matters, our Board delegates to our Audit and Finance Committee the oversight of our programs, policies, and procedures related to cybersecurity, information asset security, and network security. Broad oversight is maintained by our full Board, which receives regular reports from the Audit and Finance Committee as well as management, as appropriate. The Audit and Finance Committee and the full Board actively participate in discussions with management and among themselves regarding cybersecurity risk. Our CIO and CISO present to the Audit and Finance Committee at least a bi-annual review of our strategies, policies and internal controls relating to information technology and cybersecurity (including network security, cloud security and physical security), with respect to corporate goals, industry trends and competitive advantages. To aid the Board with its cybersecurity oversight responsibilities, the Board also receives regular presentations on these topics. Our incident response plan is designed to escalate certain cybersecurity incidents, from our information security team and CISO, through our Chief Legal Officer and CIO, to our Audit and Finance Committee, depending on the impact of the incident.

Item 2. PROPERTIES

We own our principal executive offices in St. Paul, Minnesota, and the majority of our distribution facilities. Leases of other distribution and administrative facilities generally are on a long-term basis, expiring at various times, with options to renew for additional periods. Most sales offices are leased for varying and usually shorter periods, with or without renewal options. We believe our properties are in good operating condition and are suitable for the purposes for which they are being used.

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Patterson Logistics Services

The majority of assets we use to distribute product are owned and operated by Patterson Logistics Services, Inc. (“PLSI”), a wholly-owned subsidiary, which operates the distribution function for the benefit of our dental and animal health segments in the U.S. PLSI also advises on the operations of our fulfillment centers outside of the U.S., but these properties are not owned by PLSI.

As of April 27, 2024, PLSI operated the following 13 fulfillment centers (seven primary centers) totaling 1.0 million square feet:

•two dental fulfillment centers (Hawaii and Texas);

•four animal health fulfillment centers (Alabama, Colorado and Texas (two)); and

•seven fulfillment centers that distribute dental and animal health products (California, Florida, Indiana, Iowa, Pennsylvania, South Carolina and Washington).

Approximately 90% of the PLSI fulfillment center space is owned.

Dental

The Dental segment is headquartered in our principal executive offices, and maintains sales and administrative offices at approximately 55 locations across 39 states in the U.S. and 10 locations in Canada, the majority of which are leased. Operations in Canada are supported by fulfillment centers located in Quebec and Alberta.

Animal Health

In addition to the locations operated by PLSI, Patterson Animal Health has approximately 100 properties located in the U.S., Canada and the U.K., the majority of which are leased. In the U.S., these properties are in 82 locations across 28 states, and comprise fulfillment centers, storage locations, sales and administrative offices, retail stores and call centers. In Canada, operations are supported by two fulfillment centers located in Alberta and Ontario. The segment’s operations in the U.K. are supported by a primary distribution facility in Stoke-on-Trent and an additional 10 depots used as secondary distribution points and 3 laboratory sites throughout the U.K. The headquarters for this segment are located in a leased office in Colorado.

Item 3. LEGAL PROCEEDINGS

For a discussion of Legal Proceedings, see Note 17 - Litigation of the Notes to the Consolidated Financial Statements included under Item 8.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

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PART II

Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Patterson’s common stock trades on the NASDAQ Global Select Market® under the symbol “PDCO.”

Holders

On June 10, 2024, the number of holders on record of common stock was 1,570. The transfer agent for Patterson’s common stock is EQ Shareowner Services, 1110 Centre Pointe Curve, Suite 101, Mendota Heights, Minnesota 55120, telephone: (800) 468-9716.

Dividends

In fiscal 2024, a quarterly cash dividend of $0.26 per share was declared throughout the year. In fiscal 2024, dividends were declared each quarter, with payment occurring in the subsequent quarter. We currently expect to declare and pay quarterly cash dividends in the future, but any future dividends will be subject to approval by our Board of Directors, which will depend on our earnings, capital requirements, operating results and financial condition, as well as applicable law, regulatory constraints, industry practice and other business considerations that our Board considers relevant. We are also subject to various financial covenants under our debt agreements including the maintenance of leverage and interest coverage ratios. The terms of agreements governing debt that we may incur in the future may also contain similar covenants. Accordingly, there can be no assurance that we will declare and pay dividends in the future at the same rate or at all.

Purchases of Equity Securities by the Issuer

On March 11, 2024, the Board of Directors authorized a $500 million share repurchase program through March 16, 2027, replacing a prior authorization which was expiring and under which there was $180.0 million remaining. As of April 27, 2024 there was $500.0 million remaining under the current stock repurchase program.

The following table presents activity under the stock repurchase plan during the fourth quarter of fiscal 2024.

	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Dollar Value of Shares That May Yet Be Purchased Under the Plan
January 28, 2024 to February 24, 2024	—	$	—	—	$	194,920,532
February 25, 2024 to March 23, 2024	497,859	29.97		497,859	500,000,000
March 24, 2024 to April 27, 2024	—	—		—	500,000,000
	497,859	$	29.97	497,859	$	500,000,000

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Performance Graph

The graph below compares the cumulative total shareholder return on $100 invested at the market close on April 26, 2019, through April 27, 2024, with the cumulative return over the same time period on the same amount invested in the S&P Mid-Cap 400 and the Dow Jones U.S. Health Care Index.

	Fiscal Year Ending
	4/27/2019	4/25/2020	4/24/2021	4/30/2022	4/29/2023	4/27/2024
Patterson Companies, Inc.	100.00	73.95	167.59	159.40	145.68	143.43
S&P Mid-Cap 400	100.00	79.97	143.67	132.60	134.37	158.82
Dow Jones U.S. Health Care Index	100.00	115.78	147.47	151.61	157.69	166.39

Item 6. [RESERVED]

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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

Our financial information for fiscal 2024 is summarized in this Management’s Discussion and Analysis and the Consolidated Financial Statements and related Notes. The following background is provided to readers to assist in the review of our financial information.

We present three reportable segments: Dental, Animal Health and Corporate. Dental and Animal Health are strategic business units that offer similar products and services to different customer bases. Dental provides a virtually complete range of consumable dental products, equipment, turnkey digital solutions and value-added services to dentists and dental laboratories throughout North America. Animal Health is a leading, full-line distributor in North America and the U.K. of animal health products, services and technologies to both the production-animal and companion-pet markets. Our Corporate segment is comprised of general and administrative expenses, including home office support costs in areas such as information technology, finance, legal, human resources and facilities. In addition, customer financing and other miscellaneous sales are reported within Corporate results.

Operating margins of the animal health business are lower than the dental business. While operating expenses run at a lower rate in the animal health business when compared to the dental business, gross margins in the animal health business are lower due generally to the low margins experienced on the sale of pharmaceutical products.

We operate with a 52-53 week accounting convention with our fiscal year ending on the last Saturday in April. Fiscal 2024 ended on April 27, 2024 and consisted of 52 weeks. Fiscal 2023 ended on April 29, 2023 and consisted of 52 weeks. Fiscal 2022 ended on April 30, 2022 and consisted of 53 weeks. Fiscal 2025 will end on April 26, 2025 and will consist of 52 weeks.

We believe there are several important aspects of our business that are useful in analyzing it, including: (1) growth in the various markets in which we operate; (2) internal growth; (3) growth through acquisition; and (4) continued focus on controlling costs and enhancing efficiency. Management defines internal growth as net sales adjusted to exclude the impact of foreign currency, changes in product selling relationships and contributions from recent acquisitions. Foreign currency impact represents the difference in results that is attributable to fluctuations in currency exchange rates the company uses to convert results for all foreign entities where the functional currency is not the U.S. dollar. The company calculates the impact as the difference between the current period results translated using the current period currency exchange rates and using the comparable prior period’s currency exchange rates. The company believes the disclosure of net sales changes in constant currency provides useful supplementary information to investors in light of significant fluctuations in currency rates.

Factors Affecting Our Results

Macro-economic Conditions. We are impacted by various conditions that create uncertainty in our macro-economic environment. Cost inflation and higher interest rates may affect our customer's willingness to invest in capital equipment and could impact our customers' volume of purchases. Interest expense on variable rate indebtedness increased due to higher interest rates. Cost inflation increased certain operating costs, and Patterson has implemented price increases in response; however, cost inflation did not materially impact our net results of operations in fiscal 2024.

Receivables Securitization Program. We are a party to certain receivables purchase agreements with MUFG Bank, Ltd. ("MUFG"), under which MUFG acts as an agent to facilitate the sale of certain Patterson receivables (the “Receivables”) to certain unaffiliated financial institutions (the “Purchasers”). The proceeds from the sale of these Receivables comprise a combination of cash and a deferred purchase price (“DPP”) receivable. The DPP receivable is ultimately realized by Patterson following the collection of the underlying Receivables sold to the Purchasers. The collection of the DPP receivable is recognized as an increase to net cash provided by investing activities within the Consolidated Statements of Cash Flows, with a corresponding reduction to net cash used in operating activities within the Consolidated Statements of Cash Flows.

Fiscal 2022 Legal Reserve. On August 27, 2021, we signed a memorandum of understanding to settle the federal securities class action complaint against Patterson Companies, Inc. and its former CEO and former CFO filed by Plymouth County Retirement System on March 28, 2018. Under the terms of the settlement, Patterson agreed to pay $63.0 million to resolve the case. Although we agreed to settle this matter, we expressly deny the allegations of the complaint and all liability. Our insurers consented to the settlement and contributed an aggregate of $35.0

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million to fund the settlement and to reimburse us for certain costs and expenses of the litigation. As a result of the foregoing, we recorded a pre-tax reserve of $63.0 million in other accrued liabilities in the Consolidated Balance Sheets in our Corporate segment during the first quarter of fiscal 2022 related to the probable settlement of this litigation (the "Fiscal 2022 Legal Reserve"). During the first quarter of fiscal 2022, we also recorded a receivable of $27.0 million in prepaid expenses and other current assets in the Consolidated Balance Sheets in our Corporate segment related to probable insurance recoveries, which amount was paid into the litigation settlement escrow as required by the memorandum of understanding. The net expense of $36.0 million was recorded in operating expenses in our Consolidated Statements of Operations and Other Comprehensive Income. We recorded a gain of $8.0 million during the second quarter of fiscal 2022 in our Corporate segment to account for our receipt of carrier reimbursement of previously expended fees and costs. On June 10, 2022, the U.S. District Court for the District of Minnesota entered an order granting final approval to the settlement.

Gains on Vetsource Investment. In fiscal 2022, we sold a portion of our investment in Vetsource, with a carrying value of $25.8 million, for $56.8 million. We recorded a pre-tax gain of $31.0 million in gains on investments in our Consolidated Statements of Operations and Other Comprehensive Income as a result of this sale. The cash received of $56.8 million is reported within investing activities in our Consolidated Statements of Cash Flows. We also recorded a pre-tax non-cash gain of $31.0 million to reflect the increase in the carrying value of the remaining portion of our investment in Vetsource, which was based on the selling price of the portion of the investment we sold for $56.8 million. This gain was recorded in gains on investments in our Consolidated Statements of Operations and Other Comprehensive Income. Concurrent with the sale, we obtained rights that will allow us, under certain circumstances, to require another shareholder of Vetsource to purchase our remaining shares. We recorded a pre-tax non-cash gain of $25.8 million in gains on investments in our Consolidated Statements of Operations and Other Comprehensive Income as a result of this transaction. The aggregate gains on investments of $87.8 million are reported within operating activities in our Consolidated Statements of Cash Flows. Concurrent with obtaining this put option, we also granted rights to the same Vetsource shareholder that would allow such shareholder, under certain circumstances, to require us to sell our remaining shares at fair value.

Gain on Vets Plus Investment. In fiscal 2022, we sold a portion of our investment in Vets Plus with a carrying value of $4.0 million for $17.1 million. We recorded a pre-tax gain of $13.1 million in gains on investments in our Consolidated Statements of Operations and Other Comprehensive Income as a result of this sale. This $13.1 million pre-tax gain is reported within operating activities in our Consolidated Statements of Cash Flows. The cash received of $17.1 million is reported within investing activities in our Consolidated Statements of Cash Flows.

Inventory Donation Charges. In fiscal 2022, we committed to donate certain personal protective equipment to charitable organizations to assist with COVID-19 recovery efforts. We recorded a charge of $49.2 million within cost of sales in our Consolidated Statements of Operations and Other Comprehensive Income as a result ("Inventory Donation Charges") in the first quarter of fiscal 2022. These charges were driven by our intention to not sell these products, but rather to donate them to charitable organizations. Of the $49.2 million expense recorded, $47.2 million and $2.0 million was recorded within our Dental and Animal Health segments, respectively.

Results of Operations

The following table summarizes our results as a percent of net sales:

	Fiscal Year Ended
	April 27, 2024		April 29, 2023		April 30, 2022
Net sales	100.0	%	100.0	%	100.0	%
Cost of sales	79.0		78.8		80.2
Gross profit	21.0		21.2		19.8
Operating expenses	17.1		16.9		17.4
Operating income	3.9		4.3		2.4
Other income (expense), net	(0.2)		(0.1)		1.7
Income before taxes	3.7		4.2		4.1
Income tax expense	0.9		1.0		1.0
Net income	2.8		3.2		3.1
Net loss attributable to noncontrolling interests	—		—		—
Net income attributable to Patterson Companies, Inc.	2.8	%	3.2	%	3.1	%

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Fiscal 2024 Compared to Fiscal 2023

Net sales. Consolidated net sales in fiscal 2024 were $6,568.3 million, an increase of 1.5% from $6,471.5 million in fiscal 2023. Foreign exchange rate changes had a favorable impact of 0.4% on fiscal 2024 sales. The impact of acquisitions for fiscal 2024 contributed a net increase in sales of approximately 0.3%.

Dental segment net sales decreased 0.1% to $2,488.6 million in fiscal 2024 from $2,492.1 million in fiscal 2023. Foreign exchange rate changes had an unfavorable impact of 0.1% on fiscal 2024 net sales. Net sales of consumables increased 4.2%, net sales of equipment decreased 7.0%, and net sales of value-added services and other decreased 0.9% in fiscal 2024. The decrease in equipment net sales was experienced across imaging and digital categories.

Animal Health segment net sales increased 2.6% to $4,067.1 million in fiscal 2024 from $3,964.9 million in fiscal 2023. Foreign exchange rate changes had a favorable impact of 0.8% on fiscal 2024 net sales. Acquisitions contributed 0.5% to Animal Health net sales in fiscal 2024. The net sales growth in fiscal 2024 was primarily due to market share gains within Production Animal categories led by beef, dairy and swine.

Gross profit. Consolidated gross profit margin decreased 20 basis points from the prior year to 21.0%. Approximately 10 basis points of gross margin decline was due to the widely-reported cybersecurity attack on our vendor partner, Change Healthcare, in fiscal 2024, which resulted in many dental practices being unable to process insurance claims. Many of our practice management software solutions incorporated fee-based integration with Change Healthcare for claims management for our customers. During the outage, Patterson suspended charging for that service, which impacted the net sales and gross profit of our Dental segment. The Corporate segment net sales and gross profit included unfavorable impacts of interest rate changes on our customer financing portfolio in both fiscal 2024 and 2023. This interest rate impact was partially offset by a gain on associated interest rate swap agreements, which is reflected in other income, net in our Consolidated Statements of Operations and Other Comprehensive Income.

Operating expenses. Consolidated operating expenses for fiscal 2024 were $1,127.3 million, a 2.8% increase from the prior year of $1,097.0 million. The consolidated operating expense ratio of 17.1% in fiscal 2024 increased 20 basis points from the prior fiscal year. The increase in operating expenses included investment in margin-accretive initiatives, technology, and facility enhancements in fiscal 2024 and was impacted by a $3.6 million gain on sale of an office building in fiscal 2023.

Operating income. Fiscal 2024 operating income was $252.9 million, or 3.9% of net sales, as compared to $276.0 million, or 4.3% of net sales, in fiscal 2023. The change in operating income was primarily driven by an increase in operating expenses, partially offset by the increase in net sales and gross profit, in fiscal 2024 as compared to fiscal 2023.

Dental segment operating income was $209.8 million for fiscal 2024, a decrease of $27.5 million from fiscal 2023. The decrease was primarily driven by investments in our commercial software business, a decrease in equipment net sales and the impact of the Change Healthcare cybersecurity attack in fiscal 2024. The change was also impacted by a $3.6 million gain on sale of an office building in fiscal 2023.

Animal Health segment operating income was $139.1 million for fiscal 2024, an increase of $12.1 million from fiscal 2023. The increase was primarily driven by a growth in net sales and gross profit, partially offset by higher operating expenses, in fiscal 2024.

Corporate segment operating loss was $96.0 million for fiscal 2024, as compared to a loss of $88.3 million for fiscal 2023. The change was primarily attributable to an increase in operating expenses and unfavorable impacts of interest rate changes on our customer financing portfolio in fiscal 2024.

Other income (expense). Net other expense was $9.9 million in fiscal 2024, compared to net other expense of $5.8 million in fiscal 2023. The increase was primarily due to higher interest expense, partially offset by a higher gain on interest rate swaps.

Income tax expense. The effective income tax rate for fiscal 2024 was 23.7%, compared to 23.5% for fiscal 2023.

Net income attributable to Patterson Companies, Inc. and earnings per share. Net income attributable to Patterson Companies Inc. was $185.9 million in fiscal 2024, compared to $207.6 million in fiscal 2023. Earnings per diluted share were $1.98 in fiscal 2024, compared to $2.12 in fiscal 2023. Weighted average diluted shares in fiscal

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2024 were 93.7 million, compared to 97.8 million in fiscal 2023. The fiscal 2024 and fiscal 2023 cash dividend declared was $1.04 per common share.

Fiscal 2023 Compared to Fiscal 2022

See Item 7 in our 2023 Annual Report on Form 10-K filed June 21, 2023.

Liquidity and Capital Resources

Net cash used in operating activities was $789.4 million in fiscal 2024, compared to $754.9 million in fiscal 2023 and $981.0 million in fiscal 2022. Net cash used in operating activities in fiscal 2024 and fiscal 2023 was primarily due to the impact of our Receivables Securitization Program. Net cash used in operating activities in fiscal 2022 was primarily due to the impact of our Receivables Securitization Program and a net increase in inventory, inclusive of the impact of the $49.2 million Inventory Donation Charges, partially offset by an increase in accounts payable.

Net cash provided by investing activities was $959.5 million in fiscal 2024, compared to $901.6 million in fiscal 2023 and $1,239.0 million in fiscal 2022. Collections of deferred purchase price receivables were $1,028.3 million, $998.9 million and $1,213.5 million in fiscal 2024, 2023 and 2022, respectively. In fiscal 2024, we used $1.1 million to pay a holdback following the acquisition of substantially all of the assets of Miller Vet Holdings, LLC, which was due on the 24 month anniversary of the closing date. In fiscal 2023, we recorded cash receipts of $15.2 million from a sale of an office building and used cash of $33.3 million for acquisitions and $15.0 million to purchase a Dental investment. In fiscal 2022, we recorded cash receipts of $75.9 million from the sale of investments and used $19.8 million to acquire Miller Vet. Capital expenditures were $67.6 million, $64.2 million and $38.3 million in fiscal 2024, 2023 and 2022, respectively. We expect to use a total of approximately $75 million for capital expenditures in fiscal 2025.

Net cash used in financing activities in fiscal 2024 was $215.9 million, driven by $229.5 million in share repurchases, $98.3 million for dividend payments and $36.0 million for payments on long-term debt, partially offset by $141.0 million draw on our revolving line of credit. Net cash used in financing activities in fiscal 2023 was $126.5 million, driven by $101.3 million for dividend payments, $55.5 million in share repurchases and $1.5 million for payments on long-term debt, partially offset by $16.0 million draw on our revolving line of credit. Net cash used in financing activities in fiscal 2022 was $253.2 million, driven by $101.1 million for dividend payments, $100.8 million for payments on long-term debt, $35.0 million in share repurchases and $24.0 million attributed to payments on our revolving line of credit.

In fiscal 2024, 2023 and 2022, a quarterly cash dividend of $0.26 per share was declared each quarter, with payment occurring in the subsequent quarter. We currently expect to declare and pay quarterly cash dividends in the future, but any future dividends will be subject to approval by our Board of Directors, which will depend on our earnings, capital requirements, operating results and financial condition, as well as applicable law, regulatory constraints, industry practice and other business considerations that our Board considers relevant. We are also subject to various financial covenants under our debt agreements including the maintenance of leverage and interest coverage ratios. The terms of agreements governing debt that we may incur in the future may also contain similar covenants. Accordingly, there can be no assurance that we will declare and pay dividends in the future at the same rate or at all.

In fiscal 2021, we entered into an amendment, restatement and consolidation of certain credit agreements with various lenders, including MUFG Bank, Ltd, as administrative agent. This amended and restated credit agreement (the “Credit Agreement”) consisted of a $700.0 million revolving credit facility and a $300.0 million term loan facility, and was set to mature no later than February 2024.

In fiscal 2023, we amended and restated the Credit Agreement (the “Amended Credit Agreement”). The Amended Credit Agreement consists of a $700.0 million revolving credit facility and a $300.0 million term loan facility, and will mature no later than October 2027. We used the Amended Credit Agreement facilities to refinance and consolidate the Credit Agreement, and pay the fees and expenses incurred therewith. We expect to use the Amended Credit Agreement to finance our ongoing working capital needs and for other general corporate purposes.

As of April 27, 2024, $295.5 million was outstanding under the Amended Credit Agreement term loan at an interest rate of 6.54% and $186.0 million was outstanding under the Amended Credit Agreement revolving credit facility at an interest rate of 6.53%. As of April 29, 2023, $298.5 million was outstanding under the Credit Agreement term loan at an interest rate of 6.08%, and $45.0 million was outstanding under the Credit Agreement revolving credit facility at an interest rate of 5.93%.

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On March 11, 2024, the Board of Directors authorized a $500 million share repurchase program through March 16, 2027, replacing a prior authorization which was expiring and under which there was $180.0 million remaining. As of April 27, 2024, $500.0 million remains available under the current repurchase authorization.

We have $114.5 million in cash and cash equivalents as of April 27, 2024, of which $59.3 million is in foreign bank accounts. See Note 12 to the Consolidated Financial Statements for further information regarding our intention to permanently reinvest these funds. Included in cash and cash equivalents as of April 27, 2024 is $33.8 million of cash collected from previously sold customer financing arrangements that have not yet been settled with the third party. See Note 5 to the Consolidated Financial Statements for further information.

We expect the collection of deferred purchase price receivables, existing cash balances and credit availability under existing debt facilities, less our funds used in operations, will be sufficient to meet our working capital needs and to finance our business over the next fiscal year.

We expect to continue to obtain liquidity from the sale of equipment finance contracts. Patterson sells a significant portion of our finance contracts (see below) to a commercial paper funded conduit managed by a third party bank, and as a result, commercial paper is indirectly an important source of liquidity for Patterson. Patterson is allowed to participate in the conduit due to the quality of our finance contracts and our financial strength. Cash flows could be impaired if our financial strength diminishes to a level that precluded us from taking part in this facility or other similar facilities. Also, market conditions outside of our control could adversely affect the ability for us to sell the contracts.

Customer Financing Arrangements

As a convenience to our customers, we offer several different financing alternatives, including a third party program and a Patterson-sponsored program. For the third party program, we act as a facilitator between the customer and the third party financing entity with no on-going involvement in the financing transaction. Under the Patterson-sponsored program, equipment purchased by creditworthy customers may be financed up to a maximum of $2 million. We generally sell our customers’ financing contracts to outside financial institutions in the normal course of our business.

We operate under an agreement to sell a portion of our equipment finance contracts to commercial paper conduits with MUFG Bank, Ltd. ("MUFG") serving as the agent. We utilize PDC Funding to fulfill a requirement of participating in the commercial paper conduit. We receive the proceeds of the contracts upon sale to MUFG. At least 15.0% of the proceeds are held by the conduit as security against eventual performance of the portfolio. This percentage can be greater and is based upon certain ratios defined in the agreement with MUFG. The capacity under the agreement with MUFG at April 27, 2024 was $575,000.

Our financing business is described in further detail in Note 5 to the Consolidated Financial Statements.

Contractual Obligations

A summary of our contractual obligations as of April 27, 2024 was as follows (in thousands):

	Payments due by year
	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Long-term debt principal	$	453,000	$	122,750	$	26,250	$	304,000	$	—
Long-term debt interest	79,759		23,827		38,136		17,796		—
Operating leases	147,926		38,047		55,979		27,833		26,067
Total	$	680,685	$	184,624	$	120,365	$	349,629	$	26,067

As of April 27, 2024, our gross liability for uncertain tax positions, including interest and penalties, was $9.8 million. We are not able to reasonably estimate the amount by which the liability will increase or decrease over an extended period of time or whether a cash settlement of the liability will be required. Therefore, these amounts have been excluded from the schedule of contractual obligations.

For a more complete description of our contractual obligations, see Notes 10 and 11 to the Consolidated Financial Statements.

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Working Capital Management

The following table summarizes our average accounts receivable days sales outstanding and average annual inventory turnover for the past three fiscal years:

	Fiscal Year Ended
	April 27, 2024	April 29, 2023	April 30, 2022
Days sales outstanding	28.6	25.0	25.2
Inventory turnover	6.2	6.2	6.6

Foreign Operations

We derive foreign sales from Dental operations in Canada, and Animal Health operations in Canada and the U.K. Fluctuations in currency exchange rates have not significantly impacted earnings, as these fluctuations impact sales, cost of sales and operating expenses. Changes in exchange rates positively impacted net sales by $27.8 million in fiscal 2024 and adversely affected net sales by $108.5 million in fiscal 2023, while they positively impacted net sales by $41.0 million in fiscal 2022. Changes in currency exchange rates are a risk accompanying foreign operations, but this risk is not considered material with respect to our consolidated operations.

Critical Accounting Policies and Estimates

Patterson has adopted various accounting policies to prepare our Consolidated Financial Statements in accordance with accounting principles generally accepted in the U.S. Management believes that our policies are conservative and our philosophy is to adopt accounting policies that minimize the risk of adverse events having a material impact on recorded assets and liabilities. However, the preparation of financial statements requires the use of estimates and judgments regarding the realization of assets and the settlement of liabilities based on the information available to management at the time. Changes subsequent to the preparation of the financial statements in economic, technological and competitive conditions may materially impact the recorded values of Patterson’s assets and liabilities. Therefore, the users of the financial statements should read all the Notes to the Consolidated Financial Statements and be aware that conditions currently unknown to management may develop in the future. This may require a material adjustment to a recorded asset or liability to consistently apply to our significant accounting principles and policies that are discussed in Note 1 to the Consolidated Financial Statements. The financial performance and condition of Patterson may also be materially impacted by transactions and events that we have not previously experienced and for which we have not been required to establish an accounting policy or adopt a generally accepted accounting principle.

Revenue Recognition – Revenues are generated from the sale of consumable products, equipment and support, software and support, technical service parts and labor, and other sources. Revenues are recognized when or as performance obligations are satisfied. Performance obligations are satisfied when the customer obtains control of the goods or services.

Estimates for returns, damaged goods, rebates, loyalty programs and other revenue allowances are made at the time the revenue is recognized based on the historical experience for such items. The receivables that result from the recognition of revenue are reported net of related allowances. We maintain a valuation allowance based upon the expected collectability of receivables held. Estimates are used to determine the valuation allowance and are based on several factors, including historical collection data, economic trends, and credit worthiness of customers.

Receivables from vendors earned as a result of volume rebates and reimbursements for customer pricing contracts and promotions are recorded as a reduction of cost of sales in the period in which the related revenue is recognized. We estimate the vendor receivables earned but not received based on sales forecasts, transactional data, and historical vendor collection trends.

We offer customer financing contracts on equipment purchases by creditworthy customers. For financing contracts at a below-market interest rate, we record a subsidy as a reduction to net sales in the period the contract is originated. The subsidy on below-market rate contracts is estimated based on analyses of current publicly-available interest rate trends. We do not consider contracts with a term of one year or less to have a significant financing component and do not record a subsidy for these contracts.

We generally sell our customers’ financing contracts to outside financial institutions in the normal course of our business. These financing arrangements are accounted for as a sale of assets under the provisions of ASC 860, Transfers and Servicing. We receive the proceeds of the contracts upon sale to financial institutions, with a portion of the proceeds held by the financial institutions as a deferred purchase price (DPP) as security against eventual

45

performance of the portfolio. Customer financing net sales include the impact of changes in interest rates on DPP receivables, as the average interest rate in our contract portfolio may not fluctuate at the same rate as interest rate markets, resulting in an increase or reduction of gain on contract sales. We enter into an interest rate swap to hedge a portion of the related interest rate risk. These agreements do not qualify for hedge accounting, and the gains or losses on an interest rate swap are reported in other income and expense in our consolidated statements of operation and other comprehensive income.

Our financing business is described in further detail in Note 5 to the Consolidated Financial Statements.

Inventory and Reserves – Inventory primarily consists of merchandise held for sale and is stated at the lower of cost or market. Cost is determined using the last-in, first-out ("LIFO") method for all inventories, except for foreign inventories, which are valued using the first-in, first-out ("FIFO") method. We continually assess the valuation of inventories and reduce the carrying value of those inventories that are obsolete or in excess of forecasted usage to estimated realizable value. The net realizable value of such inventories is estimated based on analyses and assumptions including, but not limited to, historical usage, future demand and market requirements.

Recoverability of Development Costs of Software to be Sold - We capitalize certain costs incurred for software to be sold, leased or otherwise marketed to our customers. The costs are treated as capital or expense based on the nature of the costs and the project stage in which the costs were incurred. At the end of each fiscal quarter, we compare the unamortized capitalized costs of software to be sold to its net realizable value. The net realizable value of capitalized software assets is the estimated future gross revenues from that product reduced by the estimated future costs of completing and disposing of that product, including the costs of performing maintenance and customer support required to satisfy the entity’s responsibility set forth at the time of sale. If the unamortized amount exceeds the net realizable value, an impairment is recorded. If the unamortized capitalized costs are less than the net realizable value of that asset, then there is no impairment. The net realizable value of capitalized software assets is estimated based on analyses and assumptions including, but not limited to, capitalizable costs, labor expenses, revenue growth projections and weighted-average cost of capital.

No significant impairments were recorded in fiscal 2024, 2023, or 2022 as a result of the assessments performed of the recoverability of development costs to be sold.

Recoverability of Goodwill – Goodwill is not amortized but rather is tested at least annually at the beginning of the fourth quarter for impairment, or more often if events or circumstances indicate the carrying value of the asset may not be recoverable.

We assess the recoverability of goodwill using a qualitative evaluation or a quantitative test to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. The determination of fair value requires management to make assumptions and to apply judgment to estimate industry and economic factors and the profitability of future business strategies. Patterson conducts impairment testing based on current business strategy in light of present industry and economic conditions, as well as future expectations.

We performed qualitative assessments for our goodwill impairment tests in fiscal 2024. No impairments were recorded in fiscal 2024, 2023, or 2022 as a result of goodwill tests performed.

Recoverability of Long-Lived Assets – Long-lived assets, including definite-lived intangible assets, are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets (or asset groups) may not be recoverable through the estimated undiscounted future cash flows derived from such assets. Our definite-lived intangible assets primarily consist of customer relationships, trade names and trademarks. When impairment exists, the related assets (or asset groups) are written down to fair value using financial projections and discount rates based on analyses and assumptions including, but not limited to, financial projections, royalty rates, and weighted-average cost of capital.

No significant impairments were recorded in fiscal 2024, 2023, or 2022 as a result of the assessments performed of the recoverability of long-lived assets.

Income Taxes – We are subject to income taxes in the U.S. and numerous foreign jurisdictions. Significant judgments are required in determining the consolidated provision for income taxes. Changes in tax policy or interpretation of current tax law create potential added uncertainties.

During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. As a result, we recognize tax liabilities based on estimates of whether additional taxes

46

and interest will be due. These tax liabilities are recognized when, despite our belief that our tax return position is supportable, we believe that certain positions may not be fully sustained upon review by tax authorities. We believe that our accruals for tax liabilities are adequate for all open audit years based on our assessment of many factors including past experience and interpretations of tax law. This assessment relies on estimates and assumptions and may involve a series of complex judgments about future events. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will impact income tax expense in the period in which such determination is made and could materially affect our financial results.

Valuation allowances are established for deferred tax assets if, after assessment of available positive and negative evidence, it is more likely than not that the deferred tax asset will not be fully realized.

Recent Accounting Pronouncements

For information concerning new accounting standards and the impact of the implementation of these standards on our financial statements, see Note 1 to the Consolidated Financial Statements.

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk

We are exposed to market risk consisting of foreign currency rate fluctuations and changes in interest rates.

We are exposed to foreign currency exchange rate fluctuations in our operating statement due to transactions denominated primarily in Canadian Dollars and British Pounds. Although we do not currently have foreign currency hedge contracts, we continually evaluate our foreign currency exchange rate risk and the different mechanisms for use in managing such risk. A hypothetical 10% change in the value of the U.S. dollar in relation to our most significant foreign currency exposures would have changed net sales by approximately $102.7 million for the fiscal year ended April 27, 2024. This amount is not indicative of the hypothetical net earnings impact due to the partially offsetting impact of the currency exchange movements on cost of sales and operating expenses. We estimate that if foreign currency exchange rates changed by 10%, the impact would have been approximately $2.8 million to income before taxes for the fiscal year ended April 27, 2024.

The Amended Credit Agreement consists of a $300.0 million term loan facility and a $700.0 million revolving credit facility, which will mature no later than October 2027. Interest on borrowings is variable and is determined as a base rate plus a spread. This spread, as well as a commitment fee on the unused portion of the facility, is based on our leverage ratio, as defined in the Amended Credit Agreement. Due to the interest rate being variable, fluctuations in interest rates may impact our earnings. Based on our current level of debt, we estimate that a 100 basis point change in interest rates would have a $4.8 million annual impact on our income before taxes.

Our earnings are also affected by fluctuations in short-term interest rates through the investment of cash balances and the practice of selling fixed rate equipment finance contracts under agreements with both a commercial paper conduit and a bank that provide for pricing based on variable interest rates.

When considering the exposure under the agreements whereby we sell equipment finance contracts to both a commercial paper conduit and bank, the interest rates in our facilities are priced based on SOFR or commercial paper rates plus a defined spread. In addition, the majority of the portfolio of installment contracts generally turns over in less than 48 months, and we can adjust the rate we charge on new customer contracts at any time. Therefore, in times where the interest rate markets are not rapidly increasing or decreasing, the average interest rate in the portfolio generally moves with the interest rate markets and thus would parallel the underlying interest rate movement of the pricing built into the sale agreements. In calculating the gain on the contract sales, we use an interest rate curve that approximates the maturity period of the then-outstanding contracts. If increases in the interest rate markets occur, the average interest rate in our contract portfolio may not increase at the same rate, resulting in a reduction of gain on the contract sales as compared to the gain that would be realized if the average interest rate in our portfolio were to increase at a more similar rate to the interest rate markets. We have forward interest rate swap agreements in order to hedge against interest rate fluctuations that impact the amount of net sales we record related to these contracts. These interest rate swap agreements do not qualify for hedge accounting treatment and, accordingly, we record the fair value of the agreements as an asset or liability and the change as income or expense during the period in which the change occurs. As a result of entering into these interest rate swap agreements, we estimate that a 10% change in interest rates would have less than a $1.0 million annual impact on our income before taxes.

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Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Patterson Companies, Inc.

Opinion on Internal Control Over Financial Reporting

We have audited Patterson Companies, Inc.’s internal control over financial reporting as of April 27, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Patterson Companies, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of April 27, 2024, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of April 27, 2024 and April 29, 2023, the related consolidated statements of operations and other comprehensive income, changes in stockholders' equity and cash flows for each of the three years in the period ended April 27, 2024, and the related notes and the financial statement schedule listed in the Index at Item 15(a)(2) and our report dated June 18, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Minneapolis, Minnesota

June 18, 2024

48

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Patterson Companies, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Patterson Companies, Inc. (the Company) as of April 27, 2024 and April 29, 2023, the related consolidated statements of operations and other comprehensive income, changes in stockholders' equity and cash flows for each of the three years in the period ended April 27, 2024, and the related notes and the financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at April 27, 2024 and April 29, 2023, and the results of its operations and its cash flows for each of the three years in the period ended April 27, 2024, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of April 27, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated June 18, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.

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Development costs of software to be sold impairment

Description of the Matter

At April 27, 2024, the Company’s capitalized development costs of software to be sold were $73.3 million. As discussed in Note 1 of the consolidated financial statements, at the end of each fiscal quarter these unamortized capitalized costs of software to be sold are compared to the net realizable value. If the unamortized capitalized costs of an asset are less than the net realizable value of that asset, then there is no impairment. Auditing management’s comparison of unamortized capitalized development costs of software to be sold to the net realizable value was complex and highly judgmental due to the significant estimation required in determining the net realizable value of the asset. For software to be sold, the estimate of the net realizable value was sensitive to significant assumptions, such as forecasted revenue, and labor and contractor costs, which are affected by expected future market or economic conditions.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s process to compare unamortized capitalized costs of software to be sold to the net realizable value, including controls over management’s forecasting processes used to develop the projected future revenue and labor and contractor costs used in the fair value estimates, as well as controls over management’s review of the significant data and assumptions described above. To test the estimated fair value of the unamortized capitalized development costs of software to be sold, we performed audit procedures that included, among others, assessing the valuation methodologies used by management and testing the significant assumptions discussed above. We compared the significant assumptions used by management to current industry, market and economic trends, historical actuals, as well as other relevant factors. We assessed the reasonableness of forecasted future revenue by comparing the forecasts to historical software sales results and relevant software market industry data. We assessed the reasonableness of future labor and contractor costs by comparing the estimates to historical actuals and presentations of planned enhancements. We also performed sensitivity analyses of significant assumptions to evaluate the significance of changes in the recoverability that would result from changes in assumptions.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 1985.

Minneapolis, Minnesota

June 18, 2024

50

PATTERSON COMPANIES, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

	April 27, 2024		April 29, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	114,462	$	159,669
Receivables, net of allowance for doubtful accounts of $2,731 and $3,667	547,287		477,384
Inventory, net	782,898		795,072
Prepaid expenses and other current assets	334,116		351,011
Total current assets	1,778,763		1,783,136
Property and equipment, net	229,081		212,283
Operating lease right-of-use assets, net	122,295		92,956
Long-term receivables, net	129,876		121,717
Goodwill	156,328		156,420
Identifiable intangibles, net	193,261		231,873
Investments	166,320		160,022
Other non-current assets, net	120,808		120,739
Total assets	$	2,896,732	$	2,879,146
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	745,375	$	724,993
Accrued payroll expense	78,211		82,253
Other accrued liabilities	167,399		168,696
Operating lease liabilities	32,815		28,390
Current maturities of long-term debt	122,750		36,000
Borrowings on revolving credit	186,000		45,000
Total current liabilities	1,332,550		1,085,332
Long-term debt	328,911		451,231
Non-current operating lease liabilities	92,464		67,376
Deferred income taxes	104,521		119,143
Other non-current liabilities	36,554		37,529
Total liabilities	1,895,000		1,760,611
Stockholders’ equity:
Common stock, $0.01 par value: 600,000 shares authorized; 89,701 and 96,350 shares issued and outstanding	897		964
Additional paid-in capital	258,679		233,706
Accumulated other comprehensive loss	(89,915)		(89,262)
Retained earnings	831,483		972,127
Total Patterson Companies, Inc. stockholders' equity	1,001,144		1,117,535
Noncontrolling interests	588		1,000
Total stockholders’ equity	1,001,732		1,118,535
Total liabilities and stockholders’ equity	$	2,896,732	$	2,879,146

See accompanying notes

51

PATTERSON COMPANIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

AND OTHER COMPREHENSIVE INCOME

(In thousands, except per share amounts)

	Fiscal Year Ended
	April 27, 2024		April 29, 2023		April 30, 2022
Net sales	$	6,568,272	$	6,471,471	$	6,499,405
Cost of sales	5,188,030		5,098,526		5,210,318
Gross profit	1,380,242		1,372,945		1,289,087
Operating expenses	1,127,318		1,096,974		1,132,085
Operating income	252,924		275,971		157,002
Other income (expense):
Gains on investments	—		—		101,809
Other income, net	35,039		27,826		27,731
Interest expense	(44,910)		(33,636)		(20,288)
Income before taxes	243,053		270,161		266,254
Income tax expense	57,534		63,563		64,540
Net income	185,519		206,598		201,714
Net loss attributable to noncontrolling interests	(412)		(959)		(1,496)
Net income attributable to Patterson Companies, Inc.	$	185,931	$	207,557	$	203,210
Earnings per share attributable to Patterson Companies, Inc.:
Basic	$	2.00	$	2.14	$	2.09
Diluted	$	1.98	$	2.12	$	2.06
Weighted average shares:
Basic	92,969		97,027		97,277
Diluted	93,679		97,815		98,514
Dividends declared per common share	$	1.04	$	1.04	$	1.04
Comprehensive income
Net income	$	185,519	$	206,598	$	201,714
Foreign currency translation gain (loss)	(1,695)		(8,788)		(19,966)
Cash flow hedges, net of tax	1,042		1,042		1,042
Comprehensive income	$	184,866	$	198,852	$	182,790

See accompanying notes

52

PATTERSON COMPANIES, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In thousands)

	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Non-controlling interests		Total
	Number	Amount
Balance at April 24, 2021	96,813	$	968	$	169,099	$	(62,592)	$	855,741	$	1,455	$	964,671
Foreign currency translation	—	—		—		(19,966)		—		—		(19,966)
Cash flow hedges	—	—		—		1,042		—		—		1,042
Net income (loss)	—	—		—		—		203,210		(1,496)		201,714
Dividends declared	—	—		—		—		(102,257)		—		(102,257)
Common stock issued	981	10		7,616		—		—		—		7,626
Repurchases of common stock	(1,032)	(10)		—		—		(34,990)		—		(35,000)
Stock based compensation	—	—		23,805		—		—		—		23,805
Contribution from noncontrolling interest	—	—		—		—		—		1,000		1,000
Balance at April 30, 2022	96,762	968		200,520		(81,516)		921,704		959		1,042,635
Foreign currency translation	—	—		—		(8,788)		—		—		(8,788)
Cash flow hedges	—	—		—		1,042		—		—		1,042
Net income (loss)	—	—		—		—		207,557		(959)		206,598
Dividends declared	—	—		—		—		(101,662)		—		(101,662)
Common stock issued	1,608	16		17,643		—		—		—		17,659
Repurchases of common stock	(2,020)	(20)		—		—		(55,472)		—		(55,492)
Stock based compensation	—	—		15,543		—		—		—		15,543
Contribution from noncontrolling interest	—	—		—		—		—		1,000		1,000
Balance at April 29, 2023	96,350	964		233,706		(89,262)		972,127		1,000		1,118,535
Foreign currency translation	—	—		—		(1,695)		—		—		(1,695)
Cash flow hedges	—	—		—		1,042		—		—		1,042
Net income (loss)	—	—		—		—		185,931		(412)		185,519
Dividends declared	—	—		—		—		(97,143)		—		(97,143)
Common stock issued	955	9		9,101		—		—		—		9,110
Repurchases of common stock	(7,604)	(76)		(1,999)		—		(229,432)				(231,507)
Stock based compensation	—	—		17,871		—		—		—		17,871
Balance at April 27, 2024	89,701	$	897	$	258,679	$	(89,915)	$	831,483	$	588	$	1,001,732

See accompanying notes

53

PATTERSON COMPANIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Fiscal Year Ended
	April 27, 2024		April 29, 2023		April 30, 2022
Operating activities:
Net income	$	185,519	$	206,598	$	201,714
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation	49,617		45,772		44,180
Amortization	38,539		37,932		37,812
Gains on investments	—		—		(101,809)
Bad debt expense	2,542		3,450		2,769
Stock-based compensation	17,871		15,543		23,805
Deferred income taxes	(13,523)		(1,993)		(4,718)
Non-cash losses (gains) and other, net	204		654		(1,431)
Change in assets and liabilities:
Receivables	(1,102,618)		(1,047,075)		(1,144,833)
Inventory	11,039		(11,086)		(53,871)
Accounts payable	21,343		43,095		80,904
Accrued liabilities	(2,788)		(21,714)		(27,630)
Other changes from operating activities, net	2,877		(26,028)		(37,886)
Net cash used in operating activities	(789,378)		(754,852)		(980,994)
Investing activities:
Additions to property and equipment and software	(67,626)		(64,220)		(38,308)
Payments related to acquisitions, net of cash acquired	(1,108)		(33,280)		(19,793)
Collection of deferred purchase price receivables	1,028,277		998,912		1,213,497
Sale of investments	—		—		75,942
Payments related to investments	—		(15,000)		—
Other investing activities	—		15,155		7,690
Net cash provided by investing activities	959,543		901,567		1,239,028
Financing activities:
Dividends paid	(98,333)		(101,346)		(101,111)
Repurchases of common stock	(229,508)		(55,492)		(35,000)
Payments on long-term debt	(36,000)		(1,500)		(100,750)
Draw (payment) on revolving credit	141,000		16,000		(24,000)
Other financing activities	6,936		15,854		7,627
Net cash used in financing activities	(215,905)		(126,484)		(253,234)
Effect of exchange rate changes on cash	533		(2,576)		(6,030)
Net change in cash and cash equivalents	(45,207)		17,655		(1,230)
Cash and cash equivalents at beginning of period	159,669		142,014		143,244
Cash and cash equivalents at end of period	$	114,462	$	159,669	$	142,014
Supplemental disclosures:
Income taxes paid (includes payments for purchased tax credits of $13,575, $0 and $0, respectively)	$	77,979	$	62,081	$	83,549
Interest paid	26,002		19,623		14,633
Supplemental disclosure of non-cash investing activity:
Retained interest in securitization transactions	$	1,010,438	$	1,008,741	$	1,122,627

See accompanying notes

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PATTERSON COMPANIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

April 27, 2024

(Dollars, except per share amounts, and shares in thousands)

1. Summary of Significant Accounting Policies

Description of Business

Patterson Companies, Inc. (referred to herein as “Patterson” or in the first person notations “we,” “our,” and “us”) is a value-added specialty distributor serving the U.S. and Canadian dental supply and the U.S., Canadian and U.K. animal health supply markets. Patterson has three reportable segments: Dental, Animal Health and Corporate.

Basis of Presentation

The Consolidated Financial Statements include the assets and liabilities of PDC Funding Company, LLC ("PDC Funding"), PDC Funding Company II, LLC ("PDC Funding II"), PDC Funding Company III, LLC ("PDC Funding III") and PDC Funding Company IV, LLC ("PDC Funding IV"), which are our wholly owned subsidiaries and separate legal entities formed under Minnesota law. PDC Funding and PDC Funding II are fully consolidated special purpose entities established to sell customer installment sale contracts to outside financial institutions in the normal course of their business. PDC Funding III and PDC Funding IV are fully consolidated special purpose entities established to sell certain receivables to unaffiliated financial institutions. The assets of PDC Funding, PDC Funding II, PDC Funding III and PDC Funding IV would be available first and foremost to satisfy the claims of its creditors. There are no known creditors of PDC Funding, PDC Funding II, PDC Funding III or PDC Funding IV. The Consolidated Financial Statements also include the assets and liabilities of Technology Partner Innovations, LLC, which is further described in Note 13.

Fiscal Year End

We operate with a 52-53 week accounting convention with our fiscal year ending on the last Saturday in April. Fiscal 2024 ended on April 27, 2024 and consisted of 52 weeks. Fiscal 2023 ended on April 29, 2023 and consisted of 52 weeks. Fiscal 2022 ended on April 30, 2022 and consisted of 53 weeks. Fiscal 2025 will end on April 26, 2025 and will consist of 52 weeks.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash equivalents consist primarily of investments in money market funds and government securities. The maturity of these securities at the time of purchase is 90 days or less. All cash and cash equivalents are classified as available-for-sale and carried at cost, which approximates fair value.

Inventory, net

Inventory, net consists of merchandise held for sale and is stated at the lower of cost or market. The cost of our inventory includes the amount we pay to our suppliers to acquire inventory and freight costs incurred in connection with the delivery of product to our distribution centers and our other locations. Cost is determined using the last-in, first-out ("LIFO") method for all inventories, except for foreign inventories, which are valued using the first-in, first-out ("FIFO") method. Inventories valued at LIFO represented 81% and 81% of total inventories at April 27, 2024 and April 29, 2023, respectively.

The accumulated LIFO reserve was $154,055 and $146,915 at April 27, 2024 and April 29, 2023, respectively. We believe that inventory replacement cost exceeds the inventory balance by an amount approximating the LIFO reserve.

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Property and Equipment, net

Property and equipment, net are stated at cost. Depreciation is calculated on the straight-line method over estimated useful lives of up to 39 years for buildings or the expected remaining life of purchased buildings, the term of the lease for leasehold improvements, 3 to 10 years for computer hardware and software, and 5 to 10 years for furniture and equipment.

Goodwill and Other Indefinite-Lived Intangible Assets

Goodwill and other indefinite-lived intangible assets are not amortized but rather are tested at least annually at the beginning of the fourth quarter for impairment, or more often if events or circumstances indicate the carrying value of the asset may not be recoverable.

Goodwill impairment testing is done at the reporting unit level, which represents an operating segment or a component of an operating segment. We have two reporting units; Dental and Animal Health. Our Corporate reportable segment's assets and liabilities, and net sales and expenses, are allocated to the two reporting units.

We perform a qualitative evaluation or a quantitative test to assess goodwill for impairment. The qualitative evaluation is an assessment of factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. We may elect not to perform the qualitative assessment for one or both reporting units and perform a quantitative impairment test.

If performed, the quantitative goodwill impairment test compares the fair value of each reporting unit to the reporting unit's carrying value, including goodwill. If the reporting unit's carrying value exceeds its fair value, an impairment loss will be recognized. Any goodwill impairment is measured as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying value of goodwill. The determination of fair value requires management to make assumptions and to apply judgment to estimate industry and economic factors and the profitability of future business strategies. Patterson conducts impairment testing based on current business strategy in light of present industry and economic conditions, as well as future expectations.

Our indefinite-lived intangible asset is a trade name, which is assessed for impairment by comparing the carrying value of the asset with its fair value. If the carrying value exceeds fair value, an impairment loss is recognized in an amount equal to the excess. The determination of fair value involves assumptions, including projected revenues and gross profit levels, as well as consideration of any factors that may indicate potential impairment.

We performed qualitative assessments for our goodwill impairment tests in fiscal 2024. No impairments were recorded in fiscal 2024, 2023, or 2022 as a result of goodwill and other indefinite-lived impairment tests performed.

Recoverability of Long-Lived Assets

Long-lived assets, including definite-lived intangible assets, are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable through the estimated undiscounted future cash flows derived from such assets. Our definite-lived intangible assets primarily consist of customer relationships, trade names and trademarks. When impairment exists, the related assets are written down to fair value using level 3 inputs, as discussed further in Note 7.

Other Non-current Assets, Net

	April 27, 2024		April 29, 2023
Development costs of software to be sold, net	$	73,259	$	71,467
Other	47,549		49,272
Other non-current assets, net	$	120,808	$	120,739

During fiscal 2024, 2023 and 2022, we recorded $11,651, $9,068 and $7,267, respectively, of amortization expense related to the development costs of software to be sold in cost of sales within the Consolidated Statements of Operations and Other Comprehensive Income.

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Recoverability of Development Costs of Software to be Sold

We capitalize certain costs incurred for software to be sold, leased or otherwise marketed to our customers. The costs are treated as capital or expense based on the nature of the costs and the project stage in which the costs were incurred. At the end of each fiscal quarter, we compare the unamortized capitalized costs of software to be sold to its net realizable value. The net realizable value of capitalized software assets is the estimated future gross revenues from that product reduced by the estimated future costs of completing and disposing of that product, including the costs of performing maintenance and customer support required to satisfy the entity’s responsibility set forth at the time of sale. If the unamortized amount exceeds the net realizable value, an impairment is recorded. If the unamortized capitalized costs are less than the net realizable value of that asset, then there is no impairment.

No significant impairments were recorded in fiscal 2024, 2023, or 2022 as a result of the assessments performed of the recoverability of development costs to be sold.

Financial Instruments

We account for derivative financial instruments under the provisions of Accounting Standards Codification ("ASC") Topic 815, “Derivatives and Hedging.” Our use of derivative financial instruments is generally limited to managing well-defined interest rate risks. We do not use financial instruments or derivatives for any trading purposes.

Revenue Recognition

Revenues are generated from the sale of consumable products, equipment and support, software and support, technical service parts and labor, and other sources. Revenues are recognized when or as performance obligations are satisfied. Performance obligations are satisfied when the customer obtains control of the goods or services.

Consumable product, equipment, software and parts sales are recorded upon delivery, except in those circumstances where terms of the sale are FOB shipping point, in which case sales are recorded upon shipment. Technical service labor is recognized as it is provided. Revenue derived from equipment support and software services is recognized ratably over the period in which the support and services are provided.

In addition to revenues generated from the distribution of consumable products under arrangements (buy/sell agreements) where the full market value of the product is recorded as revenue, we earn commissions for services provided under agency agreements. The agency agreement contrasts to a buy/sell agreement in that we do not have control over the transaction, as we do not have the primary responsibility of fulfilling the promise of the good or service and we do not bill or collect from the customer in an agency relationship. Commissions under agency agreements are recorded when the services are provided.

Estimates for returns, damaged goods, rebates, loyalty programs and other revenue allowances are made at the time the revenue is recognized based on the historical experience for such items. The receivables that result from the recognition of revenue are reported net of related allowances. We maintain a valuation allowance based upon the expected collectability of receivables held. Estimates are used to determine the valuation allowance and are based on several factors, including historical collection data, economic trends and credit worthiness of customers. Receivables are written off when we determine the amounts to be uncollectible, typically upon customer bankruptcy or non-response to continuous collection efforts. The portions of receivable amounts that are not expected to be collected during the next twelve months are classified as long-term.

Receivables from vendors earned as a result of volume rebates and reimbursements for customer pricing contracts and promotions are recorded as a reduction of cost of sales in the period in which the related revenue is recognized. We estimate the vendor receivables earned but not received based on sales forecasts, transactional data, and historical vendor collection trends.

We offer customer financing contracts on equipment purchases by creditworthy customers. For financing contracts at a below-market interest rate, we record a subsidy as a reduction to net sales in the period the contract is originated. The subsidy on below-market rate contracts is estimated based on analyses of current publicly-available interest rate trends. We do not consider contracts with a term of one year or less to have a significant financing component and do not record a subsidy for these contracts.

We generally sell our customers’ financing contracts to outside financial institutions in the normal course of our business. These financing arrangements are accounted for as a sale of assets under the provisions of ASC 860, Transfers and Servicing. We receive the proceeds of the contracts upon sale to financial institutions, with a portion of the proceeds held by the financial institutions as a deferred purchase price (DPP) as security against eventual

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performance of the portfolio. Customer financing net sales include the impact of changes in interest rates on DPP receivables, as the average interest rate in our contract portfolio may not fluctuate at the same rate as interest rate markets, resulting in an increase or reduction of gain on contract sales. We enter into an interest rate swap to hedge a portion of the related interest rate risk. These agreements do not qualify for hedge accounting, and the gains or losses on an interest rate swap are reported in other income and expense in our Consolidated Statements of Operation and Other Comprehensive Income.

Our financing business is described in further detail in Note 5 to the Consolidated Financial Statements.

Patterson has a relatively large, dispersed customer base and no single customer accounts for more than 10% of consolidated net sales. In addition, the equipment sold to customers under finance contracts generally serves as collateral for the contract and the customer provides a personal guarantee as well.

Net sales do not include sales tax as we are considered a pass-through conduit for collecting and remitting sales tax.

Contract Balances

Contract balances represent amounts presented in our Consolidated Balance Sheets when either we have transferred goods or services to the customer or the customer has paid consideration to us under the contract. These contract balances include accounts receivable, contract assets and contract liabilities.

Contract asset balances as of April 27, 2024 and April 29, 2023 were $1,373 and $1,338, respectively. Our contract liabilities primarily relate to advance payments from customers, upfront payments for software and support provided over time, and options that provide a material right to customers, such as our customer loyalty programs. At April 27, 2024 and April 29, 2023, contract liabilities of $37,399 and $36,850 were reported in other accrued liabilities, respectively. During the fiscal year ended April 27, 2024, we recognized $33,454 of the amount previously deferred at April 29, 2023.

Patterson Advantage Loyalty Program

The Dental segment provides a point-based awards program to qualifying customers involving the issuance of “Patterson Advantage dollars” which can be used toward equipment and technology purchases. Patterson Advantage dollars earned during a program year expire one year after the end of the program year. Costs of the program and changes in the corresponding liability are recognized as reductions to net sales. As of April 27, 2024, we believe we have sufficient experience with the program to reasonably estimate the amount of Patterson Advantage dollars that will not be redeemed and thus have recorded a liability for 87.0% of the maximum potential amount that could be redeemed. We recognize the expected breakage amount as revenue in proportion to the pattern of rights exercised by the customer, and we recognize the estimated value of unused Patterson Advantage dollars as redemptions occur. Breakage recognized was immaterial to all periods presented.

Freight and Delivery Charges

Freight and delivery charges are included in cost of sales in the Consolidated Statements of Operations and Other Comprehensive Income.

Advertising

We expense all advertising and promotional costs as incurred, except for direct marketing expenses, which are expensed over the shorter of the life of the asset or one year. Total net advertising and promotional expenses were $3,124, $6,888 and $1,532 for fiscal 2024, 2023 and 2022, respectively. There were no deferred direct-marketing expenses included in the Consolidated Balance Sheets as of April 27, 2024 and April 29, 2023.

Related Party Transactions

We have interests in a number of entities that are accounted for using the equity method. During fiscal 2024, 2023 and 2022, we made purchases of $195,048, $198,712 and $193,625 from these entities, respectively. During fiscal 2024, 2023 and 2022, we recorded net sales of $150,892, $123,271 and $117,347 to these entities, respectively.

Income Taxes

The liability method is used to account for income tax expense. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and

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are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

Valuation allowances are established for deferred tax assets if, after assessment of available positive and negative evidence, it is more likely than not that the deferred tax asset will not be fully realized.

Self-insurance

Patterson is self-insured for certain losses related to general liability, product liability, automobile, workers’ compensation and medical claims. We estimate our liabilities based upon an analysis of historical data and actuarial estimates. While current estimates are believed reasonable based on information currently available, actual results could differ and affect financial results due to changes in the amount or frequency of claims, medical cost inflation or other factors. Historically, actual results related to these types of claims have not varied significantly from estimated amounts.

Stock-based Compensation

We recognize stock-based compensation expense based on estimated grant date fair values. The grant date fair value of stock options and stock purchases made through our Employee Stock Purchase Plan are estimated using the Black-Scholes option pricing valuation model. The grant date fair value of performance stock units that vest upon meeting certain market conditions is estimated using the Monte Carlo valuation model. These valuations require estimates to be made including expected stock price volatility which considers historical volatility trends, implied future volatility based on certain traded options and other factors. We estimate the expected life of awards based on several factors, including types of participants, vesting schedules, contractual terms and various factors surrounding exercise behavior of different groups.

The grant date fair value of time-based restricted stock awards and restricted stock units is calculated based on the closing price of our common stock on the date of grant.

Compensation expense for all share-based payment awards is recognized over the requisite service period (or to the date a participant becomes eligible for retirement, if earlier) for awards that are expected to vest.

Retirement Savings Plan

In fiscal 2024, we merged the stand-alone Patterson Companies, Inc. Employee Stock Ownership Plan (the "ESOP") into the Patterson Companies, Inc. 401(k) Plan (the "401(k) Plan"). The ESOP remains a component of the 401(k) Plan with many of the relevant provisions for the ESOP in effect. The ESOP was previously frozen to new participants in fiscal 2021 and the last employer contribution was made to eligible participants effective for the plan year ended December 31, 2020.

The general purpose of the 401(k) plan is to provide additional financial security during retirement by providing employees with an incentive to make regular savings contributions. In addition to the participation of our employees, we make annual matching contributions using an established formula. Employer contribution expense was $20,003, $19,649 and $21,013 for fiscal 2024, 2023 and 2022, respectively, which is included in operating expenses within the Consolidated Statements of Operations and Other Comprehensive Income.

Other Income (Expense), Net

	Fiscal Year Ended
	April 27, 2024		April 29, 2023		April 30, 2022
Gain on interest rate swap agreements	$	12,447	$	9,968	$	15,835
Investment income and other	22,592		17,858		11,896
Other income (expense), net	$	35,039	$	27,826	$	27,731

Comprehensive Income

Comprehensive income is computed as net income plus certain other items that are recorded directly to stockholders’ equity. Significant items included in comprehensive income are foreign currency translation adjustments and the effective portion of cash flow hedges, net of tax. Foreign currency translation adjustments do not include a provision for income tax because earnings from foreign operations are considered to be indefinitely

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reinvested outside the U.S. The income tax expense related to cash flow hedge losses was $321, $321 and $321 for fiscal 2024, 2023 and 2022, respectively.

Earnings Per Share ("EPS")

The amount of basic EPS is computed by dividing net income attributable to Patterson Companies, Inc. by the weighted average number of outstanding common shares during the period. The amount of diluted EPS is computed by dividing net income by the weighted average number of outstanding common shares and common share equivalents, when dilutive, during the period.

The following table sets forth the denominator for the computation of basic and diluted EPS. There were no material adjustments to the numerator.

	Fiscal Year Ended
	April 27, 2024	April 29, 2023	April 30, 2022
Denominator for basic EPS – weighted average shares	92,969	97,027	97,277
Effect of dilutive securities – stock options, restricted stock and stock purchase plans	710	788	1,237
Denominator for diluted EPS – weighted average shares	93,679	97,815	98,514

Potentially dilutive securities representing 1,022, 932 and 772 shares for fiscal 2024, 2023 and 2022, respectively, were excluded from the calculation of diluted EPS because their effects were anti-dilutive using the treasury stock method.

Recent Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures". This ASU requires additional disclosures related to rate reconciliation and income taxes paid. The new standard is effective for annual disclosures in fiscal year 2026 and interim disclosures in fiscal year 2027, with early adoption permitted. We currently are evaluating the impact of adopting this pronouncement.

In November 2023, the FASB issued ASU No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures". This ASU requires disclosures of significant segment expenses and other segment items. Disclosures about a reportable segment's profit or loss and assets will be required for both annual and interim periods. This ASU also requires disclosure of the title and position of Chief Operating Decision Maker ("CODM") and an explanation of how the CODM uses the reported measures of profit or loss in assessing performance and allocating resources. The new standard is effective for annual disclosures in fiscal year 2025 and interim disclosures in fiscal year 2026, with early adoption permitted. We currently are evaluating the impact of adopting this pronouncement.

2. Acquisitions

During the first quarter of fiscal 2024, we used $1,108 to pay a holdback following our acquisition of substantially all of the assets of Miller Vet Holdings, LLC. The payment was due on the 24 month anniversary of the closing date.

During the third quarter of fiscal 2023, we acquired substantially all of the assets of Relief Services for Veterinary Practitioners and Animal Care Technologies (RSVP and ACT), Texas-based companies that provide innovative solutions to veterinary practices through data extraction and conversion, staffing and video-based training services. Also during the third quarter of fiscal 2023, we acquired substantially all of the assets of Dairy Tech, Inc., a Colorado-based company that provides pasteurizing equipment and single-use bags that allow dairy producers to produce, store and feed colostrum for newborn calves, as well as product offerings for beef cattle producers. These acquisitions expand our Companion Animal and Production Animal value-added platforms and add solutions to their suite of offerings.

The total purchase price for these acquisitions is $37,535, which includes holdbacks of $4,255 that will be paid on the 24 month anniversary of the closing dates and working capital adjustments of $23 which were paid in the fourth quarter of fiscal 2023. As of the acquisition date, we have recorded $17,300 of identifiable intangibles, $16,040 of goodwill and net tangible assets of $4,233 in our Consolidated Balance Sheets related to these acquisitions. Goodwill, which is deductible for income tax purposes, was increased by $272 subsequent to acquisition date as a result of working capital adjustments. Goodwill was recorded within the Animal Health segment and represents the

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expected benefit of integrating these value-added platforms with our existing operations. We have included their results of operations in our financial statements since the date of acquisition within the Animal Health segment. The accounting for the acquisitions was complete as of October 28, 2023. The acquisitions were not deemed significant and did not materially impact our financial statements, and, therefore, pro forma results are not provided.

3. Cash and Cash Equivalents

Cash and cash equivalents consisted of the following:

	April 27, 2024		April 29, 2023
Cash on hand	$	109,777	$	111,892
Money market funds	4,685		47,777
Total	$	114,462	$	159,669

Cash on hand is generally in interest earning accounts. Included in cash and cash equivalents in the Consolidated Balance Sheets are $33,813 and $33,072 as of April 27, 2024 and April 29, 2023, respectively, which represent cash collected from previously sold customer financing contracts that have not yet been settled. See Note 5 for additional information.

4. Receivables Securitization Program

We are party to certain receivables purchase agreements (the “Receivables Purchase Agreements”) with MUFG Bank, Ltd. ("MUFG") (f.k.a. The Bank of Tokyo-Mitsubishi UFJ, Ltd.), under which MUFG acts as an agent to facilitate the sale of certain Patterson receivables (the “Receivables”) to certain unaffiliated financial institutions (the “Purchasers”). The sale of these receivables is accounted for as a sale of assets under the provisions of ASC 860, Transfers and Servicing. We utilize PDC Funding III and PDC Funding IV to facilitate the sale to fulfill requirements within the agreement. We use a daily unit of account for these Receivables.

The proceeds from the sale of these Receivables comprise a combination of cash and a deferred purchase price (“DPP”) receivable. The DPP receivable is ultimately realized by Patterson following the collection of the underlying Receivables sold to the Purchasers. The amount available under the Receivables Purchase Agreements fluctuates over time based on the total amount of eligible Receivables generated during the normal course of business, with maximum availability of $200,000 as of April 27, 2024, of which $200,000 was utilized.

We have no retained interests in the transferred Receivables, other than our right to the DPP receivable and collection and administrative service fees. We consider the fees received adequate compensation for services rendered, and accordingly have recorded no servicing asset or liability. As of April 27, 2024 and April 29, 2023, the fair value of outstanding trade receivables transferred to the Purchasers under the facility and derecognized from the Consolidated Balance Sheets were $400,626 and $429,853, respectively. Sales of trade receivables under this facility were $3,585,194, $3,718,167, and $3,643,700, and cash collections from customers on receivables sold were $3,614,901, $3,684,412 and $3,632,145 during the fiscal years ended 2024, 2023 and 2022, respectively.

The DPP receivable is recorded at fair value within the Consolidated Balance Sheets within prepaid expenses and other current assets. The difference between the carrying amount of the Receivables and the sum of the cash and fair value of the DPP receivable received at time of transfer is recognized as a gain or loss on sale of the related Receivables inclusive of bank fees and allowance for credit losses. In operating expenses in the Consolidated Statements of Operations and Other Comprehensive Income, we recorded losses of $13,850, $11,403 and $3,247 during fiscal 2024, 2023 and 2022, respectively, related to the Receivables.

The following rollforward summarizes the activity related to the DPP receivable:

	Fiscal Year Ended
	April 27, 2024		April 29, 2023		April 30, 2022
Beginning DPP receivable balance	$	227,946	$	195,764	$	183,999
Non-cash additions to DPP receivable	949,194		960,909		1,052,938
Cash collections on DPP receivable	(978,313)		(928,727)		(1,041,173)
Ending DPP receivable balance	$	198,827	$	227,946	$	195,764

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5. Customer Financing

As a convenience to our customers, we offer several different financing alternatives, including a third party program and a Patterson-sponsored program. For the third party program, we act as a facilitator between the customer and the third party financing entity with no on-going involvement in the financing transaction. Under the Patterson-sponsored program, equipment purchased by creditworthy customers may be financed up to a maximum of $2,000. We generally sell our customers’ financing contracts to outside financial institutions in the normal course of our business. These financing arrangements are accounted for as a sale of assets under the provisions of ASC 860, Transfers and Servicing. We use a monthly unit of account for these financing contracts.

We operate under an agreement to sell a portion of our equipment finance contracts to commercial paper conduits with MUFG serving as the agent. We utilize PDC Funding to fulfill a requirement of participating in the commercial paper conduit. We receive the proceeds of the contracts upon sale to MUFG. At least 15.0% of the proceeds are held by the conduit as security against eventual performance of the portfolio. This percentage can be greater and is based upon certain ratios defined in the agreement with MUFG. The capacity under the agreement with MUFG at April 27, 2024 was $575,000.

Historically, we maintained two arrangements under which we sell these contracts. We formerly also maintained an agreement with Fifth Third Bank ("Fifth Third") whereby Fifth Third purchased customers’ financing contracts. PDC Funding II sold its financing contracts to Fifth Third. We received the proceeds of the contracts upon sale to Fifth Third. At least 15.0% were held by the conduit as security against eventual performance of the portfolio.

During fiscal 2024, Fifth Third sold and assigned the remaining purchased customer financing contracts to the facility in which MUFG is the agent. We transferred and assigned the related DPP receivable of $15,400 from PDC Funding II to PDC Funding, and the DPP counterparty changed from Fifth Third to MUFG. We amended our agreement with MUFG as agent and expanded capacity under that agreement from $525,000 to $575,000. We thereby ended our agreement with Fifth Third.

We service the financing contracts, for which we are paid a servicing fee. The servicing fees we receive are considered adequate compensation for services rendered. Accordingly, no servicing asset or liability has been recorded.

The portion of the purchase price for the receivables held by the conduits is deemed a DPP receivable, which is paid to the applicable special purpose entity as payments on the customers’ financing contracts are collected by Patterson from customers. The difference between the carrying amount of the receivables sold under these programs and the sum of the cash and fair value of the DPP receivable received at time of transfer is recognized as a gain or loss on sale of the related receivables and recorded in net sales in the Consolidated Statements of Operations and Other Comprehensive Income. Expenses incurred related to customer financing activities are recorded in operating expenses in our Consolidated Statements of Operations and Other Comprehensive Income.

During fiscal 2024, 2023 and 2022, we sold $281,076, $261,853 and $314,732 of contracts under these arrangements, respectively. In net sales in the Consolidated Statements of Operations and Other Comprehensive Income, we recorded losses of $11,010, $4,082 and $18,379 during fiscal 2024, 2023 and 2022, respectively, related to these contracts sold. Cash collections on financed receivables sold were $291,621, $302,851 and $426,188 during the fiscal years ended 2024, 2023 and 2022, respectively. Unamortized discounts of $3,097 and $0 were recorded as of April 27, 2024 and April 29, 2023, respectively, which represent subsidies on contracts with below-market interest rates.

Included in cash and cash equivalents in the Consolidated Balance Sheets are $33,813 and $33,072 as of April 27, 2024 and April 29, 2023, respectively, which represent cash collected from previously sold customer financing contracts that have not yet been settled. Included in current receivables in the Consolidated Balance Sheets are $74,430 and $77,646 as of April 27, 2024 and April 29, 2023, respectively, of finance contracts we have not yet sold. A total of $581,729 of finance contracts receivable sold under the arrangements was outstanding at April 27, 2024. Since the internal financing program began in 1994, bad debt write-offs have amounted to less than 1% of the loans originated.

The following rollforward summarizes the activity related to the DPP receivable:

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	Fiscal Year Ended
	April 27, 2024		April 29, 2023		April 30, 2022
Beginning DPP receivable balance	$	102,979	$	125,332	$	227,967
Non-cash additions to DPP receivable	61,244		47,832		69,689
Cash collections on DPP receivable	(49,964)		(70,185)		(172,324)
Ending DPP receivable balance	$	114,259	$	102,979	$	125,332

The arrangements require us to maintain a minimum current ratio and maximum leverage ratio. We were in compliance with those covenants at April 27, 2024.

6. Derivative Financial Instruments

We are a party to certain offsetting and identical interest rate cap agreements entered into to fulfill certain covenants of the equipment finance contract sale agreements. The interest rate cap agreements also provide a credit enhancement feature for the financing contracts sold by PDC Funding and PDC Funding II to the commercial paper conduit.

The interest rate cap agreements are entered into periodically to maintain consistency with the dollar maximum of the sale agreements and the maturity of the underlying financing contracts. As of April 27, 2024, PDC Funding had purchased an interest rate cap from a bank with a notional amount of $575,000 and a maturity date of July 2031. We sold an identical interest rate cap to the same bank.

These interest rate cap agreements do not qualify for hedge accounting treatment and, accordingly, we record the fair value of the agreements as an asset or liability and the change in fair value as income or expense during the period in which the change occurs.

In January 2014, we entered into a forward interest rate swap agreement with a notional amount of $250,000 and accounted for it as a cash flow hedge, in order to hedge interest rate fluctuations in anticipation of refinancing the 5.17% senior notes due March 25, 2015. These notes were repaid on March 25, 2015 and replaced with new $250,000 3.48% senior notes due March 24, 2025. A cash payment of $29,003 was made in March 2015 to settle the interest rate swap. This amount is recorded in other comprehensive income (loss), net of tax, and is recognized as interest expense over the life of the related debt.

We utilize forward interest rate swap agreements to hedge against interest rate fluctuations that impact the amount of net sales we record related to our customer financing contracts. These interest rate swap agreements do not qualify for hedge accounting treatment and, accordingly, we record the fair value of the agreements as an asset or liability and the change in fair value as income or expense during the period in which the change occurs.

As of April 29, 2023, the remaining notional amount for interest rate swap agreements was $551,504, with the latest maturity date in fiscal 2030. During fiscal 2024, we entered into forward interest rate swap agreements with a notional amount of $247,734. As of April 27, 2024, the remaining notional amount for interest rate swap agreements was $565,420, with the latest maturity date in fiscal 2031.

Net cash receipts of $14,413 and $7,626 were received in fiscal 2024 and 2023, respectively, to settle a portion of our assets and liabilities related to interest rate swap agreements. These receipts are reflected as cash flows in the Consolidated Statements of Cash Flows within net cash used in operating activities.

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The following presents the fair value of derivative instruments included in the Consolidated Balance Sheets:

Derivative type	Classification	April 27, 2024		April 29, 2023
Assets:
Interest rate contracts	Prepaid expenses and other current assets	$	5,781	$	5,875
Interest rate contracts	Other non-current assets	21,193		23,210
Total asset derivatives		$	26,974	$	29,085
Liabilities:
Interest rate contracts	Other accrued liabilities	$	259	$	267
Interest rate contracts	Other non-current liabilities	13,198		12,993
Total liability derivatives		$	13,457	$	13,260

The following tables present the pre-tax effect of derivative instruments on the Consolidated Statements of Operations and Other Comprehensive Income:

		Amount of Loss Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion)
		Fiscal Year Ended
Derivatives in cash flow hedging relationships	Statements of operations location	April 27, 2024		April 29, 2023		April 30, 2022
Interest rate contracts	Interest expense	$	(1,363)	$	(1,363)	$	(1,363)

		Amount of Gain (Loss) Recognized in Income on Derivatives
		Fiscal Year Ended
Derivatives not designated as hedging instruments	Statements of operations location	April 27, 2024		April 29, 2023		April 30, 2022
Interest rate contracts	Other income, net	$	12,447	$	9,968	$	15,835

There were no gains or losses recognized in other comprehensive income (loss) on cash flow hedging derivatives in fiscal 2024, 2023 or 2022.

We recorded no ineffectiveness during fiscal 2024, 2023 or 2022. As of April 27, 2024, the estimated pre-tax portion of accumulated other comprehensive loss that is expected to be reclassified into earnings over the next twelve months is $1,250, which will be recorded as an increase to interest expense.

7. Fair Value Measurements

Fair value is the price at which an asset could be exchanged in a current transaction between knowledgeable, willing parties. The fair value hierarchy of measurements is categorized into one of three levels based on the lowest level of significant input used:

Level 1 –	Quoted prices in active markets for identical assets and liabilities at the measurement date.
Level 2 –	Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3 –	Unobservable inputs for which there is little or no market data available. These inputs reflect management’s assumptions of what market participants would use in pricing the asset or liability.

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Our hierarchy for assets and liabilities measured at fair value on a recurring basis is as follows:

	April 27, 2024
	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	4,685	$	4,685	$	—	$	—
DPP receivable - receivables securitization program	198,827		—		—		198,827
DPP receivable - customer financing	114,259		—		—		114,259
Derivative instruments	26,974		—		26,974		—
Total assets	$	344,745	$	4,685	$	26,974	$	313,086
Liabilities:
Derivative instruments	$	13,457	$	—	$	13,457	$	—

	April 29, 2023
	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	47,777	$	47,777	$	—	$	—
DPP receivable - receivables securitization program	227,946		—		—		227,946
DPP receivable - customer financing	102,979		—		—		102,979
Derivative instruments	29,085		—		29,085		—
Total assets	$	407,787	$	47,777	$	29,085	$	330,925
Liabilities:
Derivative instruments	$	13,260	$	—	$	13,260	$	—

Cash equivalents – We value cash equivalents at their current market rates. The carrying value of cash equivalents approximates fair value and maturities are less than three months.

DPP receivable - receivables securitization program – We value this DPP receivable based on a discounted cash flow analysis using unobservable inputs, which include the estimated timing of payments and the credit quality of the underlying creditor. Significant changes in any of the significant unobservable inputs in isolation would not result in a materially different fair value estimate. The interrelationship between these inputs is insignificant.

DPP receivable - customer financing – We value this DPP receivable based on a discounted cash flow analysis using unobservable inputs, which include a forward yield curve, the estimated timing of payments and the credit quality of the underlying creditor. Significant changes in any of the significant unobservable inputs in isolation would not result in a materially different fair value estimate. The interrelationship between these inputs is insignificant.

Derivative instruments –Our derivative instruments consist of interest rate cap agreements and interest rate swaps. These instruments are valued using inputs such as interest rates and credit spreads.

Certain assets are measured at fair value on a non-recurring basis. These assets are not measured at fair value on an ongoing basis, but are subject to fair value adjustments under certain circumstances. We adjust the carrying value of our non-marketable equity securities to fair value when observable transactions of identical or similar securities occur, or due to an impairment.

We have an investment in Vetsource, a commercial partner and leading home delivery provider for veterinarians. In fiscal 2022, we sold a portion of our investment in Vetsource, with a carrying value of $25,814, for $56,849. We recorded a pre-tax gain of $31,035 in gains on investments in our Consolidated Statements of Operations and Other Comprehensive Income as a result of this sale. The cash received of $56,849 is reported within investing activities in our Consolidated Statements of Cash Flows. In fiscal 2022, we also recorded a pre-tax non-cash gain of $31,035 to reflect the increase in the carrying value of the remaining portion of our investment in Vetsource, which was based on the selling price of the portion of the investment we sold for $56,849. This gain was recorded in gains on investments in our Consolidated Statements of Operations and Other comprehensive income. The carrying value of the investment we owned following this sale was $56,849 and $56,849 as of April 27, 2024 and April 29, 2023,

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respectively. Concurrent with the sale completed in fiscal 2022, we obtained rights that will allow us, under certain circumstances, to require another shareholder of Vetsource to purchase our remaining shares. We recorded a pre-tax non-cash gain of $25,757 in gains on investments in our Consolidated Statements of Operations and Other Comprehensive Income as a result of this transaction. The carrying value of this put option as of April 27, 2024 is $25,757, and is reported within investments in our Consolidated Balance Sheets. The aggregate gains on investments of $87,827 are reported within operating activities in our Consolidated Statements of Cash Flows. Concurrent with obtaining this put option, we also granted rights to the same Vetsource shareholder that would allow such shareholder, under certain circumstances, to require us to sell our remaining shares at fair value. There were no fair value adjustments to such assets during the fiscal year ended April 27, 2024.

In fiscal 2022, we sold a portion of our investment in Vets Plus with a carrying value of $4,009 for $17,101. We recorded a pre-tax gain of $13,092 in gains on investments in our Consolidated Statements of Operations and Other Comprehensive Income as a result of this sale. This $13,092 pre-tax gain is reported within operating activities in our Consolidated Statements of Cash Flows. The cash received of $17,101 is reported within investing activities in our Consolidated Statements of Cash Flows. The carrying value of the investment we owned following this sale was $2,299 and $2,299 as of April 27, 2024 and April 29, 2023, respectively.

Our debt is not measured at fair value in the Consolidated Balance Sheets. The estimated fair value of our debt as of April 27, 2024 and April 29, 2023 was $448,287 and $483,139, respectively, as compared to a carrying value of $451,661 and $487,231 at April 27, 2024 and April 29, 2023, respectively. The fair value of debt was measured using a discounted cash flow analysis based on expected market based yields (i.e., level 2 inputs).

The carrying amounts of receivables, net of allowances, accounts payable, and certain accrued and other current liabilities approximated fair value at April 27, 2024 and April 29, 2023.

8. Goodwill and Other Intangible Assets

The changes in the carrying value of goodwill for each of our reporting units for the fiscal year ended April 27, 2024 were as follows:

	Balance at April 29, 2023		Foreign Currency Translation		Balance at April 27, 2024
Dental	$	139,111	$	(92)	$	139,019
Animal Health	17,309		—		17,309
Total	$	156,420	$	(92)	$	156,328

Balances of other intangible assets, excluding goodwill, were as follows:

	April 27, 2024						April 29, 2023
	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
Unamortized - indefinite lived:
Trade name	$	12,300	$	—	$	12,300	$	12,300	$	—	$	12,300
Amortized - definite lived:
Customer relationships	380,003		228,851		151,152		380,205		205,524		174,681
Trade names and trademarks	135,830		119,326		16,504		135,876		107,519		28,357
Developed technology and other	52,906		39,601		13,305		52,920		36,385		16,535
Total amortized intangible assets	568,739		387,778		180,961		569,001		349,428		219,573
Total identifiable intangible assets	$	581,039	$	387,778	$	193,261	$	581,301	$	349,428	$	231,873

With respect to the amortized intangible assets, future amortization expense is expected to approximate $38,525, $28,716, $27,324, $26,761 and $23,739 for fiscal 2025, 2026, 2027, 2028 and 2029, respectively. Actual amounts of amortization expense may differ from estimated amounts due to additional intangible asset acquisitions, changes in foreign currency exchange rates, impairment of intangible assets, accelerated amortization of intangible assets and other events.

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9. Property and Equipment

Property and equipment consisted of the following:

	April 27, 2024		April 29, 2023
Land	$	9,680	$	9,687
Buildings	109,727		98,174
Leasehold improvements	32,338		31,712
Furniture and equipment	213,010		204,754
Computer hardware and software	261,937		250,805
Construction-in-progress (1)	35,683		32,233
Property and equipment, gross	662,375		627,365
Accumulated depreciation	(433,294)		(415,082)
Property and equipment, net	$	229,081	$	212,283

(1)Includes $20,540 and $10,661 of unamortized development costs of software to be sold as of April 27, 2024 and April 29, 2023, respectively.

10. Leases

We lease certain warehouses, office space, vehicles and equipment. Leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheets. We recognize lease expense for these leases on a straight-line basis over the lease term. We do not separate lease and non-lease components, and instead account for each lease and non-lease component associated with that lease as a single lease component. Some leases include one or more options to renew. The exercise of renewal options is at our sole discretion. Our lease agreements do not contain significant residual value guarantees, restrictions or covenants.

Total lease costs for the fiscal year ended April 27, 2024 and April 29, 2023 were $38,497 and $35,640, respectively, which include variable lease costs and short-term lease costs, which were immaterial.

The following table presents future maturities of lease liabilities:

2025	$	38,047
2026	30,763
2027	25,216
2028	18,914
2029	8,919
After 2029	26,067
Total lease payments	147,926
Less: imputed interest	(22,647)
Present value of lease liabilities	$	125,279

The following tables present other supplemental information related to leases:

	Fiscal Year Ended
	April 27, 2024			April 29, 2023
Cash paid for amounts included in the measurement of operating lease liabilities	$	39,803		$	35,779
Lease assets obtained in exchange for new operating lease liabilities	$	83,041		$	56,603
	April 27, 2024			April 29, 2023
Weighted-average remaining lease term - operating leases	5.87 years			6.50 years
Weighted-average discount rate - operating leases	5.01		%	4.40		%

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11. Debt

Our long-term debt consisted of the following:

			Carrying Value
	Interest Rate		April 27, 2024		April 29, 2023
Senior notes due fiscal 2024 (1)	3.74	%	—		33,000
Senior notes due fiscal 2025 (2)	3.48	%	117,500		117,500
Senior notes due fiscal 2028 (3)	3.79	%	40,000		40,000
Term loan due fiscal 2025 through 2028 (4)	6.54	%	295,500		298,500
Less: Deferred debt issuance costs			(1,339)		(1,769)
Total debt			451,661		487,231
Less: Current maturities of long-term debt			(122,750)		(36,000)
Long-term debt			$	328,911	$	451,231

(1)Issued in December 2011.

(2)Issued in March 2015.

(3)Issued in March 2018.

(4)Issued in December 2019, amended in October 2022. Interest rate is 1-month SOFR plus 1.225% as of April 27, 2024.

Future principal payments due, based on stated contractual maturities for our long-term debt, were as follows as of April 27, 2024:

Fiscal Year
2025	$	122,750
2026	11,250
2027	15,000
2028	304,000
2029	—
Thereafter	—
Total	$	453,000

In fiscal 2021, we entered into an amendment, restatement and consolidation of certain credit agreements with various lenders, including MUFG Bank, Ltd, as administrative agent. This amended and restated credit agreement (the “Credit Agreement”) consisted of a $700,000 revolving credit facility and a $300,000 term loan facility, and was set to mature no later than February 2024.

In fiscal 2023, we amended and restated the Credit Agreement (the “Amended Credit Agreement”). The Amended Credit Agreement consists of a $700,000 revolving credit facility and a $300,000 term loan facility, and will mature no later than October 2027. We used the Amended Credit Agreement facilities to refinance and consolidate the Credit Agreement, and pay the fees and expenses incurred therewith. We expect to use the Amended Credit Agreement to finance our ongoing working capital needs and for other general corporate purposes.

As of April 27, 2024, $295,500 was outstanding under the Amended Credit Agreement term loan at an interest rate of 6.54% and $186,000 was outstanding under the Amended Credit Agreement revolving credit facility at an interest rate of 6.53%. As of April 29, 2023, $298,500 was outstanding under the Credit Agreement term loan at an interest rate of 6.08%, and $45,000 was outstanding under the Credit Agreement revolving credit facility at an interest rate of 5.93%.

We are subject to various financial covenants under our debt agreements including the maintenance of leverage and interest coverage ratios. In the event of our default, any outstanding obligations may become due and payable immediately. We were in compliance with the covenants under our debt agreements as of April 27, 2024.

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12. Income Taxes

The components of income before taxes were as follows:

	Fiscal Year Ended
	April 27, 2024		April 29, 2023		April 30, 2022
Income before taxes
United States	$	211,350	$	233,416	$	225,195
International	31,703		36,745		41,059
Total	$	243,053	$	270,161	$	266,254

Significant components of income tax expense were as follows:

	Fiscal Year Ended
	April 27, 2024		April 29, 2023		April 30, 2022
Current:
Federal	$	51,263	$	46,982	$	46,964
Foreign	8,201		8,280		11,968
State	11,593		10,294		10,326
Total current expense	71,057		65,556		69,258
Deferred:
Federal	(13,403)		(4,217)		(3,918)
Foreign	2,045		2,601		(217)
State	(2,165)		(377)		(583)
Total deferred benefit	(13,523)		(1,993)		(4,718)
Income tax expense	$	57,534	$	63,563	$	64,540

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Deferred tax assets and liabilities are included in other non-current assets and deferred income taxes on the Consolidated Balance Sheets. Significant components of our deferred tax assets (liabilities) were as follows:

	April 27, 2024		April 29, 2023
Deferred tax assets:
Employee compensation and benefits	$	7,674	$	7,519
Inventory related items	7,645		8,228
Foreign intangibles and goodwill	11,767		11,420
Foreign tax credit	7,003		7,003
Lease liability	29,587		19,808
Accrued charitable contributions	427		902
Capitalized research and experimentation costs	12,020		5,172
Other accrued liabilities	6,498		7,744
Other	8,329		7,270
Gross deferred tax assets	90,950		75,066
Less: Valuation allowance	(18,620)		(18,276)
Total net deferred tax assets	72,330		56,790
Deferred tax liabilities
LIFO reserve	(29,593)		(26,010)
Amortizable intangibles	(36,923)		(45,042)
Goodwill	(18,098)		(17,094)
Property, plant, equipment	(32,457)		(36,488)
Lease right-of-use assets	(29,048)		(19,361)
Investments	(26,662)		(26,959)
Other	(4,070)		(3,557)
Total deferred tax liabilities	(176,851)		(174,511)
Deferred net long-term income tax liability	$	(104,521)	$	(117,721)

At April 27, 2024, we had a U.S. foreign tax credit asset that will expire in two years. In addition, we have foreign deferred tax assets which would give rise to tax capital losses if triggered in the future. These losses can only be used against capital gain income. At this time, we believe that it is more likely than not that the foreign tax credit and potential capital loss carryforward attributes totaling $18,620 will not be fully utilized prior to expiration. As a result, a full valuation allowance has been established against these assets.

With regard to unremitted earnings of foreign subsidiaries generated after December 31, 2017, we do not currently provide for U.S. taxes since we intend to reinvest such undistributed earnings indefinitely outside of the United States.

Income tax expense varies from the amount computed using the U.S. statutory rate. The reasons for this difference and the related tax effects are shown below.

	Fiscal Year Ended
	April 27, 2024		April 29, 2023		April 30, 2022
Tax at U.S. statutory rate	$	51,038	$	56,732	$	55,912
State tax provision, net of federal benefit	7,630		8,416		9,176
Effect of foreign taxes	3,612		2,853		3,199
ESOP	(1,895)		(2,049)		(2,121)
Other permanent differences	1,308		2,481		944
Other	(4,159)		(4,870)		(2,570)
Income tax expense	$	57,534	$	63,563	$	64,540

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We have accounted for the uncertainty in income taxes recognized in the financial statements in accordance with ASC Topic 740. This standard clarifies the separate identification and reporting of estimated amounts that could be assessed upon audit. The potential assessments are considered unrecognized tax benefits, because, if it is ultimately determined they are unnecessary, the reversal of these previously recorded amounts will result in a beneficial impact to our financial statements.

As of April 27, 2024 and April 29, 2023, Patterson’s gross unrecognized tax benefits were $8,049 and $8,291, respectively. If determined to be unnecessary, these amounts (net of deferred tax assets of $1,690 and $1,741, respectively, related to the tax deductibility of the gross liabilities) would decrease our effective tax rate. The gross unrecognized tax benefits are included in other non-current liabilities on the Consolidated Balance Sheets.

A summary of the changes in the gross amounts of unrecognized tax benefits is shown below.

	April 27, 2024		April 29, 2023
Balance at beginning of period	$	8,291	$	9,898
Additions for tax positions related to the current year	1,156		1,158
Additions for tax positions of prior years	128		142
Reductions for tax positions of prior years	(12)		(1,400)
Statute expirations	(1,514)		(1,507)
Settlements	—		—
Balance at end of period	$	8,049	$	8,291

We also recognize both interest and penalties with respect to unrecognized tax benefits as a component of income tax expense. As of April 27, 2024 and April 29, 2023, we had recorded $1,756 and $1,617, respectively, for interest and penalties. These amounts are also included in other non-current liabilities on the Consolidated Balance Sheets. These amounts, net of related deferred tax assets, if determined to be unnecessary, would decrease our effective tax rate. During the year ended April 27, 2024, we recorded as part of tax expense $365 related to an increase in our estimated liability for interest and penalties.

Patterson files income tax returns, including returns for our subsidiaries, with federal, state, local and foreign jurisdictions. The IRS has either examined or waived examination for all periods up to and including our fiscal year ended April 25, 2020. In addition to the IRS, periodically, state, local and foreign income tax returns are examined by various taxing authorities. We do not believe that the outcome of these various examinations will have a material adverse impact on our financial statements.

13. Technology Partner Innovations, LLC ("TPI")

In fiscal 2019, we entered into an agreement with Cure Partners to form TPI, which offers a cloud-based practice management software, NaVetor, to its customers. Patterson and Cure Partners each contributed net assets of $4,000 to form TPI. Patterson and Cure Partners each contributed additional net assets of $1,000 and $1,000 during fiscal 2023 and 2022, respectively, and no additional net assets were contributed during fiscal 2024. We have determined that TPI is a variable interest entity, and we consolidate the results of operations of TPI as we have concluded that we are the primary beneficiary of TPI. Since TPI was formed, there have been no changes in ownership interests. As of April 27, 2024, we had noncontrolling interests of $588 on our Consolidated Balance Sheets.

During fiscal 2024, 2023 and 2022, net loss attributable to the noncontrolling interest was $412, $959 and $1,496, respectively.

14. Segment and Geographic Data

We present three reportable segments: Dental, Animal Health and Corporate. Dental and Animal Health are strategic business units that offer similar products and services to different customer bases. Dental provides a virtually complete range of consumable dental products, equipment, turnkey digital solutions and value-added services to dentists, dental laboratories, institutions, and other healthcare professionals throughout North America. Animal Health is a leading, full-line distributor in North America and the U.K. of animal health products, services and technologies to both the production-animal and companion-pet markets. Our Corporate segment is comprised of general and administrative expenses, including home office support costs in areas such as information technology, finance, legal, human resources and facilities. In addition, customer financing and other miscellaneous sales are

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reported within Corporate results. Corporate assets consist primarily of cash and cash equivalents, accounts receivable, property and equipment and long-term receivables. We evaluate segment performance based on operating income. The costs to operate the fulfillment centers are allocated to the business units based on the through-put of the unit.

The following tables present information about our reportable segments and the geographic areas in which we operate:

	Fiscal Year Ended
	April 27, 2024		April 29, 2023		April 30, 2022
Consolidated net sales
United States	$	5,438,727	$	5,423,931	$	5,358,489
United Kingdom	759,184		655,103		717,481
Canada	370,361		392,437		423,435
Total	$	6,568,272	$	6,471,471	$	6,499,405
Dental net sales
United States	$	2,260,198	$	2,256,006	$	2,259,579
Canada	228,436		236,136		256,553
Total	$	2,488,634	$	2,492,142	$	2,516,132
Animal Health net sales
United States	$	3,165,960	$	3,153,518	$	3,098,511
United Kingdom	759,184		655,103		717,481
Canada	141,925		156,301		166,882
Total	$	4,067,069	$	3,964,922	$	3,982,874
Corporate net sales
United States	$	12,569	$	14,407	$	399
Total	$	12,569	$	14,407	$	399

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	Fiscal Year Ended
	April 27, 2024		April 29, 2023		April 30, 2022
Consolidated net sales
Consumable	$	5,274,012	$	5,147,330	$	5,248,040
Equipment	888,597		950,403		920,424
Value-added services and other	405,663		373,738		330,941
Total	$	6,568,272	$	6,471,471	$	6,499,405
Dental net sales
Consumable	$	1,415,789	$	1,358,823	$	1,424,677
Equipment	766,345		823,978		800,144
Value-added services and other	306,500		309,341		291,311
Total	$	2,488,634	$	2,492,142	$	2,516,132
Animal Health net sales
Consumable	$	3,858,223	$	3,788,507	$	3,823,363
Equipment	122,252		126,425		120,280
Value-added services and other	86,594		49,990		39,231
Total	$	4,067,069	$	3,964,922	$	3,982,874
Corporate net sales
Value-added services and other	$	12,569	$	14,407	$	399
Total	$	12,569	$	14,407	$	399

	Fiscal Year Ended
	April 27, 2024		April 29, 2023		April 30, 2022
Operating income
Dental	$	209,807	$	237,268	$	180,212
Animal Health	139,077		126,994		114,403
Corporate	(95,960)		(88,291)		(137,613)
Consolidated operating income	$	252,924	$	275,971	$	157,002
Depreciation and amortization
Dental	$	15,932	$	14,051	$	13,495
Animal Health	46,462		44,644		44,561
Corporate	25,762		25,009		23,936
Consolidated depreciation and amortization	$	88,156	$	83,704	$	81,992

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	April 27, 2024		April 29, 2023
Property and equipment, net
United States	$	180,835	$	177,163
United Kingdom	24,671		21,033
Canada	23,575		14,087
Total property and equipment, net	$	229,081	$	212,283
	April 27, 2024		April 29, 2023
Total assets
Dental	$	913,478	$	853,369
Animal Health	1,568,413		1,570,760
Corporate	414,841		455,017
Total assets	$	2,896,732	$	2,879,146

15. Stockholders’ Equity

Dividends

The following table presents our declared cash dividends per share on our common stock for the past three years. In fiscal 2024, 2023 and 2022, dividends were declared in the period presented and paid in the following quarter.

	Quarter
Fiscal year	1		2		3		4
2024	$	0.26	$	0.26	$	0.26	$	0.26
2023	0.26		0.26		0.26		0.26
2022	0.26		0.26		0.26		0.26

Share Repurchases

During fiscal 2024, we repurchased 7,604 shares of our common stock for $229,508, or an average of $30.18 per share. During fiscal 2023, we repurchased 2,020 shares of our common stock for $55,492, or an average of $27.47 per share. During fiscal 2022, we repurchased 1,032 shares of our common stock for $35,000, or an average of $33.90 per share.

On March 11, 2024, the Board of Directors authorized a $500,000 share repurchase program through March 16, 2027, replacing a prior authorization which was expiring. As of April 27, 2024, $500,000 remains available under the current stock repurchase program.

16. Stock-based Compensation

The Consolidated Statements of Operations and Other Comprehensive Income for fiscal 2024, 2023 and 2022 include pre-tax (after-tax) stock-based compensation expense of $17,871 ($14,060), $15,543 ($12,353) and $23,805 ($18,686), respectively. Pre-tax expense is included in operating expenses within the Consolidated Statements of Operations and Other Comprehensive Income.

As of April 27, 2024, the total unrecognized compensation cost related to non-vested awards was $16,036, and it is expected to be recognized over a weighted average period of approximately 1.2 years.

2015 Omnibus Incentive Plan

In September 2015, our shareholders approved the 2015 Omnibus Incentive Plan ("Incentive Plan"), which was most recently amended and restated in September 2021. The aggregate number of shares of common stock that may be issued is 19,500. The Incentive Plan authorizes various award types to be issued under the plan, including stock options, restricted stock awards, restricted stock units, stock appreciation rights, performance awards, non-employee director awards, cash-based awards and other stock-based awards. We issue new shares for stock option exercises, restricted stock award grants and also for vesting of restricted stock units and performance stock

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units. Awards that expire or are canceled without delivery of shares generally become available for reissuance under the plan.

At April 27, 2024, there were 8,502 shares available for awards under the Incentive Plan.

As a result of the approval of the Incentive Plan, awards are no longer granted under any prior equity incentive plan, but all outstanding awards previously granted under such prior plans will remain outstanding and subject to the terms of such prior plans. At April 27, 2024, there were 289 shares outstanding under prior plans.

Stock Option Awards

Stock options granted to employees expire no later than ten years after the date of grant. Awards typically vest over three years.

The fair value of stock options granted was estimated as of the grant date using a Black-Scholes option-pricing model with the following assumptions:

	Fiscal Year Ended
	April 27, 2024			April 29, 2023			April 30, 2022
Expected dividend yield	3.1		%	3.5		%	3.4		%
Expected stock price volatility	39.3		%	38.8		%	38.1		%
Risk-free interest rate	4.1		%	3.2		%	1.1		%
Expected life (years)	6.0			6.0			6.0
Weighted average grant date fair value per share	$	10.69		$	8.82		$	7.97

The following is a summary of stock option activity:

	Number of Options	Weighted- Average Exercise Price		Aggregate Intrinsic Value
Balance as of April 29, 2023	2,020	$	30.52
Granted	228	33.26
Exercised	(233)	22.97
Canceled	(18)	38.05
Balance as of April 27, 2024	1,997	$	31.65	$	2,824
Vested or expected to vest as of April 27, 2024	1,995	$	31.65	$	2,824
Exercisable as of April 27, 2024	1,548	$	31.65	$	2,824

The weighted average remaining contractual lives of options outstanding and options exercisable as of April 27, 2024 were 5.4 and 4.5 years, respectively.

Related to stock options exercised, the intrinsic value, cash received and tax benefits realized were $1,906, $5,365 and $332, respectively, in fiscal 2024; $4,289, $15,555 and $948, respectively, in fiscal 2023; and $1,552, 3,975 and $238, respectively, in fiscal 2022.

Restricted Stock

Restricted stock awards and restricted stock units granted to employees generally vest over a three year period. Restricted stock awards are also granted to non-employee directors annually and vest over one year. The grant date fair value of restricted stock awards and restricted stock units is based on the closing stock price on the day of the grant. The total fair value of restricted stock awards and restricted stock units that vested in fiscal 2024, 2023 and 2022 was $13,773, $16,123 and $19,970, respectively.

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The following is a summary of restricted stock award activity:

	Restricted Stock Awards
	Shares	Weighted- Average Grant Date Fair Value
Outstanding at April 29, 2023	37	$	27.23
Granted	40	29.19
Vested	(37)	27.23
Forfeitures	—	—
Outstanding at April 27, 2024	40	$	29.19

The following is a summary of restricted stock unit activity:

	Restricted Stock Units
	Shares	Weighted- Average Grant Date Fair Value
Outstanding at April 29, 2023	792	$	29.12
Granted	438	33.18
Vested	(394)	27.86
Forfeitures	(42)	31.32
Outstanding at April 27, 2024	794	$	31.85

Performance Unit Awards

In fiscal 2024, 2023 and 2022, we granted performance unit awards to certain executives which are earned at the end of a three-year period if certain operating goals are met. The number of shares to be received at vesting related to the fiscal 2024, 2023 and 2022 awards will be determined by performance measured over three fiscal year periods and ultimately modified by Patterson's total shareholder return ("TSR") relative to the performance of companies in the S&P Midcap 400 Index measured over a three-year period. We estimate the grant date fair value of the TSR awards using the Monte Carlo valuation model. We recognize expense over the requisite service period based on the outcome that is probable for these awards. The total fair value of performance unit awards that vested in fiscal 2024 and 2023 was $2,438 and $6,220, respectively. No performance unit awards vested in fiscal 2022.

The following is a summary of performance unit award activity at target:

	Performance Unit Awards
	Shares	Weighted- Average Grant Date Fair Value
Outstanding at April 29, 2023	203	$	30.14
Granted	164	33.84
Vested	(76)	29.88
Forfeitures and cancellations	—	—
Outstanding at April 27, 2024	291	$	32.30

Employee Stock Purchase Plan ("ESPP")

We sponsor an ESPP under which a total of 9,000 shares have been reserved for purchase by employees. Eligible employees may purchase shares at 85% of the lower of the fair market value of our common stock on the beginning of the annual offering period, or on the end of each quarterly purchase period, which occur on March 31, June 30, September 30 and December 31. The offering periods begin on January 1 of each calendar year and end on December 31 of each calendar year. At April 27, 2024, there were 658 shares available for purchase under the ESPP.

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We estimate the grant date fair value of shares purchased under our ESPP using the Black-Scholes option pricing valuation model with the following assumptions:

	Fiscal Year Ended
	April 27, 2024			April 29, 2023			April 30, 2022
Expected dividend yield	3.6		%	3.7		%	3.6		%
Expected stock price volatility	38.2		%	31.5		%	28.6		%
Risk-free interest rate	5.1		%	4.7		%	0.3		%
Expected life (years)	0.6			0.6			0.6
Weighted average grant date fair value per share	$	7.55		$	6.89		$	6.79

17. Litigation

From time to time, we become involved in lawsuits, administrative proceedings, government subpoenas, and government investigations (which may, in some cases, involve our entering into settlement agreements or consent decrees), relating to antitrust, commercial, environmental, product liability, intellectual property, regulatory, employment discrimination, putative class actions under the California Labor Code Private Attorneys General Act, and other matters, including matters arising out of the ordinary course of business, including securities litigation. The results of any such proceedings cannot be predicted with certainty because such matters are inherently uncertain. Significant damages or penalties may be sought in some matters, and some matters may require years to resolve. We also may be subject to fines or penalties, and equitable remedies (including but not limited to the suspension, revocation or non-renewal of licenses).

We accrue for these matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Adverse outcomes may result in significant monetary damages or injunctive relief against us that could adversely affect our ability to conduct our business. There also exists the possibility of a material adverse effect on our financial statements for the period in which the effect of an unfavorable outcome becomes probable and reasonably estimable.

On May 23, 2024, Plaintiff Monica Mehring and Mehring Family Dentistry (together, “Plaintiffs”) filed a class action complaint against Patterson Companies Inc. “doing business as Patterson Dental,” UnitedHealth Group and its subsidiaries Change Healthcare and Optum Inc. (collectively, the “Defendants”) in a case captioned Dr. Monica Mehring et al. v. Patterson Companies, Inc. et al., Case No. 4:24-cv-3147 (N.D. Cal. May 23, 2024) (the “Class Action Complaint”). The Class Action Complaint alleges that as a result of Defendants’ failure to implement robust cybersecurity controls, “a group of cybercriminals were able to infiltrate Defendants’ computer networks and steal for ransom confidential health data and source code among other things (‘Data Breach’).” Notwithstanding the Class Action Complaint’s generic reference to “Defendants,” Plaintiffs describe the Data Breach as UnitedHealth Group’s February 21, 2024 discovery that a suspected nation-state associated cyber security threat actor had gained access to some of the Change Healthcare information technology systems. Plaintiffs allege that as a direct result of the Data Breach, they were unable to submit claims through Patterson-supplied Eaglesoft software and, to date, have been unable to receive payments for claims submitted on February 20, 2024. While Plaintiffs assert that they use Eaglesoft to access Change Healthcare and Optum software to “integrate processing, prescriptions, billing and insurance,” the Class Action Complaint does not allege that Eaglesoft or any of Patterson’s IT systems or computer networks were accessed by any threat actor or were otherwise the subject of the alleged Data Breach. Notwithstanding the foregoing, Plaintiffs assert the following causes of action against all Defendants: negligence; “negligent interference with prospective economic advantage;” negligence per se; breach of implied contract; “breach of covenant of good faith and fair dealing;” and unjust enrichment. Plaintiffs purport to bring each claim on behalf of a nationwide class defined as: (i) “[a]ll healthcare providers in the United States whose use of Change Healthcare’s and Optum’s services were disrupted by the [D]ata [B]reach occurring in February 2024”; and (ii) “[a]ll healthcare providers in the United States whose use of Patterson Dental’s Eaglesoft’s services were disrupted by the [D]ata [B]reach occurring in February 2024.” Plaintiffs separately seek to certify a Delaware statewide class defined as: (i) “[a]ll healthcare providers in the state of Delaware whose use of Change Healthcare’s and Optum’s services were disrupted by the [D]ata [B]reach occurring in February 2024”; and (ii) “[a]ll healthcare providers in the state of Delaware whose use of Patterson Dental’s Eaglesoft’s services were disrupted by the [D]ata [B]reach occurring in February 2024.” We are vigorously defending ourselves in this litigation. We do not anticipate that this matter will have a material adverse effect on our financial statements.

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18. Accumulated Other Comprehensive Loss ("AOCL")

The following table summarizes the changes in AOCL during fiscal 2024:

	Cash Flow Hedges		Currency Translation Adjustment		Total
AOCL at April 29, 2023	$	(2,412)	$	(86,850)	$	(89,262)
Other comprehensive loss before reclassifications	—		(1,695)		(1,695)
Amounts reclassified from AOCL	1,042		—		1,042
AOCL at April 27, 2024	$	(1,370)	$	(88,545)	$	(89,915)

The amounts reclassified from AOCL during fiscal 2024 include gains and losses on cash flow hedges, net of taxes of $321. The impact to the Consolidated Statements of Operations and Other Comprehensive Income was an increase to interest expense of $1,363 for fiscal 2024.

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

Item 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15 and 15d-15 of the Securities and Exchange Act of 1934 (the “Exchange Act”). Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of April 27, 2024. Disclosure controls and procedures are defined by Rules 13a-15(e) and 15d-15(e) of the Exchange Act as controls and other procedures that are designed to ensure that information required to be disclosed by Patterson in reports filed with the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in reports filed under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Management’s Annual Report on Internal Control Over Financial Reporting

The management of Patterson Companies, Inc. is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control system is designed to provide reasonable assurance to our management and Board of Directors regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we assessed the effectiveness of our internal control over financial reporting as of April 27, 2024, using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework (2013). Based on this assessment, management has concluded that our internal control over financial reporting was effective as of April 27, 2024. Ernst & Young LLP, the independent registered public accounting firm that audited our Consolidated Financial Statements included in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K, has issued an unqualified report on our internal control over financial reporting as of April 27, 2024.

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/s/ Donald J. Zurbay

President and Chief Executive Officer

/s/ Kevin M. Barry

Chief Financial Officer

June 18, 2024

The report of our independent registered public accounting firm on internal control over financial reporting is included in Item 8 of this Annual Report on Form 10-K.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended April 27, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. OTHER INFORMATION

Insider Trading Arrangements

A significant portion of the compensation of our executive officers is delivered in the form of equity awards, including restricted stock units, performance units and non-qualified stock options. All these awards contain vesting requirements related to service, with performance units also requiring satisfaction of certain performance criteria to obtain a payout. This compensation design is intended to align executive compensation with the performance experienced by our shareholders. Following delivery of shares of our common stock under such equity awards, once any applicable service- or performance-based vesting standards have been satisfied, our executive officers from time to time engage in the open-market sale of some of those shares for diversification or other personal reasons. Our executive officers may also engage from time to time in other transactions involving our securities.

Transactions in our securities by our directors and officers are required to be made in accordance with our Securities Trading and Information Disclosure Policy (our “Insider Trading Policy”), which, among other things, requires that the transactions be in accordance with applicable U.S. federal securities laws that prohibit trading while in possession of material nonpublic information. Rule 10b5-1 under the Exchange Act provides an affirmative defense that enables directors and officers to prearrange transactions in the company’s securities in a manner that avoids concerns about initiating transactions while in possession of material nonpublic information. Our Insider Trading Policy permits our directors and officers to enter into trading plans designed to comply with Rule 10b5-1.

In addition, our directors and officers are required to maintain an ownership of the company’s common stock with a value equal to at least a multiple of their annual base salary (5x annual salary for our Chief Executive Officer and 3x annual salary for all direct reports to our Chief Executive Officer) or their annual cash retainer (5x annual cash retainer for non-employee directors).

During the three months ended April 27, 2024, none of the company’s directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted, modified or terminated a Rule 10b5-1 trading arrangement, except as set forth below, and none of the company’s directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted, modified or terminated a non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K of the Securities Act of 1933, as amended).

On March 12, 2024, Donald J. Zurbay, our President and Chief Executive Officer, modified his written trading plan dated September 25, 2023, which is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c). The plan’s maximum duration of the plan is until December 31, 2024, or such earlier date upon (a) the completion of all trades under the plan, (b) the expiration of the orders relating to such trades without execution, or (c) the occurrence of such other termination event as specified in the plan. As modified, the first trade will not occur until June 11, 2024, at the earliest. The trading plan is intended to permit Mr. Zurbay to sell (i) 1,327 shares of our common stock pursuant to performance units that vested on April 24, 2021, (ii) 3,897 shares of our common stock pursuant to restricted stock units that vested on June 29, 2019, (iii) 1,016 shares of our common stock pursuant to restricted stock units that vested on June 29, 2020, (iv) 976 shares of our common stock pursuant to restricted stock units that vested on July 1, 2019, (v) 25% of the net vested shares of our common stock pursuant to performance units that

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will vest on July 1, 2024, (vi) 25% of the net vested shares of our common stock pursuant to restricted stock units that will vest on July 1, 2024, and (vii) 25% of the net vested shares of our common stock pursuant to restricted stock units that will vest on December 5, 2024.

Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

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PART III

Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Information regarding the directors of Patterson is incorporated herein by reference to the descriptions set forth under the caption “Proposal No. 1 Election of Directors” in Patterson’s Proxy Statement for its Annual Meeting of Shareholders to be held on September 16, 2024 (the “2024 Proxy Statement”). Information regarding executive officers of Patterson is incorporated herein by reference to the information set forth under the caption “Executive Officers” in the 2024 Proxy Statement. Information regarding compliance with Section 16(a) of the Securities Exchange Act of 1934 is incorporated herein by reference to the information set forth under the caption “Section 16(a) Reports” in the 2024 Proxy Statement. The information called for by Item 10, as to the Audit and Finance Committee and the audit committee financial expert, is set forth under the captions “Proposal No. 1 Election of Directors” and “Our Board of Directors and Committees” in the 2024 Proxy Statement and such information is incorporated by reference herein. Information regarding our insider trading policy is incorporated herein by reference to the information set forth under the caption “Executive Compensation – Other Executive Compensation Arrangements, Policies and Practices” in the 2024 Proxy Statement.

Code of Ethics

We have adopted and published a Code of Conduct, which provides an overview of the laws, regulations, and company policies that apply to our employees and our directors and is intended to comply with applicable NASDAQ Marketplace Rules. Our Code of Conduct is available on our website (www.pattersoncompanies.com) under the section “Investor Relations – Corporate Governance.” We intend to satisfy the disclosure requirement of Form 8-K regarding an amendment to, or waiver from, a provision of our Code of Conduct that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions and that relates to any element of the code of ethics definition enumerated in Item 406(b) of Regulation S-K by posting such information on our website at the address and location specified above.

Item 11. EXECUTIVE COMPENSATION

Information regarding executive compensation is incorporated herein by reference to the information set forth under the caption “Executive Compensation” in the 2024 Proxy Statement. Information regarding director compensation is incorporated herein by reference to the information set forth under the caption “Non-Employee Director Compensation” in the 2024 Proxy Statement. Information regarding the Compensation and Human Capital Committee and its report is incorporated herein by reference to the information set forth under the caption “Our Board of Directors and Committees" and "Executive Compensation - Compensation and Human Capital Committee Report” in the 2024 Proxy Statement.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Information regarding securities authorized for issuance under equity compensation plans is incorporated herein by reference to the information set forth under the caption “Equity Compensation Plan Information” in the 2024 Proxy Statement. Information regarding the security ownership of certain beneficial owners and management is incorporated herein by reference to the information set forth under the caption “Security Ownership of Certain Beneficial Owners and Management” in the 2024 Proxy Statement.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Information regarding transactions with related persons is incorporated herein by reference to the information set forth under the caption “Certain Relationships and Related Transactions” in the 2024 Proxy Statement. Information regarding director independence is incorporated herein by reference to the information set forth under the caption “Our Board of Directors and Committees” in the 2024 Proxy Statement.

Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Information relating to principal accounting fees and services and pre-approval policies and procedures is incorporated herein by reference to the information set forth under the caption “Proposal No. 3 Ratification of Selection of Independent Registered Public Accounting Firm – Principal Accountant Fees and Services” in the 2024 Proxy Statement.

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PART IV

Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)1. Financial Statements.

The following Consolidated Financial Statements and supplementary data of Patterson and its subsidiaries are included in Part II, Item 8:

Reports of Independent Registered Public Accounting Firm (PCAOB ID: 42)

Consolidated Balance Sheets

Consolidated Statements of Operations and Other Comprehensive Income

Consolidated Statement of Changes in Stockholders’ Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

2. Financial Statement Schedules.

The following financial statement schedule is filed herewith: Schedule II – Valuation and Qualifying Accounts

Schedules other than that listed above have been omitted because they are not applicable or the required information is included in the financial statements or notes thereto.

3. Exhibits.

Exhibit	Document Description
3.1	Restated Articles of Incorporation (incorporated by reference to our Quarterly Report on Form 10-Q, filed September 9, 2004 (File No. 000-20572)).
3.2	Amended and Restated Bylaws (incorporated by reference to our Current Report on Form 8-K, filed January 12, 2024 (File No. 000-20572)).
4.1	Specimen form of Common Stock Certificate (incorporated by reference to our Quarterly Report on Form 10-Q, filed September 9, 2004 (File No. 000-20572)).
4.2	Description of Securities (incorporated by reference to our Annual Report on Form 10-K, filed June 24, 2020 (File No. 000-20572).
10.1	Patterson Companies, Inc. Summary of Material Terms of Management Incentive Compensation Plan for Fiscal 2024 (filed herewith).**
10.2	Patterson Companies, Inc. Amended and Restated Employee Stock Purchase Plan (incorporated by reference to Annex A to our Definitive Schedule 14A (Proxy Statement), filed August 2, 2019 (File No. 000-20572)).**
10.3	Patterson Dental Company Amended and Restated Employee Stock Ownership Plan, effective May 1, 2001 (incorporated by reference to our Annual Report on Form 10-K, filed July 25, 2002 (File No. 000-20572)).**
10.4	Deferred Profit Sharing Plan for the Employees of Patterson Dental Canada Inc. (incorporated by reference to our Definitive Proxy Statement, filed July 28, 2008 (File No. 000-20572)).**
10.5	Patterson Companies, Inc. Amended and Restated Equity Incentive Plan (incorporated by reference to our Definitive Proxy Statement, filed August 7, 2012 (File No. 000-20572)).**
10.6	Patterson Companies, Inc. 2014 Sharesave Plan (incorporated by reference to our Definitive Proxy Statement, filed August 5, 2014 (File No. 000-20572)).**

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10.7	Patterson Companies, Inc. Amended and Restated 2015 Omnibus Incentive Plan (incorporated by reference to Annex B to our Definitive Schedule 14A (Proxy Statement), filed July 30, 2021 (File No. 000-20572)).**
10.8	The Executive Nonqualified Excess Plan (incorporated by reference to our Annual Report on Form 10-K, filed June 24, 2020 (File No. 000-20572)).**
10.9	Form of Non-Statutory Stock Option Agreement under the Amended and Restated 2015 Omnibus Incentive Plan (filed herewith).**
10.10	Form of Restricted Stock Award Agreement for Directors under the Amended and Restated 2015 Omnibus Incentive Plan (filed herewith).**
10.11	Form of Restricted Stock Unit Agreement for Executive Officers under the Amended and Restated 2015 Omnibus Incentive Plan (filed herewith).**
10.12	Form of Performance Share Unit Award Agreement under the Amended and Restated 2015 Omnibus Incentive Plan (filed herewith).**
10.13	Employment Agreement by and between Patterson Companies, Inc. and Donald J. Zurbay, dated October 12, 2022 (incorporated by reference to our Current Report on Form 8-K, filed October 13, 2022 (File No. 000-20572)).**
10.14	Form of Inducement Non Statutory Stock Option Agreement by and between Patterson Companies, Inc. and Donald J. Zurbay (incorporated by reference to our Current Report on Form 8-K, filed May 23, 2018 (File No. 000-20572)).**
10.15	Inducement, Severance and Change-in-Control Agreement by and between Patterson Companies, Inc. and Kevin M. Barry, dated December 13, 2022 (incorporated by reference to our Current Report on Form 8-K, filed December 15, 2022 (File No. 000-20572)).**
10.16	Restrictive Covenants, Severance and Change-in-Control Agreement by and between Patterson Companies, Inc. and Kevin M. Pohlman, dated June 11, 2018 (incorporated by reference to our Current Report on Form 8-K, filed June 12, 2018 (File No. 000-20572)).**
10.17	Restrictive Covenants, Severance and Change-in-Control Agreement by and between Patterson Companies, Inc. and Les B. Korsh, dated June 11, 2018 (incorporated by reference to our Current Report on Form 8-K, filed June 12, 2018 (File No. 000-20572)).**
10.18	Restrictive Covenants, Severance and Change-in-Control Agreement by and between Patterson Companies, Inc. and Samantha L. Bergeson, dated May 19, 2023 (filed herewith).**
10.19	Transition and Separation Agreement by and between Patterson Companies, Inc. and Tim E. Rogan, dated May 10, 2024 (incorporated by reference to our Current Report on Form 8-K, filed May 10, 2024 (File No. 000-20572)).**
10.20	Receivables Sale Agreement, dated as May 10, 2002, by and among Patterson Dental Supply, Inc., Webster Veterinary Supply, Inc., and PDC Funding Company, LLC, conformed through Amendment No. 5, dated as of April 3, 2024 (filed herewith).
10.21	Amended and Restated Receivables Sales Agreement dated August 12, 2011 by and among Patterson Dental Supply, Inc., Webster Veterinary Supply, Inc. and PDC Funding Company II, LLC (incorporated by reference to our Annual Report on Form 10-K, filed June 24, 2015 (File No. 000-20572)).
10.22	Note Purchase Agreement, dated December 8, 2011, by and among Patterson Companies, Inc., Patterson Medical Holdings, Inc., Patterson Medical Supply, Inc., Patterson Dental Holdings, Inc., Patterson Dental Supply, Inc., Webster Veterinary Supply, Inc., Webster Management, LP, conformed through Third Amendment, dated April 24, 2020 (incorporated by reference to our Annual Report on Form 10-K, filed June 24, 2020 (File No. 000-20572)).
10.23	Note Purchase Agreement, dated March 23, 2015, by and among Patterson Companies, Inc., Patterson Medical Holdings, Inc., Patterson Medical Supply, Inc., Patterson Dental Holdings, Inc., Patterson Dental Supply, Inc., Patterson Veterinary Supply, Inc., and Patterson Management, LP, conformed through Second Amendment, dated April 24, 2020 (incorporated by reference to our Annual Report on Form 10-K, filed June 24, 2020 (File No. 000-20572)).

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10.24	Third Amended and Restated Credit Agreement dated as of October 28, 2022, by and among Patterson Companies, Inc., as borrower, MUFG Bank, Ltd., as administrative agent, and certain lenders party thereto (incorporated by reference to our Current Report on Form 8-K, filed October 31, 2022 (File No. 000-20572)).
10.25	Note Purchase Agreement, dated as of March 29, 2018, among Patterson Companies, Inc., and certain of its named subsidiaries as borrowers, and various private lenders, conformed through Second Amendment, dated April 24, 2020 (incorporated by reference to our Annual Report on Form 10-K, filed June 24, 2020 (File No. 000-20572)).
10.26	Receivables Sale Agreement, dated as of July 24, 2018, by and between Patterson Dental Supply, Inc., as seller, and PDC Funding Company III, LLC, as buyer (incorporated by reference to our Current Report on Form 8-K, filed July 25, 2018 (File No. 000-20572)).
10.27	Loan Agreement, dated December 20, 2019, among Patterson Companies, Inc., the lenders from time to time parties thereto, and MUFG Bank Ltd., as administrative agent (incorporated by reference to our Current Report on Form 8-K, filed December 23, 2019 (File No. 000-20572).
10.28	Receivables Sale Agreement, dated as of January 15, 2020, by and between Patterson Veterinary Supply, Inc., as seller, and PDC Funding Company IV, LLC, as buyer (incorporated by reference to our Current Report on Form 8-K, filed January 17, 2020 (File No. 000-20572).
10.29	Third Amended and Restated Receivables Purchase Agreement dated as of December 3, 2010, among PDC Funding Company, LLC, as seller, Patterson Companies, Inc., as servicer, the conduits party thereto, the financial institutions party thereto, the purchaser agents party thereto, and MUFG Bank, Ltd. (f.k.a. The Bank of Tokyo-Mitsubishi UFJ, Ltd.), as agent, conformed through Amendment 26, dated April 3, 2024 (filed herewith).
10.30	Second Amended and Restated Contract Purchase Agreement dated as of July 20, 2020, among PDC Funding Company II, LLC, as seller, Patterson Companies, Inc., as servicer, the purchasers party thereto, and Fifth Third Bank, as agent, conformed through Second Amendment, dated July 18, 2022 (incorporated by reference to our Quarterly Report on Form 10-Q, filed September 1, 2022 (File No. 000-20572)).
10.31	Receivables Purchase Agreement, dated as of July 24, 2018, by and among Patterson Dental Supply, Inc., as servicer, PDC Funding Company III, LLC, as seller, purchasers from time to time party thereto, and MUFG Bank, Ltd., as agent, conformed through Eighth Amendment, dated August 20, 2021 (incorporated by reference to our Quarterly Report on Form 10-Q, filed September 9, 2021 (File No. 000-20572)).
10.32	Receivables Purchase Agreement, dated as of January 15, 2020, by and among Patterson Veterinary Supply, Inc., as servicer, PDC Funding Company IV, LLC, as seller, purchasers from time to time party thereto, and MUFG Bank, Ltd., as agent, conformed through Sixth Amendment, dated August 20, 2021 (incorporated by reference to our Quarterly Report on Form 10-Q, filed September 9, 2021 (File No. 000-20572)).
19	Patterson Companies, Inc. Securities Trading and Information Disclosure Policy, dated as of June 10, 2024 (filed herewith).
21	Subsidiaries (incorporated by reference to our Annual Report on Form 10-K, filed June 21, 2023 (File No. 000-20572)).
23	Consent of Independent Registered Public Accounting Firm (filed herewith).
31.1	Certification of the Chief Executive Officer pursuant to Rules 13a-4(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
31.2	Certification of the Chief Financial Officer pursuant to Rule 13a-4(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.1	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).

84

32.2	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
97	Patterson Companies, Inc. Clawback Policy, effective as of October 2, 2023 (filed herewith).
101	(Filed Electronically) The following financial information from our Annual Report on Form 10-K for fiscal 2024, formatted in Inline eXtensible Business Reporting Language (iXBRL): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations and Other Comprehensive Income, (iii) the Consolidated Statements of Changes in Stockholders’ Equity, (iv) the Consolidated Statements of Cash Flows and (v) the Notes to the Consolidated Financial Statements.(*)

(*)The iXBRL related information in Exhibit 101 to this Annual Report on Form 10-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.

**    Indicates management contract or compensatory plan or agreement.

(b) See Index to Exhibits.

(c) See Schedule II.

Item 16. Form 10-K Summary.

None.

85

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS

PATTERSON COMPANIES, INC.

(In thousands) 

	Balance at Beginning of Period		Charged to Costs and Expenses		Deductions		Balance at End of Period
Year ended April 27, 2024
Deducted from asset accounts:
Allowance for doubtful accounts	$	3,667	$	2,542	$	3,478	$	2,731
Sales returns and allowances	11,079		50,190		49,145		12,124
Total accounts receivable allowances	$	14,746	$	52,732	$	52,623	$	14,855
LIFO inventory adjustment	$	146,915	$	7,140	$	—	$	154,055
Inventory obsolescence reserve	14,611		15,688		16,589		13,710
Total inventory reserve	$	161,526	$	22,828	$	16,589	$	167,765
Year ended April 29, 2023
Deducted from asset accounts:
Allowance for doubtful accounts	$	5,913	$	3,450	$	5,696	$	3,667
Sales returns and allowances	4,400		57,920		51,241		11,079
Total accounts receivable allowances	$	10,313	$	61,370	$	56,937	$	14,746
LIFO inventory adjustment	$	130,959	$	15,956	$	—	$	146,915
Inventory obsolescence reserve	21,543		11,223		18,155		14,611
Total inventory reserve	$	152,502	$	27,179	$	18,155	$	161,526
Year ended April 30, 2022
Deducted from asset accounts:
Allowance for doubtful accounts	$	6,138	$	2,769	$	2,994	$	5,913
Sales returns and allowances	5,856		59,999		61,455		4,400
Total accounts receivable allowances	$	11,994	$	62,768	$	64,449	$	10,313
LIFO inventory adjustment	$	120,775	$	10,184	$	—	$	130,959
Inventory obsolescence reserve	29,629		61,647		69,733		21,543
Total inventory reserve	$	150,404	$	71,831	$	69,733	$	152,502

86

SIGNATURES

Pursuant to the requirements of section 13 or 15(d) 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.

		PATTERSON COMPANIES, INC.
Dated:	June 18, 2024	By	/s/ Donald J. Zurbay
			Donald J. Zurbay
			President and Chief Executive Officer, Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

		Date
/s/ Donald J. Zurbay	President and Chief Executive Officer, Director (Principal Executive Officer)	June 18, 2024
Donald J. Zurbay
/s/ Kevin M. Barry	Chief Financial Officer (Principal Financial and Accounting Officer)	June 18, 2024
Kevin M. Barry
/s/ John D. Buck	Chairman of the Board	June 18, 2024
John D. Buck
/s/ Meenu Agarwal	Director	June 18, 2024
Meenu Agarwal
/s/ Alex N. Blanco	Director	June 18, 2024
Alex N. Blanco
/s/ Jody H. Feragen	Director	June 18, 2024
Jody H. Feragen
/s/ Robert C. Frenzel	Director	June 18, 2024
Robert C. Frenzel
/s/ Philip G.J. McKoy	Director	June 18, 2024
Philip G.J. McKoy
/s/ Ellen A. Rudnick	Director	June 18, 2024
Ellen A. Rudnick
/s/ Neil A. Schrimsher	Director	June 18, 2024
Neil A. Schrimsher
/s/ Pamela J. Tomczik	Director	June 18, 2024
Pamela J. Tomczik

87

EX-10.1

EXHIBIT 10.1

PATTERSON COMPANIES, INC.

SUMMARY OF MATERIAL TERMS OF

MANAGEMENT INCENTIVE COMPENSATION PLAN FOR

FISCAL YEAR 2024

The Company’s named executive officers are eligible for annual incentives, payable in cash, under the Management Incentive Compensation Plan (the “MICP”). The MICP payout targets, which are achieved if the Company meets certain goals set out in the annual operating plan, are approved by the Compensation and Human Capital Committee of the Company’s Board of Directors (the “Committee”) each year. The MICP performance measures and their weightings are also approved by the Committee each year. The Committee also reviews and approves a schedule that details the required Company performance and resulting MICP payouts for each performance measure. If the threshold performance goals are met, MICP payouts equal at least 50% of target. The Committee maintains the discretion to vary from the formula to decrease an MICP payout. Actual MICP payouts are delivered after the Company’s results are known and applied to the MICP.

EX-10.9

EXHIBIT 10.9

PATTERSON COMPANIES, INC.
NON STATUTORY STOCK OPTION AGREEMENT
PURSUANT TO PATTERSON COMPANIES, INC.
AMENDED AND RESTATED 2015 OMNIBUS INCENTIVE PLAN

Name:	%%FIRST_NAME_MIDDLE_NAME_LAST_NAME%-%
Grant Date:	%%AWARD_DATE,’Month DD, YYYY’%-%
Award Number:	%%AWARD_NUMBER%-%
Shares Granted:	%%TOTAL_SHARES_GRANTED,’999,999,999’%-%
Market Value:	%%MARKET_VALUE%-%

Option No.: [Option Number]

This Non-Statutory Stock Option Agreement (the “Agreement”) is dated [Option Date]and is entered into by and between Patterson Companies, Inc., a Minnesota corporation (the “Company”), and [Employee Name](the “Optionee”).

WITNESSETH:

1.Grant of Option.  Pursuant to the provisions of the Patterson Companies, Inc. Amended and Restated 2015 Omnibus Incentive Plan (the “Plan”) and subject to the additional terms and conditions set forth herein, the Optionee has been granted on the date hereof the right and option to purchase from the Company all or a part of an aggregate of [Shares Granted] shares of Common Stock ($.01 par value) at the purchase price of [Option Price]per share (the “Option”).  The Option is not intended to constitute an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986.

2.Terms and Conditions.  It is understood and agreed that this Agreement and the Option are subject to the following terms and conditions and to the terms and conditions of the Plan.  The terms of the Plan are incorporated by reference in this Agreement in their entirety.  The Optionee, by execution of this Agreement, acknowledges having access to a copy of the Plan.  The provisions of this Agreement will be interpreted as to be consistent with the Plan, and any ambiguities in this Agreement will be interpreted by reference to the Plan.  In the event that any provision of this Agreement is inconsistent with the terms of the Plan, the terms of the Plan will control.  All capitalized terms in this Agreement not otherwise defined shall have the meaning(s) ascribed to them in the Plan.

EXHIBIT 10.9

(a)Expiration Date.  The Option shall expire ten years after the date hereof.

(b)Exercise of Option.  The Option shall become exercisable according to the Vesting Date(s) as shown on the attached Schedule.  The Option shall be exercisable only in accordance with the provisions of the Plan.  As set forth in Section 15.2 of the Plan, if the Optionee’s employment with the Company or a Subsidiary terminates as a result of Optionee’s Retirement prior to the Option becoming fully exercisable, the Option will be unaffected by such Retirement, so that the requirement to remain in continuous employment with the Company or a Subsidiary in order for the Option to become exercisable shall be disregarded.

(c)Payment of Purchase Price Upon Exercise.  The total purchase price of the shares to be purchased upon exercise of the Option will be paid entirely in cash (including check, bank draft or money order) or, in whole or in part, by (i) tender of a broker exercise notice; (ii) by tender, either by actual delivery or attestation as to ownership, of previously acquired shares; (iii) a “net exercise” of the Option (as further described below); (iv) by a combination of such methods; or (v) any other method approved or accepted by the Compensation and Human Capital Committee of the Board of Directors of the Company in its sole discretion. In the case of a “net exercise” of an Option, the Company will not require a payment of the exercise price of the Option from the Optionee but will reduce the number of shares of Common Stock issued upon the exercise by the largest number of whole shares that has a Fair Market Value (as defined in the Plan) on the exercise date that does not exceed the aggregate exercise price for the shares exercised under this method. Shares of Common Stock will no longer be outstanding under an Option (and will therefore not thereafter be exercisable) following the exercise of such Option to the extent of (i) shares used to pay the exercise price of an Option under the “net exercise,” (ii) shares actually delivered to the Optionee as a result of such exercise and (iii) any shares withheld for purposes of tax withholding pursuant to the Plan. For purposes of such payment, previously acquired shares tendered or covered by an attestation will be valued at their Fair Market Value (as defined in the Plan) on the exercise date of the Option.

(d)Non-Transferability of Options.  The Option may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner, whether voluntarily or involuntarily, other than by will or by the laws of descent or distribution, or as otherwise provided under Section 18.4 of the Plan.

(e)No Rights as Shareholder.  Optionee shall have no rights as a shareholder with respect to any shares of Common Stock subject to this Option prior to the date of issuance to him or her of such shares of Common Stock.

(f)No Right to Continued Status as an Employee.  This Option shall not confer upon Optionee any right with respect to continued status as an employee of the Company, nor shall it interfere in any way with the right of the Company to terminate his or her status as an employee at any time.

EXHIBIT 10.9

3.Investment Representation.  As a condition to the exercise of the Option, the Company may require the person exercising the Option to represent and warrant at the time of exercise that the shares of Common Stock are being purchased only for investment and without any present intention to sell or distribute such shares of Common Stock, if, in the opinion of counsel for the Company, such a representation is required by any relevant provisions of law.  The shares of Common Stock may be issued with appropriate legends on stock certificates representing the shares of Common Stock, and the Company may place stop transfer orders with respect to the shares of Common Stock.

4.Optionee Agreements.  In exchange for and by accepting the benefits afforded by this Agreement, and to protect the Company’s confidential, proprietary, and trade secret information, and the Company’s investment in building the relationships with its customers, suppliers and distributors, the Optionee agrees to the terms below.

(a)Non-Solicitation of Customers, Suppliers, or Distributors.  Optionee agrees that during Optionee’s employment with the Company and for a period of twelve (12) months following the voluntary and involuntary termination of Optionee’s employment for whatever reason (the “Restricted Period”), Optionee shall not directly or indirectly, whether individually or as an owner, agent, representative, consultant or employee, participate or assist any individual or business entity to solicit or encourage any customer, supplier, or distributor of the Company to (i) do business that could be done with the Company with any person or entity other than the Company or (ii) terminate or otherwise modify adversely its business relationship with the Company.

(b)Non-Solicitation of Employees.  Optionee agrees that during Optionee’s employment with the Company and during the Restricted Period, Optionee shall not directly or indirectly, whether individually or as an owner, agent, representative, consultant or employee, participate or assist any individual or business entity to solicit, employ or conspire with others to employ any of the Company’s employees.  The term “employ” for purposes of this Section 4(b) means to enter into an arrangement for services as a full-time or part-time employee, independent contractor, agent or otherwise.  Notwithstanding the foregoing, any general advertisement or public solicitation that is not directed specifically to employees of the Company shall not constitute a breach of this Section 4(b).

(c)Confidential Information. Optionee acknowledges that in the course of Optionee’s employment with the Company, Optionee will have access to Confidential Information. "Confidential Information" includes but is not limited to information not generally known to the public, in spoken, printed, electronic or any other form or medium relating directly or indirectly to: business processes, practices, policies, plans, documents, operations, services and strategies; contracts, transactions, and potential transactions; negotiations and pending negotiations; customer and prospect information including, without limitation, customer and

EXHIBIT 10.9

prospect lists, purchase and order histories, and equipment pipelines; proprietary information, trade secrets and intellectual property; supplier and vendor agreements, strategies, plans and information; financial information and results; legal strategies and information; marketing plans and strategies; pricing plans and strategies; personnel information and staffing and succession planning practices and strategies; internal controls and security policies, strategies and procedures; and/or other confidential business information that Optionee will learn, receive or use at any time during Optionee’s employment with the Company, whether or not such information has been previously identified as confidential or proprietary.

Confidential Information may be contained in written materials, such as documents, files, reports, manuals, drawings, diagrams, blueprints and correspondence, as well as computer hardware and software, and electronic or other form or media. It may also consist of unwritten knowledge, including ideas, research, processes, plans, practices and know-how.

Confidential Information does not include information that: (i) is in or becomes part of the public domain or information generally known in the trade, other than as a result of a disclosure by or through Optionee in violation of this Agreement or by a third-party in breach of a confidentiality obligation; (ii) information that Optionee acquires or independently develops completely independently of Optionee’s employment with the Company; (iii) is lawfully disclosed to Optionee by a third party provided the third party did not receive it due to a breach of this Agreement or any other obligation of confidentiality; (iv) was lawfully in Optionee's possession prior to providing services for the Company, provided that said information was not obtained from the Company; or (v) is required to be disclosed by law or the order of any court or governmental agency, or in any litigation or similar proceeding; provided that prior to making any such required disclosure, Optionee shall notify the Company in sufficient time to permit the Company to seek an appropriate protective order.

Optionee agrees that Optionee shall not, at any time during Optionee’s employment with the Company or thereafter, disclose or otherwise make available Confidential Information to any person, company or other party. Further, Optionee shall not use or disclose any Confidential Information outside the scope of Optionee’s employment with the Company at any time without the Company's prior written consent. This Agreement shall not limit any obligations Optionee may have under any other employee confidentiality agreement with the Company or under applicable law nor shall it limit Optionee’s right to provide truthful information to any governmental agency without prior notice to the Company.

(d)Return of Documents, Materials, and Property.  Optionee agrees that at the end of Optionee’s employment with the Company, or at the Company's earlier request, Optionee will return all originals and copies of any documents, materials or other property of the Company and the Company's customers, whether generated by

EXHIBIT 10.9

Optionee or any other person on Optionee’s behalf or on behalf of the Company or its customers. This includes all copies and all materials on paper, on disk, on a computer, or in any computerized or electronic medium. All documents, files, records, reports, policies, training materials, communications materials, lists and information, e-mail messages, products, keys and access cards, cellular phones, computers, other materials, equipment, physical and electronic property, whether or not pertaining to Confidential Information, which were furnished to Optionee by the Company, purchased or leased at the expense of the Company, or produced by the Company or Optionee in connection with Optionee's employment will be and remain the sole property of the Company, except as otherwise provided herein. All copies of Company property, whether in tangible or intangible form, are also the property of the Company. Optionee agrees that Optionee will not retain any paper or electronic copies of these documents and materials. Further, upon Optionee’s termination, or at the Company’s earlier request, Optionee agrees to provide the Company or its designated representative with access to any mobile device (including but not limited to any cell phone, laptop, tablet, floppy disk, CD, DVD, zip drive, jump drive, thumb drive, memory card, memory stick or other portable hard drive or external computer information storage device) owned by Optionee and connected to the Company’s network, used for Company business, or used to store Company-related information, including but not limited to Confidential Information, so that the Company or its designated representative may make a forensic image and determine whether any Company-related information remains on any such devices. All Company-related information will be removed. Generally, the Company will make reasonable efforts to preserve files that Optionee identifies in advance as personal and return them to Optionee after confirmation that they do not contain Company-related information. Optionee understands, however, that despite reasonable efforts, it may not be possible to preserve and return personal files.

(e)Remedy.  If Optionee breaches any of Optionee’s obligations set forth in this Section 4, all unvested, and all vested but unexercised, Options granted under this Agreement shall be immediately canceled and forfeited and any rights thereto shall become null and void.  Optionee also agrees to immediately return to the Company any shares of Common Stock issued to Optionee upon exercise of any Options granted hereunder which are still under Optionee’s control and to promptly reimburse to the Company the Fair Market Value (as measured on the exercise date of the Option with appreciation, if any, through the repayment date) of any such shares that are no longer under Optionee’s control.  The Company shall also be entitled to enforce the terms of this Section 4 and Optionee further agrees that the remedy of damages at law for breach by Optionee of any of the covenants and obligations contained in this Section 4 is an inadequate remedy.  In recognition of the irreparable harm that a violation by Optionee of the covenants and obligations in this Section 4 would cause the Company, or any company with which the Company has a business relationship, Optionee agrees that if Optionee breaches or proposes to breach, any provision of this Section 4, the Company

EXHIBIT 10.9

shall be entitled, in addition to all other remedies that it may have, to an injunction or other appropriate equitable relief to restrain any such breach or proposed breach without showing or proving any actual damage to the Company, it being understood by Optionee and the Company that both damages and equitable relief shall be proper modes of relief and are not to be considered alternative remedies.

(f)Class Action Waiver and Arbitration Agreement.  Any dispute, controversy or claim arising out of, relating to or in connection with this Agreement, including the breach, termination or validity thereof, shall be finally resolved by arbitration.  The tribunal shall have the power to rule on any challenge to its own jurisdiction or to the validity or enforceability of any portion of the agreement to arbitrate.  Optionee and the Company agree to arbitrate solely on an individual basis, and that the agreement to arbitrate does not permit class arbitration or any claims brought as a plaintiff or class member in any class or representative arbitration proceeding.  The arbitral tribunal may not consolidate more than one person’s claims, and may not otherwise preside over any form of a representative or class proceeding.  In the event the prohibition on class arbitration is deemed invalid or unenforceable, then the remaining portions of the arbitration agreement will remain in force.

(g)Reasonable and Necessary.  Optionee agrees that the covenants provided for in this Section 4 are reasonable and necessary to protect the Company and its confidential information, goodwill and other legitimate business interests and, without such protection, the Company’s customer and client relationships and competitive advantage would be materially adversely affected.  Optionee agrees that the provisions of this Section 4 are an essential inducement to the Company to enter into this Agreement and they are in addition to, rather than in lieu of, any similar or related covenants with the Company to which Optionee may be bound.  Optionee further acknowledges that the restrictions contained in this Section 4 shall not impose an undue hardship on Optionee since Optionee has general business skills which may be used in industries other than that in which the Company conducts its business and shall not deprive Optionee of Optionee’s livelihood.  In exchange for Optionee agreeing to be bound by these reasonable and necessary covenants, the Company is providing Optionee with the benefits as set forth in this Agreement.  Optionee acknowledges and agrees that these benefits constitute full and adequate consideration for Optionee’s obligations hereunder.

(h)Severability and Blue Penciling.  To the extent that any provision of this Section 4 shall be determined to be invalid or unenforceable as written, the validity and enforceability of the remainder of such provision and of this Agreement shall be unaffected.  If any particular provision of this Section 4 shall be adjudicated to be invalid or unenforceable, the Company and Optionee specifically authorize the tribunal making such determination to edit the invalid or unenforceable provision to allow this Agreement, and the provisions thereof, to be valid and enforceable to

EXHIBIT 10.9

the fullest extent allowed by law or public policy.  Optionee expressly stipulates that this Agreement shall be construed in a manner which renders its provisions valid and enforceable to the maximum extent (not exceeding its express terms) possible under applicable law.

(i)Company Defined.  For purposes of this Section 4, “Company” shall mean Patterson Companies, Inc., its affiliated and related entities, and any of their respective direct or indirect subsidiaries.

(j)Survival.  Notwithstanding any termination of this Agreement or Optionee’s employment with the Company, whether or not the Options granted hereunder have in whole or in part vested or been exercised at that time, Optionee shall remain bound by the provisions of this Agreement which specifically relate to periods, activities or obligations upon or subsequent to the termination of Optionee’s employment.

5.Notices.  Any notice to the Company shall be addressed to it at its principal executive offices, located at 1031 Mendota Heights Road, St. Paul, Minnesota 55120.  Any notice to Optionee shall be addressed to him or her at the current home address on record with the Company.

6.Governing Law.  This Agreement shall be governed by the laws of the State of Minnesota without regard to choice of law principles.

7.Company’s Insider Trading Policy Acknowledgement.  Optionee acknowledges that Optionee has received, or has had access to, the Company’s Securities Trading and Information Disclosure Policy effective as of June 10, 2024, or any subsequent version or iteration of such policy (the “Insider Trading Policy”).  Optionee acknowledges, agrees and understands that any purchase or sale of shares of Common Stock, including any shares of Common Stock issued in connection with this Option, or any attempted sale or transfer of the Option, are subject to and governed by the provisions of the Insider Trading Policy.  By executing this Agreement or accepting this Option, Optionee agrees to abide by and follow such the terms of the Insider Trading Policy.

The Company has caused this Agreement to be executed by a duly authorized officer.  Optionee has agreed to accept and execute this Agreement electronically using the grant acceptance procedures on Optionee’s E*TRADE Financial Services account.

EXHIBIT 10.9

Stock Options                

Vesting Schedule

Vesting Date	%
Vesting Date 1	33.3%
Vesting Date 2	33.3%
Vesting Date 3	33.4%
	100%

EX-10.10

EXHIBIT 10.10

PATTERSON COMPANIES, INC.
RESTRICTED STOCK AWARD AGREEMENT
FOR NON-EMPLOYEE DIRECTORS
PURSUANT TO PATTERSON COMPANIES, INC.
AMENDED AND RESTATED 2015 OMNIBUS INCENTIVE PLAN

Name:	%%FIRST_NAME_MIDDLE_NAME_LAST_NAME%-%
Grant Date:	%%AWARD_DATE,’Month DD, YYYY’%-%
Award Number:	%%AWARD_NUMBER%-%
Shares Granted:	%%TOTAL_SHARES_GRANTED,’999,999,999’%-%
Market Value:	%%MARKET_VALUE%-%

RSA No: [RSA Number]

This Restricted Stock Award Agreement (the “Agreement”) is dated effective [Award Date] and is entered into by and between Patterson Companies, Inc., a Minnesota corporation (the “Company”), and [Director Name] (the “Director”).

WITNESSETH:

1.Award of Restricted Stock Award. Pursuant to the provisions of the Patterson Companies, Inc. Amended and Restated 2015 Omnibus Incentive Plan (the “Plan”) and subject to the additional terms and conditions set forth herein, the Director has been awarded on the date hereof [Shares Granted] shares of Common Stock ($0.01 par value) of the Company (the “Restricted Stock”) valued at [Market Value] for each share.

2.Terms and Conditions. It is understood and agreed that this Agreement and the Restricted Stock are subject to the following terms and conditions and to the terms and conditions of the Plan. The terms of the Plan are incorporated by reference in this Agreement in their entirety. The Director, by execution of this Agreement, acknowledges having access to a copy of the Plan. The provisions of this Agreement will be interpreted as to be consistent with the Plan, and any ambiguities in this Agreement will be interpreted by reference to the Plan. In the event that any provision of this Agreement is inconsistent with the terms of the Plan, the terms of the Plan will control. All capitalized terms in this Agreement not otherwise defined shall have the meaning(s) ascribed to them in the Plan.

3.Restrictions. The Restricted Stock may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner, whether voluntarily or involuntarily, by

operation of law or otherwise, until the Vesting Date for the Restricted Stock, or portion thereof, that is shown on Schedule I attached hereto. On the Vesting Date(s) shown on the attached Schedule, and provided the Director is then serving on the Company’s Board of Directors (the “Board”) (subject to the exception set forth in the Plan), the Director shall receive the Restricted Stock, or portion thereof which has vested, free of all restrictions.

4.Forfeiture Provision. If the Director’s service on the Board terminates for any reason prior to the latest Vesting Date listed on Schedule I (subject to the exception set forth in the Plan), any unvested Restricted Stock shall be forfeited, and such unvested Restricted Stock shall be cancelled and become part of the authorized but unissued stock reserved for issuance under the Plan.

5.Notices. Any notice to the Company shall be addressed to it at its principal executive offices, located at 1031 Mendota Heights Road, St. Paul, Minnesota 55120. Any notice to the Director shall be addressed to him or her at the current home address on record with the Company.

6.Governing Law. This Agreement shall be governed by the laws of the State of Minnesota without regard to choice of law principles.

7.Company’s Insider Trading Policy Acknowledgement. The Director acknowledges that he or she has received, or has had access to, the Company’s Securities Trading and Information Disclosure Policy effective as of June 10, 2024, or any subsequent version or iteration of such policy (the “Insider Trading Policy”). The Director acknowledges, agrees and understands that any purchase or sale of shares of Common Stock, including any Restricted Stock, or any attempted sale or transfer of the Restricted Stock, are subject to and governed by the provisions of the Insider Trading Policy. By executing this Agreement or accepting this award, the Director agrees to abide by and follow such the terms of the Insider Trading Policy.

The Company has caused this Agreement to be executed by a duly authorized officer. The Director has agreed to accept and execute this Agreement electronically using the grant acceptance procedures on Employee’s E*TRADE Financial Services account.

    2    

Restricted Stock Award            

Vesting Schedule

Vesting Date	%
[Vesting Date]	100%

    3    

EX-10.11

EXHIBIT 10.11

PATTERSON COMPANIES, INC.
RESTRICTED STOCK UNIT AGREEMENT
PURSUANT TO PATTERSON COMPANIES, INC.
AMENDED AND RESTATED 2015 OMNIBUS INCENTIVE PLAN

Name:	%%FIRST_NAME_MIDDLE_NAME_LAST_NAME%-%
Grant Date:	%%AWARD_DATE,’Month DD, YYYY’%-%
Award Number:	%%AWARD_NUMBER%-%
Shares Granted:	%%TOTAL_SHARES_GRANTED,’999,999,999’%-%
Market Value:	%%MARKET_VALUE%-%

RSU No: [RSU Number]

This Restricted Stock Unit Agreement (the “Agreement”) is dated effective [Award Date] and is entered into by and between Patterson Companies, Inc., a Minnesota corporation (the “Company”), and [Employee Name] (the “Employee”).

WITNESSETH:

1.Award of Restricted Stock Units.  Pursuant to the provisions of the Patterson Companies, Inc. Amended and Restated 2015 Omnibus Incentive Plan (the “Plan”) and subject to the additional terms and conditions set forth herein, the Employee has been awarded on the date hereof [Shares Granted] restricted stock units (the “Restricted Units”) valued at [Market Value] for each unit.  The right to receive the value of the Restricted Units is subject to the restrictions set forth in the Plan and Section 3 below of this Agreement.

2.Terms and Conditions.  It is understood and agreed that this Agreement and the Restricted Units are subject to the following terms and conditions and to the terms and conditions of the Plan.  The terms of the Plan are incorporated by reference in this Agreement in their entirety.  The Employee, by execution of this Agreement, acknowledges having access to a copy of the Plan.  The provisions of this Agreement will be interpreted as to be consistent with the Plan, and any ambiguities in this Agreement will be interpreted by reference to the Plan.  In the event that any provision of this Agreement is inconsistent with the terms of the Plan, the terms of the Plan will control.  All capitalized terms in this Agreement not otherwise defined shall have the meaning(s) ascribed to them in the Plan.

1

EXHIBIT 10.11

3.Restrictions.  The Restricted Units may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner, whether voluntarily or involuntarily, by operation of law or otherwise, until the Vesting Date for the Restricted Units, or portion thereof, that is shown on Schedule I attached hereto.  On the Vesting Date(s) shown on the attached Schedule, and provided the Employee is then employed by the Company or a Subsidiary, the Employee shall receive the Restricted Units, or portion thereof which has vested, free of all restrictions.  The Restricted Units will be denominated and paid in shares of Common Stock.

4.Forfeiture Provision.  If Employee’s employment with the Company or a Subsidiary terminates for any reason prior to the latest Vesting Date listed on Schedule I (the “Final Vesting Date”), except in the case of Employee’s Retirement, any unvested Restricted Units shall be forfeited, and such unvested Restricted Units shall be cancelled and become part of the authorized but unissued stock reserved for issuance under the Plan.  If the Employee’s employment with the Company or Subsidiary terminates prior to the Final Vesting Date as a result of Employee’s Retirement, any unvested Restricted Units will be unaffected by such Retirement, so that the requirement to remain in continuous employment with the Company or a Subsidiary shall be disregarded.  If the Employee’s job changes prior to the Final Vesting Date so that Employee is no longer an Eligible Recipient, then, in such event, any unvested Restricted Units may, at the Company’s sole discretion, be forfeited and cancelled and become part of the authorized but unissued stock reserved for issuance under the Plan.

5.Limitation of Rights.  Until issuance of the shares of Common Stock, if any, Employee will not have any rights of a shareholder with respect to the Restricted Units.  Employee will have no voting, dividend, liquidation and other rights with respect to any Restricted Units granted hereunder.  Notwithstanding the foregoing, for each Restricted Unit that vests, the Employee will be entitled to an accrual of dividend equivalents with respect to the Restricted Units from the date of grant until the date such Restricted Units are paid.  The Company will deliver, together with the shares of Common Stock delivered under Section 3 of this Agreement, if any, a cash payment equal to the dividend equivalent amount; provided, that in the case of any dividend payable in shares of Common Stock, Employee will be issued additional Restricted Units.

6.Taxes and Withdrawals.  Employee acknowledges that under current federal tax law the value of the Restricted Units will be included as ordinary income in the year the restrictions lapse.  The Company is entitled to (a) withhold and deduct from future wages of Employee (or from other amounts that may be due and owing to Employee from the Company), or make other arrangements for the collection of, all legally required amounts necessary to satisfy any federal, state or local withholding and employment-related tax requirements attributable to the Restricted Units, or (b) require Employee promptly to remit the amount of such withholding to the Company at the time the restrictions lapse.  The Company may make the required withholding by canceling Restricted Units at the time the restrictions lapse.

2

EXHIBIT 10.11

7.No Right to Continued Status as an Employee.  This Agreement shall not confer upon Employee any right with respect to continued status as an employee of the Company, nor shall it interfere in any way with the right of the Company to terminate Employee’s status as an employee at any time.

8.Employee Agreements.  In exchange for and by accepting the benefits afforded by this Agreement, and to protect the Company’s confidential, proprietary, and trade secret information, and the Company’s investment in building the relationships with its customers, suppliers and distributors, the Employee agrees to the terms below.

(a)Non-Solicitation of Customers, Suppliers, or Distributors.  Employee agrees that during Employee’s employment with the Company and for a period of twelve (12) months following the voluntary and involuntary termination of Employee’s employment for whatever reason (the “Restricted Period”), Employee shall not directly or indirectly, whether individually or as an owner, agent, representative, consultant or employee, participate or assist any individual or business entity to solicit or encourage any customer, supplier, or distributor of the Company to (i) do business that could be done with the Company with any person or entity other than the Company or (ii) terminate or otherwise modify adversely its business relationship with the Company.

(b)Non-Solicitation of Employees.  Employee agrees that during Employee’s employment with the Company and during the Restricted Period, Employee shall not directly or indirectly, whether individually or as an owner, agent, representative, consultant or employee, participate or assist any individual or business entity to solicit, employ or conspire with others to employ any of the Company’s employees.  The term “employ” for purposes of this Section 8(b) means to enter into an arrangement for services as a full-time or part-time employee, independent contractor, agent or otherwise.  Notwithstanding the foregoing, any general advertisement or public solicitation that is not directed specifically to employees of the Company shall not constitute a breach of this Section 8(b).

(c)Confidential Information. Employee acknowledges that in the course of Employee’s employment with the Company, Employee will have access to Confidential Information. "Confidential Information" includes but is not limited to information not generally known to the public, in spoken, printed, electronic or any other form or medium relating directly or indirectly to: business processes, practices, policies, plans, documents, operations, services and strategies; contracts, transactions, and potential transactions; negotiations and pending negotiations; customer and prospect information including, without limitation, customer and prospect lists, purchase and order histories, and equipment pipelines; proprietary information, trade secrets and intellectual property; supplier and vendor agreements, strategies, plans and information; financial information and results; legal strategies and information; marketing plans and strategies;

3

EXHIBIT 10.11

pricing plans and strategies; personnel information and staffing and succession planning practices and strategies; internal controls and security policies, strategies and procedures; and/or other confidential business information that Employee will learn, receive or use at any time during Employee’s employment with the Company, whether or not such information has been previously identified as confidential or proprietary.

Confidential Information may be contained in written materials, such as documents, files, reports, manuals, drawings, diagrams, blueprints and correspondence, as well as computer hardware and software, and electronic or other form or media. It may also consist of unwritten knowledge, including ideas, research, processes, plans, practices and know-how.

Confidential Information does not include information that: (i) is in or becomes part of the public domain or information generally known in the trade, other than as a result of a disclosure by or through Employee in violation of this Agreement or by a third-party in breach of a confidentiality obligation; (ii) information that Employee acquires or independently develops completely independently of Employee’s employment with the Company; (iii) is lawfully disclosed to Employee by a third party provided the third party did not receive it due to a breach of this Agreement or any other obligation of confidentiality; (iv) was lawfully in Employee's possession prior to providing services for the Company, provided that said information was not obtained from the Company; or (v) is required to be disclosed by law or the order of any court or governmental agency, or in any litigation or similar proceeding; provided that prior to making any such required disclosure, Employee shall notify the Company in sufficient time to permit the Company to seek an appropriate protective order.

Employee agrees that Employee shall not, at any time during Employee’s employment with the Company or thereafter, disclose or otherwise make available Confidential Information to any person, company or other party. Further, Employee shall not use or disclose any Confidential Information outside the scope of Employee’s employment with the Company at any time without the Company's prior written consent. This Agreement shall not limit any obligations Employee may have under any other employee confidentiality agreement with the Company or under applicable law nor shall it limit Employee’s right to provide truthful information to any governmental agency without prior notice to the Company.

(d)Return of Documents, Materials, and Property.  Employee agrees that at the end of Employee’s employment with the Company, or at the Company's earlier request, Employee will return all originals and copies of any documents, materials or other property of the Company and the Company's customers, whether generated by Employee or any other person on Employee’s behalf or on behalf of the Company or its customers. This includes all copies and all materials on paper, on disk, on a computer, or in any computerized or electronic medium. All

4

EXHIBIT 10.11

documents, files, records, reports, policies, training materials, communications materials, lists and information, e-mail messages, products, keys and access cards, cellular phones, computers, other materials, equipment, physical and electronic property, whether or not pertaining to Confidential Information, which were furnished to Employee by the Company, purchased or leased at the expense of the Company, or produced by the Company or Employee in connection with Employee's employment will be and remain the sole property of the Company, except as otherwise provided herein. All copies of Company property, whether in tangible or intangible form, are also the property of the Company. Employee agrees that Employee will not retain any paper or electronic copies of these documents and materials. Further, upon Employee’s termination, or at the Company’s earlier request, Employee agrees to provide the Company or its designated representative with access to any mobile device (including but not limited to any cell phone, laptop, tablet, floppy disk, CD, DVD, zip drive, jump drive, thumb drive, memory card, memory stick or other portable hard drive or external computer information storage device) owned by Employee and connected to the Company’s network, used for Company business, or used to store Company-related information, including but not limited to Confidential Information, so that the Company or its designated representative may make a forensic image and determine whether any Company-related information remains on any such devices. All Company-related information will be removed. Generally, the Company will make reasonable efforts to preserve files that Employee identifies in advance as personal and return them to Employee after confirmation that they do not contain Company-related information. Employee understands, however, that despite reasonable efforts, it may not be possible to preserve and return personal files.

(e)Remedy.  If Employee breaches any of Employee’s obligations set forth in this Section 8, all Restricted Units awarded under this Agreement shall be immediately canceled and forfeited and any rights thereto shall become null and void.  Employee also agrees to immediately return to the Company any shares of Common Stock issued to Employee as set forth in Section 3 of this Agreement which are still under Employee’s control and to promptly reimburse to the Company the Fair Market Value (as measured on the vesting date with appreciation, if any, through the repayment date) of any such shares that are no longer under Employee’s control.  The Company shall also be entitled to enforce the terms of this Section 8 and Employee further agrees that the remedy of damages at law for breach by Employee of any of the covenants and obligations contained in this Section 8 is an inadequate remedy.  In recognition of the irreparable harm that a violation by Employee of the covenants and obligations in this Section 8 would cause the Company, or any company with which the Company has a business relationship, Employee agrees that if Employee breaches or proposes to breach, any provision of this Section 8, the Company shall be entitled, in addition to all other remedies that it may have, to an injunction or other appropriate equitable relief to restrain any such breach or proposed breach

5

EXHIBIT 10.11

without showing or proving any actual damage to the Company, it being understood by Employee and the Company that both damages and equitable relief shall be proper modes of relief and are not to be considered alternative remedies.

(f)Class Action Waiver and Arbitration Agreement.  Any dispute, controversy or claim arising out of, relating to or in connection with this Agreement, including the breach, termination or validity thereof, shall be finally resolved by arbitration.  The tribunal shall have the power to rule on any challenge to its own jurisdiction or to the validity or enforceability of any portion of the agreement to arbitrate.  Employee and the Company agree to arbitrate solely on an individual basis, and that the agreement to arbitrate does not permit class arbitration or any claims brought as a plaintiff or class member in any class or representative arbitration proceeding.  The arbitral tribunal may not consolidate more than one person’s claims, and may not otherwise preside over any form of a representative or class proceeding.  In the event the prohibition on class arbitration is deemed invalid or unenforceable, then the remaining portions of the arbitration agreement will remain in force.

(g)Reasonable and Necessary.  Employee agrees that the covenants provided for in this Section 8 are reasonable and necessary to protect the Company and its confidential information, goodwill and other legitimate business interests and, without such protection, the Company’s customer and client relationships and competitive advantage would be materially adversely affected.  Employee agrees that the provisions of this Section 8 are an essential inducement to the Company to enter into this Agreement and they are in addition to, rather than in lieu of, any similar or related covenants with the Company to which Employee may be bound.  In exchange for Employee agreeing to be bound by these reasonable and necessary covenants, the Company is providing Employee with the benefits as set forth in this Agreement.  Employee acknowledges and agrees that these benefits constitute full and adequate consideration for Employee’s obligations hereunder. 

(h)Severability and Blue Penciling.  To the extent that any provision of this Section 8 shall be determined to be invalid or unenforceable as written, the validity and enforceability of the remainder of such provision and of this Agreement shall be unaffected.  If any particular provision of this Section 8 shall be adjudicated to be invalid or unenforceable, the Company and Employee specifically authorize the tribunal making such determination to edit the invalid or unenforceable provision to allow this Agreement, and the provisions thereof, to be valid and enforceable to the fullest extent allowed by law or public policy.  Employee expressly stipulates that this Agreement shall be construed in a manner which renders its provisions valid and enforceable to the maximum extent (not exceeding its express terms) possible under applicable law.

6

EXHIBIT 10.11

(i)Company Defined.  For purposes of this Section 8, “Company” shall mean Patterson Companies, Inc., its affiliated and related entities, and any of their respective direct or indirect subsidiaries.

(j)Survival.  Notwithstanding any termination of this Agreement or Employee’s employment with the Company, whether or not the Restricted Units awarded hereunder have in whole or in part vested at that time, Employee shall remain bound by the provisions of this Agreement which specifically relate to periods, activities or obligations upon or subsequent to the termination of Employee’s employment.

9.Notices.  Any notice to the Company shall be addressed to it at its principal executive offices, located at 1031 Mendota Heights Road, St. Paul, Minnesota 55120.  Any notice to the holder shall be addressed to him or her at the current home address on record with the Company.

10.Governing Law.  This Agreement shall be governed by the laws of the State of Minnesota without regard to choice of law principles.

11.Company’s Insider Trading Policy Acknowledgement.  Employee acknowledges that Employee has received, or has had access to, the Company’s Securities Trading and Information Disclosure Policy effective as of June 10, 2024, or any subsequent version or iteration of such policy (the “Insider Trading Policy”).  Employee acknowledges, agrees and understands that any purchase or sale of shares of Common Stock, including any shares of Common Stock issued in connection with the Restricted Units, or any attempted sale or transfer of the Restricted Units, are subject to and governed by the provisions of the Insider Trading Policy.  By executing this Agreement or accepting this award, Employee agrees to abide by and follow such the terms of the Insider Trading Policy.

The Company has caused this Agreement to be executed by a duly authorized officer.  Employee has agreed to accept and execute this Agreement electronically using the grant acceptance procedures on Employee’s E*TRADE Financial Services account.

7

EXHIBIT 10.11

Restricted Stock Units                            

Vesting Schedule

Vesting Date	%
[Vesting Date 1]	33.3%
[Vesting Date 2]	33.3%
[Vesting Date 3]	33.4%
	100%

8

EX-10.12

EXHIBIT 10.12

PATTERSON COMPANIES, INC.
PERFORMANCE SHARE UNIT AWARD AGREEMENT
PURSUANT TO PATTERSON COMPANIES, INC.
AMENDED AND RESTATED 2015 OMNIBUS INCENTIVE PLAN

Name:	%%FIRST_NAME_MIDDLE_NAME_LAST_NAME%-%
Grant Date:	%%AWARD_DATE,’Month DD, YYYY’%-%
Award Number:	%%AWARD_NUMBER%-%
Shares Granted:	%%TOTAL_SHARES_GRANTED,’999,999,999’%-%
Market Value:	%%MARKET_VALUE%-%

PSU No: [PSU Number]

This Performance Share Unit Award Agreement (the “Agreement”) is dated [Award Date] and is entered into by and between Patterson Companies, Inc., a Minnesota corporation (the “Company”), and [Employee Name] (the “Employee”).

WITNESSETH:

1.    Performance Share Unit Award.  Pursuant to the provisions of the Patterson Companies, Inc. Amended and Restated 2015 Omnibus Incentive Plan (the “Plan”) and subject to the additional terms and conditions set forth herein, the Employee has been awarded on the date hereof [Shares Granted] performance share units (“PSUs”) valued at [Market Value] for each unit (the “Award”).  The right to receive Common Stock underlying this Award is subject to the restrictions set forth in the Plan and Section 3 below of this Agreement, and the achievement during the Performance Period of the Performance Measures as set forth on Schedule I hereto attached.

2.    Terms and Conditions.  It is understood and agreed that this Agreement, including those schedules and exhibits attached and incorporated hereto, and the PSUs are subject to the following terms and conditions and to the terms and conditions of the Plan.  The terms of the Plan are incorporated by reference in this Agreement in their entirety.  The Employee, by execution of this Agreement, acknowledges having received a copy of the Plan.  The provisions of this Agreement will be interpreted as to be consistent with the Plan, and any ambiguities in this Agreement will be interpreted by reference to the Plan. In the event that any provision of this Agreement is inconsistent with the terms of the Plan, the terms of the Plan will control.  All capitalized terms in this Agreement not otherwise defined shall have the meaning(s) ascribed to them in the Plan.

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EXHIBIT 10.12

3.    Restrictions.  Upon their Award, the PSUs may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner, whether voluntarily or involuntarily, by operation of law or otherwise, until the Vesting Date for the PSUs, or portion thereof, that is shown on Schedule I attached hereto.  Once the Committee has determined the extent to which the Performance Measures have been achieved, the PSUs will be denominated and paid in shares of Common Stock on the Vesting Date. Shown on the attached Schedule, and provided the Employee is then employed by the Company or a Subsidiary, the Employee shall receive Common Stock issued in payment of the earned portion of the Award, if any, free of all restrictions.

4.    Forfeiture Provision.  If Employee’s employment with the Company or a Subsidiary terminates for any reason prior to the Vesting Date, except in the case of Employee’s Retirement, the Award shall be forfeited and the PSUs shall be cancelled and become part of the authorized but unissued Common Stock reserved for issuance under the Plan.  If Employee’s employment with the Company or Subsidiary terminates prior to the Vesting Date as a result of Employee’s Retirement, the Award will be unaffected by such Retirement, so that the requirement to remain in continuous employment with the Company or a Subsidiary shall be disregarded; provided, however, that the Award shall be prorated to reflect only the portion of the Performance Period that Employee was actively employed, as provided under the Plan.  If Employee’s job changes prior to the Vesting Date so that Employee is no longer an Eligible Recipient, then, in such event, the Award may, at the Company’s sole discretion, be forfeited, and the PSUs shall be cancelled and become part of the authorized but unissued Common Stock reserved for issuance under the Plan.

5.    Limitation of Rights.  Until the Employee receives Common Stock issued in payment of the earned portion of the Award, if any, Employee will not have any rights of a shareholder with respect to the Award.  Employee will have no voting, dividend, liquidation and other rights with respect to any PSUs granted hereunder.

6.    Taxes and Withdrawals.  Employee acknowledges that under current federal tax law the value of the PSUs will be included as ordinary income in the year the restrictions lapse.  The Company is entitled to (a) withhold and deduct from future wages of Employee (or from other amounts that may be due and owing to Employee from the Company), or make other arrangements for the collection of, all legally required amounts necessary to satisfy any federal, state or local withholding and employment-related tax requirements attributable to the PSUs, or (b) require Employee promptly to remit the amount of such withholding to the Company at the time the restrictions lapse.  The Company may make the required withholding by canceling PSUs at the time the restrictions lapse.

7.    No Right to Continued Status as an Employee.  This Agreement shall not confer upon Employee any right with respect to continued status as an employee of the Company, nor shall it interfere in any way with the right of the Company to terminate Employee’s status as an employee at any time.

2

EXHIBIT 10.12

8.    Employee Agreements.  In exchange for and by accepting the benefits afforded by this Agreement, and to protect the Company’s confidential, proprietary, and trade secret information, and the Company’s investment in building the relationships with its customers, suppliers and distributors, the Employee agrees to the terms below.

(a)    Non-Solicitation of Customers, Suppliers, or Distributors.  Employee agrees that during Employee’s employment with the Company and for a period of twleve (12) months following the voluntary and involuntary termination of Employee’s employment for whatever reason (the “Restricted Period”), Employee shall not directly or indirectly, whether individually or as an owner, agent, representative, consultant or employee, participate or assiPst any individual or business entity to solicit or encourage any customer, supplier, or distributor of the Company to (i) do business that could be done with the Company with any person or entity other than the Company or (ii) terminate or otherwise modify adversely its business relationship with the Company.

(b)     Non-Solicitation of Employees.  Employee agrees that during Employee’s employment with the Company and during the Restricted Period, Employee shall not directly or indirectly, whether individually or as an owner, agent, representative, consultant or employee, participate or assist any individual or business entity to solicit, employ or conspire with others to employ any of the Company’s employees.  The term “employ” for purposes of this Section 8(b) means to enter into an arrangement for services as a full-time or part-time employee, independent contractor, agent or otherwise.  Notwithstanding the foregoing, any general advertisement or public solicitation that is not directed specifically to employees of the Company shall not constitute a breach of this Section 8(b).

(c)Confidential Information. Employee acknowledges that in the course of Employee’s employment with the Company, Employee will have access to Confidential Information. "Confidential Information" includes but is not limited to information not generally known to the public, in spoken, printed, electronic or any other form or medium relating directly or indirectly to: business processes, practices, policies, plans, documents, operations, services and strategies; contracts, transactions, and potential transactions; negotiations and pending negotiations; customer and prospect information including, without limitation, customer and prospect lists, purchase and order histories, and equipment pipelines; proprietary information, trade secrets and intellectual property; supplier and vendor agreements, strategies, plans and information; financial information and results; legal strategies and information; marketing plans and strategies; pricing plans and strategies; personnel information and staffing and succession planning practices and strategies; internal controls and security policies, strategies and procedures; and/or other confidential business information that Employee will learn, receive or use at any time during Employee’s employment with the

3

EXHIBIT 10.12

Company, whether or not such information has been previously identified as confidential or proprietary.

Confidential Information may be contained in written materials, such as documents, files, reports, manuals, drawings, diagrams, blueprints and correspondence, as well as computer hardware and software, and electronic or other form or media. It may also consist of unwritten knowledge, including ideas, research, processes, plans, practices and know-how.

Confidential Information does not include information that: (i) is in or becomes part of the public domain or information generally known in the trade, other than as a result of a disclosure by or through Employee in violation of this Agreement or by a third-party in breach of a confidentiality obligation; (ii) information that Employee acquires or independently develops completely independently of Employee’s employment with the Company; (iii) is lawfully disclosed to Employee by a third party provided the third party did not receive it due to a breach of this Agreement or any other obligation of confidentiality; (iv) was lawfully in Employee's possession prior to providing services for the Company, provided that said information was not obtained from the Company; or (v) is required to be disclosed by law or the order of any court or governmental agency, or in any litigation or similar proceeding; provided that prior to making any such required disclosure, Employee shall notify the Company in sufficient time to permit the Company to seek an appropriate protective order.

Employee agrees that Employee shall not, at any time during Employee’s employment with the Company or thereafter, disclose or otherwise make available Confidential Information to any person, company or other party. Further, Employee shall not use or disclose any Confidential Information outside the scope of Employee’s employment with the Company at any time without the Company's prior written consent. This Agreement shall not limit any obligations Employee may have under any other employee confidentiality agreement with the Company or under applicable law nor shall it limit Employee’s right to provide truthful information to any governmental agency without prior notice to the Company.

(d)Return of Documents, Materials, and Property.  Employee agrees that at the end of Employee’s employment with the Company, or at the Company's earlier request, Employee will return all originals and copies of any documents, materials or other property of the Company and the Company's customers, whether generated by Employee or any other person on Employee’s behalf or on behalf of the Company or its customers. This includes all copies and all materials on paper, on disk, on a computer, or in any computerized or electronic medium. All documents, files, records, reports, policies, training materials, communications materials, lists and information, e-mail messages, products, keys and access cards, cellular phones, computers, other materials, equipment, physical and electronic property, whether or not pertaining to Confidential Information, which were

4

EXHIBIT 10.12

furnished to Employee by the Company, purchased or leased at the expense of the Company, or produced by the Company or Employee in connection with Employee's employment will be and remain the sole property of the Company, except as otherwise provided herein. All copies of Company property, whether in tangible or intangible form, are also the property of the Company. Employee agrees that Employee will not retain any paper or electronic copies of these documents and materials. Further, upon Employee’s termination, or at the Company’s earlier request, Employee agrees to provide the Company or its designated representative with access to any mobile device (including but not limited to any cell phone, laptop, tablet, floppy disk, CD, DVD, zip drive, jump drive, thumb drive, memory card, memory stick or other portable hard drive or external computer information storage device) owned by Employee and connected to the Company’s network, used for Company business, or used to store Company-related information, including but not limited to Confidential Information, so that the Company or its designated representative may make a forensic image and determine whether any Company-related information remains on any such devices. All Company-related information will be removed. Generally, the Company will make reasonable efforts to preserve files that Employee identifies in advance as personal and return them to Employee after confirmation that they do not contain Company-related information. Employee understands, however, that despite reasonable efforts, it may not be possible to preserve and return personal files.

(e)    Remedy.  If Employee breaches any of Employee’s obligations set forth in this Section 8, all PSUs awarded under this Agreement shall be immediately canceled and forfeited and any rights thereto shall become null and void.  Employee also agrees to immediately return to the Company any shares of Common Stock issued to Employee as set forth in Section 3 of this Agreement which are still under Employee’s control and to promptly reimburse to the Company the Fair Market Value (as measured on the vesting date with appreciation, if any, through the repayment date) of any such shares that are no longer under Employee’s control.  The Company shall also be entitled to enforce the terms of this Section 8 and Employee further agrees that the remedy of damages at law for breach by Employee of any of the covenants and obligations contained in this Section 8 is an inadequate remedy.  In recognition of the irreparable harm that a violation by Employee of the covenants and obligations in this Section 8 would cause the Company, or any company with which the Company has a business relationship, Employee agrees that if Employee breaches or proposes to breach, any provision of this Section 8, the Company shall be entitled, in addition to all other remedies that it may have, to an injunction or other appropriate equitable relief to restrain any such breach or proposed breach without showing or proving any actual damage to the Company, it being understood by Employee and the Company that both damages and equitable relief shall be proper modes of relief and are not to be considered alternative remedies.

5

EXHIBIT 10.12

(f)    Class Action Waiver and Arbitration Agreement.  Any dispute, controversy or claim arising out of, relating to or in connection with this Agreement, including the breach, termination or validity thereof, shall be finally resolved by arbitration.  The tribunal shall have the power to rule on any challenge to its own jurisdiction or to the validity or enforceability of any portion of the agreement to arbitrate.  Employee and the Company agree to arbitrate solely on an individual basis, and that the agreement to arbitrate does not permit class arbitration or any claims brought as a plaintiff or class member in any class or representative arbitration proceeding.  The arbitral tribunal may not consolidate more than one person’s claims, and may not otherwise preside over any form of a representative or class proceeding.  In the event the prohibition on class arbitration is deemed invalid or unenforceable, then the remaining portions of the arbitration agreement will remain in force.

(g)     Reasonable and Necessary.  Employee agrees that the covenants provided for in this Section 8 are reasonable and necessary to protect the Company and its confidential information, goodwill and other legitimate business interests and, without such protection, the Company’s customer and client relationships and competitive advantage would be materially adversely affected.  Employee agrees that the provisions of this Section 8 are an essential inducement to the Company to enter into this Agreement and they are in addition to, rather than in lieu of, any similar or related covenants with the Company to which Employee may be bound.  Employee further acknowledges that the restrictions contained in this Section 8 shall not impose an undue hardship on Employee since Employee has general business skills which may be used in industries other than that in which the Company conducts its business and shall not deprive Employee of Employee’s livelihood.  In exchange for Employee agreeing to be bound by these reasonable and necessary covenants, the Company is providing Employee with the benefits as set forth in this Agreement.  Employee acknowledges and agrees that these benefits constitute full and adequate consideration for Employee’s obligations hereunder. 

(h)    Severability and Blue Penciling.  To the extent that any provision of this Section 8 shall be determined to be invalid or unenforceable as written, the validity and enforceability of the remainder of such provision and of this Agreement shall be unaffected.  If any particular provision of this Section 8 shall be adjudicated to be invalid or unenforceable, the Company and Employee specifically authorize the tribunal making such determination to edit the invalid or unenforceable provision to allow this Agreement, and the provisions thereof, to be valid and enforceable to the fullest extent allowed by law or public policy.  Employee expressly stipulates that this Agreement shall be construed in a manner which renders its provisions valid and enforceable to the maximum extent (not exceeding its express terms) possible under applicable law.

6

EXHIBIT 10.12

(i)    Company Defined.  For purposes of this Section 8, “Company” shall mean Patterson Companies, Inc., its affiliated and related entities, and any of their respective direct or indirect subsidiaries.

(j)    Survival.  Notwithstanding any termination of this Agreement or Employee’s employment with the Company, whether or not the PSUs awarded hereunder have in whole or in part vested at that time, Employee shall remain bound by the provisions of this Agreement which specifically relate to periods, activities or obligations upon or subsequent to the termination of Employee’s employment.

9.    Notices.  Any notice to the Company shall be addressed to it at its principal executive offices, located at 1031 Mendota Heights Road, St. Paul, Minnesota 55120.  Any notice to the holder shall be addressed to him or her at the current home address on record with the Company.

10.    Governing Law.  This Agreement shall be governed by the laws of the State of Minnesota without regard to choice of law principles.

11.    Company’s Insider Trading Policy Acknowledgement.  Employee acknowledges that Employee has received, or has had access to, the Company’s Securities Trading and Information Disclosure Policy effective as of June 10, 2024, or any subsequent version or iteration of such policy (the “Insider Trading Policy”).  Employee acknowledges, agrees and understands that any purchase or sale of shares of Common Stock, including any shares of Common Stock issued in connection with the PSUs, or any attempted sale or transfer of the PSUs or Common Stock, are subject to and governed by the provisions of the Insider Trading Policy.  By executing this Agreement or accepting this Award, Employee agrees to abide by and follow such the terms of the Insider Trading Policy.

The Company has caused this Agreement to be executed by a duly authorized officer.  Employee has agreed to accept and execute this Agreement electronically using the grant acceptance procedures on Employee’s E*TRADE Financial Services account.

7

EXHIBIT 10.12

Schedule I

Performance Measure and Payout Schedule

Patterson Companies, Inc.

Performance Period

[Date] through [Date] with respect to 100% of the PSUs

Vesting Date

[Vesting Date] or if later, the date the Compensation Committee certifies performance on the final Performance Measures and certifies application of the modification described in Exhibit B to this Schedule I.

The number of awarded PSUs that shall be conditionally earned under this Agreement will be determined by the degree by which the Company achieves the Performance Measures described below and the Payout Schedule outlined in Exhibit A to this Schedule I. Irrespective of the amount of PSUs conditionally earned at the end of the Performance Period, such PSUs shall be subject to the restrictions described in Paragraph 3 of this Agreement until the Vesting Date, and shall be subject to the modification described in Exhibit B to this Schedule I. 

Performance Measures:

Each Performance Period represents three fiscal years.  The amount of PSUs conditionally earned for the Performance Period under the Award shall be determined, on approval by the Committee, by Company financial measures which shall be determined by the Committee for the Performance Period. The Performance Measures for the Performance Period shall be communicated to the Employee as soon as administratively feasible following the Committee’s determination of the Performance Measures for the Performance Period. The Performance Measures for the Performance Period are described in Exhibit A-1 to this Schedule I.

[100%] of the PSUs for a Performance Period will be conditionally earned based on achievement against the Performance Measure for the Performance Period. The Payout Schedule for the Performance Period is described in Exhibit A-1 to this Schedule I.

The amount of PSUs conditionally earned then shall vest on the Vesting Date, or if later, the date the Compensation Committee certifies application of the modification described in Exhibit B to this Schedule I.

Standards:

1.All computations are based on results after final audit and any necessary business-related adjustments, subject to Committee approval.

2.The final payout percentage will be based on the ratios, described above, of achieved results versus budgeted objectives, rounded down to the next nearest whole percentage.

8

EXHIBIT 10.12

3.Notwithstanding anything in this Agreement to the contrary, in no event shall the modification described in Exhibit B result in the maximum percentage to be greater than the maximum percentage set forth below:

100% on 3-Year Cumulative EPS with a 3-Year rTSR Modifierfor Fiscal [Year] Performance Units (0.75 – 1.25x factor) = PSU Award
	% Achieved	% Target Paid	rTSR Modifier	% Payout
Maximum	115%	160%	1.25x	200.0%
Target	100%	100%	1.00x	100.0%
Threshold	90%	50%	0.75x	37.5%

9

EXHIBIT 10.12

Exhibit A-1

The number of PSUs conditionally earned for the Performance Period under the Award shall be determined, on approval by the Committee, by the following financial measure:

1.[100%] of such PSUs will be conditionally earned based on achievement of the Company’s three-year cumulative non-GAAP adjusted earnings per share, as defined by the Committee, for the Performance Period, and based on the Payout Schedule outlined in this Exhibit A-1.

The degree to which the Company achieves the Performance Measure during the Performance Period shall result in the earning of PSUs, conditioned on the restrictions described in Paragraph 3 of this Agreement until the Vesting Date, and the modification described in Exhibit B to this Schedule I, based on the following chart (the “Payout Schedule”).

10

EXHIBIT 10.12

Exhibit B

The number of shares of Common Stock issued pursuant to this Award on the Vesting Date will be determined by multiplying the PSUs conditionally earned for the Performance Period by the Three Year Relative TSR Multiple (as set forth in the Metrics Summary) as follows:

Three Year Cumulative PSUs Conditionally Earned

X

Three Year TSR Multiple

=

Common Stock Granted

If the Company’s Three Year Relative TSR Percentile Rank (as defined below) is at or below the 25th percentile, the Three Year Relative TSR Multiple shall equal 75%; if the Three Year Relative TSR Multiple is at or above the 80th percentile, the Three Year Relative TSR Multiple shall equal 125%; and, if the Three Year Relative TSR Multiple is between the 25th and 80th percentiles, the Three Year TSR Multiple shall be interpolated on a linear basis between 75% and 125%.

When calculating the Company’s Three Year Relative TSR Percentile Rank, the following definitions will be used:

“Target Number of Units Granted” means the number of PSUs granted at “Target” performance level as stated in the Award. The Target Number of Units Granted represents Shares that will be earned should the Performance Measures be met at a “Plan Goal” performance level and the Company’s Relative TSR Rank is at the midpoint between the 25th and 80th percentiles, and you remain employed through the Vesting Date.

“Three Year TSR Multiple” TSR for the Company and each member of the peer group will be calculated as follows:

(a)“TSR” means, for the Company and each of the Peer Companies, such company’s total shareholder return, expressed as a percentage, which will be calculated by dividing (i) the Closing Average Share Value by (ii) the Opening Average Share Value and subtracting one from the quotient.

(b)“Opening Average Share Value” means the average Share Value over the trading days in the Opening Average Period.

(c)“Opening Average Period” means the twenty trading days beginning on the first day of the first Performance Period.

11

EXHIBIT 10.12

(d)“Accumulated Shares” means, for a given trading day, the sum of (i) one (1) share and (ii) the cumulative number of shares of a company’s common stock purchasable with dividends declared on such company’s common stock to that point during the Performance Period, assuming same day reinvestment of such dividends at the closing price on the ex-dividend date.

(e)“Closing Average Share Value” means the average Share Value over the trading days in the Closing Average Period.

(f)“Closing Average Period” means the twenty trading days ending on the last day of the last Performance Period.

(g)“Share Value” means, with respect to a given trading day, the closing price of a company’s common stock multiplied by the Accumulated Shares for such trading day.

(h)“Peer Companies” means the constituents of the [S&P 400 MidCap Index] as of the determination date. Each Peer Company’s “common stock” shall mean that series of common stock that is publicly traded on a registered U.S. exchange or, in the case of a non-U.S. company, an equivalent non-U.S. exchange.

(i)“Percentile Rank” means the Company’s TSR relative to the TSR of the Peer Companies. Relative Total Shareholder Return will be determined by ranking the TSR of the Company and all of the Peer Companies from highest to lowest. After this ranking, the percentile rank of the Company’s TSR will be determined as follows:

P =	N – R
	N – 1

where:    “P” represents the percentile rank which will be rounded, if necessary, to the nearest whole percentile by application of regular rounding.

“N” represents the number of Peer Companies as of the last day of the last Performance Period, plus the Company.

“R” represents the Company’s ranking among the Peer Companies.

Example: If there are 39 Peer Companies and the Company’s TSR ranked 15th, its TSR would be at the 64th percentile: 0.64 = ((40 – 15) / (40 – 1)).

(j)“Three Year TSR Multiple” means the percentage determined according to the following table:

12

EXHIBIT 10.12

Company TSR Relative to the TSRs of the Peer Companies	Earned Percentage
25th Percentile or Below	75%
Between the 25th Percentile and the 80th Percentile	Interpolated on a linear basis between 75% and 125%
80th Percentile or Higher	125%

13

EX-10.18

EXHIBIT 10.18

Restricted Covenants, Severance & Change in Control Agreement

This Restricted Covenants, Severance & Change in Control Agreement (“Agreement”) is effective as of May 19, 2023, by and between Patterson Companies, Inc. (the “Company”) and Samantha Bergeson (referred to herein as “Executive”) (the Company and Executive are collectively referred to herein as “Parties,” and each a “Party”).

WHEREAS, the Company desires to employ Executive to render services to the Company on the terms and conditions set forth in this Agreement; and

WHEREAS, Executive desires to be employed by the Company on such terms and conditions;

NOW, THEREFORE, in consideration of the mutual covenants and promises herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, it is hereby agreed:

1.Severance Benefits. In the event that Executive’s employment with the Company is terminated by the Company without Cause as defined in Section 1(g), Executive shall, in lieu of any other cash severance benefits under any other Company agreement, plan, policy or program, be entitled to severance benefits as follows:

a.Severance Payment. Executive shall receive cash in an amount equal to the sum of (i) one-and-one-half (1.5) times Executive’s then-current base salary and (ii) the average of Executive’s annual cash incentive compensation paid to her under the Company’s Management Incentive Compensation Plan (“MICP”) (or any other similar annual non-equity compensation plan of the Company) for each of the last three full fiscal years (or such lesser number of years for which Executive was employed by the Company) prior to the year in which Executive’s employment is terminated. In the event that Executive was not employed by the Company for the whole of any such fiscal year but received pro-rated cash incentive compensation for such fiscal year, such amount shall be annualized for computation purposes.

b.Prorated Non-Equity Incentive Compensation. Executive shall receive cash in an amount equal to her prorated through the date of termination annual cash incentive compensation under the MICP (or any other similar annual non-equity incentive compensation plan of the Company) for the fiscal year in which termination occurs based on actual performance for the fiscal year through the date of termination.

c.Continued Eligibility for Benefits Programs. Medical/Dental/ Vision/Life insurance coverage will terminate following the last day of Executive’s employment. However, Executive may elect to continue coverage for herself and her eligible dependents by electing continuation coverage under the federal law, the Consolidated Omnibus Budget Reconciliation Act (“COBRA”), or applicable state law. If Executive timely elects COBRA continuation, the Company will pay for her COBRA premiums until the earlier of: (i) eighteen (18) months following the termination of Executive’s

employment, pursuant to the terms of the applicable plan, (ii) the date Executive is eligible for such coverage from another employer, or (iii) such time as the reimbursement would result in the Company being subject to an excise tax for a discriminatory health insurance benefit based on the Company’s reasonable interpretation of applicable law.

d.Release Agreement. Executive shall not receive the severance benefits set forth in Sections 1(a)-(c) unless she has first signed and returned to the Company, and not rescinded pursuant to the terms thereof, a separation agreement containing a release of claims in a reasonably customary form that is provided by and reasonably acceptable to the Company (the “Release”). The severance payments in Sections 1(a) and 1(b) will be paid in equal monthly installments over the 18-month period following Executive’s termination beginning on the sixtieth (60th) day following Executive’s termination, provided that all statutory rescission periods contained in the Release have expired without revocation, and subject to provisions of Section 5(l). Where the period available to execute (and to not revoke) the Release spans more than one calendar year, the payment shall not be made until the second calendar year as required by the applicable terms of this Agreement and Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).

e.Forfeiture. Notwithstanding the foregoing, if Executive materially breaches any of her obligations in Section 4 hereof or the terms of the Release, the termination automatically shall be deemed one by the Company for Cause and any severance payment already made to Executive shall be determined unearned and must be promptly repaid to the Company.

f.Unvested Equity Interests. All unvested equity interests held by Executive as of the date of her termination shall terminate and be forfeited, unless those unvested grants shall be deemed to have vested in their entirety as of Executive’s termination pursuant to the terms of the applicable grant agreement and the Company’s Amended and Restated 2015 Omnibus Incentive Plan (the “Omnibus Plan”), or any successor plan thereto, if applicable.

g.Cause. For purposes of this Agreement, “Cause” shall mean: (i) Executive’s willful or repeated and material failure or refusal to perform her reasonably assigned and lawful duties (other than any such failure resulting from incapacity due to physical or mental illness or disability), or serious neglect or willful and material misconduct in the performance of her reasonably assigned and lawful duties; (ii) Executive’s willful failure to comply with any reasonably assigned and legal directive of the Company’s Board of Directors (the “Board”); (iii) Executive’s disclosure or misuse of Confidential Information as defined in Section 4(g); (iv) Executive’s engagement in illegal conduct, embezzlement, misappropriation, fraud, dishonesty or breach of fiduciary duty, resulting in loss, damage or injury to the Company; (v) Executive’s conduct related to her employment for which either criminal or civil penalties against Executive or the Company may be sought; (vi) Executive’s conviction of, or plea of guilty or nolo contendere to, any crime (whether or not involving the Company) that constitutes a

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felony in the jurisdiction involved; or (vii) Executive’s violation of any Company policy or breach of the terms of this Agreement or any other agreement between Executive and the Company. For the avoidance of doubt, mere failure of the Company to achieve any performance goals shall not constitute “Cause.” For purposes of the first sentence of this paragraph, no act, or failure to act, on Executive’s part shall be considered willful unless done or omitted to be done, by her not in good faith or without reasonable belief that her action or omission was in the best interest of the Company.

2.Change In Control. In the event that (x) Executive’s employment with the Company is terminated by the Company without Cause or (y) Executive resigns her employment for Good Reason as defined in Section 2(f), in either case within two (2) years immediately following a Change in Control as defined in Section 2(e), Executive shall, in lieu of the payment of severance benefits under Section 1 of this Agreement or any other cash severance benefits under any other Company agreement, plan, policy or program, be entitled to severance benefits as follows:

a.Severance Payment. Executive shall receive cash in an amount equal to the sum of (i) two (2) times Executive’s then-current base salary and (ii) Executive’s target annual cash incentive compensation under the MICP (or any other similar annual non-equity compensation plan of the Company) for the fiscal year in which Executive’s employment is terminated.

b.Prorated Non-Equity Incentive Compensation. Executive shall receive cash in an amount equal to her prorated annual cash incentive compensation under the MICP (or any other similar annual non-equity incentive compensation plan of the Company) for the fiscal year in which termination occurs based on Executive’s target award through the date of termination.

c.Continued Eligibility for Benefits Programs. Medical/Dental/ Vision/Life insurance coverage will terminate following the last day of Executive’s employment. However, Executive may elect to continue coverage for herself and her eligible dependents by electing continuation coverage under the federal law, COBRA, or applicable state law. If Executive timely elects COBRA continuation, the Company will pay for her COBRA premiums until the earlier of: (i) eighteen (18) months following the termination of Executive’s employment, pursuant to the terms of the applicable plan, (ii) the date Executive is eligible for such coverage from another employer, or (iii) such time as the reimbursement would result in the Company being subject to an excise tax for a discriminatory health insurance benefit based on the Company’s reasonable interpretation of applicable law.

d.Release Agreement. Executive shall not receive the severance benefits set forth in Sections 2(a)-(c) unless she has first signed and returned to the Company, and not rescinded pursuant to the terms thereof, the Release. The severance payments in Sections 2(a) and 2(b) will be paid in a lump sum on the sixtieth (60th) day following Executive’s termination, provided that all statutory rescission periods contained in the Release have expired without revocation, and subject to provisions of Section 5(l). Where the period

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available to execute (and to not revoke) the release spans more than one calendar year, the payment shall not be made until the second calendar year as required by the applicable terms of this Agreement and Section 409A of the Code.

e.Change in Control. For purposes of this Agreement, “Change in Control” shall mean: (i) if any “person” or “group” as those terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or any successors thereto, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act or any successor thereto), directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities, provided, that the acquisition of additional securities by any person or group that owns 50% or more of the voting power prior to such acquisition of additional securities shall not be a Change in Control; (ii) during any 12-month period, individuals who at the beginning of such period constitute the Board and any new directors whose election by the Board or nomination for election by the Company’s shareholders was approved by at least a majority of the directors then still in office who either were directors at the beginning of the period or whose election was previously so approved, cease for any reason to constitute a majority thereof; (iii) the shareholders of the Company approve a merger or consolidation of the Company with any other corporation, other than a merger or consolidation (x) which would result in all or a portion of the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation or (y) by which the corporate existence of the Company is not affected and following which the Company’s chief executive officer and directors retain their positions with the Company (and constitute at least a majority of the Board) and such merger or consolidation is consummated; or (iv) the shareholders of the Company approve an agreement for the sale or disposition by the Company of all or substantially all the Company’s assets and such sale or disposition is consummated.

f.Good Reason. For purposes of this Agreement, “Good Reason” shall mean any refusal to accept: (i) a material diminution in Executive’s base compensation, which for purposes of this Agreement will mean a reduction of 10% or more in Executive’s base salary plus MICP target; (ii) discontinuation of eligibility to participate in a material long-term cash or equity award or equity-based grant program (or in a comparable substitute program) in which other officers of the Company are generally eligible to participate; (iii) any material diminution of authority, duties or responsibilities, including any change in the authority, duties or responsibilities of Executive that is inconsistent in any material and adverse respect with Executive’s then-current position(s), authority, duties and responsibilities with the Company or any subsidiary; provided, however, that “Good Reason” will not be deemed to exist pursuant to this clause (iii) solely on account of the Company no longer being a publicly traded entity or solely on account of a change in the reporting relationship of Executive; or (iv) a material adverse change in the geographic location at which the Company requires Executive to be based

    4    

as compared to the location where Executive was based immediately prior to the change, which for purposes of this Agreement will mean: (x) a relocation that results in an increase in the commuting distance from Executive’s principal residence to her new job location of more than 50 miles, or (y) a relocation that requires Executive to relocate her principal residence.

Notwithstanding the foregoing, however, “Good Reason” will not be deemed to exist as a result of any of the actions stated in clauses (i) or (ii) above to the extent that such actions are in connection with an across-the-board change or termination that equally affects at least ninety percent (90%) of all officers of the Company, and an act or omission will not constitute a “Good Reason” unless Executive gives written notice to the Company of the existence of such act or omission within ninety (90) days of its initial existence, the Company fails to cure the act or omission within thirty (30) days after the notification, and actual termination of employment occurs within two (2) years of the initial existence of the act or omission.

g.Forfeiture. Notwithstanding the foregoing, if Executive materially breaches any of her obligations in Section 4 hereof or the terms of the Release, the termination automatically shall be deemed one by the Company for Cause and any severance payment already made to Executive shall be determined unearned and must be promptly repaid to the Company.

h.Unvested Equity Interests. All unvested equity interests held by Executive as of the date of her termination shall be governed by the terms of the applicable grant agreement and the Omnibus Plan, or any successor plan thereto, if applicable.

i.Section 280G. Notwithstanding anything to the contrary herein contained, under no circumstances shall the payments made to Executive pursuant to Section 2 result in an “excess parachute payment” as defined under Section 280G of the Code. To the extent that such payments could result in an “excess parachute payment,” the payments shall be reduced to avoid such result, the manner of which reduction shall be in the discretion of the Board. Any amounts reduced pursuant to this Section 2(i) shall be deemed forfeited by Executive, and Executive shall have no authority whatsoever to determine the order in which benefits under this Agreement shall be so reduced.

3.Executive Agreements. In exchange for the severance benefits set forth in Sections 1(a)-(c) and Sections 2(a)-(c), Executive agrees as follows:

a.Non-Encouragement Provision. Executive agrees that during her employment with the Company and thereafter she will not instigate, cause, advise or encourage any other persons, groups of persons, corporations, partnerships or any other entity to file litigation against the Company.

b.Cooperation in Transitional Matters. After Executive’s employment ends, Executive agrees to make herself reasonably available to the Company thereafter

    5    

without additional compensation to answer questions, provide information and otherwise reasonably cooperate with the Company in any pending or transitional matters on which Executive has worked or about which Executive may have personal knowledge. Executive agrees to reasonably cooperate with the Company, including its attorneys, managers and accountants, in connection with any transitional matters, potential or actual litigation, or other real or potential disputes, which directly or indirectly involve the Company.

c.Non-competition and Notification. During Executive’s employment with the Company and for the Restricted Period as defined below, Executive agrees not to directly or indirectly engage in, be interested in, or be employed by, anywhere in the United States, Canada, the United Kingdom or any additional geographic markets the Company enters, any direct competitor of the Company (including, without limitation, Henry Schein, Inc., Benco Dental Supply Company, Burkhart Dental Supply Co., Amazon.com, Inc., MWI Veterinary Supply, Inc., AmerisourceBergen Corp., and Covetrus, Inc.) or any other business which offers, markets or sells any service or product that competes indirectly with any services or products of the Company (a “Competing Business”). The “Restricted Period” shall be twenty four (24) months following the voluntary or involuntary termination of Executive’s employment for whatever reason. By way of example, but not by way of limitation, any service or product that competes directly or indirectly with any services or products of the Company includes dental services, dental products, animal health services and animal health products. For purposes of this provision, Executive shall be deemed to be interested in a Competing Business if she is engaged or interested in such Competing Business as a stockholder, director, officer, employee, salesperson, sales representative, agent, partner, individual proprietor, consultant, or otherwise, but not if such interest in the Competing Business is limited solely to the ownership of 2% or less of the equity or debt securities of any class of a corporation whose shares are listed for trading on a national securities exchange or traded in the over-the-counter market.

In the event that Executive obtains new employment prior to expiration of the Restricted Period, Executive shall: (i) disclose this Agreement to her new employer prior to beginning the employment; and (ii) notify the Company of the identity of her new employer within seven (7) days after accepting any offer of employment by sending a written notification to the Company.

Executive agrees that the foregoing restrictions are in consideration of the consideration offered in this Agreement, and that the restrictions are reasonable and necessary for the purpose of protecting the Company’s legitimate business interests. Executive agrees that the scope of the business of the Company is independent of the location (such that it is not practical to limit the restrictions contained herein to a specific state, city or part thereof) and therefore acknowledges and agrees that the geographic scope of this restriction throughout the United States, Canada and the United Kingdom is reasonable and necessary.

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Executive further agrees that the remedy of damages at law for breach by Executive of any of the covenants and obligations contained in this Agreement is an inadequate remedy. In recognition of the irreparable harm that a violation by Executive of the covenants and obligations in this Agreement would cause the Company, or any company with which the Company has a business relationship, Executive agrees that if she breaches or proposes to breach, any provision of this Agreement, the Company shall be entitled, in addition to all other remedies that it may have, to an injunction or other appropriate equitable relief to restrain any such breach or proposed breach without showing or proving any actual damage to the Company, it being understood by Executive and the Company that both damages and equitable relief shall be proper modes of relief and are not to be considered alternative remedies.

d.Non-Solicitation of Customers, Suppliers, or Distributors. Executive agrees that during her employment with the Company and during the Restricted Period, Executive shall not directly or indirectly, whether individually or as an owner, agent, representative, consultant or employee, participate or assist any individual or business entity to solicit or encourage any customer, supplier, or distributor of the Company to (i) do business that could be done with the Company with any person or entity other than the Company or (ii) terminate or otherwise modify adversely its business relationship with the Company.

e.Non-Solicitation of Employees. Executive agrees that during her employment with the Company and during the Restricted Period, Executive shall not directly or indirectly, whether individually or as an owner, agent, representative, consultant or employee, participate or assist any individual or business entity to solicit, employ or conspire with others to employ any of the Company’s employees. The term “employ” for purposes of this Section 4(e) means to enter into an arrangement for services as a full-time or part-time employee, independent contractor, agent or otherwise. Notwithstanding the foregoing, any general advertisement or public solicitation that is not directed specifically to employees of the Company shall not constitute a breach of this Section 4(e).

f.Non-Disparagement Provision. Executive agrees that during her employment with the Company and thereafter, Executive will not make any disparaging or damaging statements about the Company, its products, services or management, whether or not libelous or defamatory, provided that this provision shall not affect Executive’s right to provide truthful information to any governmental entity. Similarly, the Board shall not at any time, whether during or after the termination of Executive’s employment with the Company, make any disparaging or damaging statements concerning Executive whether or not libelous or defamatory, provided that this provision shall not affect the Company’s right to provide truthful information to any governmental entity.

g.Confidential Information. Executive acknowledges that in the course of her employment with the Company, she will have access to Confidential Information.

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“Confidential Information” includes but is not limited to information not generally known to the public, in spoken, printed, electronic or any other form or medium relating directly or indirectly to: business processes, practices, policies, plans, documents, operations, services and strategies; contracts, transactions, and potential transactions; negotiations and pending negotiations; customer and prospect information including, without limitation, customer and prospect lists, purchase and order histories, and equipment pipelines; proprietary information, trade secrets and intellectual property; supplier and vendor agreements, strategies, plans and information; financial information and results; legal strategies and information; marketing plans and strategies; pricing plans and strategies; personnel information and staffing and succession planning practices and strategies; internal controls and security policies, strategies and procedures; and/or other confidential business information that Executive will learn, receive or use at any time during her employment with the Company, whether or not such information has been previously identified as confidential or proprietary.

Confidential Information may be contained in written materials, such as documents, files, reports, manuals, drawings, diagrams, blueprints and correspondence, as well as computer hardware and software, and electronic or other form or media. It may also consist of unwritten knowledge, including ideas, research, processes, plans, practices and know-how.

Confidential Information does not include information that: (i) is in or becomes part of the public domain or information generally known in the trade, other than as a result of a disclosure by or through Executive in violation of this Agreement or by a third-party in breach of a confidentiality obligation; (ii) information that Executive acquires or independently develops completely independently of her employment with the Company; (iii) is lawfully disclosed to Executive by a third party provided the third party did not receive it due to a breach of this Agreement or any other obligation of confidentiality; (iv) was lawfully in Executive’s possession prior to providing services for the Company, provided that said information was not obtained from the Company; or (v) is required to be disclosed by law or the order of any court or governmental agency, or in any litigation or similar proceeding; provided that prior to making any such required disclosure, Executive shall notify the Company in sufficient time to permit the Company to seek an appropriate protective order.

Executive agrees that she shall not, at any time during her employment with the Company or thereafter, disclose or otherwise make available Confidential Information to any person, company or other party. Further, Executive shall not use or disclose any Confidential Information at any time without the Company’s prior written consent. This Agreement shall not limit any obligations Executive may have under any other employee confidentiality agreement with the Company or under applicable law nor shall it limit her right to provide truthful information to any governmental agency, including, for example, the Securities and Exchange Commission (“SEC”), as part of a complaint or investigation proceeding conducted by the SEC.

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h.Defend Trade Secrets Act of 2016. Executive understands that if she breaches the provisions of Section 4(g) above, Executive may be liable to the Company under the federal Defend Trade Secrets Act of 2016 (“DTSA”). Executive further understands that by providing her with the following notice, the Company may recover from Executive its attorney fees and exemplary damages if it brings a successful claim against Executive under the DTSA: Under the DTSA, Executive shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made: (a)(i) in confidence to a federal, state, or local governmental official, either directly or indirectly, or to an attorney and (ii) solely for the purpose of reporting or investigating a suspected violation of law or (b) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Without limiting the foregoing, if Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, Executive may disclose the trade secret to her attorney and use the trade secret information in the court proceeding, if Executive (i) files any document containing the trade secret under seal and (ii) does not disclose the trade secret, except pursuant to court order.

i.Return of Documents, Materials, and Property. Executive agrees that at the end of her employment with the Company, or at the Company’s earlier request, she will return all originals and copies of any documents, materials or other property of the Company and the Company’s customers, whether generated by Executive or any other person on her behalf or on behalf of the Company or its customers. This includes all copies and all materials on paper, on disk, on a computer, or in any computerized or electronic medium. All documents, files, records, reports, policies, training materials, communications materials, lists and information, e-mail messages, products, keys and access cards, cellular phones, computers, other materials, equipment, physical and electronic property, whether or not pertaining to Confidential Information, which were furnished to Executive by the Company, purchased or leased at the expense of the Company, or produced by the Company or Executive in connection with Executive’s employment will be and remain the sole property of the Company, except as otherwise provided herein. All copies of Company property, whether in tangible or intangible form, are also the property of the Company. Executive agrees that she will not retain any paper or electronic copies of these documents and materials.

Executive agrees that, following the termination of her employment with the Company, the Company may open all mail (including but not limited to regular mail, electronic mail and voicemail) delivered to the Company and addressed to her. Notwithstanding the foregoing, the Company shall not open any mail (including but not limited to regular mail, electronic mail and voicemail) delivered to the Company and addressed to Executive if it is readily apparent that such mail is a personal item, in which case the Company will promptly forward such mail to Executive without opening it; provided, however, that this provision does not create any reasonable expectation of privacy on behalf of Executive in her use of the Company’s communications and technology systems.

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j.Class Action Waiver and Arbitration Agreement. Any dispute, controversy or claim arising out of, relating to or in connection with this Agreement, including the breach, termination or validity thereof, shall be finally resolved by arbitration, other than claims of sexual assault or sexual harassment according to the federal End Forced Arbitration of Sexual Assault and Sexual Harassment Claims Act. The tribunal shall have the power to rule on any challenge to its own jurisdiction or to the validity or enforceability of any portion of the agreement to arbitrate. The Parties agree to arbitrate solely on an individual basis, and that the agreement to arbitrate does not permit class arbitration or any claims brought as a plaintiff or class member in any class or representative arbitration proceeding. The arbitral tribunal may not consolidate more than one person’s claims, and may not otherwise preside over any form of a representative or class proceeding. In the event the prohibition on class arbitration is deemed invalid or unenforceable, then the remaining portions of the arbitration agreement will remain in force.

k.Reasonable and Necessary. Executive acknowledges that she is a key employee of the Company and that Executive participates in and contributes to key phases of the Company’s operations. Executive agrees that the covenants provided for in this Section 4 are reasonable and necessary to protect the Company and its confidential information, goodwill and other legitimate business interests and, without such protection, the Company’s customer and client relationships and competitive advantage would be materially adversely affected. Executive agrees that the provisions of this Section 4 are an essential inducement to the Company to enter into this Agreement and they are in addition to, rather than in lieu of, any similar or related covenants with the Company to which Executive may be bound. Executive further acknowledges that the restrictions contained in this Section 4 shall not impose an undue hardship on her since she has general business skills which may be used in industries other than that in which the Company conducts its business and shall not deprive Executive of her livelihood. In exchange for Executive agreeing to be bound by these reasonable and necessary covenants, the Company is providing Executive with the benefits as set forth in this Agreement. Executive acknowledges and agrees that these benefits constitute full and adequate consideration for her obligations hereunder.

l.Company Defined. For purposes of this Section 4, “Company” shall mean Patterson Companies, Inc., its affiliated and related entities, and any of their respective direct or indirect subsidiaries.

m.Survival. Notwithstanding any termination of this Agreement or Executive’s employment with the Company, Executive shall remain bound by the provisions of this Agreement which specifically relate to periods, activities or obligations upon or subsequent to the termination of her employment, irrespective of whether Executive is eligible for severance benefits under Section 1 or 2 of this Agreement.

n.Company Policies. Executive agrees that during her employment with the Company and thereafter, Executive shall be subject to and shall abide by each of the

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personnel policies applicable to officers of the Company, including without limitation any policy restricting pledging and hedging investments in Company equity by Company officers, and any policy the Company adopts regarding recovery of incentive compensation (sometimes referred to as “clawback”) and any additional clawback provisions as required by law and applicable stock exchange listing rules.

4.General Provisions. This Agreement is subject to the following general provisions:

a.Consideration. Executive acknowledges that the consideration offered in this Agreement is good and valuable consideration in exchange for the terms of this Agreement.

b.Effect of Breach. Executive agrees that it would be impossible to measure in money the damages caused by the irreparable harm the Company would suffer for any breach by her of the terms of this Agreement. Accordingly, Executive agrees that if the Company institutes any action or proceeding to enforce the terms of this Agreement, the Company shall be entitled to temporary and permanent injunctive or other equitable relief to enforce the provisions of this Agreement, such relief may be granted without the necessity of proving actual damages, Executive hereby waives to the extent permitted by law the claim or defense that the Company has an adequate remedy at law, and Executive shall not argue in any such action or proceeding that any such remedy at law exists. This provision with respect to equitable relief shall not, however, diminish the right of the Company to claim and recover damages in addition to injunctive relief. Executive agrees that she shall reimburse the Company for its attorney fees and costs incurred in seeking to enforce the terms of this Agreement.

c.Notice. Any notice required or permitted to be given under this Agreement shall be deemed to have been delivered on the date following the day the notice is deposited in the United States mail, certified or registered, postage prepaid, return receipt requested, and addressed as follows:

If to Executive:

Samantha Bergeson

781 Sweetbriar Lane

Red Wing, MN 55066

or such other address as Executive elects by giving to the Company not less than 30 days advance written notice.

If to the Company:

Donald J. Zurbay

President and Chief Executive Officer

Patterson Companies, Inc.

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1031 Mendota Heights Road

St. Paul, MN 55120

or such other address as the Company elects by giving to Executive not less than 30 days advance written notice.

d.Conflicting Agreements. Executive hereby represents that Executive is not subject to any non-competition agreement, non-disclosure agreement, or any other kind of agreement or duty that would prohibit or restrict Executive from vigorously and fully performing services for the Company.

e.Waiver. The waiver by either Party of the breach or nonperformance of any provision of this Agreement by the other Party will not operate or be construed as a waiver of any future breach or nonperformance under any such provision of this Agreement or, in the case of the Company, any similar agreement with any other employee.

f.Severability and Blue Penciling. To the extent that any provision of this Agreement shall be determined to be invalid or unenforceable as written, the validity and enforceability of the remainder of such provision and of this Agreement shall be unaffected. If any particular provision of this Agreement shall be adjudicated to be invalid or unenforceable, the Company and Executive specifically authorize the tribunal making such determination to edit the invalid or unenforceable provision to allow this Agreement, and the provisions thereof, to be valid and enforceable to the fullest extent allowed by law or public policy. Executive expressly stipulates that this Agreement shall be construed in a manner which renders its provisions valid and enforceable to the maximum extent (not exceeding its express terms) possible under applicable law.

g.Enforceable Contract. The Parties agree that this Agreement shall be deemed to have been entered into and shall be construed and enforced in accordance with the laws of the State of Minnesota, without regard to conflicts of law provisions. If any part of this Agreement is construed to be in violation of the law, such part will be modified to achieve the objective of the Parties to the fullest extent permitted and the balance of this Agreement shall remain in full force and effect.

h.Exclusivity of and Consent to Jurisdiction. Subject to the arbitration provisions of Section 4(j) of this Agreement, Executive and the Company agree that the courts of Minnesota shall have exclusive judicial jurisdiction over disputes concerning this Agreement. The Parties specifically consent to the jurisdiction of the state and federal courts of Minnesota. Accordingly, Executive and the Company submit to the personal jurisdiction of such courts for purposes of this Agreement.

i.Counterparts. The Parties agree that this Agreement may be executed in counterparts and each executed counterpart shall be as effective as a signed original. Photographic or faxed copies of such signed counterparts may be used in lieu of the originals for any purpose.

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j.Successors and Assigns. Executive may not assign this Agreement to any third party for whatever purpose and any such purported assignment shall be void. The Company may assign this Agreement to any successor or assign.

k.Entire Agreement. Except for the agreements described herein, this Agreement contains the entire agreement between the Parties relating to Executive’s employment by the Company and supersedes all prior agreements and understandings, whether written or oral, between the Parties relating to such employment. This Agreement may not be amended or changed except in writing executed by both Parties.

l.Section 409A. Notwithstanding any other provision of this Agreement to the contrary, Executive and the Company agree that the payments hereunder shall be exempt from, or satisfy the applicable requirements, if any, of Section 409A of the Code in a manner that will preclude the imposition of penalties described in Section 409A of the Code. Payments made pursuant to this Agreement are intended to satisfy the short-term deferral rule or separation pay exception within the meaning of Section 409A of Code. Executive’s termination of employment shall mean a “separation from service” within the meaning of Section 409A of the Code. Notwithstanding anything herein to the contrary, this Agreement shall, to the maximum extent possible, be administered, interpreted and construed in a manner consistent with Section 409A of Code; provided, that in no event shall the Company have any obligation to indemnify Executive from the effect of any taxes under Section 409A of the Code.

If any payment or benefit provided to Executive in connection with her termination of employment is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code and Executive is determined to be a “specified employee” as defined in Section 409A(a)(2)(b)(i) of the Code, then such payment or benefit shall not be paid until the first payroll date to occur following the six-month anniversary of the termination or, if earlier, on Executive’s death (the “Specified Employee Payment Date”). The aggregate of any payments that would otherwise have been paid before the Specified Employee Payment Date shall be paid to Executive in a lump sum on the Specified Employee Payment Date and thereafter, any remaining payments shall be paid without delay in accordance with their original schedule.

m.Clawback. The Company may terminate Executive’s right to the unvested equity compensation under Section 3, and may require reimbursement to the Company by Executive of any incentive compensation previously paid or vested within the prior 12-month period pursuant to any applicable incentive compensation plan or award agreement, in the event: (i) of a willful or reckless breach by Executive of her obligations under Section 4 of this Agreement; (ii) of Executive’s misconduct constituting Cause as defined in Section 1(g) of this Agreement; or (iii) Executive is obligated to disgorge to or reimburse the Company for such compensation paid or payable to Executive by reason of application of Section 304 of the Sarbanes-Oxley Act of 2002, Section 954 of the Dodd-

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Frank Wall Street Reform and Consumer Protection Act, or any other applicable law or regulation requiring recapture, reimbursement or disgorgement of incentive-based pay.

n.Withholding. The Company shall withhold from the compensation payable to Executive hereunder all appropriate deductions necessary for the Company to satisfy its withholding obligations under federal, state and local income and employment tax laws.

o.Acknowledgement. Executive affirms that she has read this Agreement and that the provisions of this Agreement are understandable to her and Executive has entered into this Agreement freely and voluntarily.

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EXHIBIT 10.18

IN WITNESS WHEREOF, the Parties have executed this Agreement by their signatures below.

Effective Date: May 19, 2023        

Samantha Bergeson

PATTERSON COMPANIES, INC.

Effective Date: May 19, 2023    By:    

Donald J. Zurbay

Chief Executive Officer

[Signature Page to Restricted Covenants, Severance & Change in Control Agreement by and between Patterson Companies, Inc. and Samantha Bergeson, effective May 19, 2023]

EX-10.20

EXHIBIT 10.20

CONFORMED THROUGH AMENDMENT NO. 5 TO RECEIVABLES SALE AGREEMENT DATED APRIL 3, 2024

RECEIVABLES SALE AGREEMENT

dated as of May 10, 2002,

AMONG

THE ORIGINATORS
NAMED HEREIN

AND

PDC FUNDING COMPANY, LLC
as Buyer

RECEIVABLES SALE AGREEMENT

THIS RECEIVABLES SALE AGREEMENT, dated as May 10, 2002, is by and among Patterson Dental Supply, Inc., a Minnesota corporation (“PDSI”), Patterson Veterinary Supply, Inc. (f/k/a Webster Veterinary Supply, Inc.), a Minnesota corporation (“PVSI” and, together with PDSI, the “Originators” and each, an “Originator”) and PDC Funding Company, LLC, a Minnesota limited liability company (“Buyer”). Unless defined elsewhere herein, capitalized terms used in this Agreement shall have the meanings assigned to such terms in Exhibit I hereto (or, if not defined in Exhibit I hereto, the meaning assigned to such term in Exhibit I to the Purchase Agreement).

PRELIMINARY STATEMENTS

Each Originator now owns, and from time to time hereafter will own, Originated Receivables. Each Originator wishes to sell and assign to Buyer, and Buyer wishes to purchase from such Originator, all of such Originator’s right, title and interest in and to certain of such Originated Receivables, together with the Related Security and Collections with respect thereto.

Each Originator and Buyer intend the transactions contemplated hereby to be true sales of the Receivables from such Originator to Buyer, providing Buyer with the full benefits of ownership of the Receivables, and neither of the Originators nor Buyer intends these transactions to be, or for any purpose to be characterized as, loans from Buyer to any Originator.

Following each purchase of Receivables from the Originators, Buyer will sell Receivables and the associated Related Security and Collections pursuant to that certain Third Amended and Restated Receivables Purchase Agreement dated as of December 3, 2010 (as the same may from time to time hereafter be amended, supplemented, restated or otherwise modified, the “Purchase Agreement”) among Buyer, as seller, the Servicer (as defined therein), the conduits from time to time party thereto as “Conduits”, the financial institutions from time to time party thereto as “Financial Institutions”, the purchaser agents from time to time party thereto as “Purchaser Agents” and MUFG Bank, Ltd. (f/k/a The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch) (as assignee of JPMorgan Chase Bank, N.A.), as agent for the Conduits and Financial Institutions or any successor agent appointed pursuant to the terms of the Purchase Agreement (in such capacity, together with any successors or assigns, the “Agent”).

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing premises and the mutual agreements herein contained and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

RECEIVABLES SALE AGREEMENT

ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASE

Section I.1Purchases of Receivables.

(a)Agreement to Sell and Purchase. (i) Upon the terms and subject to the conditions set forth herein, each Originator may, at its option from time to time, sell, assign, transfer and convey to Buyer, without recourse (except to the extent expressly provided herein), and Buyer may, at its option, purchase from such Originator, all of Originator’s right, title and interest in, to and under certain Originated Receivables owned by such Originator, together, in each case, with all Related Security and Collections with respect thereto. In connection with the payment of the Purchase Price for any Receivables, Buyer may request that Originator selling such Receivables deliver, and such Originator shall deliver, such approvals, opinions, information, reports or documents as Buyer may reasonably request.

(i)Not less than two Business Days prior to each date on which any Originator proposes to sell Originated Receivables to Buyer, such Originator shall deliver to Buyer (i) a notice that such Originator proposes to sell to Buyer, on the specified Purchase Date, Originated Receivables, and (ii) an executed Sale Assignment, to which shall be attached a schedule of the Originated Receivables to be sold on such Purchase Date, identified at least by contract number, Obligor and principal amount outstanding as of such Purchase Date or any other date identified in such Sale Assignment. Effective upon Buyer’s acceptance of such Sale Assignment, such Originator does hereby sell to Buyer without recourse (except to the extent expressly provided herein), and Buyer does hereby purchase or acquire, from such Originator, all of Originator’s right, title and interest in and to the Originated Receivables identified in such Sale Assignment. The schedule attached to the first Sale Assignment delivered pursuant to this Section 1.1(a)(ii) shall be deemed to be Schedule B to this Agreement (and this Agreement shall be deemed, automatically and without further action by any Person, supplemented and modified thereby) and each schedule attached to any Sale Assignment thereafter delivered pursuant to this Section 1.1(a)(ii) shall be deemed to amend and supplement Schedule B hereto. Buyer shall be obligated to pay the Purchase Price for the Receivables purchased hereunder in accordance with Section 1.2.

(b)It is the intention of the parties hereto that each Purchase of Receivables made hereunder shall constitute a sale, which sale is absolute and irrevocable and provides Buyer with the full benefits of ownership of the Receivables. Except for the Purchase Price Credits owed pursuant to Section 1.3, each sale of Receivables hereunder is made without recourse to any Originator; provided, however,that (i) each Originator shall be liable to Buyer for all representations, warranties, covenants and indemnities made by such Originator pursuant to the terms of the Transaction Documents to which such Originator is a party, and (ii) such sale does not constitute and is not intended to result in an assumption by Buyer or any assignee thereof of any obligation of any Originator or any other Person arising in connection with the Receivables, the related Contracts and/or other Related Security or any other obligations of any Originator. In view of the intention of the parties hereto that the Purchases of Receivables made hereunder shall constitute sales of such Receivables rather than loans secured thereby, each

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RECEIVABLES SALE AGREEMENT

Originator agreesthat it will, on or prior to the date hereof and in accordance with Section 4.1(e)(ii), mark its master data processing records relating to the Receivables with a legend acceptable to Buyer and to the Agent (as Buyer’s assignee), evidencing that Buyer has purchased such Receivables as provided in this Agreement and to note in its financial statements that its Receivables have been sold to Buyer. Upon the request of Buyer or the Agent (as Buyer’s assignee), each Originator will execute and file such financing or continuation statements, or amendments thereto or assignments thereof, and such other instruments or notices, as may be necessary or appropriate to perfect and maintain the perfection of Buyer’s ownership interest in the Receivables and the Related Security and Collections with respect thereto, or as Buyer or the Agent (as Buyer’s assignee) may reasonably request.

Section I.2Payment for the Purchase.

(a)The Purchase Price for any Purchase of Receivables hereunder shall be payable in full by Buyer to the Originator of such Receivables in accordance with Section 1.2(b), and shall be paid to such Originator in the following manner:

(i)by delivery of immediately available funds, to the extent of funds made available to Buyer in connection with its subsequent sale of an interest in such Receivables to the Purchasers under the Purchase Agreement or other cash on hand; and

(ii)the balance, by delivery of the proceeds of a subordinated revolving loan from such Originator to Buyer (a “Subordinated Loan”)in an amount not to exceed the least of (A) the remaining unpaid portion of such Purchase Price, (B) the maximum Subordinated Loan that could be borrowed without rendering Buyer’s Net Worth less than the Required Capital Amount and (C) the maximum Subordinated Loan that could be borrowed without rendering the Net Value less than the aggregate outstanding principal balance of the Subordinated Loans (including the Subordinated Loan proposed to be made on such date). Each Originator is hereby authorized by Buyer to endorse on the schedule attached to its Subordinated Note an appropriate notation evidencing the date and amount of each advance thereunder, as well as the date of each payment with respect thereto, provided that the failure to make such notation shall not affect any obligation of Buyer thereunder.

Subject to the limitations set forth in Section 1.2(a)(ii), each Originator irrevocably agrees to advance each Subordinated Loan requested by Buyer on or prior to the Termination Date. The Subordinated Loans shall be evidenced by, and shall be payable in accordance with the terms and provisions of the Subordinated Notes and shall be payable solely from funds which Buyer is not required under the Purchase Agreement to set aside for the benefit of, or otherwise pay over to, the Purchasers.

(b)The Purchase Price for each Receivable purchased hereunder shall be due and payable in full by Buyer to the Originator of such Receivable on the Purchase Date for such Receivable, provided that settlement of the Purchase Price between Buyer and each Originator shall be effected on the next occurring Settlement Date (or, if the Purchase Date is a Settlement Date, on such Settlement Date). In addition, increases or decreases in the amount owing under the Subordinated Notes made pursuant to Section 1.2(a) shall be deemed to have

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RECEIVABLES SALE AGREEMENT

occurred and shall be effective as of the next Settlement Date to occur after such increase or decrease.

Section I.3Purchase Price Credit Adjustments. If on any day:

(i)the Outstanding Balance of a Receivable is:

(ii)reduced as a result of any defective or rejected or returned goods, software or services, any discount or any adjustment or otherwise by the Originator of such Receivable (other than cash Collections on account of the Receivables),

(a)reduced or canceled as a result of a setoff in respect of any claim by any Person (whether such claim arises out of the same or a related transaction or an unrelated transaction), or

(b)any of the representations and warranties set forth in Article II are not true when made or deemed made with respect to any Receivable, or

(c)the Related Equipment for any Receivable is Repossessed and sold for less than the fair market value of such Related Equipment,

then, in such event, Buyer shall be entitled to a credit (each, a “Purchase Price Credit”)against the Purchase Price otherwise payable hereunder to the Originator of such Receivable equal to (i) in the case of clause (a) above, the amount of such reduction or cancellation, (ii) in the case of clause (b) above, the Outstanding Balance of such Receivable and in the case of clause (c) above, the difference between the fair market value of the Repossessed Related Equipment and the gross proceeds received upon the sale of such Repossessed Related Equipment. If such Purchase Price Credit exceeds the Purchase Price on any day, then such Originator shall pay the remaining amount of such Purchase Price Credit in cash immediately, provided that if the Termination Date has not occurred, such Originator shall be allowed to deduct the remaining amount of such Purchase Price Credit from any indebtedness owed to it under such Originator’s Subordinated Note.

Section I.4Payments and Computations, Etc. All amounts to be paid or deposited by Buyer hereunder shall be paid or deposited in accordance with the terms hereof on the day when due in immediately available funds to the account of the applicable Originator as designated from time to time by such Originator or as otherwise directed by such Originator. In the event that any payment owed by any Person hereunder becomes due on a day that is not a Business Day, then such payment shall be made on the next succeeding Business Day. If any Person fails to pay any amount hereunder when due, such Person agrees to pay, on demand, the Default Fee in respect thereof until paid in full; provided, however, that such Default Fee shall not at any time exceed the maximum rate permitted by :applicable law. All computations of interest payable hereunder shall be made on the basis of a year of 360 days for the actual number of days (including the first but excluding the last day) elapsed.

Section I.5Transfer of Records.

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RECEIVABLES SALE AGREEMENT

(a)In connection with each Purchase of Receivables hereunder, each Originator hereby sells, transfers, assigns and otherwise conveys to Buyer all of such Originator’s right and title to and interest in the Records relating to all Receivables sold hereunder, without the need for any further documentation in connection with the Purchase. In connection with such transfer, each Originator hereby grants to each of Buyer, the Agent and the Servicer an irrevocable, non-exclusive license to use, without royalty or payment of any kind, all software used by such Originator to account for its Receivables, to the extent necessary to administer such Receivables, whether such software is owned by such Originator or is owned by others and used by such Originator under license agreements with respect thereto, provided that should the consent of any licensor of such software be required for the grant of the license described herein, to be effective, such Originator hereby agrees that upon the request of Buyer (or Buyer’s assignee), such Originator will use its reasonable efforts to obtain the consent of such third-party licensor. The license granted hereby shall be irrevocable until the indefeasible payment in full of the Aggregate Unpaids, and shall terminate on the date this Agreement terminates in accordance with its terms.

(b)Each Originator (i) shall take such action requested by Buyer and/or the Agent (as Buyer’s assignee), from time to time hereafter, that may be necessary or appropriate to ensure that Buyer and its assigns under the Purchase Agreement have an enforceable ownership interest in the Records relating to the Receivables purchased from such Originator hereunder, and (ii) shall use its reasonable efforts to ensure that Buyer, the Agent and the Servicer each has an enforceable right (whether by license or sublicense or otherwise) to use all of the computer software used to account for the Receivables and/or to recreate such Records.

Section I.6Characterization. If, notwithstanding the intention of the parties expressed in Section 1.1(b), any sale by any Originator to Buyer of Receivables hereunder shall be characterized as a secured loan and not a sale or such sale shall for any reason be ineffective or unenforceable, then this Agreement shall be deemed to constitute a security agreement under the UCC and other applicable law. For this purpose and without being in derogation of the parties’ intention that the sale of Receivables hereunder shall constitute a true sale thereof, each Originator hereby grants to Buyer a duly perfected security interest in all of such Originator’s right, title and interest in, to and under all Receivables now existing and hereafter arising, all Collections and Related Security with respect thereto, each Lock-Box, P.O. Box and Collection Account, all other rights and payments relating to such Originator’s Receivables and all proceeds of the foregoing to :secure the prompt and complete payment of a loan deemed to have been made in an amount equal to the aggregate Purchase Price of the Receivables together with all other obligations of such Originator hereunder, which security interest shall be prior to all other Adverse Claims thereto. Buyer and its assigns shall have, in addition to the rights and remedies which they may have under this Agreement, all other rights and remedies provided to a secured creditor under the UCC and other applicable law, which rights and remedies shall be cumulative.

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RECEIVABLES SALE AGREEMENT

ARTICLE II
REPRESENTATIONS AND WARRANTIES

Section II.1Representations and Warranties of Originator. Each Originator hereby represents and warrants to Buyer on the date hereof and on the date of each Purchase that:

(a)Corporate Existence and Power. Such Originator is a corporation, duly organized and validly existing and in good standing under the laws of its state of incorporation. Each such Originator is duly qualified to do business and is in good standing as a foreign corporation, and has and holds all corporate power and all governmental licenses, authorizations, consents and approvals required to carry on its business in each jurisdiction in which its business is conducted, except where the failure to be so qualified or to have and hold such governmental licenses, authorizations, consents and approvals could not reasonably be expected to have a Material Adverse Effect.

(b)Power and Authority; Due Authorization, Execution and Delivery. The execution and delivery by such Originator of this Agreement and each other Transaction Document to which it is a party, and the performance of its obligations hereunder and thereunder and such Originator’s use of the proceeds of each Purchase from such Originator made hereunder, are within its corporate powers and authority, and have been duly authorized by all necessary corporate action on its part. This Agreement and each other Transaction Document to which such Originator is a party has been duly executed and delivered by such Originator.

(c)No Conflict. The execution and delivery by such Originator of this Agreement and each other Transaction Document to which it is a party, and the performance of its obligations hereunder and thereunder do not contravene or violate (i) its certificate or articles of incorporation or by-laws (or equivalent organizational documents) or any shareholder agreements, voting trusts or similar arrangements applicable to any of its authorized shares, (ii) any law, rule or regulation applicable to it, (iii) any restrictions under any agreement, contract or instrument to which it is a party or by which it or any of its property is bound, or (iv) any order, writ, judgment, award, injunction or decree binding on or affecting it or its property, and do not result in the creation or imposition of any Adverse -Claim on assets of such Originator or its Subsidiaries (except as created hereunder). No transaction contemplated hereby requires compliance with any bulk sales act or similar law.

(d)Governmental Authorization. Other than the filing of the financing statements required hereunder, no authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution and delivery by such Originator of this Agreement and each other Transaction Document to which it is a party and the performance of its obligations hereunder and thereunder.

(e)Actions, Suits. There are no actions, suits or proceedings pending, or to the best of such Originator’s knowledge, threatened, against or affecting such Originator, or any of its properties, in or before any court, arbitrator or other body, that could reasonably be expected to have a Material Adverse Effect. Such Originator is not in default with respect to any order of any court, arbitrator or governmental body.

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RECEIVABLES SALE AGREEMENT

(f)Binding Effect. This Agreement and each other Transaction Document to which such Originator is a party constitute the legal, valid and binding obligations of such Originator enforceable against such Originator in accordance with their respective terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

(g)Accuracy of Information. All information heretofore furnished by such Originator or any of its Affiliates to Buyer (or its assigns) for purposes of or in connection with this Agreement, any of the other Transaction Documents or any transaction contemplated hereby or thereby is, and all such information hereafter furnished by such Originator or any of its Affiliates to Buyer (or its assigns) will be, true and accurate in every material respect on the date such information is stated or certified and does not and will not contain any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained therein not materially misleading.

(h)Use of Proceeds. No proceeds of any Purchase hereunder will be used (i) for a purpose that violates, or would be inconsistent with, any law, rule or regulation applicable to such Originator or (ii) to acquire any security in any transaction which is subject to Section 12, 13 or 14 of the Securities Exchange Act of 1934, as amended.

(i)Good Title. Immediately prior to each Purchase hereunder, such Originator (i) is the legal and beneficial owner of the Receivables to be sold by such Originator hereunder, and (ii) is the legal and beneficial owner of the Related Security with :respect thereto or possesses a valid and perfected security interest therein, in each case, free and clear of any Adverse Claim, except as created by the Transaction Documents. There have been duly filed all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect such Originator’s ownership interest in each Receivable, its Collections and the Related Security.

(j)Perfection. This Agreement, together with the filing of the financing statements contemplated hereby and the executed Sale Assignments, is effective to transfer to Buyer (and Buyer shall acquire from such Originator) (i) legal and equitable title to, with the right to sell and encumber, each Receivable existing or hereafter arising, together with the Collections with respect thereto, and (ii) all of such Originator’s right, title and interest in the Related Security associated with each Receivable, in each case, free and clear of any Adverse Claim, except as created by the Transactions Documents. There have been duly filed all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect Buyer’s ownership interest in the Receivables, the Related Security and the Collections.

(k)Jurisdiction of Organization; Places of Business; etc. Exhibit II correctly sets forth such Originator’s legal name, jurisdiction of organization, Federal Employer’s Identification Number and State Organizational Identification Number. Such Originator’s principal places of business anal chief executive office and the offices where it keeps all of its Records are located at the address(es) listed on Exhibit II or such other locations

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RECEIVABLES SALE AGREEMENT

of which Buyer has been notified in accordance with Section 4.2(a) in jurisdictions where all action required by Section 4.1(g) or Section 7.3(a) has been taken and completed. Such Originator has not, within the period of one year prior to the date hereof, (i) changed the location of its principal place of business or chief executive office or, except as set forth on Exhibit II, its organizational structure, (ii) changed its legal name, (iii) except as set forth on Exhibit II, become a “new debtor” (within the meaning of Section 9102(a)(56) of the UCC in effect in the State of Minnesota) or (iv)changed its jurisdiction of organization. Such Originator is a “registered organization” (within the meaning of Section 9-102 of the UCC as in effect in the State of Minnesota).

(l)Collections. The conditions and requirements set forth in Section 4.1(i) have at all times been satisfied and duly performed. The names and addresses of all Collection Banks, together with the account numbers of the Collection Accounts at each Collection Bank and the post office box number of each Lock-Box or P.O. Box, are listed on Exhibit III or have been provided to Buyer (or its assigns) in a written notice that complies with Section 4.2(b). Such Originator has not granted any Person, other than Buyer (and its assigns) dominion and control or “control” (within the meaning of Section 9-104 of the UCC of all applicable jurisdictions) of any Lock-Box, P.O. Box or Collection Account, or the right to take dominion and control or “control” (within the meaning of Section 9-104 of the UCC of all applicable jurisdictions) of any such Lock-Box, P.O. Box or Collection Account at a. future time or upon the occurrence of a future event. Such Originator has taken all steps necessary to ensure that Buyer (or its assigns) has “control” (within the meaning of Section 9-104 of the UCC of all applicable jurisdictions) over all Collection Accounts. Such Originator has the ability to identify, within one Business Day of deposit, all amounts that are deposited to any First-Tier Account as constituting Collections or non-Collections.

(m)Material Adverse Effect. Since January 26, 2002, no event has occurred that would have a Material Adverse Effect.

(n)Names. In the past five (5) years, such Originator has not used any corporate or other names, trade names or assumed names other than as listed on Exhibit II.

(o)Ownership of Buyer. PDCo owns 100% of the issued and outstanding membership units of Buyer, free and clear of any Adverse Claim. Such membership units are validly issued, fully paid and nonassessable, and there are no options, warrants or other rights to acquire securities of Buyer.

(p)Not a Holding Company or an Investment Company. Such Originator is not a “holding company” or a “subsidiary holding company” of a “holding company” within the meaning of the Public Utility Holding Company Act of 1935, as amended, or any successor statute. Such Originator is not and, after giving effect to the transactions contemplated hereby, will not be required to be registered as, an “investment company” within the meaning of the Investment Company Act of 1940, as amended, or any successor statute.

(q)Compliance with Law. Such Originator has complied in all respects with all applicable laws, rules, regulations, orders, writs, judgments, injunctions, decrees

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or awards to which it may be subject, except where the failure to so comply could not reasonably be expected to have a Material Adverse Effect. Each Receivable, together with any Contract related thereto, does not contravene any laws, rules or regulations applicable thereto (including, without limitation, laws, rules and regulations relating to truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy), and no part of such Contract is in violation of any such law, rule or regulation.

(r)Compliance with Credit and Collection Policies. Such Originator has complied in all material respects with such Originator’s Credit and Collection Policy with regard to each Receivable and any related Contract, and has not made any material change to such Credit and Collection Policy, except such material change as to which Buyer (or its assigns) has been notified in accordance with Section 4.1(a)(vii).

(s)Payments to Originator. With respect to each Receivable transferred to Buyer by such Originator hereunder, the Purchase Price received by such Originator constitutes reasonably equivalent value in consideration therefor and such transfer was not made for or on account of an antecedent debt. No transfer by such Originator of any Receivable hereunder is or may be voidable under any section of the Federal Bankruptcy Code.

(t)Enforceability of Contracts. Each Contract with respect to each Receivable sold by such Originator hereunder is effective to create, and has created, a legal, valid and binding obligation of the related Obligor to pay the Outstanding Balance of the Receivable created thereunder and any accrued interest thereon, enforceable against the Obligor in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

(u)Eligible Receivables. Each Receivable sold by such Originator hereunder and included at any time in the Net Portfolio Balance as an Eligible Receivable was, on its Purchase Date, an Eligible Receivable.

(v)Accounting. The manner in which such Originator accounts for the transactions contemplated by this Agreement does not jeopardize the characterization of the transactions contemplated herein as being true sales.

(w)No Adverse Selection. To the extent that such Originator has retained Originated Receivables that would be Eligible Receivables but which have not been transferred to Buyer hereunder, such Originator has not selected those Originated receivables to be transferred hereunder in any manner that materially adversely affects Buyer.

ARTICLE III
CONDITIONS OF PURCHASE

Section III.1Conditions Precedent to Purchase. The initial Purchase under this Agreement is subject to the conditions precedent that (a) Buyer shall have received on or before

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the date of such Purchase those documents listed on Schedule A and (b) all of the conditions precedent to the initial Incremental Purchase under the Purchase Agreement shall have been satisfied or waived in accordance with the terms thereof.

Section III.2Conditions Precedent to Subsequent Payments. Buyer’s obligation to pay for Receivables on any Purchase Date shall be subject to the further conditions precedent that (a) the Facility Termination Date shall not have occurred; (b) :Buyer (or its assigns) shall have received the notice required pursuant to Section 1.1(a)(ii), an executed Sale Assignment and such other approvals, opinions or documents as it may reasonably request and (c) on the Purchase Date for such Receivables, the following statements shall be true (and acceptance of the proceeds by any Originator of any payment for such Receivable shall be deemed a representation and warranty by such Originator that such statements are then true):

(i)the representations and warranties of such Originator set forth in Article II are true and correct on and as of such Purchase Date (and after giving effect to the Purchase consummated thereon) as though made on and as of such date; and

(ii)no event has occurred and is continuing that will constitute a Termination Event or a Potential Termination Event.

Notwithstanding the foregoing conditions precedent, upon payment of the Purchase Price for any Receivable (whether by payment of cash, through an increase in the amounts outstanding under the Subordinated Notes and/or by offset of amounts owed to Buyer), title to such Receivable and the Related Security and Collections with respect thereto shall vest in Buyer, whether or not the conditions precedent to Buyer’s obligation to pay for such Receivable were in fact satisfied. The failure of any Originator to satisfy any of the foregoing conditions precedent, however, shall give rise to a right of Buyer to rescind the related purchase and direct such Originator to pay to Buyer an amount equal to the Purchase Price that shall have been paid with respect to any Receivables related thereto.

ARTICLE IV
COVENANTS

Section IV.1Affirmative Covenants of the Originators. Until the date on which this Agreement terminates in accordance with its terms, each Originator hereby covenants as set forth below:

(a)Financial Reporting. Such Originator will maintain, for itself and each of its Subsidiaries, a system of accounting established and administered in accordance with GAAP, and furnish to Buyer (and its assigns):

(i)Annual Reporting. Within 90 days after the close of each of its fiscal years, audited, unqualified consolidated financial statements (which shall include balance sheets, statements of income and retained earnings and a statement of cash flows) for PDCo and its consolidated Subsidiaries for such fiscal year certified in a manner acceptable to Buyer (or its assigns) by independent public accountants acceptable to Buyer (or its assigns).

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Delivery within the time period specified above of PDCo’s annual report on Form 10-K for such fiscal year (together with PDCo’s annual report to shareholders, if any, prepared pursuant to Rule 14a-3 under the Securities Exchange Act of 1934, as amended) prepared in accordance with the requirements therefor and filed with the Securities and Exchange Commission, shall be deemed to satisfy the requirements of this Section 4.1(a)(i), provided, that the report of the independent public accounts contained therein is acceptable to the Agent.

(ii)Quarterly Reporting. Within 45 days after the close of the first three (3) quarterly periods of each of its fiscal years, balance sheets of PDCo as at the close of each such period and statements of income and retained earnings and a statement of cash flows for PDCo for the period from the beginning of such fiscal year to the end of such quarter, all certified by its chief financial officer. Delivery within the time period specified above of PDCo’s quarterly report on Form 10-Q for such fiscal quarter prepared in accordance with the requirements therefor and filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this Section 4.1(a)(ii).

(iii)Compliance Certificate. Together with the financial statements required hereunder, a compliance certificate in substantially the form of Exhibit IV signed by such Originator’s Authorized Officer and dated the date of such annual financial statement or such quarterly financial statement, as the case may be.

(iv)Shareholder Statements and Reports. Promptly upon the furnishing thereof to the shareholders of PDCo or such Originator, copies of all financial statements, reports and proxy statements so furnished.

(v)S.E.C. Filings. Promptly upon the filing thereof, copies of all registration statements and annual, quarterly, monthly or other regular reports which PDCo or such Originator or any of their respective Subsidiaries files with the Securities and Exchange Commission.

(vi)Copies of Notices. Promptly upon its receipt of any notice, request for consent, financial statements, certification, report or other communication under or in connection with any Transaction Document from any Person other than Buyer, the Agent, any Purchaser Agent (so long as the Agent is copied on such communication) or any Purchaser (so long as each other Purchaser is copied on such communication), copies of the same.

(vii)Change in Credit and Collection Policies. At least thirty (30) days prior to the effectiveness of any material change in or material amendment to such Originator’s Credit and Collection Policy, a copy of such Originator’s Credit and Collection Policy then in effect and a notice (A) indicating such change or amendment, and (B) if such proposed change or amendment would be reasonably likely to adversely affect the collectibility of the Receivables of such Originator or decrease the credit quality of any newly created Receivables of such Originator, requesting Buyer’s consent thereto.

(viii)Other Information. Promptly, from time to time, such other information, documents, records or reports relating to the Receivables or the condition or

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operations, financial or otherwise, of such Originator as Buyer (or its assigns) may from time to time reasonably request in order to protect the interests of Buyer (and its assigns) under or as contemplated by this Agreement.

(b)Notices. Such Originator will notify the Buyer (or its assigns) in writing of any of the following promptly upon learning of the occurrence thereof, describing the same and, if applicable, the steps being taken with respect thereto:

(i)Termination Events or Potential Termination Events. The occurrence of each Termination Event and each Potential Termination Event, by a statement of an Authorized Officer of such Originator.

(i)Judgment and Proceedings. (1) The entry of any judgment or decree against such Originator or any of its Subsidiaries if the aggregate amount of all judgments and decrees then outstanding exceeds $1,000,000, and (2) the institution of any litigation, arbitration proceeding or governmental proceeding against such Originator that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

(ii)Material Adverse Effect. The occurrence of any event or condition that has had, or could reasonably be expected to have, a Material Adverse Effect.

(iii)Defaults Under Other Agreements. The occurrence of a default or an event of default under any other financing arrangement pursuant to which such Originator is a debtor or an obligor.

(iv)Downgrade of PDCo or an Originator. Any downgrade in the rating of any Indebtedness of PDCo or any Originator by Standard & Poor’s Ratings Services or by Moody’s Investors Service, Inc., setting forth the Indebtedness affected and the nature of such change.

(c)Compliance with Laws and Preservation of Corporate Existence. Such Originator will comply in all respects with all applicable laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject, except where the failure to so comply could not reasonably be expected to have a Material Adverse Effect. Such Originator will preserve and maintain its corporate existence, rights, franchises and privileges in the jurisdiction of its incorporation, and qualify and remain qualified in good standing as a foreign corporation in each jurisdiction where its business is conducted, except where the failure to so preserve and maintain any such rights, franchises or privileges or to so qualify could not reasonably be expected to have a Material Adverse Effect.

(d)Audits. Such Originator will furnish to Buyer (or its assigns) from time to time such information with respect to it and the Receivables as Buyer (or its assigns) may reasonably request. Such Originator will, from time to time during regular business hours as requested by Buyer (or its assigns), upon reasonable notice and at the sole cost of such Originator, permit Buyer (or its assigns) or their respective agents or representatives, (i) to examine and make copies of and abstracts from all Records in the possession or under the control

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of such Originator relating to the Receivables of such Originator and the Related Security, including, without limitation, the related Contracts, and (ii) to visit the offices and properties of such Originator for the purpose of examining such materials described in clause (i) above, and to discuss matters relating to such Originator’s financial condition or the Receivables of such Originator and the Related Security or such Originator’s performance under any of the Transaction Documents or such Originator’s performance under the Contracts and, in each case, with any of the officers or employees of such Originator having knowledge of such matters.

(e)Keeping and Marking of Records and Books.

(i)Such Originator will maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate records evidencing Receivables in the event of the destruction of the originals thereof), and keep and maintain all documents, books, records and other information reasonably necessary or advisable for the collection of all Receivables (including, without limitation, records adequate to permit the immediate identification of each new Receivable and all Collections of and adjustments to each existing Receivable). Such Originator will give Buyer (or its assigns) notice of any material change in the administrative and operating procedures referred to in the previous sentence.

(ii)Such Originator will (A) on or prior to the date hereof, mark its master data processing records and other books and records relating to the Receivables of such Originator with a legend, acceptable to Buyer (or its assigns), describing Buyer’s ownership interests in the Receivables and further describing the Asset Portfolio of the Agent (on behalf of the Purchasers) under the Purchase Agreement and (B) upon the request of Buyer (or its assigns), (x) mark each Contract with a legend describing Buyer’s ownership interests in the Receivables of such Originator and further describing the Asset Portfolio of the Agent (on behalf of the Purchasers) and (y) deliver to Buyer (or its assigns) all Contracts (including, without limitation, all multiple originals of any such Contract) relating to the Receivables.

(f)Compliance with Contracts and Credit and Collection Policies. Such Originator will timely and fully (i) perform and comply with all provisions, covenants and other promises required to be observed by it under the Contracts related to the Receivables of such Originator and (ii) comply in all respects with the Credit and Collection Policy in regard to each Receivable and the related Contract.

(g)Ownership. Such Originator will take all necessary action to establish and maintain, irrevocably in Buyer, (A) legal and equitable title to the Receivables of such Originator and the Collections and (B) all of such Originator’s right, title and interest in the Related Security associated with the Receivables of such Originator, in each case, free and clear of any Adverse Claims other than Adverse Claims in favor of Buyer (and its assigns) (including, without limitation, the filing of all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect Buyer’s interest in such Receivables, Related Security and Collections and such other

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action to perfect, protect or more fully evidence the interest of Buyer as Buyer (or its assigns) may reasonably request).

(h)Purchasers’ Reliance. Each Originator acknowledges that the Agent, the Purchaser Agents and the Purchasers are entering into the transactions contemplated by the Purchase Agreement in reliance upon Buyer’s identity as a legal entity that is separate from such Originator and any Affiliates thereof. Therefore, from and after the date of execution and delivery of this Agreement, such Originator will take all reasonable steps including, without limitation, all steps that Buyer or any assignee of Buyer may from time to time reasonably request to maintain Buyer’s identity as a separate legal entity and to make it manifest to third parties that Buyer is an entity with assets and liabilities distinct from those of such Originator and any Affiliates thereof and not just a division of such Originator or any such Affiliate. Without limiting the generality of the foregoing and in addition to the other covenants set forth herein, such Originator (i) will not hold itself out to third parties as liable for the debts of Buyer nor purport to own the Receivables and other assets acquired by Buyer, (ii) will take all other actions necessary on its part to ensure that Buyer is at all times in compliance with the covenants set forth in Section 7.1(i) of the Purchase Agreement and (iii) will cause all tax liabilities arising in connection with the transactions contemplated herein or otherwise to be allocated between such Originator and Buyer on an arm’s-length basis and in a manner consistent with the procedures set forth in U.S. Treasury Regulations §§1.1502- 33(d) and 1.1552-1.

(i)Collections. Such Originator will cause (1) all items from all P.O. Boxes to be processed and deposited into a Collection Account within 1 Business Day after receipt in a P.O. Box, all ACH Receipts to be deposited immediately to a Collection Account and all proceeds from all Lock-Boxes to be directly deposited by a Collection Bank into a Collection Account, (2) all Collections deposited to any First-Tier Account to be electronically swept or otherwise transferred to the Second-Tier Account within 1 Business Day after deposit to such First-Tier Account, and (3) each Lock-Box, P.O. Box and Collection Account to be subject at all times to a Collection Account Agreement that is in full force and effect. In the event any payments relating to Receivables are remitted directly to such Originator or any Affiliate of such Originator, such Originator will remit such payments (or will cause all such payments to be remitted) directly to a Collection Bank for deposit into a Collection Account within one (1) Business Day following receipt thereof and, at all times prior to such remittance, such Originator will itself hold such payments or, if applicable, will cause such payments to be held, in trust for the exclusive benefit of Buyer and its assigns. Such Originator will transfer exclusive ownership, dominion and control (including “control” within the meaning of Section 9-104 of the UCC of all applicable jurisdictions) of each Lock-Box, P.O. Box and Collection Account to Buyer and will not grant the right to take dominion and control or grant “control” (within the meaning of Section 9-104 of the UCC of all applicable jurisdictions) of any Lock-Box, P.O. Box or Collection Account at a future time or upon the occurrence of a future event to any Person, except to Buyer (or its assigns) as contemplated by this Agreement and the Purchase Agreement.

(j)Taxes. Such Originator will file all tax returns and reports required by law to be filed by it and promptly pay all taxes and governmental charges at any time owing. Such Originator will pay when due any taxes payable in connection with the Receivables of such

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Originator, exclusive of taxes on or measured by income or gross receipts of Buyer and its assigns.

(k)Insurance. Such Originator will maintain in effect, or cause - to be maintained in effect, at such Originator’s own expense, such casualty and liability insurance as such Originator deems appropriate in its good faith business judgment. Buyer and the Agent, for the benefit of the Purchasers, shall be named as additional insureds with respect to all such liability insurance maintained by such Originator. Such Originator will pay, or cause to be paid, the premiums therefor and deliver to Buyer and the Agent evidence satisfactory to Buyer and the Agent of such insurance coverage. Copies of each policy shall be furnished to Buyer, the Agent and any Purchaser in certificated form upon Buyer’s, the Agent’s or such Purchaser’s request.

Section IV.2Negative Covenants of the Originators. Until the date on which this Agreement terminates in accordance with its terms, each Originator hereby covenants that:

(a)Name Change, Jurisdiction of Organization, Offices and Books of Account. Such Originator will not change its name, jurisdiction of organization, identity, corporate or other organizational structure (within the meaning of Sections 9-503 and/or 9-507 of the UCC of all applicable jurisdictions) or relocate its chief executive office, principal place of business or any office where Records are kept unless it shall have: (i) given Buyer (or its assigns) at least forty-five(45) days’ prior written notice thereof and (ii) delivered to Buyer (or its assigns) all financing statements, instruments and other documents requested by Buyer (or its assigns) in connection with such change or relocation acceptable to the Agent.

(b)Change in Payment Instructions to Obligors. Such Originator will not add or terminate any bank as a Collection Bank, or make any change in the instructions to Obligors regarding payments to be made to any Lock-Box, P.O. Box or Collection Account, unless Buyer (or its assigns) shall have received, at least ten (10) days before the proposed effective date therefor, (i) written notice of such addition, termination or change and (ii) with respect to the addition of a Collection Bank or a Collection Account, P.O. Box or Lock-Box, an executed Collection Account Agreement with respect to the new Collection Account or Lock-Box or P.O. Box; provided, however, that such Originator may make changes in instructions to Obligors regarding payments if such new instructions require such Obligor to make payments to another existing Collection Account.

(c)Modifications to Contracts and Credit and Collection Policy. Such Originator will not make any change to its Credit and Collection Policy that could adversely affect the collectibility of the Receivables of such Originator, or decrease the credit quality of any newly created Receivables of such Originator. Except as otherwise permitted in its capacity as sub-Servicer pursuant to Article VIII of the Purchase Agreement, such Originator will not extend, amend or otherwise modify the terms of any Receivable or the Contract related thereto other than in accordance with such Originator’s Credit and Collection Policy.

(d)Sales, Liens. Such Originator will not sell, assign (by operation of law or otherwise) or otherwise dispose of, or grant any option with respect to, or create or suffer to exist any Adverse Claim upon (including, without limitation, the filing of any financing

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statement) or with respect to, any Receivable of such Originator or any Related Security or Collections, or upon or with respect to the Contract under which any Receivable of such Originator arises, or any Lock-Box, P.O. Box or Collection Account, or assign any right to receive income with respect thereto (other than, in each case, the creation of the interests therein in favor of Buyer provided for herein), and such Originator will defend the right, title and interest of Buyer in, to and under any of the foregoing property, against all claims of third parties claiming through or under such Originator. Such Originator shall not create or suffer to exist any mortgage, pledge, security interest, encumbrance, lien, charge or other similar arrangement on any of its inventory the financing or lease of which gives rise to any Receivable of such Originator.

(e)No Adverse Selection. To the extent that such Originator has retained Originated Receivables that would be Eligible Receivables but which have not been transferred to Buyer hereunder, such Originator will not select those Originated Receivables to be transferred hereunder in any manner that materially adversely affects Buyer.

(f)Accounting for Purchase. Such Originator will not, and will not permit any Affiliate to, account for or treat (whether in financial statements or otherwise) the transactions contemplated hereby in any manner other than the sale of the Receivables of such Originator and the Related Security by such Originator to Buyer or in any other respect account for or treat the transactions contemplated hereby in any manner other than as a sale of the Receivables of such Originator and the Related Security by such Originator to Buyer except to the extent that such transactions are not recognized on account of consolidated financial reporting in accordance with GAAP.

(g)Collections. Such Originator will not deposit or otherwise credit, or cause or permit to be so deposited or credited, to the Second-Tier Account, cash or cash proceeds other than Collections. Such Originator will not deposit or otherwise credit, or cause or permit to be so deposited or credited, any Collections or proceeds thereof to any lock-box account or to any other account not covered by a Collection Account Agreement.

ARTICLE V
TERMINATION EVENTS

Section V.1Termination Events. The occurrence of any one or more of the following events shall constitute a “Termination Event”:

(a)Originator shall fail (i)-to make any payment or deposit required hereunder when due, or (ii) to perform or observe any term, covenant or agreement hereunder (other than as referred to in clause (i) of this paragraph (a)) or any other Transaction Document to which it is a party and such failure shall continue for seven (7) consecutive Business Days.

(b)Any representation, warranty, certification or statement made by any Originator in this Agreement, any other Transaction Document to which it is a party or in any other document delivered pursuant hereto or thereto shall prove to have been incorrect in any material respect when made or deemed made.

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(c)Failure of any Originator to pay any Indebtedness when due in excess of $1,000,000; or the default by such Originator in the performance of any term, provision or condition contained in any agreement under which any such Indebtedness was created or is governed, the effect of which is to cause, or to permit the holder or holders of such Indebtedness to cause, such Indebtedness to become due prior to its stated maturity; or any such Indebtedness of such Originator shall be declared to be due and payable or required to be prepaid (other than by a regularly scheduled payment) prior to the date of maturity thereof.

(d)(i) Any Originator or any of its Subsidiaries shall generally not pay its debts as such debts become due or shall admit in writing its inability to pay its debts generally or shall make a general assignment for the benefit of creditors; or (ii) any proceeding shall be instituted by or against any Originator or any of its Subsidiaries seeking to adjudicate it bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver,trustee or other similar official for it or any substantial part of its property and, solely in the case of a proceeding instituted against (and not by) such Originator, such proceeding is not dismissed within 60 days; or (iii) any Originator or any of its Subsidiaries shall take any corporate action to authorize any of the actions set forth in the foregoing clauses (i) or (ii) of this subsection (d).

(e)A Change of Control shall occur.

(f)One or more final judgments for the payment of money in an amount in excess of $1,000,000, individually or in the aggregate, shall be entered against any Originator on claims not covered by insurance or as to which the insurance carrier has denied its responsibility, and such judgment shall continue unsatisfied and in effect for fifteen (15) consecutive days without a stay of execution.

Section V.2Remedies. Upon the occurrence and during the continuation of a Termination Event, Buyer may take any of the following actions: (i) declare the Termination Date to have occurred, whereupon the Termination Date shall forthwith occur, without demand, protest or further notice of any kind, all of which are hereby expressly waived by each Originator; provided, however, that upon the occurrence of a Termination Event described in Section 5.1(d), or of an actual or deemed entry of an order for relief with respect to any Originator under the Federal Bankruptcy Code or under any other applicable bankruptcy, insolvency, arrangement, moratorium or similar laws of any other jurisdiction (foreign or domestic), the Termination Date shall automatically occur, without demand, protest or any notice of any kind, all of which are hereby expressly waived by each Originator and (ii) to the fullest extent permitted by applicable law, declare that the Default Fee shall accrue with respect to any amounts then due and owing by each Originator to Buyer. The aforementioned rights and remedies shall be without limitation and shall be in addition to all other rights and remedies of Buyer and its assigns otherwise available under any other provision of this Agreement, by operation of law, at equity or otherwise, all of which are hereby expressly preserved, including,

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without limitation, all rights and remedies provided under the UCC, all of which rights shall be cumulative.

ARTICLE VI
INDEMNIFICATION

Section VI.1Indemnities by the Originators. Without limiting any other rights that Buyer may have hereunder or under applicable law, each Originator hereby agrees to indemnify (and pay upon demand to) Buyer and its assigns (and their respective Affiliates), officers, directors, agents and employees (each an “Indemnified Party”)from and against any and all damages, losses, claims, taxes, liabilities, costs, expenses and for all other amounts payable, including reasonable attorneys’ fees (which attorneys may be employees of Buyer or any such assign) and disbursements (all of the foregoing being collectively referred to as “Indemnified Amounts”)awarded against or incurred by any of them arising out of or as a result of this Agreement, or the use of proceeds of any purchase hereunder, or the acquisition, funding or ownership either directly or indirectly, by Buyer of an interest in the Receivables, or any Receivable or any Contract or Related Security, or any action or inaction of such Originator, excluding, however:

        (x)    Indemnified Amounts to the extent a final judgment of a court of competent jurisdiction holds that such Indemnified Amounts resulted from gross negligence or willful misconduct on the part of the Indemnified Party seeking indemnification;

        (y)    Indemnified Amounts to the extent the same includes losses in respect of Receivables that are uncollectible on account of the insolvency, bankruptcy or lack of creditworthiness of the related Obligor; or

        (z)    taxes imposed by the jurisdiction in which such Indemnified Party’s principal executive office is located, on or measured by the overall net income of such Indemnified Party to the extent that the computation of such taxes is consistent with the characterization for income tax purposes of the acquisition by the Purchasers of Asset Portfolio under the Purchase Agreement as a loan or loans by the Purchasers to Buyer secured by, among other things, the Receivables, the Related Security and the Collections;

provided, however, that nothing contained in this sentence shall limit the liability of any Originator or limit the recourse of Buyer to any Originator for amounts otherwise specifically provided to be paid by such Originator under the terms of this Agreement. Without limiting the generality of the foregoing indemnification, each Originator shall indemnify Buyer for Indemnified Amounts (including, without limitation, losses in respect of uncollectible receivables, regardless of whether reimbursement therefor would constitute recourse to Originator) relating to or resulting from:

(i)any representation or warranty made by such Originator (or any officers of such Originator) under or in connection with this Agreement, any other

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Transaction Document or any other information or report delivered by such Originator pursuant hereto or thereto that shall have been false or incorrect when made or deemed made;

(ii)the failure by such Originator, to comply with any applicable law, rule or regulation with respect to any Receivable or Contract related thereto, or the nonconformity of any Receivable or Contract included therein with any such applicable law, rule or regulation or any failure of such Originator to keep or perform any of its obligations, express or implied, with respect to any Contract;

(iii)any failure of such Originator to perform its duties, covenants or other obligations in accordance with the provisions of this Agreement or any other Transaction Document;

(iv)any products liability, personal injury or damage, suit or other similar claim arising out of or in connection with merchandise, insurance or services that are the subject of any Contract or any Receivable;

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

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

(vii)any investigation, litigation or proceeding related to or arising from this Agreement or any other Transaction Document, the transactions contemplated hereby, the use of the proceeds of any Purchase, the ownership of the Receivables of such Originator or any other investigation, litigation or proceeding relating to such Originator in which any Indemnified Party becomes involved as a result of any of the transactions contemplated hereby;

(viii)any inability to litigate any claim against any Obligor in respect of any Receivable of such Originator as a result of such Obligor being immune from civil and commercial law and suit on the grounds of sovereignty or otherwise from any legal action, suit or proceeding;

(ix)any Termination Event described in Section 5.1(d);

(x)any failure to vest and maintain vested in Buyer, or to transfer to Buyer, legal and equitable title to, and ownership of, the Receivables of such Originator and the Collections, and all of such Originator’s right, title and interest in the

19

RECEIVABLES SALE AGREEMENT

Related Security associated with the Receivables of such Originator, in each case, free and clear of any Adverse Claim;

(xi)the failure to have filed, or any delay in filing, financing statements or other similar instruments or documents under the UCC of any applicable jurisdiction or other applicable laws with respect to any Receivable of such Originator and the Related Security and Collections with respect thereto, and the proceeds of any thereof, whether at the time of the Purchase or at any subsequent time;

(xii)any action or omission by such Originator which reduces or impairs the rights of Buyer with respect to any Receivable of such Originator or the value of any such Receivable;

(xiii)any attempt by any Person to void the Purchase hereunder under statutory provisions or common law or equitable action;

(xiv)the failure of any Receivable of such Originator included in the calculation of the Net Portfolio Balance as an Eligible Receivable to be an Eligible Receivable at the time so included; and

(xv)the Hedging Obligations.

Section VI.2Other Costs and Expenses. Each Originator shall be jointly and severally liable for, and shall reimburse Buyer on demand for, all costs and out-of- pocket expenses in connection with the preparation, negotiation, arrangement, execution, delivery and administration of this Agreement, the transactions contemplated hereby and the other documents to be delivered hereunder. Each Originator shall reimburse Buyer on demand for any and all costs and expenses of Buyer, if any, including reasonable counsel fees and expenses, in connection with the enforcement of this Agreement and the other documents delivered hereunder and in connection with any restructuring or workout of this Agreement or such documents, or the administration of this Agreement following a Termination Event.

ARTICLE VII
MISCELLANEOUS

Section VII.1Waivers and Amendments.

(a)No failure or delay on the part of Buyer (or its assigns) in exercising any power, right or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or remedy preclude any other further exercise thereof or the exercise of any other power, right or remedy. The rights and remedies herein provided shall be cumulative and nonexclusive of any rights or remedies provided by law. Any waiver of this Agreement shall be effective only in the specific instance and for the specific purpose for which given.

20

RECEIVABLES SALE AGREEMENT

(b)No provision of this Agreement may be amended, supplemented, modified or waived except in writing signed by each Originator and Buyer and, to - the extent required under the Purchase Agreement, the Agent and the Purchasers or the Required Purchasers.

Section VII.2Notices. All communications and notices provided for hereunder shall be in writing (including bank wire, telecopy or electronic facsimile transmission or similar writing) and shall be given to the other parties hereto at their respective addresses or telecopy numbers set forth on the signature pages hereof or at such other address or telecopy number as such Person may hereafter specify for the purpose of notice to each of the other parties hereto. Each such notice or other communication shall be effective (i) if given by telecopy, upon the receipt thereof, (ii) if given by mail, three (3) Business Days after the time such communication is deposited in the mail with first class postage prepaid or (iii) if given by any other means, when received at the address specified in this Section 7.2.

Section VII.3Protection of Ownership Interests of Buyer.

(a)Each Originator agrees that from time to time, at its expense, it will promptly execute and deliver all instruments and documents, and take all actions, that may be necessary or desirable, or that Buyer (or its assigns) may request, to perfect, protect or more fully evidence the interest of Buyer hereunder and the Asset Portfolio transferred pursuant to the Purchase Agreement, or to enable Buyer (or its assigns) to exercise and enforce their rights and remedies hereunder. Without limiting the foregoing, each Originator will, upon the request of Buyer (or its assigns), file such financing or continuation statements, or amendments thereto or assignments thereof, and execute and file such other instruments and documents, that may be necessary or desirable, or that Buyer (or its assigns) may reasonably request, to perfect, protect or evidence such interest of Buyer (or such Asset Portfolio). At any time, Buyer may, at the applicable Originator’s sole cost and expense, direct such Originator to notify the Obligors of Receivables of such Originator of the ownership interests of Buyer under this Agreement and may also direct that payments of all amounts due or that become due under any or all Receivables be made directly to Buyer or its designee.

(b)If any Originator fails to perform any of its obligations hereunder, Buyer (or its assigns) may (but shall not be required to) perform, or cause performance of, such obligations, and Buyer’s (or such assigns’) costs and expenses incurred in connection therewith shall be payable by the Originators as provided in Section 6.2. Each Originator irrevocably authorizes Buyer (and its assigns) at any time and from time to time in the sole and absolute discretion of Buyer (or its assigns), and appoints Buyer (and its assigns) as its attorney(ies)-in-fact, to act on behalf of such Originator (i) to authorize and/or execute on behalf of such Originator as debtor and to file financing or continuation statements (and amendments thereto and assignments thereof) necessary or desirable in Buyer’s (or its assigns’) sole and absolute discretion to perfect and to maintain the perfection and priority of the interest of Buyer in the Receivables and (ii) to file a carbon, photographic or other reproduction of this Agreement or any financing statement with respect to the Receivables as a financing statement in such offices as Buyer (or its assigns) in their sole and absolute discretion deem necessary or desirable to

21

RECEIVABLES SALE AGREEMENT

perfect and to maintain the perfection and priority of Buyer’s interests in the Receivables. This appointment is coupled with an interest and is irrevocable. The authorization by each Originator set forth in the second sentence of this Section 7.3(b) is intended to meet all requirements for authorization by a debtor under Article 9 of any applicable enactment of the UCC, including without limitation, Section 9-509 thereof.

Section VII.4Confidentiality.

(a)Each Originator shall maintain and shall cause each of its employees and officers to maintain the confidentiality of this Agreement and the other confidential or proprietary information with respect to the Agent, each Purchaser Agent and each Purchaser and their respective businesses obtained by it or them in connection with the structuring, negotiating and execution of the transactions contemplated herein, except that such Originator and its officers and employees may disclose such information to such Originator’s external accountants and attorneys and as required by any applicable law or order of any judicial or administrative proceeding.

(b)Anything herein to the contrary notwithstanding, each Originator hereby consents to the disclosure of any nonpublic information with respect to it (i) to Buyer, the Agent, the Purchaser Agents, the Financial Institutions or the Conduits by each other, (ii) by Buyer, the Agent, the Purchaser Agents or the Purchasers to any prospective or actual assignee or participant of any of them and (iii) by the Agent, any Purchaser Agent or any Purchaser to any rating agency, Funding Source, Commercial Paper dealer or provider of a surety, guaranty or credit or liquidity enhancement to any Conduit or any entity organized for the purpose of purchasing, or making loans secured by, financial assets for which MUFG Bank, Ltd. (f/k/a The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch) or any Purchaser Agent acts as the administrative agent and to any officers, directors, employees, outside accountants and attorneys of any of the foregoing, provided each such Person is informed of, and agrees to maintain the confidential nature of, such information, In addition, the Purchasers, the Purchaser Agents and the Agent may disclose any such nonpublic information pursuant to any law, rule, regulation, direction, request or order of any judicial, administrative or regulatory authority or proceedings (whether or not having the force or effect of law).

(c)Buyer shall maintain and shall cause each of its employees and officers to maintain the confidentiality of this Agreement and the other confidential or proprietary information with respect to each Originator, the Obligors and their respective businesses obtained by it in connection with the due diligence evaluations, structuring, negotiating and execution of the Transaction Documents, and the consummation of the transactions contemplated herein and any other activities of Buyer arising from or related to the transactions contemplated herein provided, however, that each of Buyer and its employees and officers shall be permitted to disclose such confidential or proprietary information: (i) to the Agent, each Purchaser Agent and each Purchaser, (ii) to any prospective or actual assignee or participant of the Agent, any Purchaser Agent or any Purchaser, (iii) to any rating agency, Funding Source or provider of a surety, guaranty or credit or liquidity enhancement to any Conduit, (iv) to any officers, directors, employees, outside accountants and attorneys of any of

22

RECEIVABLES SALE AGREEMENT

the foregoing, and (v) to the extent required pursuant to any applicable law, rule, regulation, direction, request or order of any judicial, administrative or regulatory authority or proceedings with competent jurisdiction (whether or not having the force or effect of law) so long as such required disclosure is made under seal to the extent permitted by applicable law or by rule of court or other applicable body.

Section VII.5Bankruptcy Petition. (a) Each Originator and Buyer each hereby covenants and agrees that, prior to the date that is one year and one day after the payment in full of all outstanding senior indebtedness of any Funding Source that is a special purpose bankruptcy remote entity or of any Conduit or any Financial Institution, it will not institute against, or join any other Person in instituting against, any such entity or the Conduit any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceeding under the laws of the United States or any state of the United States.

(a)Each Originator covenants and agrees that, prior to the date that is one year and one day after the payment in full of all outstanding obligations of Buyer under the Purchase Agreement, it will not institute against, or join any other Person in instituting against, Buyer any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceeding under the laws of the United States or any state of the United States.

Section VII.6Limitation of Liability. Except with respect to any claim arising out of the willful misconduct or gross negligence of any Conduit, the Agent, any Purchaser Agent, any Funding Source or any Financial Institution, no claim may be made by any Originator or any other Person against the Conduit, the Agent or any Financial Institution or their respective Affiliates, directors, officers, employees, attorneys or agents for any special, indirect, consequential or punitive damages in respect of any claim for breach of contract or any other theory of liability arising out of or related to the transactions contemplated by this Agreement, or any act, omission or event occurring in connection therewith; and each Originator hereby waives, releases, and agrees not to sue upon any claim for any such damages, whether or not accrued and whether or not known or suspected to exist in its favor.

Section VII.7CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS.

Section VII.8CONSENT TO JURISDICTION. EACH ORIGINATOR HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH ORIGINATOR PURSUANT TO THIS AGREEMENT AND EACH ORIGINATOR HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN

23

RECEIVABLES SALE AGREEMENT

SHALL LIMIT THE RIGHT OF BUYER (OR ITS ASSIGNS) TO BRING PROCEEDINGS AGAINST ANY ORIGINATOR IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY ORIGINATOR AGAINST BUYER (OR ITS ASSIGNS) OR ANY AFFILIATE THEREOF INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH ORIGINATOR PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.

Section VII.9WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY ANY ORIGINATOR PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.

Section VII.10Integration; Binding Effect; Survival of Terms.

(a)This Agreement and each other Transaction Document contain the final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire agreement among the parties hereto with respect to the subject matter hereof superseding all prior oral or written understandings.

(b)This Agreement shall be binding upon and inure to the benefit of each Originator and Buyer, and their respective successors and permitted assigns (including any trustee in bankruptcy). No Originator may assign any of its rights and obligations hereunder or any interest herein without the prior written consent of Buyer. Buyer may assign at any time its rights and obligations hereunder and interests herein to any other Person without the consent of any Originator. Without limiting the foregoing, each Originator acknowledges that Buyer, pursuant to the Purchase Agreement, may assign to the Agent, for the benefit of the Purchasers, its rights, remedies, powers and privileges hereunder and that the Agent may further assign such rights, remedies, powers and privileges to the extent permitted in the Purchase Agreement. Each Originator agrees that the Agent, as the assignee of Buyer, shall, subject to the terms of the Purchase Agreement, have the right to enforce this Agreement and to exercise directly all of Buyer’s rights and remedies under this Agreement (including, without limitation, the right to give or withhold any consents or approvals of Buyer to be given or withheld hereunder) and each Originator agrees to cooperate fully with the Agent in the exercise of such rights and remedies. This Agreement shall create and constitute the continuing obligations of the parties hereto in accordance with its terms and shall remain in full force and effect until terminated in accordance with its terms, provided, however, that the rights and remedies with respect to (i) any breach of any representation and warranty made by the Originators pursuant to Article H; (ii) the indemnification and payment provisions of Article VI; and (iii) Section 7.5 shall be continuing and shall survive any termination of this Agreement.

24

RECEIVABLES SALE AGREEMENT

Section VII.11Counterparts: Severability; Section References. This Agreement may be executed in any number of counterparts and by different parties hereto in separate 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. Any provisions of this Agreement which are prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Unless otherwise expressly indicated, all references herein to “Article,” “Section,” “Schedule” or “Exhibit” shall mean articles and sections of, and schedules and exhibits to, this Agreement.

Section VII.12Subordination. Each Originator shall have the right to receive, and Buyer shall make, any and all payments relating to any indebtedness, obligation or claim such Originator may from time to time hold or otherwise have against Buyer or any assets or properties of Buyer, whether arising hereunder or otherwise existing, provided that, after giving effect to any such payment, the aggregate Outstanding Balance of Receivables owned by Buyer at such time exceeds the sum of (a) the Aggregate Unpaids under the Purchase Agreement, plus (b) the aggregate outstanding principal balance of the Subordinated Loans. Each Originator hereby agrees that at any time during which the condition set forth in the proviso of the immediately preceding sentence shall not be satisfied, such Originator shall be subordinate in right of payment to the prior payment of any indebtedness or obligation of Buyer owing to the Agent, any Purchaser Agent or any Purchaser under the Purchase Agreement.

(Signature Page Follows)

25

RECEIVABLES SALE AGREEMENT

IN WITNESS WHEREOF. the parties hereto have caused this Agreement to he executed and delivered by their duly authorized officers as of the date hereof.

Conformed copy of agreement does not contain signatures as signatories only sign individual amendments.

S-1

RECEIVABLES SALE AGREEMENT

Exhibit I

Definitions

As used in this Agreement and the Exhibits, Schedules and Annexes thereto, capitalized terms have the meanings set forth in this Exhibit I (such meanings to be equally applicable to the singular and plural forms thereof). If a capitalized term is used in this Agreement, or any Exhibit, Schedule or Annex thereto, and not otherwise defined therein or in this Exhibit I, such term shall have the meaning assigned thereto in Exhibit Ito the Purchase Agreement.

“Agent”has the meaning set forth in the Preliminary Statements to this Agreement.

“Agreement”means this Receivables Sale Agreement, as the same may be - amended, restated, supplemented or otherwise modified from time to time.

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

“Calculation Period”means each Fiscal Month or portion thereof which elapses during the term of this Agreement; provided,that the first Calculation Period shall commence on the date of the initial Purchase hereunder and end on the last day of the Fiscal Month ending thereafter and the final Calculation Period shall terminate on the Termination Date.

“Change of Control”means PDCo shall cease to own, directly or indirectly, 100% of the outstanding capital stock of any Originator.

“Collections” means, with respect to any Receivable, all cash collections and other cash and other proceeds in respect of such Receivable, including, without limitation, all scheduled payments, prepayments, yield, Finance Charges or other related amounts accruing in respect thereof, and all cash proceeds of Related Security with respect to such Receivable.

“Credit and Collection Policy” means each Originator’s credit and collection policies and practices relating to Contracts and Receivables existing on the date hereof and summarized in Exhibit V, as modified from time to time in accordance with the Agreement.

“Default Fee”means a per annum rate of interest equal to the sum of (i) the Prime Rate, p2 (ii) 2% per annum.

“Dilutions”means, at any time, the aggregate amount of reductions or cancellations described in Section 1.3(a) of this Agreement.

“Discount Factor”means a percentage calculated to provide Buyer with a reasonable return on its investment in the Receivables of any Originator after taking account of (i) the time value of money based upon the anticipated dates of collection of the Receivables of such Originator and the cost to Buyer of financing its investment in such Receivables during such period and (ii) the risk of nonpayment by the Obligors. The Originator of such Receivables

RECEIVABLES SALE AGREEMENT

and Buyer may agree from time to time to change the Discount Factor based on changes in one or more of the items affecting the calculation thereof, provided that any change to the Discount Factor shall take effect as of the commencement of a Calculation Period, shall apply only prospectively and shall not affect the Purchase Price payment made prior to the Calculation Period during which such Originator and Buyer agree to make such change.

“Initial Cutoff Date” has the meaning set forth in Section 1.2(a).

“Material Adverse Effect” means a material adverse effect on (i) the financial condition or operations of any Originator and its Subsidiaries, (ii) the ability of any Originator to perform its obligations under the Agreement or any other Transaction Document, (iii) the legality, validity or enforceability of the Agreement or any other Transaction Document, (iv) any Originator’s, Buyer’s, the Agent’s or any Purchaser’s interest in the Receivables generally or in any significant portion of the Receivables, the Related Security or Collections with respect thereto, or (v) the collectibility of the Receivables generally or of any material portion of the Receivables.

“Net Value” means, as of any date of determination, an amount equal to the sum of (i) the aggregate Outstanding Balance of the Receivables at such time, minus (ii) the sum of (A) the Aggregate Capital outstanding at such time, plus (B) the Credit Enhancement.

“Net Worth” means, as of the last Business Day of each Calculation Period preceding any date of determination, the excess, if any, of (a) the aggregate Outstanding Balance of the Receivables at such time, over (b) the sum of (i) the Aggregate Capital outstanding at such time, plus (ii) the aggregate outstanding principal balance of the Subordinated Loans (including any Subordinated Loan proposed to be made on the date of determination).

“Originated Receivable” means all indebtedness and other obligations owed to an Originator (at the time it arises, and before giving effect to any transfer or conveyance under this Agreement) or Buyer (after giving effect to the transfers under this Agreement) or in which an Originator or Buyer has a security interest or other interest, including, without limitation, any indebtedness, obligation or interest constituting an account, chattel paper, instrument or general intangible, arising in connection with the sale, licensing or financing of goods or software or the rendering of services by an Originator and further includes, without limitation, the obligation to pay any Finance Charges with respect thereto. Indebtedness and other rights and obligations arising from any one transaction, including, without limitation, indebtedness and other rights and obligations represented by an individual invoice, shall constitute an Originated Receivable separate from an Originated Receivable consisting of the indebtedness and other rights and obligations arising from any other transaction; provided, further, that any indebtedness, rights or obligations referred to in the immediately preceding sentence shall be an Originated Receivable regardless or whether the account debtor or the Originator of such Originated Receivable treats such indebtedness, rights or obligations as a separate payment obligation.

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

Exh. I-2

RECEIVABLES SALE AGREEMENT

“Potential Termination Event” means an event which, with the passage of time or the giving of notice, or both, would constitute a Termination Event.

“Purchase” means a purchase of Originated Receivables pursuant to Section 1.1(a) of this Agreement by Buyer from any Originator of such Originated Receivables and the Related Security and Collections related thereto, together with all related rights in connection therewith.

“Purchase Agreement” has the meaning set forth in the Preliminary Statements to this Agreement.

“Purchase Date” means any day selected by an Originator and notified to Buyer in accordance with Section 1.1(a) of this Agreement on which a Purchase is to occur.

“Purchase Price” means, with respect to any Purchase from any Originator hereunder, the aggregate price to be paid by Buyer to such Originator for such Purchase in accordance with Section 1.2 for the Receivables of such Originator, Collections and Related Security being sold to Buyer, which price shall equal on any date (i) the product of (x) the Outstanding Balance of such Receivables on such date, multipliedby (y) one minus the Discount Factor in effect on such date, minus (ii) any Purchase Price Credits to be credited against the Purchase Price otherwise payable to such Originator in accordance with Section 1.3.

“Purchase Price Credit” has the meaning set forth in Section 1.3.

“Receivable” means, at any time, each and every Originated Receivable that has been identified for sale to the Buyer in any Sale Assignment (including all schedules thereto) delivered pursuant to Section 1.1(a)(ii) of this Agreement.

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

(i)all of such Originator’s interest in the Related Equipment or other inventory, software and goods (including returned or repossessed inventory, software or goods), if any, the sale, licensing or financing of which by such Originator gave rise to such Receivable, and all insurance contracts with respect thereto,

(ii)all other security interests or liens and property subject thereto from time to time, if any, purporting to secure payment of such Receivable, whether pursuant to the Contract related to such Receivable or otherwise, together with all financing statements and security agreements describing any collateral securing such Receivable,

(iii)all guaranties, letters of credit, insurance, “supporting obligations” (within the meaning of Section 9-102(a) of the UCC of all applicable jurisdictions) and other agreements or arrangements of whatever character from time to time supporting or securing payment of such Receivable whether pursuant to the Contract related to such Receivable or otherwise,

Exh. I-3

RECEIVABLES SALE AGREEMENT

(iv)all service contracts and other contracts and agreements associated with such Receivable,

(v)all Records related to such Receivable,

(vi)all of such Originator’s right, title and interest in each Lock-Box, P.O. Box and each Collection Account, and any and all agreements related thereto,

(vii)all Collections in respect thereof, and

(viii)all proceeds of such Receivable and any of the foregoing.

“Required Capital Amount” means, as of any date of determination, an amount equal to the sum of (i) the twenty-four month rolling average of Dilutions, plus (ii) the result obtained in the foregoing clause (i) of this definition, multiplied by 10% .

“Sale Assignment” means a sale assignment substantially in the form of Exhibit VII.

“Settlement Date” means, with respect to each Calculation Period, the date that is the 19`h calendar day (or, if such day is not a Business Day, then the first Business Day thereafter) of the month following such Calculation Period.

“Subordinated Loan” has the meaning set forth in Section 1.2(a).

“Subordinated Note” means a promissory note in substantially the form of Exhibit VI hereto as more fully described in Section 1.2, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“Termination Date” means the earliest to occur of (i) the Facility Termination Date, (ii) the Business Day immediately prior to the occurrence of a Termination Event set forth in Section 5.1(d), (iii) the Business Day specified in a written notice from Buyer to Originator following the occurrence of any other Termination Event, and (iv) the date which is 5 Business Days after Buyer’s receipt of written notice from Originator that it wishes to terminate the facility evidenced by this Agreement.

“Termination Event” has the meaning set forth in Section 5.1 of the Agreement.

“Transaction Documents” means, collectively, this Agreement, each Collection Account Agreement, each Sale Assignment, the Subordinated Notes and all other instruments, documents and agreements executed and delivered in connection herewith.

Exh. I-4

EX-10.29

EXHIBIT 10.29

CONFORMED THROUGH AMENDMENT NO. 26 TO THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT, DATED APRIL 3, 2024

THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT

dated as of December 3, 2010

among

PDC FUNDING COMPANY, LLC, as Seller,

PATTERSON COMPANIES, INC., as Servicer,

THE CONDUITS PARTY HERETO,

THE FINANCIAL INSTITUTIONS PARTY HERETO,

THE PURCHASER AGENTS PARTY HERETO

and

MUFG BANK, LTD. (F/K/A THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.)
as Agent

TABLE OF CONTENTS

Page

ARTICLE I	PURCHASE ARRANGEMENTS	2
Section 1.1	Purchase Facility	2
Section 1.2	Increases; Sale of Asset Portfolio	2
Section 1.3	Decreases	4
Section 1.4	Payment Requirements	5
Section 1.5	Deemed Exchange	5
Section 1.6	RPA Deferred Purchase Price	5
ARTICLE II	PAYMENTS AND COLLECTIONS	6
Section 2.1	Payments	6
Section 2.2	Collections Prior to Amortization	6
Section 2.3	Collections Following Amortization	8
Section 2.4	Ratable Payments	9
Section 2.5	Payment Rescission	9
Section 2.6	Maximum Purchases In Respect of the Asset Portfolio	10
Section 2.7	Clean-Up Call; Limitation on Payments	10
Section 2.8	Investment of Collections in Second-Tier Account	11
ARTICLE III	CONDUIT PURCHASES	11
Section 3.1	CP Costs	11
Section 3.2	CP Costs Payments	11
Section 3.3	Calculation of CP Costs	11
ARTICLE IV	FINANCIAL INSTITUTION FUNDING	11
Section 4.1	Financial Institution Funding	11
Section 4.2	Financial Institution Yield Payments	12
Section 4.3	Selection and Continuation of Rate Tranche Periods	12
Section 4.4	Financial Institution Discount Rates	13
Section 4.5	Inability to Determine Rates; Change in Legality	13
Section 4.6	Extension of Liquidity Termination Date	19
Section 4.7	Compensation for Losses	21
ARTICLE V	REPRESENTATIONS AND WARRANTIES	22
Section 5.1	Representations and Warranties of the Seller Parties	22
ARTICLE VI	CONDITIONS OF PURCHASES	27
Section 6.1	Conditions Precedent to Initial Purchase and Deemed Exchange	27
Section 6.2	Conditions Precedent to All Purchases	27
ARTICLE VII	COVENANTS	28
Section 7.1	Affirmative Covenants of The Seller Parties	28
Section 7.2	Negative Covenants of The Seller Parties	36
Section 7.3	Hedging Agreements	38
ARTICLE VIII	ADMINISTRATION AND COLLECTION	40
Section 8.1	Designation of Servicer	40
Section 8.2	Duties of Servicer	40
Section 8.3	Collection Notices	42
Section 8.4	Responsibilities of Seller	42
Section 8.5	Reports	42

i

TABLE OF CONTENTS

(continued)

Page

Section 8.6	Servicing Fees	43
ARTICLE IX	AMORTIZATION EVENTS	43
Section 9.1	Amortization Events	43
Section 9.2	Remedies	45
ARTICLE X	INDEMNIFICATION	46
Section 10.1	Indemnities by The Seller Parties	46
Section 10.2	Increased Cost and Reduced Return	49
Section 10.3	Other Costs and Expenses	50
Section 10.4	Allocations	50
Section 10.5	Accounting Based Consolidation Event	50
Section 10.6	Required Rating	51
ARTICLE XI	AGENT	51
Section 11.1	Authorization and Action	51
Section 11.2	Delegation of Duties	52
Section 11.3	Exculpatory Provisions	52
Section 11.4	Reliance by Agent	52
Section 11.5	Non-Reliance on Agent and Other Purchasers	53
Section 11.6	Reimbursement and Indemnification	53
Section 11.7	Agent in its Individual Capacity	53
Section 11.8	Successor Agent	53
Section 11.9	Erroneous Payments	54
ARTICLE XII	ASSIGNMENTS; PARTICIPATIONS	57
Section 12.1	Assignments	57
Section 12.2	Participations	59
Section 12.3	Federal Reserve	59
Section 12.4	Collateral Trustee	59
ARTICLE XIII	PURCHASER AGENTS	59
Section 13.1	Purchaser Agents	59
ARTICLE XIV	MISCELLANEOUS	60
Section 14.1	Waivers and Amendments	60
Section 14.2	Notices	61
Section 14.3	Ratable Payments	61
Section 14.4	Protection of Ownership Interests of the Purchasers	62
Section 14.5	Confidentiality	62
Section 14.6	Bankruptcy Petition	63
Section 14.7	Limitation of Liability	63
Section 14.8	CHOICE OF LAW	64
Section 14.9	CONSENT TO JURISDICTION	64
Section 14.10	WAIVER OF JURY TRIAL	64
Section 14.11	Integration; Binding Effect; Survival of Terms	64
Section 14.12	Counterparts; Severability; Section References	65
Section 14.13	MUFG Roles and Purchaser Agent Roles	65
Section 14.14	Characterization	66

ii

TABLE OF CONTENTS

(continued)

Page

Section 14.15	Excess Funds	66
Section 14.16	[Reserved]	66
Section 14.17	Confirmation and Ratification of Terms	66
Section 14.18	Consent	67
Section 14.19	USA PATRIOT Act Notice	67
Section 14.20	Acknowledgement Regarding Any Supported QFCs	67

iii

EXHIBITS

Exhibit I    -     Definitions
Exhibit II     -    Form of Purchase Notice
Exhibit III    -    Places of Business of the Seller Parties; Locations
            of Records; Federal Employer Identification Number(s)
Exhibit IV    -    Names of Collection Banks; Collection Accounts
Exhibit V    -    Form of Compliance Certificate
Exhibit VI    -    Form of Collection Account Agreement
Exhibit VII    -    Form of Assignment Agreement
Exhibit VIII    -    Credit and Collection Policy
Exhibit IX    -    Form of Contract(s)
Exhibit X    -    Form of Monthly Report
Exhibit XI    -    Form of Performance Undertaking
Exhibit XII    -    Form of Postal Notice

Exhibit XIII    -    Form of DPP Report

SCHEDULES

Schedule A     -    Commitments, Payment Addresses, Conduit Purchase Limits, Purchaser
            Agents and Related Financial Institutions

Schedule B    -    Documents to be delivered to Agent and Each Purchaser Agent on or
            prior to the Initial Purchase

Schedule C    -    Payment Instructions

iv

INDEX OF DEFINED TERMS
DEFINED IN THE BODY OF THE AGREEMENT

Affected Financial Institution    62

Agent    1

Agent’s Account    7

Aggregate Reduction    5

Amortization Event    47

Asset Portfolio    4

Assignment Agreement    62

Conduits    1

Consent Notice    24

Consent Period    24

Deemed Exchange    5

Extension Notice    23

Financial Institutions    1

Indemnified Amounts    50

Indemnified Party    50

MUFG    1

MUFG Conduit    1

MUFG Roles    69

Non-Renewing Financial Institution    24

Obligations    6

Other Costs    54

Other Sellers    54

Participant    63

Payment Instruction    5

PDCo    1

Prior Agreement    1

Proposed Reduction Date    4

Purchase    2

Purchase Notice    2

Purchaser Agent Roles    69

Purchaser Agents    1

Purchasing Financial Institutions    62

Ratings Request    53

Reduction Notice    4

Required Ratings    53

RPA Deferred Purchase Price    6

Seller    1

Seller Parties    1

Seller Party    1

Servicer    44

Servicing Fee    47

Terminating Financial Institution    24

Terminating Rate Tranche    13

Termination Date    8

Termination Percentage    8

v

THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT

THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT

This Third Amended and Restated Receivables Purchase Agreement, dated as of December 3, 2010, is by and among PDC Funding Company, LLC, a Minnesota limited liability company (the “Seller”), Patterson Companies, Inc., a Minnesota corporation (together with its successors and assigns “PDCo”), as initial Servicer (Servicer together with Seller, the “Seller Parties” and each a “Seller Party”), the entities listed on Schedule A to this Agreement under the heading “Financial Institution” (together with any of their respective successors and assigns hereunder, the “Financial Institutions”), the entities listed on Schedule A to this Agreement under the heading “Conduit” (together with any of their respective successors and assigns hereunder, the “Conduits”), the entities listed on Schedule A to this Agreement under the heading “Purchaser Agent” (together with any of their respective successors and assigns hereunder, the “Purchaser Agents”) and MUFG Bank, Ltd. (f/k/a The Bank of Tokyo-Mitsubishi UFJ, Ltd.) (“MUFG”), as assignee of JPMorgan, as agent for the Purchasers hereunder or any successor agent hereunder (together with its successors and assigns hereunder, the “Agent”). Unless defined elsewhere herein, capitalized terms used in this Agreement shall have the meanings assigned to such terms in Exhibit I.

PRELIMINARY STATEMENTS

The Seller Parties, MUFG and certain other financial institutions, Victory Receivables Corporation and certain other commercial paper conduits and JPMorgan are parties to that certain Second Amended and Restated Receivables Purchase Agreement, dated as of March 19, 2010 (as amended supplemented, or otherwise modified through the date hereof excluding this Agreement, the “Prior Agreement”).

The parties to the Prior Agreement are entering into the Closing Date Assignment Agreement as of the date hereof and, in connection therewith, the parties hereto now desire to amend and restate the Prior Agreement in its entirety to read as set forth herein.

MUFG has been requested and is willing to act as Agent on behalf of Gotham Funding Corporation (the “MUFG Conduit”), the other Conduits and the Financial Institutions in accordance with the terms hereof.

AGREEMENT

Now therefore, in consideration of the foregoing and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree that, subject to satisfaction of the conditions precedent set forth in Section 6.1, the Prior Agreement is hereby amended and restated in its entirety to read as follows:

THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT

ARTICLE IPURCHASE ARRANGEMENTS

Section I.1Purchase Facility.

(a)    Upon the terms and subject to the conditions hereof, during the period from the date hereof to but not including the Facility Termination Date, Seller shall sell and assign, as described in Section 1.2(b), the Asset Portfolio to Agent for the benefit of the Purchasers, as applicable. In accordance with the terms and conditions set forth herein, each Conduit may, at its option, instruct Agent to make cash payments to Seller of the related Cash Purchase Price in respect of the Asset Portfolio (each such cash payment, a “Purchase”) on behalf of such Conduit, or if any Conduit shall decline to make such Purchase, Agent shall make such Purchase, on behalf of such declining Conduit’s Related Financial Institutions, in each case and from time to time in an aggregate amount not to exceed at such time (i) in the case of each Conduit, its Conduit Purchase Limit and (ii) in the aggregate, the lesser of (A) the Purchase Limit and (B) the aggregate amount of the Commitments. Any amount not paid for the Asset Portfolio hereunder as Cash Purchase Price shall be paid to Seller as the RPA Deferred Purchase Price pursuant to, and only to the extent required by, the priority of payments set forth in Sections 2.2(b) and (c) and otherwise pursuant to the terms of this Agreement (including Section 2.6).

(b)Seller may, upon at least 10 Business Days’ prior notice to Agent and each Purchaser Agent, terminate in whole or reduce in part, ratably among the Financial Institutions, the unused portion of the Purchase Limit; provided that (i) each partial reduction of the Purchase Limit shall be in an amount equal to $5,000,000 or an integral multiple thereof and (ii) the aggregate of the Conduit Purchase Limits for all of the Conduits shall also be terminated in whole or reduced in part, ratably among the Conduits, by an amount equal to such termination or reduction in the Purchase Limit.

Section I.2Increases; Sale of Asset Portfolio.

(a)Increases. Seller shall provide Agent and each Purchaser Agent with at least two Business Days’ (or if the date of such Purchase will be other than a Settlement Date, three Business Days’) prior notice in a form set forth as Exhibit II hereto of each Purchase (a “Purchase Notice”). Each Purchase Notice shall be subject to Section 6.2 hereof and, except as set forth below, shall be irrevocable, shall specify the requested Cash Purchase Price (which shall not be less than $10,000,000 and in additional increments of $100,000) and the requested date of such Purchase (which shall be on a Settlement Date or any other Business Day so long as no more than one Purchase occurs each calendar month on a date other than a Settlement Date) and, in the case of a Purchase, if the Cash Purchase Price thereof is to be funded by any of the Financial Institutions, the requested Discount Rate and Rate Tranche Period and shall be accompanied by a current listing of all Receivables (including any Receivables to be purchased by Seller under the Receivables Sale Agreement on the date of such Purchase specified in such Purchase Notice). Following receipt of a Purchase Notice, Agent will promptly notify the MUFG Conduit of such Purchase Notice,

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THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT

each Purchaser Agent will promptly notify the Conduit in such Purchaser Agent’s Purchaser Group of such Purchase Notice and Agent and each Purchaser Agent will identify the Conduits that agree to make the Purchase. If any Conduit declines to make a proposed Purchase, Seller may cancel the Purchase Notice or, in the absence of such a cancellation, the Purchase of such Receivables, Related Security and Collections, which such Conduit has declined to Purchase, will be made by such declining Conduit’s Related Financial Institution(s) in accordance with the rest of this Section 1.2(a). If the proposed Purchase or any portion thereof is to be made by any of the Financial Institutions, Agent shall send notice of the proposed Purchase to the MUFG Conduit’s Related Financial Institution and/or the applicable Purchaser Agent shall send notice of the proposed Purchase to the Related Financial Institutions in such Purchaser Agent’s Purchaser Group, as applicable, in each case concurrently by telecopier or email specifying (i) the date of such Purchase, which date must be at least one Business Day after such notice is received by the applicable Financial Institutions, (ii) each Financial Institution’s Pro Rata Share of the aggregate Cash Purchase Price in respect of such Receivables, Related Security and Collections of the Financial Institutions in such Financial Institution’s Purchaser Group are then purchasing and (iii) the requested Discount Rate and the requested Rate Tranche Period. On the date of each Purchase, upon satisfaction of the applicable conditions precedent set forth in Article VI and the conditions set forth in this Section 1.2(a), the Conduits and/or the Financial Institutions, as applicable, shall deposit to the Facility Account, in immediately available funds, no later than 12:00 noon (Chicago time), an amount equal to (i) in the case of a Conduit that has agreed to make such Purchase, such Conduit’s Pro Rata Share of the aggregate Cash Purchase Price of the Receivables, Related Security and Collections in respect of such Purchase or (ii) in the case of a Financial Institution, such Financial Institution’s Pro Rata Share of the aggregate Cash Purchase Price of the Receivables, Related Security and Collections the Financial Institutions in such Financial Institution’s Purchaser Group are then purchasing. Each Financial Institution’s Commitment hereunder shall be limited to purchasing the assets in the Asset Portfolio that the Conduit in such Financial Institution’s Purchaser Group has declined to Purchase. Each Financial Institution’s obligation shall be several, such that the failure of any Financial Institution to make available to Seller any funds in connection with any Purchase shall not relieve any other Financial Institution of its obligation, if any, hereunder to make funds available on the date of such Purchase, but no Financial Institution shall be responsible for the failure of any other Financial Institution to make funds available in connection with any Purchase.

Notwithstanding anything to the contrary set forth in this Section 1.2(a) or otherwise in this Agreement, the parties hereto hereby acknowledge and agree that any Financial Institution may, in its reasonable discretion, by written notice (a “Delayed Purchase Notice”) delivered to the Agent and the Seller no later than 12:00 p.m. (Chicago time) on the Business Day immediately preceding the applicable Purchase date elect (subject to the proviso below) with respect to any Purchase to pay its Pro Rata Share of the aggregate Cash Purchase Price of the Receivables, Related Security and Collections on or before the thirty-fifth (35th) day following the date of the related Purchase Notice (or if such day is not a Business Day, then on the next succeeding Business Day) (the “Delayed Purchase Date”), rather than on the date requested in such Purchase Notice (any Financial Institution making such an election, a “Delayed Financial

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THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT

Institution”); provided, that, with respect to each Financial Institution’s Purchaser Group, an amount equal to 10.0% of such Financial Institution’s Purchaser Group’s Commitment may not be subject to a Delayed Purchase Date.

No Delayed Financial Institution (or, for the avoidance of doubt, its related Conduit) shall be obligated to pay its Pro Rata Share of the applicable aggregate Cash Purchase Price until the applicable Delayed Purchase Date. A Delayed Financial Institution shall pay its Pro Rata Share of the applicable aggregate Cash Purchase Price on the applicable Delayed Purchase Date in accordance with this Section 1.2(a); provided, however, that a Delayed Financial Institution may, in its sole discretion, pay its Pro Rata Share of the applicable aggregate Cash Purchase Price on any Business Day prior to such Delayed Purchase Date. The Seller shall be obligated to accept the proceeds of such Delayed Financial Institution’s portion of the applicable Cash Purchase Price on the applicable Delayed Purchase Date in accordance with this Section 1.2(a).

The parties hereto hereby acknowledge and agree that they are implementing the delayed funding mechanics provided for in this Section for the purpose of effecting a more favorable “liquidity coverage ratio” (including as set forth in “Basel III” or as “Basel III” or portions thereof may be adopted in any particular jurisdiction) with respect to one or more Financial Institutions (or its holding company). Upon the occurrence of any Regulatory Change reasonably likely to eliminate such favorable effects with respect to all Financial Institutions, so long as no Amortization Event or Potential Amortization Event has occurred and is continuing, the Seller and Servicer may request in writing delivered to the Agent and each Purchaser Agent that this Agreement be amended such that the delayed funding mechanics set forth in this Section are removed. The Agent and each Purchaser Agent shall promptly notify the Seller and Servicer if they consent to such request and such request may be accepted or rejected by such parties in their sole discretion. Failure of the Agent or any Purchaser Agent to notify the Seller or the Servicer within ten (10) Business Days shall be deemed to constitute a rejection of such request.

(b)Sale of Asset Portfolio. In accordance with Sections 1.1(a) and 1.2(a), Seller hereby sells, assigns and transfers to Agent (on behalf of Purchasers), for the related Cash Purchase Price and the RPA Deferred Purchase Price, effective on and as of the date of each Purchase by any Purchaser hereunder, all of its right, title and interest in, to and under all Receivables and the Related Security and Collections relating to such Receivables (other than Seller’s title in and to the Second-Tier Account and the Facility Account, each of which shall remain with Seller), whether currently existing or thereafter acquired (the assets sold, assigned and transferred to include not only the Receivables, Collections and Related Security (other than Seller’s title in and to the Second-Tier Account and the Facility Account) existing as of the date of such Purchase but also all future Receivables and such Related Security and Collections acquired by Seller from time to time as provided herein). Purchaser’s right, title and interest in and to such assets is herein called the “Asset Portfolio”.

Section I.3Decreases. Seller shall provide Agent with an irrevocable prior written notice in conformity with the Required Notice Period (a “Reduction Notice”) of any proposed reduction of the Aggregate Capital from Collections and Agent will promptly notify each Purchaser of such Reduction Notice after Agent’s receipt thereof. Such

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THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT

Reduction Notice shall designate (i) the date (the “Proposed Reduction Date”) upon which any such reduction of the Aggregate Capital shall occur (which date shall give effect to the applicable Required Notice Period), and (ii) the amount of the Aggregate Capital to be reduced that shall be applied ratably to the aggregate Capital of the Conduits and the Financial Institutions in accordance with the amount of Capital (if any) owing to the Conduits (ratably to each Conduit, based on the ratio of such Conduit’s Capital at such time to the aggregate Capital of all the Conduits at such time), on the one hand, and the amount of Capital (if any) owing to the Financial Institutions (ratably to each Financial Institution, based on the ratio of such Financial Institution’s Capital at such time to the aggregate Capital of all of the Financial Institutions at such time), on the other hand (the “Aggregate Reduction”), without regard to any unpaid RPA Deferred Purchase Price. Only one (1) Reduction Notice shall be outstanding at any time. Concurrently with any reduction of the Aggregate Capital pursuant to this Section, Seller shall pay to the applicable Purchaser all Broken Funding Costs arising as a result of such reduction. No Aggregate Reduction will be made following the occurrence of the Amortization Date without the prior written consent of Agent.

Section I.4Payment Requirements. All amounts to be paid or deposited by any Seller Party pursuant to any provision of this Agreement or any other Transaction Document shall be paid or deposited in accordance with the terms hereof no later than 11:00 a.m. (Chicago time) on the day when due in immediately available funds, and if not received before 11:00 a.m. (Chicago time) shall be deemed to be received on the next succeeding Business Day. If such amounts are payable to (i) Agent, they shall be paid to Agent for its own account, in accordance with the applicable instructions set forth on Schedule C and (ii) any Purchaser Agent or Purchaser, they shall be paid to the Purchaser Agent for such Person’s Purchaser Group, for the account of such Person, in accordance with the applicable instructions set forth on Schedule C, in each case until otherwise notified by Agent or the related Purchaser Agent, as applicable (each instruction set forth in clauses (i) and (ii) being a “Payment Instruction”). Upon notice to Seller, Agent (on behalf of itself and/or any Purchaser) may debit the Facility Account for all amounts due and payable hereunder. All computations of Financial Institution Yield, per annum fees or discount calculated as part of any CP Costs, per annum fees hereunder and per annum fees under any Fee Letter shall be made on the basis of a year of 360 days for the actual number of days elapsed. If any amount hereunder or under any other Transaction Document shall be payable on a day which is not a Business Day, such amount shall be payable on the next succeeding Business Day.

Section I.5Deemed Exchange. Notwithstanding the otherwise applicable conditions precedent to payments in respect of the Asset Portfolio hereunder, upon the effectiveness of this Agreement in accordance with its terms and the effectiveness of the Closing Date Assignment Agreement in accordance with its terms, each Purchaser shall be deemed to have delivered and released its undivided interests in the “Purchaser Interest” under (and as defined in) the Prior Agreement as of the date hereof in a contemporaneous exchange for the acquisition of the Asset Portfolio hereunder in an amount equal to the outstanding principal amount of all outstanding “Capital” (as defined in the Prior Agreement)

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THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT

advanced in respect of the initial purchase under the Prior Agreement or any subsequent “Incremental Purchase” under and as defined in the Prior Agreement. Such deemed exchange under the Prior Agreement and the initial Purchase hereunder (the “Deemed Exchange”) shall constitute a replacement of all outstanding principal amounts of the outstanding “Capital” made under the Prior Agreement by way of such initial Purchase hereunder.

Section I.6RPA Deferred Purchase Price. Subject to the application of Collections as RPA Deferred Purchase Price as permitted on each Settlement Date pursuant to Sections 2.2(b), 2.2(c) and 2.6, on each Business Day on and after the Final Payout Date, Servicer, on behalf of Agent and the Purchasers, shall pay to Seller an amount as deferred purchase price (the “RPA Deferred Purchase Price”) equal to the Collections of Receivables then held or thereafter received by Seller (or Servicer on its behalf) less any accrued and unpaid Servicing Fee.

ARTICLE IIPAYMENTS AND COLLECTIONS

Section II.1Payments. Notwithstanding any limitation on recourse contained in this Agreement, Seller shall immediately pay to Agent when due, for the account of Agent, or the relevant Purchaser or Purchasers, on a full recourse basis: (a) all amounts accrued or payable by Seller to any such Person as described in Section 2.2 and (b) each of the following amounts, to the extent that such amounts are not paid in accordance with Section 2.2: (i) such fees as set forth in each Fee Letter (which fees collectively shall be sufficient to pay all fees owing to the Financial Institutions), (ii) all amounts payable as CP Costs, (iii) all amounts payable as Financial Institution Yield, (iv) all amounts payable as Deemed Collections (which shall be immediately due and payable by Seller and applied to reduce the outstanding Aggregate Capital hereunder in accordance with Sections 2.2 and 2.3 hereof), (v) all amounts required pursuant to Section 2.5 or 2.6, (vi) all amounts payable pursuant to Article X, if any, (vii) all Servicer costs and expenses, including the Servicing Fee, in connection with servicing, administering and collecting the Receivables, (viii) all Broken Funding Costs, (ix) all Hedging Obligations, (x) all Default Fees and (xi) any Erroneous Payment Subrogation Rights (the fees, amounts and other obligations described in clauses (a) and (b) collectively, the “Obligations”). If any Person fails to pay any of the Obligations when due, such Person agrees to pay, on demand, the Default Fee in respect thereof until paid. Notwithstanding the foregoing, no provision of this Agreement or any Fee Letter shall require the payment or permit the collection of any amounts hereunder in excess of the maximum permitted by applicable law. If at any time Seller receives any Collections or is deemed to receive any Collections, Seller shall immediately pay such Collections or Deemed Collections to Servicer for payment in accordance with the terms and conditions hereof and, at all times prior to such payment, such Collections or Deemed Collections shall be held in trust by Seller for the exclusive benefit of the Purchasers and Agent.

Section II.2Collections Prior to Amortization.

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THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT

(a)Collections Generally. On any day prior to the Amortization Date that Servicer receives any Collections and/or Deemed Collections, such Collections and/or Deemed Collections shall be set aside and held in trust by Servicer for the benefit of Agent and the Purchasers in the Collection Accounts in the manner set forth in Sections 7.1(j) and 8.2. Prior to the Amortization Date, all such amounts shall be applied as set forth in this Section 2.2. Servicer shall, on each Settlement Date, determine the amount of Collections set aside in accordance with the first sentence of this Section 2.2 during the related Settlement Period which constitute Principal Collections and the portion of such Collections which constitute Finance Charge Collections. On each Settlement Date, Servicer shall remit the Principal Collections set aside pursuant to this subsection (a) to the Second-Tier Account (to the extent such Principal Collections are not already on deposit therein) to be distributed in accordance with subsection (b) below and Servicer shall remit the Finance Charge Collections set aside pursuant to this subsection (a) to the Second-Tier Account (to the extent such Finance Charge Collections are not already on deposit therein) to be distributed in accordance with subsection (c) below.

(b)Application of Principal Collections. On each Settlement Date, Servicer will apply the Principal Collections on deposit in the Second-Tier Account in accordance with the applicable Payment Instructions pursuant to Section 2.2(a) to make the following distributions in the following amounts and order of priority:

first, to each Terminating Financial Institution, an amount equal to such Terminating Financial Institution’s Termination Percentage of such Principal Collections for the ratable reduction of the Capital of each such Terminating Financial Institution,

second, subject to Section 2.6, if any Purchase Notice shall have been delivered in accordance with Section 1.2(a), to Seller to fund the Cash Purchase Price of the Purchase to be made on such date; otherwise, to Agent for the account of the Purchasers (other than any Terminating Financial Institution) as a further reduction of the Aggregate Capital, and

third, subject to Section 2.6, to the extent of any such amounts remaining after such payments, to be applied as if they were Finance Charge Collections in accordance with the priority of payments set forth in subsection (c) below.

(c)Application of Finance Charge Collections. On each Settlement Date, Servicer will apply (i) the Finance Charge Collections on deposit in the Second-Tier Account and (ii) all remaining Principal Collections after making the distributions pursuant to clauses first and second of subsection (b) above, pursuant to Section 2.2(a), together with the applicable Hedge Floating Amount, if any, paid to Seller by each Hedge Provider and any net income from Permitted Investments deposited to the Second-Tier Account pursuant to Section 2.8, in accordance with the applicable Payment Instructions, to make the following distributions in the following amounts and order of priority:

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THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT

first, to the reimbursement of Agent’s, each Purchaser’s and each Purchaser Agent’s costs of collection and enforcement of this Agreement,

second, to Agent for the account of the Purchasers, all accrued and unpaid fees under any Fee Letter and all accrued and unpaid CP Costs and Financial Institution Yield, including any accrued CP Costs and Financial Institution Yield in respect of Capital reduced pursuant to clause second of subsection (b) above, together with any Broken Funding Costs,

third, if Servicer is not then Seller or an Affiliate of Seller, to Servicer in payment of the Servicing Fee,

fourth, to Agent as a reduction of Aggregate Capital an amount necessary to pay in full the Outstanding Balance of any Receivables that became Defaulted Receivables during the related Settlement Period and Receivables that became Defaulted Receivables during any prior Settlement Period that have not previously been the subject of payment hereunder,

fifth, if Seller or an Affiliate of Seller is then acting as Servicer, to Servicer in payment of the Servicing Fee,

sixth, to the applicable Persons, for the ratable payment in full of all other unpaid Obligations, and

seventh, the balance, if any, in the following priority: first, to Agent for deposit to the Second-Tier Account if the conditions of Section 7.3 requiring that the Hedging Agreements be in effect have occurred, but the Hedging Agreements are not then in effect (such amount to be set aside and held in trust for application in accordance with this Section 2.2(c) on the next occurring Settlement Date), and then second, subject to Section 2.6, to Seller as RPA Deferred Purchase Price.

(d)Each Terminating Financial Institution shall be allocated a ratable portion of Collections from the Liquidity Termination Date that such Terminating Financial Institution did not consent to extend (as to such Terminating Financial Institution, the “Termination Date”), until, with respect to a Terminating Financial Institution, such Terminating Financial Institution’s Capital, if any, shall be paid in full and the applicable, ratable portion of the RPA Deferred Purchase Price allocable to such Terminating Financial Institution’s portion of the Asset Portfolio has been paid in full in accordance with the priority of payments set forth in Section 2.2(b). This ratable portion shall be calculated on the Termination Date of each Terminating Financial Institution as a percentage equal to (i) Capital of such Terminating Financial Institution outstanding on its Termination Date, dividedby (ii) the Aggregate Capital outstanding on such Termination Date (the “Termination Percentage”). Each Terminating Financial Institution’s Termination Percentage shall remain constant prior to the Amortization Date. On and after the Amortization Date, each Termination Percentage shall be disregarded, and each Terminating Financial Institution’s Capital shall be reduced ratably with all Financial Institutions in accordance with Section 2.3.

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THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT

Section II.3Collections Following Amortization. On the Amortization Date and on each day thereafter, Servicer shall set aside and hold in trust for the benefit of Agent and the Purchasers, in the Collection Accounts in the manner set forth in Sections 7.1(j) and 8.2, all Collections and/or Deemed Collections received on such day and any additional amount for the payment of any Aggregate Unpaids owed by Seller and not previously paid by Seller in accordance with Section 2.1. On and after the Amortization Date, Servicer shall, at any time upon the request from time to time by (or pursuant to standing instructions from) Agent (i) remit to the Second-Tier Account the amounts set aside pursuant to the preceding sentence (to the extent such amounts are not already on deposit therein), and (ii) apply such amounts at Agent’s direction to reduce the Aggregate Capital and any other Aggregate Unpaids (it being understood and agreed that, in any event, no portion of the RPA Deferred Purchase Price may be paid to Seller on a date on or after the Amortization Date and prior to the Final Payout Date). If there shall be insufficient funds on deposit for Servicer to distribute funds in payment in full of the aforementioned amounts, Servicer shall distribute funds in accordance with the applicable Payment Instructions:

first, to the reimbursement of Agent’s, each Purchaser’s and each Purchaser Agent’s costs of collection and enforcement of this Agreement,

second, ratably to the payment of all accrued and unpaid fees under any Fee Letter and all accrued and unpaid CP Costs and Financial Institution Yield,

third, to the payment of Servicer’s reasonable out-of-pocket costs and expenses in connection with servicing, administering and collecting the Receivables, including the Servicing Fee, if Seller, or one of its Affiliates is not then acting as Servicer,

fourth, to the ratable reduction of Aggregate Capital to zero,

fifth, for the ratable payment of all other unpaid Obligations, provided that to the extent such Obligations relate to the payment of Servicer costs and expenses, including the Servicing Fee, when Seller or one of its Affiliates is acting as Servicer, such costs and expenses will not be paid until after the payment in full of all other Obligations,

sixth, to the ratable payment in full of all other Aggregate Unpaids, and

seventh, after the Aggregate Unpaids have been indefeasibly reduced to zero and this Agreement has terminated in accordance with its terms, to Seller as RPA Deferred Purchase Price, any remaining Collections.

Section II.4Ratable Payments. Collections applied to the payment of Aggregate Unpaids shall be distributed in accordance with the aforementioned provisions, and, giving effect to each of the priorities set forth in Sections 2.2 and 2.3 above, shall be shared ratably (within each priority) among Agent, the Purchaser Agents and the

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Purchasers in accordance with the amount of such Aggregate Unpaids owing to each of them in respect of each such priority.

Section II.5Payment Rescission. No payment of any of the Aggregate Unpaids shall be considered paid or applied hereunder to the extent that, at any time, all or any portion of such payment or application is rescinded by application of law or judicial authority, or must otherwise be returned or refunded for any reason. Seller shall remain obligated for the amount of any payment or application so rescinded, returned or refunded, and shall promptly pay to Agent (for application to the Person or Persons who suffered such rescission, return or refund), the full amount thereof, plus the Default Fee from the date of any such rescission, return or refunding, in each case, if such rescinded amounts have not been paid under Section 2.2.

Section II.6Maximum Purchases In Respect of the Asset Portfolio. Notwithstanding anything to the contrary in this Agreement, Seller shall ensure that the Net Portfolio Balance shall at no time be less than the sum of (i) the Aggregate Capital at such time, plus (ii) the Credit Enhancement at such time. If, on any date of determination, the sum of (i) the Aggregate Capital, plus (ii) the Credit Enhancement exceeds the Net Portfolio Balance, in each case at such time, Seller shall pay to the Purchasers within one (1) Business Day an amount to be applied to reduce the Aggregate Capital (allocated ratably based on the ratio of each Purchaser’s Capital at such time to the Aggregate Capital at such time), such that after giving effect to such payment, the Net Portfolio Balance equals or exceeds the sum of (i) the Aggregate Capital, plus (ii) the Credit Enhancement, in each case at such time; providedhowever, that if on any Settlement Date, the Net Portfolio Balance is less than the sum of (i) the Aggregate Capital, plus (ii) the Credit Enhancement, in each case at such time, the payment in full of the amount required by the previous sentence shall be made prior to any distributions are made pursuant to Section 2.2(b).

Section II.7Clean-Up Call; Limitation on Payments.

(a)Clean Up Call. In addition to Seller’s rights pursuant to Section 1.3, Seller shall have the right (after providing written notice to Agent and each Purchaser Agent in accordance with the Required Notice Period), at any time following the reduction of the Aggregate Capital to a level that is less than 10.0% of the Purchase Limit as of the date hereof, to repurchase from the Purchasers all, but not less than all, of the Asset Portfolio at such time. The purchase price in respect thereof shall be an amount equal to the Aggregate Unpaids through the date of such repurchase, payable in immediately available funds. Such repurchase shall be without representation, warranty or recourse of any kind by, on the part of, or against any Purchaser, any Purchaser Agent or Agent. If, at any time, Servicer is not Seller or an Affiliate of Seller, Seller may waive its repurchase rights under this Section 2.7(a) by providing a written notice of such waiver to Agent and each Purchaser Agent.

(b)Purchasers’ and Agent’s Limitation on Payments. Notwithstanding any provision contained in this Agreement or any other Transaction Document to the contrary, none of the Purchasers or Agent shall, and none of them shall be

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obligated (whether on behalf of a Purchaser or otherwise) to, pay any amount to Seller in respect of any portion of the RPA Deferred Purchase Price, except to the extent that Collections are available for distribution to Seller in accordance with this Agreement. In addition, notwithstanding anything to the contrary contained in this Agreement or any other Transaction Document, the obligations of any Purchaser that is a commercial paper conduit or similar vehicle under this Agreement or under any other Transaction Document shall be payable by such Purchaser or successor or assign solely to the extent of funds received from Seller in accordance herewith or from any party to any Transaction Document in accordance with the terms thereof in excess of funds necessary to pay such Person’s matured and maturing Commercial Paper or other senior indebtedness of such Person when due. Any amount which Agent or a Purchaser is not obligated to pay pursuant to the operation of the two preceding sentences shall not constitute a claim (as defined in § 101 of the Federal Bankruptcy Code) against, or corporate obligation of, any Purchaser or Agent, as applicable, for any such insufficiency unless and until such amount becomes available for distribution to Seller pursuant to the terms hereof.

Section II.8Investment of Collections in Second-Tier Account. All amounts from time to time held in, deposited in or credited to, the Second-Tier Account shall be invested by Servicer (as agent for Agent) in Permitted Investments selected in writing by Servicer. All such investments shall at all times be held by or on behalf of Agent for the benefit of the Purchasers and the Hedge Providers (if any), provided, that neither Agent, any Purchaser nor the Hedge Providers shall be held liable in any way by reason of any loss arising from the investment of amounts on deposit in the Second-Tier Account in Permitted Investments. All income or other gain from investment of monies deposited in or credited to the Second-Tier Account shall be deposited in or credited to the Second-Tier Account immediately upon receipt, and any loss resulting from such investment shall be charged thereto. Any net income from such investments shall be transferred to the Second-Tier Account on a monthly basis on the Business Day preceding each Settlement Date to be applied in accordance with Section 2.2. Except as permitted in writing by Agent, funds on deposit in the Second-Tier Account shall be invested in Permitted Investments that will mature no later than the Business Day immediately preceding the next Settlement Date. No Permitted Investment shall be sold or otherwise disposed of prior to its scheduled maturity date unless a default occurs with respect to such Permitted Investment and Agent directs Servicer in writing to dispose of such Permitted Investment.

ARTICLE IIICONDUIT PURCHASES

Section III.1CP Costs. Seller shall pay CP Costs with respect to the outstanding Capital associated with each of the Conduits for each day that any such Capital is outstanding.

Section III.2CP Costs Payments. On each Settlement Date, Seller shall pay to Agent (for the benefit of the Conduits) an aggregate amount equal to all

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accrued and unpaid CP Costs in respect of the outstanding Capital of each of the Conduits for the related Settlement Period in accordance with Article II.

Section III.3Calculation of CP Costs. On the third Business Day immediately preceding each Settlement Date, each Conduit shall calculate the aggregate amount of its Conduit Costs for the related Settlement Period and shall notify Seller of such aggregate amount.

ARTICLE IVFINANCIAL INSTITUTION FUNDING

Section IV.1Financial Institution Funding. The aggregate Capital associated with the Purchases by the Financial Institutions shall accrue Financial Institution Yield for each day during its Rate Tranche Period at either the Term SOFR Reference Rate or the Alternate Base Rate in accordance with the terms and conditions hereof. Until Seller gives notice to Agent and the applicable Purchaser Agent(s) of another Discount Rate in accordance with Section 4.4, the initial Discount Rate for any portion of the Asset Portfolio transferred to the Financial Institutions pursuant to the terms and conditions hereof shall be the Alternate Base Rate. If any pro rata portion of the Asset Portfolio of any Conduit is assigned or transferred to, or funded by, any Funding Source of such Conduit pursuant to any Funding Agreement or to or by any other Person, each such portion of the Asset Portfolio so assigned, transferred or funded shall each be deemed to have a new Rate Tranche Period commencing on the date of any such assignment, transfer or funding, and shall accrue Yield for each day during its Rate Tranche Period at either the Term SOFR Reference Rate or the Alternate Base Rate in accordance with the terms and conditions hereof as if each such portion of the Asset Portfolio was held by a Financial Institution. With respect to each such portion of the Asset Portfolio, the assignee or transferee thereof, or the lender with respect thereto, shall be deemed to be a Financial Institution in the applicable Conduit’s Purchaser Group solely for the purposes of Sections 4.1, 4.2, 4.3, 4.4 and 4.5 hereof.

Section IV.2Financial Institution Yield Payments. On the Settlement Date for each Rate Tranche Period with respect to the aggregate Capital of the Financial Institutions, Seller shall pay to Agent (for the benefit of the Financial Institutions) an aggregate amount equal to all accrued and unpaid Financial Institution Yield for the entire Rate Tranche Period with respect to such Capital in accordance with Article II. On the third Business Day immediately preceding the Settlement Date for such Capital of each of the Financial Institutions, each Financial Institution shall calculate the aggregate amount of accrued and unpaid Financial Institution Yield for the entire Rate Tranche Period for such Capital of such Financial Institution and shall notify Seller of such aggregate amount.

Section IV.3Selection and Continuation of Rate Tranche Periods.

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(a)With consultation from (and approval by) Agent, the applicable Financial Institution and, if applicable, the Purchaser Agent in such Financial Institution’s Purchaser Group, Seller shall from time to time, only for purposes of computing the Financial Institution Yield with respect to such Financial Institution, request Rate Tranche Periods to account for the portion of the Asset Portfolio funded or maintained by such Financial Institution, provided that, if at any time any of the Financial Institutions shall have any Capital outstanding, Seller shall always request Rate Tranche Periods such that at least one Rate Tranche Period shall end on the date specified in clause (A) of the definition of Settlement Date.

(b)Seller or the applicable Financial Institution, upon notice to and consent by the other received at least three (3) Business Days prior to the end of a Rate Tranche Period (a “Terminating Rate Tranche”) for any portion of the Asset Portfolio funded or maintained by such Financial Institution, may, effective on the last day of the Terminating Rate Tranche: (i) divide any such Financial Institution’s Capital into multiple portions by subdividing such Capital into smaller amounts of Capital, (ii) combine any such portion of such Financial Institution’s Capital with one or more other portions of such Financial Institution’s Capital that have a Terminating Rate Tranche ending on the same day as such Terminating Rate Tranche by combining the associated Capital of such Financial Institution or (iii) combine any such Financial Institution’s existing Capital with additional Capital being paid to Seller as Cash Purchase Price in respect of a new Purchase made on the day such Terminating Rate Tranche ends by combining the associated Capital in respect of such new Purchase with the existing Capital of such Financial Institution, provided, that in no event may the Capital of any Purchaser be combined with the Capital of any other Purchaser.

Section IV.4Financial Institution Discount Rates. Seller may select the Term SOFR Reference Rate or the Alternate Base Rate for each portion of the Capital of any of the Financial Institutions. Seller shall by 11:00 a.m. (Chicago time): (i) at least three (3) U.S. Government Securities Business Days prior to the expiration of any Terminating Rate Tranche with respect to which the Term SOFR Reference Rate is being requested as a new Discount Rate and (ii) at least one (1) Business Day prior to the expiration of any Terminating Rate Tranche with respect to which the Alternate Base Rate is being requested as a new Discount Rate, give each Financial Institution (or Funding Source) irrevocable notice of the new Discount Rate for the Capital or portion thereof associated with such Terminating Rate Tranche. Until Seller gives notice to the applicable Financial Institution (or Funding Source) of another Discount Rate, the initial Discount Rate for any Capital of any Financial Institution pursuant to the terms and conditions hereof (or assigned or transferred to, or funded by, any Funding Source pursuant to any Funding Agreement or to or by any other Person) shall be the Alternate Base Rate.

Section IV.5Inability to Determine Rates; Change in Legality.

(a)Subject to clause (b) below, if, on or prior to the first day of any Rate Tranche Period for any funding of any portion of the Asset Portfolio or Capital at Term SOFR:

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(i)the Agent determines (which determination shall be conclusive and binding absent manifest error) that “Term SOFR” cannot be determined pursuant to the definition thereof, or

(ii)any Financial Institution determines that for any reason in connection with any request for any funding of any portion of the Asset Portfolio or Capital at Term SOFR or a conversion thereto or a continuation thereof that Term SOFR for any requested Rate Tranche Period with respect to a proposed funding of any portion of the Asset Portfolio or Capital at Term SOFR does not adequately and fairly reflect the cost to the applicable Financial Institution’s Purchase Group of funding its Pro Rata Share of the Aggregate Capital in respect to the Financial Institutions in such Financial Institution’s Purchaser Group, and such Financial Institution has provided notice of such determination to the Agent,

the Agent will promptly so notify the Seller and each Purchaser Agent.

Upon notice thereof by the Agent to the Seller, any obligation of the Financial Institutions to make or fund any funding of any portion of the Asset Portfolio or Capital at Term SOFR, and any right of the Seller to continue any funding of any portion of the Asset Portfolio or Capital at Term SOFR or to convert such portion of the Asset Portfolio or Capital of the Financial Institution funded at the Alternate Base Rate to a funding of such portion of the Asset Portfolio or Capital of the Financial Institution at Term SOFR, shall be suspended (to the extent of the affected portion of the Asset Portfolio or Capital funded at Term SOFR or affected Rate Tranche Periods) until the Agent (with respect to clause (ii), at the instruction of the Purchaser Agent (or group of Purchaser Agents)) revokes such notice. Upon receipt of such notice, (i) the Seller may revoke any pending request for a purchase of, conversion to or continuation of any funding of any portion of the Asset Portfolio or Capital at Term SOFR (to the extent of the affected portion of the Asset Portfolio or Capital funded at Term SOFR or affected Rate Tranche Periods) or, failing that, the Seller will be deemed to have converted any such request into a request for a funding of a Purchase at, or conversion to a Purchase funded at the Alternate Base Rate in the amount specified therein and (ii) any outstanding affected portion of the Asset Portfolio or Capital funded at Term SOFR will be deemed to have been converted into a funding of such portion of the Asset Portfolio or Capital at the Alternate Base Rate at the end of the applicable Rate Tranche Period. Upon any such conversion, the Seller shall also pay accrued Financial Institution Yield on the amount so converted, together with any additional amounts pursuant to Section 4.7. Subject to clause (c), if the Agent determines (which determination shall be conclusive and binding absent manifest error) that “Term SOFR” cannot be determined pursuant to the definition thereof on any given day, the Financial Institution Yield on any portion of the Asset Portfolio or Capital funded at the Alternate Base Rate shall be determined by the Agent without reference to clause (c) of the definition of “Alternate Base Rate” until the Agent revokes such determination.

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(b)If any Financial Institution determines that any law has made it unlawful, or that any governmental authority has asserted that it is unlawful, for any Purchaser in its Financial Institution’s Purchaser Group or its applicable lending office to make, maintain or fund Purchases whose yield rate is determined by reference to SOFR, the Term SOFR Reference Rate or Term SOFR, or to determine or charge yield rates based upon SOFR, the Term SOFR Reference Rate or Term SOFR, then, upon notice thereof by such Financial Institution to the Seller (through the Agent), (a) any obligation of the Purchaser in such Financial Institution’s Purchaser Group to provide any funding of any portion of the Asset Portfolio or Capital at Term SOFR, and any right of the Seller to continue any funding of any portion of the Asset Portfolio or Capital at Term SOFR or to convert such portion of the Asset Portfolio or Capital of the Financial Institution funded at the Alternate Base Rate to a funding of such portion of the Asset Portfolio or Capital of the Financial Institution at Term SOFR, shall be suspended, and (b) the yield rate on which such portion of the Asset Portfolio or Capital of the Financial Institution funded at the Alternate Base Rate shall, if necessary to avoid such illegality, be determined by the Agent without reference to clause (c) of the definition of “Alternate Base Rate”, in each case until such Financial Institution notifies the Agent and the Seller that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, (i) the Seller shall, if necessary to avoid such illegality, upon demand from any Financial Institution (with a copy to the Agent), prepay or, if applicable, convert all of such Financial Institution’s Pro Rata Share of the Aggregate Capital from being funded at Term SOFR to being funded at Alternate Base Rate (the yield rate on which any funding of any portion of the Asset Portfolio or Capital at by such Financial Institution at the Alternate Base Rate shall, if necessary to avoid such illegality, be determined by the Agent without reference to clause (c) of the definition of “Alternate Base Rate”), on the last day of the Rate Tranche Period therefor, if all affected Financial Institutions may lawfully continue to maintain such any portion of the Asset Portfolio or Capital funded at Term SOFR to such day, or immediately, if any Financial Institution may not lawfully continue to maintain such portion of the Asset Portfolio or Capital funded at Term SOFR to such day, and (ii) if necessary to avoid such illegality, the Agent shall during the period of such suspension compute the Alternate Base Rate without reference to clause (c) of the definition of “Alternate Base Rate,” in each case until the Agent is advised in writing by each affected Financial Institution that it is no longer illegal for such Financial Institution to determine or charge interest rates based upon SOFR, the Term SOFR Reference Rate or Term SOFR. Upon any such prepayment or conversion, the Seller shall also pay accrued interest on the amount so prepaid or converted, together with any additional amounts pursuant to Section 4.7.

(c) Benchmark Replacement Setting.

(i)Benchmark Replacement. Notwithstanding anything to the contrary herein or in any other Transaction Document, upon the occurrence of a Benchmark Transition Event, the Agent and the Seller may amend this Agreement to replace the then-current Benchmark with a Benchmark Replacement. Any such amendment with respect to a Benchmark Transition Event will become effective at 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the Agent has posted such proposed amendment to all affected Financial Institutions and the Seller so long as

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the Agent has not received, by such time, written notice of objection to such amendment from the Purchasers comprising the Required Purchasers. No replacement of a Benchmark with a Benchmark Replacement pursuant to this Section 4.5(c) will occur prior to the applicable Benchmark Transition Start Date.

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

(iii)Notices; Standards for Decisions and Determinations. The Agent will promptly notify the Seller and the Purchaser Agents of (i) the implementation of any Benchmark Replacement and (ii) the effectiveness of any Conforming Changes in connection with the use, administration, adoption or implementation of a Benchmark Replacement. The Agent will promptly notify the Seller of the removal or reinstatement of any tenor of a Benchmark pursuant to sub-clause (iv) below. Any determination, decision or election that may be made by the Agent or, if applicable, any Purchaser Agent (or group of Purchaser Agents) pursuant to this Section 4.5, 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 sole discretion and without consent from any other party to this Agreement or any other Transaction Document, except, in each case, as expressly required pursuant to this Section 4.5.

(iv)Unavailability of Tenor of Benchmark. 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), (i) if the then-current Benchmark is a term rate (including the Term SOFR Reference 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 Agent in its reasonable discretion or (B) the administrator of such Benchmark or 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 not or will not be representative or in compliance with or aligned with the International Organization of Securities Commissions (IOSCO) Principles for Financial Benchmarks, then the Agent may modify the definition of “Rate Tranche Period” (or any similar or analogous definition) for any Benchmark settings at or after such time to remove such unavailable, non-representative, non-compliant or non-aligned tenor and (ii) if a tenor that was removed pursuant to clause (a) 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 not or will not be

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representative or in compliance with or aligned with the International Organization of Securities Commissions (IOSCO) Principles for Financial Benchmarks for a Benchmark (including a Benchmark Replacement), then the Agent may modify the definition of “Rate Tranche Period” (or any similar or analogous definition) for all Benchmark settings at or after such time to reinstate such previously removed tenor.

(v)Benchmark Unavailability Period. Upon the Seller's receipt of notice of the commencement of a Benchmark Unavailability Period the Seller may revoke any request for a Purchase to be funded at Term SOFR, conversion to or continuation of any portion of the Asset Portfolio or Capital funded at Term SOFR to be made, converted or continued during any Benchmark Unavailability Period and, failing that, the Seller will be deemed to have converted any such request into a request for a Purchase of or conversion to a request for a Purchase funded at the Alternate Base Rate. During any Benchmark Unavailability Period or at any time that a tenor for the then-current Benchmark is not an Available Tenor, the component of the Alternate Base Rate based upon the then-current Benchmark or such tenor for such Benchmark, as applicable, will not be used in any determination of the Alternate Base Rate.

(vi)Rates. The Agent does not warrant or accept responsibility for, and shall not have any liability with respect to (a) the continuation of, administration of, submission of, calculation of or any other matter related to Alternate Base Rate, the Term SOFR Reference Rate or Term SOFR, or any component definition thereof or rates referred to in the definition thereof, or any alternative, successor or replacement rate thereto (including any Benchmark Replacement), including whether the composition or characteristics of any such alternative, successor or replacement rate (including any Benchmark Replacement) will be similar to, or produce the same value or economic equivalence of, or have the same volume or liquidity as, Alternate Base Rate, the Term SOFR Reference Rate, Term SOFR or any other Benchmark prior to its discontinuance or unavailability, or (b) the effect, implementation or composition of any Conforming Changes. The Agent and its affiliates or other related entities may engage in transactions that affect the calculation of Alternate Base Rate, the Term SOFR Reference Rate, Term SOFR, any alternative, successor or replacement rate (including any Benchmark Replacement) or any relevant adjustments thereto, in each case, in a manner adverse to the Seller. The Agent may select information sources or services in its reasonable discretion to ascertain Alternate Base Rate, the Term SOFR Reference Rate, Term SOFR or any other Benchmark, in each case pursuant to the terms of this Agreement, and shall have no liability to the Seller, any Financial Institution or any other person or entity for damages of any kind, including direct or indirect, special, punitive, incidental or consequential damages, costs, losses or expenses (whether in tort, contract or otherwise and whether at law or in equity), for any error or calculation of any such rate (or component thereof) provided by any such information source or service.

(vii) Certain Defined Terms. As used in this Section 4.5:

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“Available Tenor” means, as of any date of determination and with respect to the then-current Benchmark, as applicable, (x) if such Benchmark is a term rate, any tenor for such Benchmark (or component thereof) that is or may be used for determining the length of a yield period pursuant to this Agreement or (y) otherwise, any payment period for interest calculated with reference to such Benchmark (or component thereof) that is or may be used for determining any frequency of making payments of interest calculated with reference to such Benchmark, in each case, as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Rate Tranche Period” pursuant to sub-clause (iv) of this Section 4.5.

“Benchmark” means, initially, the Term SOFR Reference Rate; provided that if a Benchmark Transition Event has occurred with respect to the Term SOFR Reference 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 sub-clause (i) of this Section 4.5.

“Benchmark Replacement” means with respect to any Benchmark Transition Event, the sum of: (a) the alternate benchmark rate that has been selected by the Agent and the Seller giving due consideration to (i) any selection or recommendation of a replacement benchmark 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 benchmark rate as a replacement to the then-current Benchmark for dollar-denominated syndicated credit facilities and (b) the related Benchmark Replacement Adjustment; provided that, if such Benchmark Replacement as so determined would be less than the Floor, such 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, 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 Agent and the Seller 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 such Benchmark with the applicable Unadjusted Benchmark Replacement 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 the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for dollar-denominated syndicated credit facilities.

“Benchmark Replacement Date” means the earlier to occur of the following events with respect to the 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

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component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof); 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 or on behalf of the administrator of such Benchmark (or such component thereof) or the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be non-representative or non-compliant with or non-aligned with the International Organization of Securities Commissions (IOSCO) Principles for Financial Benchmarks; provided that such non-representativeness, non-compliance or non-alignment will be determined by reference to the most recent statement or publication referenced in such clause (c) and even if any Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date.

For the avoidance of doubt, 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 all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).

“Benchmark Transition Event” means the occurrence of one or more of the following events with respect to the 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 all Available Tenors of 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 any Available Tenor of 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 Federal Reserve Bank of New York, 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), which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of 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 any Available Tenor of such Benchmark (or such component thereof); or

(3)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) or the regulatory supervisor for the administrator of such Benchmark (or such component

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thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are not, or as of a specified future date will not be, representative or in compliance with or aligned with the International Organization of Securities Commissions (IOSCO) Principles for Financial Benchmarks.

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 each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).

“Benchmark Transition Start Date” means, in the case of a Benchmark Transition Event, the earlier of (a) the applicable Benchmark Replacement Date and (b) if such Benchmark Transition Event is a public statement or publication of information of a prospective event, the 90th day prior to the expected date of such event as of such public statement or publication of information (or if the expected date of such prospective event is fewer than 90 days after such statement or publication, the date of such statement or publication).

“Benchmark Unavailability Period” means, the period (if any) (a) beginning at the time that a Benchmark Replacement Date has occurred if, at such time, no Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Transaction Document in accordance with this Section 4.5 and (b) ending at the time that a Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Transaction Document in accordance with this Section 4.5.

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

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

Section IV.6Extension of Liquidity Termination Date.

(a)Seller may request one or more 364-day extensions of the Liquidity Termination Date then in effect by giving written notice of such request to Agent (each such notice, an “Extension Notice”) at least 60 days prior to the Liquidity Termination Date then in effect. After Agent’s receipt of any Extension Notice, Agent shall promptly notify each Purchaser Agent of such Extension Notice. After Agent’s and each Purchaser Agent’s receipt of any Extension Notice, Agent shall promptly notify the Financial Institutions in the MUFG Conduit’s Purchaser Group of such Extension Notice and each Purchaser Agent shall promptly notify the Financial Institutions in such Purchaser Agent’s Purchaser Group of such Extension Notice. Each Financial Institution may, in its sole discretion, by a revocable notice (a “Consent Notice”) given to Agent and, if applicable, the Purchaser Agent in such Financial Institution’s Purchaser Group on or prior to the 30th day prior to the Liquidity Termination Date then in effect (such period from the date of the Extension Notice to such 30th day being referred to herein as the “Consent Period”), consent to such extension of such Liquidity Termination Date; provided, however, that, except as

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provided in Section 4.6(b), such extension shall not be effective with respect to any of the Financial Institutions if any one or more Financial Institutions: (i) notifies Agent and, if applicable, the Purchaser Agent in such Financial Institution’s Purchaser Group during the Consent Period that such Financial Institution either does not wish to consent to such extension or wishes to revoke its prior Consent Notice or (ii) fails to respond to Agent and, if applicable, the Purchaser Agent in such Financial Institution’s Purchaser Group within the Consent Period (each Financial Institution or its related Conduit, as the case may be, that does not wish to consent to such extension or wishes to revoke its prior Consent Notice of fails to respond to Agent and, if applicable, such Purchaser Agent within the Consent Period is herein referred to as a “Non-Renewing Financial Institution”). If none of the events described in the foregoing clauses (i) or (ii) occurs during the Consent Period and all Consent Notices have been received, then, the Liquidity Termination Date shall be irrevocably extended until the date that is 364 days after the Liquidity Termination Date then in effect. Agent shall promptly notify Seller of any Consent Notice or other notice received by Agent pursuant to this Section 4.6(a).

(b)Upon receipt of notice from Agent or, if applicable, a Purchaser Agent, pursuant to Section 4.6(a) of any Non-Renewing Financial Institution or that the Liquidity Termination Date has not been extended, one or more of the Financial Institutions (including any Non-Renewing Financial Institution) may proffer to Agent, the Conduit in such Non-Renewing Financial Institution’s Purchaser Group and, if applicable, the Purchaser Agent in such Non-Renewing Financial Institution’s Purchaser Group the names of one or more institutions meeting the criteria set forth in Section 12.1(b)(i) that are willing to accept assignments of and assume the rights and obligations under this Agreement and the other applicable Transaction Documents of the Non-Renewing Financial Institution. Provided the proffered name(s) are acceptable to Agent, the Conduit in such Non-Renewing Financial Institution’s Purchaser Group and, if applicable, the Purchaser Agent in such Non-Renewing Financial Institution’s Purchaser Group, Agent shall notify each Purchaser Agent and the remaining Financial Institutions in the MUFG Conduit’s Purchaser Group of such fact and each Purchaser Agent shall notify the remaining Financial Institutions in such Purchaser Agent’s Purchaser Group of such fact, and the then existing Liquidity Termination Date shall be extended for an additional 364 days upon satisfaction of the conditions for an assignment in accordance with Section 12.1, and the Commitment of each Non-Renewing Financial Institution shall be reduced to zero. If the rights and obligations under this Agreement and the other applicable Transaction Documents of each Non-Renewing Financial Institution are not assigned as contemplated by this Section 4.6(b) (each such Non-Renewing Financial Institution or its related Conduit, as the case may be, whose rights and obligations under this Agreement and the other applicable Transaction Documents are not so assigned is herein referred to as a “Terminating Financial Institution”) and at least one Financial Institution is not a Non-Renewing Financial Institution, the then existing Liquidity Termination Date shall be extended for an additional 364 days; provided, however, that (i) the Purchase Limit shall be reduced on the Termination Date applicable to each Terminating Financial Institution by an aggregate amount equal to the Terminating Commitment Availability as of such date of each Terminating Financial Institution and shall thereafter continue to be reduced by amounts equal to any reduction in the Capital of any Terminating Financial Institution (after application of

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Collections pursuant to Sections 2.2 and 2.3), (ii) the Conduit Purchase Limit of each Conduit shall be reduced by the aggregate amount of the Terminating Commitment Amount of each Terminating Financial Institution in such Conduit’s Purchaser Group and (iii) the Commitment of each Terminating Financial Institution shall be reduced to zero on the Termination Date applicable to such Terminating Financial Institution. Upon reduction to zero of the Capital of a Terminating Financial Institution (after application of Collections thereto pursuant to Section 2.2 and 2.3), all rights and obligations of such Terminating Financial Institution hereunder shall be terminated and such Terminating Financial Institution shall no longer be a “Financial Institution”; provided, however, that the provisions of Article X shall continue in effect for its benefit with respect to the Capital held by such Terminating Financial Institution prior to its termination as a Financial Institution. For the avoidance of doubt, each reference to a Financial Institution in the context of a Terminating Financial Institution shall be deemed to refer to the related Conduit if such Conduit continues to have Capital outstanding as a Terminating Financial Institution.

(c)Any requested extension of the Liquidity Termination Date may be approved or disapproved by a Financial Institution in its sole discretion. In the event that the Commitments are not extended in accordance with the provisions of this Section 4.6, the Commitment of each Financial Institution shall be reduced to zero on the Liquidity Termination Date. Upon reduction to zero of the Commitment of a Financial Institution and upon reduction to zero of the Capital of such Financial Institution, all rights and obligations of such Financial Institution hereunder shall be terminated and such Financial Institution shall no longer be a “Financial Institution”; provided, however, that the provisions of Article X shall continue in effect for its benefit with respect to the Capital held by such Financial Institution prior to its termination as a Financial Institution.

Section IV.7Compensation for Losses. In the event of (a) the payment of any portion of the Asset Portfolio or Capital being funded at Term SOFR, other than on the last day of the Rate Tranche Period applicable thereto (including as a result of an Amortization Event), (b) the conversion of any portion of the Asset Portfolio or Capital funded at Term SOFR other than on the last day of the Rate Tranche Period applicable thereto (including as a result of an Amortization Event), (c) the failure to fund, convert, continue or prepay any portion of the Asset Portfolio or Capital funded at Term SOFR on the date specified in any notice delivered pursuant hereto, or (d) the assignment of any portion of the Asset Portfolio or Capital funded at Term SOFR other than on the last day of the Rate Tranche Period applicable thereto as a result of a request by the Seller pursuant to Section 4.5(c)(ii), then, in any such event, the Seller shall compensate each Purchaser for any loss, cost and expense attributable to such event, including any loss, cost or expense arising from the liquidation or redeployment of funds. A certificate of any Purchaser setting forth any amount or amounts that such Purchaser is entitled to receive pursuant to this Section 4.7 shall be delivered to the Seller and shall be conclusive absent manifest error. The Seller shall pay such Purchaser the amount shown as due on any such certificate within 10 days after receipt thereof.

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ARTICLE VREPRESENTATIONS AND WARRANTIES

Section V.1Representations and Warranties of the Seller Parties. Each Seller Party hereby represents and warrants to Agent, the Purchaser Agents and the Purchasers, as to itself, as of the date hereof and as of the date of each Purchase (other than with respect to the representations and warranties set forth in clause (x), which are only made as of the date hereof) that:

(a)Existence and Power. Such Seller Party is a corporation or limited liability company, as applicable, duly organized, validly existing and in good standing under the laws of its state of organization. Such Seller Party is duly qualified to do business and is in good standing as a foreign entity, and has and holds all power, corporate or otherwise, and all governmental licenses, authorizations, consents and approvals required to carry on its business in each jurisdiction in which its business is conducted, except where the failure to be so qualified or to have and hold such governmental licenses, authorization, consents and approvals could not reasonably be expected to have a Material Adverse Effect.

(b)Power and Authority; Due Authorization, Execution and Delivery. The execution and delivery by such Seller Party of this Agreement and each other Transaction Document to which it is a party, and the performance of its obligations hereunder and thereunder and, in the case of Seller, Seller’s use of the proceeds of Purchases made hereunder, are within its powers and authority, corporate or otherwise, and have been duly authorized by all necessary action, corporate or otherwise, on its part. This Agreement and each other Transaction Document to which such Seller Party is a party has been duly executed and delivered by such Seller Party.

(c)No Conflict. The execution and delivery by such Seller Party of this Agreement and each other Transaction Document to which it is a party, and the performance of its obligations hereunder and thereunder do not contravene or violate (i) its certificate or articles of incorporation or organization, by-laws or limited liability company agreement (or equivalent governing documents), (ii) any law, rule or regulation applicable to it, (iii) any restrictions under any agreement, contract or instrument to which it is a party or by which it or any of its property is bound, or (iv) any order, writ, judgment, award, injunction or decree binding on or affecting it or its property, and do not result in the creation or imposition of any Adverse Claim on assets of such Seller Party or its Subsidiaries (except as created hereunder); and no transaction contemplated hereby requires compliance with any bulk sales act or similar law.

(d)Governmental Authorization. Other than the filing of the financing statements required hereunder, no authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution and delivery by such Seller Party of this Agreement and each other Transaction Document to which it is a party and the performance of its obligations hereunder and thereunder.

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(e)Actions, Suits. There are no actions, suits or proceedings pending, or to the best of such Seller Party’s knowledge, threatened, against or affecting such Seller Party, or any of its properties, in or before any court, arbitrator or other body, that could reasonably be expected to have a Material Adverse Effect. Such Seller Party is not in default with respect to any order of any court, arbitrator or governmental body.

(f)Binding Effect. This Agreement and each other Transaction Document to which such Seller Party is a party constitute the legal, valid and binding obligations of such Seller Party enforceable against such Seller Party in accordance with their respective terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

(g)Accuracy of Information. All information heretofore furnished by such Seller Party or any of its Affiliates to Agent, the Purchaser Agents or the Purchasers for purposes of or in connection with this Agreement, any of the other Transaction Documents or any transaction contemplated hereby or thereby is, and all such information hereafter furnished by such Seller Party or any of its Affiliates to Agent, the Purchaser Agents or the Purchasers will be, true and accurate in every material respect on the date such information is stated or certified and does not and will not contain any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained therein not materially misleading.

(h)Use of Proceeds. No proceeds of any Purchase hereunder will be used (i) for a purpose that violates, or would be inconsistent with, Regulation T, U or X promulgated by the Board of Governors of the Federal Reserve System from time to time or (ii) to acquire any security in any transaction which is subject to Section 12, 13 or 14 of the Securities Exchange Act of 1934, as amended.

(i)Good Title. Immediately prior to each Purchase hereunder, Seller shall be the legal and beneficial owner of the Receivables and Related Security with respect thereto, free and clear of any Adverse Claim, except as created by the Transaction Documents. There have been duly filed all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect Seller’s ownership interest in each Receivable, its Collections and the Related Security.

(j)Perfection. This Agreement, together with the filing of the financing statements contemplated hereby, is effective to, and shall, upon each Purchase hereunder, transfer to Agent for the benefit of the Purchasers (and Agent for the benefit of the Purchasers shall acquire from Seller) a valid and perfected ownership of or first priority perfected security interest in each Receivable existing or hereafter arising and in the Related Security and Collections with respect thereto, free and clear of any Adverse Claim, except as created by the Transaction Documents. There have been duly filed all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of

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all appropriate jurisdictions to perfect Agent’s (on behalf of the Purchasers) ownership or security interest in the Receivables, the Related Security and the Collections.

(k)Jurisdiction of Organization; Places of Business and Locations of Records. The principal places of business, jurisdiction of organization and chief executive office of such Seller Party and the offices where it keeps all of its Records are located at the address(es) listed on Exhibit III or such other locations of which Agent and each Purchaser Agent have been notified in accordance with Section 7.2(a) in jurisdictions where all action required by Section 7.1(h) and/or Section 14.4(a) has been taken and completed. Such Seller party’s organizational number assigned to it by its jurisdiction of organization and such Seller Party’s Federal Employer Identification Number are correctly set forth on Exhibit III. Except as set forth on Exhibit III, such Seller Party has not, within a period of one year prior to the date hereof, (i) changed the location of its principal place of business or chief executive office or its organizational structure, (ii) changed its legal name, (iii) become a “new debtor” (as defined in Section 9-102(a)(56) of the UCC in effect in the State of Minnesota) or (iv) changed its jurisdiction of organization. Seller is a Minnesota limited liability company and is a “registered organization” (within the meaning of Section 9-102 of the UCC in effect in the State of Minnesota).

(l)Collections. The conditions and requirements set forth in Section 7.1(j) and Section 8.2 have at all times been satisfied and duly performed. The names and addresses of all Collection Banks, together with the account numbers of the Collection Accounts at each Collection Bank and the post office box number of each Lock-Box or P.O. Box, are listed on Exhibit IV or have been provided to Agent and each Purchaser Agent in a written notice that complies with Section 7.2(b). Seller has not granted any Person, other than Agent as contemplated by this Agreement, dominion and control or “control” (within the meaning of Section 9-104 of the UCC of all applicable jurisdictions) of any Lock-Box, P.O. Box or Collection Account, or the right to take dominion and control or “control” (within the meaning of Section 9-104 of the UCC of all applicable jurisdictions) of any such Lock-Box, P.O. Box or Collection Account at a future time or upon the occurrence of a future event. Each Seller Party has taken all steps necessary to ensure that Agent has “control” (within the meaning of Section 9-104 of the UCC of all applicable jurisdictions) over all Collection Accounts. Such Seller Party has the ability to identify, within one Business Day of deposit, all amounts that are deposited to any First-Tier Account as constituting Collections or non-Collections. No funds other than the proceeds of Receivables are deposited to the Second-Tier Account.

(m)Material Adverse Effect. (i) The initial Servicer represents and warrants that since January 26, 2002, no event has occurred that would have a material adverse effect on the financial condition or operations of the initial Servicer and its Subsidiaries or the ability of the initial Servicer to perform its obligations under this Agreement, and (ii) Seller represents and warrants that since May 10, 2002, no event has occurred that would have a material adverse effect on (A) the financial condition or operations of Seller, (B) the ability of Seller to perform its obligations under the Transaction Documents,

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or (C) the collectibility of the Receivables generally or any material portion of the Receivables.

(n)Names. In the past five (5) years, Seller has not used any corporate or other names, trade names or assumed names other than the name in which it has executed this Agreement.

(o)Ownership of Seller. PDCo owns, directly or indirectly, 100% of the issued and outstanding membership units of Seller, free and clear of any Adverse Claim. Such membership units are validly issued, fully paid and nonassessable, and there are no options, warrants or other rights to acquire securities of Seller.

(p)Not an Investment Company. Such Seller Party is not and, after giving effect to the transactions contemplated hereby, will not be required to be registered as, an “investment company” within the meaning of the Investment Company Act of 1940, as amended (the “Investment Company Act”), or any successor statute. Seller is not a “covered fund” under Section 13 of the U.S. Bank Holding Company Act of 1956, as amended, and the applicable rules and regulations thereunder (the “Volcker Rule”). In determining that Seller is not a “covered fund” under the Volcker Rule, Seller is entitled to rely on the exemption from the definition of “investment company” set forth in Section 3(c)(5)(A) or (B) of the Investment Company Act and may also rely on other exemptions under the Investment Company Act.

(q)Compliance with Law. Such Seller Party has complied in all respects with all applicable laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject, except where the failure to so comply could not reasonably be expected to have a Material Adverse Effect. Each Receivable, together with the Contract related thereto, does not contravene any laws, rules or regulations applicable thereto (including, withoutlimitation, laws, rules and regulations relating to truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy), and no part of such Contract is in violation of any such law, rule or regulation.

(r)Compliance with Credit and Collection Policy. Such Seller Party has complied in all material respects with the Credit and Collection Policy with regard to each Receivable and the related Contract, and has not made any material change to such Credit and Collection Policy, except such material change as to which Agent and each Purchaser Agent have been notified in accordance with Section 7.1(a)(vii).

(s)Payments to Originators and PDC Funding II. With respect to each Receivable transferred to Seller under the Receivables Sale Agreement, Seller has given reasonably equivalent value to the applicable Originator in consideration therefor and such transfer was not made for or on account of an antecedent debt. With respect to each Receivable transferred to Seller under the Fifth Third Assignment Agreement, Seller has given reasonably equivalent value to PDC Funding II in consideration therefor and such transfer was not made for or on account of an antecedent debt. No transfer by any Originator of any Receivable under the Receivables Sale Agreement is or may be voidable under any

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section of the Federal Bankruptcy Code. No transfer by PDC Funding II of any Receivable under the Fifth Third Assignment Agreement is or may be voidable under any section of the Federal Bankruptcy Code.

(t)Enforceability of Contracts. Each Contract with respect to each Receivable is effective to create, and has created, a legal, valid and binding obligation of the related Obligor to pay the Outstanding Balance of the Receivable created thereunder and any accrued interest thereon, enforceable against the Obligor in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

(u)Eligible Receivables. Each Receivable included in the Net Portfolio Balance as an Eligible Receivable was an Eligible Receivable on the date of its purchase by Seller under the Receivables Sale Agreement or the Fifth Third Assignment Agreement, as applicable.

(v)Net Portfolio Balance. Seller has determined that, immediately after giving effect to each Purchase hereunder (including the initial Purchase and the Deemed Exchange on the date hereof), the Net Portfolio Balance equals or exceeds the sum of (i) the Aggregate Capital, plus (ii) the Credit Enhancement, in each case, at such time.

(w)Accounting. The manner in which such Seller Party accounts for the transactions contemplated by this Agreement and the Receivables Sale Agreement does not jeopardize the true sale analysis.

(x)Prior Agreement. As of the date hereof, no Amortization Event or Potential Amortization Event has occurred and is continuing under the Prior Agreement and no default under any of the “Transaction Documents” (as defined in the Prior Agreement) has occurred and is continuing.

(y)The Hedging Agreement entered into by Seller is for the purpose of hedging interest rate risk, and not for speculative purposes or to gain investment exposure to any financial or other assets.

(z)Anti-Corruption Laws, Anti-Terrorism Laws and Sanctions. None of (a) the Seller Parties or any of their respective Subsidiaries, Affiliates, directors, officers, employees, or agents that will act in any capacity in connection with or directly benefit from the facility established hereby is a Sanctioned Person, (b) the Seller Parties nor any of their respective Subsidiaries is organized or resident in a Sanctioned Country, and (c) the Seller Parties has violated, been found in violation of or is under investigation by any governmental authority for possible violation of any Anti-Corruption Laws, Anti-Terrorism Laws or of any Sanctions. No proceeds received by any Seller Party or any of their respective Subsidiaries or Affiliates in connection with any Purchase will be used in any manner that will violate Anti-Corruption Laws, Anti-Terrorism Laws or Sanctions.

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(aa)Policies and Procedures. Policies and procedures have been implemented and maintained by or on behalf of each of the Seller Parties that are designed to achieve compliance by the Seller Parties and their respective Subsidiaries, Affiliates, directors, officers, employees and agents with Anti-Corruption Laws, Anti-Terrorism Laws and Sanctions, and the Seller Parties and their respective Subsidiaries, Affiliates, officers, employees, directors and agents acting in any capacity in connection with or directly benefitting from the facility established hereby, are in compliance with Anti-Corruption Laws, Anti-Terrorism Laws and Sanctions.

(ab)Beneficial Ownership Rule. The Seller is an entity that is organized under the laws of the United States or of any State and at least 51 percent of whose common stock or analogous equity interest is owned by a Person whose common stock or analogous equity interests are listed on the New York Stock Exchange or the American Stock Exchange or have been designated as a NASDAQ National Market Security listed on the NASDAQ stock exchange and is excluded on that basis from the definition of Legal Entity Customer as defined in the Beneficial Ownership Rule.

ARTICLE VICONDITIONS OF PURCHASES

Section VI.1Conditions Precedent to Initial Purchase and Deemed Exchange. Each of the initial Purchase and the Deemed Exchange under this Agreement are subject to the conditions precedent that (a) Agent and each Purchaser Agent shall have received on or before the date of such Purchase those documents listed on Schedule B, (b) Agent, each Purchaser Agent and each Purchaser shall have received all fees and expenses required to be paid on or prior to such date pursuant to the terms of this Agreement and/or any Fee Letter, (c) Seller shall have marked its books and records with a legend satisfactory to Agent identifying Agent’s interest therein, (d) Agent and each Purchaser Agent shall have completed to its satisfaction a due diligence review of each Originator’s and Seller’s billing, collection and reporting systems and other items related to the Receivables and (e) each of the Purchasers shall have received the approval of its credit committee of the transactions contemplated hereby.

Section VI.2Conditions Precedent to All Purchases. Each Purchase (including the initial Purchase and the Deemed Exchange) shall be subject to the further conditions precedent that in the case of each such Purchase: (a) Servicer shall have delivered to Agent and each Purchaser Agent on or prior to the date of such Purchase, in form and substance satisfactory to Agent and each Purchaser Agent, all Monthly Reports as and when due under Section 8.5, and upon Agent’s or any Purchaser Agent’s request, Servicer shall have delivered to Agent and each Purchaser Agent at least three (3) days prior to such Purchase an interim Monthly Report showing the amount of Eligible Receivables; (b) the Facility Termination Date shall not have occurred; (c) Agent and each Purchaser Agent shall have received a duly executed Purchase Notice and such other approvals, opinions or documents as Agent or any Purchaser Agent may reasonably request; (d) if required to be in

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effect pursuant to Section 7.3, the Hedging Agreements shall be in full force and effect; (e) if the date of such Purchase will be other than a Settlement Date, Servicer shall have delivered to Agent and each Purchaser on or prior to the date of such Purchase, in form and substance satisfactory to Agent and each Purchaser Agent, a pro-forma Monthly Report after giving effect to such Purchase and all Receivables purchased by Seller under the Receivables Sale Agreement and the Fifth Third Assignment Agreement on or prior to such date of Purchase and (f) on the date of each such Purchase, the following statements shall be true (and acceptance of the proceeds of such Purchase shall be deemed a representation and warranty by Seller that such statements are then true):

(i)the representations and warranties set forth in Section 5.1 are true and correct on and as of the date of such Purchase as though made on and as of such date;

(ii)no event has occurred and is continuing, or would result from such Purchase, that will constitute an Amortization Event, and no event has occurred and is continuing, or would result from such Purchase, that would constitute a Potential Amortization Event; and

(iii)the Aggregate Capital does not exceed the Purchase Limit and the Net Portfolio Balance equals or exceeds the sum of (i) the Aggregate Capital, plus (ii) the Credit Enhancement, in each case, both immediately before and after giving effect to such Purchase.

ARTICLE VIICOVENANTS

Section VII.1Affirmative Covenants of The Seller Parties. Until the date on which the Aggregate Unpaids have been indefeasibly paid in full and this Agreement terminates in accordance with its terms, each Seller Party hereby covenants, as to itself, as set forth below:

(a)Financial Reporting. Such Seller Party will maintain, for itself and each of its Subsidiaries, a system of accounting established and administered in accordance with GAAP, and furnish or cause to be furnished to Agent and each Purchaser Agent:

(i)Annual Reporting. Within 90 days after the close of each of its respective Fiscal Years, (x) audited, unqualified consolidated financial statements (which shall include balance sheets, statements of income and retained earnings and a statement of cash flows) for PDCo and its consolidated Subsidiaries for such Fiscal Year certified in a manner acceptable to Agent by independent public accountants acceptable to Agent and (y) unaudited balance sheets of Seller as at the close of such Fiscal Year and statements of income and retained earnings and a statement of cash flows for Seller for such Fiscal Year, all certified by its chief financial officer.

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Delivery within the time period specified above of PDCo’s annual report on Form 10-K for such Fiscal Year (together with PDCo’s annual report to shareholders, if any, prepared pursuant to Rule 14a-3 under the Securities Exchange Act of 1934, as amended) prepared in accordance with the requirements therefor and filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of clause (x) of this Section 7.1(a)(i), provided that the report of the independent public accountants contained therein is acceptable to Agent.

(ii)Quarterly Reporting. Within 45 days after the close of the first three (3) quarterly periods of each of its respective Fiscal Years, unaudited balance sheets of PDCo as at the close of each such period and statements of income and retained earnings and a statement of cash flows for PDCo for the period from the beginning of such Fiscal Year to the end of such quarter, all certified by its chief financial officer. Delivery within the time period specified above of copies of PDCo’s quarterly report Form 10-Q for such fiscal quarter prepared in accordance with the requirements therefor and filed with the Securities and Exchange Commission shall be deemed to satisfy the foregoing requirements of this Section 7.1(a)(ii).

(iii)Compliance Certificate. Together with the financial statements required hereunder, a compliance certificate in substantially the form of Exhibit V signed by such Seller Party’s Authorized Officer and dated the date of such annual financial statement or such quarterly financial statement, as the case may be.

(iv)Shareholders Statements and Reports. Promptly upon the furnishing thereof to the shareholders of such Seller Party copies of all financial statements, reports and proxy statements so furnished.

(v)S.E.C. Filings. Promptly upon the filing thereof, copies of all registration statements and annual, quarterly, monthly or other regular reports which PDCo, any Originator or any of their respective Subsidiaries files with the Securities and Exchange Commission.

(vi)Copies of Notices. Promptly upon its receipt of any notice, request for consent, financial statements, certification, report or other communication under or in connection with any Transaction Document from any Person other than Agent, any Purchaser Agent (so long as Agent is copied on such communication) or any Purchaser (so long as each other Purchaser is copied on such communication), copies of the same.

(vii)Change in Credit and Collection Policy. At least thirty (30) days prior to the effectiveness of any material change in or material amendment to the Credit and Collection Policy, a copy of the Credit and Collection Policy then in effect and a notice (A) indicating such change or amendment, and (B) if such proposed change or amendment would be reasonably likely to adversely affect the collectibility of the Receivables or decrease the credit quality of any newly created Receivables, requesting Agent’s and each Purchaser Agent’s consent thereto.

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(viii)Sale Assignments. Promptly upon its receipt of any Sale Assignment under and as defined in the Receivables Sale Agreement, copies of the same.

(ix)Other Information. Promptly, from time to time, such other information, documents, records or reports relating to the Receivables or the condition or operations, financial or otherwise, of such Seller Party as Agent or any Purchaser Agent may from time to time reasonably request in order to protect the interests of Agent and the Purchasers under or as contemplated by this Agreement.

(b)Notices. Such Seller Party will notify Agent and each Purchaser Agent in writing of any of the following promptly upon learning of the occurrence thereof, describing the same and, if applicable, the steps being taken with respect thereto:

(i)Amortization Events or Potential Amortization Events. The occurrence of each Amortization Event and each Potential Amortization Event, by a statement of an Authorized Officer of such Seller Party.

(ii)Judgment and Proceedings. (1) The entry of any judgment or decree against Servicer or any of its respective Subsidiaries if the aggregate amount of all judgments and decrees then outstanding against Servicer and its Subsidiaries exceeds $1,000,000, (2) the institution of any litigation, arbitration proceeding or governmental proceeding against Servicer that could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and (3) the entry of any judgment or decree or the institution of any litigation, arbitration proceeding or governmental proceeding against Seller.

(iii)Material Adverse Effect. The occurrence of any event or condition that has had, or could reasonably be expected to have, a Material Adverse Effect.

(iv)Termination Date. The occurrence of the “Termination Date” under and as defined in the Receivables Sale Agreement.

(v)Defaults Under Other Agreements. The occurrence of a default or an event of default under any other financing arrangement pursuant to which such Seller Party is a debtor or an obligor.

(vi)Downgrade of PDCo or any Originator. Any downgrade in the rating of any Indebtedness of PDCo or any Originator by S&P or Moody’s, setting forth the Indebtedness affected and the nature of such change.

(vii)Appointment of Independent Governor. The decision to appoint a new governor of Seller as the “Independent Governor” for purposes of this Agreement, such notice to be issued not less than ten (10) days prior to the

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effective date of such appointment and to certify that the designated Person satisfies the criteria set forth in the definition herein of “Independent Governor.”

(c)Compliance with Laws and Preservation of Existence. Such Seller Party will comply in all respects with all applicable laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject, except where the failure to so comply could not reasonably be expected to have a Material Adverse Effect. Such Seller Party will preserve and maintain its legal existence, rights, franchises and privileges in the jurisdiction of its organization, and qualify and remain qualified in good standing as a foreign entity in each jurisdiction where its business is conducted, except where the failure to so preserve and maintain any such rights, franchises or privileges or to so qualify could not reasonably be expected to have a Material Adverse Effect.

(d)Audits. Such Seller Party will furnish to Agent and each Purchaser Agent from time to time such information with respect to it and the Receivables as Agent or any Purchaser Agent may reasonably request. Such Seller Party will, from time to time during regular business hours as requested by Agent or any Purchaser Agent upon reasonable notice and at the sole cost of such Seller Party, permit Agent or any Purchaser Agent or any of their respective agents or representatives, (i) to examine and make copies of and abstracts from all Records in the possession or under the control of such Person relating to the Receivables and the Related Security, including, without limitation, the related Contracts, and (ii) to visit the offices and properties of such Person for the purpose of examining such materials described in clause (i) above, and to discuss matters relating to such Person’s financial condition or the Receivables and the Related Security or any Person’s performance under any of the Transaction Documents or any Person’s performance under the Contracts and, in each case, with any of the officers or employees of Seller or Servicer having knowledge of such matters. Without limiting the foregoing, such Seller Party will, annually and prior to any Financial Institution renewing its Commitment hereunder, during regular business hours as requested by Agent or any Purchaser Agent upon reasonable notice and at the sole cost of such Seller Party, permit Agent or any Purchaser Agent or any of their respective agents or representatives, to conduct a follow-up audit.

(e)Keeping and Marking of Records and Books.

(i)Servicer will maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate records evidencing Receivables in the event of the destruction of the originals thereof), and keep and maintain all documents, books, records and other information reasonably necessary or advisable for the collection of all Receivables (including, without limitation, records adequate to permit the immediate identification of each new Receivable and all Collections of and adjustments to each existing Receivable). Servicer will give Agent notice of any material change in the administrative and operating procedures referred to in the previous sentence.

(ii)Such Seller Party (A) has on or prior to May 10, 2002, marked its master data processing records and other books and records relating to

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the Asset Portfolio with a legend, acceptable to Agent, describing the Asset Portfolio and (B) will, upon the request of Agent (x) mark each Contract with a legend describing the Asset Portfolio and (y) deliver to Agent all Contracts (including, without limitation, all multiple originals of any such Contract) relating to the Receivables.

(f)Compliance with Contracts and Credit and Collection Policy. Such Seller Party will timely and fully (i) perform and comply with all provisions, covenants and other promises required to be observed by it under the Contracts related to the Receivables, and (ii) comply in all respects with the Credit and Collection Policy in regard to each Receivable and the related Contract.

(g)Performance and Enforcement of Receivables Sale Agreement and Fifth Third Assignment Agreement. Seller will, and will require each Originator and PDC Funding II to, perform each of their respective obligations and undertakings under and pursuant to the Receivables Sale Agreement and the Fifth Third Assignment Agreement, will purchase Receivables thereunder in strict compliance with the terms thereof and will vigorously enforce the rights and remedies accorded to Seller under the Receivables Sale Agreement and the Fifth Third Assignment Agreement. Seller will take all actions to perfect and enforce its rights and interests (and the rights and interests of Agent and the Purchasers as assignees of Seller) under the Receivables Sale Agreement and the Fifth Third Assignment Agreement as Agent may from time to time reasonably request, including, withoutlimitation, making claims to which it may be entitled under any indemnity, reimbursement or similar provision contained in the Receivables Sale Agreement or the Fifth Third Assignment Agreement.

(h)Ownership. Seller will take all necessary action to (i) vest legal and equitable title to the Receivables, the Related Security and the Collections purchased under the Receivables Sale Agreement and under the Fifth Third Assignment Agreement irrevocably in Seller, free and clear of any Adverse Claims other than Adverse Claims in favor of Agent and the Purchasers (including, withoutlimitation, the filing of all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect Seller’s interest in such Receivables, Related Security and Collections and such other action to perfect, protect or more fully evidence the interest of Seller therein as Agent may reasonably request), and (ii) establish and maintain, in favor of Agent, for the benefit of the Purchasers, a valid and perfected ownership interest (and/or a valid and perfected first priority security interest) in all Receivables, Related Security and Collections to the full extent contemplated herein, free and clear of any Adverse Claims other than Adverse Claims in favor of Agent for the benefit of the Purchasers (including, without limitation, the filing of all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect Agent’s (for the benefit of the Purchasers) interest in such Receivables, Related Security and Collections and such other action to perfect, protect or more fully evidence the interest of Agent for the benefit of the Purchasers as Agent may reasonably request).

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(i)Purchasers’ Reliance. Seller acknowledges that the Purchasers are entering into the transactions contemplated by this Agreement in reliance upon Seller’s identity as a legal entity that is separate from each Patterson Entity and their respective Affiliates. Therefore, from and after May 10, 2002, Seller will take all reasonable steps, including, without limitation, all steps that Agent, any Purchaser Agent or any Purchaser may from time to time reasonably request, to maintain Seller’s identity as a separate legal entity and to make it manifest to third parties that Seller is an entity with assets and liabilities distinct from those of each Patterson Entity and any Affiliates thereof and not just a division of any Patterson Entity. Without limiting the generality of the foregoing and in addition to the other covenants set forth herein, Seller will:

(A)conduct its own business in its own name and require that all full-time employees of Seller, if any, identify themselves as such and not as employees of any Patterson Entity (including, without limitation, by means of providing appropriate employees with business or identification cards identifying such employees as Seller’s employees);

(B)compensate all employees, consultants and agents directly, from Seller’s own funds, for services provided to Seller by such employees, consultants and agents and, to the extent any employee, consultant or agent of Seller is also an employee, consultant or agent of any Patterson Entity or any Affiliate thereof, allocate the compensation of such employee, consultant or agent between Seller and such Patterson Entity or such Affiliate, as applicable on a basis that reflects the services rendered to Seller and such Patterson Entity or such Affiliate, as applicable;

(C)clearly identify its offices (by signage or otherwise) as its offices and, if such office is located in the offices of any Patterson Entity or an Affiliate thereof, Seller will lease such office at a fair market rent;

(D)have a separate telephone number, which will be answered only in its name and separate stationery, invoices and checks in its own name;

(E)conduct all transactions with each Patterson Entity and Servicer and their respective Affiliates strictly on an arm’s-length basis, allocate all overhead expenses (including, without limitation, telephone and other utility charges) for items shared between Seller and any Patterson Entity or any Affiliate thereof on the basis of actual use to the extent practicable and, to the extent such allocation is not practicable, on a basis reasonably related to actual use;

(F)at all times have a Board of Governors consisting of three members, at least one member of which is an Independent Governor;

(G)observe all limited liability company formalities as a distinct entity, and ensure that all limited liability company actions relating to (1) the selection, maintenance or replacement of the Independent Governor, (2) the dissolution or liquidation of Seller or (3) the initiation of, participation in, acquiescence in or consent to

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any bankruptcy, insolvency, reorganization or similar proceeding involving Seller, are duly authorized by unanimous vote of its Board of Governors (including the Independent Governor);

(H)maintain Seller’s books and records separate from those of each Patterson Entity and any Affiliate thereof and otherwise readily identifiable as its own assets rather than assets of any Patterson Entity and any Affiliate thereof;

(I)prepare its financial statements separately from those of each Patterson Entity and insure that any consolidated financial statements of any Patterson Entity or any Affiliate thereof that include Seller, including any that are filed with the Securities and Exchange Commission or any other governmental agency have notes clearly stating that Seller is a separate legal entity and that its assets will be available first and foremost to satisfy the claims of the creditors of Seller;

(J)except as herein specifically otherwise provided, maintain the funds or other assets of Seller separate from, and not commingled with, those of any Patterson Entity or any Affiliate thereof and only maintain bank accounts or other depository accounts to which Seller alone (or Servicer in the performance of its duties hereunder) is the account party and from which Seller alone (or Servicer in the performance of its duties hereunder or Agent hereunder) has the power to make withdrawals;

(K)pay all of Seller’s operating expenses from Seller’s own assets (except for certain payments by any Patterson Entity or other Persons pursuant to allocation arrangements that comply with the requirements of this Section 7.1(i));

(L)operate its business and activities such that: it does not engage in any business or activity of any kind, or enter into any transaction or indenture, mortgage, instrument, agreement, contract, lease or other undertaking, other than the transactions contemplated and authorized by this Agreement, the Fifth Third Assignment Agreement and the Receivables Sale Agreement; and does not create, incur, guarantee, assume or suffer to exist any Indebtedness or other liabilities, whether direct or contingent, other than (1) as a result of the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business, (2) the incurrence of obligations under this Agreement, (3) the incurrence of obligations, as expressly contemplated in the Receivables Sale Agreement, to make payment to the Originators thereunder for the purchase of Receivables from the Originators under the Receivables Sale Agreement, (4) the incurrence of obligations, as expressly contemplated in the Fifth Third Assignment Agreement, to make payment to PDC Funding II thereunder for the purchase of Receivables from PDC Funding II under the Fifth Third Assignment Agreement, and (5) the incurrence of operating expenses in the ordinary course of business of the type otherwise contemplated by this Agreement;

(M)maintain its articles of organization and bylaws in conformity with this Agreement, such that (1) it does not amend, restate, supplement or

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otherwise modify its articles of organization or bylaws in any respect that would impair its ability to comply with the terms or provisions of any of the Transaction Documents, including, without limitation, Section 7.1(i) of this Agreement; and (2) its articles of organization and bylaws, at all times that this Agreement is in effect, provides for not less than ten (10) days’ prior written notice to Agent of the replacement or appointment of any governor that is to serve as an Independent Governor for purposes of this Agreement and the condition precedent to giving effect to such replacement or appointment that Seller certify that the designated Person satisfied the criteria set forth in the definition herein of “Independent Governor” and Agent’s written acknowledgement that in its reasonable judgment the designated Person satisfies the criteria set forth in the definition herein of “Independent Governor”;

(N)maintain the effectiveness of, and continue to perform under the Receivables Sale Agreement, the Performance Undertaking and the other Transaction Documents, such that it does not amend, restate, supplement, cancel, terminate or otherwise modify the Receivables Sale Agreement, the Performance Undertaking or any other Transaction Document, or give any consent, waiver, directive or approval thereunder or waive any default, action, omission or breach under the Receivables Sale Agreement, the Performance Undertaking, or any other Transaction Document, or otherwise grant any indulgence thereunder, without (in each case) the prior written consent of Agent and the Required Purchasers;

(O)maintain its legal separateness such that it does not merge or consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions, and except as otherwise contemplated herein) all or substantially all of its assets (whether now owned or hereafter acquired) to, or acquire all or substantially all of the assets of, any Person, nor at any time create, have, acquire, maintain or hold any interest in any Subsidiary;

(P)maintain at all times the Required Capital Amount (as defined in the Receivables Sale Agreement) and refrain from making any dividend, distribution, redemption of membership units or payment of any subordinated Indebtedness or other liabilities which would cause the Required Capital Amount to cease to be so maintained; and

(Q)take such other actions as are necessary on its part to ensure that the facts and assumptions set forth in the opinions issued by counsel for Seller, in connection with the Transaction Documents (as such opinions may be brought down or replaced from time to time), relating to substantive consolidation issues, and in the certificates accompanying such opinion, remain true and correct in all material respects at all times.

(j)Collections. Such Seller Party will cause (1) all items from all P.O. Boxes to be processed and deposited into a Collection Account within 1 Business Day after receipt in a P.O. Box, all ACH Receipts to be deposited immediately to a Collection Account and all proceeds from all Lock-Boxes to be directly deposited by a Collection Bank

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into a Collection Account, (2) all Collections deposited to any First-Tier Account to be electronically swept or otherwise transferred to the Second-Tier Account within 1 Business Day of being deposited to such First-Tier Account, and (3) each Lock-Box, P.O. Box and Collection Account to be subject at all times to a Collection Account Agreement that is in full force and effect. In the event any payments relating to Receivables are remitted directly to any Seller Party or any Affiliate of any Seller Party, such Seller Party will remit (or will cause all such payments to be remitted) directly to a Collection Bank and deposited into a Collection Account within 1 Business Day following receipt thereof, and, at all times prior to such remittance, such Seller Party or Affiliate will itself hold or, if applicable, will cause such payments to be held in trust for the exclusive benefit of Agent and the Purchasers. Seller will maintain exclusive ownership, dominion and control (subject to the terms of this Agreement) of each Lock-Box, P.O. Box and Collection Account and shall not grant the right to take dominion and control or establish “control” (within the meaning of Section 9-104 of the UCC of all applicable jurisdictions) of any Lock-Box, P.O. Box or Collection Account at a future time or upon the occurrence of a future event to any Person, except to Agent as contemplated by this Agreement. With respect to each Collection Account, each Seller Party shall take all steps necessary to ensure that Agent has “control” (within the meaning of Section 9-104 of the UCC of all applicable jurisdictions) over each such Collection Account.

(k)Taxes. Such Seller Party will file all tax returns and reports required by law to be filed by it and will promptly pay all taxes and governmental charges at any time owing. Seller will pay when due any taxes payable in connection with the Receivables, exclusive of taxes on or measured by income or gross receipts of any Conduit, Agent or any Financial Institution.

(l)Insurance. Seller will maintain in effect, or cause to be maintained in effect, at Seller’s own expense, such casualty and liability insurance as Seller shall deem appropriate in its good faith business judgment. Agent, for the benefit of the Purchasers, shall be named as an additional insured with respect to all such liability insurance maintained by Seller. Seller will pay or cause to be paid, the premiums therefor and deliver to Agent evidence satisfactory to Agent of such insurance coverage. Copies of each policy shall be furnished to Agent and any Purchaser in certificated form upon Agent’s or such Purchaser’s request. The foregoing requirements shall not be construed to negate, reduce or modify, and are in addition to, Seller’s obligations hereunder.

(m)Payments to Originators and PDC Funding II. With respect to any Receivable purchased by Seller from any Originator, such sale shall be effected under, and in strict compliance with the terms of, the Receivables Sale Agreement, including, withoutlimitation, the terms relating to the amount and timing of payments to be made to such Originator in respect of the purchase price for such Receivable. With respect to any Receivable purchased by Seller from PDC Funding II, such sale shall be effected under, and in strict compliance with the terms of, the Fifth Third Assignment Agreement, including, withoutlimitation, the terms relating to the amount and timing of payments to be made to PDC Funding II in respect of the purchase price for such Receivable.

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(n)Anti-Corruption Laws, Anti-Terrorism Laws and Sanctions. Such Seller Party will cause policies and procedures to be maintained and enforced by or on behalf of such Seller Party that are designed to promote and achieve compliance, by the Seller Parties and each of their Subsidiaries, Affiliates and their respective directors, officers, employees and agents with Anti-Corruption Laws, Anti-Terrorism Laws and Sanctions.

(o)Beneficial Ownership Rule. Promptly following any change that would result in a change to the status of the Seller as an excluded “Legal Entity Customer” under the Beneficial Ownership Rule, the Seller shall execute and deliver to the Agent a Certification of Beneficial Owner(s) complying with the Beneficial Ownership Rule, in form and substance reasonably acceptable to the Agent.

Section VII.2Negative Covenants of The Seller Parties. Until the date on which the Aggregate Unpaids have been indefeasibly paid in full and this Agreement terminates in accordance with its terms, each Seller Party hereby covenants, as to itself, that:

(a)Name Change, Offices and Records. Such Seller Party will not change its name, jurisdiction of organization, identity or organizational structure (within the meaning of Sections 9-503 and/or 9-507 of the UCC of all applicable jurisdictions) or relocate its chief executive office, principal place of business or any office where Records are kept unless it shall have: (i) given Agent and each Purchaser Agent at least forty-five (45) days’ prior written notice thereof and (ii) delivered to Agent all financing statements, instruments and other documents requested by Agent and each Purchaser Agent in connection with such change or relocation.

(b)Change in Payment Instructions to Obligors. Except as may be required by Agent pursuant to Section 8.2(b), such Seller Party will not add or terminate any bank as a Collection Bank, or make any change in the instructions to Obligors regarding payments to be made to any Lock-Box, P.O. Box or Collection Account, unless Agent and each Purchaser Agent shall have received, at least ten (10) days before the proposed effective date therefor, (i) written notice of such addition, termination or change and (ii) with respect to the addition of a Collection Bank or a Collection Account, P.O. Box or Lock-Box, an executed Collection Account Agreement with respect to the new Collection Account or Lock-Box or P.O. Box; provided, however, that Servicer may make changes in instructions to Obligors regarding payments if such new instructions require such Obligor to make payments to another existing Collection Account.

(c)Modifications to Contracts and Credit and Collection Policy. Such Seller Party will not make any change to the Credit and Collection Policy that could adversely affect the collectibility of the Receivables or decrease the credit quality of any newly created Receivables. Servicer will not extend, amend or otherwise modify the terms of any Receivable or any Contract related thereto other than in accordance with the Credit and Collection Policy and Section 8.2(d).

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(d)Sales, Liens. Seller will not sell, assign (by operation of law or otherwise) or otherwise dispose of, or grant any option with respect to, or create or suffer to exist any Adverse Claim upon (including, without limitation, the filing of any financing statement) or with respect to, any Receivable, Related Security or Collections, or upon or with respect to any Contract under which any Receivable arises, or any Lock-Box, P.O. Box or Collection Account, or assign any right to receive income with respect thereto (other than, in each case, the creation of the interests therein in favor of Agent and the Purchasers provided for herein), and Seller will defend the right, title and interest of Agent and the Purchasers in, to and under any of the foregoing property, against all claims of third parties claiming through or under Seller or any Originator. Seller will not create or suffer to exist any mortgage, pledge, security interest, encumbrance, lien, charge or other similar arrangement on any of its inventory, the financing or lease of which gives rise to any Receivable.

(e)Net Portfolio Balance. At no time prior to the Amortization Date shall Seller permit the Net Portfolio Balance to be less than an amount equal to the sum of (i) the Aggregate Capital plus (ii) the Credit Enhancement, in each case, at such time.

(f)Termination Date Determination. Seller will not designate the Termination Date (as defined in the Receivables Sale Agreement), or send any written notice to any Originator in respect thereof, without the prior written consent of Agent and each Purchaser Agent, except with respect to the occurrence of such Termination Date arising pursuant to Section 5.1(d) of the Receivables Sale Agreement.

(g)Restricted Junior Payments. From and after the occurrence of any Amortization Event, Seller will not make any Restricted Junior Payment if, after giving effect thereto, Seller would fail to meet its obligations set forth in Section 7.2(e).

(h)Collections. No Seller Party will deposit or otherwise credit, or cause or permit to be so deposited or credited, to the Second-Tier Account cash or cash proceeds other than Collections. Except as may be required by Agent pursuant to the last sentence of Section 8.2(b), no Seller Party will deposit or otherwise credit, or cause or permit to be so deposited or credited, any Collections or proceeds thereof to any lock-box account or to any other account not covered by a Collection Account Agreement.

(i)Anti-Corruption Laws, Anti-Terrorism Laws and Sanctions. No Seller Party will request any Purchase, and shall procure that its respective Subsidiaries, Affiliates, directors, officers, employees and agents shall not use, the proceeds of any Purchase (A) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws or Anti-Terrorism Laws, (B) for the purpose of funding or financing any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, in each case to the extent doing so would violate any Sanctions, or (C) in any other manner that would result in liability to any Person under any applicable Sanctions or result in the violation of any Anti-Corruption Laws, Anti-Terrorism Laws or Sanctions.

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(j)Evading and Avoiding. No Seller Party will engage in, or permit any of its Subsidiaries, Affiliates or any director, officer, employee, agent or other Person acting on behalf of such Seller Party or any of its Subsidiaries in any capacity in connection with or directly benefitting from the Agreement to engage in, or to conspire to engage in, any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Corruption Laws, Anti-Terrorism Laws and Sanctions.

Section VII.3Hedging Agreements. (a) Entering into Hedging Agreements. At all times Seller shall be a party to a Hedging Agreement in accordance with the terms hereof.

(a)Notices. Each Seller Party will notify Agent in writing of any of the following promptly upon learning of the occurrence thereof, describing the same, and if applicable, the steps being taken with respect thereto:

(A)the occurrence of any default, event of default, early termination date, termination event or similar event under, or the termination of, any Hedging Agreement;

(B)the failure of any Hedging Agreement (or assignment thereof from Seller to Agent for the ratable benefit of the Purchasers) to be in full force and effect;

(C)any downgrade in, or withdrawal of, the unsecured, unguaranteed, long-term debt rating of any Hedge Provider by S&P or Moody’s, setting forth the long-term debt rating effected and the nature of such change; and

(D)any failure of any Hedge Provider to be an Eligible Hedge Provider.

(b)Affirmative Covenants. So long as Seller is a party to any Hedging Agreement:

(A)Seller will timely and fully perform and comply with all provisions, covenants and other promises required to be observed by it under any Hedging Agreement and will vigorously enforce the rights and remedies accorded to Seller under any Hedging Agreement. Seller will take all actions to perfect and enforce its rights and interests (and the rights and interests of Agent and the Purchasers as assignees of Seller) under each Hedging Agreement as Agent may from time to time reasonably request, including, without limitation, making claims to which it may be entitled under any provision contained in any Hedging Agreement.

(B)Seller and Servicer will instruct all Hedge Providers to pay all Hedge Floating Amounts relating to any Hedging Agreement directly to Second-Tier Account. In the event any Hedge Floating Amounts relating to any Hedging

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Agreement are remitted directly to any Seller Party or any Affiliate of a Seller Party, such Seller Party will remit (or will cause all such payments to be remitted) directly to Second-Tier Account within one Business Day following receipt thereof, and, at all times prior to such remittance, such Seller Party or Affiliate will itself hold or, if applicable, will cause such payments to be held in trust for the exclusive benefit of Agent and the Purchasers.

(C)At any time that it enters into a Hedging Agreement, Seller will (A) execute and deliver to Agent, for the ratable benefit of the Purchasers, an assignment, in form and substance satisfactory to Agent, of all Hedge Floating Amounts payable to Seller under such Hedging Agreement and (B) cause the applicable Hedge Provider to consent and agree to such assignment, which consent and agreement shall be evidenced by a writing in form and substance satisfactory to Agent and shall effect any amendments to the applicable Hedging Agreement to allow such assignment.

(D)If a Hedge Provider Downgrade shall occur with respect to a Hedge Provider, within 10 days thereof, Seller shall cause such Hedge Provider to transfer its obligations under this Agreement and the applicable Hedging Agreement, at such Hedge Provider’s cost and expense, to a bank or other financial institution acceptable to Agent, and consented to by Seller (such consent not to be unreasonably withheld) which possesses an unsecured, unguaranteed, long-term debt rating of A- or better by S&P and A3 or better by Moody’s.

(c)Negative Covenants. So long as Seller is a party to any Hedging Agreement:

(A)No Seller Party will make any change in the instructions to any Hedge Provider regarding payments to be made to the Second-Tier Account (it being understood that on the date hereof Seller shall instruct each Hedge Provider to direct all Hedge Floating Amounts to the Second-Tier Account in accordance with Section 7.3(c)(B) instead of to the “Agent’s Account” under and as defined in the Prior Agreement).

(B)Seller will not designate an early termination date under any Hedging Agreement, or send any written notice to any Hedge Provider in respect thereof, or waive any provision of any Hedging Agreement, without, in each case, the prior written consent of Agent.

(C)Seller shall not supplement, amend, extend, replace, terminate, or otherwise modify any Hedging Agreement without, in each case, the prior written consent of Agent.

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ARTICLE VIIIADMINISTRATION AND COLLECTION

Section VIII.1Designation of Servicer. (a) The servicing, administration and collection of the Receivables on behalf of Agent and the Purchasers shall be conducted by such Person (the “Servicer”) so designated from time to time in accordance with this Section 8.1. PDCo is hereby designated as, and hereby agrees to perform the duties and obligations of, Servicer for Agent and the Purchasers pursuant to the terms of this Agreement. Agent (on behalf of the Purchasers) may, and at the direction of the Required Purchasers shall, at any time following the occurrence of an Amortization Event designate as Servicer any Person to succeed PDCo or any successor Servicer.

(a)Without the prior written consent of Agent and the Required Purchasers, PDCo shall not be permitted to delegate any of its duties or responsibilities as Servicer to any Person other than (i) an Originator (with respect to Receivables originated by such Originator), (ii) Seller and (iii) with respect to certain Charged-Off Receivables, outside collection agencies and lawyers in accordance with its customary practices. None of Seller or any Originator shall be permitted to further delegate to any other Person any of the duties or responsibilities of Servicer delegated to it by PDCo. If at any time Agent shall designate as Servicer any Person other than PDCo, all duties and responsibilities theretofore delegated by PDCo to Seller and any Originator may, at the discretion of Agent, be terminated forthwith on notice given by Agent to PDCo and to Seller.

(b)Notwithstanding the foregoing subsection (b), (i) PDCo shall be and remain primarily liable to Agent, the Purchaser Agents and the Purchasers and the Hedge Providers (if any) for the full and prompt performance of all duties and responsibilities of Servicer hereunder and (ii) Agent, the Purchaser Agents and the Purchasers shall be entitled to deal exclusively with PDCo in matters relating to the discharge by Servicer of its duties and responsibilities hereunder. Agent, the Purchaser Agents and the Purchasers shall not be required to give notice, demand or other communication to any Person other than PDCo in order for communication to Servicer and its sub-servicer or other delegate with respect thereto to be accomplished. PDCo, at all times that it is Servicer, shall be responsible for providing any sub-servicer or other delegate of Servicer with any notice given to Servicer under this Agreement.

Section VIII.2Duties of Servicer. (a) Servicer shall take or cause to be taken all such actions as may be necessary or advisable to collect each Receivable from time to time, all in accordance with applicable laws, rules and regulations, with reasonable care and diligence, and in accordance with the Credit and Collection Policy.

(a)Servicer will instruct all Obligors to pay all Collections either (i) directly to a Collection Account by means of an automatic electronic funds transfer, wire transfer or otherwise or (ii) directly to a Lock-Box or P.O. Box. Servicer shall cause any payments made by means of automatic electronic funds transfer to be deposited directly into a Collection Account from each Obligor’s relevant account. Servicer shall effect a Collection

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Account Agreement substantially in the form of Exhibit VI with each bank party to a Collection Account at any time. In the case of any remittances received in any Lock-Box, P.O. Box or Collection Account that shall have been identified, to the satisfaction of Servicer, to not constitute Collections or other proceeds of the Receivables or the Related Security, Servicer shall promptly remit such items to the Person identified to it as being the owner of such remittances. From and after the date Agent delivers a Collection Notice to any Collection Bank or a Postal Notice to any post office pursuant to Section 8.3, Agent may request that Servicer, and Servicer thereupon promptly shall instruct all Obligors with respect to the Receivables, to remit all payments thereon to a new lock-box, post office box or depositary account specified by Agent and, at all times thereafter, Seller and Servicer shall not deposit or otherwise credit, and shall not permit any other Person to deposit or otherwise credit to such new lock-box, post office box or depositary account any cash or payment item other than Collections.

(b)Servicer shall administer the Collections in accordance with the procedures described herein and in Article II. Servicer shall set aside and hold in trust for the account of Seller (in respect of RPA Deferred Purchase Price, as applicable), the Purchasers and the Hedge Providers (if any) their respective shares of the Collections in accordance with Article II. Servicer shall, upon the request of Agent, segregate, in a manner acceptable to Agent, all cash, checks and other instruments received by it from time to time constituting Collections from the general funds of Servicer or Seller prior to the remittance thereof in accordance with Article II. If Servicer shall be required to segregate Collections pursuant to the preceding sentence, Servicer shall segregate and deposit with a bank designated by Agent such allocable share of Collections of Receivables set aside for the Purchasers on the first Business Day following receipt by Servicer of such Collections, duly endorsed or with duly executed instruments of transfer.

(c)Servicer may, in accordance with the Credit and Collection Policy, extend the maturity of any Receivable or adjust the Outstanding Balance of any Receivable as Servicer determines to be appropriate to maximize Collections thereof; provided, however, that such extension or adjustment shall not (x) alter the status of such Receivable as a Delinquent Receivable, Defaulted Receivable or Charged-Off Receivable and for purposes of determining if such Receivable is a Delinquent Receivable, Defaulted Receivable or Charged-Off Receivable, the original due date for such Receivable shall continue to apply or (y) limit the rights of Agent, the Purchaser Agents or the Purchasers under this Agreement; providedfurther, however, that solely with respect to any Eligible COVID-19 Modified Receivable, no installment payment that has been reduced to $0 during the related 3 month deferral period in connection with the COVID-19 Deferred Payment Program shall be considered delinquent for purposes of this Agreement. Notwithstanding anything to the contrary contained herein, Agent shall have the absolute and unlimited right to direct Servicer to commence or settle any legal action with respect to any Receivable or to foreclose upon or repossess any Related Security.

(d)Servicer shall hold in trust for Agent on behalf of the Purchasers all Records that (i) evidence or relate to the Receivables, the related Contracts and

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Related Security or (ii) are otherwise necessary or desirable to collect the Receivables and shall, as soon as practicable upon demand of Agent, deliver or make available to Agent all such Records, at a place selected by Agent. Servicer shall, as soon as practicable following receipt thereof turn over to Seller any cash collections or other cash proceeds received with respect to Indebtedness not constituting Receivables. Servicer shall, from time to time at the request of any Purchaser, furnish to the Purchasers (promptly after any such request) a calculation of the amounts set aside for the Purchasers pursuant to Article II.

(e)Any payment by an Obligor in respect of any Indebtedness or other liability owed by it to the applicable Originator or Seller shall, except as otherwise specified by such Obligor or otherwise required by contract or law and unless otherwise instructed by Agent, be applied as a Collection of any Receivable of such Obligor (starting with the oldest such Receivable) to the extent of any amounts then due and payable thereunder before being applied to any other receivable or other obligation of such Obligor.

Section VIII.3Collection Notices. Agent is authorized at any time after the occurrence of an Amortization Event to date and to deliver to the Collection Banks the Collection Notices and to date and deliver the Postal Notices to the applicable post offices. Seller hereby transfers to Agent for the benefit of the Purchasers, effective when Agent delivers such notices, the dominion and control and “control” (within the meaning of Section 9-104 of the UCC of all applicable jurisdictions) of each Lock-Box, P. O. Box, each Collection Account and the amounts on deposit therein. In case any authorized signatory of Seller whose signature appears on a Collection Account Agreement shall cease to have such authority before the delivery of such notice, such Collection Notice or Postal Notice shall nevertheless be valid as if such authority had remained in force. Seller hereby authorizes Agent, and agrees that Agent shall be entitled to (i) endorse Seller’s name on checks and other instruments representing Collections, (ii) enforce the Receivables, the related Contracts and the Related Security and (iii) take such action as shall be necessary or desirable to cause all cash, checks and other instruments constituting Collections of Receivables to come into the possession of Agent rather than Seller.

Section VIII.4Responsibilities of Seller. Anything herein to the contrary notwithstanding, the exercise by Agent, the Purchaser Agents and the Purchasers of their rights hereunder shall not release Servicer, any Originator or Seller from any of their duties or obligations with respect to any Receivables or under the related Contracts. The Purchasers shall have no obligation or liability with respect to any Receivables or related Contracts, nor shall any of them be obligated to perform the obligations of Seller.

Section VIII.5Reports. Servicer shall prepare and forward to Agent and each Purchaser Agent (i) three Business Days prior to each Settlement Date and at such times as Agent or any Purchaser Agent shall request, a Monthly Report, (ii) no later than the 10th day of each calendar month, a DPP Report and (iii) at such times as Agent or any Purchaser Agent shall request, a listing by Obligor of all Receivables together with an aging of such Receivables. Unless otherwise requested by Agent or any Purchaser Agent, all computations in such Monthly Report and such DPP Report shall be made as of the close of

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business on the last day of the Accrual Period preceding the date on which such Monthly Report or DPP Report, as applicable, is delivered.

Section VIII.6Servicing Fees. In consideration of PDCo’s agreement to act as Servicer hereunder, the Purchasers hereby agree that, so long as PDCo shall continue to perform as Servicer hereunder, PDCo shall be paid a fee (the “Servicing Fee“) in accordance with the priority of payments set forth in Sections 2.2(c) and 2.3, as applicable, on the 19th calendar day of each month (or, if such day is not a Business Day, then the next Business Day thereafter), in arrears for the immediately preceding Fiscal Month, equal to 1% per annum of the average Net Portfolio Balance during such period, as compensation for its servicing activities.

ARTICLE IXAMORTIZATION EVENTS

Section IX.1Amortization Events. The occurrence of any one or more of the following events shall constitute an “Amortization Event”:

(a)Any Seller Party shall fail (i) to make any payment or deposit required hereunder when due, or (ii) to perform or observe any term, covenant or agreement hereunder (other than as referred to in clause (i) of this paragraph (a) and Section 9.1(e)) or any other Transaction Document and such failure shall continue for seven (7) consecutive Business Days.

(b)Any representation, warranty, certification or statement made by any Seller Party in this Agreement, any other Transaction Document or in any other document delivered pursuant hereto or thereto shall prove to have been incorrect in any material respect when made or deemed made.

(c)Failure of Seller to pay any Indebtedness when due or the failure of any other Seller Party to pay Indebtedness when due in excess of $1,000,000; or the default by any Seller Party in the performance of any term, provision or condition contained in any agreement under which any such Indebtedness was created or is governed, the effect of which is to cause, or to permit the holder or holders of such Indebtedness to cause, such Indebtedness to become due prior to its stated maturity; or any such Indebtedness of any Seller Party shall be declared to be due and payable or required to be prepaid (other than by a regularly scheduled payment) prior to the date of maturity thereof.

(d)(i) Any Seller Party, the Hedge Providers (if any), the Performance Provider or any of their respective Subsidiaries shall generally not pay its debts as such debts become due or shall admit in writing its inability to pay its debts generally or shall make a general assignment for the benefit of creditors; or (ii) any proceeding shall be instituted by or against any Seller Party, the Hedge Providers (if any), the Performance Provider or any of their respective Subsidiaries seeking to adjudicate it bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief

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or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee or other similar official for it or any substantial part of its property, and solely in the case of Servicer and the Performance Provider and a proceeding instituted against (and not by) such Person, such proceeding is not dismissed within 60 days; or (iii) any Seller Party, the Hedge Providers (if any), the Performance Provider or any of their respective Subsidiaries shall take any corporate or other action to authorize any of the actions set forth in clauses (i) or (ii) above in this subsection (d).

(e)Seller shall fail to comply with the terms of Section 2.6 or Section 7.3 hereof.

(f)As at the end of any Fiscal Month:

(i)the average of the Delinquency Ratio for such Fiscal Month and each of the two immediately preceding Fiscal Months shall exceed 5.0%, or

(ii)the average of the Default Ratio for such Fiscal Month and each of the two immediately preceding Fiscal Months shall exceed 3.30%,

(iii)Excess Spread is less than 0.75%, or

(iv)the average of the Payment Rate for such Fiscal Month and each of the two immediately preceding Fiscal Months shall be less than 3.00%.

(g)A Change of Control shall occur.

(h)A Hedge Provider Downgrade shall occur and a replacement Hedge Provider meeting the requirements of Section 7.3 fails to assume such then current Hedge Provider’s obligations under this Agreement and the applicable Hedging Agreement as provided in Section 7.3 after such occurrence.

(i)(i) One or more final judgments for the payment of money shall be entered against Seller or (ii) one or more final judgments for the payment of money in an amount in excess of $1,000,000, individually or in the aggregate, shall be entered against Servicer on claims not covered by insurance or as to which the insurance carrier has denied its responsibility, and such judgment shall continue unsatisfied and in effect for fifteen (15) consecutive days without a stay of execution.

(j)The “Termination Date” under and as defined in the Receivables Sale Agreement shall occur under the Receivables Sale Agreement or any Originator shall for any reason cease to transfer, or cease to have the legal capacity to transfer, or otherwise be incapable of transferring Receivables to Seller under the Receivables Sale Agreement; or Seller shall for any reason cease to purchase, or cease to have the legal capacity

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to purchase, or otherwise be incapable of accepting Receivables from any Originator under the Receivables Sale Agreement.

(k)This Agreement shall terminate in whole or in part (except in accordance with its terms), or shall cease to be effective or to be the legally valid, binding and enforceable obligation of Seller, or any Obligor shall directly or indirectly contest in any manner such effectiveness, validity, binding nature or enforceability, or Agent for the benefit of the Purchasers shall cease to have a valid and perfected ownership or first priority perfected security interest in the Receivables, the Related Security and the Collections with respect thereto and the Collection Accounts.

(l)If required to be in effect pursuant to Section 7.3, any Hedging Agreement shall for any reason not be in full force and effect.

(m)[Reserved].

(n)As determined commencing with fiscal quarter ending January 27, 2018, PDCo’s Leverage Ratio shall exceed the applicable amount set forth in Section 6.20 of the Credit Agreement as of any applicable period(s) or date(s) set forth in Section 6.20 of the Credit Agreement.

(o)Performance Provider shall fail to perform or observe any term, covenant or agreement required to be performed by it under the Performance Undertaking, or the Performance Undertaking shall cease to be effective or to be the legally valid, binding and enforceable obligation of Performance Provider, or Performance Provider shall directly or indirectly contest in any manner such effectiveness, validity, binding nature or enforceability.

(p)As determined commencing with fiscal quarter ending January 27, 2018, PDCo’s Interest Expense Coverage Ratio shall be less than the applicable amount set forth in Section 6.21 of the Credit Agreement as of any applicable period(s) or date(s) set forth in Section 6.21 of the Credit Agreement.

(q)Any Person shall be appointed as an Independent Governor of Seller without prior notice thereof having been given to Agent in accordance with Section 7.1(b)(vii) or without the written acknowledgement by Agent that such Person conforms, to the satisfaction of Agent, with the criteria set forth in the definition herein of “Independent Governor.”

(r)Seller shall fail to pay in full all of its Obligations to Agent and the Purchasers hereunder and under each other Transaction Document on or prior to the Legal Maturity Date.

Section IX.2Remedies. Upon the occurrence and during the continuation of an Amortization Event, Agent may, or upon the direction of the Required Purchasers shall, take any of the following actions: (i) replace the Person then acting as

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Servicer, (ii) declare the Amortization Date to have occurred, whereupon the Amortization Date shall forthwith occur, without demand, protest or further notice of any kind, all of which are hereby expressly waived by each Seller Party; provided, however, that upon the occurrence of an Amortization Event described in Section 9.1(d), or of an actual or deemed entry of an order for relief with respect to any Seller Party under the Federal Bankruptcy Code or under any other applicable bankruptcy, insolvency, arrangement, moratorium or similar laws of any other jurisdiction (foreign or domestic), the Amortization Date shall automatically occur, without demand, protest or any notice of any kind, all of which are hereby expressly waived by each Seller Party, (iii) to the fullest extent permitted by applicable law, declare that the Default Fee shall accrue with respect to any of the Aggregate Unpaids outstanding at such time, (iv) deliver the Collection Notices to the Collection Banks and the Postal Notices to any post office where a P.O. Box is located and (v) notify Obligors of the Purchasers’ interest in the Receivables. The aforementioned rights and remedies shall be without limitation, and shall be in addition to all other rights and remedies of Agent, the Purchaser Agents and the Purchasers otherwise available under any other provision of this Agreement, by operation of law, at equity or otherwise, all of which are hereby expressly preserved, including, without limitation, all rights and remedies provided under the UCC, all of which rights shall be cumulative.

ARTICLE XINDEMNIFICATION

Section X.1Indemnities by The Seller Parties. Without limiting any other rights that Agent, any Purchaser Agent, any Funding Source, any Purchaser or any of their respective Affiliates may have hereunder or under applicable law, (A) Seller hereby agrees to indemnify (and pay upon demand to) Agent, each Purchaser Agent, each Funding Source, each Purchaser and the Hedge Providers (if any) and their respective Affiliates, successors, assigns, officers, directors, agents and employees (each an “Indemnified Party”) from and against any and all damages, losses, claims, taxes, liabilities, costs, expenses and for all other amounts payable, including reasonable attorneys’ fees (which attorneys may be employees of any Indemnified Party) and disbursements (all of the foregoing being collectively referred to as “Indemnified Amounts”) awarded against or incurred by any of them arising out of or as a result of this Agreement or the Hedging Agreements, or the use of the proceeds of any Purchase hereunder, or the acquisition, funding or ownership either directly or indirectly, by any Indemnified Party of an interest in the Asset Portfolio, Receivables, or any Receivable or any Contract or any Related Security, or any action or inaction of any Seller Party, and (B) Servicer hereby agrees to indemnify (and pay upon demand to) each Indemnified Party for Indemnified Amounts awarded against or incurred by any of them arising out of Servicer’s activities as Servicer hereunder excluding, however, in all of the foregoing instances under the preceding clauses (A) and (B):

(x)    Indemnified Amounts to the extent a final judgment of a court of competent jurisdiction holds that such Indemnified Amounts resulted from gross

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negligence or willful misconduct on the part of the Indemnified Party seeking indemnification;

(y)    Indemnified Amounts to the extent the same includes losses in respect of Receivables that are uncollectible on account of the insolvency, bankruptcy or lack of creditworthiness of the related Obligor; or

(z)    taxes imposed by the jurisdiction in which such Indemnified Party’s principal executive office is located, on or measured by the overall net income of such Indemnified Party to the extent that the computation of such taxes is consistent with the characterization for income tax purposes of the acquisition by the Purchasers of the Asset Portfolio as a loan or loans by the Purchasers to Seller secured by the Receivables, the Related Security, the Collection Accounts and the Collections;

provided,however, that nothing contained in this sentence shall limit the liability of any Seller Party or limit the recourse of the Purchasers to any Seller Party for amounts otherwise specifically provided to be paid by such Seller Party under the terms of this Agreement. Without limiting the generality of the foregoing indemnification, Seller shall indemnify each Indemnified Party for Indemnified Amounts (including, without limitation, losses in respect of uncollectible receivables, regardless of whether reimbursement therefor would constitute recourse to Seller or Servicer) relating to or resulting from:

(i)any representation or warranty made by any Seller Party, any Originator, PDC Funding II or Performance Provider (or any officers of any such Person) under or in connection with this Agreement, any other Transaction Document or any other information or report delivered by any such Person pursuant hereto or thereto, which shall have been false or incorrect when made or deemed made;

(ii)the failure by Seller, Servicer, PDC Funding II or any Originator to comply with any applicable law, rule or regulation with respect to any Receivable or Contract related thereto, or the nonconformity of any Receivable or Contract included therein with any such applicable law, rule or regulation or any failure of any Originator to keep or perform any of its obligations, express or implied, with respect to any Contract;

(iii)any failure of Seller, Servicer, PDC Funding II, any Originator or Performance Provider to perform its duties, covenants or other obligations in accordance with the provisions of this Agreement or any other Transaction Document;

(iv)any products liability, personal injury or damage suit, or other similar claim arising out of or in connection with merchandise, insurance or services that are the subject of any Contract or any Receivable;

(v)any dispute, claim, offset or defense (other than discharge in bankruptcy of the Obligor) of the Obligor to the payment of any Receivable (including, without limitation, a defense based on such Receivable or the related Contract

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not being a legal, valid and binding obligation of such Obligor enforceable against it in accordance with its terms), or any other claim resulting from the sale of the merchandise or service related to such Receivable or the furnishing or failure to furnish such merchandise or services;

(vi)the commingling of Collections of Receivables at any time with other funds;

(vii)any investigation, litigation or proceeding related to or arising from this Agreement or any other Transaction Document, the transactions contemplated hereby, the use of the proceeds of a Purchase, the ownership of the Asset Portfolio (or any portion thereof) or any other investigation, litigation or proceeding relating to Seller, Servicer, PDC Funding II or any Originator in which any Indemnified Party becomes involved as a result of any of the transactions contemplated hereby;

(viii)any inability to litigate any claim against any Obligor in respect of any Receivable as a result of such Obligor being immune from civil and commercial law and suit on the grounds of sovereignty or otherwise from any legal action, suit or proceeding;

(ix)any Amortization Event described in Section 9.1(d);

(x)any failure of Seller to acquire and maintain legal and equitable title to, and ownership of, any Receivable and the Related Security and Collections with respect thereto from any Originator or PDC Funding II, free and clear of any Adverse Claim (other than as created hereunder); or any failure of Seller to give reasonably equivalent value to any Originator or PDC Funding II under the Receivables Sale Agreement or the Fifth Third Assignment Agreement, as applicable, in consideration of the transfer by such Originator or PDC Funding II of any Receivable, or any attempt by any Person to void such transfer under statutory provisions or common law or equitable action;

(xi)any failure to vest and maintain vested in Agent for the benefit of the Purchasers, or to transfer to Agent for the benefit of the Purchasers, legal and equitable title to, and ownership of, or a valid and perfected first priority security interest in, the Asset Portfolio, free and clear of any Adverse Claim (except as created by the Transaction Documents);

(xii)the failure to have filed, or any delay in filing, financing statements or other similar instruments or documents under the UCC of any applicable jurisdiction or other applicable laws with respect to any Receivable, the Related Security and Collections with respect thereto, and the proceeds of any thereof, whether at the time of any Purchase or at any subsequent time;

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(xiii)any action or omission by any Seller Party which reduces or impairs the rights of Agent or the Purchasers with respect to any Receivable or the value of any such Receivable;

(xiv)any attempt by any Person to void any Purchase under statutory provisions or common law or equitable action;

(xv)the failure of any Receivable included in the calculation of the Net Portfolio Balance as an Eligible Receivable to be an Eligible Receivable at the time so included; and

(xvi)any civil penalty or fine assessed by OFAC or any other governmental authority administering any Anti-Terrorism Law, Anti-Corruption Law or Sanctions, and all reasonable costs and expenses (including reasonable documented legal fees and disbursements) incurred in connection with defense thereof by, any Indemnified Party in connection with the Transaction Documents as a result of any action of the Seller or any of its respective Affiliates.

Section X.2Increased Cost and Reduced Return. (a) If any Regulatory Change (i) subjects any Purchaser or any Funding Source to any charge or withholding on or with respect to any Funding Agreement or this Agreement or a Purchaser’s or Funding Source’s obligations under a Funding Agreement or this Agreement, or on or with respect to the Receivables, or changes the basis of taxation of payments to any Purchaser or any Funding Source of any amounts payable under any Funding Agreement or this Agreement (except for changes in the rate of tax on the overall net income of a Purchaser or Funding Source or taxes excluded by Section 10.1) or (ii) imposes, modifies or deems applicable any reserve, assessment, fee, tax, insurance charge, special deposit or similar requirement against assets of, deposits with or for the account of, or liabilities of a Funding Source or a Purchaser, or credit extended by a Funding Source or a Purchaser pursuant to a Funding Agreement or this Agreement or (iii) imposes any other condition the result of which is to increase the cost to a Funding Source or a Purchaser of performing its obligations under a Funding Agreement or this Agreement, or to reduce the rate of return on a Funding Source’s or Purchaser’s capital as a consequence of its obligations under a Funding Agreement or this Agreement, or to reduce the amount of any sum received or receivable by a Funding Source or a Purchaser under a Funding Agreement or this Agreement, or to require any payment calculated by reference to the amount of interests or loans held or interest received by it, then, upon demand by Agent, Seller shall pay to Agent, for the benefit of the relevant Funding Source or Purchaser, such amounts charged to such Funding Source or Purchaser or such amounts to otherwise compensate such Funding Source or such Purchaser for such increased cost or such reduction.

(a)A certificate of the applicable Purchaser or Funding Source setting forth the amount or amounts necessary to compensate such Purchaser or Funding Source pursuant to paragraph (a) of this Section 10.2 shall be delivered to Seller and shall be conclusive absent manifest error.

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(b)If any Purchaser or any Funding Source has or anticipates having any claim for compensation from Seller pursuant to clause (iii) of the definition of Regulatory Change, and such Purchaser or Funding Source believes that having the Facility publicly rated by one credit rating agency would reduce the amount of such compensation by an amount deemed by such Purchaser or Funding Source to be material, such Purchaser or Funding Source shall provide written notice to Seller and Servicer (a “Ratings Request”) that such Purchaser or Funding Source intends to request a public rating of the Facility from one credit rating agency selected by such Purchaser or Funding Source and reasonably acceptable to Seller, of at least AA equivalent (the “Required Rating“). Seller and Servicer agree that they shall cooperate with such Purchaser’s or Funding Source’s efforts to obtain the Required Rating, and shall provide the applicable credit rating agency (either directly or through distribution to Agent, Purchaser or Funding Source), any information requested by such credit rating agency for purposes of providing and monitoring the Required Rating. Seller shall pay the initial fees payable to the credit rating agency for providing the rating and all ongoing fees payable to the credit rating agency for their continued monitoring of the rating. Nothing in this Section 10.2(c) shall preclude any Purchaser or Funding Source from demanding compensation from Seller pursuant to Section 10.2(a) hereof at any time and without regard to whether the Required Rating shall have been obtained, or shall require any Purchaser or Funding Source to obtain any rating on the Facility prior to demanding any such compensation from Seller.

Section X.3Other Costs and Expenses. Seller shall reimburse Agent, each Purchaser Agent and each Conduit on demand for all costs and out-of-pocket expenses in connection with the preparation, negotiation, arrangement, execution, delivery, enforcement and administration of this Agreement, the transactions contemplated hereby and the other documents to be delivered hereunder, including without limitation, the cost of any Conduit’s auditors auditing the books, records and procedures of Seller, reasonable fees and out-of-pocket expenses of legal counsel for any Conduit, any Purchaser Agent and/or Agent (which such counsel may be employees of any Conduit, any Purchaser Agent or Agent) with respect thereto and with respect to advising any Conduit, any Purchaser Agent and/or Agent as to their respective rights and remedies under this Agreement. Seller shall reimburse Agent and each Purchaser Agent on demand for any and all costs and expenses of Agent, the Purchaser Agents and the Purchasers, if any, including reasonable counsel fees and expenses in connection with the enforcement of this Agreement and the other documents delivered hereunder and in connection with any restructuring or workout of this Agreement or such documents, or the administration of this Agreement following an Amortization Event. Seller shall reimburse each Conduit on demand for all other costs and expenses incurred by such Conduit (“Other Costs”), including, without limitation, the cost of auditing such Conduit’s books by certified public accountants, the cost of rating the Commercial Paper of such Conduit by independent financial rating agencies, and the reasonable fees and out-of-pocket expenses of counsel for such Conduit or any counsel for any shareholder of such Conduit with respect to advising such Conduit or such shareholder as to matters relating to such Conduit’s operations.

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Section X.4Allocations. Each Conduit shall allocate the liability for Other Costs among Seller and other Persons with whom such Conduit has entered into agreements to purchase interests in receivables (“Other Sellers”). If any Other Costs are attributable to Seller and not attributable to any Other Seller, Seller shall be solely liable for such Other Costs. However, if Other Costs are attributable to Other Sellers and not attributable to Seller, such Other Sellers shall be solely liable for such Other Costs. All allocations to be made pursuant to the foregoing provisions of this Article X shall be made by the applicable Conduit in its sole and absolute discretion and shall be binding on Seller and Servicer.

Section X.5Accounting Based Consolidation Event. Upon demand by Agent, Seller shall pay to Agent, for the benefit of the relevant Funding Source, such amounts as such Funding Source reasonably determines will compensate or reimburse such Funding Source for any (i) fee, expense or increased cost charged to, incurred or otherwise suffered by such Funding Source, (ii) reduction in the rate of return on such Funding Source’s capital or reduction in the amount of any sum received or receivable by such Funding Source or (iii) internal capital charge or other imputed cost determined by such Funding Source to be allocable to Seller or the transactions contemplated in this Agreement, in each case resulting from or in connection with the consolidation, for financial and/or regulatory accounting purposes, of all or any portion of the assets and liabilities of the Conduit, that are subject to this Agreement or any other Transaction Document with all or any portion of the assets and liabilities of a Funding Source. Amounts under this Section 10.5 may be demanded at any time without regard to the timing of issuance of any financial statement by the Conduit or by any Funding Source. A certificate of the Funding Source setting forth the amount or amounts necessary to compensate such Funding Source pursuant to this Section 10.5 shall be delivered to Seller and shall be conclusive absent manifest error. Seller shall pay such Funding Source the amount as due on any such certificate on the next Settlement Date following receipt of such notice.

Section X.6Required Rating. Agent shall have the right at any time to request that a public rating of the Facility of at least the Required Rating be obtained from one credit rating agency acceptable to Agent. Each of Seller and Servicer agree that they shall cooperate with Agent’s efforts to obtain the Required Rating, and shall provide Agent, for distribution to the applicable credit rating agency, any information requested by such credit rating agency for purposes of providing the Required Rating. Any Ratings Request shall be in writing, and if the Required Rating is not obtained within 60 days following the date of such Ratings Request (unless the failure to obtain the Required Rating is solely the result of Agent’s failure to provide the credit rating agency with sufficient information to permit the credit rating agency to perform their analysis, and is not the result of Seller or Servicer’s failure to cooperate or provide sufficient information to Agent), (i) upon written notice by Agent to Seller, the Amortization Date shall occur, and (ii) outstanding Capital shall thereafter incur the Default Fee and costs associated with obtaining the Required Rating hereunder shall be paid by Seller or Servicer.

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ARTICLE XIAGENT

Section XI.1Authorization and Action. Each Purchaser hereby designates and appoints MUFG to act as its agent hereunder and under each other Transaction Document, and authorizes Agent to take such actions as agent on its behalf and to exercise such powers as are delegated to Agent by the terms of this Agreement and the other Transaction Documents together with such powers as are reasonably incidental thereto. Agent shall not have any duties or responsibilities, except those expressly set forth herein or in any other Transaction Document, or any fiduciary relationship with any Purchaser, and no implied covenants, functions, responsibilities, duties, obligations or liabilities on the part of Agent shall be read into this Agreement or any other Transaction Document or otherwise exist for Agent. In performing its functions and duties hereunder and under the other Transaction Documents, Agent shall act solely as agent for the Purchasers and does not assume nor shall be deemed to have assumed any obligation or relationship of trust or agency with or for any Seller Party or any Purchaser Agent or any of such Seller Party’s or Purchaser Agent’s successors or assigns. Agent shall not be required to take any action that exposes Agent to personal liability or that is contrary to this Agreement, any other Transaction Document or applicable law. The appointment and authority of Agent hereunder shall terminate upon the indefeasible payment in full of all Aggregate Unpaids. Each Purchaser hereby authorizes Agent to authorize and file each of the Uniform Commercial Code financing or continuations statements (and amendments thereto and assignments or terminations thereof) on behalf of such Purchaser (the terms of which shall be binding on such Purchaser).

Section XI.2Delegation of Duties. Agent may execute any of its duties under this Agreement and each other Transaction Document by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care.

Section XI.3Exculpatory Provisions. Neither Agent nor any of its directors, officers, agents or employees shall be (i) liable for any action lawfully taken or omitted to be taken by it or them under or in connection with this Agreement or any other Transaction Document (except for its, their or such Person’s own gross negligence or willful misconduct), or (ii) responsible in any manner to any of the Purchasers for any recitals, statements, representations or warranties made by any Seller Party contained in this Agreement, any other Transaction Document or any certificate, report, statement or other document referred to or provided for in, or received under or in connection with, this Agreement, or any other Transaction Document or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement, or any other Transaction Document or any other document furnished in connection herewith or therewith, or for any failure of any Seller Party to perform its obligations hereunder or thereunder, or for the satisfaction of any condition specified in Article VI, or for the ownership, perfection, priority,

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condition, value or sufficiency of any collateral pledged in connection herewith. Agent shall not be under any obligation to any Purchaser to ascertain or to inquire as to the observance or performance of any of the agreements or covenants contained in, or conditions of, this Agreement or any other Transaction Document, or to inspect the properties, books or records of the Seller Parties. Agent shall not be deemed to have knowledge of any Amortization Event or Potential Amortization Event unless Agent has received notice from Seller or a Purchaser.

Section XI.4Reliance by Agent. Agent and each Purchaser Agent shall in all cases be entitled to rely, and shall be fully protected in relying, upon any document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to any Seller Party), independent accountants and other experts selected by Agent. Agent shall in all cases be fully justified in failing or refusing to take any action under this Agreement or any other Transaction Document unless it shall first receive such advice or concurrence of the Required Purchasers or all of the Purchasers, as applicable, as it deems appropriate and it shall first be indemnified to its satisfaction by the Purchasers, provided that unless and until Agent shall have received such advice, Agent may take or refrain from taking any action, as Agent shall deem advisable and in the best interests of the Purchasers. Agent shall in all cases be fully protected in acting, or in refraining from acting, in accordance with a request of the Required Purchasers or all of the Purchasers, as applicable, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Purchasers.

Section XI.5Non-Reliance on Agent and Other Purchasers. Each Purchaser expressly acknowledges that neither Agent, nor any of its officers, directors, employees, agents, attorneys-in-fact or affiliates has made any representations or warranties to it and that no act by Agent hereafter taken, including, without limitation, any review of the affairs of any Seller Party, shall be deemed to constitute any representation or warranty by Agent. Each Purchaser represents and warrants to Agent that it has and will, independently and without reliance upon Agent or any other Purchaser and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, prospects, financial and other conditions and creditworthiness of each Seller Party and made its own decision to enter into this Agreement, the other Transaction Documents and all other documents related hereto or thereto.

Section XI.6Reimbursement and Indemnification. Each Financial Institution and each Purchaser Agent agrees to reimburse and indemnify Agent and its officers, directors, employees, representatives and agents ratably based on the ratio of each such indemnifying Financial Institution’s Commitment to the aggregate Commitment (or, in the case of an indemnifying Purchaser Agent, ratably based on the Commitment(s) of each Financial Institution in such Purchaser Agent’s Purchaser Group to the aggregate Commitment), to the extent not paid or reimbursed by Seller Parties (i) for any amounts for which Agent, acting in its capacity as Agent, is entitled to reimbursement by the Seller Parties hereunder and (ii) for any other expenses incurred by Agent, in its capacity as Agent

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and acting on behalf of the Purchasers, in connection with the administration and enforcement of this Agreement and the other Transaction Documents.

Section XI.7Agent in its Individual Capacity. Agent and its Affiliates may make loans to, accept deposits from and generally engage in any kind of business with any Seller Party or any Affiliate of any Seller Party as though Agent were not Agent hereunder. With respect to the acquisition of the Asset Portfolio on behalf of the Purchasers pursuant to this Agreement, Agent shall have the same rights and powers under this Agreement in its individual capacity as any Purchaser and may exercise the same as though it were not Agent, and the terms “Financial Institution,” “Related Financial Institution,” “Purchaser,” “Financial Institutions,” “Related Financial Institutions” and “Purchasers” shall include Agent in its individual capacity.

Section XI.8Successor Agent. Agent may, upon 10 Business Days’ notice to Seller and the Purchasers, and Agent will, upon the direction of all of the Purchasers (other than Agent, in its individual capacity) resign as Agent. If Agent shall resign, then the Required Purchasers during such five-day period shall appoint from among the Purchasers and the Purchaser Agents a successor agent. If for any reason no successor Agent is appointed by the Required Purchasers during such five-day period, then effective upon the termination of such five-day period, the Purchasers shall perform all of the duties of Agent hereunder and under the other Transaction Documents and Seller and Servicer (as applicable) shall make all payments in respect of the Aggregate Unpaids directly to the applicable Purchasers and for all purposes shall deal directly with the Purchasers. After the effectiveness of any retiring Agent’s resignation hereunder as Agent, the retiring Agent shall be discharged from its duties and obligations hereunder and under the other Transaction Documents and the provisions of this Article XI and Article X shall continue in effect for its benefit with respect to any actions taken or omitted to be taken by it while it was Agent under this Agreement and under the other Transaction Documents.

Section XI.9Erroneous Payments

(a)If the Agent notifies a Purchaser, a Purchaser Agent or a Indemnified Party, or any Person who has received funds on behalf of a Purchaser, a Purchaser Agent or Indemnified Party (any such Purchaser, Purchaser Agent, Indemnified Party or other recipient, a “Payment Recipient”) that the Agent has determined in its sole discretion (whether or not after receipt of any notice under immediately succeeding clause (b)) that any funds received by such Payment Recipient from the Agent or any of its Affiliates were erroneously transmitted to, or otherwise erroneously or mistakenly received by, such Payment Recipient (whether or not known to such Purchaser, Purchaser Agent, Indemnified Party or other Payment Recipient on its behalf) (any such funds, whether received as a payment, prepayment or repayment of principal, interest, fees, distribution or otherwise, individually and collectively, an “Erroneous Payment”) and demands the return of such Erroneous Payment (or a portion thereof), such Erroneous Payment shall at all times remain the property of the Agent pending its return or repayment as contemplated below in this Section 11.9 and held in trust for the benefit of the Agent, and such Purchaser, Purchaser

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Agent or Indemnified Party shall (or, with respect to any Payment Recipient who received such funds on its behalf, shall cause such Payment Recipient to) promptly, but in no event later than two (2) Business Days thereafter return to the Agent the amount of any such Erroneous Payment (or portion thereof) as to which such a demand was made, in same day funds (in the currency so received), together with interest thereon in respect of each day from and including the date such Erroneous Payment (or portion thereof) was received by such Payment Recipient to the date such amount is repaid to the Agent in same day funds at the greater of the Federal Funds Effective Rate and a rate determined by the Agent in accordance with banking industry rules on interbank compensation from time to time in effect . A notice of the Agent to any Payment Recipient under this clause (a) shall be conclusive, absent manifest error.

(b)Without limiting immediately preceding clause (a), each Purchaser, Purchaser Agent or Indemnified Party, or any Person who has received funds on behalf of a Purchaser, Purchaser Agent or Indemnified Party, agrees that if it receives a payment, prepayment or repayment (whether received as a payment, prepayment or repayment of principal, interest, fees, distribution or otherwise) from the Agent (or any of its Affiliates) (x) that is in a different amount than, or on a different date from, that specified in this Agreement or in a notice of payment, prepayment or repayment sent by the Agent (or any of its Affiliates) with respect to such payment, prepayment or repayment, (y) that was not preceded or accompanied by a notice of payment, prepayment or repayment sent by the Agent (or any of its Affiliates), or (z) that such Purchaser, Purchaser Agent or Indemnified Party, or other such recipient, otherwise becomes aware was transmitted, or received, in error or by mistake (in whole or in part), then in each such case:

(i)it acknowledges and agrees that (A) in the case of immediately preceding clauses (x) or (y), an error shall be presumed to have been made (absent written confirmation from the Agent to the contrary) or (B) an error has been made (in the case of immediately preceding clause (z)), in each case, with respect to such payment, prepayment or repayment; and

(ii)such Purchaser, Purchaser Agent or Indemnified Party shall (and shall cause any other recipient that receives funds on its respective behalf to) promptly (and, in all events, within one (1) Business Day of its knowledge of the occurrence of any of the circumstances described in immediately preceding clauses (x), (y) and (z)) notify the Agent of its receipt of such payment, prepayment or repayment, the details thereof (in reasonable detail) and that it is so notifying the Agent pursuant to this Section 11.9(b).

For the avoidance of doubt, the failure to deliver a notice to the Agent pursuant to this Section 11.9(b) shall not have any effect on a Payment Recipient’s obligations pursuant to Section 11.9(a) or on whether or not an Erroneous Payment has been made.

(c)Each Purchaser, Purchaser Agent or Indemnified Party hereby authorizes the Agent to set off, net and apply any and all amounts at any time owing to such Purchaser, Purchaser Agent or Indemnified Party under any Transaction Document, or

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otherwise payable or distributable by the Agent to such Purchaser, Purchaser Agent or Indemnified Party under any Transaction Document with respect to any payment of principal, interest, fees or other amounts, against any amount that the Agent has demanded to be returned under immediately preceding clause (a) or under the indemnification provisions of this Agreement.

(d)(i) In the event that an Erroneous Payment (or portion thereof) is not recovered by the Agent for any reason, after demand therefor in accordance with immediately preceding clause (a), from any Purchaser or Purchaser Agent that has received such Erroneous Payment (or portion thereof) (and/or from any Payment Recipient who received such Erroneous Payment (or portion thereof) on its respective behalf) (such unrecovered amount, an “Erroneous Payment Return Deficiency”), upon the Agent’s notice to such Purchaser or Purchaser Agent at any time, then effective immediately (with the consideration therefor being acknowledged by the parties hereto), (A) such Purchaser shall be deemed to have assigned its Capital (but not its Commitments ) with respect to which such Erroneous Payment was made in an amount equal to the Erroneous Payment Return Deficiency (or such lesser amount as the Agent may specify) (such assignment of the Capital (but not Commitments), the “Erroneous Payment Deficiency Assignment”) (on a cashless basis and such amount calculated at par plus any accrued and unpaid interest (with the assignment fee to be waived by the Agent in such instance)), and is hereby (together with the Seller) deemed to execute and deliver an Assignment and Assumption with respect to such Erroneous Payment Deficiency Assignment, (B) the Agent as the assignee Purchaser shall be deemed to have acquired the Erroneous Payment Deficiency Assignment, (C) upon such deemed acquisition, the Agent as the assignee Purchaser shall become a Purchaser, as applicable, hereunder with respect to such Erroneous Payment Deficiency Assignment and the assigning Purchaser shall cease to be a Purchaser, as applicable, hereunder with respect to such Erroneous Payment Deficiency Assignment, excluding, for the avoidance of doubt, its obligations under the indemnification provisions of this Agreement and its applicable Commitments which shall survive as to such assigning Purchaser, (D) the Agent and the Seller shall each be deemed to have waived any consents required under this Agreement to any such Erroneous Payment Deficiency Assignment, and (E) the Agent will reflect in the Register its ownership interest in the Capital subject to the Erroneous Payment Deficiency Assignment. For the avoidance of doubt, no Erroneous Payment Deficiency Assignment will reduce the Commitments of any Purchaser and such Commitments shall remain available in accordance with the terms of this Agreement.

(i) Subject to Section 11.9 (but excluding, in all events, any assignment consent or approval requirements (whether from the Seller or otherwise)), the Agent may, in its discretion, sell any Capital acquired pursuant to an Erroneous Payment Deficiency Assignment and upon receipt of the proceeds of such sale, the Erroneous Payment Return Deficiency owing by the applicable Purchaser shall be reduced by the net proceeds of the sale of such Purchaser (or portion thereof), and the Agent shall retain all other rights, remedies and claims against such Purchaser (and/or against any recipient that receives funds on its respective behalf). In addition, an Erroneous Payment Return Deficiency owing by the applicable Purchaser (x) shall be reduced by the proceeds of

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prepayments or repayments of principal and interest, or other distribution in respect of principal and interest, received by the Agent on or with respect to any such Capital acquired from such Purchaser or related Purchaser Agent pursuant to an Erroneous Payment Deficiency Assignment (to the extent that any such Capital are then owned by the Agent) and (y) may, in the sole discretion of the Agent, be reduced by any amount specified by the Agent in writing to the applicable Purchaser from time to time.

(e)The parties hereto agree that (x) irrespective of whether the Agent may be equitably subrogated, in the event that an Erroneous Payment (or portion thereof) is not recovered from any Payment Recipient that has received such Erroneous Payment (or portion thereof) for any reason, the Agent shall be subrogated to all the rights and interests of such Payment Recipient (and, in the case of any Payment Recipient who has received funds on behalf of Purchaser or Indemnified Party, to the rights and interests of such Purchaser, Purchaser Agent or Indemnified Party, as the case may be) under the Transaction Documents with respect to such amount (the “Erroneous Payment Subrogation Rights”) (provided that the Obligations under the Transaction Documents in respect of the Erroneous Payment Subrogation Rights shall not be duplicative of such Obligations in respect of Capital that has been assigned to the Agent under an Erroneous Payment Deficiency Assignment) and (y) an Erroneous Payment shall not pay, prepay, repay, discharge or otherwise satisfy any Obligations owed by the Seller or Servicer; provided that this Section 11.9 shall not be interpreted to increase (or accelerate the due date for), or have the effect of increasing (or accelerating the due date for), the Obligations of the Seller relative to the amount (and/or timing for payment) of the Obligations that would have been payable had such Erroneous Payment not been made by the Agent; provided, further, that for the avoidance of doubt, immediately preceding clauses (x) and (y) shall not apply to the extent any such Erroneous Payment is, and solely with respect to the amount of such Erroneous Payment that is, comprised of funds received by the Agent from the Seller or the Servicer for the purpose of making such Erroneous Payment.

(f)To the extent permitted by applicable law, no Payment Recipient shall assert any right or claim to an Erroneous Payment, and hereby waives, and is deemed to waive, any claim, counterclaim, defense or right of set-off or recoupment with respect to any demand, claim or counterclaim by the Agent for the return of any Erroneous Payment received, including, without limitation, any defense based on “discharge for value” or any similar doctrine.

(g)Each party’s obligations, agreements and waivers under this Section 11.9 shall survive the resignation or replacement of the Agent, any transfer of rights or obligations by, or the replacement of, a Purchaser or Purchaser Agent, the termination of the Commitments and/or the repayment, satisfaction or discharge of all Obligations (or any portion thereof) under any Transaction Document.

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ARTICLE XIIASSIGNMENTS; PARTICIPATIONS

Section XII.1Assignments. (a) (I) Seller, Servicer, Agent, each Purchaser Agent and each Purchaser hereby agree and consent to the complete or partial assignment by any Conduit of all or any portion of its rights under, interest in, title to and obligations under this Agreement to any Funding Source pursuant to any Funding Agreement or to any other Person, and upon such assignment, such Conduit shall be released from its obligations so assigned; provided, however, that no Conduit shall transfer, sell or assign its rights in all or any part of the Asset Portfolio at any time prior to the Amortization Date unless the RPA Deferred Purchase Price allocable to the Asset Portfolio (or such relevant portion thereof), as determined by Agent to be allocable to such assigned interest on a pro rata basis, has been paid in full or is being assumed by the applicable transferee. Further, Seller, Servicer, Agent, each Purchaser Agent and each Purchaser hereby agree that any assignee of any Conduit of this Agreement or of all or any portion of the Asset Portfolio of any Conduit shall have all of the rights and benefits under this Agreement as if the term “Conduit” explicitly referred to and included such party (provided that (i) the Capital of any such assignee that is a Conduit or a commercial paper conduit shall accrue CP Costs based on such Conduit’s Conduit Costs or on such commercial paper conduit’s cost of funds, respectively, and (ii) the Capital of any other such assignee shall accrue Financial Institution Yield pursuant to Section 4.1), and no such assignment shall in any way impair the rights and benefits of any Conduit hereunder.

(II)    Neither Seller nor Servicer shall have the right to assign its rights or obligations under this Agreement; provided, however, that Seller may assign its right to receive the RPA Deferred Purchase Price or any portion thereof, which right shall be freely assignable by Seller without the consent of Agent, any Purchaser or any Purchaser Agent so long as no Amortization Event has occurred that has not been waived in accordance with the terms hereof and the Amortization Date has not occurred, upon prior written notice of such assignment to Agent; provided, that the related assignee has agreed, in a writing in form and substance reasonably satisfactory to Agent, to (i) all of the terms and conditions hereunder in respect of payment of the RPA Deferred Purchase Price (including Section 2.7(b)), (ii) a non-petition clause in favor of each of Seller and each Conduit in substantially the form of Section 14.6 and (iii) a limitation on payment clause in favor of Agent and each Purchaser in substantially the form of Section 2.7(b).

(a)Any Financial Institution may at any time and from time to time assign to one or more Persons (“Purchasing Financial Institutions”) all or any part of its rights and obligations under this Agreement pursuant to an assignment agreement, substantially in the form set forth in Exhibit VII hereto (the “Assignment Agreement”) executed by such Purchasing Financial Institution and such selling Financial Institution; provided, however, that no Financial Institution shall transfer, sell or assign its rights in all or any part of the Asset Portfolio at any time prior to the Amortization Date unless the RPA Deferred Purchase Price allocable to the Asset Portfolio (or such relevant portion thereof), as determined by Agent to be allocable to such assigned interest on a pro rata basis, has been paid in full or is being assumed by the applicable transferee. The consent of the Conduit in

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such selling Financial Institution’s Purchaser Group shall be required prior to the effectiveness of any such assignment. Each assignee of a Financial Institution must (i) have a short-term debt rating of A-1 or better by S&P and P-1 by Moody’s and (ii) agree to deliver to Agent, promptly following any request therefor by Agent or the Conduit in such selling Financial Institution’s Purchaser Group, an enforceability opinion in form and substance satisfactory to Agent and such Conduit. Upon delivery of the executed Assignment Agreement to Agent, such selling Financial Institution shall be released from its obligations hereunder to the extent of such assignment. Thereafter the Purchasing Financial Institution shall for all purposes be a Financial Institution party to this Agreement and shall have all the rights and obligations of a Financial Institution (including, without limitation, the applicable obligations of a Related Financial Institution) under this Agreement to the same extent as if it were an original party hereto and no further consent or action by Seller, the Purchasers, the Purchaser Agents or Agent shall be required.

(b)Each of the Financial Institutions agrees that in the event that it shall cease to have a short-term debt rating of A-1 or better by S&P and P-1 by Moody’s (an “Affected Financial Institution”), such Affected Financial Institution shall be obliged, at the request of the Conduit in such Affected Financial Institution’s Purchaser Group or Agent, to assign all of its rights and obligations hereunder to (x) another Financial Institution in such Affected Financial Institution’s Purchaser Group or (y) another funding entity nominated by Agent and acceptable to the Conduit in such Affected Financial Institution’s Purchaser Group, and willing to participate in this Agreement through the Liquidity Termination Date in the place of such Affected Financial Institution; provided that the Affected Financial Institution receives payment in full, pursuant to an Assignment Agreement, of an amount equal to such Financial Institution’s Pro Rata Share of the Aggregate Capital and Financial Institution Yield owing to the Financial Institutions in such Affected Financial Institution’s Purchaser Group and all accrued but unpaid fees and other costs and expenses payable in respect of its Pro Rata Share of the Asset Portfolio of the Financial Institutions in such Affected Financial Institution’s Purchaser Group; provided, further, that, if such assignment occurs at any time prior to the Amortization Date, the Affected Financial Institution shall (x) pay in full or (y) provide that the related Assignment Agreement requires the assignee to assume, the RPA Deferred Purchase Price allocable to the Asset Portfolio (or such relevant portion thereof), as determined by Agent to be allocable to such assigned interest on a pro rata basis.

Section XII.2Participations. Any Financial Institution may, in the ordinary course of its business at any time sell to one or more Persons (each a “Participant”) participating interests in its Pro Rata Share portion of the Asset Portfolio of the Financial Institutions in such Financial Institution’s Purchaser Group or any other interest of such Financial Institution hereunder. Notwithstanding any such sale by a Financial Institution of a participating interest to a Participant, such Financial Institution’s rights and obligations under this Agreement shall remain unchanged, such Financial Institution shall remain solely responsible for the performance of its obligations hereunder, and each Seller Party, each Conduit, each other Financial Institution, each Purchaser Agent and Agent shall continue to deal solely and directly with such Financial Institution in connection with such Financial

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Institution’s rights and obligations under this Agreement. Each Financial Institution agrees that any agreement between such Financial Institution and any such Participant in respect of such participating interest shall not restrict such Financial Institution’s right to agree to any amendment, supplement, waiver or modification to this Agreement, except for any amendment, supplement, waiver or modification described in Section 14.1(b)(i).

Section XII.3Federal Reserve. Notwithstanding any other provision of this Agreement to the contrary, any Financial Institution may at any time pledge or grant a security interest in all or any portion of its rights (including, without limitation, its portion of the Asset Portfolio and any rights to payment of Capital and Financial Institution Yield) under this Agreement to secure obligations of such Financial Institution to a Federal Reserve Bank, without notice to or consent of Seller or Agent; provided that no such pledge or grant of a security interest shall release a Financial Institution from any of its obligations hereunder, or substitute any such pledgee or grantee for such Financial Institution as a party hereto.

Section XII.4Collateral Trustee. Notwithstanding any other provision of this Agreement to the contrary, any Conduit may at any time pledge or grant a security interest in all or any portion of its rights (including, without limitation, its portion of the Asset Portfolio and any rights to payment of Capital and CP Costs) under this Agreement to secure obligations of such Conduit to a collateral trustee or security trustee under its Commercial Paper program, without notice to or consent of Seller or Agent; provided that no such pledge or grant of a security interest shall release a Conduit from any of its obligations hereunder, or substitute any such pledgee or grantee for such Conduit as a party hereto.

ARTICLE XIIIPURCHASER AGENTS

Section XIII.1Purchaser Agents. Each Purchaser Group may (but is not required to) designate and appoint a “Purchaser Agent” hereunder which Purchaser Agent shall become a party to this Agreement and shall authorize such Purchaser Agent to take such actions as agent on its behalf and to exercise such powers as are delegated to the Purchaser Agent by the terms of this Agreement and the other Transaction Documents together with such powers as are reasonably incidental thereto. Unless otherwise notified in writing to the contrary by the applicable Purchaser, Agent and the Seller Parties shall provide all notices and payments specified to be made by Agent or any Seller Party to a Purchaser hereunder to such Purchaser’s Purchaser Agent, if any, for the benefit of such Purchaser, instead of to such Purchaser. Each Purchaser Agent may perform any of the obligations of, or exercise any of the rights of, any member of its Purchaser Group and such performance or exercise shall constitute performance of the obligations of, or exercise of the rights of, such member hereunder. In performing its functions and duties hereunder and under the other Transaction Documents, each Purchaser Agent shall act solely as agent for the Purchasers in such Purchaser Agent’s Purchaser Group and does not assume nor shall be deemed to have assumed any obligation or relationship of trust or agency with or for any other Purchaser or

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any Seller Party or any of such Purchaser’s or Seller Party’s successors or assigns. The appointment and authority of each Purchaser Agent hereunder shall terminate upon the indefeasible payment in full of all Aggregate Unpaids. Each member of the MUFG Conduit’s Purchaser Group hereby designates MUFG, and MUFG hereby agrees to perform the duties and obligations of, such Purchaser Group’s Purchaser Agent.

ARTICLE XIVMISCELLANEOUS

Section XIV.1Waivers and Amendments. (a) No failure or delay on the part of Agent, any Purchaser Agent or any Purchaser in exercising any power, right or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or remedy preclude any other further exercise thereof or the exercise of any other power, right or remedy. The rights and remedies herein provided shall be cumulative and nonexclusive of any rights or remedies provided by law. Any waiver of this Agreement shall be effective only in the specific instance and for the specific purpose for which given.

(a)No provision of this Agreement may be amended, supplemented, modified or waived except in writing in accordance with the provisions of this Section 14.1(b). Each Conduit, Seller, each Purchaser Agent and Agent, at the direction of the Required Purchasers, may enter into written modifications or waivers of any provisions of this Agreement, provided, however, that no such modification or waiver shall:

(i)without the consent of each affected Purchaser, (A) extend the Liquidity Termination Date or the date of any payment or deposit of Collections by Seller or Servicer, (B) reduce the rate or extend the time of payment of Financial Institution Yield or any CP Costs (or any component of Financial Institution Yield or CP Costs), (C) reduce any fee payable to Agent for the benefit of the Purchasers, (D) except pursuant to Article XII hereof, change the amount of the Capital of any Purchaser, any Financial Institution’s Pro Rata Share, any Conduit’s Pro Rata Share, any Financial Institution’s Commitment or any Conduit’s Conduit Purchase Limit (other than, to the extent applicable in each case, pursuant to Section 4.6 or the terms of any Funding Agreement), (E) amend, modify or waive any provision of the definition of Required Purchasers, Section 2.2, Section 2.3, Section 4.6, this Section 14.1(b) or Section 14.6, (F) consent to or permit the assignment or transfer by Seller of any of its rights and obligations under this Agreement, (G) change the definition of “Eligible Receivable,”“Credit Enhancement,”“Hedging Agreement,”“Hedge Provider,”“Net Portfolio Balance” or “RPA Deferred Purchase Price” or (H) amend or modify any defined term (or any defined term used directly or indirectly in such defined term) used in clauses (A) through (G) above in a manner that would circumvent the intention of the restrictions set forth in such clauses; or

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(ii)without the written consent of the then Agent, amend, modify or waive any provision of this Agreement if the effect thereof is to affect the rights or duties of such Agent.

Notwithstanding the foregoing, (i) without the consent of the Purchasers, but with the consent of Seller, Agent may amend this Agreement solely to add additional Persons as Financial Institutions, Conduits and/or Purchaser Agents hereunder and (ii) Agent, the Required Purchasers and each Conduit may enter into amendments to modify any of the terms or provisions of Article XI, Article XII, Section 14.13 or any other provision of this Agreement without the consent of any Seller Party, provided that such amendment has no negative impact upon such Seller Party. Any modification or waiver made in accordance with this Section 14.1 shall apply to each of the Purchasers equally and shall be binding upon each Seller Party, the Purchaser Agents, the Purchasers and Agent.

Section XIV.2Notices. Except as provided in this Section 14.2, all communications and notices provided for hereunder shall be in writing (including bank wire, telecopy or electronic facsimile transmission or similar writing) and shall be given to the other parties hereto at their respective addresses or telecopy numbers set forth on the signature pages hereof or at such other address or telecopy number as such Person may hereafter specify for the purpose of notice to each of the other parties hereto. Each such notice or other communication shall be effective  if given by telecopy, upon the receipt thereof,  if given by mail, three (3) Business Days after the time such communication is deposited in the mail with first class postage prepaid or  if given by any other means, when received at the address specified in this Section14.2. Seller hereby authorizes Agent and the Purchasers to effect Purchases and Rate Tranche Period and Discount Rate selections based on telephonic notices made by any Person whom Agent or applicable Purchaser in good faith believes to be acting on behalf of Seller. Seller agrees to deliver promptly to Agent and each applicable Purchaser a written confirmation of each telephonic notice signed by an authorized officer of Seller; provided, however, the absence of such confirmation shall not affect the validity of such notice. If the written confirmation differs from the action taken by Agent and/or the applicable Purchaser, the records of Agent and/or the applicable Purchaser shall govern absent manifest error.

Section XIV.3Ratable Payments. If any Purchaser, whether by setoff or otherwise, has payment made to it with respect to any portion of the Aggregate Unpaids owing to such Purchaser (other than payments received pursuant to Sections 10.2 or 10.3) in a greater proportion than that received by any other Purchaser entitled to receive a ratable share of such Aggregate Unpaids, such Purchaser agrees, promptly upon demand, to purchase for cash without recourse or warranty a portion of such Aggregate Unpaids held by the other Purchasers so that after such purchase each Purchaser will hold its ratable proportion of such Aggregate Unpaids; provided that if all or any portion of such excess amount is thereafter recovered from such Purchaser, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest.

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Section XIV.4Protection of Ownership Interests of the Purchasers. (a) Seller agrees that from time to time, at its expense, it will promptly execute and deliver all instruments and documents, and take all actions, that may be necessary or desirable, or that Agent may request, to perfect, protect or more fully evidence Agent’s (on behalf of the Purchasers) valid ownership of or first priority perfected security interest in the Asset Portfolio, or to enable Agent or the Purchasers to exercise and enforce their rights and remedies hereunder. Without limiting the foregoing, Seller will, upon the request of Agent, file such financing or continuation statements, or amendments thereto or assignments thereof, and execute and file such other instruments and documents, that may be necessary or desirable, or that Agent may reasonably request, to perfect, protect or evidence such valid ownership of or first priority perfected security interest in the Asset Portfolio. At any time following the occurrence of an Amortization Event, Agent may, or Agent may direct Seller or Servicer to, notify the Obligors of Receivables, at Seller’s expense, of the ownership or security interests of the Purchasers under this Agreement and may also direct that payments of all amounts due or that become due under any or all Receivables be made directly to Agent or its designee. Seller or Servicer (as applicable) shall, at any Purchaser’s request, withhold the identity of such Purchaser in any such notification.

(a)If any Seller Party fails to perform any of its obligations hereunder, Agent or any Purchaser may (but shall not be required to) perform, or cause performance of, such obligations, and Agent’s or such Purchaser’s costs and expenses incurred in connection therewith shall be payable by Seller as provided in Section 10.3. Each Seller Party irrevocably authorizes Agent at any time and from time to time in the sole and absolute discretion of Agent, and appoints Agent as its attorney-in-fact, to act on behalf of such Seller Party (i) to authorize and/or execute on behalf of such Seller Party as debtor and to file financing or continuation statements (and amendments thereto and assignments thereof) necessary or desirable in Agent’s sole and absolute discretion to perfect and to maintain Agent’s (on behalf of the Purchasers) valid ownership of or first priority perfected security interest in the Receivables and (ii) to file a carbon, photographic or other reproduction of this Agreement or any financing statement with respect to the Receivables as a financing statement in such offices as Agent in its sole and absolute discretion deems necessary or desirable to perfect and to maintain the ownership of or first priority perfected security interest in the interests of the Purchasers in the Receivables. This appointment is coupled with an interest and is irrevocable. The authorization by each Seller Party set forth in the second sentence of this Section 14.4(b) is intended to meet all requirements for authorization by a debtor under Article 9 of any applicable enactment of the UCC, including, without limitation, Section 9-509 thereof.

Section XIV.5Confidentiality. (a) Each Seller Party, Agent, each Purchaser Agent and each Purchaser shall maintain and shall cause each of its employees and officers to maintain the confidentiality of this Agreement and the other confidential or proprietary information with respect to Agent, each Purchaser Agent, each Purchaser and their respective businesses obtained by it or them in connection with the structuring, negotiating and execution of the transactions contemplated herein, except that such Seller Party, Agent, such Purchaser Agent and such Purchaser and its officers and employees may

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disclose such information to such Seller Party’s, Agent’s, such Purchaser Agent’s and such Purchaser’s external accountants and attorneys and as required by any applicable law or order of any judicial or administrative proceeding.

(a)Anything herein to the contrary notwithstanding, each Seller Party hereby consents to the disclosure of any nonpublic information with respect to it (i) to Agent, the Financial Institutions, the Purchaser Agents or the Conduits by each other and by each such Person to such Person’s equityholders, (ii) by Agent, the Purchaser Agents or the Purchasers to any prospective or actual assignee or participant of any of them and (iii) by Agent, any Purchaser Agent or any Conduit to any collateral trustee or security trustee, any rating agency, Funding Source, Commercial Paper dealer or provider of a surety, guaranty or credit or liquidity enhancement to any Conduit or any entity organized for the purpose of purchasing, or making loans secured by, financial assets for which MUFG or any Purchaser Agent acts as the administrative agent and to any officers, directors, employees, outside accountants and attorneys of any of the foregoing, provided each such Person is informed of and agrees to maintain the confidential nature of such information. In addition, the Purchasers, the Purchaser Agents and Agent may disclose any such nonpublic information pursuant to any law, rule, regulation, direction, request or order of any judicial, administrative or regulatory authority or proceedings (whether or not having the force or effect of law).

Section XIV.6Bankruptcy Petition. (a) Seller, Servicer, Agent, each Purchaser Agent and each Purchaser hereby covenants and agrees that, prior to the date that is one year and one day after the payment in full of all outstanding senior indebtedness of any Conduit or any Financial Institution or Funding Source that is a special purpose bankruptcy remote entity, it will not institute against, or join any other Person in instituting against, any Conduit, any Financial Institution or any such entity any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceeding under the laws of the United States or any state of the United States.

(a)Servicer hereby covenants and agrees that, prior to the date that is one year and one day after the payment in full of all Obligations of Seller, it will not institute against, or join any other Person in instituting against, Seller any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceeding under the laws of the United States or any state of the United States.

Section XIV.7Limitation of Liability. Except with respect to any claim arising out of the willful misconduct or gross negligence of any Conduit, Agent, any Purchaser Agent, any Funding Source or any Financial Institution, no claim may be made by any Seller Party or any other Person against any Conduit, Agent, any Purchaser Agent, any Funding Source or any Financial Institution or their respective Affiliates, directors, officers, employees, attorneys or agents for any special, indirect, consequential or punitive damages in respect of any claim for breach of contract or any other theory of liability arising out of or related to the transactions contemplated by this Agreement, or any act, omission or event occurring in connection therewith; and each Seller Party hereby waives, releases, and agrees

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not to sue upon any claim for any such damages, whether or not accrued and whether or not known or suspected to exist in its favor.

Section XIV.8CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS.

Section XIV.9CONSENT TO JURISDICTION. EACH SELLER PARTY HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH PERSON PURSUANT TO THIS AGREEMENT AND EACH SELLER PARTY HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF AGENT, ANY PURCHASER AGENT OR ANY PURCHASER TO BRING PROCEEDINGS AGAINST ANY SELLER PARTY IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY SELLER PARTY AGAINST AGENT, ANY PURCHASER AGENT OR ANY PURCHASER OR ANY AFFILIATE OF AGENT, ANY PURCHASER AGENT OR ANY PURCHASER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH SELLER PARTY PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.

Section XIV.10WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY ANY SELLER PARTY PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.

Section XIV.11Integration; Binding Effect; Survival of Terms.

(a)This Agreement and each other Transaction Document contain the final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire agreement among the parties hereto with respect to the subject matter hereof superseding all prior oral or written understandings.

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(b)This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns (including any trustee in bankruptcy) and shall inure to the benefit of the Hedge Providers (if any) and its successors and permitted assigns (including any trustee in bankruptcy). This Agreement shall create and constitute the continuing obligations of the parties hereto in accordance with its terms and shall remain in full force and effect until terminated in accordance with its terms; provided, however, that the rights and remedies with respect to (i) any breach of any representation and warranty made by any Seller Party pursuant to Article V, (ii) the indemnification, payment and other provisions of Article X, and Sections 2.7(b), 14.5 and 14.6 shall be continuing and shall survive any termination of this Agreement.

Section XIV.12Counterparts; Severability; Section References. This Agreement may be executed in any number of counterparts and by different parties hereto in separate 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. Any provisions of this Agreement which are prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Unless otherwise expressly indicated, all references herein to “Article,” “Section,” “Schedule” or “Exhibit” shall mean articles and sections of, and schedules and exhibits to, this Agreement.

Section XIV.13MUFG Roles and Purchaser Agent Roles.

(a)Each of the Purchasers and Purchaser Agents acknowledges that MUFG acts, or may in the future act, (i) as administrative agent for the MUFG Conduit or any Financial Institution in the MUFG Conduit’s Purchaser Group, (ii) as issuing and paying agent for certain Commercial Paper, (iii) to provide credit or liquidity enhancement for the timely payment for certain Commercial Paper and (iv) to provide other services from time to time for the MUFG Conduit or any Financial Institution in the MUFG Conduit’s Purchaser Group (collectively, the “MUFG Roles”). Without limiting the generality of this Section 14.13, each Purchaser and each Purchaser Agent hereby acknowledges and consents to any and all MUFG Roles and agrees that in connection with any MUFG Role, MUFG may take, or refrain from taking, any action that it, in its discretion, deems appropriate, including, without limitation, in its role as administrative agent for the MUFG Conduit.

(b)Each of the Purchasers acknowledges that each Purchaser Agent acts, or may in the future act, (i) as administrative agent for the Conduit in such Purchaser Agent’s Purchaser Group or any Financial Institution in such Purchaser Agent’s Purchaser Group, (ii) as issuing and paying agent for certain Commercial Paper, (iii) to provide credit or liquidity enhancement for the timely payment for certain Commercial Paper and (iv) to provide other services from time to time for the Conduit in such Purchaser Agent’s Purchaser Group or any Financial Institution in such Purchaser Agent’s Purchaser Group

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(collectively, the “Purchaser Agent Roles”). Without limiting the generality of this Section 14.13, each Purchaser hereby acknowledges and consents to any and all Purchaser Agent Roles and agrees that in connection with any Purchaser Agent Role, the applicable Purchaser Agent may take, or refrain from taking, any action that it, in its discretion, deems appropriate, including, without limitation, in its role as agent for the Conduit in such Purchaser Agent’s Purchaser Group.

Section XIV.14Characterization. (a) It is the intention of the parties hereto that each Purchase hereunder shall constitute and be treated as an absolute and irrevocable sale to Agent, on behalf of the Purchasers, for all purposes (other than federal and state income tax purposes), which such Purchase shall provide Agent, on behalf of the Purchasers, with the full benefits of ownership of the Asset Portfolio. Except as specifically provided in this Agreement, each Purchase hereunder is made without recourse to Seller; provided, however, that (i) Seller shall be liable to each Purchaser, each Purchaser Agent and Agent for all representations, warranties, covenants and indemnities made by Seller pursuant to the terms of this Agreement, and (ii) such sale does not constitute and is not intended to result in an assumption by any Purchaser, any Purchaser Agent or Agent or any assignee thereof of any obligation of Seller or any Originator or any other Person arising in connection with the Receivables, the Related Security, or the related Contracts, or any other obligations of Seller or any Originator.

(a)In addition to any ownership interest which Agent may from time to time acquire pursuant hereto, Seller hereby grants to Agent for the ratable benefit of the Purchasers a valid and perfected security interest in all of Seller’s right, title and interest in, to and under all Receivables now existing or hereafter arising, the Collections, each Lock-Box, each P.O. Box, each Collection Account, all Related Security, all other rights and payments relating to such Receivables, and all proceeds of any thereof prior to all other liens on and security interests therein to secure the prompt and complete payment of the Aggregate Unpaids. Agent, the Purchaser Agents and the Purchasers shall have, in addition to the rights and remedies that they may have under this Agreement, all other rights and remedies provided to a secured creditor under the UCC and other applicable law, which rights and remedies shall be cumulative.

Section XIV.15Excess Funds. Each of Seller, Servicer, each Purchaser, each Purchaser Agent and Agent agrees that each Conduit shall be liable for any claims that such party may have against such Conduit only to the extent that such Conduit has funds in excess of those funds necessary to pay matured and maturing Commercial Paper and to the extent such excess funds are insufficient to satisfy the obligations of such Conduit hereunder, such Conduit shall have no liability with respect to any amount of such obligations remaining unpaid and such unpaid amount shall not constitute a claim against such Conduit. Any and all claims against any Conduit shall be subordinate to the claims against such Conduit of the holders of Commercial Paper and any Person providing liquidity support to such Conduit.

Section XIV.16[Reserved].

Section XIV.17Confirmation and Ratification of Terms.

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(a)Upon the effectiveness of this Agreement, each reference to the Prior Agreement in any other Transaction Document, and any document, instrument or agreement executed and/or delivered in connection with the Prior Agreement or any other Transaction Document, shall mean and be a reference to this Agreement.

(b)The other Transaction Documents and all agreements, instruments and documents executed or delivered in connection with the Prior Agreement or any other Transaction Document shall each be deemed to be amended to the extent necessary, if any, to give effect to the provisions of this Agreement, as the same may be amended, modified, supplemented or restated from time to time.

(c)The effect of this Agreement is to amend and restate the Prior Agreement in its entirety, and to the extent that any rights, benefits or provisions in favor of Agent or any Purchaser existed in the Prior Agreement and continue to exist in this Agreement without any written waiver of any such rights, benefits or provisions prior to the date hereof, then such rights, benefits or provisions are acknowledged to be and to continue to be effective from and after May 10, 2002. This Agreement is not a novation.

(d)The parties hereto agree and acknowledge that any and all rights, remedies and payment provisions under the Prior Agreement, including, without limitation, any and all rights, remedies and payment provisions with respect to (i) any representation and warranty made or deemed to be made pursuant to the Prior Agreement, or (ii) any indemnification provision, shall continue and survive the execution and delivery of this Agreement.

(e)The parties hereto agree and acknowledge that any and all amounts owing as or for Capital, Financial Institution Yield, CP Costs, fees, expenses or otherwise under or pursuant to the Prior Agreement, immediately prior to the effectiveness of this Agreement shall be owing as or for Capital, Financial Institution Yield, CP Costs, fees, expenses or otherwise, respectively, under or pursuant to this Agreement.

Section XIV.18Consent. Each of the parties hereto hereby consents to Amendment No. 3 to the Receivables Sale Agreement, dated as of the date hereof, among Seller, PDSI and PVSI.

Section XIV.19USA PATRIOT Act Notice. Each Financial Institution that is subject to the requirements of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”) herby notifies the Seller Parties that pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies each Seller Party, which information includes the name, address, tax identification number and other information that will allow such Financial Institution to identify such Seller Party in accordance with the Patriot Act. This notice is given in accordance with the requirements of the Patriot Act. Promptly following any request therefor, the Seller shall deliver to the each Financial Institution all documentation and other information required by bank regulatory authorities requested by

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such Financial Institution for purposes of compliance with applicable “know your customer” requirements under the Patriot Act, the Beneficial Ownership Rule or other applicable anti-money laundering laws, rules and regulations.

Section XIV.20Acknowledgement Regarding Any Supported QFCs. To the extent that this Agreement provides support, through a guarantee or otherwise, for any Hedging Agreements or any other agreement or instrument that is a QFC (such support, “QFC Credit Support” and each such QFC a “Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Transaction Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States):

(a)In the event a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Transaction Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Transaction Documents were governed by the laws of the United States or a state of the United States. Without limitation of the foregoing, it is understood and agreed that rights and remedies of the parties with respect to a Financial Institution that fails to satisfy its obligation to make and maintain any Purchase as required hereunder shall in no event affect the rights of any Covered Party with respect to a Supported QFC or any QFC Credit Support.

(Signature Pages Follow)

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WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their duly authorized officers as of the date hereof.

Conformed copy of agreement does not contain signatures as signatories only sign individual amendments.

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EXHIBIT I

DEFINITIONS

As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

“3D Cone Beam Receivable” means a Receivable originated by PDSI that arises from the sale or financing (or servicing) of 3D Cone Beam technology.

“Accrual Period” means each Fiscal Month, provided that the initial Accrual Period hereunder means the period from (and including) the date hereof to (and including) the last day of the Fiscal Month thereafter.

“ACH Receipts” means funds received in respect of Automatic Debit Collections.

“Acquisition” means any transaction, or any series of related transactions, consummated on or after September 12, 2003, by which PDCo or any of its Subsidiaries (i) acquires any going concern business or all or substantially all of the assets of any Person, or division thereof, whether through purchase of assets, merger or otherwise or (ii) directly or indirectly acquires from one or more Persons (in one transaction or as the most recent transaction in a series of transactions) at least a majority (in number of votes) of the securities of a corporation which have ordinary voting power for the election of directors (other than securities having such power only by reason of the happening of a contingency) or a majority (by percentage or voting power) of the outstanding ownership interests of a partnership or limited liability company of any Person.

“Adverse Claim” means a lien, security interest, charge or encumbrance, or other right or claim in, of or on any Person’s assets or properties in favor of any other Person.

“Affected Financial Institution” has the meaning set forth in Section 12.1(c).

“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person or any Subsidiary of such Person. A Person shall be deemed to control another Person if the controlling Person owns 10% or more of any class of voting securities of the controlled Person or possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the controlled Person, whether through ownership of stock, by contract or otherwise.

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

“Aggregate Capital” means, on any date of determination, the aggregate outstanding Capital of all Purchasers on such date.

“Aggregate Reduction” has the meaning set forth in Section 1.3.

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“Aggregate Unpaids” means, at any time, an amount equal to the sum of all accrued and unpaid fees under any Fee Letter, CP Costs, Financial Institution Yield, Aggregate Capital, Hedging Obligations and all other unpaid Obligations (whether due or accrued) at such time.

“Agreement” means this Third Amended and Restated Receivables Purchase Agreement, as it may be amended, restated, supplemented or otherwise modified and in effect from time to time.

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus ½ of 1% and (c) the greater of (i) 0.00% and (ii) Term SOFR for a one month period on such day (or if such day is not a U.S Government Securities Business Day, the immediately preceding Business Day), plus 1%, plus the SOFR Spread. Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or Term SOFR shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or Term SOFR, respectively.

“Alternate Base Rate Term SOFR Determination Day” has the meaning specified in the definition of “Term SOFR”.

“Amendment Date” means August 5, 2021.

“Amortization Date” means the earliest to occur of (i) the day on which any of the conditions precedent set forth in Section 6.2 are not satisfied, (ii) the Business Day immediately prior to the occurrence of an Amortization Event set forth in Section 9.1(d)(ii), (iii) the Business Day specified in a written notice from Agent following the occurrence of any other Amortization Event, (iv) the Business Day specified in a written notice from Agent following the failure to obtain the Required Ratings within 60 days following delivery of a Ratings Request to Seller and Servicer, and (v) the date which is 5 Business Days after Agent’s receipt of written notice from Seller that it wishes to terminate the facility evidenced by this Agreement.

“Amortization Event” has the meaning set forth in Article IX.

“Annual Vintage Pool” means as of any date of determination and with respect to any Fiscal Year, the pool of Receivables originated by the Originators during such Fiscal Year.

“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to the Seller, the Servicer, any Originator or any of their respective Subsidiaries from time to time concerning or relating to bribery or corruption, including, but not limited to, the U.S. Foreign Corrupt Practices Act of 1977, as amended, the UK Bribery Act 2010, and any other applicable law or regulation implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

“Anti-Terrorism Laws”means each of: (a) the Executive Order; (b) the Patriot Act; (c) the Money Laundering Control Act of 1986, 18 U.S.C. Sect. 1956 and any successor statute thereto; (d) the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada);

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(e) the Bank Secrecy Act, and the rules and regulations promulgated thereunder; and (f) any other law of the United States, Canada or any member state of the European Union now or hereafter enacted to monitor, deter or otherwise prevent: (i) terrorism or (ii) the funding or support of terrorism or (iii) money laundering.

“Asset Portfolio” has the meaning set forth in Section 1.2(b).

“Assignment Agreement” has the meaning set forth in Section 12.1(b).

“Authorized Officer” means, with respect to any Person, its president, corporate controller, treasurer or chief financial officer.

“Automatic Debit Collection” means the payment of Collections by an Obligor by means of automatic electronic funds transfer from the Obligor’s bank account.

“Balloon Payment Receivable” means a Receivable that arises under a Contract that requires the final payment to be in an amount equal to 35% of the initial balance of such Receivable.

“Beneficial Ownership Rule” means 31 C.F.R. § 1010.230.

“BHC Act Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.

“Broken Funding Costs” means for any Capital of any Purchaser which: (i) is reduced without compliance by Seller with the notice requirements hereunder or (ii) is assigned, transferred or funded pursuant to a Funding Agreement or otherwise transferred or terminated on a date prior to the date on which it was originally scheduled to end; an amount equal to the excess, if any, of (A) the CP Costs or Financial Institution Yield (as applicable) that would have accrued during the remainder of the Rate Tranche Periods or the tranche periods for Commercial Paper determined by the applicable Purchaser Agent or Agent to relate to such Capital (as applicable) subsequent to the date of such reduction, assignment, transfer, funding or termination of such Capital if such reduction, assignment, transfer, funding or termination had not occurred, over (B) the income, if any, actually received net of any costs of redeployment of funds during the remainder of such period by the holder of such Capital from investing the portion of such Capital not so allocated. In the event that the amount referred to in clause (B) exceeds the amount referred to in clause (A), the relevant Purchaser or Purchasers agree to pay to Seller the amount of such excess. All Broken Funding Costs shall be due and payable hereunder upon demand.

“Business Day” means any day that is not a Saturday, Sunday or other day that is a legal holiday under the laws of the State of New York or is a day on which banking institutions in such state are authorized or required by law to close.

“Capital” means at any time with respect to the Asset Portfolio and any Purchaser, an amount equal to (A) the amount of Cash Purchase Price paid by such Purchaser to Seller for

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Purchases pursuant to Sections 1.1 and 1.2, minus (B) the sum of the aggregate amount of Collections and other payments received by Agent or such Purchaser, as applicable, which in each case are applied to reduce such Purchaser’s Capital in accordance with the terms and conditions of this Agreement; provided that such Capital shall be restored (in accordance with Section 2.5) in the amount of any Collections or other payments so received and applied if at any time the distribution of such Collections or payments are rescinded, returned or refunded for any reason.

“Cap Strike Rate” means 4.00%, or such other applicable “cap strike rate” approved by Agent and specified as such in the applicable Hedging Agreement in effect at such time.

“Cash Purchase Price” means, with respect to any Purchase of any portion of the Asset Portfolio, the amount paid to Seller for such portion of the Asset Portfolio which shall not exceed the least of (i) the amount requested by Seller in the applicable Purchase Notice, (ii) the unused portion of the Purchase Limit on the applicable Purchase date, taking into account any other proposed Purchase requested on the applicable Purchase date, and (iii) the excess, if any, of the Net Portfolio Balance (less the Credit Enhancement) on the applicable Purchase date over the aggregate outstanding amount of the Aggregate Capital determined as of the date of the most recent Monthly Report, taking into account any other proposed Purchase requested on the applicable Purchase date.

“CEREC Receivable” means a Receivable originated by PDSI that arises from the sale or financing (or servicing) by PDSI of ceramic reconstruction machinery that was manufactured by or on behalf of Sirona Dental Systems, Inc.

“Change of Control” means (i) the acquisition by any Person, or two or more Persons acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934) of 30% or more of the outstanding shares of voting stock of Servicer or (ii) PDCo ceases to own, directly or indirectly, 100% of the outstanding membership units of Seller or 100% of the outstanding capital stock of any Originator.

“Charged-Off Receivable”means a Receivable: (i) as to which the Obligor thereof has taken any action, or suffered any event to occur, of the type described in Section 9.1(d) (as if references to the Seller Party therein refer to such Obligor); (ii) as to which the Obligor thereof, if a natural person, is deceased, (iii) which, consistent with the Credit and Collection Policy, would be written off Seller’s books as uncollectible, (iv) which has been identified by Seller as uncollectible or (v) as to which any payment, or part thereof, remains unpaid for 180 days or more from the original due date for such payment.

“Closing Date Assignment Agreement” means that certain Assignment and Assumption Agreement, dated as of the date hereof, by and among Servicer, Seller, JPMorgan, Agent, the MUFG Conduit, MUFG, Chariot Funding LLC, J.P. Morgan Securities, Inc., Three Pillars Funding LLC, SunTrust Bank and SunTrust Robinson Humphrey, Inc., as amended, restated, supplemented or otherwise modified from time to time.

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“Collection Account” means, collectively, each First-Tier Account and the Second-Tier Account.

“Collection Account Agreement” means (i) with respect to each Lock-Box or Collection Account, an agreement, substantially in the form of Exhibit VI, among an Originator (if applicable), Seller, Agent and a Collection Bank, or any similar or analogous agreement among an Originator, Seller, Agent and a Collection Bank and (ii) with respect to each P.O. Box, a Postal Notice, in each case as such document may be amended, restated, supplemented or otherwise modified from time to time.

“Collection Bank” means, at any time, any of the banks holding one or more Collection Accounts.

“Collection Notice” means a notice, in substantially the form of Annex A to Exhibit VI, from Agent to a Collection Bank, or any similar or analogous notice from Agent to a Collection Bank.

“Collections” means, with respect to any Receivable, all cash collections and other cash and other proceeds in respect of such Receivable, including, without limitation, all scheduled payments, prepayments, yield, Finance Charges or other related amounts accruing in respect thereof, all cash proceeds of Related Security with respect to such Receivable and all payments received pursuant to the Hedging Agreements.

“Commercial Paper” means promissory notes of any Conduit issued by such Conduit in the commercial paper market.

“Commitment” means, for each Financial Institution, the commitment of such Financial Institution to Purchase portions of the Asset Portfolio from Seller and to the extent that the Conduit in its Purchaser Group declines to make such Purchases, in an amount not to exceed (i) in the aggregate, the amount set forth opposite such Financial Institution’s name on Schedule A to this Agreement, as such amount may be modified in accordance with the terms hereof (including, without limitation, any termination of Commitments pursuant to Section 4.6 hereof) and (ii) with respect to any individual Purchase hereunder, its Pro Rata Share of the Cash Purchase Price therefor.

“Concentration Limit” means, at any time, for any Obligor, (i) if such Obligor is a Group Practice Obligor, $2,000,000 and (ii) if such Obligor is other than a Group Practice Obligor, $750,000; provided, that in the case of an Obligor and any Affiliate of such Obligor, the Concentration Limit shall be calculated as if such Obligor and such Affiliate are one Obligor.

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

“Conduit Costs” means, for any outstanding Capital of any Conduit, an amount equal to such Capital multipliedby a per annum rate equivalent to the “weighted average cost” (as defined below) related to the issuance of indexed Commercial Paper of such Conduit that is allocated, in whole or in part, to fund such Capital (and which may also be allocated in part to the

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funding of other assets of such Conduit); provided, however, that if any component of such rate is a discount rate, in calculating such rate for such Capital for such date, the rate used to calculate such component of such rate shall be a rate resulting from converting such discount rate to an interest bearing equivalent rate per annum. As used in this definition, the “weighted average cost” shall consist of (x) the actual interest rate paid to purchasers of indexed Commercial Paper issued by such Conduit, (y) the costs associated with the issuance of such Commercial Paper (including dealer fees and commissions to placement agents), and (z) interest on other borrowing or funding sources by such Conduit, including to fund small or odd dollar amounts that are not easily accommodated in the commercial paper market.

“Conduit Purchase Limit” means, for each Conduit, the purchase limit of such Conduit with respect to Purchases from Seller, in an amount not to exceed (i) in the aggregate, the amount set forth opposite such Conduit’s name on Schedule A to this Agreement, as such amount may be modified in accordance with the terms hereof (including, without limitation, Section 4.6(b)) and (ii) with respect to any individual Purchase hereunder, its Pro Rata Share of the aggregate Cash Purchase Price therefor.

“Conforming Changes” means, with respect to either the use or administration of Term SOFR or the use, administration, adoption or implementation of any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Alternate Base Rate,” the definition of “Business Day,” the definition of “U.S. Government Securities Business Day,” the definition of “Rate Tranche Period” or any similar or analogous definition (or the addition of a concept of “interest period”), timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, the applicability and length of lookback periods, the applicability of Section 4.02 and other technical, administrative or operational matters) that the Agent decides may be appropriate to reflect the adoption and implementation of any such rate or to permit the use and administration thereof by the Agent in a manner substantially consistent with market practice (or, if the Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Agent determines, that no market practice for the administration of any such rate exists, in such other manner of administration as the Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Transaction Documents).

“Consent Notice” has the meaning set forth in Section 4.6(a).

“Consent Period” has the meaning set forth in Section 4.6(a).

“Contingent Obligation” of a Person means any agreement, undertaking or arrangement by which such Person assumes, guarantees, endorses, contingently agrees to purchase or provide funds for the payment of, or otherwise becomes or is contingently liable upon, the obligation or liability of any other Person, or agrees to maintain the net worth or working capital or other financial condition of any other Person, or otherwise assures any creditor of such other Person against loss, including, without limitation, any comfort letter, operating agreement, take-or-pay contract or application for a letter of credit or the obligations of any such Person as general partner of a partnership with respect to the liabilities of the partnership. The amount of any

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Contingent Obligation shall be deemed to be an amount equal to the lesser of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made and (b) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Contingent Obligation, unless such primary obligation and the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount of the Contingent Obligation shall be such guaranteeing person’s reasonably anticipated liability in respect thereof as determined by such Person in good faith.

“Contract” means, with respect to any Receivable, any and all instruments, agreements, invoices or other writings (including those with electronic signatures or other electronic authorization), which may be executed in counterparts and received by facsimile or electronic mail, pursuant to which such Receivable arises or which evidences such Receivable.

“Covered Entity” means any of the following:

(i)    a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);

(ii)    a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or

(iii)    a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).

“COVID-19 Deferred Payment Program” means PDSI’s program that permits Obligors to defer payments under their related Contract for a period of up to 3 months in connection with the COVID-19 Emergency.

“COVID-19 Emergency” means collectively, the public health emergency declared by the United States Secretary of Health and Human Services on January 27, 2020, with respect to the 2019 Novel Coronavirus and all related federal and state emergency declarations and measures.

“COVID-19 Modifications” means, with respect to any COVID-19 Modified Receivable, each of the following modifications to the related Contract: (i) installment payments under the related Contract are deferred for a period of up to 3 months commencing on the date such Receivable first became a COVID-19 Modified Receivable and (ii) the deferred monthly installments are added to the end of the related Contract and payable in equal monthly installments.

“COVID-19 Modified Receivable” means a Receivable as to which the payment terms of the related Contract have been extended or modified in connection with the COVID-19 Deferred Payment Program.

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“CP Costs” means, for each day, the aggregate discount or yield accrued with respect to the outstanding Capital of each respective Conduit as determined in accordance with the definition of Conduit Costs.

“Credit Agreement” means the Second Amended and Restated Credit Agreement, dated on or about February 16, 2021 (as it may be amended, restated, supplemented or otherwise modified from time to time) by and among PDCo, the lenders from time to time party thereto, MUFG, as administrative agent.

“Credit and Collection Policy” means Seller’s and/or the applicable Originator’s credit and collection policies and practices relating to Contracts and Receivables existing on the date of the Prior Agreement and summarized in Exhibit VIII hereto, as modified from time to time in accordance with this Agreement.

“Credit Enhancement” means, on any date, an amount equal to the product of (i) the Net Portfolio Balance as of the close of business of Servicer on such date, multipliedby (ii)

the sum of (x) the greatest of (a) 15.0%, (b) the product of (I) the highest Cumulative Gross Loss Percentage for any Annual Vintage Pool (other than any Annual Vintage Pool that was originated prior to the 2003 Fiscal Year), multipliedby (II) 4.0, and (c) the sum of (I) the product of (A) the sum of (i) 1.0 plus (ii) 20.0% (or during the Temporary Period, 25.0%) of the Weighted Average Remaining Months Without Repayment Spike on such date multipliedby (B) the average Loss-to-Liquidation Ratio for the immediately preceding three Fiscal Months multipliedby (C) the Loss Multiple, multipliedby (D) 20.0% (or during the Temporary Period, 25.0%), plus (II) the product of (A) 80.0% (or during the Temporary Period, 75.0%), multipliedby (B) the average Loss-to-Liquidation Ratio for the immediately preceding three Fiscal Months multipliedby (C) the Loss Multiple, plus (y) the average Dilution Ratio for the immediately preceding three Fiscal Months.

“Credit Loss” means a Receivable that is written off the Seller’s books and records in accordance with the applicable Originator’s Credit and Collection Policy.

“Cumulative Gross Loss Event” means, at any time of determination on or after April 20, 2020, the following event has occurred and is continuing: the Cumulative Gross Loss Percentage for any Specified Annual Vintage Pool exceeds 2.0%.

“Cumulative Gross Loss Percentage” means, on any date and with respect to any Annual Vintage Pool, a percentage equal to (i) the aggregate Outstanding Balance of all Receivables in such Annual Vintage Pool which became a Credit Loss, in each case, calculated as of the date such Receivable became a Credit Loss, dividedby (ii) the aggregate initial Outstanding Balance of all Receivables in such Annual Vintage Pool.

“Deemed Collections” means the aggregate of all amounts Seller shall have been deemed to have received as a Collection of a Receivable. If at any time, (i) the Outstanding Balance of any Receivable is either (x) reduced as a result of any defective or rejected goods, software or services, any discount or any adjustment or otherwise by Seller, PDC Funding II or any

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Originator (other than cash Collections on account of the Receivables) or (y) reduced or canceled as a result of a setoff in respect of any claim by any Person (whether such claim arises out of the same or a related transaction or an unrelated transaction), (ii) any of the representations or warranties in Article V are no longer true with respect to any Receivable or (iii) the Related Equipment for any Receivable is Repossessed and sold for less than the fair market value of such Related Equipment, Seller shall be deemed to have received a Collection of such Receivable in the amount of (A) such reduction or cancellation in the case of clause (i) above, (B) the entire Outstanding Balance in the case of clause (ii) above and (C) the difference between the fair market value of the Repossessed Related Equipment and the gross proceeds received upon the sale of such Repossessed Related Equipment in the case of clause (iii) above.

“Deemed Exchange” shall have the meaning set forth in Section 1.5.

“Defaulted Receivable” means a Receivable as to which any payment, or part thereof, remains unpaid for 121 days or more from the original due date for such payment.

“Default Fee” means with respect to any amount due and payable by Seller in respect of any Aggregate Unpaids, an amount equal to the greater of (i) $1000 and (ii) interest on any such unpaid Aggregate Unpaids at a rate per annum equal to 3.50% above the Alternate Base Rate.

“Default Ratio” means, as of the last day of each Fiscal Month, a percentage equal to: (i) the aggregate Outstanding Balance of all Defaulted Receivables on such day, dividedby (ii) the aggregate Outstanding Balance of all Receivables on such day.

“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

“Delayed Financial Institution” has the meaning set forth in Section 1.2(a).

“Delinquency Ratio” means, at any time, a percentage equal to (i) the aggregate Outstanding Balance of all Receivables that were Delinquent Receivables at such time dividedby (ii) the aggregate Outstanding Balance of all Receivables at such time.

“Delinquent Receivable” means a Receivable as to which any payment, or part thereof, remains unpaid for 61 days or more from the original due date for such payment.

“Designated Obligor” means an Obligor indicated by Agent to Seller in writing.

“Dilution Ratio” means, on any date, an amount equal to the product of (i) 6 multipliedby (ii) the quotient of (x) “non-cash full returns” and “non-cash partial returns” (each as set forth as a separate line item in the Monthly Report) dividedby (y) the Outstanding Balance of all Receivables as of the first day of the current Fiscal Month.

“Dilutions” means, at any time, the aggregate amount of reductions or cancellations described in clause (i) of the definition of “Deemed Collections”.

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“Discounted Receivable” means a Receivable that arises under a Contract pursuant to which the first installment payment thereunder is not required to be made prior to 120 days after the contract inception; provided that such Receivable shall cease to be a Discounted Receivable after the date 120 days after the contract inception and shall at all times thereafter be deemed to be a “Skip Receivable”; providedfurther, if the first six payments thereunder are made in full in consecutive months, such Receivable shall no longer be deemed to be a “Skip Receivable.”

“Discount Rate” means, (i) Term SOFR plus the SOFR Spread or (ii) the Alternate Base Rate, as applicable, with respect to the Capital of each Financial Institution.

“DPP Report” means a report, in substantially the form of Exhibit XIII hereto (appropriately completed), furnished by Servicer to Agent and each Purchaser Agent pursuant to Section 8.5.

“Dynamic EDR Maximum Percentage” means, at any time, a percentage equal to (x) if such time is during the Temporary Period, 25.0% and (y) otherwise, (I) if a Cumulative Gross Loss Event has occurred and is continuing, 20.0% and (II) otherwise, the lesser of (i) 20.0% and (ii) a percentage equal to (A) the aggregate Outstanding Balance of all Eligible Receivables that are Extended Discounted Receivables, dividedby (B) the aggregate Outstanding Balance of all Receivables.

“Dynamic ESR Maximum Percentage” means, at any time, a percentage equal to (x) if such time is during the Temporary Period, the lesser of (I) 30.00% and (II) a percentage equal to (i) (A) the aggregate Outstanding Balance of all Eligible Receivables that are either Extended Discounted Receivables or Extended Skip Receivables, dividedby (B) the aggregate Outstanding Balance of all Receivables, times (ii) if such date of determination is (A) prior to delivery of the Monthly Report in August 2023 with an as of date of July 31, 2023, 100% and (B) on or after delivery of the Monthly Report in August 2023 with an as of date of July 31, 2023, 92.5% and (y) otherwise, (I) if a Cumulative Gross Loss Event has occurred and is continuing, 25.0% and (II) otherwise, the lesser of (i) 25.0% and (ii) a percentage equal to (A) (x) the aggregate Outstanding Balance of all Eligible Receivables that are either Extended Discounted Receivables or Extended Skip Receivables, dividedby (y) the aggregate Outstanding Balance of all Receivables, times (B) 92.5%.

“EagleSoft Computer Receivable” means a Receivable originated by PDSI that arises from the sale or financing of computer hardware equipment by PDSI. “EagleSoft Computer Receivables” may also be referred to as “Patterson Computer Receivables”.

“Eligible COVID-19 Modified Receivable” means, as of any date of determination, a COVID-19 Modified Receivable that satisfied each of the following criteria: (i) installment payments under the related Contract are not required to be made for a period of up to 3 months commencing on the date such Receivable first became a COVID-19 Modified Receivable, (ii) interest will continue to accrue under the related Contract during such deferral period, (iii) the monthly installment amount owing by the related Obligor during the related deferral period is $0, (iv) the deferred monthly installments will be added to the end of the related Contract and payable in equal monthly installments, (v) such Receivable was not a Delinquent Receivable on

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the date it became a COVID-19 Modified Receivable, (vi) no payment, or part thereof, that was invoiced to the related Obligor prior to such Receivable becoming a COVID-19 Modified Receivable remains unpaid for 61 days or more from the original due date for such payment, (vii) the related Obligor has affirmatively elected to participate in the COVID-19 Deferred Payment Program by completing and submitting an application therefore to PDSI, (viii) such Receivable became a COVID-19 Modified Receivable not later than June 30, 2020, (ix) no more than three monthly installment payments in the aggregate are being deferred under the related Contract and (x) the Originator thereof is PDSI.

“Eligible Hedge Provider” means any financial institution that has an unsecured, unguaranteed, long-term debt rating of at least A- by S&P or A3 by Moody’s.

“Eligible Receivable” means, at any time, a Receivable:

(i)the Obligor of which (a) if a natural person, is a resident of the United States or, if a corporation or other business organization, is organized under the laws of the United States or any political subdivision thereof and has its chief executive office in the United States; (b) is not an Affiliate of any of the parties hereto; (c) is neither a Designated Obligor nor a Sanctioned Person; and (d) is not a government or a governmental subdivision or agency,

(ii)the Obligor of which is not, and has not been, the Obligor of any Charged-Off Receivable or any Defaulted Receivable,

(iii)that is not a Charged-Off Receivable or a Defaulted Receivable,

(iv)that is not a Delinquent Receivable,

(v)that arises under a Contract that has not had any payment or other terms of such Contract extended, modified or waived other than, in the case of an Eligible COVID-19 Modified Receivable, the COVID-19 Modifications,

(vi)that is an “account” or “chattel paper” within the meaning of Article 9 of the UCC of all applicable jurisdictions,

(vii)that is denominated and payable only in United States dollars in the United States,

(viii)that arises under a Contract in substantially the form of one of the form contracts set forth on Exhibit IX hereto or otherwise approved by Agent in writing, which, together with such Receivable, is in full force and effect and constitutes the legal, valid and binding obligation of the related Obligor enforceable against such Obligor in accordance with its terms subject to no offset, counterclaim or other defense,

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(ix)that arises under a Contract that (A) does not require the Obligor under such Contract to consent to the transfer, sale or assignment of the rights and duties of the applicable Originator or any of its assignees under such Contract, (B) does not contain a confidentiality provision that purports to restrict the ability of any Purchaser to exercise its rights under this Agreement, including, without limitation, its right to review the Contract and (C) at the time the payment is received the Contract is continuing and does not constitute a refund on a terminated Contract,

(x)that arises under a Contract that contains an obligation to pay a specified sum of money, contingent only upon the sale of goods, sale or licensing of software or the provision of services by the applicable Originator,

(xi)that, together with the Contract related thereto, does not contravene any law, rule or regulation applicable thereto (including, without limitation, any law, rule and regulation relating to truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy) and with respect to which no part of the Contract related thereto is in violation of any such law, rule or regulation,

(xii)that satisfies all applicable requirements of the Credit and Collection Policy,

(xiii)that was generated in the ordinary course of the applicable Originator’s business,

(xiv)that arises solely from the sale, licensing or financing of goods or software or the provision of services to the related Obligor by the applicable Originator, and not by any other Person (in whole or in part),

(xv)as to which Agent has not notified Seller that Agent has determined that such Receivable or class of Receivables is not acceptable as an Eligible Receivable, including, without limitation, because such Receivable arises under a Contract that is not acceptable to Agent,

(xvi)that is not subject to any right of rescission, set-off, counterclaim, any other defense (including defenses arising out of violations of usury laws) of the applicable Obligor against the applicable Originator or any other Adverse Claim, and the Obligor thereon holds no right as against such Originator to cause such Originator to repurchase the goods, software or merchandise the sale of which shall have given rise to such Receivable (except with respect to sale discounts effected pursuant to the Contract, or defective goods or software returned in accordance with the terms of the Contract),

(xvii)that, (a) if such Receivable is a Discounted Receivable, the related Contract requires that payment in full of the Outstanding Balance of such Receivable be made not later than 64 months (or in the case of a Large

Exh. I-12

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Receivable, not later than 88 months) after the date such Receivable was originated; (b) if such Receivable is an Extended Discounted Receivable, the related Contract requires (i) that payment in full of the Outstanding Balance of such Receivable be made not later than 73 months after the date such Receivable was originated and (ii) no more than 60 monthly payments; (c) if such Receivable is an EagleSoft Computer Receivable, the related Contract requires that payment in full of the Outstanding Balance of such Receivable be made not later than 39 months after the date such Receivable was originated; (d) if such Receivable is a Large Receivable, the related Contract requires that payment in full of the Outstanding Balance of such Receivable be made not later than 85 months after the date such Receivable was originated; and (e) otherwise, the related Contract requires that payment in full of the Outstanding Balance of such Receivable be made not later than 61 months after the date such Receivable was originated,

(xviii)as to which the applicable Originator has satisfied and fully performed all obligations on its part with respect to such Receivable required to be fulfilled by it, and no further action is required to be performed by any Person with respect thereto other than payment thereon by the applicable Obligor,

(xix)all right, title and interest to and in which has been validly transferred by (a) the applicable Originator directly to Seller under and in accordance with the Receivables Sale Agreement or (b) PDC Funding II directly to the Seller under and in accordance with the Fifth Third Assignment Agreement, and Seller has good and marketable title thereto free and clear of any Adverse Claim,

(xx)that arises under a Contract that requires the Outstanding Balance of such Receivable to be paid in equal consecutive monthly installments,

(xxi)that is not (a) a Balloon Payment Receivable or (b) a Modified Receivable that does not constitute an Eligible COVID-19 Modified Receivable,

(xxii)that, together with the related Contract, has not been sold, assigned or pledged by the applicable Originator, PDC Funding II or Seller, except pursuant to the terms of the Receivables Sale Agreement, the Fifth Third Assignment Agreement and this Agreement,

(xxiii)[reserved],

(xxiv)with respect to which there is only one original executed copy of the related Contract, which will, together with the related records be held by Servicer as bailee of Agent and the Purchasers, and no other custodial agreements are in effect with respect thereto,

(xxv)that excludes residual value and any maintenance component, and

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(xxvi)that if such Receivable is an Extended Skip Receivable, no required payment or part thereof, in connection with such Receivable remains unpaid for 30 days or more from the original due date for such payment.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

“Erroneous Payment” has the meaning assigned to it in Section 11.9(a).

“Erroneous Payment Deficiency Assignment” has the meaning assigned to it in Section 11.9(d)(i).

“Erroneous Payment Return Deficiency” has the meaning assigned to it in Section 11.9(d)(i).

“Erroneous Payment Subrogation Rights” has the meaning assigned to it in Section 11.9(e).

“Excess Spread” means, as of the last day of any Fiscal Month, the sum of (i) the weighted average annual percentage rate accruing on the Receivables, minus (ii) 1%, minus (iii) the Cap Strike Rate, minus (iv) the Program Fee Rate (as defined in each Fee Letter).

“Extended Discounted Receivable” means a Receivable that arises under a Contract pursuant to which the first installment payment thereunder is not required to be made prior to 4 to 12 months after the contract inception; providedthat such Receivable shall cease to be an Extended Discounted Receivable after the date on which the first installment payment thereunder is required to be paid and shall at all times thereafter be deemed to be an “Extended Skip Receivable”; providedfurther, if the first six payments thereunder are made in full in consecutive months, such Receivable shall no longer be deemed to be an “Extended Skip Receivable.”

“Extended Skip Receivable” has the meaning set forth in the definition of “Extended Discounted Receivable”.

“Extension Notice” has the meaning set forth in Section 4.6(a).

“Facility” means the facility providing for Seller to sell the Asset Portfolio as provided in this Agreement.

“Facility Account” means the account numbered 1109495 maintained by Seller in the name of “PDC Funding Company, LLC” at JPMorgan, together with any successor account or sub-account.

“Facility Termination Date” means the earliest of (i) the Liquidity Termination Date and (ii) the Amortization Date.

“Federal Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy,” as amended and any successor statute thereto.

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“Federal Funds Effective Rate” means for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by Agent from three Federal funds brokers of recognized standing selected by it. Notwithstanding the foregoing, if any Financial Institution is borrowing overnight funds on any day from a Federal Reserve Bank to make or maintain such Financial Institution’s funding of all or any portion of the Asset Portfolio hereunder, the Federal Funds Effective Rate, at the option of such Financial Institution, for such Financial Institution shall be the average rate per annum at which such overnight borrowings are made on any such day. Each determination of the Federal Funds Effective Rate shall be conclusive and binding on Seller and the Seller Parties, except in the case of manifest error.

“Fee Letter” means the letter agreement dated August 4, 2022 (as amended, restated, supplemented, or otherwise modified from time to time) among Seller, MUFG, the MUFG Conduit, Truist Bank, Royal Bank of Canada and Thunder Bay Funding, LLC.

“Fifth Third Assignment Agreement” means that certain Termination, Payoff and Assignment Agreement, dated as of July 28, 2023, by and among Servicer, Seller, each Originator, PDC Funding II, Fifth Third Bank, National Association and Agent, as amended, restated, supplemented or otherwise modified from time to time.

“Final Payout Date” means the date following the Amortization Date on which the Aggregate Capital shall have been reduced to zero and all of the Aggregate Unpaids, Obligations and all other amounts then accrued or payable to Agent, the Purchaser Agents, the Purchasers and the other Indemnified Parties shall have been indefeasibly paid in full in cash.

“Finance Charge Collections” means Collections consisting of Finance Charges.

“Finance Charges” means, with respect to a Contract, any finance, interest, late payment charges or similar charges owing by an Obligor pursuant to such Contract.

“Financial Institutions” has the meaning set forth in the preamble in this Agreement.

“Financial Institution Yield” means for each respective Rate Tranche Period relating to any Capital (or portion thereof) of any of the Financial Institutions, an amount equal to the product of the applicable Discount Rate for such Capital (or portion thereof) multipliedby the Capital (or portion thereof) of such Financial Institution for each day elapsed during such Rate Tranche Period, annualized on a 360 day basis.

“First-Tier Account” means each concentration account, depositary account, lock-box account or similar account in which any Collections are collected or deposited, including, without limitation, by means of automatic funds transfer (other than the Second-Tier Account) and which is listed on Exhibit IV.

Exh. I-15

THIRD AMENDED AND RESTATED
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“Fiscal Month” means any of the twelve consecutive four week or five week accounting periods used by PDCo for accounting purposes which begin on the Sunday after the last Saturday in April of each year and ending on the last Saturday in April of the next year.

“Fiscal Year”means the twelve consecutive month accounting period used by PDCo for accounting purposes which begins on the Sunday after the last Saturday in April of each year and ending on the last Saturday of April of the next year.

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

“Funding Agreement” means (i) this Agreement and (ii) any agreement or instrument executed by any Funding Source with or for the benefit of a Conduit.

“Funding Source” means with respect to any Conduit (i) such Conduit’s Related Financial Institution(s) or (ii) any insurance company, bank or other funding entity providing liquidity, credit enhancement or back-up purchase support or facilities to such Conduit.

“GAAP” means generally accepted accounting principles in effect in the United States of America as of the date of this Agreement, provided, that if there occurs after the date of this Agreement any change in GAAP that affects in any material respect the calculation of any amount described in Sections 9.1(f) or (m), Agent and Seller shall negotiate in good faith amendments to the provisions of this Agreement that relate to the calculation of such amounts with the intent of having the respective positions of Agent and the Purchasers and Seller after such change in GAAP conform as nearly as possible to their respective positions as of the date of this Agreement and, until any such amendments have been agreed upon, the amounts described in Sections 9.1(f) or (m) shall be calculated as if no such change in GAAP has occurred.

“Group Practice” means a dental practice that has multiple dentists with (i) four or more offices and (ii) $200,000 or more in annual expenditures for goods and inventory.

“Group Practice Obligor” means an Obligor that is both (i) a corporation or other business association that has been in existence for more than five years and (ii) a Group Practice.

“Hedge Floating Amount” means, with respect to any Hedging Agreement, all amounts owing to Seller under, and any other Collections with respect to, such Hedging Agreement.

“Hedge Provider” means any Person that enters into a Hedging Agreement with Seller.

“Hedge Provider Downgrade” means the unsecured, unguaranteed, long-term debt rating of any Hedge Provider under its then current Hedging Agreement, if any, is reduced below A- or withdrawn by S&P or below A3 or withdrawn by Moody’s.

“Hedging Agreement” means an interest rate cap agreement or other interest rate hedge agreement, in each case, in form and substance satisfactory to Agent, entered into by Seller (and pledged to Agent, for the ratable benefit of the Purchasers), as the same may from time to time be supplemented, amended, extended, replaced or otherwise modified, in each case, in accordance with Section 7.3(d)(iii); provided that (i) at the time such transaction is entered into,

Exh. I-16

THIRD AMENDED AND RESTATED
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the Hedge Provider thereunder is an Eligible Hedge Provider, (ii) Seller shall have no payment obligations nor any Hedging Obligations under such transaction other than the payment of up-front premiums to the Eligible Hedge Provider (and on or prior to the date of such Hedging Agreement all such premiums payable by Seller during the scheduled term of such Hedging Agreement shall have been duly paid in full in advance), (iii) the notional amount with respect to such Hedging Agreement shall be an amount at all times satisfactory to Agent, which amount shall be $575,000,000until otherwise specified by Agent to Seller and (iv) the documentation governing such hedge transaction shall be in form and substance satisfactory to Agent.

“Hedging Obligations” means all amounts payable to a Hedge Provider under such Hedge Provider’s Hedging Agreement, including, without limitation, the accrued fixed amount under such Hedging Agreement and all breakage costs associated with the termination of such Hedging Agreement.

“Indebtedness” of a Person means such Person’s (i) obligations for borrowed money, (ii) obligations representing the deferred purchase price of property or services (other than accounts payable arising in the ordinary course of such Person’s business payable on terms customary in the trade), (iii) obligations, whether or not assumed, secured by liens or payable out of the proceeds or production from property now or hereafter owned or acquired by such Person, (iv) obligations which are evidenced by notes, acceptances, or other instruments, (v) capitalized lease obligations, (vi) net liabilities under interest rate swap, exchange or cap agreements, (vii) Contingent Obligations and (viii) liabilities in respect of unfunded vested benefits under plans covered by Title IV of ERISA.

“Indemnified Amounts” has the meaning set forth in Section 10.1.

“Indemnified Party” has the meaning set forth in Section 10.1.

“Independent Governor” shall mean a member of the Board of Governors of Seller who (i) shall not have been at the time of such Person’s appointment or at any time during the preceding five years, and shall not be as long as such Person is a governor of Seller, (A) a director, officer, employee, partner, shareholder, member, manager, governor or Affiliate of any of the following Persons (collectively, the “Independent Parties”): Servicer, any Patterson Entity, or any of their respective Subsidiaries or Affiliates (other than Seller), (B) a supplier to any of the Independent Parties, (C) a Person controlling or under common control with any partner, shareholder, member, manager, governor, Affiliate or supplier of any of the Independent Parties, or (D) a member of the immediate family of any director, officer, employee, partner, shareholder, member, manager, Affiliate or supplier of any of the Independent Parties; (ii) has prior experience as an independent director or governor for a corporation or limited liability company whose charter documents required the unanimous consent of all independent directors or governors thereof before such corporation or limited liability company could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy and (iii) has at least three years of employment experience with one or more entities that provide, in the ordinary course of their respective businesses, advisory, management or placement services to issuers of

Exh. I-17

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securitization or structured finance instruments, agreements or securities and is employed by any such entity.

“Interest Expense Coverage Ratio” shall have the meaning assigned to such term in the Credit Agreement as in effect on the Amendment Date, including all defined terms used within such term which defined terms and definitions thereof are incorporated by reference herein; provided, however, that in the event the Credit Agreement is terminated or such defined term is no longer used in the Credit Agreement, the respective meaning assigned to such term immediately preceding such termination or non-usage shall be used for purposes of this Agreement. If, after the Amendment Date, the Interest Expense Coverage Ratio maintenance covenant set forth in Section 6.21 of the Credit Agreement (or any of the defined terms used in connection with such covenant (including the term “Interest Expense Coverage Ratio”)) is amended, modified or waived, then the test set forth in this Agreement or the defined terms used therein, as applicable, shall, for all purposes of this Agreement, automatically and without further action on the part of any Person, be deemed to be also so amended, modified or waived, if at the time of such amendment, modification or waiver, (i) each Purchaser Agent and the Agent is a party to the Credit Agreement and (ii) such amendment, modification or waiver is consummated in accordance with the terms of the Credit Agreement.

“JPMorgan” means JPMorgan Chase Bank, N.A. in its individual capacity and its successors and assigns.

“Large Receivable” means (i) each Receivable, the initial Outstanding Balance of such Receivable on the date it was originated was not less than $75,000, (ii) each 3D Cone Beam Receivable that was originated on or prior to November 30, 2012 and (iii) each CEREC Receivable that was originated on or prior to November 30, 2012.

“Legal Maturity Date” means the two-year anniversary of the due date of the latest maturing Receivable in the Asset Portfolio on the date of the occurrence of the Amortization Date.

“Leverage Ratio” shall have the meaning assigned to such term in the Credit Agreement as in effect on the Amendment Date, including all defined terms used within such term which defined terms and definitions thereof are incorporated by reference herein; provided, however, that in the event the Credit Agreement is terminated or such defined term is no longer used in the Credit Agreement, the respective meaning assigned to such term immediately preceding such termination or non-usage shall be used for purposes of this Agreement. If, after the Amendment Date, the Leverage Ratio maintenance covenant set forth in Section 6.20 of the Credit Agreement (or any of the defined terms used in connection with such covenant (including the term “Leverage Ratio”)) is amended, modified or waived, then the test set forth in this Agreement or the defined terms used therein, as applicable, shall, for all purposes of this Agreement, automatically and without further action on the part of any Person, be deemed to be also so amended, modified or waived, if at the time of such amendment, modification or waiver, (i) each Purchaser Agent and the Agent is a party to the Credit Agreement and (ii) such amendment, modification or waiver is consummated in accordance with the terms of the Credit Agreement.

Exh. I-18

THIRD AMENDED AND RESTATED
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“Liquidity Termination Date” means July 26, 2024, as extended by the mutual agreement of Seller, Agent, the Purchaser Agents and the Purchasers.

“Lock-Box” means each locked postal box with respect to which a bank who has executed a Collection Account Agreement has been granted exclusive access for the purpose of retrieving and processing payments made on the Receivables and which is listed on Exhibit IV.

“Loss Multiple” means (i) 3.5 if the Leverage Ratio is less than or equal to 3.00x and (ii) 4.5 if the Leverage Ratio is greater than 3.00x, in each case as of the last day of the immediately preceding fiscal quarter.

“Loss-to-Liquidation Ratio” means, on any date, an amount equal to the quotient of (i) the Loss Amount dividedby (ii) the sum of (x) the total Collections that reduce the Outstanding Balance on the Receivables during the immediately preceding Fiscal Month, plus (y) the Loss Amount,

where:

Loss Amount     =    The sum of (A) the positive number representing the difference between (i) the Outstanding Balance of all Receivables which became Defaulted Receivables during the immediately preceding Fiscal Month minus (ii) the Outstanding Balance of all Receivables which ceased to continue to be Defaulted Receivables (solely as a consequence of any Obligor making a payment on any Defaulted Receivable) during the immediately preceding Fiscal Month, plus (B) the Outstanding Balance of all Receivables that are not Defaulted Receivables and the Obligor thereof has taken any action, or suffered any event to occur, of the type described in Section 9.1(d) (as if references to the Seller Party therein refer to such Obligor) during the immediately preceding Fiscal Month. The Loss Amount shall not be less than “zero”.

“Material Adverse Effect” means a material adverse effect on (i) the financial condition or operations of any Seller Party and its Subsidiaries, (ii) the ability of any Seller Party to perform its obligations under this Agreement or the Performance Provider to perform its obligations under the Performance Undertaking, (iii) the legality, validity or enforceability of this Agreement or any other Transaction Document, (iv) any Purchaser’s interest in the Receivables generally or in any significant portion of the Receivables, the Related Security or the Collections with respect thereto, or (v) the collectibility of the Receivables generally or of any material portion of the Receivables.

“Modified Receivable” means a Receivable as to which the payment terms of the related Contract have been extended or modified for credit reasons since the origination of such Receivable.

Exh. I-19

THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT

“Monthly Report” means a report, in substantially the form of Exhibit X hereto (appropriately completed), furnished by Servicer to Agent and each Purchaser Agent pursuant to Section 8.5.

“Moody’s” means Moody’s Investors Service, Inc.

“MUFG”has the meaning set forth in the Preliminary Statements to this Agreement.

“MUFG Conduit”has the meaning set forth in the Preliminary Statements to this Agreement.

“MUFG Roles” has the meaning set forth in Section 14.13(a).

“Net Portfolio Balance” means, at any time, the aggregate Outstanding Balance of all Eligible Receivables at such time reduced by the sum of the following amounts, without duplication: (i) the aggregate amount by which the Outstanding Balance of all Eligible Receivables of each Obligor and its Affiliates exceeds the Concentration Limit for such Obligor, plus (ii) the aggregate amount by which the Outstanding Balance of all Eligible Receivables that are Veterinary Receivables, exceeds 10.0% of the aggregate Outstanding Balance of all Receivables, plus (iii) the aggregate amount by which the Outstanding Balance of all Eligible Receivables that are Software Receivables, exceeds 0.5% of the aggregate Outstanding Balance of all Receivables, plus (iv) the aggregate amount by which the Outstanding Balance of all Eligible Receivables that are EagleSoft Computer Receivable (also referred to as a “Patterson Computer Receivable”), exceeds 0.0% of the aggregate Outstanding Balance of all Receivables, plus (v) the aggregate amount by which the Outstanding Balance of all Eligible Receivables that are Large Receivables for which the related Contract requires that payment in full of the Outstanding Balance of such Receivable be made later than 64 months after the date such Receivable was originated, exceeds 10.0% of the aggregate Outstanding Balance of all Receivables, plus (vi) the aggregate amount by which the Outstanding Balance of all Eligible Receivables that are Discounted Receivables, exceeds 2.5% of the aggregate Outstanding Balance of all Receivables, plus (vii) the aggregate amount by which the Outstanding Balance of all Eligible Receivables that are Special Market Receivables, exceeds 2.5% of the aggregate Outstanding Balance of all Receivables, plus (viii) the aggregate amount by which the Outstanding Balance of all Eligible Receivables that are Skip Receivables, exceeds 5.0% of the aggregate Outstanding Balance of all Receivables, plus (ix) the aggregate amount by which the Outstanding Balance of all Eligible Receivables that are Extended Discounted Receivables, exceeds the Dynamic EDR Maximum Percentage at such time of the aggregate Outstanding Balance of all Receivables, plus (x) the aggregate amount by which the Outstanding Balance of all Eligible Receivables that are either Extended Discounted Receivables or Extended Skip Receivables, exceeds the Dynamic ESR Maximum Percentage at such time of the aggregate Outstanding Balance of all Receivables.

“Non-Renewing Financial Institution” has the meaning set forth in Section 4.6(a).

“Obligations” shall have the meaning set forth in Section 2.1.

Exh. I-20

THIRD AMENDED AND RESTATED
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“Obligor” means a Person obligated to make payments pursuant to a Contract.

“OFAC” has the meaning set forth in the definition of Sanctioned Person.

“Off-Balance Sheet Liability” of a Person means the principal component of (i) any repurchase obligation or liability of such Person with respect to accounts or notes receivable sold by such Person, (ii) any liability under any sale and leaseback transaction which is not a capitalized lease, (iii) any liability under any so-called “synthetic lease” or “tax ownership operating lease” transaction entered into by such Person, (iv) any receivables purchase or financing facility or (v) any obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the consolidated balance sheets of such Person, but excluding from this clause (v) all operating leases.

“Originated Receivable” means all indebtedness and other obligations owed to Seller, PDC Funding II or an Originator (at the time it arises, and before giving effect to any transfer or conveyance under the Receivables Sale Agreement, the Fifth Third Assignment Agreement or hereunder) or in which Seller, PDC Funding II or an Originator has a security interest or other interest, including, without limitation, any indebtedness, obligation or interest constituting an account, chattel paper, instrument or general intangible, arising in connection with the sale, licensing or financing of goods or software or the rendering of services by an Originator, and further includes, without limitation, the obligation to pay any Finance Charges with respect thereto. Indebtedness and other rights and obligations arising from any one transaction, including, without limitation, indebtedness and other rights and obligations represented by an individual invoice, shall constitute an Originated Receivable separate from an Originated Receivable consisting of the indebtedness and other rights and obligations arising from any other transaction; providedfurther, that any indebtedness, rights or obligations referred to in the immediately preceding sentence shall be an Originated Receivable regardless of whether the account debtor, any Originator, PDC Funding II or Seller treats such indebtedness, rights or obligations as a separate payment obligation.

“Originator” means each of PDSI and PVSI, in their respective capacities as seller under the Receivables Sale Agreement and any other seller from time to time party thereto.

“Other Costs” shall have the meaning set forth in Section 10.3.

“Other Sellers” shall have the meaning set forth in Section 10.4.

“Outstanding Balance” of any Receivable at any time means the then outstanding principal balance thereof.

“Participant” has the meaning set forth in Section 12.2.

“Patriot Act” has the meaning set forth in Section 14.19.

Exh. I-21

THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT

“Patterson Entity” means each of PDC Funding II, PDCo and each Originator and their respective successors and assigns.

“Payment Instruction” has the meaning set forth in Section 1.4.

“Payment Rate” means, at any time of determination, the ratio (expressed as a percentage) of (a) the total amount of Collections that reduce the Outstanding Balance on the Receivables during such Fiscal Month to (b) the aggregate Outstanding Balance of Receivables as of the inception of such Fiscal Month.

“Payment Recipient” has the meaning assigned to it in Section 11.9(a).

“PDC Funding II” means PDC Funding Company II, LLC, a Minnesota limited liability company, together with its successors and assigns.

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

“PDSI” means Patterson Dental Supply, Inc., a Minnesota corporation, together with its successors and assigns.

“PVSI” means Patterson Veterinary Supply, Inc. (f/k/a Webster Veterinary Supply, Inc.), a Minnesota corporation, together with its successors and assigns.

“Performance Provider” means PDCo in its capacity as Provider under the Performance Undertaking.

“Performance Undertaking” means that certain Performance Undertaking, dated as of May 10, 2002, by Performance Provider in favor of Seller, substantially in the form of Exhibit XI, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“Periodic Term SOFR Determination Day”has the meaning specified in the definition of “Term SOFR”.

“Permitted Investments” means (a) evidences of indebtedness maturing within thirty days after the date of loan thereof, issued by, or guaranteed by the full faith and credit of, the federal government of the United States, (b) repurchase agreements with banking institutions or broker-dealers registered under the Securities Exchange Act of 1934 which are fully secured by obligations of the kind specified in clause (a), (c) money market funds (i) rated not lower than the highest rating category from Moody’s and “AAA m” or “AAAm-g,” from S&P or (ii) which are otherwise acceptable to Agent or (d) commercial paper issued by any corporation incorporated under the laws of the United States and rated at least “A-1+” (or the equivalent) by S&P and at least “P-1” (or the equivalent) by Moody’s.

“Person” means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.

Exh. I-22

THIRD AMENDED AND RESTATED
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“P.O. Box” means a locked postal box located in a United States post office to which Obligors remit payments of Receivables.

“Postal Notice” means a notice from an Originator directing the United States post office where any P.O. Box is located to transfer control of such P.O. Box to Agent, which notice shall be substantially in the form of Exhibit XII.

“Post-Amendment Date” means May 20, 2020.

“Potential Amortization Event” means an event which, with the passage of time or the giving of notice, or both, would constitute an Amortization Event.

“Prior Agreement” has the meaning set forth in the Preliminary Statements to this Agreement.

“Prime Rate” means a rate per annum equal to the prime rate of interest announced from time to time by MUFG or its parent (which is not necessarily the lowest rate charged to any customer), changing when and as said prime rate changes.

“Primescan Receivable” means a Receivable originated by PDSI that arises from the sale, licensing or financing in a single transaction of both (i) computer software and (ii) equipment, in each case, by PDSI.

“Principal Collections” means Collections other than Finance Charge Collections.

“Proposed Reduction Date” has the meaning set forth in Section 1.3.

“Pro Rata Share” means, (a) for each Financial Institution, a percentage equal to (i) the Commitment of such Financial Institution, dividedby (ii) the aggregate amount of all Commitments of all Financial Institutions in such Financial Institution’s Purchaser Group, adjusted as necessary to give effect to the application of the terms of Section 4.6, and (b) for each Conduit, a percentage equal to (i) the Conduit Purchase Limit of such Conduit, dividedby (ii) the aggregate amount of all Conduit Purchase Limits of all Conduits hereunder.

“Purchase” has the meaning set forth in Section 1.1(a).

“Purchase Limit” means $575,000,000,as such amount may be modified in accordance with the terms of Section 4.6(b).

“Purchase Notice” has the meaning set forth in Section 1.2(a).

“Purchaser Agent Roles” has the meaning set forth in Section 14.13(b).

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

“Purchaser Group” means with respect to (i) each Conduit, a group consisting of such Conduit, its Purchaser Agent and its Related Financial Institution(s), (ii) each Financial

Exh. I-23

THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT

Institution, a group consisting of such Financial Institution, the Conduit (if any) for which such Financial Institution is a Related Financial Institution, its Purchaser Agent and each other Financial Institution that is a Related Financial Institution for such Conduit (if any) and (iii) each Purchaser Agent, a group consisting of such Purchaser Agent and the Conduit (if any) and Financial Institution(s) for which such Purchaser Agent is acting as Purchaser Agent hereunder.

“Purchasers” means each Conduit and each Financial Institution.

“Purchasing Financial Institution” has the meaning set forth in Section 12.1(b).

“QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).

“Rate Tranche Period” means, with respect to any portion of the Asset Portfolio held by a Financial Institution:

(a)    if Financial Institution Yield for any portion of such Financial Institution’s Capital is calculated on the basis of Term SOFR, a period of one month, or such other period as may be mutually agreeable to the applicable Financial Institution and Seller, commencing on a U.S. Government Securities Business Day selected by Seller or the applicable Financial Institution pursuant to this Agreement. Such Rate Tranche Period shall end on the day in the applicable succeeding calendar month which corresponds numerically to the beginning day of such Rate Tranche Period, provided, however, that if there is no such numerically corresponding day in such succeeding month, such Rate Tranche Period shall end on the last U.S. Government Securities Business Day of such succeeding month; or

(b)    if Financial Institution Yield for any portion of such Financial Institution’s Capital is calculated on the basis of the Alternate Base Rate, a period commencing on a Business Day selected by Seller and agreed to by the applicable Financial Institution, provided no such period shall exceed one month.

If any Rate Tranche Period would end on a day which is not a Business Day, such Rate Tranche Period shall end on the next succeeding Business Day, provided, however, that in the case of Rate Tranche Periods corresponding to Term SOFR, if such next succeeding U.S. Government Securities Business Day falls in a new month, such Rate Tranche Period shall end on the immediately preceding U.S. Government Securities Business Day. In the case of any Rate Tranche Period for any portion of any Financial Institution’s Capital which commences before the Amortization Date and would otherwise end on a date occurring after the Amortization Date, such Rate Tranche Period shall end on the Amortization Date. The duration of each Rate Tranche Period which commences after the Amortization Date shall be of such duration as selected by the applicable Financial Institution.

“Ratings Request” has the meaning as specified in Section 10.2(c).

“Receivable” means at any time, each and every Originated Receivable that (i) has been identified for sale to Seller in any Sale Assignment (as defined in the Receivables Sale

Exh. I-24

THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT

Agreement), including all schedules thereto, delivered pursuant to Section 1.1(a)(ii) of the Receivables Sale Agreement or (ii) that has been identified for sale by PDC Funding II to Seller in the Fifth Third Assignment Agreement.

“Receivables Sale Agreement” means that certain Receivables Sale Agreement, dated as of May 10, 2002, by and among the Originators and Seller, as amended, restated, supplemented or otherwise modified from time to time.

“Records” means, with respect to any Receivable, all Contracts and other documents, books, records and other information (including, without limitation, computer programs, tapes, disks, punch cards, data processing software and related property and rights) relating to such Receivable, any Related Security therefor and the related Obligor.

“Reduction Notice” has the meaning set forth in Section 1.3.

“Regulatory Change” shall mean (i) the adoption after the date hereof of any applicable law, rule or regulation (including any applicable law, rule or regulation regarding capital adequacy) or any change therein after the date hereof, (ii) any change after the date hereof in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency, or (iii) the compliance, whether commenced prior to or after the date hereof, by any Funding Source or Purchaser with 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, or any rules or regulations promulgated in connection therewith by any such agency.

“Related Equipment” means with respect to any Receivable, the goods sold or licensed to or financed for the Obligor which sale, licensing or financing gave rise to such Receivable and all financing statements or other filings with respect thereto.

“Related Financial Institution” means with respect to each Conduit, each Financial Institution set forth opposite such Conduit’s name on Schedule A to this Agreement and/or, in the case of an assignment pursuant to Section 12.1, set forth in the applicable Assignment Agreement.

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

(i)all of Seller’s interest in the Related Equipment or other inventory, software and goods (including returned or repossessed inventory, software or goods), if any, the sale, licensing or financing of which by the applicable Originator gave rise to such Receivable, and all insurance contracts with respect thereto,

Exh. I-25

THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT

(ii)all other security interests or liens and property subject thereto from time to time, if any, purporting to secure payment of such Receivable, whether pursuant to the Contract related to such Receivable or otherwise, together with all financing statements and security agreements describing any collateral securing such Receivable,

(xxvii)all guaranties, letters of credit, insurance, “supporting obligations” (within the meaning of Section 9-102(a) of the UCC of all applicable jurisdictions) and other agreements or arrangements of whatever character from time to time supporting or securing payment of such Receivable whether pursuant to the Contract related to such Receivable or otherwise,

(xxviii)all service contracts and other contracts and agreements associated with such Receivable,

(xxix)all Records related to such Receivable,

(xxx)all of Seller’s right, title and interest in, to and under the Receivables Sale Agreement, the Fifth Third Assignment Agreement and the Performance Undertaking,

(xxxi)all of Seller’s right, title and interest in and to each Lock-Box, P.O. Box and Collection Account, and any and all agreements related thereto,

(xxxii)all of Seller’s right, title and interest in, to and under the Hedging Agreements,

(xxxiii)all Collections in respect thereof, and

(xxxiv)all proceeds of such Receivable and any of the foregoing.

“Repossessed” means that, with respect to any Related Equipment, the applicable Originator or its agent has obtained possession, control and dominion of such Related Equipment from the related Obligor.

“Required Monthly Payments” means, as of any Settlement Date, an amount equal to (i) if such date is before the Amortization Date, the amount owing on such Settlement Date under clauses first and second of Section 2.2(c) and (ii) if such date is on and after the Amortization Date, the Aggregate Unpaids at such time.

“Required Notice Period” means the number of days required notice set forth below applicable to the Aggregate Reduction indicated below:

Exh. I-26

THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT

Aggregate Reduction	Required Notice Period
≤$100,000,000	two Business Days
>$100,000,000 to $250,000,000	five Business Days
≥$250,000,000	ten Business Days

“Required Purchasers” means, at any time, the Financial Institutions with Commitments in excess of 75% of the aggregate Commitments hereunder.

“Required Ratings” has the meaning as specified in Section 10.2(c).

“Restricted Junior Payment” means (i) any dividend or other distribution, direct or indirect, on account of any shares of any class of membership units of Seller now or hereafter outstanding, except a dividend payable solely in shares of that class of membership units or in any junior class of membership units of Seller, (ii) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any shares of any class of membership units of Seller now or hereafter outstanding, (iii) any payment or prepayment of principal of, premium, if any, or interest, fees or other charges on or with respect to, and any redemption, purchase, retirement, defeasance, sinking fund or similar payment and any claim for rescission with respect to the Subordinated Loans (as defined in the Receivables Sale Agreement), (iv) any payment made to redeem, purchase, repurchase or retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of membership units of Seller now or hereafter outstanding, and (v) any payment of management fees by Seller (except for reasonable management fees to the Originators or their Affiliates in reimbursement of actual management services performed).

“RPA Deferred Purchase Price” has the meaning set forth in Section 1.6.

“Sanctioned Country” means, at any time, a country or territory which is the subject or target of any Sanctions, including, without limitation, Cuba, the Crimea, Donetsk People’s Republic, and Luhansk People’s Republic regions of Ukraine, Iran, North Korea and Syria.

“Sanctioned Person” means, at any time, (a) any Person currently the subject or the target of any Sanctions, including any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”) (or any successor thereto) or the U.S. Department of State, available at: http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx, or as otherwise published from time to time; (b) that is fifty-percent or more owned, directly or indirectly, in the aggregate by one or more Persons described in clause (a) above; (c) that is operating, organized or resident in a Sanctioned Country; (d) with whom engaging in trade, business or other activities is otherwise prohibited or restricted by Sanctions; or (e) (i) an agency of the government of a Sanctioned Country, (ii) an organization controlled by a Sanctioned Country, or (iii) a person resident in a Sanctioned Country, to the extent subject to a sanctions program administered by OFAC.

Exh. I-27

THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT

“Sanctions” means the laws, rules, regulations and executive orders promulgated or administered to implement economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time (a) by the US government, including those administered by OFAC, the US State Department, the US Department of Commerce or the US Department of the Treasury, (b) by the United Nations Security Council, the European Union or Her Majesty’s Treasury of the United Kingdom or (c) by other relevant sanctions authorities to the extent compliance with the sanctions imposed by such other authorities would not entail a violation of applicable law.

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.

“Second-Tier Account” means the account numbered 4910006458 maintained by Seller in the name of “PDC Funding Company, LLC” at MUFG Union Bank, N.A., together with any successor account or sub-account.

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

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

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

“Servicer” means at any time the Person (which may be Agent) then authorized pursuant to Article VIII to service, administer and collect Receivables.

“Servicing Fee” has the meaning set forth in Section 8.6.

“Settlement Date” means (A) the 19th day of each calendar month, and (B) the last day of the relevant Rate Tranche Period in respect of each portion of Capital of any Financial Institution; or, in each case, if such day is not a Business Day, then the first Business Day thereafter.

“Settlement Period” means (i) in respect of the Capital of any Conduit, each Accrual Period and (ii) in respect of each portion of Capital of any Financial Institution, the entire Rate Tranche Period of such portion of Capital.

“Skip Receivable” has the meaning set forth in the definition of “Discounted Receivable”.

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

“SOFR Administrator” means the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).

“SOFR Spread” means 0.11 % per annum.

Exh. I-28

THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT

“Software Receivable” means a Receivable (i) that is not a Primescan Receivable and (ii) originated by PDSI that arises from the sale, licensing or financing of computer software by PDSI.

“Special Market Receivables” means any Receivable that both (i) the Obligor of which is a Group Practice Obligor and (ii) was originated by the “Special Markets” division (or any other division that is the successor thereof) of PDSI.

“Specified Annual Vintage Pool” means the Annual Vintage Pool with respect to the current Fiscal Year and each other Fiscal Year commencing with 2003.

“Subsidiary” of a Person means (i) any corporation more than 50% of the outstanding securities having ordinary voting power of which shall at the time be owned or controlled, directly or indirectly, by such Person or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, or (ii) any partnership, association, limited liability company, joint venture or similar business organization more than 50% of the ownership interests having ordinary voting power of which shall at the time be so owned or controlled. Unless otherwise expressly provided, all references herein to a “Subsidiary” shall mean a Subsidiary of Seller.

“Temporary Period” means the period commencing on April 28, 2023 and ending on (and excluding) January 19, 2024.

“Term SOFR” means,

(a)    for any calculation with respect to any portion of the Asset Portfolio or Capital funded at Term SOFR, the Term SOFR Reference Rate for a tenor comparable to the applicable Interest Period on the day (such day, the “Periodic Term SOFR Determination Day”) that is two (2) U.S. Government Securities Business Days prior to the first day of such Interest Period, as such rate is published by the Term SOFR Administrator; provided, however, that if as of 5:00 p.m. (New York City time) on any Periodic Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than three (3) U.S. Government Securities Business Days prior to such Periodic Term SOFR Determination Day, and

(b)for any calculation with respect to any portion of the Asset Portfolio or Capital funded at the Alternate Base Rate on any day, the Term SOFR Reference Rate for a tenor of one month on the day (such day, the “Alternate Base Rate Term SOFR Determination Day”) that is two (2) U.S. Government Securities Business Days prior to such day, as such rate is published by the Term SOFR Administrator; provided, however, that if as of 5:00 p.m. (New York City time) on any Alternate Base Rate Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator and a Benchmark

Exh. I-29

THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT

Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than three (3) U.S. Government Securities Business Days prior to such Base Rate Term SOFR Determination Day;

provided, further,that if Term SOFR determined as provided above (including pursuant to the proviso under clause (a) or clause (b) above) shall ever be less than the Floor, then Term SOFR shall be deemed to be the Floor.

“Term SOFR Administrator” means CME Group Benchmark Administration Limited (CBA) (or a successor administrator of the Term SOFR Reference Rate selected by the Administrative Agent in its reasonable discretion).

“Term SOFR Reference Rate” means the forward looking term rate based on SOFR.

“Terminating Commitment Amount” means, with respect to any Terminating Financial Institution, an amount equal to the Commitment (without giving effect to clause (iii) of the proviso to the penultimate sentence of Section 4.6(b)) of such Terminating Financial Institution, minus an amount equal to 2% of such Commitment.

“Terminating Commitment Availability” means, with respect to any Terminating Financial Institution, the positive difference (if any) between (a) an amount equal to the Commitment (without giving effect to clause (iii) of the proviso to the penultimate sentence of Section 4.6(b)) of such Terminating Financial Institution, minus an amount equal to 2% of such Commitment, minus (b) the Capital funded by such Terminating Financial Institution.

“Terminating Financial Institution” has the meaning set forth in Section 4.6(b).

“Terminating Rate Tranche” has the meaning set forth in Section 4.3(b).

“Termination Date” has the meaning set forth in Section 2.2(d).

“Termination Percentage” has the meaning set forth in Section 2.2(d).

“Transaction Documents” means, collectively, this Agreement, the Prior Agreement, each Purchase Notice, the Receivables Sale Agreement, the Performance Undertaking, each Collection Account Agreement, the Hedging Agreements, each Fee Letter, the Subordinated Note (as defined in the Receivables Sale Agreement), the Closing Date Assignment Agreement, the Fifth Third Assignment Agreement and all other instruments, documents and agreements executed and delivered in connection herewith or in connection with the Prior Agreement, in each case, as amended, restated, supplemented or otherwise modified from time to time.

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

Exh. I-30

THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT

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

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

“US Bank” means U.S. Bank National Association, a national banking association, together with its successors and assigns.

“US Bank Contract Purchase Agreement” means that certain Contract Purchase Agreement, dated as of April 27, 2007, by and among PDC Funding Company II, LLC, certain financial institutions party thereto and US Bank, as agent, as amended, restated, supplemented or otherwise modified from time to time.

“US Bank Receivable” means each receivable identified on a schedule to the US Bank Contract Purchase Agreement (or in any other writing delivered pursuant thereto) as a receivable to be sold thereunder and identified at least by the obligor thereof and the outstanding principal amount thereof.

“Veterinary Receivable” means a Receivable arising from the sale or financing by PVSI of veterinary equipment.

“Weighted Average Remaining Months Without Repayment” means, on any date of determination, the number of months following such date of determination equal to:

(a)    the sum, with respect to each Extended Discounted Receivable of the product of (i) the number of months remaining under the related Contract for each Extended Discounted Receivable for which the related Obligor is not required to make an installment payment for such month, times (ii) the Outstanding Balance of such Extended Discounted Receivable;

divided by:

(b)    the aggregate Outstanding Balance at such time of all Extended Discounted Receivable.

“Weighted Average Remaining Months Without Repayment Spike” means, on any date of determination, the highest Weighted Average Remaining Months Without Repayment observed over the twelve (12) immediately preceding Fiscal Months.

All accounting terms defined directly or by incorporation in this Agreement or the Receivables Sale Agreement shall have the defined meanings when used in any certificate or other document delivered pursuant thereto unless otherwise defined therein. For purposes of this Agreement, the Receivables Sale Agreement and all such certificates and other documents, unless the context otherwise requires: (a) accounting terms not specifically defined herein shall be construed in accordance with GAAP; (b) all terms used in Article 9 of the UCC in the State of Illinois, and not specifically defined herein, are used herein as defined in such Article 9; (c) references to any amount as on deposit or outstanding on any particular date means such

Exh. I-31

THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT

amount at the close of business on such day; (d) 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); (e) references to any Section are references to such Section in such agreement (or the certificate or other document in which the reference is made), and references to any paragraph, subsection, clause or other subdivision within any Section or definition refer to such paragraph, subsection, clause or other subdivision of such Section or definition; (f) the term “including” means “including without limitation”; (g) references to any law, rule, regulation, or directive of any governmental or regulatory authority refer to such law, rule, regulation, or directive, as amended from time to time and include any successor law, rule, regulation, or directive; (h) references to any agreement refer to that agreement as from time to time amended or supplemented or as the terms of such agreement are waived or modified in accordance with its terms; (i) references to any Person include that Person’s successors and assigns; (j) headings are for purposes of reference only and shall not otherwise affect the meaning or interpretation of any provision hereof; (k) unless otherwise provided, in the calculation of time from a specified date to a later specified date, the term “from” means “from and including”, and the terms “to” and “until” each means “to but excluding”; (l) terms in one gender include the parallel terms in the neuter and opposite gender; and (m) the term “or” is not exclusive.

Exh. I-32

EX-19

        EXHIBIT 19

PATTERSON COMPANIES, INC.
Securities Trading and Information Disclosure Policy

Effective: June 10, 2024

Patterson Companies, Inc. (together with its subsidiaries, the “Company”) has adopted the following policy as to securities trading and information disclosure by Company directors, officers, and employees (“Covered Persons”):

If a Covered Person has material non-public information relating to the Company, neither that person nor any Related Person may buy or sell securities of the Company or engage in any other action to take advantage of, or pass on to others, that information. This policy also applies to material non-public information relating to any other company with publicly traded securities, including our customers, vendors and partners, obtained in the course of your employment by, or work with, the Company.

Transactions that may seem necessary or justifiable to the individual involved (such as the need to raise money for an emergency expenditure) are not excluded from this policy. You must avoid even the appearance of an improper transaction to preserve the Company’s reputation for adhering to the highest standards of ethical conduct and to avoid legal inquiries or proceedings for the individuals involved.

1.	Purpose	The purpose of this Securities Trading and Information Disclosure Policy (the “Policy”) is to promote compliance with applicable securities laws by the Company and its Covered Persons.
2.	Applicability	This Policy is applicable to all Covered Persons. This Policy also applies to any Related Person (as defined below). It is also the Company’s policy that the Company will not engage in market transactions in the Company’s securities while aware of material non-public information relating to the Company or its securities, other than pursuant to a trading plan that complies with Rule 10b5-1 under the Securities Exchange Act, as amended (“Rule 10b5-1”).
		This Policy applies to all transactions in the Company’s securities, including common stock, options and any other securities that the Company may issue, as well as to derivative securities relating to any of the Company’s securities, whether or not issued by the Company. This Policy does not apply to exercises of options granted by the Company, the vesting of restricted stock, or the exercise of a tax withholding right pursuant to which the Company withholds shares of stock to satisfy tax withholding requirements upon the vesting of any restricted stock; however, it would apply to any proposed sale of stock acquired upon exercise of options or the sale of restricted stock after vesting. This means, for example, that a “cashless exercise” of a Company-issued stock option through a broker will be subject to the restrictions set forth in this Policy.

3.	General Policy	If a Covered Person has material non-public information relating to the Company, it is the policy of the Company (and the requirements of the U.S. securities laws) that neither that person nor any Related Person (as defined below) may buy or sell securities of the Company, or puts, calls or options on the securities of the Company or engage in any other action to take advantage of, or pass on to others, that information (the terms “material” and “non-public” are defined in Section 5 below). This Policy also applies to material non-public information relating to any other company with publicly traded securities obtained in the course of employment by or association with the Company.
		In addition, to ensure that the Policy is effectively implemented and to avoid the appearance of impropriety, the Company requires all Covered Persons with frequent access to material non-public information regarding the Company (individually an “Access Person” and collectively “Access Personnel,” as more specifically identified in Section 5 of this Policy) to comply with certain additional procedures of the Policy before effecting any trades involving the Company’s securities.
4.	Reasons for this Policy	Insider trading (that is, trading on material non-public information) is against both federal and state securities laws. These laws are often strictly enforced by the U.S. Securities and Exchange Commission and state securities regulators. The Company has adopted this Policy because of the very substantial penalties imposed by these laws, because the Company’s reputation is among its most important assets and because the potential damage to both your reputation and the Company’s reputation is serious if you are accused of insider trading.
5.	FAQs	Who is an “Insider”? Any person who possesses material non-public information is considered an “insider” as to that information. Insiders generally include directors, officers and employees of the Company, and those persons in a special relationship with the Company (e.g., its auditors, attorneys and consultants). The definition of insider is transaction specific. In other words, an individual is an insider with respect to each material non-public item of information of which he or she is aware.

    2

What is “Material Information”?

Materiality of a fact depends upon the circumstances. Materiality, however, involves a relatively low threshold. Information is generally regarded as “material” if it has market significance, that is, if its public dissemination is likely to affect the market price of securities, or if it otherwise is information that a reasonable investor would want to know before making an investment decision.

Examples of Material Information Include:

·revenue, earnings or other operating results not yet released

·projections of future earnings or losses

·changes to previously announced earnings guidance

·significant write-downs in assets or increases in reserves

·major expansion plans or plans to downsize

·liquidity problems

·significant changes in margins, return rates, and other key business indicators

·proposals, plans or agreements, even if preliminary in nature, involving mergers, acquisitions, tender offers, joint ventures, recapitalizations, strategic alliances, licensing arrangements or significant changes in assets

·significant developments regarding customers or vendors (such as gain or loss of a key vendor, or significant changes in customer acquisition or retention rates)

·developments regarding significant litigation or government agency investigations

·public offerings

·developments that may lead to a change in control of the Company

·changes in senior management or the composition of the Board of Directors

·changes in the Company’s auditors

·events regarding the Company’s securities, such as dividends, sales of securities or repurchase plans

·bankruptcies or receiverships

·a significant disruption in the Company’s operations or loss, potential loss, breach or unauthorized access of its properties or assets, including its facilities or information technology infrastructure (e.g., a significant cybersecurity incident, such as a data breach)

    3

The above list is only illustrative; many other types of information may be considered “material” depending on the circumstances. The materiality of particular information is subject to reassessment on a regular basis. Material information is further not limited to historical facts but may also include projections and forecasts. With respect to a future event, such as a merger, acquisition or introduction of a new line of business, the point at which negotiations or product development are determined to be material is determined by balancing the probability that the event will occur against the magnitude of the effect that the event would have on a company’s operations or stock price should it occur. Thus, information concerning an event that would have a large effect on stock price, such as a merger, may be material even if the possibility that the event will occur is relatively small. If you are unsure whether information is material, you should consult the Insider Trading Compliance Officer before making any decision to disclose such information (other than to persons who need to know it) or to trade in or recommend securities to which that information relates.

What is “Non-Public Information”?

Non-public information is any information that has not been disclosed generally to the public. Information that is received under circumstances that indicate the information is not yet in general circulation should be assumed to be non-public. The fact that information has been disclosed to a few members of the public does not make it public for insider trading purposes. The circulation of rumors, even if accurate and reported in the media, does not constitute effective public dissemination.

Information is not considered to be known to the public immediately upon issuance of a press release but is public information only after there is adequate time for the news to be circulated and absorbed by the market and investors. You should not trade until the start of trading on the second business day following publication as a reasonable waiting period before such information is deemed to be public. For example, assuming regular work weeks without holidays, if an earnings release were issued on a Thursday, you may not trade until the following Monday, which would be the second business day following the publication of the material information.

As with questions of materiality, if you are not sure whether information is considered public, you should either consult with the Insider Trading Compliance Officer or assume that the information is “non-public” and treat it as confidential.

    4

Who is an “Access Person”?

If you are (i) a member of the Board of Directors, (ii) a corporate officer of the Company, (iii) an employee at grade 58 or higher who has received an equity award or similar grant under any of the Company’s existing or future-adopted incentive plans, or an employee at grade 58 or higher who has been with the Company for less than one year, or (iv) have been designated a key employee by the Insider Trading Compliance Officer, you are an Access Person, collectively Access Personnel, and are subject to additional restrictions on your ability to buy or sell securities of the Company. The Insider Trading Compliance Officer shall have the authority to interpret this policy and determine who qualifies as an Access Person when it is ambiguous.

Who is a “Section 16 Person”?

If you are a director or “executive officer” of the Company, or a beneficial owner (directly or indirectly) of more than 10% of the outstanding securities of the Company, you are a Section 16 Person and are subject to the additional restrictions applicable to Access Personnel, and are also required to pre-clear any sales or purchases of the Company’s securities as set forth in Section 8 below. Executive officers of the Company are those named as such in the Company’s Annual Report on Form 10-K or those subsequently deemed as such by the Board of Directors.

Who is a “Related Person?”

For purposes of the Policy, a Related Person includes your spouse, minor children and anyone else living in your household; partnerships in which you are a general partner; trusts of which you are a trustee; estates of which you are an executor; and other equivalent legal entities that you control. Although a person’s parent or sibling may not be considered a Related Person (unless living in the same household), a parent or sibling may be a “tippee” for securities laws purposes. See Section 6 below for a discussion of the prohibition on “tipping.”

    5

When is a “Window Period”?

The window period opens at the start of trading on the second business day after the Company’s annual results or quarterly results, as the case may be, have been publicly released and closes at the close of trading on the 15th calendar day (or if not a trading day, the immediately preceding trading day) of the last month of each fiscal quarter. These window periods supplement, and do not replace, the overriding prohibition on trading when in possession of material non-public information.

Note that Access Personnel may not trade in the Company’s securities except during a window period. This prohibition extends to (i) entering into, modifying or terminating a Rule 10b5-1 Plan or (ii) enrolling in or making payroll deduction changes in the Company’s Employee Stock Purchase Plan, or other similar plans, including those that may be approved from time to time, under which employees may elect to purchase securities of the Company (one or more of such actions are referred to in this policy as “Enrollment / Change”).

What is a “Blackout Period”?

From time to time you may be notified by the Company’s Insider Trading Compliance Officer that no trading in the Company’s securities should occur (a “Blackout Period”). A Blackout Period is intended to prevent or avoid an illegal trading transaction, or even the appearance of illegal or improper activities. You may not trade in the Company’s securities, authorize an Enrollment / Change, or enter into, modify or terminate a Rule 10b5-1 Plan once a Blackout Period has been announced, unless you have been informed by the Insider Trading Compliance Officer that the Blackout Period has expired. In addition, the Company may from time to time use these event-specific blackout procedures to restrict trading during certain days before and after an announcement related to the Company’s share repurchase program.

Who is the Insider Trading Compliance Officer?

The Company’s Insider Trading Compliance Officer is the Chief Legal Officer.

Additional persons may be designated by the Board of Directors as Insider Trading Compliance Officers in the future under this policy.

The duties of the Insider Trading Compliance Officer include, but are not limited to:

·assisting with implementation of this Policy;

·circulating this Policy to all employees and ensuring that this Policy is amended as necessary to remain up-to-date with insider trading laws;

    6

		·pre-clearing all trading in securities of the Company by Section 16 Persons in accordance with the procedures set forth in Section 8 below; and ·providing approval of any Rule 10b5-1 plans in accordance with the procedures set forth in Section 7 below.
		Who is responsible for complying with this Policy? You are responsible for understanding and complying with this Policy. While the Insider Trading Compliance Officer is responsible for enforcing the Policy, your failure to comply will have consequences on you.
6.	Trading Guidelines for Covered Persons	The following guidelines should be followed to ensure compliance with this Policy and to protect Covered Persons from accusations of insider trading. The guidelines apply even if Covered Persons want to make the proposed purchase or sale for reasons having nothing to do with his or her possession of the insider information, such as a desire to raise money for unanticipated expenditures.
		Do not disclose material non-public information You may not give anyone, including relatives, friends or work associates, any non-public information regarding the Company, either orally or in writing, except that information may be shared in the ordinary course of business with work associates who need such information to conduct business appropriately. Furthermore, if you are in possession of material non-public information, you may not make any recommendations that may encourage or discourage others from buying securities of the Company (even though you do not actually disclose the information behind such recommendations). If you come into possession of material non-public information that you were not supposed to receive, notify the Insider Trading Compliance Officer immediately.
		Do not trade Company securities when you are in possession of material non-public information You may not buy or sell securities of the Company, including initial elections, changes in election or reallocation of funds relating to Company securities in 401(k) plan accounts, or recommend that another person buy or sell Company securities when you are in possession of material non-public information regarding the Company.

    7

If you possess material non-public information regarding the Company, do not trade until the start of trading on the second business day after such information has been publicly released

To allow the Company’s shareholders and the investing public a reasonable amount of time to receive and act upon information released about the Company, if you possess material non-public information, you may not buy or sell the Company’s securities until the start of trading on the second business day after such information has been publicly released, at which time you may again buy or sell the Company’s securities.

    8

Avoid speculation and other practices that may appear to be based on non-public information

Purchases of the Company’s securities should be made as long-term investments.

You are prohibited from engaging in short selling of the Company’s securities, which would reward you for downward changes in price, because, in hindsight, such sales are likely to appear to have resulted from the possession of non-public information. Short selling also has the potential to signal to the market that the seller lacks confidence in the Company’s prospects, and may reduce a seller’s incentive to seek to improve the Company’s performance.

You also are prohibited from engaging in other speculative trading of the Company’s securities, including writing or trading in options, warrants, puts, calls or other derivative securities on the Company’s stock.

In addition, the Company discourages Covered Persons from engaging in frequent trading in Company stock because frequent trading also may give the appearance, in hindsight, that such sales were based on non-public information.

Hedging transactions, including the use of prepaid variable forwards, equity swaps, collars or exchange funds, may permit a Covered Person to continue to own Company securities obtained through employee benefit plans or otherwise without the full risks and rewards of ownership. When that occurs, the Covered Person may not have the same objectives as the Company’s other shareholders. Therefore, Covered Persons are prohibited from engaging in hedging transactions.

Because a margin sale or foreclosure sale may occur at a time when the pledger is aware of material non-public information or otherwise is not permitted to trade in Company securities, Covered Persons are prohibited from holding Company securities in a margin account or otherwise pledging Company securities as collateral for a loan.

Lastly, standing and limit orders (except standing and limit orders under an Approved 10b5-1 Plan, as described below) create heightened risk for insider trading violations similar to the use of margin accounts. There is no control over the timing of purchases or sales that result from standing instructions to a broker, and as a result the broker could execute a transaction when a Covered Person is in possession of material non-public information. The Company therefore discourages placing standing or limit orders on Company securities.

    9

You are also responsible for transactions by your Related Persons

This Policy applies to your Related Persons. Covered Persons are expected to be responsible for the compliance of their Related Persons and, as described below, you should not “tip” information to your Related Persons, friends, or anybody else.

Do not “tip” information to others

It is inappropriate, and illegal, for a person in possession of material non-public information to provide other people with such information or to recommend that they buy or sell securities based upon that information, even if they do not give the other person the specific information. This is called “tipping” by securities regulators and can result in punishment of both the tipper and tippee. Accordingly, do not share non-public information with anyone outside of the Company (except its legal counsel or accountants, as appropriate). Do not share any such information with employees of the Company except as required for the Company’s business. Do not share non-public information with anyone if you suspect that the recipient might buy or sell securities of the Company in response to the information. Do not recommend to others the purchase or sale of the Company’s securities while you are arguably in possession of insider information. Note that the prohibition against disclosing non-public information to others applies whether or not you derive any monetary benefit from making the disclosure. Consistent with the foregoing, you should exercise discretion in handling non-public information and not discuss it in public places where it can be overheard, such as elevators, restaurants, taxis and airplanes.

This Policy also applies to trading in other securities

In the course of your business relationships with other companies on behalf of the Company, such as our vendors or suppliers, you may receive material non-public information regarding such other companies. This Policy applies equally to disclosure and discussion of information related to these other companies. Similarly, this Policy applies to the agents, advisors and independent contractors of the Company to the extent they are exposed to material non-public information.

    10

		Your transactions will be evaluated with the benefit of 20/20 hindsight Remember, if your securities transactions ever become the subject of scrutiny, they are likely to be viewed after-the-fact with the benefit of hindsight. As a result, before engaging in any transaction, you should carefully consider how the transaction may be construed in the bright light of hindsight. This is particularly true where you may have non-public information that you do not consider to be material, but which others, including courts, may consider to be material.
7.	Additional Requirements for Access Personnel	Access Personnel may only trade in the Window Period If you meet the definition of Access Personnel, you may not (a) trade in securities of the Company (other than exercises of options granted by the Company), (b) authorize an Enrollment / Change (as defined above), or (c) enter into, modify or terminate a Rule 10b5-1 Plan, except during the window period – independent of whether you believe you possess any material non-public information.
		Exception for Trading under Pre-Existing 10b5-1 Plans These trading restrictions do not apply to transactions under a pre-existing plan, contract, instruction, or arrangement under Rule 10b5-1 entered into by an Access Person or their Related Person where the following conditions are met:
		a.The plan has been reviewed and approved in advance by the Insider Trading Compliance Officer; b.You certify that you are not in possession of material non-public information when you enter into the plan; c.The plan is entered into during an open window period and no Blackout Period has been announced; d.You certify that you are adopting the plan in good faith and you will act in good faith with respect to the plan; e.The applicable mandatory “cooling off” period must expire before trades begin (which varies from 30 days to up to 120 days depending upon your status); f.You may not implement multiple single trade or overlapping Rule 10b5-1 trading plans, unless an exception applies; and
		g. The plan gives a third party the discretionary authority to execute such purchases and sales, outside the control of the Access Person or their Related Person, as the case may be, so long as such third party does not possess any material non-public information about the Company; or explicitly specifies the security or securities to be purchased or sold, the number of shares, the prices and/or dates of transactions, or other formula(s) describing such transactions (collectively, an “Approved 10b5-1 Plan”).

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You may buy or sell securities of the Company pursuant to certain contracts, instructions and plans regardless of whether you have material, non-public information so long as you are not in possession of material non-public information when you enter into or adopt the contract, instructions or plan. Prior to entering into any such contract, instruction or plan, you should provide a copy to the Insider Trading Compliance Officer. The existence of the contract, instruction or plan for a Section 16 Person must be disclosed publicly.

Once your contract, instruction or plan has been put in place, all proposed modifications or terminations of the contract, instruction or plan must be provided to or reviewed by the Insider Trading Compliance Officer prior to implementation.

After your contract, instruction or plan has been put in place, purchases or sales of the Company’s securities may proceed in accordance with the contract, instruction or plan even if you become aware of material non-public information. You may not alter or deviate from the terms of the approved contract, instruction or plan and you may not engage in any corresponding or hedging transactions.

In addition, even though authorizing an Enrollment / Change is prohibited during a Blackout Period, these trading restrictions do not apply to the periodic purchases of Company stock under the terms of such purchase plans. These trading restrictions would, however, apply to any sales of shares purchased pursuant to such plans.

No Trading of Derivatives, Hedging, Margin Accounts or Pledging

You may not (1) enter into any arrangement or agreement involving writing or trading in options, warrants, puts, calls or other derivative securities on the Company’s stock, (2) engage in any hedging transactions including the use of prepaid variable forwards, equity swaps, collars or exchange funds, or (3) hold Company securities in a margin account or otherwise pledge Company securities as collateral for a loan.

Gifts

Gifts may only be made during a window period when no Blackout Period has been announced.

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		Blackout Periods You may occasionally be subject to a trading “blackout” even though the window period is in effect because the Company has determined that you have knowledge of material non-public information regarding the Company’s plans or due to some other reason. Because trading at this time would put you at risk of a securities law violation, you are prohibited from trading in Company securities (or authorizing an Enrollment / Change, or entering into, modifying or terminating a Rule 10b5-1 Plan) until the second business day following public disclosure of the information, or the express lifting of the trading prohibition. During such a blackout, you should refrain from discussing the trading prohibition with third parties, as its very existence could itself be viewed as material non-public information.
		Please also note that such a trading prohibition does not preclude you from exercising an option for cash and holding the related shares (an exercise and hold). It does, however, preclude you from exercising an option through a broker-assisted cashless exercise (an exercise and sell) because that type of transaction involves a sale into the marketplace.
8.	Additional Requirements for Section 16 Persons	General Because of the greater access Section 16 Persons have to sensitive information regarding the Company, and even though they may not believe that they possess any material non-public information at that time, in addition to only trading during a window period, Section 16 Persons are required to pre-clear with the Company all trading activity in securities of the Company (including option exercises and gifts). Pre-clearance is required to avoid even the appearance of an improper transaction, to provide some uniformity to the definition of “material non-public information” among the Company’s personnel, and to facilitate timely compliance with Section 16 reporting requirements. Therefore, prior to making any purchase, sale or gift of the Company’s securities, Section 16 Persons must contact the Insider Trading Compliance Officer to determine whether his or her proposed trade is permitted under the Policy. The Insider Trading Compliance Officer will advise such person as to whether the proposed trade is permissible.

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As a Section 16 Person, if you are advised that the trade may occur, you may proceed with your proposed transaction. A response by the Insider Trading Compliance Officer that a trade may occur in compliance with the Policy is effective from the time of response until the end of trading on the next succeeding business day, unless you are otherwise advised by the Insider Trading Compliance Officer prior to trading. You must notify the Insider Trading Compliance Officer of the date you will complete the trade, and coordinate with the Company to ensure a Form 4 is filed with the U.S. Securities and Exchange Commission within two business days of completing your trade.

NOTE: Section 16 Persons will have to continue to file Form 4s for transactions after they cease to be a director or officer of the Company if the transaction occurs within 6 months of their last transaction while an officer or director. As a result, this Policy continues to apply to your transactions in the Company’s securities even after you have terminated employment or Board service.

Pre-clearance is required for entry into an Approved 10b5-1 Plan. Pre-clearance is not required for purchases and sales of securities under an Approved 10b5-1 Plan, but it is required for modification or termination of an Approved 10b5-1 Plan. With respect to any purchase or sale under an Approved 10b5-1 Plan, the third party effecting transactions on behalf of an Access Person or their Related Person should be instructed to send duplicate confirmations of all such transactions to the Insider Trading Compliance Officer.

If you are advised that the trade may not occur, you may not effect the proposed transaction. To avoid signaling to others that something non-public and material is happening with respect to the Company, you should keep this response entirely confidential. This confidentiality will be easier to maintain if you go through the required pre-clearance procedures prior to discussing a proposed trade with others (including your broker). If you talk to others first and then get a response that the trade cannot be made, you will be in the position of having to provide an explanation for your change of mind.

A favorable response to a trading inquiry from the Insider Trading Compliance Officer should not be interpreted as approval by the Company of the advisability of the proposed trade or of its compliance with other applicable policies, laws and regulations, including the Policy. It is your responsibility to ascertain whether a contemplated transaction is within the scope of these other restrictions. In any event, you should not effect the proposed trade if you are, in fact, in possession of material non-public information regarding the Company.

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		Prohibition on Short Swing Profits Section 16 Persons may not sell Company securities of the same class for at least six months after a purchase, and may not purchase Company securities of the same class for at least six months after a sale.
9.	What May Happen	Even if you in fact possessed no non-public information, if you buy or sell the Company’s securities shortly before an event that affects their market price, you may be investigated by the U.S. Securities and Exchange Commission, the NASDAQ Stock Market, or others. The same is true if such a purchase or sale is undertaken by one of your friends, relatives or work associates. Defending against such a charge is very difficult, expensive and embarrassing for both you and the Company. Although it is impossible to assure that your trading in securities of the Company will not occur shortly before such a price change, it is very important that you strive to avoid even an appearance that you might have traded while in possession of non-public information regarding the Company.
10.	Possible Penalties	Individuals who trade on material non-public information, or who “tip” such information to others may be subject to the following:
		·A civil penalty of up to 3 times the profit made or loss avoided;
		·A criminal fine (no matter how small the profit) of up to $5 million; and
		·A jail term of up to 20 years.
		·In addition, if you violate this Policy, the Company may take any disciplinary action that it determines to be appropriate, up to and including termination of your employment for cause.
		The Company also may be subject to significant criminal and civil penalties because of trading in violation of this Policy by directors, officers, employees or others. Given the severity of the potential penalties, compliance with the Policy is absolutely mandatory.

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11.	Important Disclaimer	The purposes of this Policy are to provide information concerning the current legal restrictions on securities trading by Company personnel and to impress upon the Company’s directors, officers, and employees the importance the Company places on complying with these restrictions. This Policy is not intended to result in the imposition of any liability to the Company that would not exist in the absence of this Policy.
12.	Assistance	Any person with questions about specific transactions may obtain additional guidance from the Company’s Insider Trading Compliance Officer. Remember, however, that the ultimate responsibility for adhering to this Policy and avoiding improper transactions rests with you.

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ACKNOWLEDGEMENT

The undersigned hereby acknowledges receipt of the Patterson Companies, Inc. Securities Trading and Information Disclosure Policy (the “Policy”) and the undersigned has read the same and agrees to comply with the Policy.

Signature	Date
Printed Name

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EX-23

EXHIBIT 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statements on Forms S-8 (Nos. 333-03583, 333-101691, 333-198694, 333-207116, 333-227511, 333-235403, and 333-261448) of Patterson Companies, Inc. of our reports dated June 18, 2024, with respect to the consolidated financial statements of Patterson Companies, Inc. and the effectiveness of internal control over financial reporting of Patterson Companies, Inc. included in this Annual Report (Form 10-K) of Patterson Companies, Inc. for the year ended April 27, 2024.

/s/ Ernst & Young LLP

Minneapolis, Minnesota

June 18, 2024

EX-31.1

Exhibit 31.1

Certification of the Chief Executive Officer Pursuant to

Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as

adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Donald J. Zurbay, certify that:

1.I have reviewed this annual report on Form 10-K for the fiscal year ended April 27, 2024 of Patterson Companies, Inc.;

2.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;

3.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;

4.The registrant’s other certifying officer 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

5.The registrant’s other certifying officer 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: June 18, 2024	/s/ Donald J. Zurbay
	Donald J. Zurbay
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of the Chief Financial Officer Pursuant to

Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as

adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Kevin M. Barry, certify that:

1.I have reviewed this annual report on Form 10-K for the fiscal year ended April 27, 2024 of Patterson Companies, Inc.;

2.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;

3.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;

4.The registrant’s other certifying officer 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

5.The registrant’s other certifying officer 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: June 18, 2024	/s/ Kevin M. Barry
	Kevin M. Barry
	Chief Financial Officer

EX-32.1

EXHIBIT 32.1

Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as

adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report on Form 10-K of Patterson Companies, Inc., (the “Company”) for the fiscal year ended April 27, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned officer of the Company certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

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

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

/s/ Donald J. Zurbay

Donald J. Zurbay

President and Chief Executive Officer

Date: June 18, 2024

EX-32.2

EXHIBIT 32.2

Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as

adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report on Form 10-K of Patterson Companies, Inc., (the “Company”) for the fiscal year ended April 27, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned officer of the Company certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

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

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

/s/ Kevin M. Barry

Kevin M. Barry

Chief Financial Officer

Date: June 18, 2024

EX-97

EXHIBIT 97

PATTERSON COMPANIES, INC.

CLAWBACK POLICY

(Effective October 2, 2023)

1.Introduction and Purpose

1.1Introduction. This document sets forth the Patterson Companies, Inc. Clawback Policy, effective October 2, 2023.

1.2Purpose. The Company has established this Policy to provide for the recovery of Erroneously Awarded Compensation from Section 16 Officers. This Policy is designed to comply with Applicable Rules and Regulations.

1.3Definitions. All capitalized terms not defined herein shall have the meanings set forth in Section 3.5 of this Policy.

2.Mandatory Recovery of Compensation

2.1Recovery.In the event of an Accounting Restatement, the Company will reasonably promptly recover the Erroneously Awarded Compensation in accordance with Applicable Rules and Regulations. For the avoidance of doubt, recovery of Erroneously Awarded Compensation is on a “no fault” basis, meaning that it will occur regardless of whether the Section 16 Officer engaged in misconduct or was otherwise directly or indirectly responsible, in whole or in part, for the Accounting Restatement.

2.2Notice and Demand. Upon the occurrence of an Accounting Restatement, the Committee shall determine the amount of any Erroneously Awarded Compensation and shall promptly deliver a written notice to each Section 16 Officer containing the amount of any Erroneously Awarded Compensation and a demand for repayment or return of such compensation, as applicable.

2.3Determination of Amount. To determine the amount of any Erroneously Awarded Compensation for Incentive-based Compensation that is based on a Financial Reporting Measure other than stock price or TSR, after an Accounting Restatement, the Committee shall (a) recalculate the applicable Financial Reporting Measure and the amount of Incentive-based Compensation that would have been Received based on such Financial Reporting Measure; and (b) determine whether the Section 16 Officers Received a greater amount of Incentive-based Compensation than would have been Received applying the recalculated Financial Reporting Measure, based on: (i) the originally calculated Financial Reporting Measure, and (ii) taking into consideration any discretion that the Committee applied

EXHIBIT 97

to reduce the amount originally received. To determine the amount of any Erroneously Awarded Compensation for Incentive-based Compensation that is based on stock price or TSR, where the amount of Erroneously Awarded Compensation is not subject to mathematical recalculation directly from the information in the applicable Accounting Restatement: (a) the amount to be repaid or returned shall be determined by the Committee based on a reasonable estimate of the effect of the Accounting Restatement on the Company’s stock price or TSR upon which the Incentive-based Compensation was Received, and (b) the Company shall maintain documentation of the determination of such reasonable estimate and provide the relevant documentation as required to Nasdaq.

2.4Method of Recovery. The Committee shall have discretion to determine the appropriate means of recouping Erroneously Awarded Compensation hereunder based on the particular facts and circumstances, which may include, without limitation: (a) requiring repayment of cash Incentive-based Compensation; (b) seeking recovery of any gain realized on the vesting, exercise, settlement, sale, transfer, or other disposition of any equity-based awards; (c) offsetting the recouped amount from any compensation otherwise owed; (d) reducing future compensation; (e) canceling outstanding vested or unvested equity awards; and/or (f) taking any other remedial and recovery action permitted by law, as determined by the Committee, in its sole discretion. Notwithstanding the foregoing, except as set forth in Section 2.6 below, in no event may the Committee accept an amount that is less than the amount of Erroneously Awarded Compensation in satisfaction of a Section 16 Officer’s obligations hereunder.

2.5Failure to Repay. To the extent that a Section 16 Officer fails to repay all Erroneously Awarded Compensation to the Company when due, the Committee shall take all actions reasonable and appropriate to recover such Erroneously Awarded Compensation from the applicable Section 16 Officer. The applicable Section 16 Officer shall be required to reimburse the Company for any and all expenses reasonably incurred (including legal fees) by the Company in recovering such Erroneously Awarded Compensation in accordance with the immediately preceding sentence.

2.6Exceptions. Notwithstanding anything herein to the contrary, the Company shall not be required to take the actions contemplated by Section 2.1 above if the Committee determines that recovery would be impracticable and either of the following two conditions is met: (a) the Committee has determined that the direct expenses, such as reasonable legal expenses and consulting fees, paid to a third party to assist in enforcing the Policy would exceed the amount to be recovered (and the Company has made a reasonable attempt to recover the Erroneously Awarded Compensation, documented such attempt(s) to recover, and provided such documentation to Nasdaq); or (b) recovery would likely cause an otherwise tax-qualified retirement plan, under which benefits are broadly available to employees of the Company, to fail to meet the requirements of Section 401(a)(13) or Section 411(a) of the Code.

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EXHIBIT 97

2.7Mandatory Disclosure. The Company shall file this Policy and, in the event of an Accounting Restatement, will disclose information related to such Accounting Restatement in accordance with applicable law, including, for the avoidance of doubt, Applicable Rules and Regulations.

2.8Insurance and Indemnification. The Company shall not be permitted to insure or indemnify any Section 16 Officer against (a) the loss of any Erroneously Awarded Compensation that is repaid, returned, or recovered pursuant to the terms of this Policy, or (b) any claims relating to the Company’s enforcement of its rights under this Policy. While Section 16 Officers subject to this Policy may purchase insurance to cover their potential recovery obligations, the Company shall not be permitted to pay or reimburse the Section 16 Officer for premiums for such an insurance policy. Further, the Company shall not enter into any agreement that exempts any Incentive-based Compensation that is granted, paid, or awarded to a Section 16 Officer from the application of this Policy or that waives the Company’s right to recovery of any Erroneously Awarded Compensation, and this Policy shall supersede any such agreement (whether entered into before, on, or after the Effective Date of this Policy). Other than as expressly set forth herein, this Policy does not limit the Company’s ability to indemnify Section 16 Officers.

2.9Other Recoupment Rights. This Policy shall be binding and enforceable against all Section 16 Officers and, to the extent required by applicable law or guidance from the SEC or Nasdaq, their beneficiaries, heirs, executors, administrators, or other legal representatives. The Committee intends that Section 2.1 above will be applied to the fullest extent required by applicable law. Any employment agreement, equity award agreement, compensatory plan, or any other agreement or arrangement with a Section 16 Officer shall be deemed to include, as a condition to the grant of any benefit thereunder, an agreement by the Section 16 Officer to abide by the terms of this Policy. Any right of recovery under this Policy is in addition to, and not in lieu of, any other remedies or rights of recovery that may be available to the Company under applicable law, regulation, or rule pursuant to the terms of any other policy of the Company or any provision in any employment agreement, equity award agreement, compensatory plan, agreement, or other arrangement.

3.Miscellaneous and Definitions

3.1Administration and Interpretation. This Policy shall be administered by the Committee or by the independent members of the Board acting as the Committee, which shall have authority to (a) exercise all of the powers granted to it under the Policy, (b) construe, interpret, and implement this Policy, (c) make all determinations necessary or advisable in administering this Policy and for the Company’s compliance with Applicable Rules and Regulations, and any other applicable law, regulation, rule, or interpretation of the SEC or Nasdaq Rules promulgated or issued in connection therewith, and (d) amend this Policy,

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EXHIBIT 97

including to reflect changes in applicable law or stock exchange regulation. Any determinations made by the Committee shall be final and binding on all affected individuals.

3.2Amendment; Termination. The Committee may amend this Policy from time to time in its discretion and shall amend this Policy as it deems necessary. Notwithstanding anything in this Section 3.2 to the contrary, no amendment or termination of this Policy shall be effective if such amendment or termination would (after taking into account any actions taken by the Company contemporaneously with such amendment or termination) cause the Company to violate any federal securities laws or Applicable Rules and Regulations.

3.3Employment and Sarbanes Clawbacks. Nothing in this Policy will limit in any respect (a) the Company’s right to take or not to take any action with respect to any Section 16 Officer’s employment or (b) the obligation of the Chief Executive Officer or the Chief Financial Officer to reimburse the Company in accordance with Section 304 of the Sarbanes-Oxley Act of 2002, as amended.

3.4No Duplication. To the extent that the Section 16 Officer has already reimbursed the Company for any Erroneously Awarded Compensation under any duplicative recovery obligations established by the Company or applicable law, it shall be appropriate for any such reimbursed amount to be credited to the amount of Erroneously Awarded Compensation that is subject to recovery under this Policy.

3.5Definitions. For purposes of this Policy, the following terms shall have the following meanings:

(a)“Accounting Restatement” means an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under the securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements (a “Big R” restatement), or that corrects an error that is not material to previously issued financial statements but would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period (a “little r” restatement).

(b)“Applicable Rules and Regulations” means Nasdaq Rules, Section 10D and Rule 10D-1.

(c)“Board” means the Board of Directors of the Company.

(d)“Clawback Eligible Incentive Compensation” means all Incentive-based Compensation Received by a Section 16 Officer (i) on or after the Effective Date, (ii) after beginning service as a Section 16 Officer, (iii) who served as a Section 16 Officer at any time during the applicable performance period relating to any Incentive-based Compensation (whether or not such Section 16 Officer is serving at the time any Erroneously Awarded Compensation is required to be repaid to the Company), (iv) while the Company has a class of securities listed

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EXHIBIT 97

on a national securities exchange or a national securities association, and (v) during the applicable Clawback Period.

(e)“Clawback Period” means, with respect to any Accounting Restatement, the three completed fiscal years of the Company immediately preceding the Restatement Date and if the Company changes its fiscal year, any transition period of less than nine months within or immediately following those three completed fiscal years.

(f)“Code” means the Internal Revenue Code of 1986, as amended, and regulations thereunder.

(g)“Committee” means the Compensation and Human Capital Committee of the Board, which is required to be composed entirely of independent directors.

(h)“Company” means Patterson Companies, Inc.

(i)“Effective Date” means October 2, 2023.

(j)“Erroneously Awarded Compensation” means, with respect to each Section 16 Officer in connection with an Accounting Restatement, the amount of Clawback Eligible Incentive Compensation that exceeds the amount of Incentive-based Compensation that would have been Received had it been determined based on the restated amounts in the Accounting Restatement, computed without regard to any taxes paid.

(k)“Exchange Act” means the Securities Exchange Act of 1934, as amended.

(l)“Financial Reporting Measure” means a measure that is determined and presented in accordance with the accounting principles used in preparing the Company’s financial statements, and any other measure that is derived wholly or in part from such a measure. Stock price and TSR (and any measure that is derived wholly or in part from stock price or TSR) shall, for purposes of this Policy, be considered a Financial Reporting Measure. For the avoidance of doubt, a Financial Reporting Measure need not be presented in the Company’s financial statements or included in a filing with the SEC.

(m)“Incentive-based Compensation” means any compensation that is granted, earned, or vested based wholly or in part upon the attainment of a Financial Reporting Measure. For the avoidance of doubt, equity awards that vest exclusively upon completion of a specified employment period, without any performance condition, and bonus awards that are discretionary or based on subjective goals or goals unrelated to Financial Reporting Measures, do not constitute Incentive-based Compensation.

(n) “Nasdaq” means The Nasdaq Stock Market.

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EXHIBIT 97

(o)“Nasdaq Rules” means rules of Nasdaq.

(p)“Policy” means the Patterson Companies, Inc. Clawback Policy.

(q)“Received” means, with respect to any Incentive-based Compensation, actual or deemed receipt, and Incentive-based Compensation shall be deemed received in the Company’s fiscal period during which the Financial Reporting Measure specified in the Incentive-based Compensation award is attained even if the payment or grant of the Incentive-based Compensation to the Section 16 Officer occurs after the end of that period. For the avoidance of doubt, Incentive-based Compensation shall only be treated as Received during one (and only one) fiscal year, even if such Incentive-based Compensation is deemed received in one fiscal year and actually received in a later fiscal year. For example, if an amount is deemed received in fiscal 2024, but actually received in fiscal 2025, such amount shall be treated as Received under this definition only in fiscal 2024.

(r)“Restatement Date” means the earlier to occur of (i) the date the Board, a committee of the Board, or officers of the Company authorized to take action if Board action is not required, concludes, or reasonably should have concluded, that the Company is required to prepare an Accounting Restatement, or (ii) the date a court, regulator, or other legally authorized body directs the Company to prepare an Accounting Restatement.

(s)“Rule 10D-1” means Rule 10D-1 promulgated under the Exchange Act.

(t)“SEC” means the U.S. Securities and Exchange Commission.

(u)“Section 10D” means Section 10D of the Exchange Act.

(v)“Section 16 Officer” means each individual who is currently or was previously designated as an “executive officer” of the Company, within the meaning of Rule 10D-1.

(w) “TSR” means total shareholder return.

    6    

XML

Cover - USD ($) $ in Millions	12 Months Ended
	Apr. 27, 2024	Jun. 10, 2024	Oct. 28, 2023
Cover [Abstract]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Apr. 27, 2024
Current Fiscal Year End Date	--04-27
Document Transition Report	false
Entity File Number	0-20572
Entity Registrant Name	PATTERSON COMPANIES, INC.
Entity Incorporation, State or Country Code	MN
Entity Tax Identification Number	41-0886515
Entity Address, Address Line One	1031 Mendota Heights Road
Entity Address, City or Town	St. Paul
Entity Address, State or Province	MN
Entity Address, Postal Zip Code	55120
City Area Code	651
Local Phone Number	686-1600
Title of 12(b) Security	Common Stock, par value $.01
Trading Symbol	PDCO
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Document Financial Statement Error Correction [Flag]	false
Entity Shell Company	false
Entity Public Float			$ 2,822
Entity Common Stock, Shares Outstanding		87,760,000
Amendment Flag	false
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	FY
Entity Central Index Key	0000891024

XML

Audit Information	12 Months Ended
	Apr. 27, 2024
Auditor Information [Abstract]
Auditor Name	Ernst & Young LLP
Auditor Location	Minneapolis, Minnesota
Auditor Firm ID	42

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Apr. 27, 2024	Apr. 29, 2023
Current assets:
Cash and cash equivalents	$ 114,462	$ 159,669
Receivables, net of allowance for doubtful accounts of $2,731 and $3,667	547,287	477,384
Inventory, net	782,898	795,072
Prepaid expenses and other current assets	334,116	351,011
Total current assets	1,778,763	1,783,136
Property and equipment, net	229,081	212,283
Operating lease right-of-use assets, net	122,295	92,956
Long-term receivables, net	129,876	121,717
Goodwill	156,328	156,420
Identifiable intangibles, net	193,261	231,873
Investments	166,320	160,022
Other non-current assets, net	120,808	120,739
Total assets	2,896,732	2,879,146
Current liabilities:
Accounts payable	745,375	724,993
Accrued payroll expense	78,211	82,253
Other accrued liabilities	167,399	168,696
Operating lease liabilities	32,815	28,390
Current maturities of long-term debt	122,750	36,000
Borrowings on revolving credit	186,000	45,000
Total current liabilities	1,332,550	1,085,332
Long-term debt	328,911	451,231
Non-current operating lease liabilities	92,464	67,376
Deferred income taxes	104,521	119,143
Other non-current liabilities	36,554	37,529
Total liabilities	1,895,000	1,760,611
Stockholders’ equity:
Common stock	897	964
Additional paid-in capital	258,679	233,706
Accumulated other comprehensive loss	(89,915)	(89,262)
Retained earnings	831,483	972,127
Total stockholders’ equity	1,001,144	1,117,535
Noncontrolling interests	588	1,000
Total stockholders’ equity	1,001,732	1,118,535
Total liabilities and stockholders’ equity	$ 2,896,732	$ 2,879,146

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Apr. 27, 2024	Apr. 29, 2023
Statement of Financial Position [Abstract]
Receivables, allowance for doubtful accounts	$ 2,731	$ 3,667
Common stock, par value (in usd per share)	$ 0.01	$ 0.01
Common stock, authorized shares (in shares)	600,000	600,000
Common stock, issued shares (in shares)	89,701	96,350
Common stock, outstanding shares (in shares)	89,701	96,350

XML

CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Apr. 27, 2024	Apr. 29, 2023	Apr. 30, 2022
Income Statement [Abstract]
Net sales	$ 6,568,272	$ 6,471,471	$ 6,499,405
Cost of sales	5,188,030	5,098,526	5,210,318
Gross profit	1,380,242	1,372,945	1,289,087
Operating expenses	1,127,318	1,096,974	1,132,085
Goodwill impairment	0	0	0
Operating income	252,924	275,971	157,002
Gains on investments	0	0	101,809
Other income (expense):
Other income, net	35,039	27,826	27,731
Interest expense	(44,910)	(33,636)	(20,288)
Income before taxes	243,053	270,161	266,254
Income tax expense	57,534	63,563	64,540
Net income	185,519	206,598	201,714
Net loss attributable to noncontrolling interests	(412)	(959)	(1,496)
Net income attributable to Patterson Companies, Inc.	$ 185,931	$ 207,557	$ 203,210
Earnings (loss) per share attributable to Patterson Companies, Inc.:
Basic (in usd per share)	$ 2.00	$ 2.14	$ 2.09
Diluted (in usd per share)	$ 1.98	$ 2.12	$ 2.06
Weighted average shares:
Basic (in shares)	92,969	97,027	97,277
Diluted (in shares)	93,679	97,815	98,514
Dividends declared per common share (in usd per share)	$ 1.04	$ 1.04	$ 1.04
Comprehensive income
Net income	$ 185,519	$ 206,598	$ 201,714
Foreign currency translation gain (loss)	(1,695)	(8,788)	(19,966)
Cash flow hedges, net of tax	1,042	1,042	1,042
Comprehensive income	$ 184,866	$ 198,852	$ 182,790

XML

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Loss	Retained Earnings	Non-controlling interests
Beginning balance at Apr. 24, 2021	$ 964,671	$ 968	$ 169,099	$ (62,592)	$ 855,741	$ 1,455
Beginning balance (in shares) at Apr. 24, 2021		96,813
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Foreign currency translation	(19,966)			(19,966)
Cash flow hedges	1,042			1,042
Net income	201,714				203,210	(1,496)
Dividends declared	(102,257)				(102,257)
Common stock issued	7,626	$ 10	7,616
Common stock issued (in shares)		981
Repurchases of common stock	(35,000)	$ (10)			(34,990)
Repurchases of common stock (in shares)		(1,032)
Stock based compensation	23,805		23,805
Contribution from noncontrolling interest	1,000
Ending balance at Apr. 30, 2022	1,042,635	$ 968	200,520	(81,516)	921,704	959
Ending balance (in shares) at Apr. 30, 2022		96,762
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Foreign currency translation	(8,788)			(8,788)
Cash flow hedges	1,042			1,042
Net income	206,598				207,557	(959)
Dividends declared	(101,662)				(101,662)
Common stock issued	17,659	$ 16	17,643
Common stock issued (in shares)		1,608
Repurchases of common stock	(55,492)	$ (20)			(55,472)
Repurchases of common stock (in shares)		(2,020)
Stock based compensation	15,543		15,543
Contribution from noncontrolling interest	1,000					1,000
Ending balance at Apr. 29, 2023	$ 1,118,535	$ 964	233,706	(89,262)	972,127	1,000
Ending balance (in shares) at Apr. 29, 2023	96,350	96,350
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Foreign currency translation	$ (1,695)			(1,695)
Cash flow hedges	1,042			1,042
Net income	185,519				185,931	(412)
Dividends declared	(97,143)				(97,143)
Common stock issued	9,110	$ 9	9,101
Common stock issued (in shares)		955
Repurchases of common stock	(231,507)	$ (76)	(1,999)		(229,432)
Repurchases of common stock (in shares)		(7,604)
Stock based compensation	17,871		17,871
Ending balance at Apr. 27, 2024	$ 1,001,732	$ 897	$ 258,679	$ (89,915)	$ 831,483	$ 588
Ending balance (in shares) at Apr. 27, 2024	89,701	89,701

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Apr. 27, 2024	Apr. 29, 2023	Apr. 30, 2022
Operating activities:
Net income	$ 185,519	$ 206,598	$ 201,714
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation	49,617	45,772	44,180
Amortization	38,539	37,932	37,812
Gains on investments	0	0	(101,809)
Bad debt expense	2,542	3,450	2,769
Stock-based compensation	17,871	15,543	23,805
Deferred income taxes	(13,523)	(1,993)	(4,718)
Non-cash losses (gains) and other, net	204	654	(1,431)
Change in assets and liabilities:
Receivables	(1,102,618)	(1,047,075)	(1,144,833)
Inventory	11,039	(11,086)	(53,871)
Accounts payable	21,343	43,095	80,904
Accrued liabilities	(2,788)	(21,714)	(27,630)
Other changes from operating activities, net	2,877	(26,028)	(37,886)
Net cash used in operating activities	(789,378)	(754,852)	(980,994)
Investing activities:
Additions to property and equipment and software	(67,626)	(64,220)	(38,308)
Payments related to acquisitions, net of cash acquired	(1,108)	(33,280)	(19,793)
Collection of deferred purchase price receivables	1,028,277	998,912	1,213,497
Sale of investments	0	0	75,942
Payments related to investments	0	(15,000)	0
Other investing activities	0	15,155	7,690
Net cash provided by investing activities	959,543	901,567	1,239,028
Financing activities:
Dividends paid	(98,333)	(101,346)	(101,111)
Repurchases of common stock	(229,508)	(55,492)	(35,000)
Payments on long-term debt	(36,000)	(1,500)	(100,750)
Draw (payment) on revolving credit	141,000	16,000	(24,000)
Other financing activities	6,936	15,854	7,627
Net cash used in financing activities	(215,905)	(126,484)	(253,234)
Effect of exchange rate changes on cash	533	(2,576)	(6,030)
Net change in cash and cash equivalents	(45,207)	17,655	(1,230)
Cash and cash equivalents at beginning of period	159,669	142,014	143,244
Cash and cash equivalents at end of period	114,462	159,669	142,014
Supplemental disclosures:
Income taxes paid (includes payments for purchased tax credits of $13,575, $0 and $0, respectively)	77,979	62,081	83,549
Interest paid	26,002	19,623	14,633
Supplemental disclosure of non-cash investing activity:
Retained interest in securitization transactions	$ 1,010,438	$ 1,008,741	$ 1,122,627

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Apr. 27, 2024	Apr. 29, 2023	Apr. 30, 2022
Statement of Cash Flows [Abstract]
Payments for purchased tax credits	$ 13,575	$ 0	$ 0

XML

Summary of Significant Accounting Policies

12 Months Ended

Apr. 27, 2024

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Description of Business

Patterson Companies, Inc. (referred to herein as “Patterson” or in the first person notations “we,” “our,” and “us”) is a value-added specialty distributor serving the U.S. and Canadian dental supply and the U.S., Canadian and U.K. animal health supply markets. Patterson has three reportable segments: Dental, Animal Health and Corporate.

Basis of Presentation

The Consolidated Financial Statements include the assets and liabilities of PDC Funding Company, LLC ("PDC Funding"), PDC Funding Company II, LLC ("PDC Funding II"), PDC Funding Company III, LLC ("PDC Funding III") and PDC Funding Company IV, LLC ("PDC Funding IV"), which are our wholly owned subsidiaries and separate legal entities formed under Minnesota law. PDC Funding and PDC Funding II are fully consolidated special purpose entities established to sell customer installment sale contracts to outside financial institutions in the normal course of their business. PDC Funding III and PDC Funding IV are fully consolidated special purpose entities established to sell certain receivables to unaffiliated financial institutions. The assets of PDC Funding, PDC Funding II, PDC Funding III and PDC Funding IV would be available first and foremost to satisfy the claims of its creditors. There are no known creditors of PDC Funding, PDC Funding II, PDC Funding III or PDC Funding IV. The Consolidated Financial Statements also include the assets and liabilities of Technology Partner Innovations, LLC, which is further described in Note 13.

Fiscal Year End

We operate with a 52-53 week accounting convention with our fiscal year ending on the last Saturday in April. Fiscal 2024 ended on April 27, 2024 and consisted of 52 weeks. Fiscal 2023 ended on April 29, 2023 and consisted of 52 weeks. Fiscal 2022 ended on April 30, 2022 and consisted of 53 weeks. Fiscal 2025 will end on April 26, 2025 and will consist of 52 weeks.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash equivalents consist primarily of investments in money market funds and government securities. The maturity of these securities at the time of purchase is 90 days or less. All cash and cash equivalents are classified as available-for-sale and carried at cost, which approximates fair value.

Inventory, net

Inventory, net consists of merchandise held for sale and is stated at the lower of cost or market. The cost of our inventory includes the amount we pay to our suppliers to acquire inventory and freight costs incurred in connection with the delivery of product to our distribution centers and our other locations. Cost is determined using the last-in, first-out ("LIFO") method for all inventories, except for foreign inventories, which are valued using the first-in, first-out ("FIFO") method. Inventories valued at LIFO represented 81% and 81% of total inventories at April 27, 2024 and April 29, 2023, respectively.

The accumulated LIFO reserve was $154,055 and $146,915 at April 27, 2024 and April 29, 2023, respectively. We believe that inventory replacement cost exceeds the inventory balance by an amount approximating the LIFO reserve.

Property and Equipment, net

Property and equipment, net are stated at cost. Depreciation is calculated on the straight-line method over estimated useful lives of up to 39 years for buildings or the expected remaining life of purchased buildings, the term of the lease for leasehold improvements, 3 to 10 years for computer hardware and software, and 5 to 10 years for furniture and equipment.

Goodwill and Other Indefinite-Lived Intangible Assets

Goodwill and other indefinite-lived intangible assets are not amortized but rather are tested at least annually at the beginning of the fourth quarter for impairment, or more often if events or circumstances indicate the carrying value of the asset may not be recoverable.

Goodwill impairment testing is done at the reporting unit level, which represents an operating segment or a component of an operating segment. We have two reporting units; Dental and Animal Health. Our Corporate reportable segment's assets and liabilities, and net sales and expenses, are allocated to the two reporting units.

We perform a qualitative evaluation or a quantitative test to assess goodwill for impairment. The qualitative evaluation is an assessment of factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. We may elect not to perform the qualitative assessment for one or both reporting units and perform a quantitative impairment test.

If performed, the quantitative goodwill impairment test compares the fair value of each reporting unit to the reporting unit's carrying value, including goodwill. If the reporting unit's carrying value exceeds its fair value, an impairment loss will be recognized. Any goodwill impairment is measured as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying value of goodwill. The determination of fair value requires management to make assumptions and to apply judgment to estimate industry and economic factors and the profitability of future business strategies. Patterson conducts impairment testing based on current business strategy in light of present industry and economic conditions, as well as future expectations.

Our indefinite-lived intangible asset is a trade name, which is assessed for impairment by comparing the carrying value of the asset with its fair value. If the carrying value exceeds fair value, an impairment loss is recognized in an amount equal to the excess. The determination of fair value involves assumptions, including projected revenues and gross profit levels, as well as consideration of any factors that may indicate potential impairment.

We performed qualitative assessments for our goodwill impairment tests in fiscal 2024. No impairments were recorded in fiscal 2024, 2023, or 2022 as a result of goodwill and other indefinite-lived impairment tests performed.

Recoverability of Long-Lived Assets

Long-lived assets, including definite-lived intangible assets, are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable through the estimated undiscounted future cash flows derived from such assets. Our definite-lived intangible assets primarily consist of customer relationships, trade names and trademarks. When impairment exists, the related assets are written down to fair value using level 3 inputs, as discussed further in Note 7.

Other Non-current Assets, Net

	April 27, 2024		April 29, 2023
Development costs of software to be sold, net	$	73,259	$	71,467
Other	47,549		49,272
Other non-current assets, net	$	120,808	$	120,739

During fiscal 2024, 2023 and 2022, we recorded $11,651, $9,068 and $7,267, respectively, of amortization expense related to the development costs of software to be sold in cost of sales within the Consolidated Statements of Operations and Other Comprehensive Income.

Recoverability of Development Costs of Software to be Sold

We capitalize certain costs incurred for software to be sold, leased or otherwise marketed to our customers. The costs are treated as capital or expense based on the nature of the costs and the project stage in which the costs were incurred. At the end of each fiscal quarter, we compare the unamortized capitalized costs of software to be sold to its net realizable value. The net realizable value of capitalized software assets is the estimated future gross revenues from that product reduced by the estimated future costs of completing and disposing of that product, including the costs of performing maintenance and customer support required to satisfy the entity’s responsibility set forth at the time of sale. If the unamortized amount exceeds the net realizable value, an impairment is recorded. If the unamortized capitalized costs are less than the net realizable value of that asset, then there is no impairment.

No significant impairments were recorded in fiscal 2024, 2023, or 2022 as a result of the assessments performed of the recoverability of development costs to be sold.

Financial Instruments

We account for derivative financial instruments under the provisions of Accounting Standards Codification ("ASC") Topic 815, “Derivatives and Hedging.” Our use of derivative financial instruments is generally limited to managing well-defined interest rate risks. We do not use financial instruments or derivatives for any trading purposes.

Revenue Recognition

Revenues are generated from the sale of consumable products, equipment and support, software and support, technical service parts and labor, and other sources. Revenues are recognized when or as performance obligations are satisfied. Performance obligations are satisfied when the customer obtains control of the goods or services.

Consumable product, equipment, software and parts sales are recorded upon delivery, except in those circumstances where terms of the sale are FOB shipping point, in which case sales are recorded upon shipment. Technical service labor is recognized as it is provided. Revenue derived from equipment support and software services is recognized ratably over the period in which the support and services are provided.

In addition to revenues generated from the distribution of consumable products under arrangements (buy/sell agreements) where the full market value of the product is recorded as revenue, we earn commissions for services provided under agency agreements. The agency agreement contrasts to a buy/sell agreement in that we do not have control over the transaction, as we do not have the primary responsibility of fulfilling the promise of the good or service and we do not bill or collect from the customer in an agency relationship. Commissions under agency agreements are recorded when the services are provided.

Estimates for returns, damaged goods, rebates, loyalty programs and other revenue allowances are made at the time the revenue is recognized based on the historical experience for such items. The receivables that result from the recognition of revenue are reported net of related allowances. We maintain a valuation allowance based upon the expected collectability of receivables held. Estimates are used to determine the valuation allowance and are based on several factors, including historical collection data, economic trends and credit worthiness of customers. Receivables are written off when we determine the amounts to be uncollectible, typically upon customer bankruptcy or non-response to continuous collection efforts. The portions of receivable amounts that are not expected to be collected during the next twelve months are classified as long-term.

Receivables from vendors earned as a result of volume rebates and reimbursements for customer pricing contracts and promotions are recorded as a reduction of cost of sales in the period in which the related revenue is recognized. We estimate the vendor receivables earned but not received based on sales forecasts, transactional data, and historical vendor collection trends.

We offer customer financing contracts on equipment purchases by creditworthy customers. For financing contracts at a below-market interest rate, we record a subsidy as a reduction to net sales in the period the contract is originated. The subsidy on below-market rate contracts is estimated based on analyses of current publicly-available interest rate trends. We do not consider contracts with a term of one year or less to have a significant financing component and do not record a subsidy for these contracts.

We generally sell our customers’ financing contracts to outside financial institutions in the normal course of our business. These financing arrangements are accounted for as a sale of assets under the provisions of ASC 860, Transfers and Servicing. We receive the proceeds of the contracts upon sale to financial institutions, with a portion of the proceeds held by the financial institutions as a deferred purchase price (DPP) as security against eventual

performance of the portfolio. Customer financing net sales include the impact of changes in interest rates on DPP receivables, as the average interest rate in our contract portfolio may not fluctuate at the same rate as interest rate markets, resulting in an increase or reduction of gain on contract sales. We enter into an interest rate swap to hedge a portion of the related interest rate risk. These agreements do not qualify for hedge accounting, and the gains or losses on an interest rate swap are reported in other income and expense in our Consolidated Statements of Operation and Other Comprehensive Income.

Our financing business is described in further detail in Note 5 to the Consolidated Financial Statements.

Patterson has a relatively large, dispersed customer base and no single customer accounts for more than 10% of consolidated net sales. In addition, the equipment sold to customers under finance contracts generally serves as collateral for the contract and the customer provides a personal guarantee as well.

Net sales do not include sales tax as we are considered a pass-through conduit for collecting and remitting sales tax.

Contract Balances

Contract balances represent amounts presented in our Consolidated Balance Sheets when either we have transferred goods or services to the customer or the customer has paid consideration to us under the contract. These contract balances include accounts receivable, contract assets and contract liabilities.

Contract asset balances as of April 27, 2024 and April 29, 2023 were $1,373 and $1,338, respectively. Our contract liabilities primarily relate to advance payments from customers, upfront payments for software and support provided over time, and options that provide a material right to customers, such as our customer loyalty programs. At April 27, 2024 and April 29, 2023, contract liabilities of $37,399 and $36,850 were reported in other accrued liabilities, respectively. During the fiscal year ended April 27, 2024, we recognized $33,454 of the amount previously deferred at April 29, 2023.

Patterson Advantage Loyalty Program

The Dental segment provides a point-based awards program to qualifying customers involving the issuance of “Patterson Advantage dollars” which can be used toward equipment and technology purchases. Patterson Advantage dollars earned during a program year expire one year after the end of the program year. Costs of the program and changes in the corresponding liability are recognized as reductions to net sales. As of April 27, 2024, we believe we have sufficient experience with the program to reasonably estimate the amount of Patterson Advantage dollars that will not be redeemed and thus have recorded a liability for 87.0% of the maximum potential amount that could be redeemed. We recognize the expected breakage amount as revenue in proportion to the pattern of rights exercised by the customer, and we recognize the estimated value of unused Patterson Advantage dollars as redemptions occur. Breakage recognized was immaterial to all periods presented.

Freight and Delivery Charges

Freight and delivery charges are included in cost of sales in the Consolidated Statements of Operations and Other Comprehensive Income.

Advertising

We expense all advertising and promotional costs as incurred, except for direct marketing expenses, which are expensed over the shorter of the life of the asset or one year. Total net advertising and promotional expenses were $3,124, $6,888 and $1,532 for fiscal 2024, 2023 and 2022, respectively. There were no deferred direct-marketing expenses included in the Consolidated Balance Sheets as of April 27, 2024 and April 29, 2023.

Related Party Transactions

We have interests in a number of entities that are accounted for using the equity method. During fiscal 2024, 2023 and 2022, we made purchases of $195,048, $198,712 and $193,625 from these entities, respectively. During fiscal 2024, 2023 and 2022, we recorded net sales of $150,892, $123,271 and $117,347 to these entities, respectively.

Income Taxes

The liability method is used to account for income tax expense. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and

are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

Valuation allowances are established for deferred tax assets if, after assessment of available positive and negative evidence, it is more likely than not that the deferred tax asset will not be fully realized.

Self-insurance

Patterson is self-insured for certain losses related to general liability, product liability, automobile, workers’ compensation and medical claims. We estimate our liabilities based upon an analysis of historical data and actuarial estimates. While current estimates are believed reasonable based on information currently available, actual results could differ and affect financial results due to changes in the amount or frequency of claims, medical cost inflation or other factors. Historically, actual results related to these types of claims have not varied significantly from estimated amounts.

Stock-based Compensation

We recognize stock-based compensation expense based on estimated grant date fair values. The grant date fair value of stock options and stock purchases made through our Employee Stock Purchase Plan are estimated using the Black-Scholes option pricing valuation model. The grant date fair value of performance stock units that vest upon meeting certain market conditions is estimated using the Monte Carlo valuation model. These valuations require estimates to be made including expected stock price volatility which considers historical volatility trends, implied future volatility based on certain traded options and other factors. We estimate the expected life of awards based on several factors, including types of participants, vesting schedules, contractual terms and various factors surrounding exercise behavior of different groups.

The grant date fair value of time-based restricted stock awards and restricted stock units is calculated based on the closing price of our common stock on the date of grant.

Compensation expense for all share-based payment awards is recognized over the requisite service period (or to the date a participant becomes eligible for retirement, if earlier) for awards that are expected to vest.

Retirement Savings Plan

In fiscal 2024, we merged the stand-alone Patterson Companies, Inc. Employee Stock Ownership Plan (the "ESOP") into the Patterson Companies, Inc. 401(k) Plan (the "401(k) Plan"). The ESOP remains a component of the 401(k) Plan with many of the relevant provisions for the ESOP in effect. The ESOP was previously frozen to new participants in fiscal 2021 and the last employer contribution was made to eligible participants effective for the plan year ended December 31, 2020.

The general purpose of the 401(k) plan is to provide additional financial security during retirement by providing employees with an incentive to make regular savings contributions. In addition to the participation of our employees, we make annual matching contributions using an established formula. Employer contribution expense was $20,003, $19,649 and $21,013 for fiscal 2024, 2023 and 2022, respectively, which is included in operating expenses within the Consolidated Statements of Operations and Other Comprehensive Income.

Other Income (Expense), Net

	Fiscal Year Ended
	April 27, 2024		April 29, 2023		April 30, 2022
Gain on interest rate swap agreements	$	12,447	$	9,968	$	15,835
Investment income and other	22,592		17,858		11,896
Other income (expense), net	$	35,039	$	27,826	$	27,731

Comprehensive Income

Comprehensive income is computed as net income plus certain other items that are recorded directly to stockholders’ equity. Significant items included in comprehensive income are foreign currency translation adjustments and the effective portion of cash flow hedges, net of tax. Foreign currency translation adjustments do not include a provision for income tax because earnings from foreign operations are considered to be indefinitely

reinvested outside the U.S. The income tax expense related to cash flow hedge losses was $321, $321 and $321 for fiscal 2024, 2023 and 2022, respectively.

Earnings Per Share ("EPS")

The amount of basic EPS is computed by dividing net income attributable to Patterson Companies, Inc. by the weighted average number of outstanding common shares during the period. The amount of diluted EPS is computed by dividing net income by the weighted average number of outstanding common shares and common share equivalents, when dilutive, during the period.

The following table sets forth the denominator for the computation of basic and diluted EPS. There were no material adjustments to the numerator.

	Fiscal Year Ended
	April 27, 2024	April 29, 2023	April 30, 2022
Denominator for basic EPS – weighted average shares	92,969	97,027	97,277
Effect of dilutive securities – stock options, restricted stock and stock purchase plans	710	788	1,237
Denominator for diluted EPS – weighted average shares	93,679	97,815	98,514

Potentially dilutive securities representing 1,022, 932 and 772 shares for fiscal 2024, 2023 and 2022, respectively, were excluded from the calculation of diluted EPS because their effects were anti-dilutive using the treasury stock method.

Recent Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures". This ASU requires additional disclosures related to rate reconciliation and income taxes paid. The new standard is effective for annual disclosures in fiscal year 2026 and interim disclosures in fiscal year 2027, with early adoption permitted. We currently are evaluating the impact of adopting this pronouncement.

In November 2023, the FASB issued ASU No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures". This ASU requires disclosures of significant segment expenses and other segment items. Disclosures about a reportable segment's profit or loss and assets will be required for both annual and interim periods. This ASU also requires disclosure of the title and position of Chief Operating Decision Maker ("CODM") and an explanation of how the CODM uses the reported measures of profit or loss in assessing performance and allocating resources. The new standard is effective for annual disclosures in fiscal year 2025 and interim disclosures in fiscal year 2026, with early adoption permitted. We currently are evaluating the impact of adopting this pronouncement.

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Acquisitions

12 Months Ended

Apr. 27, 2024

Business Combination and Asset Acquisition [Abstract]

Acquisitions

Acquisitions

During the first quarter of fiscal 2024, we used $1,108 to pay a holdback following our acquisition of substantially all of the assets of Miller Vet Holdings, LLC. The payment was due on the 24 month anniversary of the closing date.

During the third quarter of fiscal 2023, we acquired substantially all of the assets of Relief Services for Veterinary Practitioners and Animal Care Technologies (RSVP and ACT), Texas-based companies that provide innovative solutions to veterinary practices through data extraction and conversion, staffing and video-based training services. Also during the third quarter of fiscal 2023, we acquired substantially all of the assets of Dairy Tech, Inc., a Colorado-based company that provides pasteurizing equipment and single-use bags that allow dairy producers to produce, store and feed colostrum for newborn calves, as well as product offerings for beef cattle producers. These acquisitions expand our Companion Animal and Production Animal value-added platforms and add solutions to their suite of offerings.

The total purchase price for these acquisitions is $37,535, which includes holdbacks of $4,255 that will be paid on the 24 month anniversary of the closing dates and working capital adjustments of $23 which were paid in the fourth quarter of fiscal 2023. As of the acquisition date, we have recorded $17,300 of identifiable intangibles, $16,040 of goodwill and net tangible assets of $4,233 in our Consolidated Balance Sheets related to these acquisitions. Goodwill, which is deductible for income tax purposes, was increased by $272 subsequent to acquisition date as a result of working capital adjustments. Goodwill was recorded within the Animal Health segment and represents the

expected benefit of integrating these value-added platforms with our existing operations. We have included their results of operations in our financial statements since the date of acquisition within the Animal Health segment. The accounting for the acquisitions was complete as of October 28, 2023. The acquisitions were not deemed significant and did not materially impact our financial statements, and, therefore, pro forma results are not provided.

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Cash and Cash Equivalents

12 Months Ended

Apr. 27, 2024

Cash and Cash Equivalents [Abstract]

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents consisted of the following:

	April 27, 2024		April 29, 2023
Cash on hand	$	109,777	$	111,892
Money market funds	4,685		47,777
Total	$	114,462	$	159,669

Cash on hand is generally in interest earning accounts. Included in cash and cash equivalents in the Consolidated Balance Sheets are $33,813 and $33,072 as of April 27, 2024 and April 29, 2023, respectively, which represent cash collected from previously sold customer financing contracts that have not yet been settled. See Note 5 for additional information.

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Receivables Securitization Program

12 Months Ended

Apr. 27, 2024

Transfers and Servicing [Abstract]

Receivables Securitization Program

Receivables Securitization Program

We are party to certain receivables purchase agreements (the “Receivables Purchase Agreements”) with MUFG Bank, Ltd. ("MUFG") (f.k.a. The Bank of Tokyo-Mitsubishi UFJ, Ltd.), under which MUFG acts as an agent to facilitate the sale of certain Patterson receivables (the “Receivables”) to certain unaffiliated financial institutions (the “Purchasers”). The sale of these receivables is accounted for as a sale of assets under the provisions of ASC 860, Transfers and Servicing. We utilize PDC Funding III and PDC Funding IV to facilitate the sale to fulfill requirements within the agreement. We use a daily unit of account for these Receivables.

The proceeds from the sale of these Receivables comprise a combination of cash and a deferred purchase price (“DPP”) receivable. The DPP receivable is ultimately realized by Patterson following the collection of the underlying Receivables sold to the Purchasers. The amount available under the Receivables Purchase Agreements fluctuates over time based on the total amount of eligible Receivables generated during the normal course of business, with maximum availability of $200,000 as of April 27, 2024, of which $200,000 was utilized.

We have no retained interests in the transferred Receivables, other than our right to the DPP receivable and collection and administrative service fees. We consider the fees received adequate compensation for services rendered, and accordingly have recorded no servicing asset or liability. As of April 27, 2024 and April 29, 2023, the fair value of outstanding trade receivables transferred to the Purchasers under the facility and derecognized from the Consolidated Balance Sheets were $400,626 and $429,853, respectively. Sales of trade receivables under this facility were $3,585,194, $3,718,167, and $3,643,700, and cash collections from customers on receivables sold were $3,614,901, $3,684,412 and $3,632,145 during the fiscal years ended 2024, 2023 and 2022, respectively.

The DPP receivable is recorded at fair value within the Consolidated Balance Sheets within prepaid expenses and other current assets. The difference between the carrying amount of the Receivables and the sum of the cash and fair value of the DPP receivable received at time of transfer is recognized as a gain or loss on sale of the related Receivables inclusive of bank fees and allowance for credit losses. In operating expenses in the Consolidated Statements of Operations and Other Comprehensive Income, we recorded losses of $13,850, $11,403 and $3,247 during fiscal 2024, 2023 and 2022, respectively, related to the Receivables.

The following rollforward summarizes the activity related to the DPP receivable:

	Fiscal Year Ended
	April 27, 2024		April 29, 2023		April 30, 2022
Beginning DPP receivable balance	$	227,946	$	195,764	$	183,999
Non-cash additions to DPP receivable	949,194		960,909		1,052,938
Cash collections on DPP receivable	(978,313)		(928,727)		(1,041,173)
Ending DPP receivable balance	$	198,827	$	227,946	$	195,764

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Customer Financing

12 Months Ended

Apr. 27, 2024

Receivables [Abstract]

Customer Financing

Customer Financing

As a convenience to our customers, we offer several different financing alternatives, including a third party program and a Patterson-sponsored program. For the third party program, we act as a facilitator between the customer and the third party financing entity with no on-going involvement in the financing transaction. Under the Patterson-sponsored program, equipment purchased by creditworthy customers may be financed up to a maximum of $2,000. We generally sell our customers’ financing contracts to outside financial institutions in the normal course of our business. These financing arrangements are accounted for as a sale of assets under the provisions of ASC 860, Transfers and Servicing. We use a monthly unit of account for these financing contracts.

We operate under an agreement to sell a portion of our equipment finance contracts to commercial paper conduits with MUFG serving as the agent. We utilize PDC Funding to fulfill a requirement of participating in the commercial paper conduit. We receive the proceeds of the contracts upon sale to MUFG. At least 15.0% of the proceeds are held by the conduit as security against eventual performance of the portfolio. This percentage can be greater and is based upon certain ratios defined in the agreement with MUFG. The capacity under the agreement with MUFG at April 27, 2024 was $575,000.

Historically, we maintained two arrangements under which we sell these contracts. We formerly also maintained an agreement with Fifth Third Bank ("Fifth Third") whereby Fifth Third purchased customers’ financing contracts. PDC Funding II sold its financing contracts to Fifth Third. We received the proceeds of the contracts upon sale to Fifth Third. At least 15.0% were held by the conduit as security against eventual performance of the portfolio.

During fiscal 2024, Fifth Third sold and assigned the remaining purchased customer financing contracts to the facility in which MUFG is the agent. We transferred and assigned the related DPP receivable of $15,400 from PDC Funding II to PDC Funding, and the DPP counterparty changed from Fifth Third to MUFG. We amended our agreement with MUFG as agent and expanded capacity under that agreement from $525,000 to $575,000. We thereby ended our agreement with Fifth Third.

We service the financing contracts, for which we are paid a servicing fee. The servicing fees we receive are considered adequate compensation for services rendered. Accordingly, no servicing asset or liability has been recorded.

The portion of the purchase price for the receivables held by the conduits is deemed a DPP receivable, which is paid to the applicable special purpose entity as payments on the customers’ financing contracts are collected by Patterson from customers. The difference between the carrying amount of the receivables sold under these programs and the sum of the cash and fair value of the DPP receivable received at time of transfer is recognized as a gain or loss on sale of the related receivables and recorded in net sales in the Consolidated Statements of Operations and Other Comprehensive Income. Expenses incurred related to customer financing activities are recorded in operating expenses in our Consolidated Statements of Operations and Other Comprehensive Income.

During fiscal 2024, 2023 and 2022, we sold $281,076, $261,853 and $314,732 of contracts under these arrangements, respectively. In net sales in the Consolidated Statements of Operations and Other Comprehensive Income, we recorded losses of $11,010, $4,082 and $18,379 during fiscal 2024, 2023 and 2022, respectively, related to these contracts sold. Cash collections on financed receivables sold were $291,621, $302,851 and $426,188 during the fiscal years ended 2024, 2023 and 2022, respectively. Unamortized discounts of $3,097 and $0 were recorded as of April 27, 2024 and April 29, 2023, respectively, which represent subsidies on contracts with below-market interest rates.

Included in cash and cash equivalents in the Consolidated Balance Sheets are $33,813 and $33,072 as of April 27, 2024 and April 29, 2023, respectively, which represent cash collected from previously sold customer financing contracts that have not yet been settled. Included in current receivables in the Consolidated Balance Sheets are $74,430 and $77,646 as of April 27, 2024 and April 29, 2023, respectively, of finance contracts we have not yet sold. A total of $581,729 of finance contracts receivable sold under the arrangements was outstanding at April 27, 2024. Since the internal financing program began in 1994, bad debt write-offs have amounted to less than 1% of the loans originated.

The following rollforward summarizes the activity related to the DPP receivable:

	Fiscal Year Ended
	April 27, 2024		April 29, 2023		April 30, 2022
Beginning DPP receivable balance	$	102,979	$	125,332	$	227,967
Non-cash additions to DPP receivable	61,244		47,832		69,689
Cash collections on DPP receivable	(49,964)		(70,185)		(172,324)
Ending DPP receivable balance	$	114,259	$	102,979	$	125,332

The arrangements require us to maintain a minimum current ratio and maximum leverage ratio. We were in compliance with those covenants at April 27, 2024.

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Derivative Financial Instruments

12 Months Ended

Apr. 27, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

We are a party to certain offsetting and identical interest rate cap agreements entered into to fulfill certain covenants of the equipment finance contract sale agreements. The interest rate cap agreements also provide a credit enhancement feature for the financing contracts sold by PDC Funding and PDC Funding II to the commercial paper conduit.

The interest rate cap agreements are entered into periodically to maintain consistency with the dollar maximum of the sale agreements and the maturity of the underlying financing contracts. As of April 27, 2024, PDC Funding had purchased an interest rate cap from a bank with a notional amount of $575,000 and a maturity date of July 2031. We sold an identical interest rate cap to the same bank.

These interest rate cap agreements do not qualify for hedge accounting treatment and, accordingly, we record the fair value of the agreements as an asset or liability and the change in fair value as income or expense during the period in which the change occurs.

In January 2014, we entered into a forward interest rate swap agreement with a notional amount of $250,000 and accounted for it as a cash flow hedge, in order to hedge interest rate fluctuations in anticipation of refinancing the 5.17% senior notes due March 25, 2015. These notes were repaid on March 25, 2015 and replaced with new $250,000 3.48% senior notes due March 24, 2025. A cash payment of $29,003 was made in March 2015 to settle the interest rate swap. This amount is recorded in other comprehensive income (loss), net of tax, and is recognized as interest expense over the life of the related debt.

We utilize forward interest rate swap agreements to hedge against interest rate fluctuations that impact the amount of net sales we record related to our customer financing contracts. These interest rate swap agreements do not qualify for hedge accounting treatment and, accordingly, we record the fair value of the agreements as an asset or liability and the change in fair value as income or expense during the period in which the change occurs.

As of April 29, 2023, the remaining notional amount for interest rate swap agreements was $551,504, with the latest maturity date in fiscal 2030. During fiscal 2024, we entered into forward interest rate swap agreements with a notional amount of $247,734. As of April 27, 2024, the remaining notional amount for interest rate swap agreements was $565,420, with the latest maturity date in fiscal 2031.

Net cash receipts of $14,413 and $7,626 were received in fiscal 2024 and 2023, respectively, to settle a portion of our assets and liabilities related to interest rate swap agreements. These receipts are reflected as cash flows in the Consolidated Statements of Cash Flows within net cash used in operating activities.

The following presents the fair value of derivative instruments included in the Consolidated Balance Sheets:

Derivative type	Classification	April 27, 2024		April 29, 2023
Assets:
Interest rate contracts	Prepaid expenses and other current assets	$	5,781	$	5,875
Interest rate contracts	Other non-current assets	21,193		23,210
Total asset derivatives		$	26,974	$	29,085
Liabilities:
Interest rate contracts	Other accrued liabilities	$	259	$	267
Interest rate contracts	Other non-current liabilities	13,198		12,993
Total liability derivatives		$	13,457	$	13,260

The following tables present the pre-tax effect of derivative instruments on the Consolidated Statements of Operations and Other Comprehensive Income:

		Amount of Loss Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion)
		Fiscal Year Ended
Derivatives in cash flow hedging relationships	Statements of operations location	April 27, 2024		April 29, 2023		April 30, 2022
Interest rate contracts	Interest expense	$	(1,363)	$	(1,363)	$	(1,363)

		Amount of Gain (Loss) Recognized in Income on Derivatives
		Fiscal Year Ended
Derivatives not designated as hedging instruments	Statements of operations location	April 27, 2024		April 29, 2023		April 30, 2022
Interest rate contracts	Other income, net	$	12,447	$	9,968	$	15,835

There were no gains or losses recognized in other comprehensive income (loss) on cash flow hedging derivatives in fiscal 2024, 2023 or 2022.

We recorded no ineffectiveness during fiscal 2024, 2023 or 2022. As of April 27, 2024, the estimated pre-tax portion of accumulated other comprehensive loss that is expected to be reclassified into earnings over the next twelve months is $1,250, which will be recorded as an increase to interest expense.

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Fair Value Measurements

12 Months Ended

Apr. 27, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Fair value is the price at which an asset could be exchanged in a current transaction between knowledgeable, willing parties. The fair value hierarchy of measurements is categorized into one of three levels based on the lowest level of significant input used:

Level 1 –	Quoted prices in active markets for identical assets and liabilities at the measurement date.
Level 2 –	Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3 –	Unobservable inputs for which there is little or no market data available. These inputs reflect management’s assumptions of what market participants would use in pricing the asset or liability.

Our hierarchy for assets and liabilities measured at fair value on a recurring basis is as follows:

	April 27, 2024
	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	4,685	$	4,685	$	—	$	—
DPP receivable - receivables securitization program	198,827		—		—		198,827
DPP receivable - customer financing	114,259		—		—		114,259
Derivative instruments	26,974		—		26,974		—
Total assets	$	344,745	$	4,685	$	26,974	$	313,086
Liabilities:
Derivative instruments	$	13,457	$	—	$	13,457	$	—

	April 29, 2023
	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	47,777	$	47,777	$	—	$	—
DPP receivable - receivables securitization program	227,946		—		—		227,946
DPP receivable - customer financing	102,979		—		—		102,979
Derivative instruments	29,085		—		29,085		—
Total assets	$	407,787	$	47,777	$	29,085	$	330,925
Liabilities:
Derivative instruments	$	13,260	$	—	$	13,260	$	—

Cash equivalents – We value cash equivalents at their current market rates. The carrying value of cash equivalents approximates fair value and maturities are less than three months.

DPP receivable - receivables securitization program – We value this DPP receivable based on a discounted cash flow analysis using unobservable inputs, which include the estimated timing of payments and the credit quality of the underlying creditor. Significant changes in any of the significant unobservable inputs in isolation would not result in a materially different fair value estimate. The interrelationship between these inputs is insignificant.

DPP receivable - customer financing – We value this DPP receivable based on a discounted cash flow analysis using unobservable inputs, which include a forward yield curve, the estimated timing of payments and the credit quality of the underlying creditor. Significant changes in any of the significant unobservable inputs in isolation would not result in a materially different fair value estimate. The interrelationship between these inputs is insignificant.

Derivative instruments –Our derivative instruments consist of interest rate cap agreements and interest rate swaps. These instruments are valued using inputs such as interest rates and credit spreads.

Certain assets are measured at fair value on a non-recurring basis. These assets are not measured at fair value on an ongoing basis, but are subject to fair value adjustments under certain circumstances. We adjust the carrying value of our non-marketable equity securities to fair value when observable transactions of identical or similar securities occur, or due to an impairment.

We have an investment in Vetsource, a commercial partner and leading home delivery provider for veterinarians. In fiscal 2022, we sold a portion of our investment in Vetsource, with a carrying value of $25,814, for $56,849. We recorded a pre-tax gain of $31,035 in gains on investments in our Consolidated Statements of Operations and Other Comprehensive Income as a result of this sale. The cash received of $56,849 is reported within investing activities in our Consolidated Statements of Cash Flows. In fiscal 2022, we also recorded a pre-tax non-cash gain of $31,035 to reflect the increase in the carrying value of the remaining portion of our investment in Vetsource, which was based on the selling price of the portion of the investment we sold for $56,849. This gain was recorded in gains on investments in our Consolidated Statements of Operations and Other comprehensive income. The carrying value of the investment we owned following this sale was $56,849 and $56,849 as of April 27, 2024 and April 29, 2023,

respectively. Concurrent with the sale completed in fiscal 2022, we obtained rights that will allow us, under certain circumstances, to require another shareholder of Vetsource to purchase our remaining shares. We recorded a pre-tax non-cash gain of $25,757 in gains on investments in our Consolidated Statements of Operations and Other Comprehensive Income as a result of this transaction. The carrying value of this put option as of April 27, 2024 is $25,757, and is reported within investments in our Consolidated Balance Sheets. The aggregate gains on investments of $87,827 are reported within operating activities in our Consolidated Statements of Cash Flows. Concurrent with obtaining this put option, we also granted rights to the same Vetsource shareholder that would allow such shareholder, under certain circumstances, to require us to sell our remaining shares at fair value. There were no fair value adjustments to such assets during the fiscal year ended April 27, 2024.

In fiscal 2022, we sold a portion of our investment in Vets Plus with a carrying value of $4,009 for $17,101. We recorded a pre-tax gain of $13,092 in gains on investments in our Consolidated Statements of Operations and Other Comprehensive Income as a result of this sale. This $13,092 pre-tax gain is reported within operating activities in our Consolidated Statements of Cash Flows. The cash received of $17,101 is reported within investing activities in our Consolidated Statements of Cash Flows. The carrying value of the investment we owned following this sale was $2,299 and $2,299 as of April 27, 2024 and April 29, 2023, respectively.

Our debt is not measured at fair value in the Consolidated Balance Sheets. The estimated fair value of our debt as of April 27, 2024 and April 29, 2023 was $448,287 and $483,139, respectively, as compared to a carrying value of $451,661 and $487,231 at April 27, 2024 and April 29, 2023, respectively. The fair value of debt was measured using a discounted cash flow analysis based on expected market based yields (i.e., level 2 inputs).

The carrying amounts of receivables, net of allowances, accounts payable, and certain accrued and other current liabilities approximated fair value at April 27, 2024 and April 29, 2023.

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Goodwill and Other Intangible Assets

12 Months Ended

Apr. 27, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

The changes in the carrying value of goodwill for each of our reporting units for the fiscal year ended April 27, 2024 were as follows:

	Balance at April 29, 2023		Foreign Currency Translation		Balance at April 27, 2024
Dental	$	139,111	$	(92)	$	139,019
Animal Health	17,309		—		17,309
Total	$	156,420	$	(92)	$	156,328

Balances of other intangible assets, excluding goodwill, were as follows:

	April 27, 2024						April 29, 2023
	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
Unamortized - indefinite lived:
Trade name	$	12,300	$	—	$	12,300	$	12,300	$	—	$	12,300
Amortized - definite lived:
Customer relationships	380,003		228,851		151,152		380,205		205,524		174,681
Trade names and trademarks	135,830		119,326		16,504		135,876		107,519		28,357
Developed technology and other	52,906		39,601		13,305		52,920		36,385		16,535
Total amortized intangible assets	568,739		387,778		180,961		569,001		349,428		219,573
Total identifiable intangible assets	$	581,039	$	387,778	$	193,261	$	581,301	$	349,428	$	231,873

With respect to the amortized intangible assets, future amortization expense is expected to approximate $38,525, $28,716, $27,324, $26,761 and $23,739 for fiscal 2025, 2026, 2027, 2028 and 2029, respectively. Actual amounts of amortization expense may differ from estimated amounts due to additional intangible asset acquisitions, changes in foreign currency exchange rates, impairment of intangible assets, accelerated amortization of intangible assets and other events.

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Property and Equipment

12 Months Ended

Apr. 27, 2024

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and Equipment

Property and equipment consisted of the following:

	April 27, 2024		April 29, 2023
Land	$	9,680	$	9,687
Buildings	109,727		98,174
Leasehold improvements	32,338		31,712
Furniture and equipment	213,010		204,754
Computer hardware and software	261,937		250,805
Construction-in-progress (1)	35,683		32,233
Property and equipment, gross	662,375		627,365
Accumulated depreciation	(433,294)		(415,082)
Property and equipment, net	$	229,081	$	212,283

(1)Includes $20,540 and $10,661 of unamortized development costs of software to be sold as of April 27, 2024 and April 29, 2023, respectively.

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Leases

12 Months Ended

Apr. 27, 2024

Commitments and Contingencies Disclosure [Abstract]

Leases

Leases

We lease certain warehouses, office space, vehicles and equipment. Leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheets. We recognize lease expense for these leases on a straight-line basis over the lease term. We do not separate lease and non-lease components, and instead account for each lease and non-lease component associated with that lease as a single lease component. Some leases include one or more options to renew. The exercise of renewal options is at our sole discretion. Our lease agreements do not contain significant residual value guarantees, restrictions or covenants.

Total lease costs for the fiscal year ended April 27, 2024 and April 29, 2023 were $38,497 and $35,640, respectively, which include variable lease costs and short-term lease costs, which were immaterial.

The following table presents future maturities of lease liabilities:

2025	$	38,047
2026	30,763
2027	25,216
2028	18,914
2029	8,919
After 2029	26,067
Total lease payments	147,926
Less: imputed interest	(22,647)
Present value of lease liabilities	$	125,279

The following tables present other supplemental information related to leases:

	Fiscal Year Ended
	April 27, 2024			April 29, 2023
Cash paid for amounts included in the measurement of operating lease liabilities	$	39,803		$	35,779
Lease assets obtained in exchange for new operating lease liabilities	$	83,041		$	56,603
	April 27, 2024			April 29, 2023
Weighted-average remaining lease term - operating leases	5.87 years			6.50 years
Weighted-average discount rate - operating leases	5.01		%	4.40		%

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Debt

12 Months Ended

Apr. 27, 2024

Debt Disclosure [Abstract]

Debt

Debt

Our long-term debt consisted of the following:

			Carrying Value
	Interest Rate		April 27, 2024		April 29, 2023
Senior notes due fiscal 2024 (1)	3.74	%	—		33,000
Senior notes due fiscal 2025 (2)	3.48	%	117,500		117,500
Senior notes due fiscal 2028 (3)	3.79	%	40,000		40,000
Term loan due fiscal 2025 through 2028 (4)	6.54	%	295,500		298,500
Less: Deferred debt issuance costs			(1,339)		(1,769)
Total debt			451,661		487,231
Less: Current maturities of long-term debt			(122,750)		(36,000)
Long-term debt			$	328,911	$	451,231

(1)Issued in December 2011.

(2)Issued in March 2015.

(3)Issued in March 2018.

(4)Issued in December 2019, amended in October 2022. Interest rate is 1-month SOFR plus 1.225% as of April 27, 2024.

Future principal payments due, based on stated contractual maturities for our long-term debt, were as follows as of April 27, 2024:

Fiscal Year
2025	$	122,750
2026	11,250
2027	15,000
2028	304,000
2029	—
Thereafter	—
Total	$	453,000

In fiscal 2021, we entered into an amendment, restatement and consolidation of certain credit agreements with various lenders, including MUFG Bank, Ltd, as administrative agent. This amended and restated credit agreement (the “Credit Agreement”) consisted of a $700,000 revolving credit facility and a $300,000 term loan facility, and was set to mature no later than February 2024.

In fiscal 2023, we amended and restated the Credit Agreement (the “Amended Credit Agreement”). The Amended Credit Agreement consists of a $700,000 revolving credit facility and a $300,000 term loan facility, and will mature no later than October 2027. We used the Amended Credit Agreement facilities to refinance and consolidate the Credit Agreement, and pay the fees and expenses incurred therewith. We expect to use the Amended Credit Agreement to finance our ongoing working capital needs and for other general corporate purposes.

As of April 27, 2024, $295,500 was outstanding under the Amended Credit Agreement term loan at an interest rate of 6.54% and $186,000 was outstanding under the Amended Credit Agreement revolving credit facility at an interest rate of 6.53%. As of April 29, 2023, $298,500 was outstanding under the Credit Agreement term loan at an interest rate of 6.08%, and $45,000 was outstanding under the Credit Agreement revolving credit facility at an interest rate of 5.93%.

We are subject to various financial covenants under our debt agreements including the maintenance of leverage and interest coverage ratios. In the event of our default, any outstanding obligations may become due and payable immediately. We were in compliance with the covenants under our debt agreements as of April 27, 2024.

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Income Taxes

12 Months Ended

Apr. 27, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The components of income before taxes were as follows:

	Fiscal Year Ended
	April 27, 2024		April 29, 2023		April 30, 2022
Income before taxes
United States	$	211,350	$	233,416	$	225,195
International	31,703		36,745		41,059
Total	$	243,053	$	270,161	$	266,254

Significant components of income tax expense were as follows:

	Fiscal Year Ended
	April 27, 2024		April 29, 2023		April 30, 2022
Current:
Federal	$	51,263	$	46,982	$	46,964
Foreign	8,201		8,280		11,968
State	11,593		10,294		10,326
Total current expense	71,057		65,556		69,258
Deferred:
Federal	(13,403)		(4,217)		(3,918)
Foreign	2,045		2,601		(217)
State	(2,165)		(377)		(583)
Total deferred benefit	(13,523)		(1,993)		(4,718)
Income tax expense	$	57,534	$	63,563	$	64,540

Deferred tax assets and liabilities are included in other non-current assets and deferred income taxes on the Consolidated Balance Sheets. Significant components of our deferred tax assets (liabilities) were as follows:

	April 27, 2024		April 29, 2023
Deferred tax assets:
Employee compensation and benefits	$	7,674	$	7,519
Inventory related items	7,645		8,228
Foreign intangibles and goodwill	11,767		11,420
Foreign tax credit	7,003		7,003
Lease liability	29,587		19,808
Accrued charitable contributions	427		902
Capitalized research and experimentation costs	12,020		5,172
Other accrued liabilities	6,498		7,744
Other	8,329		7,270
Gross deferred tax assets	90,950		75,066
Less: Valuation allowance	(18,620)		(18,276)
Total net deferred tax assets	72,330		56,790
Deferred tax liabilities
LIFO reserve	(29,593)		(26,010)
Amortizable intangibles	(36,923)		(45,042)
Goodwill	(18,098)		(17,094)
Property, plant, equipment	(32,457)		(36,488)
Lease right-of-use assets	(29,048)		(19,361)
Investments	(26,662)		(26,959)
Other	(4,070)		(3,557)
Total deferred tax liabilities	(176,851)		(174,511)
Deferred net long-term income tax liability	$	(104,521)	$	(117,721)

At April 27, 2024, we had a U.S. foreign tax credit asset that will expire in two years. In addition, we have foreign deferred tax assets which would give rise to tax capital losses if triggered in the future. These losses can only be used against capital gain income. At this time, we believe that it is more likely than not that the foreign tax credit and potential capital loss carryforward attributes totaling $18,620 will not be fully utilized prior to expiration. As a result, a full valuation allowance has been established against these assets.

With regard to unremitted earnings of foreign subsidiaries generated after December 31, 2017, we do not currently provide for U.S. taxes since we intend to reinvest such undistributed earnings indefinitely outside of the United States.

Income tax expense varies from the amount computed using the U.S. statutory rate. The reasons for this difference and the related tax effects are shown below.

	Fiscal Year Ended
	April 27, 2024		April 29, 2023		April 30, 2022
Tax at U.S. statutory rate	$	51,038	$	56,732	$	55,912
State tax provision, net of federal benefit	7,630		8,416		9,176
Effect of foreign taxes	3,612		2,853		3,199
ESOP	(1,895)		(2,049)		(2,121)
Other permanent differences	1,308		2,481		944
Other	(4,159)		(4,870)		(2,570)
Income tax expense	$	57,534	$	63,563	$	64,540

We have accounted for the uncertainty in income taxes recognized in the financial statements in accordance with ASC Topic 740. This standard clarifies the separate identification and reporting of estimated amounts that could be assessed upon audit. The potential assessments are considered unrecognized tax benefits, because, if it is ultimately determined they are unnecessary, the reversal of these previously recorded amounts will result in a beneficial impact to our financial statements.

As of April 27, 2024 and April 29, 2023, Patterson’s gross unrecognized tax benefits were $8,049 and $8,291, respectively. If determined to be unnecessary, these amounts (net of deferred tax assets of $1,690 and $1,741, respectively, related to the tax deductibility of the gross liabilities) would decrease our effective tax rate. The gross unrecognized tax benefits are included in other non-current liabilities on the Consolidated Balance Sheets.

A summary of the changes in the gross amounts of unrecognized tax benefits is shown below.

	April 27, 2024		April 29, 2023
Balance at beginning of period	$	8,291	$	9,898
Additions for tax positions related to the current year	1,156		1,158
Additions for tax positions of prior years	128		142
Reductions for tax positions of prior years	(12)		(1,400)
Statute expirations	(1,514)		(1,507)
Settlements	—		—
Balance at end of period	$	8,049	$	8,291

We also recognize both interest and penalties with respect to unrecognized tax benefits as a component of income tax expense. As of April 27, 2024 and April 29, 2023, we had recorded $1,756 and $1,617, respectively, for interest and penalties. These amounts are also included in other non-current liabilities on the Consolidated Balance Sheets. These amounts, net of related deferred tax assets, if determined to be unnecessary, would decrease our effective tax rate. During the year ended April 27, 2024, we recorded as part of tax expense $365 related to an increase in our estimated liability for interest and penalties.

Patterson files income tax returns, including returns for our subsidiaries, with federal, state, local and foreign jurisdictions. The IRS has either examined or waived examination for all periods up to and including our fiscal year ended April 25, 2020. In addition to the IRS, periodically, state, local and foreign income tax returns are examined by various taxing authorities. We do not believe that the outcome of these various examinations will have a material adverse impact on our financial statements.

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Technology Partner Innovations, LLC ("TPI")

12 Months Ended

Apr. 27, 2024

Equity Method Investments and Joint Ventures [Abstract]

Technology Partner Innovations, LLC ("TPI")

Technology Partner Innovations, LLC ("TPI")

In fiscal 2019, we entered into an agreement with Cure Partners to form TPI, which offers a cloud-based practice management software, NaVetor, to its customers. Patterson and Cure Partners each contributed net assets of $4,000 to form TPI. Patterson and Cure Partners each contributed additional net assets of $1,000 and $1,000 during fiscal 2023 and 2022, respectively, and no additional net assets were contributed during fiscal 2024. We have determined that TPI is a variable interest entity, and we consolidate the results of operations of TPI as we have concluded that we are the primary beneficiary of TPI. Since TPI was formed, there have been no changes in ownership interests. As of April 27, 2024, we had noncontrolling interests of $588 on our Consolidated Balance Sheets.

During fiscal 2024, 2023 and 2022, net loss attributable to the noncontrolling interest was $412, $959 and $1,496, respectively.

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Segment and Geographic Data

12 Months Ended

Apr. 27, 2024

Segment Reporting [Abstract]

Segment and Geographic Data

Segment and Geographic Data

We present three reportable segments: Dental, Animal Health and Corporate. Dental and Animal Health are strategic business units that offer similar products and services to different customer bases. Dental provides a virtually complete range of consumable dental products, equipment, turnkey digital solutions and value-added services to dentists, dental laboratories, institutions, and other healthcare professionals throughout North America. Animal Health is a leading, full-line distributor in North America and the U.K. of animal health products, services and technologies to both the production-animal and companion-pet markets. Our Corporate segment is comprised of general and administrative expenses, including home office support costs in areas such as information technology, finance, legal, human resources and facilities. In addition, customer financing and other miscellaneous sales are

reported within Corporate results. Corporate assets consist primarily of cash and cash equivalents, accounts receivable, property and equipment and long-term receivables. We evaluate segment performance based on operating income. The costs to operate the fulfillment centers are allocated to the business units based on the through-put of the unit.

The following tables present information about our reportable segments and the geographic areas in which we operate:

	Fiscal Year Ended
	April 27, 2024		April 29, 2023		April 30, 2022
Consolidated net sales
United States	$	5,438,727	$	5,423,931	$	5,358,489
United Kingdom	759,184		655,103		717,481
Canada	370,361		392,437		423,435
Total	$	6,568,272	$	6,471,471	$	6,499,405
Dental net sales
United States	$	2,260,198	$	2,256,006	$	2,259,579
Canada	228,436		236,136		256,553
Total	$	2,488,634	$	2,492,142	$	2,516,132
Animal Health net sales
United States	$	3,165,960	$	3,153,518	$	3,098,511
United Kingdom	759,184		655,103		717,481
Canada	141,925		156,301		166,882
Total	$	4,067,069	$	3,964,922	$	3,982,874
Corporate net sales
United States	$	12,569	$	14,407	$	399
Total	$	12,569	$	14,407	$	399

	Fiscal Year Ended
	April 27, 2024		April 29, 2023		April 30, 2022
Consolidated net sales
Consumable	$	5,274,012	$	5,147,330	$	5,248,040
Equipment	888,597		950,403		920,424
Value-added services and other	405,663		373,738		330,941
Total	$	6,568,272	$	6,471,471	$	6,499,405
Dental net sales
Consumable	$	1,415,789	$	1,358,823	$	1,424,677
Equipment	766,345		823,978		800,144
Value-added services and other	306,500		309,341		291,311
Total	$	2,488,634	$	2,492,142	$	2,516,132
Animal Health net sales
Consumable	$	3,858,223	$	3,788,507	$	3,823,363
Equipment	122,252		126,425		120,280
Value-added services and other	86,594		49,990		39,231
Total	$	4,067,069	$	3,964,922	$	3,982,874
Corporate net sales
Value-added services and other	$	12,569	$	14,407	$	399
Total	$	12,569	$	14,407	$	399

	Fiscal Year Ended
	April 27, 2024		April 29, 2023		April 30, 2022
Operating income
Dental	$	209,807	$	237,268	$	180,212
Animal Health	139,077		126,994		114,403
Corporate	(95,960)		(88,291)		(137,613)
Consolidated operating income	$	252,924	$	275,971	$	157,002
Depreciation and amortization
Dental	$	15,932	$	14,051	$	13,495
Animal Health	46,462		44,644		44,561
Corporate	25,762		25,009		23,936
Consolidated depreciation and amortization	$	88,156	$	83,704	$	81,992

	April 27, 2024		April 29, 2023
Property and equipment, net
United States	$	180,835	$	177,163
United Kingdom	24,671		21,033
Canada	23,575		14,087
Total property and equipment, net	$	229,081	$	212,283
	April 27, 2024		April 29, 2023
Total assets
Dental	$	913,478	$	853,369
Animal Health	1,568,413		1,570,760
Corporate	414,841		455,017
Total assets	$	2,896,732	$	2,879,146

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Stockholders' Equity

12 Months Ended

Apr. 27, 2024

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

Dividends

The following table presents our declared cash dividends per share on our common stock for the past three years. In fiscal 2024, 2023 and 2022, dividends were declared in the period presented and paid in the following quarter.

	Quarter
Fiscal year	1		2		3		4
2024	$	0.26	$	0.26	$	0.26	$	0.26
2023	0.26		0.26		0.26		0.26
2022	0.26		0.26		0.26		0.26

Share Repurchases

During fiscal 2024, we repurchased 7,604 shares of our common stock for $229,508, or an average of $30.18 per share. During fiscal 2023, we repurchased 2,020 shares of our common stock for $55,492, or an average of $27.47 per share. During fiscal 2022, we repurchased 1,032 shares of our common stock for $35,000, or an average of $33.90 per share.

On March 11, 2024, the Board of Directors authorized a $500,000 share repurchase program through March 16, 2027, replacing a prior authorization which was expiring. As of April 27, 2024, $500,000 remains available under the current stock repurchase program.

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Stock-based Compensation

12 Months Ended

Apr. 27, 2024

Share-Based Payment Arrangement [Abstract]

Stock-based Compensation

Stock-based Compensation

The Consolidated Statements of Operations and Other Comprehensive Income for fiscal 2024, 2023 and 2022 include pre-tax (after-tax) stock-based compensation expense of $17,871 ($14,060), $15,543 ($12,353) and $23,805 ($18,686), respectively. Pre-tax expense is included in operating expenses within the Consolidated Statements of Operations and Other Comprehensive Income.

As of April 27, 2024, the total unrecognized compensation cost related to non-vested awards was $16,036, and it is expected to be recognized over a weighted average period of approximately 1.2 years.

2015 Omnibus Incentive Plan

In September 2015, our shareholders approved the 2015 Omnibus Incentive Plan ("Incentive Plan"), which was most recently amended and restated in September 2021. The aggregate number of shares of common stock that may be issued is 19,500. The Incentive Plan authorizes various award types to be issued under the plan, including stock options, restricted stock awards, restricted stock units, stock appreciation rights, performance awards, non-employee director awards, cash-based awards and other stock-based awards. We issue new shares for stock option exercises, restricted stock award grants and also for vesting of restricted stock units and performance stock

units. Awards that expire or are canceled without delivery of shares generally become available for reissuance under the plan.

At April 27, 2024, there were 8,502 shares available for awards under the Incentive Plan.

As a result of the approval of the Incentive Plan, awards are no longer granted under any prior equity incentive plan, but all outstanding awards previously granted under such prior plans will remain outstanding and subject to the terms of such prior plans. At April 27, 2024, there were 289 shares outstanding under prior plans.

Stock Option Awards

Stock options granted to employees expire no later than ten years after the date of grant. Awards typically vest over three years.

The fair value of stock options granted was estimated as of the grant date using a Black-Scholes option-pricing model with the following assumptions:

	Fiscal Year Ended
	April 27, 2024			April 29, 2023			April 30, 2022
Expected dividend yield	3.1		%	3.5		%	3.4		%
Expected stock price volatility	39.3		%	38.8		%	38.1		%
Risk-free interest rate	4.1		%	3.2		%	1.1		%
Expected life (years)	6.0			6.0			6.0
Weighted average grant date fair value per share	$	10.69		$	8.82		$	7.97

The following is a summary of stock option activity:

	Number of Options	Weighted- Average Exercise Price		Aggregate Intrinsic Value
Balance as of April 29, 2023	2,020	$	30.52
Granted	228	33.26
Exercised	(233)	22.97
Canceled	(18)	38.05
Balance as of April 27, 2024	1,997	$	31.65	$	2,824
Vested or expected to vest as of April 27, 2024	1,995	$	31.65	$	2,824
Exercisable as of April 27, 2024	1,548	$	31.65	$	2,824

The weighted average remaining contractual lives of options outstanding and options exercisable as of April 27, 2024 were 5.4 and 4.5 years, respectively.

Related to stock options exercised, the intrinsic value, cash received and tax benefits realized were $1,906, $5,365 and $332, respectively, in fiscal 2024; $4,289, $15,555 and $948, respectively, in fiscal 2023; and $1,552, 3,975 and $238, respectively, in fiscal 2022.

Restricted Stock

Restricted stock awards and restricted stock units granted to employees generally vest over a three year period. Restricted stock awards are also granted to non-employee directors annually and vest over one year. The grant date fair value of restricted stock awards and restricted stock units is based on the closing stock price on the day of the grant. The total fair value of restricted stock awards and restricted stock units that vested in fiscal 2024, 2023 and 2022 was $13,773, $16,123 and $19,970, respectively.

The following is a summary of restricted stock award activity:

	Restricted Stock Awards
	Shares	Weighted- Average Grant Date Fair Value
Outstanding at April 29, 2023	37	$	27.23
Granted	40	29.19
Vested	(37)	27.23
Forfeitures	—	—
Outstanding at April 27, 2024	40	$	29.19

The following is a summary of restricted stock unit activity:

	Restricted Stock Units
	Shares	Weighted- Average Grant Date Fair Value
Outstanding at April 29, 2023	792	$	29.12
Granted	438	33.18
Vested	(394)	27.86
Forfeitures	(42)	31.32
Outstanding at April 27, 2024	794	$	31.85

Performance Unit Awards

In fiscal 2024, 2023 and 2022, we granted performance unit awards to certain executives which are earned at the end of a three-year period if certain operating goals are met. The number of shares to be received at vesting related to the fiscal 2024, 2023 and 2022 awards will be determined by performance measured over three fiscal year periods and ultimately modified by Patterson's total shareholder return ("TSR") relative to the performance of companies in the S&P Midcap 400 Index measured over a three-year period. We estimate the grant date fair value of the TSR awards using the Monte Carlo valuation model. We recognize expense over the requisite service period based on the outcome that is probable for these awards. The total fair value of performance unit awards that vested in fiscal 2024 and 2023 was $2,438 and $6,220, respectively. No performance unit awards vested in fiscal 2022.

The following is a summary of performance unit award activity at target:

	Performance Unit Awards
	Shares	Weighted- Average Grant Date Fair Value
Outstanding at April 29, 2023	203	$	30.14
Granted	164	33.84
Vested	(76)	29.88
Forfeitures and cancellations	—	—
Outstanding at April 27, 2024	291	$	32.30

Employee Stock Purchase Plan ("ESPP")

We sponsor an ESPP under which a total of 9,000 shares have been reserved for purchase by employees. Eligible employees may purchase shares at 85% of the lower of the fair market value of our common stock on the beginning of the annual offering period, or on the end of each quarterly purchase period, which occur on March 31, June 30, September 30 and December 31. The offering periods begin on January 1 of each calendar year and end on December 31 of each calendar year. At April 27, 2024, there were 658 shares available for purchase under the ESPP.

We estimate the grant date fair value of shares purchased under our ESPP using the Black-Scholes option pricing valuation model with the following assumptions:

	Fiscal Year Ended
	April 27, 2024			April 29, 2023			April 30, 2022
Expected dividend yield	3.6		%	3.7		%	3.6		%
Expected stock price volatility	38.2		%	31.5		%	28.6		%
Risk-free interest rate	5.1		%	4.7		%	0.3		%
Expected life (years)	0.6			0.6			0.6
Weighted average grant date fair value per share	$	7.55		$	6.89		$	6.79

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Litigation

12 Months Ended

Apr. 27, 2024

Commitments and Contingencies Disclosure [Abstract]

Litigation

Litigation

From time to time, we become involved in lawsuits, administrative proceedings, government subpoenas, and government investigations (which may, in some cases, involve our entering into settlement agreements or consent decrees), relating to antitrust, commercial, environmental, product liability, intellectual property, regulatory, employment discrimination, putative class actions under the California Labor Code Private Attorneys General Act, and other matters, including matters arising out of the ordinary course of business, including securities litigation. The results of any such proceedings cannot be predicted with certainty because such matters are inherently uncertain. Significant damages or penalties may be sought in some matters, and some matters may require years to resolve. We also may be subject to fines or penalties, and equitable remedies (including but not limited to the suspension, revocation or non-renewal of licenses).

We accrue for these matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Adverse outcomes may result in significant monetary damages or injunctive relief against us that could adversely affect our ability to conduct our business. There also exists the possibility of a material adverse effect on our financial statements for the period in which the effect of an unfavorable outcome becomes probable and reasonably estimable.

On May 23, 2024, Plaintiff Monica Mehring and Mehring Family Dentistry (together, “Plaintiffs”) filed a class action complaint against Patterson Companies Inc. “doing business as Patterson Dental,” UnitedHealth Group and its subsidiaries Change Healthcare and Optum Inc. (collectively, the “Defendants”) in a case captioned Dr. Monica Mehring et al. v. Patterson Companies, Inc. et al., Case No. 4:24-cv-3147 (N.D. Cal. May 23, 2024) (the “Class Action Complaint”). The Class Action Complaint alleges that as a result of Defendants’ failure to implement robust cybersecurity controls, “a group of cybercriminals were able to infiltrate Defendants’ computer networks and steal for ransom confidential health data and source code among other things (‘Data Breach’).” Notwithstanding the Class Action Complaint’s generic reference to “Defendants,” Plaintiffs describe the Data Breach as UnitedHealth Group’s February 21, 2024 discovery that a suspected nation-state associated cyber security threat actor had gained access to some of the Change Healthcare information technology systems. Plaintiffs allege that as a direct result of the Data Breach, they were unable to submit claims through Patterson-supplied Eaglesoft software and, to date, have been unable to receive payments for claims submitted on February 20, 2024. While Plaintiffs assert that they use Eaglesoft to access Change Healthcare and Optum software to “integrate processing, prescriptions, billing and insurance,” the Class Action Complaint does not allege that Eaglesoft or any of Patterson’s IT systems or computer networks were accessed by any threat actor or were otherwise the subject of the alleged Data Breach. Notwithstanding the foregoing, Plaintiffs assert the following causes of action against all Defendants: negligence; “negligent interference with prospective economic advantage;” negligence per se; breach of implied contract; “breach of covenant of good faith and fair dealing;” and unjust enrichment. Plaintiffs purport to bring each claim on behalf of a nationwide class defined as: (i) “[a]ll healthcare providers in the United States whose use of Change Healthcare’s and Optum’s services were disrupted by the [D]ata [B]reach occurring in February 2024”; and (ii) “[a]ll healthcare providers in the United States whose use of Patterson Dental’s Eaglesoft’s services were disrupted by the [D]ata [B]reach occurring in February 2024.” Plaintiffs separately seek to certify a Delaware statewide class defined as: (i) “[a]ll healthcare providers in the state of Delaware whose use of Change Healthcare’s and Optum’s services were disrupted by the [D]ata [B]reach occurring in February 2024”; and (ii) “[a]ll healthcare providers in the state of Delaware whose use of Patterson Dental’s Eaglesoft’s services were disrupted by the [D]ata [B]reach occurring in February 2024.” We are vigorously defending ourselves in this litigation. We do not anticipate that this matter will have a material adverse effect on our financial statements.

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Accumulated Other Comprehensive Loss ("AOCL")

12 Months Ended

Apr. 27, 2024

Equity [Abstract]

Accumulated Other Comprehensive Loss (AOCL)

Accumulated Other Comprehensive Loss ("AOCL")

The following table summarizes the changes in AOCL during fiscal 2024:

	Cash Flow Hedges		Currency Translation Adjustment		Total
AOCL at April 29, 2023	$	(2,412)	$	(86,850)	$	(89,262)
Other comprehensive loss before reclassifications	—		(1,695)		(1,695)
Amounts reclassified from AOCL	1,042		—		1,042
AOCL at April 27, 2024	$	(1,370)	$	(88,545)	$	(89,915)

The amounts reclassified from AOCL during fiscal 2024 include gains and losses on cash flow hedges, net of taxes of $321. The impact to the Consolidated Statements of Operations and Other Comprehensive Income was an increase to interest expense of $1,363 for fiscal 2024.

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Schedule II Valuation And Qualifying Accounts

12 Months Ended

Apr. 27, 2024

SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract]

Schedule II Valuation And Qualifying Accounts

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS

PATTERSON COMPANIES, INC.

(In thousands) 

	Balance at Beginning of Period		Charged to Costs and Expenses		Deductions		Balance at End of Period
Year ended April 27, 2024
Deducted from asset accounts:
Allowance for doubtful accounts	$	3,667	$	2,542	$	3,478	$	2,731
Sales returns and allowances	11,079		50,190		49,145		12,124
Total accounts receivable allowances	$	14,746	$	52,732	$	52,623	$	14,855
LIFO inventory adjustment	$	146,915	$	7,140	$	—	$	154,055
Inventory obsolescence reserve	14,611		15,688		16,589		13,710
Total inventory reserve	$	161,526	$	22,828	$	16,589	$	167,765
Year ended April 29, 2023
Deducted from asset accounts:
Allowance for doubtful accounts	$	5,913	$	3,450	$	5,696	$	3,667
Sales returns and allowances	4,400		57,920		51,241		11,079
Total accounts receivable allowances	$	10,313	$	61,370	$	56,937	$	14,746
LIFO inventory adjustment	$	130,959	$	15,956	$	—	$	146,915
Inventory obsolescence reserve	21,543		11,223		18,155		14,611
Total inventory reserve	$	152,502	$	27,179	$	18,155	$	161,526
Year ended April 30, 2022
Deducted from asset accounts:
Allowance for doubtful accounts	$	6,138	$	2,769	$	2,994	$	5,913
Sales returns and allowances	5,856		59,999		61,455		4,400
Total accounts receivable allowances	$	11,994	$	62,768	$	64,449	$	10,313
LIFO inventory adjustment	$	120,775	$	10,184	$	—	$	130,959
Inventory obsolescence reserve	29,629		61,647		69,733		21,543
Total inventory reserve	$	150,404	$	71,831	$	69,733	$	152,502

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Pay vs Performance Disclosure - USD ($) $ in Thousands	12 Months Ended
	Apr. 27, 2024	Apr. 29, 2023	Apr. 30, 2022
Pay vs Performance Disclosure
Net Income (Loss) Attributable to Parent	$ 185,931	$ 207,557	$ 203,210

XML

Insider Trading Arrangements

3 Months Ended

12 Months Ended

Apr. 27, 2024

shares

Apr. 27, 2024

shares

Trading Arrangements, by Individual

Material Terms of Trading Arrangement

On March 12, 2024, Donald J. Zurbay, our President and Chief Executive Officer, modified his written trading plan dated September 25, 2023, which is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c). The plan’s maximum duration of the plan is until December 31, 2024, or such earlier date upon (a) the completion of all trades under the plan, (b) the expiration of the orders relating to such trades without execution, or (c) the occurrence of such other termination event as specified in the plan. As modified, the first trade will not occur until June 11, 2024, at the earliest. The trading plan is intended to permit Mr. Zurbay to sell (i) 1,327 shares of our common stock pursuant to performance units that vested on April 24, 2021, (ii) 3,897 shares of our common stock pursuant to restricted stock units that vested on June 29, 2019, (iii) 1,016 shares of our common stock pursuant to restricted stock units that vested on June 29, 2020, (iv) 976 shares of our common stock pursuant to restricted stock units that vested on July 1, 2019, (v) 25% of the net vested shares of our common stock pursuant to performance units that

will vest on July 1, 2024, (vi) 25% of the net vested shares of our common stock pursuant to restricted stock units that will vest on July 1, 2024, and (vii) 25% of the net vested shares of our common stock pursuant to restricted stock units that will vest on December 5, 2024.

Rule 10b5-1 Arrangement Adopted

false

Non-Rule 10b5-1 Arrangement Adopted

false

Rule 10b5-1 Arrangement Terminated

false

Non-Rule 10b5-1 Arrangement Terminated

false

Donald J. Zurbay [Member]

Trading Arrangements, by Individual

Name

Donald J. Zurbay

Title

President and Chief Executive Officer

Rule 10b5-1 Arrangement Adopted

true

Adoption Date

March 12, 2024

Rule 10b5-1 Arrangement Terminated

true

Termination Date

September 25, 2023

Arrangement Duration

294 days

Donald J. Zurbay, Performance Units Vested April 24, 2021 [Member] | Donald J. Zurbay [Member]

Trading Arrangements, by Individual

Aggregate Available

1,327

1,327

Donald J. Zurbay, Restricted Stock Units Vested June 29, 2019 [Member] | Donald J. Zurbay [Member]

Trading Arrangements, by Individual

Aggregate Available

3,897

3,897

Donald J. Zurbay, Restricted Stock Units Vested June 29, 2020 [Member] | Donald J. Zurbay [Member]

Trading Arrangements, by Individual

Aggregate Available

1,016

1,016

Donald J. Zurbay, Restricted Stock Units Vested July 1, 2019 [Member] | Donald J. Zurbay [Member]

Trading Arrangements, by Individual

Aggregate Available

976

976

XML

Insider Trading Policies and Procedures	12 Months Ended
	Apr. 27, 2024
Insider Trading Policies and Procedures [Line Items]
Insider Trading Policies and Procedures Adopted	true

XML

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Apr. 27, 2024

Accounting Policies [Abstract]

Description of Business

Description of Business

Patterson Companies, Inc. (referred to herein as “Patterson” or in the first person notations “we,” “our,” and “us”) is a value-added specialty distributor serving the U.S. and Canadian dental supply and the U.S., Canadian and U.K. animal health supply markets. Patterson has three reportable segments: Dental, Animal Health and Corporate.

Basis of Presentation

Basis of Presentation

The Consolidated Financial Statements include the assets and liabilities of PDC Funding Company, LLC ("PDC Funding"), PDC Funding Company II, LLC ("PDC Funding II"), PDC Funding Company III, LLC ("PDC Funding III") and PDC Funding Company IV, LLC ("PDC Funding IV"), which are our wholly owned subsidiaries and separate legal entities formed under Minnesota law. PDC Funding and PDC Funding II are fully consolidated special purpose entities established to sell customer installment sale contracts to outside financial institutions in the normal course of their business. PDC Funding III and PDC Funding IV are fully consolidated special purpose entities established to sell certain receivables to unaffiliated financial institutions. The assets of PDC Funding, PDC Funding II, PDC Funding III and PDC Funding IV would be available first and foremost to satisfy the claims of its creditors. There are no known creditors of PDC Funding, PDC Funding II, PDC Funding III or PDC Funding IV. The Consolidated Financial Statements also include the assets and liabilities of Technology Partner Innovations, LLC, which is further described in Note 13.

Fiscal Year End

Fiscal Year End

We operate with a 52-53 week accounting convention with our fiscal year ending on the last Saturday in April. Fiscal 2024 ended on April 27, 2024 and consisted of 52 weeks. Fiscal 2023 ended on April 29, 2023 and consisted of 52 weeks. Fiscal 2022 ended on April 30, 2022 and consisted of 53 weeks. Fiscal 2025 will end on April 26, 2025 and will consist of 52 weeks.

Use of Estimates in the Preparation of Financial Statements

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash equivalents consist primarily of investments in money market funds and government securities. The maturity of these securities at the time of purchase is 90 days or less. All cash and cash equivalents are classified as available-for-sale and carried at cost, which approximates fair value.

Inventory

Inventory, net

Inventory, net consists of merchandise held for sale and is stated at the lower of cost or market. The cost of our inventory includes the amount we pay to our suppliers to acquire inventory and freight costs incurred in connection with the delivery of product to our distribution centers and our other locations. Cost is determined using the last-in, first-out ("LIFO") method for all inventories, except for foreign inventories, which are valued using the first-in, first-out ("FIFO") method. Inventories valued at LIFO represented 81% and 81% of total inventories at April 27, 2024 and April 29, 2023, respectively.

Property and Equipment, net

Property and Equipment, net

Property and equipment, net are stated at cost. Depreciation is calculated on the straight-line method over estimated useful lives of up to 39 years for buildings or the expected remaining life of purchased buildings, the term of the lease for leasehold improvements, 3 to 10 years for computer hardware and software, and 5 to 10 years for furniture and equipment.

Goodwill and Other Indefinite-Lived Intangible Assets

Goodwill and Other Indefinite-Lived Intangible Assets

Goodwill and other indefinite-lived intangible assets are not amortized but rather are tested at least annually at the beginning of the fourth quarter for impairment, or more often if events or circumstances indicate the carrying value of the asset may not be recoverable.

Goodwill impairment testing is done at the reporting unit level, which represents an operating segment or a component of an operating segment. We have two reporting units; Dental and Animal Health. Our Corporate reportable segment's assets and liabilities, and net sales and expenses, are allocated to the two reporting units.

We perform a qualitative evaluation or a quantitative test to assess goodwill for impairment. The qualitative evaluation is an assessment of factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. We may elect not to perform the qualitative assessment for one or both reporting units and perform a quantitative impairment test.

If performed, the quantitative goodwill impairment test compares the fair value of each reporting unit to the reporting unit's carrying value, including goodwill. If the reporting unit's carrying value exceeds its fair value, an impairment loss will be recognized. Any goodwill impairment is measured as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying value of goodwill. The determination of fair value requires management to make assumptions and to apply judgment to estimate industry and economic factors and the profitability of future business strategies. Patterson conducts impairment testing based on current business strategy in light of present industry and economic conditions, as well as future expectations.

Our indefinite-lived intangible asset is a trade name, which is assessed for impairment by comparing the carrying value of the asset with its fair value. If the carrying value exceeds fair value, an impairment loss is recognized in an amount equal to the excess. The determination of fair value involves assumptions, including projected revenues and gross profit levels, as well as consideration of any factors that may indicate potential impairment.

We performed qualitative assessments for our goodwill impairment tests in fiscal 2024. No impairments were recorded in fiscal 2024, 2023, or 2022 as a result of goodwill and other indefinite-lived impairment tests performed.

Goodwill and Other Indefinite-Lived Intangible Assets

Goodwill and Other Indefinite-Lived Intangible Assets

Goodwill and other indefinite-lived intangible assets are not amortized but rather are tested at least annually at the beginning of the fourth quarter for impairment, or more often if events or circumstances indicate the carrying value of the asset may not be recoverable.

Goodwill impairment testing is done at the reporting unit level, which represents an operating segment or a component of an operating segment. We have two reporting units; Dental and Animal Health. Our Corporate reportable segment's assets and liabilities, and net sales and expenses, are allocated to the two reporting units.

We perform a qualitative evaluation or a quantitative test to assess goodwill for impairment. The qualitative evaluation is an assessment of factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. We may elect not to perform the qualitative assessment for one or both reporting units and perform a quantitative impairment test.

If performed, the quantitative goodwill impairment test compares the fair value of each reporting unit to the reporting unit's carrying value, including goodwill. If the reporting unit's carrying value exceeds its fair value, an impairment loss will be recognized. Any goodwill impairment is measured as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying value of goodwill. The determination of fair value requires management to make assumptions and to apply judgment to estimate industry and economic factors and the profitability of future business strategies. Patterson conducts impairment testing based on current business strategy in light of present industry and economic conditions, as well as future expectations.

Our indefinite-lived intangible asset is a trade name, which is assessed for impairment by comparing the carrying value of the asset with its fair value. If the carrying value exceeds fair value, an impairment loss is recognized in an amount equal to the excess. The determination of fair value involves assumptions, including projected revenues and gross profit levels, as well as consideration of any factors that may indicate potential impairment.

We performed qualitative assessments for our goodwill impairment tests in fiscal 2024. No impairments were recorded in fiscal 2024, 2023, or 2022 as a result of goodwill and other indefinite-lived impairment tests performed.

Recoverability of Long-Lived Assets

Recoverability of Long-Lived Assets

Long-lived assets, including definite-lived intangible assets, are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable through the estimated undiscounted future cash flows derived from such assets. Our definite-lived intangible assets primarily consist of customer relationships, trade names and trademarks. When impairment exists, the related assets are written down to fair value using level 3 inputs, as discussed further in Note 7.

Recoverability of Development Costs of Software to be Sold

Recoverability of Development Costs of Software to be Sold

We capitalize certain costs incurred for software to be sold, leased or otherwise marketed to our customers. The costs are treated as capital or expense based on the nature of the costs and the project stage in which the costs were incurred. At the end of each fiscal quarter, we compare the unamortized capitalized costs of software to be sold to its net realizable value. The net realizable value of capitalized software assets is the estimated future gross revenues from that product reduced by the estimated future costs of completing and disposing of that product, including the costs of performing maintenance and customer support required to satisfy the entity’s responsibility set forth at the time of sale. If the unamortized amount exceeds the net realizable value, an impairment is recorded. If the unamortized capitalized costs are less than the net realizable value of that asset, then there is no impairment.

Financial Instruments

Financial Instruments

We account for derivative financial instruments under the provisions of Accounting Standards Codification ("ASC") Topic 815, “Derivatives and Hedging.” Our use of derivative financial instruments is generally limited to managing well-defined interest rate risks. We do not use financial instruments or derivatives for any trading purposes.

Revenue Recognition and Contract Balances

Revenue Recognition

Revenues are generated from the sale of consumable products, equipment and support, software and support, technical service parts and labor, and other sources. Revenues are recognized when or as performance obligations are satisfied. Performance obligations are satisfied when the customer obtains control of the goods or services.

Consumable product, equipment, software and parts sales are recorded upon delivery, except in those circumstances where terms of the sale are FOB shipping point, in which case sales are recorded upon shipment. Technical service labor is recognized as it is provided. Revenue derived from equipment support and software services is recognized ratably over the period in which the support and services are provided.

In addition to revenues generated from the distribution of consumable products under arrangements (buy/sell agreements) where the full market value of the product is recorded as revenue, we earn commissions for services provided under agency agreements. The agency agreement contrasts to a buy/sell agreement in that we do not have control over the transaction, as we do not have the primary responsibility of fulfilling the promise of the good or service and we do not bill or collect from the customer in an agency relationship. Commissions under agency agreements are recorded when the services are provided.

Estimates for returns, damaged goods, rebates, loyalty programs and other revenue allowances are made at the time the revenue is recognized based on the historical experience for such items. The receivables that result from the recognition of revenue are reported net of related allowances. We maintain a valuation allowance based upon the expected collectability of receivables held. Estimates are used to determine the valuation allowance and are based on several factors, including historical collection data, economic trends and credit worthiness of customers. Receivables are written off when we determine the amounts to be uncollectible, typically upon customer bankruptcy or non-response to continuous collection efforts. The portions of receivable amounts that are not expected to be collected during the next twelve months are classified as long-term.

Receivables from vendors earned as a result of volume rebates and reimbursements for customer pricing contracts and promotions are recorded as a reduction of cost of sales in the period in which the related revenue is recognized. We estimate the vendor receivables earned but not received based on sales forecasts, transactional data, and historical vendor collection trends.

We offer customer financing contracts on equipment purchases by creditworthy customers. For financing contracts at a below-market interest rate, we record a subsidy as a reduction to net sales in the period the contract is originated. The subsidy on below-market rate contracts is estimated based on analyses of current publicly-available interest rate trends. We do not consider contracts with a term of one year or less to have a significant financing component and do not record a subsidy for these contracts.

We generally sell our customers’ financing contracts to outside financial institutions in the normal course of our business. These financing arrangements are accounted for as a sale of assets under the provisions of ASC 860, Transfers and Servicing. We receive the proceeds of the contracts upon sale to financial institutions, with a portion of the proceeds held by the financial institutions as a deferred purchase price (DPP) as security against eventual

performance of the portfolio. Customer financing net sales include the impact of changes in interest rates on DPP receivables, as the average interest rate in our contract portfolio may not fluctuate at the same rate as interest rate markets, resulting in an increase or reduction of gain on contract sales. We enter into an interest rate swap to hedge a portion of the related interest rate risk. These agreements do not qualify for hedge accounting, and the gains or losses on an interest rate swap are reported in other income and expense in our Consolidated Statements of Operation and Other Comprehensive Income.

Our financing business is described in further detail in Note 5 to the Consolidated Financial Statements.

Patterson has a relatively large, dispersed customer base and no single customer accounts for more than 10% of consolidated net sales. In addition, the equipment sold to customers under finance contracts generally serves as collateral for the contract and the customer provides a personal guarantee as well.

Net sales do not include sales tax as we are considered a pass-through conduit for collecting and remitting sales tax.

Contract Balances

Contract balances represent amounts presented in our Consolidated Balance Sheets when either we have transferred goods or services to the customer or the customer has paid consideration to us under the contract. These contract balances include accounts receivable, contract assets and contract liabilities.

Patterson Advantage Loyalty Program

Patterson Advantage Loyalty Program

The Dental segment provides a point-based awards program to qualifying customers involving the issuance of “Patterson Advantage dollars” which can be used toward equipment and technology purchases. Patterson Advantage dollars earned during a program year expire one year after the end of the program year. Costs of the program and changes in the corresponding liability are recognized as reductions to net sales. As of April 27, 2024, we believe we have sufficient experience with the program to reasonably estimate the amount of Patterson Advantage dollars that will not be redeemed and thus have recorded a liability for 87.0% of the maximum potential amount that could be redeemed. We recognize the expected breakage amount as revenue in proportion to the pattern of rights exercised by the customer, and we recognize the estimated value of unused Patterson Advantage dollars as redemptions occur. Breakage recognized was immaterial to all periods presented.

Freight and Delivery Charges

Freight and Delivery Charges

Freight and delivery charges are included in cost of sales in the Consolidated Statements of Operations and Other Comprehensive Income.

Advertising

Advertising

We expense all advertising and promotional costs as incurred, except for direct marketing expenses, which are expensed over the shorter of the life of the asset or one year.

Income Taxes

ncome Taxes

The liability method is used to account for income tax expense. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and

are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

Valuation allowances are established for deferred tax assets if, after assessment of available positive and negative evidence, it is more likely than not that the deferred tax asset will not be fully realized.

Self-insurance

Self-insurance

Patterson is self-insured for certain losses related to general liability, product liability, automobile, workers’ compensation and medical claims. We estimate our liabilities based upon an analysis of historical data and actuarial estimates. While current estimates are believed reasonable based on information currently available, actual results could differ and affect financial results due to changes in the amount or frequency of claims, medical cost inflation or other factors. Historically, actual results related to these types of claims have not varied significantly from estimated amounts.

Stock-based Compensation

Stock-based Compensation

We recognize stock-based compensation expense based on estimated grant date fair values. The grant date fair value of stock options and stock purchases made through our Employee Stock Purchase Plan are estimated using the Black-Scholes option pricing valuation model. The grant date fair value of performance stock units that vest upon meeting certain market conditions is estimated using the Monte Carlo valuation model. These valuations require estimates to be made including expected stock price volatility which considers historical volatility trends, implied future volatility based on certain traded options and other factors. We estimate the expected life of awards based on several factors, including types of participants, vesting schedules, contractual terms and various factors surrounding exercise behavior of different groups.

The grant date fair value of time-based restricted stock awards and restricted stock units is calculated based on the closing price of our common stock on the date of grant.

Compensation expense for all share-based payment awards is recognized over the requisite service period (or to the date a participant becomes eligible for retirement, if earlier) for awards that are expected to vest.

Retirement Savings Plan

Retirement Savings Plan

In fiscal 2024, we merged the stand-alone Patterson Companies, Inc. Employee Stock Ownership Plan (the "ESOP") into the Patterson Companies, Inc. 401(k) Plan (the "401(k) Plan"). The ESOP remains a component of the 401(k) Plan with many of the relevant provisions for the ESOP in effect. The ESOP was previously frozen to new participants in fiscal 2021 and the last employer contribution was made to eligible participants effective for the plan year ended December 31, 2020.

The general purpose of the 401(k) plan is to provide additional financial security during retirement by providing employees with an incentive to make regular savings contributions. In addition to the participation of our employees, we make annual matching contributions using an established formula. Employer contribution expense was $20,003, $19,649 and $21,013 for fiscal 2024, 2023 and 2022, respectively, which is included in operating expenses within the Consolidated Statements of Operations and Other Comprehensive Income.

Comprehensive Income

Comprehensive Income

Comprehensive income is computed as net income plus certain other items that are recorded directly to stockholders’ equity. Significant items included in comprehensive income are foreign currency translation adjustments and the effective portion of cash flow hedges, net of tax. Foreign currency translation adjustments do not include a provision for income tax because earnings from foreign operations are considered to be indefinitely

reinvested outside the U.S.

Earnings Per Share

Earnings Per Share ("EPS")

The amount of basic EPS is computed by dividing net income attributable to Patterson Companies, Inc. by the weighted average number of outstanding common shares during the period. The amount of diluted EPS is computed by dividing net income by the weighted average number of outstanding common shares and common share equivalents, when dilutive, during the period.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures". This ASU requires additional disclosures related to rate reconciliation and income taxes paid. The new standard is effective for annual disclosures in fiscal year 2026 and interim disclosures in fiscal year 2027, with early adoption permitted. We currently are evaluating the impact of adopting this pronouncement.

In November 2023, the FASB issued ASU No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures". This ASU requires disclosures of significant segment expenses and other segment items. Disclosures about a reportable segment's profit or loss and assets will be required for both annual and interim periods. This ASU also requires disclosure of the title and position of Chief Operating Decision Maker ("CODM") and an explanation of how the CODM uses the reported measures of profit or loss in assessing performance and allocating resources. The new standard is effective for annual disclosures in fiscal year 2025 and interim disclosures in fiscal year 2026, with early adoption permitted. We currently are evaluating the impact of adopting this pronouncement.

XML

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Apr. 27, 2024

Accounting Policies [Abstract]

Schedule of Other Non-current Assets

Other Non-current Assets, Net

	April 27, 2024		April 29, 2023
Development costs of software to be sold, net	$	73,259	$	71,467
Other	47,549		49,272
Other non-current assets, net	$	120,808	$	120,739

Schedule of Other Income, Net

Other Income (Expense), Net

	Fiscal Year Ended
	April 27, 2024		April 29, 2023		April 30, 2022
Gain on interest rate swap agreements	$	12,447	$	9,968	$	15,835
Investment income and other	22,592		17,858		11,896
Other income (expense), net	$	35,039	$	27,826	$	27,731

Computation of Basic and Diluted Earnings Per Share

The following table sets forth the denominator for the computation of basic and diluted EPS. There were no material adjustments to the numerator.

	Fiscal Year Ended
	April 27, 2024	April 29, 2023	April 30, 2022
Denominator for basic EPS – weighted average shares	92,969	97,027	97,277
Effect of dilutive securities – stock options, restricted stock and stock purchase plans	710	788	1,237
Denominator for diluted EPS – weighted average shares	93,679	97,815	98,514

XML

Cash and Cash Equivalents (Tables)

12 Months Ended

Apr. 27, 2024

Cash and Cash Equivalents [Abstract]

Cash and Cash Equivalents

Cash and cash equivalents consisted of the following:

	April 27, 2024		April 29, 2023
Cash on hand	$	109,777	$	111,892
Money market funds	4,685		47,777
Total	$	114,462	$	159,669

XML

Receivables Securitization Program (Tables)

12 Months Ended

Apr. 27, 2024

Transfers and Servicing [Abstract]

Schedule of Deferred Purchase Price Receivable

The following rollforward summarizes the activity related to the DPP receivable:

	Fiscal Year Ended
	April 27, 2024		April 29, 2023		April 30, 2022
Beginning DPP receivable balance	$	227,946	$	195,764	$	183,999
Non-cash additions to DPP receivable	949,194		960,909		1,052,938
Cash collections on DPP receivable	(978,313)		(928,727)		(1,041,173)
Ending DPP receivable balance	$	198,827	$	227,946	$	195,764

XML

Customer Financing (Tables)

12 Months Ended

Apr. 27, 2024

Receivables [Abstract]

Rollforward Summary of Activity Related to the DPP Receivable

The following rollforward summarizes the activity related to the DPP receivable:

	Fiscal Year Ended
	April 27, 2024		April 29, 2023		April 30, 2022
Beginning DPP receivable balance	$	102,979	$	125,332	$	227,967
Non-cash additions to DPP receivable	61,244		47,832		69,689
Cash collections on DPP receivable	(49,964)		(70,185)		(172,324)
Ending DPP receivable balance	$	114,259	$	102,979	$	125,332

XML

Derivative Financial Instruments (Tables)

12 Months Ended

Apr. 27, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Fair Value of Derivative Instruments Included in Consolidated Balance Sheets

The following presents the fair value of derivative instruments included in the Consolidated Balance Sheets:

Derivative type	Classification	April 27, 2024		April 29, 2023
Assets:
Interest rate contracts	Prepaid expenses and other current assets	$	5,781	$	5,875
Interest rate contracts	Other non-current assets	21,193		23,210
Total asset derivatives		$	26,974	$	29,085
Liabilities:
Interest rate contracts	Other accrued liabilities	$	259	$	267
Interest rate contracts	Other non-current liabilities	13,198		12,993
Total liability derivatives		$	13,457	$	13,260

Effect of Derivative Instruments in Cash Flow Hedging Relationships on the Consolidated Statements of Income and Other Comprehensive Income

The following tables present the pre-tax effect of derivative instruments on the Consolidated Statements of Operations and Other Comprehensive Income:

		Amount of Loss Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion)
		Fiscal Year Ended
Derivatives in cash flow hedging relationships	Statements of operations location	April 27, 2024		April 29, 2023		April 30, 2022
Interest rate contracts	Interest expense	$	(1,363)	$	(1,363)	$	(1,363)

		Amount of Gain (Loss) Recognized in Income on Derivatives
		Fiscal Year Ended
Derivatives not designated as hedging instruments	Statements of operations location	April 27, 2024		April 29, 2023		April 30, 2022
Interest rate contracts	Other income, net	$	12,447	$	9,968	$	15,835

XML

Fair Value Measurements (Tables)

12 Months Ended

Apr. 27, 2024

Fair Value Disclosures [Abstract]

Fair Value Hierarchy Measurements, Fair Value Levels

Level 1 –	Quoted prices in active markets for identical assets and liabilities at the measurement date.
Level 2 –	Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3 –	Unobservable inputs for which there is little or no market data available. These inputs reflect management’s assumptions of what market participants would use in pricing the asset or liability.

Assets and Liabilities Measured at Fair Value on Recurring Basis

Our hierarchy for assets and liabilities measured at fair value on a recurring basis is as follows:

	April 27, 2024
	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	4,685	$	4,685	$	—	$	—
DPP receivable - receivables securitization program	198,827		—		—		198,827
DPP receivable - customer financing	114,259		—		—		114,259
Derivative instruments	26,974		—		26,974		—
Total assets	$	344,745	$	4,685	$	26,974	$	313,086
Liabilities:
Derivative instruments	$	13,457	$	—	$	13,457	$	—

	April 29, 2023
	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	47,777	$	47,777	$	—	$	—
DPP receivable - receivables securitization program	227,946		—		—		227,946
DPP receivable - customer financing	102,979		—		—		102,979
Derivative instruments	29,085		—		29,085		—
Total assets	$	407,787	$	47,777	$	29,085	$	330,925
Liabilities:
Derivative instruments	$	13,260	$	—	$	13,260	$	—

XML

Goodwill and Other Intangible Assets (Tables)

12 Months Ended

Apr. 27, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Changes in Carrying Value of Goodwill

The changes in the carrying value of goodwill for each of our reporting units for the fiscal year ended April 27, 2024 were as follows:

	Balance at April 29, 2023		Foreign Currency Translation		Balance at April 27, 2024
Dental	$	139,111	$	(92)	$	139,019
Animal Health	17,309		—		17,309
Total	$	156,420	$	(92)	$	156,328

Balances of Other Intangible Assets Excluding Goodwill

Balances of other intangible assets, excluding goodwill, were as follows:

	April 27, 2024						April 29, 2023
	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
Unamortized - indefinite lived:
Trade name	$	12,300	$	—	$	12,300	$	12,300	$	—	$	12,300
Amortized - definite lived:
Customer relationships	380,003		228,851		151,152		380,205		205,524		174,681
Trade names and trademarks	135,830		119,326		16,504		135,876		107,519		28,357
Developed technology and other	52,906		39,601		13,305		52,920		36,385		16,535
Total amortized intangible assets	568,739		387,778		180,961		569,001		349,428		219,573
Total identifiable intangible assets	$	581,039	$	387,778	$	193,261	$	581,301	$	349,428	$	231,873

XML

Property and Equipment (Tables)

12 Months Ended

Apr. 27, 2024

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

Property and equipment consisted of the following:

	April 27, 2024		April 29, 2023
Land	$	9,680	$	9,687
Buildings	109,727		98,174
Leasehold improvements	32,338		31,712
Furniture and equipment	213,010		204,754
Computer hardware and software	261,937		250,805
Construction-in-progress (1)	35,683		32,233
Property and equipment, gross	662,375		627,365
Accumulated depreciation	(433,294)		(415,082)
Property and equipment, net	$	229,081	$	212,283

(1)Includes $20,540 and $10,661 of unamortized development costs of software to be sold as of April 27, 2024 and April 29, 2023, respectively.

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Lease Commitments (Tables)

12 Months Ended

Apr. 27, 2024

Commitments and Contingencies Disclosure [Abstract]

Future Maturities of Lease Liabilities

The following table presents future maturities of lease liabilities:

2025	$	38,047
2026	30,763
2027	25,216
2028	18,914
2029	8,919
After 2029	26,067
Total lease payments	147,926
Less: imputed interest	(22,647)
Present value of lease liabilities	$	125,279

Supplemental Information Related to Leases

The following tables present other supplemental information related to leases:

	Fiscal Year Ended
	April 27, 2024			April 29, 2023
Cash paid for amounts included in the measurement of operating lease liabilities	$	39,803		$	35,779
Lease assets obtained in exchange for new operating lease liabilities	$	83,041		$	56,603
	April 27, 2024			April 29, 2023
Weighted-average remaining lease term - operating leases	5.87 years			6.50 years
Weighted-average discount rate - operating leases	5.01		%	4.40		%

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Debt (Tables)

12 Months Ended

Apr. 27, 2024

Debt Disclosure [Abstract]

Schedule of Long-term Debt

Our long-term debt consisted of the following:

			Carrying Value
	Interest Rate		April 27, 2024		April 29, 2023
Senior notes due fiscal 2024 (1)	3.74	%	—		33,000
Senior notes due fiscal 2025 (2)	3.48	%	117,500		117,500
Senior notes due fiscal 2028 (3)	3.79	%	40,000		40,000
Term loan due fiscal 2025 through 2028 (4)	6.54	%	295,500		298,500
Less: Deferred debt issuance costs			(1,339)		(1,769)
Total debt			451,661		487,231
Less: Current maturities of long-term debt			(122,750)		(36,000)
Long-term debt			$	328,911	$	451,231

(1)Issued in December 2011.

(2)Issued in March 2015.

(3)Issued in March 2018.

(4)Issued in December 2019, amended in October 2022. Interest rate is 1-month SOFR plus 1.225% as of April 27, 2024.

Schedule of Maturities of Long-term Debt

Future principal payments due, based on stated contractual maturities for our long-term debt, were as follows as of April 27, 2024:

Fiscal Year
2025	$	122,750
2026	11,250
2027	15,000
2028	304,000
2029	—
Thereafter	—
Total	$	453,000

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Income Taxes (Tables)

12 Months Ended

Apr. 27, 2024

Income Tax Disclosure [Abstract]

Components of Provision for Income Taxes

The components of income before taxes were as follows:

	Fiscal Year Ended
	April 27, 2024		April 29, 2023		April 30, 2022
Income before taxes
United States	$	211,350	$	233,416	$	225,195
International	31,703		36,745		41,059
Total	$	243,053	$	270,161	$	266,254

Significant components of income tax expense were as follows:

	Fiscal Year Ended
	April 27, 2024		April 29, 2023		April 30, 2022
Current:
Federal	$	51,263	$	46,982	$	46,964
Foreign	8,201		8,280		11,968
State	11,593		10,294		10,326
Total current expense	71,057		65,556		69,258
Deferred:
Federal	(13,403)		(4,217)		(3,918)
Foreign	2,045		2,601		(217)
State	(2,165)		(377)		(583)
Total deferred benefit	(13,523)		(1,993)		(4,718)
Income tax expense	$	57,534	$	63,563	$	64,540

Components of Deferred Tax Assets (Liabilities)

Significant components of our deferred tax assets (liabilities) were as follows:

	April 27, 2024		April 29, 2023
Deferred tax assets:
Employee compensation and benefits	$	7,674	$	7,519
Inventory related items	7,645		8,228
Foreign intangibles and goodwill	11,767		11,420
Foreign tax credit	7,003		7,003
Lease liability	29,587		19,808
Accrued charitable contributions	427		902
Capitalized research and experimentation costs	12,020		5,172
Other accrued liabilities	6,498		7,744
Other	8,329		7,270
Gross deferred tax assets	90,950		75,066
Less: Valuation allowance	(18,620)		(18,276)
Total net deferred tax assets	72,330		56,790
Deferred tax liabilities
LIFO reserve	(29,593)		(26,010)
Amortizable intangibles	(36,923)		(45,042)
Goodwill	(18,098)		(17,094)
Property, plant, equipment	(32,457)		(36,488)
Lease right-of-use assets	(29,048)		(19,361)
Investments	(26,662)		(26,959)
Other	(4,070)		(3,557)
Total deferred tax liabilities	(176,851)		(174,511)
Deferred net long-term income tax liability	$	(104,521)	$	(117,721)

Summary of Effective Income Tax Expense Reconciliation

Income tax expense varies from the amount computed using the U.S. statutory rate. The reasons for this difference and the related tax effects are shown below.

	Fiscal Year Ended
	April 27, 2024		April 29, 2023		April 30, 2022
Tax at U.S. statutory rate	$	51,038	$	56,732	$	55,912
State tax provision, net of federal benefit	7,630		8,416		9,176
Effect of foreign taxes	3,612		2,853		3,199
ESOP	(1,895)		(2,049)		(2,121)
Other permanent differences	1,308		2,481		944
Other	(4,159)		(4,870)		(2,570)
Income tax expense	$	57,534	$	63,563	$	64,540

Summary of Changes in Gross Amounts of Unrecognized Tax Benefits

A summary of the changes in the gross amounts of unrecognized tax benefits is shown below.

	April 27, 2024		April 29, 2023
Balance at beginning of period	$	8,291	$	9,898
Additions for tax positions related to the current year	1,156		1,158
Additions for tax positions of prior years	128		142
Reductions for tax positions of prior years	(12)		(1,400)
Statute expirations	(1,514)		(1,507)
Settlements	—		—
Balance at end of period	$	8,049	$	8,291

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Segment and Geographic Data (Tables)

12 Months Ended

Apr. 27, 2024

Segment Reporting [Abstract]

Information about Reportable Segments

The following tables present information about our reportable segments and the geographic areas in which we operate:

	Fiscal Year Ended
	April 27, 2024		April 29, 2023		April 30, 2022
Consolidated net sales
United States	$	5,438,727	$	5,423,931	$	5,358,489
United Kingdom	759,184		655,103		717,481
Canada	370,361		392,437		423,435
Total	$	6,568,272	$	6,471,471	$	6,499,405
Dental net sales
United States	$	2,260,198	$	2,256,006	$	2,259,579
Canada	228,436		236,136		256,553
Total	$	2,488,634	$	2,492,142	$	2,516,132
Animal Health net sales
United States	$	3,165,960	$	3,153,518	$	3,098,511
United Kingdom	759,184		655,103		717,481
Canada	141,925		156,301		166,882
Total	$	4,067,069	$	3,964,922	$	3,982,874
Corporate net sales
United States	$	12,569	$	14,407	$	399
Total	$	12,569	$	14,407	$	399

	Fiscal Year Ended
	April 27, 2024		April 29, 2023		April 30, 2022
Consolidated net sales
Consumable	$	5,274,012	$	5,147,330	$	5,248,040
Equipment	888,597		950,403		920,424
Value-added services and other	405,663		373,738		330,941
Total	$	6,568,272	$	6,471,471	$	6,499,405
Dental net sales
Consumable	$	1,415,789	$	1,358,823	$	1,424,677
Equipment	766,345		823,978		800,144
Value-added services and other	306,500		309,341		291,311
Total	$	2,488,634	$	2,492,142	$	2,516,132
Animal Health net sales
Consumable	$	3,858,223	$	3,788,507	$	3,823,363
Equipment	122,252		126,425		120,280
Value-added services and other	86,594		49,990		39,231
Total	$	4,067,069	$	3,964,922	$	3,982,874
Corporate net sales
Value-added services and other	$	12,569	$	14,407	$	399
Total	$	12,569	$	14,407	$	399

	Fiscal Year Ended
	April 27, 2024		April 29, 2023		April 30, 2022
Operating income
Dental	$	209,807	$	237,268	$	180,212
Animal Health	139,077		126,994		114,403
Corporate	(95,960)		(88,291)		(137,613)
Consolidated operating income	$	252,924	$	275,971	$	157,002
Depreciation and amortization
Dental	$	15,932	$	14,051	$	13,495
Animal Health	46,462		44,644		44,561
Corporate	25,762		25,009		23,936
Consolidated depreciation and amortization	$	88,156	$	83,704	$	81,992

Information by Geographical Area

	April 27, 2024		April 29, 2023
Property and equipment, net
United States	$	180,835	$	177,163
United Kingdom	24,671		21,033
Canada	23,575		14,087
Total property and equipment, net	$	229,081	$	212,283
	April 27, 2024		April 29, 2023
Total assets
Dental	$	913,478	$	853,369
Animal Health	1,568,413		1,570,760
Corporate	414,841		455,017
Total assets	$	2,896,732	$	2,879,146

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Stockholders' Equity (Tables)

12 Months Ended

Apr. 27, 2024

Equity [Abstract]

Cash Dividends Declared and Paid

The following table presents our declared cash dividends per share on our common stock for the past three years. In fiscal 2024, 2023 and 2022, dividends were declared in the period presented and paid in the following quarter.

	Quarter
Fiscal year	1		2		3		4
2024	$	0.26	$	0.26	$	0.26	$	0.26
2023	0.26		0.26		0.26		0.26
2022	0.26		0.26		0.26		0.26

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Stock-based Compensation (Tables)

12 Months Ended

Apr. 27, 2024

Share-Based Payment Arrangement [Abstract]

Summary of Stock Options, Weighted Average Assumptions

The fair value of stock options granted was estimated as of the grant date using a Black-Scholes option-pricing model with the following assumptions:

	Fiscal Year Ended
	April 27, 2024			April 29, 2023			April 30, 2022
Expected dividend yield	3.1		%	3.5		%	3.4		%
Expected stock price volatility	39.3		%	38.8		%	38.1		%
Risk-free interest rate	4.1		%	3.2		%	1.1		%
Expected life (years)	6.0			6.0			6.0
Weighted average grant date fair value per share	$	10.69		$	8.82		$	7.97

Summary of Stock Options

The following is a summary of stock option activity:

	Number of Options	Weighted- Average Exercise Price		Aggregate Intrinsic Value
Balance as of April 29, 2023	2,020	$	30.52
Granted	228	33.26
Exercised	(233)	22.97
Canceled	(18)	38.05
Balance as of April 27, 2024	1,997	$	31.65	$	2,824
Vested or expected to vest as of April 27, 2024	1,995	$	31.65	$	2,824
Exercisable as of April 27, 2024	1,548	$	31.65	$	2,824

Summary of Non-Vested Restricted Stock Awards and Performance Unit Awards

The following is a summary of restricted stock award activity:

	Restricted Stock Awards
	Shares	Weighted- Average Grant Date Fair Value
Outstanding at April 29, 2023	37	$	27.23
Granted	40	29.19
Vested	(37)	27.23
Forfeitures	—	—
Outstanding at April 27, 2024	40	$	29.19

The following is a summary of restricted stock unit activity:

	Restricted Stock Units
	Shares	Weighted- Average Grant Date Fair Value
Outstanding at April 29, 2023	792	$	29.12
Granted	438	33.18
Vested	(394)	27.86
Forfeitures	(42)	31.32
Outstanding at April 27, 2024	794	$	31.85

The following is a summary of performance unit award activity at target:

	Performance Unit Awards
	Shares	Weighted- Average Grant Date Fair Value
Outstanding at April 29, 2023	203	$	30.14
Granted	164	33.84
Vested	(76)	29.88
Forfeitures and cancellations	—	—
Outstanding at April 27, 2024	291	$	32.30

Summary of Weighted-Average Assumptions Under ESPP and CAP

We estimate the grant date fair value of shares purchased under our ESPP using the Black-Scholes option pricing valuation model with the following assumptions:

	Fiscal Year Ended
	April 27, 2024			April 29, 2023			April 30, 2022
Expected dividend yield	3.6		%	3.7		%	3.6		%
Expected stock price volatility	38.2		%	31.5		%	28.6		%
Risk-free interest rate	5.1		%	4.7		%	0.3		%
Expected life (years)	0.6			0.6			0.6
Weighted average grant date fair value per share	$	7.55		$	6.89		$	6.79

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Accumulated Other Comprehensive Loss ("AOCL") (Tables)

12 Months Ended

Apr. 27, 2024

Equity [Abstract]

Summary of the Changes in Accumulated Other Comprehensive Loss

The following table summarizes the changes in AOCL during fiscal 2024:

	Cash Flow Hedges		Currency Translation Adjustment		Total
AOCL at April 29, 2023	$	(2,412)	$	(86,850)	$	(89,262)
Other comprehensive loss before reclassifications	—		(1,695)		(1,695)
Amounts reclassified from AOCL	1,042		—		1,042
AOCL at April 27, 2024	$	(1,370)	$	(88,545)	$	(89,915)

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Summary of Significant Accounting Policies - Additional Information (Details)	12 Months Ended
	Apr. 27, 2024 USD ($) reportingUnit Segment	Apr. 29, 2023 USD ($)	Apr. 30, 2022 USD ($)
Accounting Policies [Abstract]
Number of reportable segments | Segment	3
Maturity period of maximum (in days)	90 days
Inventories valued at LIFO as % of total inventories	81.00%	81.00%
Inventory, LIFO reserve	$ 154,055,000	$ 146,915,000
Property, Plant and Equipment [Line Items]
Number of reporting units | reportingUnit	2
Indefinite-lived intangible assets, impairment	$ 0	0	$ 0
Goodwill impairment	0	0	0
Amortization expense	11,651,000	9,068,000	7,267,000
Contract assets	1,373,000	1,338,000
Contract liabilities	37,399,000	36,850,000
Contract liability, revenue recognized	$ 33,454,000
Loyalty program, awards expiration period	1 year
Liability for percentage of maximum potential amount that could be redeemed	87.00%
Advertising expense	$ 3,124,000	6,888,000	$ 1,532,000
Deferred direct marketing expense, maximum amortization period	1 year
Deferred direct marketing costs	$ 0	$ 0
Building
Property, Plant and Equipment [Line Items]
Estimated useful lives	39 years
Computer Hardware And Software | Minimum
Property, Plant and Equipment [Line Items]
Estimated useful lives	3 years
Computer Hardware And Software | Maximum
Property, Plant and Equipment [Line Items]
Estimated useful lives	10 years
Office Furniture And Equipment | Minimum
Property, Plant and Equipment [Line Items]
Estimated useful lives	5 years
Office Furniture And Equipment | Maximum
Property, Plant and Equipment [Line Items]
Estimated useful lives	10 years

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Summary of Significant Accounting Policies -Other Non-current Assets (Details) - USD ($) $ in Thousands	Apr. 27, 2024	Apr. 29, 2023
Accounting Policies [Abstract]
Development costs of software to be sold, net	$ 73,259	$ 71,467
Other	47,549	49,272
Other non-current assets, net	$ 120,808	$ 120,739

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Summary of Significant Accounting Policies - Related Party Transactions (Details) - Equity Method - USD ($) $ in Thousands	12 Months Ended
	Apr. 27, 2024	Apr. 29, 2023	Apr. 30, 2022
Related Party Transaction [Line Items]
Purchases	$ 195,048	$ 198,712	$ 193,625
Net sales	$ 150,892	$ 123,271	$ 117,347

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Summary of Significant Accounting Policies - Retirement Savings Plan (Details) - USD ($) $ in Thousands	12 Months Ended
	Apr. 27, 2024	Apr. 29, 2023	Apr. 30, 2022
Accounting Policies [Abstract]
Employer contribution expense	$ 20,003	$ 19,649	$ 21,013

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Summary of Significant Accounting Policies - Schedule of Other Income (Expense), Net (Details) - USD ($) $ in Thousands	12 Months Ended
	Apr. 27, 2024	Apr. 29, 2023	Apr. 30, 2022
Accounting Policies [Abstract]
Gain on interest rate swap agreements	$ 12,447	$ 9,968	$ 15,835
Investment income and other	22,592	17,858	11,896
Other income (expense), net	$ 35,039	$ 27,826	$ 27,731

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Summary of Significant Accounting Policies - Comprehensive Income (Details) - USD ($) $ in Thousands	12 Months Ended
	Apr. 27, 2024	Apr. 29, 2023	Apr. 30, 2022
Accounting Policies [Abstract]
Income tax expense related to cash flow hedge losses	$ 321	$ 321	$ 321

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Summary of Significant Accounting Policies - Computation of Basic and Diluted Earnings Per Share (Details) - shares shares in Thousands	12 Months Ended
	Apr. 27, 2024	Apr. 29, 2023	Apr. 30, 2022
Earnings Per Share [Abstract]
Denominator for basic earnings per share – weighted average shares (in shares)	92,969	97,027	97,277
Effect of dilutive securities – stock options, restricted stock and stock purchase plans (in shares)	710	788	1,237
Diluted (in shares)	93,679	97,815	98,514
Antidilutive securities excluded from computation of earnings per share (in shares)	1,022	932	772

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Acquisitions (Details) - USD ($) $ in Thousands	3 Months Ended
	Jul. 29, 2023	Jan. 28, 2023	Apr. 27, 2024	Apr. 29, 2023
Asset Acquisition [Line Items]
Goodwill			$ 156,328	$ 156,420
Series of Individually Immaterial Business Acquisitions
Asset Acquisition [Line Items]
Payment for holdback	$ 1,108
Acquisition, anniversary of closing dates	24 months	24 months
Business acquisition cash paid		$ 37,535
Acquisition, holdbacks				$ 4,255
Working capital adjustments		23
Total identifiable intangible assets		17,300
Goodwill		16,040
Tangible assets		4,233
Goodwill increase (decrease)		$ 272

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Cash and Cash Equivalents (Details) - USD ($) $ in Thousands	Apr. 27, 2024	Apr. 29, 2023
Cash and Cash Equivalents [Abstract]
Cash on hand	$ 109,777	$ 111,892
Money market funds	4,685	47,777
Total	114,462	159,669
Cash and Cash Equivalents [Line Items]
Cash and cash equivalents	114,462	159,669
Unsettled Financing Arrangements
Cash and Cash Equivalents [Abstract]
Total	33,813	33,072
Cash and Cash Equivalents [Line Items]
Cash and cash equivalents	$ 33,813	$ 33,072

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Receivables Securitization Program (Details) - USD ($) $ in Thousands	12 Months Ended
	Apr. 27, 2024	Apr. 29, 2023	Apr. 30, 2022
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Maximum available under Purchase Agreement	$ 200,000
Eligible receivables, amount utilized under Purchase Agreement	200,000
Receivables transferred and derecognized, fair value	400,626	$ 429,853
Proceeds from receivables sold	291,621	302,851	$ 426,188
Loss on sale of receivables	(13,850)	(11,403)	(3,247)
Receivables Purchase Agreements
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Trade receivable sold under facility	3,585,194	3,718,167	3,643,700
Proceeds from receivables sold	$ 3,614,901	$ 3,684,412	$ 3,632,145

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Receivables Securitization Program - Activity in DPP Receivable (Details) - Receivables Purchase Agreements - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Apr. 27, 2024	Apr. 27, 2024	Apr. 29, 2023	Apr. 30, 2022
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Beginning DPP receivable balance		$ 227,946	$ 195,764	$ 183,999
Non-cash additions to DPP receivable	$ 949,194		960,909	1,052,938
Cash collections on DPP receivable	(978,313)		(928,727)	(1,041,173)
Ending DPP receivable balance	$ 198,827	$ 198,827	$ 227,946	$ 195,764

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Customer Financing (Details)	12 Months Ended
	Apr. 27, 2024 USD ($) contract	Apr. 29, 2023 USD ($)	Apr. 30, 2022 USD ($)
Customer Financing [Line Items]
Maximum credit financed for equipment purchases for any one customer	$ 2,000,000
Number of customer financing contracts | contract	2
Deferred purchase price receivable transferred	$ 15,400,000
Financing contracts sold	281,076,000	$ 261,853,000	$ 314,732,000
Loss on sale of financing contracts	(11,010,000)	(4,082,000)	(18,379,000)
Proceeds from receivables sold	291,621,000	302,851,000	$ 426,188,000
Unamortized discount	3,097,000	0
Cash and cash equivalents	114,462,000	159,669,000
Current receivables of finance contracts not yet sold	74,430,000	77,646,000
Finance contracts receivable sold and outstanding	$ 581,729,000
Maximum bad debt write-offs (percentage)	1.00%
Fifth Third Bank
Customer Financing [Line Items]
Capacity under agreement		525
Mitsubishi UFJ Financial Group
Customer Financing [Line Items]
Capacity under agreement	$ 575,000
Unsettled Financing Arrangements
Customer Financing [Line Items]
Cash and cash equivalents	$ 33,813,000	$ 33,072,000
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Customer Financing [Line Items]
Percentage of principal amount of financing contracts held as collateral (at least)	15.00%
Capacity under agreement	$ 575,000,000
Fifth Third Bank
Customer Financing [Line Items]
Percentage of principal amount of financing contracts held as collateral (at least)	15.00%

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Customer Financing - Activity in DPP Receivables (Details) - Customer Finance Contracts - USD ($) $ in Thousands	12 Months Ended
	Apr. 27, 2024	Apr. 29, 2023	Apr. 30, 2022
Deferred Purchase Price Receivable [Roll Forward]
Beginning DPP receivable balance	$ 102,979	$ 125,332	$ 227,967
Non-cash additions to DPP receivable	61,244	47,832	69,689
Cash collections on DPP receivable	(49,964)	(70,185)	(172,324)
Ending DPP receivable balance	$ 114,259	$ 102,979	$ 125,332

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Derivative Financial Instruments - Additional Information (Details) - USD ($)	1 Months Ended	12 Months Ended
	Mar. 31, 2015	Apr. 27, 2024	Apr. 29, 2023	Apr. 30, 2022	Mar. 25, 2015	Jan. 31, 2014
Derivative [Line Items]
Gains or losses recognized in other comprehensive income (loss) on derivatives		$ 0	$ 0	$ 0
Hedge ineffectiveness recorded		0	0	$ 0
Cash flow hedge gain (loss) to be reclassified into earnings over the next twelve months		(1,250,000)
Interest Rate Cap
Derivative [Line Items]
Derivative, notional amount		575,000,000
Interest Rate Swap Agreement
Derivative [Line Items]
Derivative, notional amount		565,420,000	551,504,000			$ 250,000,000
Percentage of senior notes						5.17%
Payment for settlement of swap	$ (29,003,000)
Cash receipts from settlement of swap		(14,413,000)	$ (7,626,000)
Interest Rate Swap Agreement | Senior Notes 3.48%
Derivative [Line Items]
Percentage of senior notes					3.48%
Aggregate principal amount					$ 250,000,000
Forward Interest Rate Swap Agreement
Derivative [Line Items]
Derivative, notional amount		$ 247,734,000

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Derivative Financial Instruments - Fair Value of Interest Rate Contracts Included in Consolidated Balance Sheets (Details) - USD ($) $ in Thousands	Apr. 27, 2024	Apr. 29, 2023
Derivatives, Fair Value [Line Items]
Interest rate contracts, assets, fair value	$ 26,974	$ 29,085
Interest rate, liabilities, fair value	13,457	13,260
Interest rate contracts
Derivatives, Fair Value [Line Items]
Interest rate, liabilities, fair value	13,457	13,260
Prepaid Expenses and Other Current Assets | Interest rate contracts
Derivatives, Fair Value [Line Items]
Interest rate contracts, assets, fair value	5,781	5,875
Other non-current assets | Interest rate contracts
Derivatives, Fair Value [Line Items]
Interest rate contracts, assets, fair value	21,193	23,210
Other accrued liabilities | Interest rate contracts
Derivatives, Fair Value [Line Items]
Interest rate, liabilities, fair value	259	267
Other non-current liabilities | Interest rate contracts
Derivatives, Fair Value [Line Items]
Interest rate, liabilities, fair value	$ 13,198	$ 12,993

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Derivative Financial Instruments - Effect of Interest Rate Contracts and Interest Rate Swaps on Consolidated Statements of Income and Other Comprehensive Income (Details) - USD ($) $ in Thousands	12 Months Ended
	Apr. 27, 2024	Apr. 29, 2023	Apr. 30, 2022
Derivative Instruments, Gain (Loss) [Line Items]
Gain on interest rate swap agreements	$ 12,447	$ 9,968	$ 15,835
Interest rate contracts | Interest expense
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) reclassified form Accumulated Other Comprehensive Loss	(1,363)	(1,363)	(1,363)
Interest rate contracts | Other income, net
Derivative Instruments, Gain (Loss) [Line Items]
Gain on interest rate swap agreements	$ 12,447	$ 9,968	$ 15,835

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Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands	Apr. 27, 2024	Apr. 29, 2023
Assets:
Cash equivalents	$ 4,685	$ 47,777
DPP receivable - receivables securitization program	198,827	227,946
DPP receivable - customer financing	114,259	102,979
Derivative instruments	26,974	29,085
Total assets	344,745	407,787
Liabilities:
Derivative instruments	13,457	13,260
Level 1
Assets:
Cash equivalents	4,685	47,777
DPP receivable - receivables securitization program	0	0
DPP receivable - customer financing	0	0
Derivative instruments	0	0
Total assets	4,685	47,777
Liabilities:
Derivative instruments	0	0
Level 2
Assets:
Cash equivalents	0	0
DPP receivable - receivables securitization program	0	0
DPP receivable - customer financing	0	0
Derivative instruments	26,974	29,085
Total assets	26,974	29,085
Liabilities:
Derivative instruments	13,457	13,260
Level 3
Assets:
Cash equivalents	0	0
DPP receivable - receivables securitization program	198,827	227,946
DPP receivable - customer financing	114,259	102,979
Derivative instruments	0	0
Total assets	313,086	330,925
Liabilities:
Derivative instruments	$ 0	$ 0

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Fair Value Measurements - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Apr. 27, 2024	Apr. 29, 2023	Apr. 30, 2022
Schedule of Investments [Line Items]
Noncash gain on investment	$ 0	$ 0	$ 101,809
Gains on investments	0	0	101,809
Estimated fair value of debt	448,287	483,139
Long-term debt	451,661	487,231
Vetsource
Schedule of Investments [Line Items]
Carrying value of investment sold			25,814
Proceeds from sale of investment			56,849
Gain on sale of investment			31,035
Noncash gain on investment			31,035
Investment	56,849	56,849
Gain on investment put option			25,757
Carrying value of put option	25,757
Gains on investments	87,827
Vets Plus
Schedule of Investments [Line Items]
Carrying value of investment sold			4,009
Proceeds from sale of investment			17,101
Gain on sale of investment			$ 13,092
Investment	$ 2,299	$ 2,299

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Goodwill and Other Intangible Assets - Changes in Carrying Value of Goodwill (Details) $ in Thousands	12 Months Ended
	Apr. 27, 2024 USD ($)
Goodwill [Roll Forward]
Beginning Balance	$ 156,420
Foreign Currency Translation	(92)
Ending Balance	156,328
Dental
Goodwill [Roll Forward]
Beginning Balance	139,111
Foreign Currency Translation	(92)
Ending Balance	139,019
Animal Health
Goodwill [Roll Forward]
Beginning Balance	17,309
Foreign Currency Translation	0
Ending Balance	$ 17,309

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Goodwill and Other Intangible Assets - Balances of Other Intangible Assets Excluding Goodwill (Details) - USD ($) $ in Thousands	Apr. 27, 2024	Apr. 29, 2023
Unamortized - indefinite lived:
Trade name	$ 12,300	$ 12,300
Amortized - definite lived:
Gross	568,739	569,001
Accumulated Amortization	(387,778)	(349,428)
Net	180,961	219,573
Total identifiable intangible assets, gross	581,039	581,301
Total amortized intangible assets	193,261	231,873
Customer relationships
Amortized - definite lived:
Gross	380,003	380,205
Accumulated Amortization	(228,851)	(205,524)
Net	151,152	174,681
Trade names and trademarks
Amortized - definite lived:
Gross	135,830	135,876
Accumulated Amortization	(119,326)	(107,519)
Net	16,504	28,357
Developed technology and other
Amortized - definite lived:
Gross	52,906	52,920
Accumulated Amortization	(39,601)	(36,385)
Net	$ 13,305	$ 16,535

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Goodwill and Other Intangible Assets - Additional Information (Details) $ in Thousands	Apr. 27, 2024 USD ($)
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
2024	$ 38,525
2025	28,716
2026	27,324
2027	26,761
2028	$ 23,739

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Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands	Apr. 27, 2024	Apr. 29, 2023
Property, Plant and Equipment [Abstract]
Land	$ 9,680	$ 9,687
Buildings	109,727	98,174
Leasehold improvements	32,338	31,712
Furniture and equipment	213,010	204,754
Computer hardware and software	261,937	250,805
Construction-in-progress	35,683	32,233
Property and equipment, gross	662,375	627,365
Accumulated depreciation	(433,294)	(415,082)
Property and equipment, net	229,081	212,283
Unamortized capitalized computer development	$ 20,540	$ 10,661

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Leases - Additional Information (Details) $ in Thousands	12 Months Ended
	Apr. 27, 2024 USD ($) investment	Apr. 29, 2023 USD ($)
Leases [Abstract]
Options to renew | investment	1
Lease cost | $	$ 38,497	$ 35,640

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Leases - Future Maturities of Lease Liabilities (Details) $ in Thousands	Apr. 27, 2024 USD ($)
Leases [Abstract]
2024	$ 38,047
2025	30,763
2026	25,216
2027	18,914
2028	8,919
After 2028	26,067
Total lease payments	147,926
Less: imputed interest	(22,647)
Operating lease liabilities	$ 125,279

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Leases - Supplemental Information Related to Leases (Details) - USD ($) $ in Thousands	12 Months Ended
	Apr. 27, 2024	Apr. 29, 2023
Leases [Abstract]
Cash paid for amounts included in the measurement of operating lease liabilities	$ 39,803	$ 35,779
Lease assets obtained in exchange for new operating lease liabilities	$ 83,041	$ 56,603
Weighted-average remaining lease term - operating leases	5 years 10 months 13 days	6 years 6 months
Weighted-average discount rate - operating leases	5.01%	4.40%

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Debt - Long-Term Debt (Details) - USD ($) $ in Thousands	12 Months Ended
	Apr. 27, 2024	Apr. 29, 2023
Debt Instrument [Line Items]
Less: Deferred debt issuance costs	$ (1,339)	$ (1,769)
Total	451,661	487,231
Less: current debt obligations	(122,750)	(36,000)
Long-term debt	$ 328,911	451,231
Senior notes due fiscal 2024
Debt Instrument [Line Items]
Fixed rate	3.74%
Fixed rate senior notes	$ 0	33,000
Senior notes due fiscal 2025
Debt Instrument [Line Items]
Fixed rate	3.48%
Fixed rate senior notes	$ 117,500	117,500
Senior notes due fiscal 2028
Debt Instrument [Line Items]
Fixed rate	3.79%
Fixed rate senior notes	$ 40,000	40,000
Term loan due fiscal 2025 through 2028
Debt Instrument [Line Items]
Fixed rate	6.54%
Fixed rate senior notes	$ 295,500	$ 298,500
Term loan due fiscal 2025 through 2028 | Secured Overnight Financing Rate (SOFR)
Debt Instrument [Line Items]
Interest rate	1.225%

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Debt - Schedule of Debt Maturities (Details) $ in Thousands	Apr. 27, 2024 USD ($)
Debt Disclosure [Abstract]
2025	$ 122,750
2026	11,250
2027	15,000
2028	304,000
2029	0
Thereafter	0
Total	$ 453,000

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Debt - Additional Information (Details) - USD ($)	Apr. 27, 2024	Apr. 29, 2023	Apr. 24, 2021
Line of Credit Facility [Line Items]
Outstanding debt	$ 453,000,000
Amended Credit Agreement | Revolving Credit Facility
Line of Credit Facility [Line Items]
Maximum borrowing capacity		$ 700,000,000	$ 700,000,000
Outstanding debt	$ 186,000,000	$ 45,000,000
Fixed rate	6.53%	5.93%
Amended Credit Agreement | Term Loan due February 2024
Line of Credit Facility [Line Items]
Maximum borrowing capacity			$ 300,000,000
Amended Credit Agreement | Term Loan Due October 2027
Line of Credit Facility [Line Items]
Maximum borrowing capacity		$ 300,000,000
Amended Credit Agreement | Term loan due fiscal 2024 through 2028
Line of Credit Facility [Line Items]
Outstanding debt	$ 295,500,000	$ 298,500,000
Fixed rate	6.54%	6.08%

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Income Taxes - Components of Income Before Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Apr. 27, 2024	Apr. 29, 2023	Apr. 30, 2022
Income Tax Disclosure [Abstract]
United States	$ 211,350	$ 233,416	$ 225,195
International	31,703	36,745	41,059
Income before taxes	$ 243,053	$ 270,161	$ 266,254

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Income Taxes - Components of Income Tax Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Apr. 27, 2024	Apr. 29, 2023	Apr. 30, 2022
Current:
Federal	$ 51,263	$ 46,982	$ 46,964
Foreign	8,201	8,280	11,968
State	11,593	10,294	10,326
Total current expense	71,057	65,556	69,258
Deferred:
Federal	(13,403)	(4,217)	(3,918)
Foreign	2,045	2,601	(217)
State	(2,165)	(377)	(583)
Total deferred benefit	(13,523)	(1,993)	(4,718)
Income tax expense	$ 57,534	$ 63,563	$ 64,540

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Income Taxes - Components of Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands	Apr. 27, 2024	Apr. 29, 2023
Deferred tax assets:
Employee compensation and benefits	$ 7,674	$ 7,519
Inventory related items	7,645	8,228
Foreign intangibles and goodwill	11,767	11,420
Foreign tax credit	7,003	7,003
Lease liability	29,587	19,808
Accrued charitable contributions	427	902
Capitalized research and experimentation costs	12,020	5,172
Other accrued liabilities	6,498	7,744
Other	8,329	7,270
Gross deferred tax assets	90,950	75,066
Less: Valuation allowance	(18,620)	(18,276)
Total net deferred tax assets	72,330	56,790
Deferred tax liabilities
LIFO reserve	(29,593)	(26,010)
Amortizable intangibles	(36,923)	(45,042)
Goodwill	(18,098)	(17,094)
Property, plant, equipment	(32,457)	(36,488)
Lease right-of-use assets	(29,048)	(19,361)
Investments	(26,662)	(26,959)
Other	(4,070)	(3,557)
Total deferred tax liabilities	(176,851)	(174,511)
Deferred net long-term income tax liability	$ (104,521)	$ (117,721)

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Income Taxes - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Apr. 27, 2024	Apr. 29, 2023	Apr. 30, 2022
Tax Credit Carryforward [Line Items]
Foreign net operating loss carryforwards	$ 18,620
Gross unrecognized tax benefits	8,049	$ 8,291	$ 9,898
Deferred tax assets, deductibility of gross liabilities	1,690	1,741
Interest and penalties	1,756	$ 1,617
Increase in interest and penalties expense	$ 365
Foreign Tax Credit Carryforward
Tax Credit Carryforward [Line Items]
Expiration period	2 years

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Income Taxes - Summary of Effective Income Tax Expense Reconciliation (Details) - USD ($) $ in Thousands	12 Months Ended
	Apr. 27, 2024	Apr. 29, 2023	Apr. 30, 2022
Income Tax Disclosure [Abstract]
Tax at U.S. statutory rate	$ 51,038	$ 56,732	$ 55,912
State tax provision, net of federal benefit	7,630	8,416	9,176
Effect of foreign taxes	3,612	2,853	3,199
ESOP	(1,895)	(2,049)	(2,121)
Other permanent differences	1,308	2,481	944
Other	(4,159)	(4,870)	(2,570)
Income tax expense	$ 57,534	$ 63,563	$ 64,540

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Income Taxes - Summary of Changes in Gross Amounts of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Apr. 27, 2024	Apr. 29, 2023
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Balance at beginning of period	$ 8,291	$ 9,898
Additions for tax positions related to the current year	1,156	1,158
Additions for tax positions of prior years	128	142
Reductions for tax positions of prior years	(12)	(1,400)
Statute expirations	(1,514)	(1,507)
Settlements	0	0
Balance at end of period	$ 8,049	$ 8,291

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Technology Partner Innovations, LLC ("TPI") (Details) - USD ($) $ in Thousands	12 Months Ended
	Apr. 27, 2024	Apr. 29, 2023	Apr. 30, 2022	Apr. 27, 2019
Schedule of Equity Method Investments [Line Items]
Noncontrolling interest	$ 588	$ 1,000
Net loss attributable to noncontrolling interest	412	959	$ 1,496
Technology Partner Innovations, LLC
Schedule of Equity Method Investments [Line Items]
Net assets contributed	0		1,000	$ 4,000
Net loss attributable to noncontrolling interest	$ 412	959	1,496
Technology Partner Innovations, LLC | Cure Partners
Schedule of Equity Method Investments [Line Items]
Net assets contributed		$ 1,000	$ 1,000

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Segment and Geographic Data - Additional Information (Details)	12 Months Ended
	Apr. 27, 2024 Segment
Segment Reporting [Abstract]
Number of reportable segments	3

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Segment and Geographic Data - Net Sales Information by Geographic Area and Product (Details) - USD ($) $ in Thousands	12 Months Ended
	Apr. 27, 2024	Apr. 29, 2023	Apr. 30, 2022
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	$ 6,568,272	$ 6,471,471	$ 6,499,405
Consumable
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	5,274,012	5,147,330	5,248,040
Equipment
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	888,597	950,403	920,424
Value Added Services and Other
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	405,663	373,738	330,941
Dental
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	2,488,634	2,492,142	2,516,132
Dental | Consumable
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	1,415,789	1,358,823	1,424,677
Dental | Equipment
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	766,345	823,978	800,144
Dental | Value Added Services and Other
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	306,500	309,341	291,311
Animal Health
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	4,067,069	3,964,922	3,982,874
Animal Health | Consumable
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	3,858,223	3,788,507	3,823,363
Animal Health | Equipment
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	122,252	126,425	120,280
Animal Health | Value Added Services and Other
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	86,594	49,990	39,231
Corporate
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	12,569	14,407	399
Corporate | Value Added Services and Other
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	12,569	14,407	399
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	5,438,727	5,423,931	5,358,489
United States | Dental
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	2,260,198	2,256,006	2,259,579
United States | Animal Health
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	3,165,960	3,153,518	3,098,511
United Kingdom
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	759,184	655,103	717,481
United Kingdom | Animal Health
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	759,184	655,103	717,481
Canada
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	370,361	392,437	423,435
Canada | Dental
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	228,436	236,136	256,553
Canada | Animal Health
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	$ 141,925	$ 156,301	$ 166,882

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Segment and Geographic Data - Information about Reportable Segments (Details) - USD ($) $ in Thousands	12 Months Ended
	Apr. 27, 2024	Apr. 29, 2023	Apr. 30, 2022
Segment Reporting Information [Line Items]
Operating income	$ 252,924	$ 275,971	$ 157,002
Depreciation and amortization	88,156	83,704	81,992
Property and equipment, net	229,081	212,283
Total assets	2,896,732	2,879,146
United States
Segment Reporting Information [Line Items]
Property and equipment, net	180,835	177,163
United Kingdom
Segment Reporting Information [Line Items]
Property and equipment, net	24,671	21,033
Canada
Segment Reporting Information [Line Items]
Property and equipment, net	23,575	14,087
Dental
Segment Reporting Information [Line Items]
Operating income	209,807	237,268	180,212
Depreciation and amortization	15,932	14,051	13,495
Total assets	913,478	853,369
Animal Health
Segment Reporting Information [Line Items]
Operating income	139,077	126,994	114,403
Depreciation and amortization	46,462	44,644	44,561
Total assets	1,568,413	1,570,760
Corporate
Segment Reporting Information [Line Items]
Operating income	(95,960)	(88,291)	(137,613)
Depreciation and amortization	25,762	25,009	$ 23,936
Total assets	$ 414,841	$ 455,017

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Stockholders' Equity - Cash Dividends Declared and Paid (Details) - $ / shares	3 Months Ended
	Apr. 27, 2024	Jan. 27, 2024	Oct. 28, 2023	Jul. 29, 2023	Apr. 29, 2023	Jan. 28, 2023	Oct. 29, 2022	Jul. 30, 2022	Apr. 30, 2022	Jan. 29, 2022	Oct. 30, 2021	Jul. 31, 2021
Equity [Abstract]
Cash dividend paid (in usd per share)	$ 0.26	$ 0.26	$ 0.26	$ 0.26	$ 0.26	$ 0.26	$ 0.26	$ 0.26	$ 0.26	$ 0.26	$ 0.26	$ 0.26

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Stockholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Apr. 27, 2024	Apr. 29, 2023	Apr. 30, 2022	Mar. 11, 2024
Equity [Abstract]
Common stock repurchased (in shares)	7,604	2,020	1,032
Common stock repurchased	$ 229,508	$ 55,492	$ 35,000
Average cost of common shares repurchased (in usd per share)	$ 30.18	$ 27.47	$ 33.90
Shares authorized for repurchase under share repurchase program (in shares)				500,000
Remaining shares available under repurchase program (in shares)	500,000

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Stock-based Compensation - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Apr. 27, 2024	Apr. 29, 2023	Apr. 30, 2022	Sep. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expense recognized	$ 17,871	$ 15,543	$ 23,805
After-tax stock-based compensation expense	14,060	$ 12,353	18,686
Compensation cost before income taxes related to non-vested awards yet to be recognized	$ 16,036
Total compensation cost expected to be recognized over a weighted average period	1 year 2 months 12 days
Number of shares outstanding (in shares)	1,997,000	2,020,000
Weighted average remaining contractual lives of options outstanding	5 years 4 months 24 days
Weighted average remaining contractual lives of options exercisable	4 years 6 months
Stock options exercised, intrinsic value	$ 1,906	$ 4,289	1,552
Stock options exercised, cash received	5,365	15,555	3,975
Stock options exercised, tax benefit	$ 332	948	238
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration period	10 years
Vesting period	3 years
Restricted Stock And Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee stock vesting period	3 years
Total fair value of restricted stock awards vested in period	$ 13,773	$ 16,123	$ 19,970
Restricted Stock Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Minimum restriction period for restricted stock and restricted stock units	1 year
Number of performance units vested	37,000
Performance Unit Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of performance units vested	76,000
2015 Omnibus Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares of common stock reserved for issuance (in shares)				19,500,000
Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for awards (in shares)	8,502,000
Prior Equity Incentive Plans
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares outstanding (in shares)	289,000
Total Shareholder Return | Performance Unit Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee stock vesting period	3 years	3 years	3 years
Number of performance units vested	2,438,000	6,220,000	0
Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares of common stock reserved for issuance (in shares)	9,000,000
Number of shares available for awards (in shares)	658,000
Percentage of fair market value of the common stock	85.00%

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Stock-based Compensation - Summary of Weighted-Average Assumptions (Details) - $ / shares	12 Months Ended
	Apr. 27, 2024	Apr. 29, 2023	Apr. 30, 2022
Director And Employee Stock Option Plans
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected dividend yield	3.10%	3.50%	3.40%
Expected stock price volatility	39.30%	38.80%	38.10%
Risk-free interest rate	4.10%	3.20%	1.10%
Expected life (years)	6 years	6 years	6 years
Weighted average grant date fair value per share (in usd per share)	$ 10.69	$ 8.82	$ 7.97
Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected dividend yield	3.60%	3.70%	3.60%
Expected stock price volatility	38.20%	31.50%	28.60%
Risk-free interest rate	5.10%	4.70%	0.30%
Expected life (years)	7 months 6 days	7 months 6 days	7 months 6 days
Weighted average grant date fair value per share (in usd per share)	$ 7.55	$ 6.89	$ 6.79

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Stock-based Compensation - Summary of Stock Options (Details) $ / shares in Units, $ in Thousands	12 Months Ended
	Apr. 27, 2024 USD ($) $ / shares shares
Number of Options
Beginning balance (in shares) | shares	2,020,000
Granted (in shares) | shares	228,000
Exercised (in shares) | shares	(233,000)
Canceled (in shares) | shares	(18,000)
Ending balance (in shares) | shares	1,997,000
Vested or expected to vest at end of year (in shares) | shares	1,995,000
Exercisable at end of year (in shares) | shares	1,548,000
Weighted- Average Exercise Price
Beginning balance (in usd per share) | $ / shares	$ 30.52
Granted (in usd per share) | $ / shares	33.26
Exercised (in usd per share) | $ / shares	22.97
Canceled (in usd per share) | $ / shares	38.05
Ending balance (in usd per share) | $ / shares	31.65
Vested or expected to vest at end of year (in usd per share) | $ / shares	31.65
Exercisable at end of year (in usd per share) | $ / shares	$ 31.65
Aggregate Intrinsic Value
Balance at end of year | $	$ 2,824
Vested or expected to vest at end of year | $	2,824
Exercisable at end of year | $	$ 2,824

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Stock-based Compensation - Summary of Non-Vested Restricted Stock Awards and Performance Unit Awards (Details) shares in Thousands	12 Months Ended
	Apr. 27, 2024 $ / shares shares
Restricted Stock Awards
Shares
Outstanding, Beginning balance (in shares) | shares	37
Granted (in shares) | shares	40
Vested (in shares) | shares	(37)
Forfeitures and cancellations (in shares) | shares	0
Outstanding, Ending balance (in shares) | shares	40
Weighted- Average Grant Date Fair Value
Beginning balance (in usd per share) | $ / shares	$ 27.23
Granted (in usd per share) | $ / shares	29.19
Vested (in usd per share) | $ / shares	27.23
Forfeitures and cancellations (in usd per share) | $ / shares	0
Ending balance (in usd per share) | $ / shares	$ 29.19
Restricted Stock Units
Shares
Outstanding, Beginning balance (in shares) | shares	792
Granted (in shares) | shares	438
Vested (in shares) | shares	(394)
Forfeitures and cancellations (in shares) | shares	(42)
Outstanding, Ending balance (in shares) | shares	794
Weighted- Average Grant Date Fair Value
Beginning balance (in usd per share) | $ / shares	$ 29.12
Granted (in usd per share) | $ / shares	33.18
Vested (in usd per share) | $ / shares	27.86
Forfeitures and cancellations (in usd per share) | $ / shares	31.32
Ending balance (in usd per share) | $ / shares	$ 31.85
Performance Unit Awards
Shares
Outstanding, Beginning balance (in shares) | shares	203
Granted (in shares) | shares	164
Vested (in shares) | shares	(76)
Forfeitures and cancellations (in shares) | shares	0
Outstanding, Ending balance (in shares) | shares	291
Weighted- Average Grant Date Fair Value
Beginning balance (in usd per share) | $ / shares	$ 30.14
Granted (in usd per share) | $ / shares	33.84
Vested (in usd per share) | $ / shares	29.88
Forfeitures and cancellations (in usd per share) | $ / shares	0
Ending balance (in usd per share) | $ / shares	$ 32.30

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Accumulated Other Comprehensive Loss ("AOCL") - Summary of Accumulated Other Comprehensive Income (Loss) (Details) $ in Thousands	12 Months Ended
	Apr. 27, 2024 USD ($)
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	$ 1,117,535
Ending Balance	1,001,144
Cash Flow Hedges
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(2,412)
Other comprehensive loss before reclassifications	0
Amounts reclassified from AOCL	1,042
Ending Balance	(1,370)
Currency Translation Adjustment
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(86,850)
Other comprehensive loss before reclassifications	(1,695)
Amounts reclassified from AOCL	0
Ending Balance	(88,545)
Total
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(89,262)
Other comprehensive loss before reclassifications	(1,695)
Amounts reclassified from AOCL	1,042
Ending Balance	$ (89,915)

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Accumulated Other Comprehensive Loss ("AOCL") - Additional Information (Details) $ in Thousands	12 Months Ended
	Apr. 27, 2024 USD ($)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Increase in interest expense	$ 1,363
Cash Flow Hedges
Accumulated Other Comprehensive Income (Loss) [Line Items]
Reclassification from AOCI, tax	$ 321

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Schedule II Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands	12 Months Ended
	Apr. 27, 2024	Apr. 29, 2023	Apr. 30, 2022
Allowance for doubtful accounts
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at Beginning of Period	$ 3,667	$ 5,913	$ 6,138
Charged to Costs and Expenses	2,542	3,450	2,769
Deductions	3,478	5,696	2,994
Balance at End of Period	2,731	3,667	5,913
Sales returns and allowances
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at Beginning of Period	11,079	4,400	5,856
Charged to Costs and Expenses	50,190	57,920	59,999
Deductions	49,145	51,241	61,455
Balance at End of Period	12,124	11,079	4,400
Total accounts receivable allowances
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at Beginning of Period	14,746	10,313	11,994
Charged to Costs and Expenses	52,732	61,370	62,768
Deductions	52,623	56,937	64,449
Balance at End of Period	14,855	14,746	10,313
LIFO inventory adjustment
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at Beginning of Period	146,915	130,959	120,775
Charged to Costs and Expenses	7,140	15,956	10,184
Deductions	0	0	0
Balance at End of Period	154,055	146,915	130,959
Inventory obsolescence reserve
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at Beginning of Period	14,611	21,543	29,629
Charged to Costs and Expenses	15,688	11,223	61,647
Deductions	16,589	18,155	69,733
Balance at End of Period	13,710	14,611	21,543
Total inventory reserve
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at Beginning of Period	161,526	152,502	150,404
Charged to Costs and Expenses	22,828	27,179	71,831
Deductions	16,589	18,155	69,733
Balance at End of Period	$ 167,765	$ 161,526	$ 152,502