Exhibit 10.6
SALE AGREEMENT
Dated as of May 22, 2000
between
KPMG CONSULTING, LLC
and
KPMG CONSULTING, INC
TABLE OF CONTENTS
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PAGE
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ARTICLE I AGREEMENT TO PURCHASE AND SELL ..................................... 2
1.1 Agreement To Purchase and Sell ..................................... 2
1.2 Timing of Purchases ................................................ 3
1.3 Consideration for Purchases ........................................ 3
1.4 Sale Termination Date .............................................. 3
1.5 Intention of the Parties ........................................... 3
ARTICLE II CALCULATION OF SALE PURCHASE PRICE ................................. 3
2.1 Calculation of Sale Purchase Price ................................. 3
ARTICLE III PAYMENT OF SALE PURCHASE PRICE ..................................... 5
3.1 Initial Sale Purchase Price Payment. ............................... 5
3.2 Subsequent Sale Purchase Price Payments ............................ 5
3.3 Settlement as to Specific Receivables and Dilution ................. 5
3.4 Reconveyance of Receivables ........................................ 6
ARTICLE IV CONDITIONS OF PURCHASES ............................................ 7
4.1 Conditions Precedent to Initial Purchase ........................... 7
4.2 Certification as to Representations and Warranties ................. 8
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE ORIGINATOR ................... 9
5.1 Organization and Good Standing ..................................... 9
5.2 Due Qualification .................................................. 9
5.3 Power and Authority; Due Authorization ............................. 9
5.4 Valid Sale; Binding Obligations .................................... 9
5.5 No Violation ....................................................... 9
5.6 Proceedings ........................................................ 10
5.7 Bulk Sales Acts .................................................... 10
5.8 Government Approvals ............................................... 10
5.9 Financial Condition ................................................ 10
5.10 Licenses, Contingent Liabilities, and Labor Controversies .......... 10
5.11 Margin Regulations ................................................. 10
5.12 Quality of Title ................................................... 11
5.13 Accuracy of Information ............................................ 11
5.14 Offices ............................................................ 11
5.15 Trade Names ........................................................ 11
5.16 Taxes .............................................................. 12
TABLE OF CONTENTS
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PAGE
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5.17 Compliance with Applicable Laws .................................... 12
5.18 Reliance on Separate Legal Identity ................................ 12
ARTICLE VI COVENANTS OF THE ORIGINATOR ........................................ 12
6.1 Affirmative Covenants .............................................. 12
6.2 Reporting Requirements ............................................. 14
6.3 Negative Covenants ................................................. 15
6.4 Lock-Box Banks ..................................................... 15
6.5 Accounting for Purchases ........................................... 15
6.6 Transaction Documents .............................................. 16
6.7 Substantive Consolidation .......................................... 16
ARTICLE VII ADDITIONAL RIGHTS AND OBLIGATIONS IN RESPECT OF THE RECEIVABLES .... 17
7.1 Rights of the Company .............................................. 17
7.2 Responsibilities of the Originator ................................. 18
7.3 Further Action Evidencing Purchases ................................ 18
7.4 Application of Collections ......................................... 19
ARTICLE VIII SALE TERMINATION EVENTS ............................................ 19
8.1 Sale Termination Events ............................................ 19
8.2 Remedies ........................................................... 20
ARTICLE IX INDEMNIFICATION .................................................... 20
9.1 Indemnities by the Originator ...................................... 20
ARTICLE X MISCELLANEOUS ...................................................... 22
10.1 Amendments, etc. ................................................... 22
10.2 Notices, etc. ...................................................... 22
10.3 No Waiver; Cumulative Remedies ..................................... 22
10.4 Binding Effect; Assignability ...................................... 23
10.5 Governing Law ...................................................... 23
10.6 Costs, Expenses and Taxes .......................................... 23
10.7 Submission to Jurisdiction ......................................... 23
10.8 Waiver of Jury Trial ............................................... 24
10.9 Captions and Cross References; Incorporation by Reference .......... 24
10.10 Execution in Counterparts .......................................... 24
10.11 Acknowledgment and Agreement ....................................... 24
EXHIBIT A - Form of Sale Purchase Report
EXHIBIT B - Form of KCI Note
EXHIBIT C - Form of Originator Assignment Certificate
EXHIBIT D - Proceedings
EXHIBIT E - Office Locations
EXHIBIT F - Trade Names
SALE AGREEMENT
THIS SALE AGREEMENT (this "Agreement"), dated as of May 22, 2000, is
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between KPMG CONSULTING, LLC ("KCL"), a Delaware limited liability company, as
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Originator (the "Originator"), KPMG CONSULTING, INC. ("KCI"), a Delaware
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corporation, as the initial Servicer, and purchaser (in such capacity, the
"Company").
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Definitions
Unless otherwise indicated, certain terms that are capitalized and used
throughout this Agreement are defined in Exhibit I to the Receivables Purchase
Agreement of even date herewith (as the same may be amended, supplemented or
otherwise modified from time to time, the "Receivables Purchase Agreement")
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among KCI, KCI Funding Corporation, Market Street Funding Corporation, as the
Issuer (the "Issuer"), and PNC Bank, National Association. All references herein
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to months are to calendar months unless otherwise expressly indicated.
Background
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1. KCI Funding Corporation is a special purpose corporation, all of the issued
and outstanding shares of which are owned by KCI.
2. The Originator generates Receivables in the ordinary course of its
businesses.
3. The Originator, in order to finance its business, wishes to sell Receivables
to the Company, and the Company is willing, on the terms and subject to the
conditions set forth herein, to purchase Receivables from the Originator.
4. The Originator and the Company intend this transaction to be a true sale of
Receivables by the Originator to the Company, providing the Company with the
full benefits of ownership of the Receivables and the Originator and the
Company do not intend the transactions hereunder to be, or for any purpose to
be, characterized as a loan from the Company to the Originator.
5. The Company intends to sell, assign and transfer to KCI Funding Corporation,
all of its right, title and interest in and to all of the Receivables and
Related Rights pursuant to the Purchase and Sale Agreement in order to
finance its purchases of certain Receivables and Related Rights hereunder.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
AGREEMENT TO PURCHASE AND SELL
1.1 Agreement To Purchase and Sell. On the terms and subject to the conditions
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set forth in this Agreement (including Article IV), the Originator, severally
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and for itself alone, agrees to sell to the Company, and the Company agrees to
purchase from the Originator, from time to time on or after the Closing Date,
but before the Sale Termination Date, all of Originator's right, title and
interest in and to:
(a) each Receivable of the Originator that existed and was owing
to the Originator at the closing of the Originator's business
on April 30, 2000 (the "Sale Cut-off Date");
(b) each Receivable created by the Originator from and including
the Cut-off Date to and including the Sale Termination Date;
(c) all rights to, but not the obligations under, all Related
Security;
(d) all monies due or to become due with respect to any of the
foregoing;
(e) all books and records related to any of the foregoing; and
(f) all collections and other proceeds of any of the foregoing
(as defined in the applicable UCC) that are or were received
by the Originator on or after the Sale Cut-off Date,
including, without limitation, all funds which either are
received by the Originator, the Company or the Servicer from
or on behalf of the Obligors in payment of any amounts owed
(including, without limitation, invoice price, finance
charges, interest and all other charges) in respect of
Receivables, or are applied to such amounts owed by the
Obligors (including, without limitation, insurance payments
that the Originator or Servicer applies in the ordinary course
of its business to amounts owed in respect of any Receivable
and net proceeds of sale or other disposition of repossessed
goods or other collateral or property of the Obligors or any
other parties directly or indirectly liable for payment of
such Receivables).
All purchases hereunder shall be made without recourse, but shall be made
pursuant to, and in reliance upon, the representations, warranties and covenants
of the Originator set forth in this Agreement and each other Transaction
Document. No obligation or liability to any Obligor on any Receivable is
intended to be assumed by the Company hereunder, and any such assumption is
expressly disclaimed. The Company's foregoing commitment to purchase Receivables
and the proceeds and rights described in clauses (c) through (f) (collectively,
the "Sale Related Rights") is herein called the "Sale Purchase Facility."
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1.2 Timing of Purchases.
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(a) Closing Date Purchases. The Originator's entire right, title
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and interest in (i) each Receivable that existed and was owing
to the Originator at the Sale Cut-off Date, (ii) all
Receivables created by the Originator from and including the
Sale Cut-off Date, to and including the Closing Date, and
(iii) all Sale Related Rights automatically shall be deemed to
have been sold to the Company on the Closing Date.
(b) Regular Purchases. After the Closing Date, until the Sale
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Termination Date, each Receivable (and the Sale Related
Rights) created by the Originator shall be deemed to have been
sold to the Company immediately (and without further action)
upon the creation of such Receivable.
1.3 Consideration for Purchases. On the terms and subject to the conditions set
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forth in this Agreement, the Company agrees to make Sale Purchase Price payments
to the Originator in accordance with Article III.
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1.4 Sale Termination Date. The "Sale Termination Date" shall be the earliest to
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occur of (a) the date of the termination of this Agreement pursuant to Section
8.2 and (b) the Sale Payment Date immediately following the day on which
Originator shall have given notice to the Company at or prior to 10:00 a.m. (New
York City time) that the Originator desires to terminate this Agreement.
1.5 Intention of the Parties. It is the express intent of the parties hereto
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that the transfers of the Receivables and Sale Related Rights by the Originator
to the Company, as contemplated by this Agreement be, and be treated as, sales
and not as loans secured by the Receivables and Sale Related Rights. If,
however, notwithstanding the intent of the parties, such transactions are deemed
to be loans, the Originator hereby grants to the Company a first priority
security interest in all of the Originator's right, title and interest in and to
the Receivables and the Sale Related Rights now existing and hereafter created
by the Originator, all monies due or to become due and all amounts received with
respect thereto, and all proceeds thereof, to secure all of the Originator's
obligations hereunder.
ARTICLE II
CALCULATION OF SALE PURCHASE PRICE
2.1 Calculation of Sale Purchase Price. On the Closing Date and on each Monthly
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Settlement Date, the Servicer shall deliver to the Company and the Originator a
report in substantially the form of Exhibit A (each such report being herein
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called a "Sale Purchase Report") with respect to the matters set forth therein
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and the Company's purchases of Receivables from the Originator:
(a) that are to be made on the Closing Date (in the case of the
Sale Purchase Report to be delivered on the Closing Date), or
(b) that were made during the period commencing on the Monthly
Settlement Date immediately preceding such Monthly Settlement
Date to (but not including) such Monthly Settlement Date (in
the case of each subsequent Sale Purchase Report).
The "Sale Purchase Price" (to be paid to the Originator in accordance with the
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terms of Article III) for the Receivables and the Sale Related Rights that are
purchased hereunder from the Originator shall be determined in accordance with
the following formula:
PP = OB X FMVD
where:
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PP = Sale Purchase Price for each Receivable as calculated
on the relevant Sale Payment Date.
OB = The Outstanding Balance of such Receivable on the
relevant Sale Payment Date.
FMVD = Fair Market Value Discount, as measured on such Sale
Payment Date, which is equal to the quotient
(expressed as percentage) of (a) one divided by (b)
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the sum of (i) one, plus (ii) the product of (A) the
Prime Rate on such Sale Payment Date plus .25% and
(B) a fraction, the numerator of which is the Days'
Sales Outstanding (calculated as of the last day of
the Settlement Period next preceding such Sale
Payment Date) and the denominator of which is 365.
"Sale Payment Date" means (i) the Closing Date and (ii) each Business
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Day thereafter that the Originator is open for business.
"Prime Rate" means a per annum rate equal to the "Prime Rate" as
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published in the "Money Rates" section of The Wall Street Journal or such other
publication as determined by the Administrator in its sole discretion.
ARTICLE III
PAYMENT OF SALE PURCHASE PRICE
3.1 Initial Sale Purchase Price Payment. On the terms and subject to the
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conditions set forth in this Agreement, the Company agrees to pay to the
Originator the Sale Purchase Price for the purchase to be made from the
Originator on the Closing Date partially in cash (in an amount to be agreed
between the Company and the Originator and set forth in the initial Sale
Purchase Report) and partially by issuing a promissory note in the form of
Exhibit B to the Originator with an initial principal balance equal to the
remaining Sale Purchase Price (the promissory note, as it may be amended,
supplemented, indorsed or otherwise modified from time to time, together with
all promissory notes issued from time to time in substitution therefor or
renewal thereof in accordance with the Transaction Documents, each being herein
called a "KCI Note").
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3.2 Subsequent Sale Purchase Price Payments. On each Sale Payment Date
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subsequent to the Closing Date, on the terms and subject to the conditions set
forth in this Agreement, the Company shall pay to the Originator the Sale
Purchase Price for the Receivables generated by the Originator on such Sale
Payment Date:
(a) First, the Sale Purchase Price shall be paid in cash to the
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extent the Company has cash available therefor; and
(b) Second, to the extent any portion of the Sale Purchase Price
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remains unpaid, the principal amount outstanding under the
KCI Note issued to the Originator shall be increased by an
amount equal to such remaining Sale Purchase Price, up to
the maximum permitted outstanding principal amount under
the terms of the KCI Note.
Servicer shall make all appropriate record keeping entries with respect
to the KCI Note or otherwise to reflect the foregoing payments, and Servicer's
books and records shall constitute rebuttable presumptive evidence of the
principal amount of, and accrued interest on, the KCI Note at any time.
Furthermore, Servicer shall hold the KCI Note for the benefit of the Originator.
The Originator hereby irrevocably authorizes Servicer to xxxx the KCI Note
"CANCELLED" and to return such KCI Note to the Company upon the final payment
thereof after the occurrence of the Sale Termination Date.
3.3 Settlement as to Specific Receivables and Dilution.
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(a) If, on the day of purchase of any Receivable from the
Originator hereunder, any of the representations or warranties
set forth in Sections 5.4 and 5.12 are not true with respect
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to such Receivable or as a result of any action or inaction of
the Originator, on any day, any of such representations or
warranties set forth in Sections 5.4 and 5.12 is no longer
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true with respect to such a Receivable (other than a
representation or warranty set forth in Section 5.12(c)), then
the Sale Purchase Price with respect to such Receivables shall
be reduced by an amount equal to the Outstanding Balance of
such Receivable and shall be accounted to the Originator as
provided in subsection (c) below; provided, that if the
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Company thereafter receives payment on account of Collections
due with respect to such Receivable, the Company promptly
shall deliver such funds to the Originator.
(b) If, on any day, the Outstanding Balance of any Receivable
purchased hereunder is reduced or adjusted as a result of any
defective, rejected, returned goods or services, or any
discount or other adjustment made by the Originator, the
Company or Servicer or any setoff or dispute between the
Originator or the Servicer and an Obligor as indicated on the
books of the Company (or, for periods prior to the Closing
Date, the books of the Originator), then the Sale Purchase
Price with respect to such Receivable shall be reduced by the
amount of such net reduction and shall be accounted to the
Originator as provided in subsection (c) below.
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(c) Any reduction in the Sale Purchase Price of any Receivable
pursuant to subsection (a) or (b) above shall be applied as a
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credit for the account of the Company against the Sale
Purchase Price of Receivables subsequently purchased by the
Company from the Originator hereunder; provided, however if
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there have been no purchases of Receivables from the
Originator (or insufficiently large purchases of Receivables)
to create a Sale Purchase Price sufficient to so apply such
credit against, the amount of such credit
(i) shall be paid in cash to the Company by the Originator
in the manner and for application as described in the following proviso,
or
(ii) shall be deemed to be a payment under, and shall be
deducted from the principal amount outstanding under, the KCI Note
payable to the Originator;
provided, further, that at any time (y) when a Termination Event or Unmatured
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Termination Event exists under the Receivables Purchase Agreement or (z) on or
after the Sale Termination Date, the amount of any such credit shall be paid by
the Originator to the Company by deposit in immediately available funds into the
relevant Lock-Box Account for application by Servicer to the same extent as if
Collections of the applicable Receivable in such amount had actually been
received on such date.
(d) Each Sale Purchase Report (other than the Sale Purchase Report
delivered on the Closing Date) shall include, in respect of
the Receivables previously generated by the Originator, a
calculation of the aggregate reductions described in
subsection (a) or (b) relating to such Receivables since the
last Sale Purchase Report delivered hereunder, as indicated on
the books of the Company (or, for such period prior to the
Closing Date, the books of the Originator).
3.4 Reconveyance of Receivables. In the event that the Originator has paid to
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the Company the full Outstanding Balance of any Receivable pursuant to Section
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3.3, the Company shall reconvey such Receivable to the Originator, without
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representation or warranty, but free and clear of all liens, security interests,
charges, and encumbrances created by the Company.
ARTICLE IV
CONDITIONS OF PURCHASES
4.1 Conditions Precedent to Initial Purchase. The initial purchase hereunder is
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subject to the condition precedent that Servicer (on the Company's behalf) shall
have received, on or before the Closing Date, the following, each (unless
otherwise indicated) dated the Closing Date, and each in form and substance
satisfactory to Servicer (acting on the Company's behalf):
(a) An Originator Assignment Certificate in the form of Exhibit C
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from the Originator, duly completed, executed and delivered by
the Originator;
(b) A copy of the written consent of KCI, as member of the
Originator approving the Transaction Documents to be delivered
by it and the transactions contemplated hereby and thereby,
certified by the Secretary or Assistant Secretary of the
Originator;
(c) Good standing certificates for the Originator issued as of a
recent date acceptable to Servicer by the Secretary of State
of the jurisdiction of the Originator's organization and the
jurisdiction where the Originator's chief executive office is
located;
(d) A certificate of the Secretary or Assistant Secretary of the
Originator certifying the names and true signatures of the
officers authorized on such Person's behalf to sign the
Transaction Documents to be delivered by it (on which
certificate Servicer and the Company may conclusively rely
until such time as the Servicer shall receive from such Person
a revised certificate meeting the requirements of this
subsection (d));
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(e) The certificate of formation, operating agreement or other
organizational document of the Originator, duly certified by
the Secretary of State of the jurisdiction of Originator's
organization as of a recent date acceptable to the Servicer,
together with a copy of the limited liability company
agreement of the Originator, each duly certified by the
Secretary or an Assistant Secretary of the Originator;
(f) Originals of the proper financing statements (Form UCC-1) that
have been duly executed and name the Originator as the
debtor/seller and the Company as the secured party/purchaser
(and KCI Funding Corporation, as assignee of the Company, and
the Issuer, as assignee of KCI Funding Corporation) of the
Receivables generated by the Originator as may be necessary
or, in the Servicer's or the Administrator's opinion,
desirable under the UCC of all appropriate jurisdictions to
perfect the Company's ownership interest in all Receivables
and such other rights, accounts, instruments and moneys
(including, without limitation, Related Security) in which an
ownership or security interest may be assigned to it
hereunder;
(g) A written search report from a Person satisfactory to the
Servicer listing all effective financing statements that name
the Originator as debtor or seller and that are filed in the
jurisdictions in which filings were made pursuant to the
foregoing subsection (f), together with copies of such
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financing statements (none of which, except for those
described in the foregoing subsection (f), shall cover any
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Receivable or any Sale Related Rights which are to be sold to
the Company hereunder), and tax and judgment lien search
reports from a Person satisfactory to the Servicer showing no
evidence of such liens filed against the Originator;
(h) A favorable opinion of Sidley & Austin, counsel to the
Originator, in form and substance satisfactory to the Servicer
and the Administrator;
(i) A KCI Note in favor of the Originator, duly executed by the
Company; and
(j) A certificate from an officer of the Originator to the effect
that the Servicer and the Originator have placed on the most
recent, and have taken all steps reasonably necessary to
ensure that there shall be placed on each subsequent, data
processing report that it generates which are of the type that
a proposed purchaser or lender would use to evaluate the
Receivables, the following legend (or the substantive
equivalent thereof): "THE RECEIVABLES DESCRIBED HEREIN HAVE
BEEN SOLD TO KPMG CONSULTING, INC. PURSUANT TO A SALE
AGREEMENT, DATED AS OF MAY 22, 2000, AS AMENDED, BETWEEN KPMG
CONSULTING, LLC AND KPMG CONSULTING, INC., AND SUCH
RECEIVABLES HAVE BEEN SOLD BY KPMG CONSULTING, INC. TO KCI
FUNDING CORPORATION PURSUANT TO A PURCHASE AND SALE AGREEMENT,
DATED AS OF MAY 22, 2000, AS AMENDED, BETWEEN KPMG CONSULTING,
INC., AND KCI FUNDING CORPORATION; AND AN UNDIVIDED,
FRACTIONAL OWNERSHIP INTEREST IN THE RECEIVABLES DESCRIBED
HEREIN HAS BEEN SOLD TO MARKET STREET FUNDING CORPORATION
PURSUANT TO A RECEIVABLES PURCHASE AGREEMENT, DATED AS OF MAY
22, 2000, AS AMENDED, AMONG KPMG CONSULTING, INC., AS THE
SERVICER, KCI FUNDING CORPORATION, MARKET STREET FUNDING
CORPORATION AND PNC BANK, NATIONAL ASSOCIATION."
4.2 Certification as to Representations and Warranties. The Originator, by
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accepting the Sale Purchase Price related to each purchase of Receivables
generated by the Originator, shall be deemed to have certified that the
representations and warranties contained in Article V are true and correct on
and as of such day, with the same effect as though made on and as of such day.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE ORIGINATOR
In order to induce the Company to enter into this Agreement and to make
purchases hereunder, the Originator hereby makes, with respect to itself, the
representations and warranties set forth in this Article V.
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5.1 Organization and Good Standing. The Originator has been duly organized and
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is validly existing as a limited liability company in good standing under the
laws of the State of Delaware, with power and authority to own its properties
and to conduct its business as such properties are presently owned and such
business is presently conducted.
5.2 Due Qualification. The Originator is duly licensed and in good standing in
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the jurisdiction where its chief executive office is located and is qualified to
do business as a foreign limited liability company in good standing in all other
jurisdictions in which (a) the ownership or lease of its property or the conduct
of its business requires such licensing or qualification and (b) the failure to
be so licensed or qualified would be reasonably likely to have a Material
Adverse Effect.
5.3 Power and Authority; Due Authorization. The Originator has (a) all
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necessary power, authority and legal right (i) to execute and deliver, and
perform its obligations under, each Transaction Document to which it is a party
and (ii) to generate, own, sell, and assign Receivables on the terms and subject
to the conditions herein and therein provided; and (b) duly authorized such
execution and delivery and such sale and assignment and the performance of such
obligations by all necessary company action.
5.4 Valid Sale; Binding Obligations. Each sale made by the Originator pursuant
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to this Agreement shall constitute a valid sale, transfer, and assignment of
Receivables to the Company, enforceable against creditors of, and purchasers
from, the Originator; and this Agreement constitutes, and each other Transaction
Document to be signed by the Originator, when duly executed and delivered, will
constitute, a legal, valid, and binding obligation of the Originator,
enforceable in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, or other similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity, regardless of whether such enforceability is considered in
a proceeding in equity or at law.
5.5 No Violation. The consummation of the transactions contemplated by this
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Agreement and the other Transaction Documents and the fulfillment of the terms
hereof or thereof, will not (a) conflict with, result in any breach of any of
the terms and provisions of, or constitute (with or without notice or lapse of
time) a default under (i) the Originator's certificate of formation or operating
agreement or (ii) any indenture, loan agreement, mortgage, deed of trust, or
other material agreement or instrument to which it is a party or by which it is
bound, (b) result in the creation or imposition of any Adverse Claim upon any of
its properties pursuant to the terms of any such indenture, loan agreement,
mortgage, deed of trust, or other agreement or instrument, other than the
Transaction Documents, or (c) violate any law or any order, rule or regulation
applicable to it of any court or of any state or foreign regulatory body,
administrative agency, or other governmental instrumentality having jurisdiction
over it or any of its properties.
5.6 Proceedings. Except as set forth in Exhibit D, there is no action, suit,
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proceeding or investigation pending before any court, regulatory body,
arbitrator, administrative agency, or other tribunal or governmental
instrumentality (a) asserting the invalidity of any Transaction Document, (b)
seeking to prevent the issuance of the Originator's Originator Assignment
Certificate or the consummation of any of the transactions contemplated by any
Transaction Document or (c) seeking any determination or ruling that is
reasonably likely to have a Material Adverse Effect.
5.7 Bulk Sales Acts. No transaction contemplated hereby requires compliance
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with, or will be subject to avoidance under, any bulk sales act or similar law.
5.8 Government Approvals. Except for the filing of the UCC financing statements
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referred to in Article IV, all of which, at the time required in Article IV,
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shall have been duly made and shall be in full force and effect, 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 Originator's
due execution, delivery and performance of any Transaction Document to which it
is a party.
5.9 Financial Condition.
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(a) Material Adverse Effect. Since June 30, 1999, no event has occurred
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that has had, or is reasonably likely to have, a Material Adverse Effect.
(b) Solvent. On the date hereof, and on the date of each purchase hereunder
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(both before and after giving effect to such purchase) the Originator
shall be Solvent.
5.10 Licenses, Contingent Liabilities, and Labor Controversies.
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(a) The Originator has not failed to obtain any licenses, permits,
franchises or other governmental authorizations necessary to the
ownership of its properties or to the conduct of its business, which
violation or failure to obtain would be reasonably likely to have a
Material Adverse Effect.
(b) There are no labor controversies pending against the Originator that
have had (or are reasonably likely to have) a Material Adverse Effect.
5.11 Margin Regulations. No use of any funds acquired by the Originator under
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this Agreement will conflict with or contravene any of Regulations T, U and X
promulgated by the Federal Reserve Board from time to time.
5.12 Quality of Title.
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(a) Each Receivable of the Originator (together with the Sale Related
Rights with respect to such Receivable) which is to be sold to the Company
hereunder is or shall be owned by the Originator, free and clear of any
Adverse Claim, except as provided herein, the Purchase and Sale Agreement
and in the Receivables Purchase Agreement. Whenever the Company makes a
purchase hereunder, it shall have acquired and shall continue to have
maintained a valid and perfected ownership interest (free and clear of any
Adverse Claim) in all Receivables generated by the Originator and all
Collections related thereto, and in the Originator's entire right, title
and interest in and to the Sale Related Rights with respect thereto.
(b) No effective financing statement or other instrument similar in
effect covering any Receivable generated by the Originator or any Sale
Related Rights is on file in any recording office except such as may be
filed in favor of the Company in accordance with this Agreement, in favor
of KCI Funding Corporation, in accordance with the Purchase and Sale
Agreement or in favor of the Issuer in accordance with the Receivables
Purchase Agreement.
(c) Unless otherwise identified to the Company on the date of the purchase
hereunder, each Receivable purchased hereunder is on the date of purchase,
an Eligible Receivable.
5.13 Accuracy of Information. All factual written information heretofore or
-----------------------
contemporaneously furnished (and prepared) by the Originator to the Company or
the Administrator for purposes of or in connection with any Transaction Document
or any transaction contemplated hereby or thereby is, and all other such factual
written information hereafter furnished (and prepared) by the Originator to the
Company or the Administrator pursuant to or in connection with any Transaction
Document will be, true and accurate in every material respect on the date as of
which such information is dated or certified.
5.14 Offices. The Originator's principal place of business and chief executive
-------
office is located at the address specified in Exhibit E, and the offices where
---------
the Originator keeps its master records concerning the Receivables are located
at the addresses specified in Exhibit E (or at such other locations, notified to
---------
the Servicer and the Administrator in accordance with Section 6.1(f), in
--------------
jurisdictions where all action required by Section 7.3 has been taken and
-----------
completed).
5.15 Trade Names. The Originator does not use any trade name other than its
-----------
actual organizational name and the trade names set forth in Exhibit F. From and
---------
after the date that fell five (5) years before the date hereof, except as set
forth in Exhibit F, the Originator has not been known by any legal name other
---------
than its organizational name as of the date hereof, nor has the Originator been
the subject of any merger or other organizational reorganization.
5.16 Taxes. The Originator has filed all tax returns and reports required by
-----
law to have been filed by it and has paid all taxes and governmental charges
thereby shown to be owing, except any such taxes or charges which are being
diligently contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP shall have been set aside on its
books.
5.17 Compliance with Applicable Laws. The Originator is in compliance with the
-------------------------------
requirements of all applicable laws, rules, regulations and orders of all
governmental authorities, a breach of any of which, individually or in the
aggregate, would be reasonably likely to have a Material Adverse Effect.
5.18 Reliance on Separate Legal Identity. The Originator acknowledges that the
-----------------------------------
Issuer and the Administrator are entering into the Receivables Purchase
Agreement in reliance upon KCI Funding Corporation's identity as a legal entity
separate from the Originator.
5.19 Year 2000 Problem. The Originator has reviewed the areas within its
-----------------
business and operations which could be adversely affected by, and has developed
or is developing a program to address on a timely basis, the Year 2000 Problem.
The Year 2000 Problem will not result in any Material Adverse Effect.
5.20 Investment Company. The Originator is not an "investment
------------------
company," or a company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended. In addition, the
Originator is not a "holding company," a "subsidiary company" of a "holding
company" or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
ARTICLE VI
COVENANTS OF THE ORIGINATOR
6.1 Affirmative Covenants. From the date hereof until the first day following
---------------------
the Sale Termination Date, the Originator will, unless the Administrator
and the Company shall otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply in all material respects with
--------------------------
all applicable laws, rules, regulations and orders with respect to the
Receivables generated by it and the Contracts and other agreements related
thereto except where the failure to so comply would not materially and
adversely affect the collectibility of such Receivables or the rights of
the Company hereunder.
(b) Preservation of Organizational Existence. Preserve and maintain
----------------------------------------
its existence as a limited liability company and all rights, franchises and
privileges in the jurisdiction of its formation, and qualify and remain
qualified in good standing as a foreign limited liability company in each
jurisdiction where the failure to preserve and maintain such existence,
rights, franchises, privileges and qualification would be reasonably likely
to have a Material Adverse Effect.
(c) Receivables Reviews. (i) At any time and from time to time during
-------------------
regular business hours but no more frequently than quarterly unless (x) a
Sale Termination Event or Unmatured Sale Termination Event has occurred and
is continuing or (y) in the opinion of the Administrator reasonable grounds
for insecurity exist with respect to the collectibility of a material
amount of the Pool Receivables or with respect to the Originator's
performance or ability to perform in any material respect its obligations
under the Agreement, and upon reasonable prior notice (unless a Sale
Termination Event or Unmatured Sale Termination Event exists), and upon
reasonable prior notice, permit the Company or the Administrator, or their
respective agents or representatives, (A) to examine and make copies of and
abstracts from all books, records and documents (including, without
limitation, computer tapes and disks) in possession or under the control of
the Originator relating to Receivables, including, without limitation, the
related Contracts and purchase orders and other agreements related thereto,
and (B) to visit the offices and properties of the Originator for the
purpose of examining such materials described in clause (i)(A) next above
-------------
and to discuss matters relating to the Receivables originated by it or the
performance hereunder with any of the officers or employees of the
Originator having knowledge of such matters, and (ii) without limiting the
foregoing clause (i) above, from time to time on request of the
----------
Administrator, permit certified public accountants or other auditors
acceptable to the Company and
Administrator to conduct, at the Company's expense, a review of the
Originator's books and records with respect to such Receivables.
(d) Keeping of Records and Books of Account. Maintain and implement
---------------------------------------
administrative and operating procedures (including, without limitation, an
ability to re-create records evidencing Receivables it generates in the
event of the destruction of the originals thereof) within a reasonable time
thereafter, and keep and maintain all documents, books, records and other
information reasonably necessary or advisable for the collection of such
Receivables (including, without limitation, records adequate to permit the
daily identification of each new Receivable and all Collections of and
adjustments to each existing Receivable).
(e) Performance and Compliance with Receivables and Contracts. Timely
---------------------------------------------------------
and fully perform and comply with all material provisions, covenants and
other promises required to be observed by it under the Contracts and all
other agreements related to the Receivables that it generates.
(f) Location of Records. Keep its principal place of business and
-------------------
chief executive office, and the offices where it keeps its records
concerning or related to Receivables, at the address(es) referred to in
Exhibit E or, upon 30 days' prior written notice to the Company and the
---------
Administrator, at such other locations in jurisdictions where all action
required by Section 7.3 shall have been taken and completed.
-----------
(g) Credit and Collection Policies. Comply in all material respects
------------------------------
with its Credit and Collection Policy in connection with the Receivables
that it generates and all Contracts and other agreements related thereto.
(h) Post Office Boxes. On or prior to the date hereof, deliver to the
-----------------
Servicer (on behalf of the Company) a certificate from an authorized
officer of the Originator to the effect that (i) the name of the renter of
all post office boxes into which Collections may from time to time be
mailed have been changed to the name of KCI Funding Corporation (unless
such post office boxes are in the name of the relevant Lock-Box Banks) and
(ii) all relevant postmasters have been notified that each of the Servicer
and the Administrator are authorized to collect mail delivered to such post
office boxes (unless such post office boxes are in the name of the relevant
Lock-Box Banks).
6.2 Reporting Requirements. From the date hereof until the first day following
----------------------
the Sale Termination Date, the Originator will, unless the Servicer (on behalf
of the Company) shall otherwise consent in writing, furnish to the Company and
the Administrator:
(a) Sale Termination Events. As soon as possible after knowledge of
-----------------------
the occurrence of, and in any event within five Business Days after
knowledge of the occurrence of each Sale Termination Event or each
Unmatured Sale Termination Event in respect of the Originator, the
statement of the chief financial officer or chief accounting officer of the
Originator describing such Sale Termination Event or Unmatured Sale
Termination Event and the action that the Originator proposes to take
with respect thereto, in each case in reasonable detail;
(b) Proceedings. As soon as possible and in any event within three Business
-----------
Days after the Originator otherwise has knowledge thereof, written
notice of (i) litigation, investigation or proceeding of the type
described in Section 5.6 not previously disclosed to the Company and
-----------
(ii) all material adverse developments that have occurred with respect
to any previously disclosed litigation, proceedings and investigations;
and
(c) Other. Promptly, from time to time, such other information,
-----
documents, records or reports respecting the Receivables or the conditions
or operations, financial or otherwise, of the Originator as the Company,
the Issuer or the Administrator may from time to time reasonably request in
order to protect the interests of the Company, the Issuer or the
Administrator under or as contemplated by the Transaction Documents.
6.3 Negative Covenants. From the date hereof until the date following the Sale
------------------
Termination Date, the Originator agrees that, unless the Servicer (on behalf of
the Company) and the Administrator shall otherwise consent in writing, it shall
not:
(a) Sales, Liens, Etc. Except as otherwise provided herein or in any
------------------
other Transaction Document, sell, assign (by operation of law or otherwise)
or otherwise dispose of, or create or suffer to exist any Adverse Claim
upon or with respect to, any Receivable or related Contract or Related
Security, or any interest therein, or any Collections thereon, or assign
any right to receive income in respect thereof.
(b) Extension or Amendment of Receivables. Except as otherwise permitted in
-------------------------------------
Section 4.2(a) of the Receivables Purchase Agreement, extend, amend or
--------------
otherwise modify the terms of any Receivable in any material respect
generated by it, or amend, modify or waive, in any material respect, any
term or condition of any Contract related thereto (which term or condition
relates to payments under, or the enforcement of, such Contract).
(c) Change in Business or Credit and Collection Policy. Make any
--------------------------------------------------
change in the character of its business or materially alter its Credit and
Collection Policy, which change would, in either case, materially change
the credit standing required of particular Obligors or potential Obligors
or impair, in any material respect, the collectibility of the Receivables
generated by it.
(d) Receivables Not to be Evidenced by Promissory Notes or Chattel Paper.
--------------------------------------------------------------------
Take ainy action to cause or permit any Receivable generated by it to
become evidenced by any "instrument" or "chattel paper" (as defined in the
applicable UCC).
(e) Mergers, Acquisitions, Sales, etc. (i) Be a party to any merger or
---------------------
consolidation, except a merger or consolidation where the Originator is the
surviving entity or is merged or consolidated with the Company, or (ii)
directly or indirectly sell,
transfer, assign, convey or lease (A) whether in one or a series of
transactions, all or substantially all of its assets or (B) any Receivables
or any interest therein (other than pursuant to this Agreement) except in
connection with a liquidation of its assets, so long as the Company is the
owner of the Receivables and the Sale Related Rights after such
liquidation.
6.4 Lock-Box Banks. Make any changes in its instructions to Obligors regarding
--------------
Collections or add or terminate any bank as a Lock-Box Bank unless the
requirements of paragraph 2(g) of Exhibit IV to the Receivables Purchase
-------------- ----------
Agreement have been met.
6.5 Accounting for Purchases. Account for or treat (whether in financial
------------------------
statements or otherwise) the transactions contemplated hereby in any manner
other than as sales of the Receivables and Sale Related Rights by the Originator
to the Company.
6.6 Transaction Documents. Enter into, execute, deliver or otherwise become
---------------------
bound by any agreement, instrument, document or other arrangement that restricts
the right of the Originator to amend, supplement, amend and restate or otherwise
modify, or to extend or renew, or to waive any right under, this Agreement or
any other Transaction Documents.
6.7 Substantive Consolidation. The Originator hereby acknowledges that this
-------------------------
Agreement and the other Transaction Documents are being entered into in reliance
upon KCI Funding Corporation's identity as a legal entity separate from the
Originator and its Affiliates. Therefore, from and after the date hereof, the
Originator shall take all reasonable steps necessary to make it apparent to
third Persons that KCI Funding Corporation is an entity with assets and
liabilities distinct from those of the Originator and any other Person, and is
not a division of the Originator, its Affiliates or any other Person. Without
limiting the generality of the foregoing and in addition to and consistent with
the other covenants set forth herein, the Originator shall take such actions as
shall be required in order that:
(a) the Originator shall not be involved in the day to day management
of KCI Funding Corporation;
(b) the Originator shall maintain separate corporate records and books of
account from KCI Funding Corporation and otherwise will observe corporate
formalities and have a separate area from KCI Funding Corporation for its
business;
(c) the financial statements and books and records of the Originator shall
be prepared after the date of creation of KCI Funding Corporation to
reflect and shall reflect the separate existence of KCI Funding
Corporation; provided, that KCI Funding Corporation's assets and
liabilities may be included in a consolidated financial statement issued by
an affiliate of KCI Funding Corporation; provided, however, that any such
consolidated financial statement shall make clear that KCI Funding
Corporation's assets are not available to satisfy the obligations of such
affiliate;
(d) except as permitted by the Receivables Purchase Agreement, (i) the
Originator shall maintain its assets separately from the assets of KCI
Funding Corporation, (ii) and the Originator's assets, and records relating
thereto, have not been, are not, and shall not be, commingled with those of
KCI Funding Corporation;
(e) all of KCI Funding Corporation's business correspondence and other
communications shall be conducted in KCI Funding Corporation's own name and
on its own stationery;
(f) the Originator shall not act as an agent for KCI Funding Corporation,
other than the Originator in a capacity as a Sub-Servicer, and in
connection therewith, shall present itself to the public as an agent for
KCI Funding Corporation and a legal entity separate from KCI Funding
Corporation;
(g) the Originator shall not conduct any of the business of KCI Funding
Corporation in its own name;
(h) the Originator shall not pay any liabilities of KCI Funding Corporation
out of its own funds or assets;
(i) the Originator shall maintain an arm's-length relationship with KCI
Funding Corporation;
(j) the Originator shall not assume or guarantee or become obligated for
the debts of KCI Funding Corporation or hold out its credit as being
available to satisfy the obligations of KCI Funding Corporation;
(k) the Originator shall not acquire obligations of KCI Funding
Corporation;
(l) the Originator shall allocate fairly and reasonably overhead or other
expenses that are properly shared with KCI Funding Corporation, including,
without limitation, shared office space;
(m) the Originator shall identify and hold itself out as a separate and
distinct entity from KCI Funding Corporation;
(n) the Originator shall correct any known misunderstanding regarding its
separate identity from KCI Funding Corporation;
(o) the Originator shall not enter into, or be a party to, any transaction
with KCI Funding Corporation, except in the ordinary course of its business
and on terms which are intrinsically fair and not less favorable to it than
would be obtained in a comparable arm's-length transaction with an
unrelated third party; and
(p) the Originator shall not pay the salaries of KCI Funding Corporation's
employees, if any.
ARTICLE VII
ADDITIONAL RIGHTS AND OBLIGATIONS IN
RESPECT OF THE RECEIVABLES
7.1 Rights of the Company. The Originator hereby authorizes the Company, the
---------------------
Servicer, the Administrator or their respective designees to take any and all
steps in the Originator's name necessary or desirable, in their respective
determination, to collect all amounts due under any and all Receivables,
including, without limitation, indorsing the name of the Originator on checks
and other instruments representing Collections and enforcing such Receivables
and the provisions of the related Contracts that concern payment and/or
enforcement of rights to payment.
7.2 Responsibilities of the Originator. Anything herein to the contrary
----------------------------------
notwithstanding:
(a) Collection Procedures. The Originator agrees to direct its respective
---------------------
Obligors to make payments of Receivables directly to a post office box
related to the relevant Lock-Box Account at a Lock-Box Bank. The Originator
further agrees to transfer any Collections that it receives directly to the
Servicer (for the Company's account) within one (1) Business Day of receipt
thereof, and agrees that all such Collections shall be deemed to be
received in trust for the Company and shall be maintained and segregated
separate and apart from all other funds and monies of the Originator until
transfer of such Collections to the Servicer.
(b) The Originator shall perform its obligations hereunder, and the
exercise by the Company or its designee of its rights hereunder shall not
relieve the Originator from such obligations.
(c) None of the Company, KCI Funding Corporation, the Servicer or the
Administrator shall have any obligation or liability to any Obligor or any
other third Person with respect to any Receivables, Contracts related
thereto or any other related agreements, nor shall the Company, KCI Funding
Corporation, the Servicer, the Issuer or the Administrator be obligated to
perform any of the obligations of the Originator thereunder.
(d) The Originator hereby grants to the Administrator an irrevocable power
of attorney, with full power of substitution, coupled with an interest, to
take in the name of the Originator all steps necessary or advisable to
indorse, negotiate or otherwise realize on any writing or other right of
any kind held or transmitted by the Originator or transmitted or received
by the Company (whether or not from the Originator) in connection with any
Receivable.
7.3 Further Action Evidencing Purchases. The Originator agrees that from
-------------------------------------
time to time, at its expense, it will promptly execute and deliver all further
instruments and documents, and take all further action that the Servicer may
reasonably request in order to
perfect, protect or more fully evidence the Receivables and Sale Related Rights
purchased by the Company hereunder, or to enable the Company to exercise or
enforce any of its rights hereunder or under any other Transaction Document.
Without limiting the generality of the foregoing, upon the request of the
Servicer, the Originator will:
(a) 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; and
(b) xxxx the master data processing records that evidence or list (i) such
Receivables and (ii) related Contracts with the legend set forth in
Section 4.1(j).
-------------
The Originator hereby authorizes the Company or its designee to file one or more
financing or continuation statements, and amendments thereto and assignments
thereof, relative to all or any of the Receivables and Sale Related Rights now
existing or hereafter generated by the Originator. If the Originator fails to
perform any of its agreements or obligations under this Agreement, the Company
or its designee may (but shall not be required to) itself perform, or cause
performance of, such agreement or obligation, and the expenses of the Company or
its designee incurred in connection therewith shall be payable by the Originator
as provided in Section 9.1.
-----------
7.4 Application of Collections. Any payment by an Obligor in respect of any
--------------------------
indebtedness owed by it to the Originator shall, except as otherwise specified
by such Obligor or otherwise required by contract or law and unless otherwise
instructed by the Company or the Administrator, be applied as a Collection of
any Receivable or Receivables of such Obligor to the extent of any amounts then
due and payable thereunder before being applied to any other indebtedness of
such Obligor.
ARTICLE VIII
SALE TERMINATION EVENTS
8.1 Sale Termination Events. Each of the following events or occurrences
-----------------------
described in this Section 8.1 shall constitute a "Sale Termination Event":
----------- ----------------------
(a) A Termination Event (as defined in the Receivables Purchase Agreement)
shall have occurred and, in the case of a Termination Event (other than one
described in paragraph (f) of Exhibit V of the Receivables Purchase
------------- ---------
Agreement), the Administrator, shall have declared the Facility Termination
Date to have occurred; or
(b) The Originator shall fail to make any payment or deposit to be made by
it hereunder when due and such failure shall remain unremedied for two (2)
Business Days; or
(c) Any representation or warranty made or deemed to be made by the
Originator (or any of its officers) under or in connection with this
Agreement, any other Transaction Documents, or any other information or
report delivered pursuant hereto or thereto shall prove to have been
incorrect or untrue in any material respect when made or deemed made, and
shall remain incorrect or untrue for 10 days after notice to the Originator
of such inaccuracy; or
(d) The Originator shall fail to perform or observe any other term,
covenant or agreement contained in this Agreement on its part to be
performed or observed and such failure shall remain unremedied for 30 days
after written notice thereof shall have been given by the Servicer to the
Originator.
8.2 Remedies.
--------
(a) Optional Termination. Upon the occurrence of a Sale Termination Event,
--------------------
the Company (and not the Servicer) shall have the option, by notice to the
Originator (with a copy to the Administrator), to declare the Sale
Termination Date to have occurred.
(b) Remedies Cumulative. Upon any termination of the Sale Purchase Facility
-------------------
pursuant to Section 8.2(a), the Company shall have, in addition to all
--------------
other rights and remedies under this Agreement, all other rights and
remedies provided under the UCC of each applicable jurisdiction and other
applicable laws, which rights shall be cumulative.
ARTICLE IX
INDEMNIFICATION
9.1 Indemnities by the Originator. Without limiting any other rights which the
-----------------------------
Company may have hereunder or under applicable law, the Originator, severally
and for itself alone, hereby agrees to indemnify the Company and each of its
officers, directors, employees and agents (each of the foregoing Persons being
individually called a "Sale Indemnified Party"), forthwith on demand, from and
----------------------
against any and all damages, losses, claims, judgments, liabilities and related
costs and expenses, including reasonable attorneys' fees and disbursements (all
of the foregoing being collectively called "Sale Indemnified Amounts") awarded
------------------------
against or incurred by any of them arising out of or as a result of the failure
of the Originator to perform its obligations under this Agreement or any other
Transaction Document, or arising out of the claims asserted against a Sale
Indemnified Party relating to the transactions contemplated herein or therein or
the use of proceeds thereof or therefrom, excluding, however, (i) Sale
--------- -------
Indemnified Amounts to the extent resulting from gross negligence or willful
misconduct on the part of such Sale Indemnified Party, (ii) any indemnification
which has the effect of recourse for non-payment of the Receivables to any
indemnitor (except as otherwise specifically provided under this Section 9.1)
-----------
and (iii) any tax based upon or measured by net income or gross receipts.
Without limiting the
foregoing, the Originator, severally for itself alone, shall indemnify each Sale
Indemnified Party for Sale Indemnified Amounts relating to or resulting from:
(a) the transfer by the Originator of an interest in any Receivable to any
Person other than the Company;
(b) the breach of any representation or warranty made by the Originator (or
any of its officers) under or in connection with this Agreement or any
other Transaction Document, or any written information or report delivered
by the Originator pursuant hereto or thereto, which shall have been false
or incorrect in any material respect when made or deemed made;
(c) the failure by the Originator to comply with any applicable law, rule
or regulation with respect to any Receivable generated by the Originator or
the related Contract, or the nonconformity of any Receivable generated by
the Originator or the related Contract with any such applicable law, rule
or regulation;
(d) the failure to vest and maintain vested in the Company an ownership
interest in the Receivables generated by the Originator free and clear of
any Adverse Claim, other than an Adverse Claim arising solely as a result
of an act of the Company, whether existing at the time of the purchase of
such Receivables or at any time thereafter;
(e) the failure to file, 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 Receivables or
purported Receivables generated by the Originator, whether at the time of
any purchase or at any subsequent time;
(f) any dispute, claim, offset or defense (other than discharge in
bankruptcy) of the Obligor to the payment of any Receivable or purported
Receivable generated by the Originator (including, without limitation, a
defense based on such Receivable's or the related Contract's 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
services related to any such Receivable or the furnishing of or failure to
furnish such services;
(g) any product liability claim arising out of or in connection with
services that are the subject of any Receivable generated by the
Originator; and
(h) any tax or governmental fee or charge (other than any tax excluded
pursuant to clause (iii) in the proviso to the preceding sentence), all
------------
interest and penalties thereon or with respect thereto, and all
out-of-pocket costs and expenses, including the reasonable fees and
expenses of counsel in defending against the same, which may arise by
reason of the purchase or ownership of the Receivables generated by the
Originator or any Related Security connected with any such Receivables.
If for any reason the indemnification provided above in this Section
-------
9.1 is unavailable to a Sale Indemnified Party or is insufficient to hold such
---
Sale Indemnified Party harmless, then the Originator, severally and for itself,
shall contribute to the amount paid or payable by such Sale Indemnified Party to
the maximum extent permitted under applicable law.
ARTICLE X
MISCELLANEOUS
10.1 Amendments, etc.
---------------
(a) The provisions of this Agreement may from time to time be
amended, modified or waived, if such amendment, modification
or waiver is in writing and consented to by the Company, the
Administrator and the Originator (with respect to an
amendment) or by the Company and the Administrator (with
respect to a waiver or consent by it).
(b) No failure or delay on the part of the Company, the Servicer,
the Originator or any third party beneficiary in exercising
any power or right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such
power or right preclude any other or further exercise thereof
or the exercise of any other power or right. No notice to or
demand on the Company, the Servicer or the Originator in any
case shall entitle it to any notice or demand in similar or
other circumstances. No waiver or approval by the Company or
the Servicer under this Agreement shall, except as may
otherwise be stated in such waiver or approval, be applicable
to subsequent transactions. No waiver or approval under this
Agreement shall require any similar or dissimilar waiver or
approval thereafter to be granted hereunder.
(c) The Transaction Documents contain a final and complete
integration of all prior expressions by the parties hereto
with respect to the subject matter thereof and shall
constitute the entire agreement among the parties hereto with
respect to the subject matter thereof, superseding all prior
oral or written understandings.
10.2 Notices, etc. All notices and other communications provided for hereunder
------------
shall, unless otherwise stated herein, be in writing (including facsimile
communication) and shall be personally delivered or sent by certified mail,
postage prepaid, or by facsimile, to the intended party at the address or
facsimile number of such party set forth under its name on the signature pages
hereof or at such other address or facsimile number as shall be designated by
such party in a written notice to the other parties hereto. All such notices and
communications shall be effective (i) if personally delivered, when received,
(ii) if sent by certified mail three (3) Business Days after having been
deposited in the mail, postage prepaid, and (iii) if transmitted by facsimile,
when sent, receipt confirmed by telephone or electronic means.
10.3 No Waiver; Cumulative Remedies. The remedies herein provided are cumulative
------------------------------
and not exclusive of any remedies provided by law. Without limiting the
foregoing,
the Originator hereby authorizes the Company, at any time and from time to time,
to the fullest extent permitted by law, to set off, against any obligations of
the Originator to the Company arising in connection with the Transaction
Documents (including, without limitation, amounts payable pursuant to Section
-------
9.1) that are then due and payable or that are not then due and payable but are
---
accruing in respect of the then current Settlement Period, any and all
indebtedness at any time owing by the Company to or for the credit or the
account of the Originator.
10.4 Binding Effect; Assignability. This Agreement shall be binding upon and
-----------------------------
inure to the benefit of the Company and the Originator and their respective
successors and permitted assigns. The Originator may not assign any of its
rights hereunder or any interest herein without the prior written consent of the
Company, except as otherwise herein specifically provided. This Agreement shall
create and constitute the continuing obligations of the parties hereto in
accordance with its terms, and shall remain in full force and effect until such
time as the parties hereto shall agree. The rights and remedies with respect to
any breach of any representation and warranty made by the Originator pursuant to
Article V and the indemnification and payment provisions of Article IX and
Section 10.6 shall be continuing and shall survive any termination of this
Agreement.
10.5 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
-------------
ACCORDANCE WITH, THELAWS OF THE STATE OF NEW YORK.
10.6 Costs, Expenses and Taxes. In addition to the obligations of the Originator
-------------------------
under Article IX, the Originator, severally and for itself alone, agrees to pay
----------
on demand:
(a) all reasonable costs and expenses in connection with the
enforcement of this Agreement, the Originator Assignment
Certificate and the other Transaction Documents; and
(b) all stamp and other taxes and fees payable or determined to be
payable in connection with the execution, delivery, filing and
recording of this Agreement or the other Transaction Documents
to be delivered hereunder, and agrees to indemnify each Sale
Indemnified Party against any liabilities with respect to or
resulting from any delay in paying or omission to pay such
taxes and fees.
10.7 Submission to Jurisdiction. EACH PARTY HERETO HEREBY IRREVOCABLY (a)
--------------------------
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF NEW YORK OR UNITED STATES FEDERAL
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, OVER ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO ANY TRANSACTION DOCUMENT; (b) AGREES THAT ALL
CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN
SUCH STATE OR UNITED STATES FEDERAL COURT; (c) WAIVES, TO THE FULLEST EXTENT IT
MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE
OF SUCH ACTION OR PROCEEDING; (d) IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND
ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH
PROCESS
TO SUCH PERSON AT ITS ADDRESS SPECIFIED IN SECTION 10.2; AND (e) AGREES THAT A
------------
FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. NOTHING IN THIS SECTION 10.7 SHALL AFFECT THE COMPANY'S RIGHT
------------
TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING ANY
ACTION OR PROCEEDING AGAINST THE ORIGINATOR OR ITS PROPERTY IN THE COURTS OF ANY
OTHER JURISDICTIONS.
10.8 Waiver of Jury Trial. EACH PARTY HERETO WAIVES ANY RIGHT TO A TRIAL BY JURY
--------------------
IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR RELATING TO
THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT, OR ANY AMENDMENT, INSTRUMENT,
DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN
CONNECTION HEREWITH OR ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH
THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, AND AGREES THAT (a) ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY AND (b)
ANY PARTY HERETO (OR ANY ASSIGNEE OR THIRD PARTY BENEFICIARY OF THIS AGREEMENT)
MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF ANY OTHER PARTY OR PARTIES HERETO TO WAIVER
OF ITS OR THEIR RIGHT TO TRIAL BY JURY.
10.9 Captions and Cross References; Incorporation by Reference. The various
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captions (including, without limitation, the table of contents) in this
Agreement are included for convenience only and shall not affect the meaning or
interpretation of any provision of this Agreement. References in this Agreement
to any underscored Section or Exhibit are to such Section or Exhibit of this
Agreement, as the case may be. The Exhibits hereto are hereby incorporated by
reference into and made a part of this Agreement.
10.10 Execution in Counterparts. 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.
10.11 Acknowledgment and Agreement. By execution below, the Originator expressly
----------------------------
acknowledges and agrees that all of the Company's rights, title, and interests
in, to, and under this Agreement (but not its obligations), shall be assigned by
the Company to KCI Funding Corporation pursuant to the Purchase and Sale
Agreement and assigned by KCI Funding Corporation to the Issuer pursuant to the
Receivables Purchase Agreement and the Originator consents to all such
assignments. Each of the parties hereto acknowledges and agrees that the
Administrator and the Issuer are third party beneficiaries of the rights of the
Company arising hereunder and under the other Transaction Documents to which the
Originator is a party.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
first above written.
KPMG CONSULTING, INC.,
as purchaser and initial servicer
By:_______________________________
Name:_____________________________
Title:______________________________
Address: 0 Xxxxxxxx Xxxxx Xxxx
Xxxxxxxx Xxx
Xxxxxxxx, XX 00000
Attention: Treasurer's Office
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Address: 0000 Xxxxxxxxxxxxx Xxxxx
XxXxxx, Xxxxxxxx 00000
Attention: General Counsel and Secretary
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
S-2
ORIGINATOR:
KPMG CONSULTING, LLC
By:____________________________
Name:__________________________
Title:___________________________
Address: 0 Xxxxxxxx Xxxxx Xxxx
Xxxxxxxx Xxx
Xxxxxxxx, XX 00000
Attention: Treasurer's Office
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Address: 0000 Xxxxxxxxxxxxx Xxxxx
XxXxxx, Xxxxxxxx 00000
Attention: General Counsel and Secretary
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
S-3
Exhibit A
to Sale Agreement
FORM OF PURCHASE REPORT
SELLER: KPMG CONSULTING, LLC
PURCHASER: KPMG CONSULTING, INC.
DATE: ___________________________
I. OUTSTANDING BALANCE OF RECEIVABLES
PURCHASED:__________________
II. FAIR MARKET VALUE DISCOUNT:
1/[1 + ((Prime Rate + .25%) X Days' Sales Outstanding)]
-----------------------
365
Prime Rate = _________________
Days' Sales Outstanding = _________________
III. PURCHASE PRICE (I X II) = $_______________
S-1
Exhibit B
to Sale Agreement
FORM OF KCI NOTE
S-1
Exhibit C
to Sale Agreement
FORM OF ORIGINATOR CERTIFICATE
S-1
Exhibit D
to Sale Agreement
PROCEEDINGS
NONE.
S-1
Exhibit E
to Sale Agreement
OFFICE LOCATIONS
The Originator maintains its master books and records relating to Receivables
at:
000 Xxxxxxxxx Xxxxxx XX
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
The Principal Place of Business and Chief Executive Office of the Originator is:
0000 Xxxxxxxxxxxxx Xxxxx
XxXxxx, Xxxxxxxx 00000
S-1
Exhibit F
to Sale Agreement
TRADE NAMES
-----------
Legal Name Trade names/Fictitious Names
---------- ----------------------------
KPMG CONSULTING, LLC KPMG CONSULTING
S-1
