Exhibit 10.5
PURCHASE AND SALE AGREEMENT
Dated as of May 22, 2000
between
KPMG CONSULTING, INC.
and
KCI FUNDING CORPORATION
TABLE OF CONTENTS
-----------------
PAGE
----
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 Purchase and Sale Termination Date ................................ 3
1.5 Intention of the Parties .......................................... 3
ARTICLE II CALCULATION OF PURCHASE PRICE ..................................... 3
2.1 Calculation of Purchase Price ..................................... 3
ARTICLE III PAYMENT OF PURCHASE PRICE ......................................... 5
3.1 Contribution of Receivables and Initial Purchase Price Payment .... 5
3.2 Subsequent Purchase Price Payments ................................ 5
3.3 Settlement as to Specific Receivables and Dilution ................ 6
3.4 Reconveyance of Receivables ....................................... 7
ARTICLE IV CONDITIONS OF PURCHASES ........................................... 7
4.1 Conditions Precedent to Initial Purchase .......................... 7
4.2 Certification as to Representations and Warranties ................ 9
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE SELLER ...................... 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 ...................................................... 10
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 ................................................ 11
5.12 Quality of Title .................................................. 11
5.13 Accuracy of Information ........................................... 11
5.14 Offices ........................................................... 11
5.15 Trade Names ....................................................... 12
5.16 Taxes ............................................................. 12
5.17 Compliance with Applicable Laws ................................... 12
-i-
5.18 Reliance on Separate Legal Identity ........................... 12
ARTICLE VI COVENANTS OF THE SELLER ....................................... 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 Seller ................................ 18
7.3 Further Action Evidencing Purchases ........................... 18
7.4 Application of Collections .................................... 19
ARTICLE VIII PURCHASE AND SALE TERMINATION EVENTS .......................... 19
8.1 Purchase and Sale Termination Events .......................... 19
8.2 Remedies ...................................................... 20
ARTICLE IX INDEMNIFICATION ............................................... 20
9.1 Indemnities by the Seller ..................................... 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
-ii-
EXHIBIT A - Form of Purchase Report
EXHIBIT B - Form of Company Note
EXHIBIT C - Form of KCI Assignment Certificate
EXHIBIT D - Proceedings
EXHIBIT E - Office Locations
EXHIBIT F - Trade Names
-iii-
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement"), dated as of May 22,
---------
2000, is between KPMG CONSULTING, INC. ("KCI"), a Delaware corporation, as
---
seller (the "Seller"), KCI, as the initial Servicer, and KCI FUNDING
CORPORATION, a Delaware corporation (the "Company").
-------
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")
------------------------------
among KCI, the Company, Market Street Funding Corporation, as the Issuer (the
"Issuer"), and PNC Bank, National Association. All references herein to months
------
are to calendar months unless otherwise expressly indicated.
Background
----------
1. The Company is a special purpose corporation, all of the issued and
outstanding shares of which are owned by KCI.
2. KPMG, Consulting, LLC generates Receivables in the ordinary course of
its businesses and sells such Receivables to the Seller pursuant to the Sale
Agreement, dated as of May 22, 2000 by and between KPMG, Consulting, LLC and the
Seller.
3. The Seller, 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 Seller.
4. The Seller and the Company intend this transaction to be a true sale of
Receivables by the Seller to the Company, providing the Company with the full
benefits of ownership of the Receivables and the Seller 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 Seller.
5. The Company intends to sell the Purchased Interest in the Receivables to
the Issuer pursuant to the Receivables Purchase Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto agree as follows:
ARTICLE II
AGREEMENT TO PURCHASE AND SELL
2.1 Agreement To Purchase and Sell. On the terms and subject to the
------------------------------
conditions set forth in this Agreement (including Article IV), the Seller,
----------
severally and for itself alone, agrees to sell to the Company, and the Company
agrees to purchase from the Seller, from time to time on or after the Closing
Date, but before the Purchase and Sale Termination Date, all of Seller's right,
title and interest in and to:
(a) each Receivable of the Seller that existed and was owing to the
Seller at the closing of the Seller's business on April 30, 2000 (the
"Cut-off Date") other than Receivables contributed pursuant to Section 3.1
------------ -----------
(the "Contributed Receivables");
-----------------------
(b) each Receivable acquired or created by the Seller from and
including the Cutoff Date to and including the Purchase and 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 Seller on
or after the Cut-off Date, including, without limitation, all funds which
either are received by the Seller, 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 Seller
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 and contributions hereunder shall be made without recourse, but
shall be made pursuant to, and in reliance upon, the representations, warranties
and covenants of the Seller 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 "Related Rights") is herein called the "Purchase
--- -------------- --------
Facility."
--------
2
2.2 Timing of Purchases.
-------------------
(a) Closing Date Purchases. The Seller's entire right, title and
----------------------
interest in (i) each Receivable that existed and was owing to the Seller at
the Cut-off Date (other than Contributed Receivables), (ii) all Receivables
acquired or created by the Seller from and including the Cut-off Date, to
and including the Closing Date (other than Contributed Receivables), and
(iii) all 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 Purchase and
-----------------
Sale Termination Date, each Receivable (and the Related Rights) acquired or
created by the Seller shall be deemed to have been sold to the Company
immediately (and without further action) upon the creation of such
Receivable.
2.3 Consideration for Purchases. On the terms and subject to the conditions
---------------------------
set forth in this Agreement, the Company agrees to make Purchase Price payments
to the Seller and to reflect all contributions in accordance with Article III.
-----------
2.4 Purchase and Sale Termination Date. The "Purchase and Sale Termination
---------------------------------- -----------------------------
Date" shall be the earliest to occur of (a) the date of the termination of this
----
Agreement pursuant to Section 8.2 and (b) the Payment Date immediately following
-----------
the day on which Seller shall have given notice to the Company at or prior to
10:00 a.m. (New York City time) that the Seller desires to terminate this
Agreement.
2.5 Intention of the Parties. It is the express intent of the parties
------------------------
hereto that the transfers of the Receivables and Related Rights by the Seller to
the Company, as contemplated by this Agreement be, and be treated as, sales or
contributions, as applicable, and not as loans secured by the Receivables and
Related Rights. If, however, notwithstanding the intent of the parties, such
transactions are deemed to be loans, the Seller hereby grants to the Company a
first priority security interest in all of the Seller's right, title and
interest in and to the Receivables and the Related Rights now existing and
hereafter acquired or created by the Seller, all monies due or to become due and
all amounts received with respect thereto, and all proceeds thereof, to secure
all of the Seller's obligations hereunder.
ARTICLE III
CALCULATION OF PURCHASE PRICE
3.1 Calculation of Purchase Price. On the Closing Date and on each Monthly
-----------------------------
Settlement Date, the Servicer shall deliver to the Company and the Seller a
report in substantially the form of
3
Exhibit A (each such report being herein called a "Purchase Report") with
--------- ---------------
respect to the matters set forth therein and the Company's purchases of
Receivables from the Seller:
(a) that are to be made on the Closing Date (in the case of the
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
Purchase Report).
The "Purchase Price" (to be paid to the Seller in accordance with the terms of
--------------
Article III) for the Receivables and the Related Rights that are purchased
-----------
hereunder from the Seller shall be determined in accordance with the following
formula:
PP = OB X FMVD
where:
-----
PP = Purchase Price for each Receivable as calculated on the
relevant Payment Date.
OB = The Outstanding Balance of such Receivable on the relevant
Payment Date.
FMVD = Fair Market Value Discount, as measured on such Payment
Date, which is equal to the quotient (expressed as
percentage) of (a) one divided by (b) the sum of (i) one,
-------
plus (ii) the product of (A) the Prime Rate on such 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 Payment Date)
and the denominator of which is 365.
"Payment Date" means (i) the Closing Date and (ii) each Business Day
------------
thereafter that the Seller is open for business.
"Prime Rate" means a per annum rate equal to the "Prime Rate" as
---------- --- -----
published in the "Money Rates" section of The Wall Street Journal or such other
publication as determined by the Administrator in its sole discretion.
4
ARTICLE IV
PAYMENT OF PURCHASE PRICE
4.1 Contribution of Receivables and Initial Purchase Price Payment. (a) On
--------------------------------------------------------------
the Closing Date KCI shall, and hereby does, contribute to the capital of the
Company Receivables and Related Rights with respect thereto consisting of each
Receivable of KCI that existed and was owing to KCI on the Closing Date
beginning with the oldest of such Receivables and continuing chronologically
thereafter such that the aggregate Outstanding Balance of all such Contributed
Receivables shall be equal to $14,000,000.
(b) On the terms and subject to the conditions set forth in this Agreement,
the Company agrees to pay to the Seller the Purchase Price for the purchase to
be made from the Seller on the Closing Date partially in cash (in an amount to
be agreed between the Company and the Seller and set forth in the initial
Purchase Report) and partially by issuing a promissory note in the form of
Exhibit B to the Seller with an initial principal balance equal to the remaining
---------
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 "Company
-------
Note").
----
4.2 Subsequent Purchase Price Payments. On each Payment Date subsequent to
----------------------------------
the Closing Date, on the terms and subject to the conditions set forth in this
Agreement, the Company shall pay to the Seller the Purchase Price for the
Receivables acquired or generated by the Seller on such Payment Date:
(a) First, the Purchase Price shall be paid in cash to the extent the
-----
Company has cash available therefor; and
(b) Second, to the extent any portion of the Purchase Price remains
------
unpaid, the principal amount outstanding under the Company Note issued to
the Seller shall be increased by an amount equal to such remaining Purchase
Price, up to the maximum permitted outstanding principal amount under the
terms of the Company Note.
Servicer shall make all appropriate record keeping entries with respect to
the Company 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 Company Note at any time.
Furthermore, Servicer shall hold the Company Note for the benefit of the Seller.
The Seller hereby irrevocably authorizes Servicer to xxxx the Company Note
"CANCELLED" and to return such Company Note to the Company upon the final
payment thereof after the occurrence of the Purchase and Sale Termination Date.
5
4.3 Settlement as to Specific Receivables and Dilution.
--------------------------------------------------
(a) If, on the day of purchase or contribution of any Receivable from
the Seller hereunder, any of the representations or warranties set forth in
Sections 5.4 and 5.12 are not true with respect to such Receivable or as a
------------ ----
result of any action or inaction of the Seller, on any day, any of such
representations or warranties set forth in Sections 5.4, 5.12 is no longer
------------ ----
true with respect to such a Receivable (other than a representation or
warranty set forth in Section 5.12(c)), then the Purchase Price (or in the
---------------
case of a Contributed Receivable, the Outstanding Balance of such
Receivable, (the "Contributed Value")) 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 Seller as provided in subsection
----------
(c) below; provided, that if the Company thereafter receives payment on
--- --------
account of Collections due with respect to such Receivable, the Company
promptly shall deliver such funds to the Seller.
(b) If, on any day, the Outstanding Balance of any Receivable
(including any Contributed Receivable) purchased or contributed 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 Seller,
the Company or Servicer or any setoff or dispute between the Seller 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 Seller), then the
Purchase Price or Contributed Value, as the case may be, with respect to
such Receivable shall be reduced by the amount of such net reduction and
shall be accounted to the Seller as provided in subsection (c) below.
--------------
(c) Any reduction in the Purchase Price (or Contributed Value) of any
Receivable pursuant to subsection (a) or (b) above shall be applied as a
-------------- ---
credit for the account of the Company against the Purchase Price of
Receivables subsequently purchased by the Company from the Seller
hereunder; provided, however if there have been no purchases of Receivables
-------- -------
from the Seller (or insufficiently large purchases of Receivables) to
create a 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 Seller 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 Company Note payable to the
Seller;
provided, further, that at any time (y) when a Termination Event or Unmatured
-------- -------
Termination Event exists under the Receivables Purchase Agreement or (z) on or
after the Purchase and Sale Termination Date, the amount of any such credit
shall be paid by the Seller to the Company by deposit in immediately available
funds into the relevant Lock-Box Account for application by
6
Servicer to the same extent as if Collections of the applicable Receivable in
such amount had actually been received on such date.
(d) Each Purchase Report (other than the Purchase Report delivered on
the Closing Date) shall include, in respect of the Receivables previously
acquired or generated by the Seller (including Contributed Receivables), a
calculation of the aggregate reductions described in subsection (a) or (b)
-------------- ---
relating to such Receivables since the last 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 Seller).
4.4 Reconveyance of Receivables. In the event that the Seller has paid
---------------------------
to the Company the full Outstanding Balance of any Receivable pursuant to
Section 3.3, the Company shall reconvey such Receivable to the Seller, without
-----------
representation or warranty, but free and clear of all liens, security interests,
charges, and encumbrances created by the Company.
ARTICLE V
CONDITIONS OF PURCHASES
5.1 Conditions Precedent to Initial Purchase. The initial purchase
----------------------------------------
hereunder is 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) A KCI Assignment Certificate in the form of Exhibit C from the
---------
Seller, duly completed, executed and delivered by the Seller;
(b) A copy of the resolutions of the Executive Committee of the Board
of Directors of the Seller 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 Seller;
(c) Good standing certificates for the Seller issued as of a recent
date acceptable to Servicer by the Secretary of State of the jurisdiction
of the Seller's incorporation and the jurisdiction where the Seller's chief
executive office is located;
(d) A certificate of the Secretary or Assistant Secretary of the
Seller 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));
--------------
7
(e) The certificate or articles of incorporation or other
organizational document of the Seller, duly certified by the Secretary of
State of the jurisdiction of Seller's incorporation as of a recent date
acceptable to the Servicer, together with a copy of the bylaws of the
Seller, each duly certified by the Secretary or an Assistant Secretary of
the Seller;
(f) Originals of the proper financing statements (Form UCC-1) that
have been duly executed and name the Seller as the debtor/seller and the
Company as the secured party/purchaser (and the Issuer, as assignee of the
Company) of the Receivables acquired or generated by the Seller 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 Seller 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
--------------
financing statements (none of which, except for those described in the
foregoing subsection (f), shall cover any Receivable or any 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 Seller;
(h) A favorable opinion of Sidley & Austin, counsel to the Seller, in
form and substance satisfactory to the Servicer and the Administrator;
(i) A Company Note in favor of the Seller, duly executed by the
Company; and
(j) A certificate from an officer of the Seller to the effect that the
Servicer and the Seller 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
8
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."
5.2 Certification as to Representations and Warranties. The Seller, by
--------------------------------------------------
accepting the Purchase Price related to each purchase of Receivables acquired or
generated by the Seller, 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 VI
REPRESENTATIONS AND WARRANTIES OF THE SELLER
In order to induce the Company to enter into this Agreement and to make
purchases and accept contributions hereunder, the Seller hereby makes, with
respect to itself, the representations and warranties set forth in this
Article V.
---------
6.1 Organization and Good Standing. The Seller has been duly organized and
------------------------------
is validly existing as a corporation 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.
6.2 Due Qualification. The Seller is duly licensed and in good standing in
-----------------
the jurisdiction where its chief executive office is located and is qualified to
do business as a foreign corporation 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.
6.3 Power and Authority; Due Authorization. The Seller has (a) all
--------------------------------------
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 acquire or generate, own, sell, contribute 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, contribution and
assignment and the performance of such obligations by all necessary corporate
action.
6.4 Valid Sale; Binding Obligations. Each sale or contribution, as the case
-------------------------------
may be, made by the Seller pursuant to this Agreement shall constitute a valid
sale or contribution, as the case may be, transfer, and assignment of
Receivables to the Company, enforceable against creditors of, and purchasers
from, the Seller; and this Agreement constitutes, and each other Transaction
Document to be signed by the Seller, when duly executed and delivered, will
constitute, a legal, valid, and
9
binding obligation of the Seller, 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.
6.5 No Violation. The consummation of the transactions contemplated by this
------------
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 Seller's certificate of incorporation or by-laws
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.
6.6 Proceedings. Except as set forth in Exhibit D, there is no action,
----------- ---------
suit, 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 Seller's KCI 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.
6.7 Bulk Sales Acts. No transaction contemplated hereby requires compliance
---------------
with, or will be subject to avoidance under, any bulk sales act or similar law.
6.8 Government Approvals. Except for the filing of the UCC financing
--------------------
statements referred to in Article IV, all of which, at the time required in
----------
Article IV, 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 Seller's due
execution, delivery and performance of any Transaction Document to which it is a
party.
6.9 Financial Condition.
-------------------
(a) Material Adverse Effect. Since June 30, 1999, no event has
-----------------------
occurred 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 (both before and after giving effect to such purchase) the Seller
shall be Solvent.
6.10 Licenses, Contingent Liabilities, and Labor Controversies.
---------------------------------------------------------
10
(a) The Seller 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 Seller that
have had (or are reasonably likely to have) a Material Adverse Effect.
6.11 Margin Regulations. No use of any funds acquired by the Seller under
------------------
this Agreement will conflict with or contravene any of Regulations T, U and X
promulgated by the Federal Reserve Board from time to time.
6.12 Quality of Title.
----------------
(a) Each Receivable of the Seller (together with the Related Rights
with respect to such Receivable) which is to be sold to the Company
hereunder is or shall be owned by the Seller, free and clear of any Adverse
Claim, except as provided herein, the Sale Agreement and in the Receivables
Purchase Agreement. Whenever the Company makes a purchase or accepts a
contribution 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 acquired or generated by the Seller and
all Collections related thereto, and in the Seller's entire right, title
and interest in and to the Related Rights with respect thereto.
(b) No effective financing statement or other instrument similar in
effect covering any Receivable acquired or generated by the Seller or any
Related Rights is on file in any recording office except such as may be
filed in favor of the Seller, in accordance with the Sale Agreement, in
favor of the Company in accordance with this 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 or contribution hereunder, each Receivable purchased hereunder is
on the date of purchase or contribution, an Eligible Receivable.
6.13 Accuracy of Information. All factual written information heretofore or
-----------------------
contemporaneously furnished (and prepared) by the Seller 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 Seller 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.
11
6.14 Offices. The Seller's principal place of business and chief executive
-------
office is located at the address specified in Exhibit E, and the offices where
---------
the Seller 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).
6.15 Trade Names. The Seller does not use any trade name other than its
-----------
actual corporate 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 Seller has not been known by any legal name other than its
---------
corporate name as of the date hereof, nor has the Seller been the subject of any
merger or other corporate reorganization.
6.16 Taxes. The Seller 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.
6.17 Compliance with Applicable Laws. The Seller 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.
6.18 Reliance on Separate Legal Identity. The Seller acknowledges that the
-----------------------------------
Issuer and the Administrator are entering into the Receivables Purchase
Agreement in reliance upon the Company's identity as a legal entity separate
from the Seller.
6.19 Year 2000 Problem. The Seller 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.
6.20 Investment Company. The Seller 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 Seller 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.
12
ARTICLE VII
COVENANTS OF THE SELLER
7.1 Affirmative Covenants. From the date hereof until the first day
---------------------
following the Purchase and Sale Termination Date, the Seller 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 acquired or 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 Corporate Existence. Preserve and maintain its
-----------------------------------
existence as a corporation and all rights, franchises and privileges in the
jurisdiction of its formation, and qualify and remain qualified in good
standing as a foreign corporation 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
Purchase and Sale Termination Event or Unmatured Purchase and 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 Seller's performance or ability to perform in any material
respect its obligations under the Agreement, and upon reasonable prior
notice (unless a Purchase and Sale Termination Event or Unmatured Purchase
and Sale Termination Event exists), 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 Seller relating to the 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 Seller for the purpose of examining such materials
described in clause (i)(A) next above and to discuss matters relating to
-------------
Receivables originated by it or the performance hereunder with any of the
officers or employees of the Seller 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 Seller and Administrator to conduct, at the
Seller's expense, a review of the Seller's books and records with respect
to such Receivables.
13
(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.
(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 Seller 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 the Company (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).
7.2 Reporting Requirements. From the date hereof until the first day
----------------------
following the Purchase and Sale Termination Date, the Seller will, unless the
Servicer (on behalf of the Company) shall otherwise consent in writing, furnish
to the Company and the Administrator:
(a) Purchase and 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 Purchase and Sale Termination
Event or each Unmatured Purchase and Sale Termination Event in respect of
the Seller, the statement of the chief financial officer or chief
accounting officer of the Seller describing such Purchase and Sale
Termination Event or Unmatured Purchase and Sale Termination Event and the
action that the Seller proposes to take with respect thereto, in each case
in reasonable detail;
14
(b) Proceedings. As soon as possible and in any event within three
-----------
Business Days after the Seller 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 Seller 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.
7.3 Negative Covenants. From the date hereof until the date following the
------------------
Purchase and Sale Termination Date, the Seller 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 acquired or 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
acquired or generated by it.
(d) Receivables Not to be Evidenced by Promissory Notes or Chattel
--------------------------------------------------------------
Paper. Take any action to cause or permit any Receivable acquired or
-----
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 Seller is the
surviving entity, or
15
(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).
7.4 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.
7.5 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 Related Rights by the Seller to the
Company.
7.6 Transaction Documents. Enter into, execute, deliver or otherwise become
---------------------
bound by any agreement, instrument, document or other arrangement that restricts
the right of the Seller 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.
7.7 Substantive Consolidation. The Seller hereby acknowledges that this
-------------------------
Agreement and the other Transaction Documents are being entered into in reliance
upon the Company's identity as a legal entity separate from the Seller and its
Affiliates. Therefore, from and after the date hereof, the Seller shall take all
reasonable steps necessary to make it apparent to third Persons that the Company
is an entity with assets and liabilities distinct from those of the Seller and
any other Person, and is not a division of the Seller, 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 Seller shall
take such actions as shall be required in order that:
(a) the Seller shall not be involved in the day to day management of
the Company;
(b) the Seller shall maintain separate corporate records and books of
account from the Company and otherwise will observe corporate formalities
and have a separate area from the Company for its business;
(c) the financial statements and books and records of the Seller shall
be prepared after the date of creation of the Company to reflect and shall
reflect the separate existence of the Company; provided, that the Company's
--------
assets and liabilities may be included in a consolidated financial
statement issued by an affiliate of the Company; provided, however, that
-------- -------
any such consolidated financial statement shall make clear that the
Company's assets are not available to satisfy the obligations of such
affiliate;
(d) except as permitted by the Receivables Purchase Agreement, (i) the
Seller shall maintain its assets separately from the assets of the Company,
(ii) and the Company's
16
assets, and records relating thereto, have not been, are not, and shall not
be, commingled with those of the Company;
(e) all of the Company's business correspondence and other
communications shall be conducted in the Company's own name and on its own
stationery;
(f) the Seller shall not act as an agent for the Company, other than
KCI in its capacity as the Servicer, and in connection therewith, shall
present itself to the public as an agent for the Company and a legal entity
separate from the Company;
(g) the Seller shall not conduct any of the business of the Company in
its own name;
(h) the Seller shall not pay any liabilities of the Company out of its
own funds or assets;
(i) the Seller shall maintain an arm's-length relationship with the
Company;
(j) the Seller shall not assume or guarantee or become obligated for
the debts of the Company or hold out its credit as being available to
satisfy the obligations of the Company;
(k) the Seller shall not acquire obligations of the Company;
(l) the Seller shall allocate fairly and reasonably overhead or other
expenses that are properly shared with the Company, including, without
limitation, shared office space;
(m) the Seller shall identify and hold itself out as a separate and
distinct entity from the Company;
(n) the Seller shall correct any known misunderstanding regarding its
separate identity from the Company;
(o) the Seller shall not enter into, or be a party to, any transaction
with the Company, 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 Seller shall not pay the salaries of the Company's employees,
if any.
17
ARTICLE VIII
ADDITIONAL RIGHTS AND OBLIGATIONS IN
RESPECT OF THE RECEIVABLES
8.1 Rights of the Company. The Seller hereby authorizes the Company, the
---------------------
Servicer, the Administrator or their respective designees to take any and all
steps in the Seller'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 Seller 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.
8.2 Responsibilities of the Seller. Anything herein to the contrary
------------------------------
notwithstanding:
(a) Collection Procedures. The Seller 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 Seller
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 Seller until
transfer of such Collections to the Servicer.
(b) The Seller shall perform its obligations hereunder, and the
exercise by the Company or its designee of its rights hereunder shall not
relieve the Seller from such obligations.
(c) None of the Company, 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, the Servicer, the Issuer or the
Administrator be obligated to perform any of the obligations of the Seller
thereunder.
(d) The Seller 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 Seller 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 Seller or transmitted or received by the Company
(whether or not from the Seller) in connection with any Receivable.
8.3 Further Action Evidencing Purchases. The Seller 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
18
fully evidence the Receivables and Related Rights purchased by or contributed to
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 Seller
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 Seller 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 Related Rights now
existing or hereafter acquired or generated by the Seller. If the Seller 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
Seller as provided in Section 9.1.
-----------
8.4 Application of Collections. Any payment by an Obligor in respect of any
--------------------------
indebtedness owed by it to the Seller 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 IX
PURCHASE AND SALE TERMINATION EVENTS
9.1 Purchase and Sale Termination Events. Each of the following events or
------------------------------------
occurrences described in this Section 8.1 shall constitute a "Purchase and 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
19
(b) The Seller 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
Seller (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 Seller of such
inaccuracy; or
(d) The Seller 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
Seller.
9.2 Remedies.
--------
(a) Optional Termination. Upon the occurrence of a Purchase and Sale
--------------------
Termination Event, the Company (and not the Servicer) shall have the
option, by notice to the Seller (with a copy to the Administrator), to
declare the Purchase and Sale Termination Date to have occurred.
(b) Remedies Cumulative. Upon any termination of the 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 X
INDEMNIFICATION
10.1 Indemnities by the Seller. Without limiting any other rights which the
-------------------------
Company may have hereunder or under applicable law, the Seller, 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 "Purchase and 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 "Purchase and
------------
Sale Indemnified Amounts") awarded against or incurred by any of them arising
------------------------
out of or as a result of the failure of the Seller to perform its obligations
under this Agreement or any other Transaction Document, or arising out of the
claims
20
asserted against a Purchase and Sale Indemnified Party relating to the
transactions contemplated herein or therein or the use of proceeds thereof or
therefrom, excluding, however, (i) Purchase and Sale Indemnified Amounts to the
--------- -------
extent resulting from gross negligence or willful misconduct on the part of such
Purchase and 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 Seller, severally for itself alone, shall indemnify each Purchase
and Sale Indemnified Party for Purchase and Sale Indemnified Amounts relating to
or resulting from:
(a) the transfer by the Seller of an interest in any Receivable to any
Person other than the Company;
(b) the breach of any representation or warranty made by the Seller
(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 Seller 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 Seller to comply with any applicable law, rule
or regulation with respect to any Receivable acquired or generated by the
Seller or the related Contract, or the nonconformity of any Receivable
acquired or generated by the Seller 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 acquired or generated by the Seller
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 acquired or generated by the Seller, whether at the
time of any purchase or contribution 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 acquired or generated by the Seller (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 acquired or generated by
the Seller; and
21
(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 acquired or
generated by the Seller 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 Purchase and Sale Indemnified Party or is insufficient to hold
such Purchase and Sale Indemnified Party harmless, then the Seller, severally
and for itself, shall contribute to the amount paid or payable by such Purchase
and Sale Indemnified Party to the maximum extent permitted under applicable law.
ARTICLE XI
MISCELLANEOUS
11.1 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
Seller (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 Seller 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 Seller 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.
22
11.2 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.
11.3 No Waiver; Cumulative Remedies. The remedies herein provided are
------------------------------
cumulative and not exclusive of any remedies provided by law. Without limiting
the foregoing, the Seller 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 Seller 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 Seller.
11.4 Binding Effect; Assignability. This Agreement shall be binding
-----------------------------
upon and inure to the benefit of the Company and the Seller and their respective
successors and permitted assigns. The Seller 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 Seller 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.
11.5 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
-------------
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
11.6 Costs, Expenses and Taxes. In addition to the obligations of the
-------------------------
Seller under Article IX, the Seller, 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 KCI 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 Purchase
23
and Sale Indemnified Party against any liabilities with respect to or
resulting from any delay in paying or omission to pay such taxes and fees.
11.7 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 SELLER OR ITS
PROPERTY IN THE COURTS OF ANY OTHER JURISDICTIONS.
11.8 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.
11.9 Captions and Cross References; Incorporation by Reference. The
---------------------------------------------------------
various 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.
24
11.10 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.
11.11 Acknowledgment and Agreement. By execution below, the Seller
----------------------------
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 pursuant to the Receivables Purchase Agreement, and the
Seller consents to such assignment. 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 Seller is a party.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
25
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.
KCI FUNDING CORPORATION
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-1 Purchase and Sale Agreement
KPMG CONSULTING, INC.,
as 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 Purchase and Sale Agreement
SELLER:
KPMG CONSULTING, INC.
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 Purchase and Sale Agreement
Exhibit A
to Purchase and Sale Agreement
FORM OF PURCHASE REPORT
SELLER: KPMG CONSULTING, INC.
PURCHASER: KCI FUNDING CORPORATION
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) = $
-------------
A-1 Purchase and Sale Agreement
Exhibit B
to Purchase and Sale Agreement
FORM OF COMPANY NOTE
B-1 Purchase and Sale Agreement
Exhibit C
to Purchase and Sale Agreement
FORM OF KCI ASSIGNMENT CERTIFICATE
C-1 Purchase and Sale Agreement
Exhibit D
to Purchase and Sale Agreement
PROCEEDINGS
NONE.
D-1 Purchase and Sale Agreement
Exhibit E
to Purchase and Sale Agreement
OFFICE LOCATIONS
----------------
The Seller 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 Seller is:
0000 Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
E-1
Exhibit F
to Purchase and Sale Agreement
TRADE NAMES
-----------
Legal Name Trade names/Fictitious Names
--------------------------------------------------------------------------------
KPMG CONSULTING, INC. KPMG CONSULTING
F-1
