Valuation Services Conveyance Agreement - KPMG LLP, KPMG Consulting Inc. and KPMG Consulting LLC
VALUATION SERVICES CONVEYANCE AGREEMENT
THIS VALUATION SERVICES CONVEYANCE AGREEMENT (this
"Agreement") is effective as of the 30th day of June, 2000, by and among KPMG
LLP, a Delaware limited liability partnership ("KPMG"), KPMG Consulting, Inc., a
Delaware corporation ("KCI"), and KPMG Consulting, LLC, a Delaware limited
liability company ("LLC," and together with KCI, "Consulting"). Capitalized
terms not otherwise defined herein have the meaning ascribed to such terms in
the Separation Agreement, dated as of December 29, 1999, by and among KPMG, KCI
and LLC (the "Separation Agreement").
W I T N E S S E T H:
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WHEREAS, pursuant to the Separation Agreement, KPMG agreed to
transfer the management and information technology consulting services business
to Consulting;
WHEREAS, as of January 31, 2000, KPMG transferred the
Transferred Assets to Consulting, but did not transfer the Excluded Assets or
the Retained Liabilities;
WHEREAS, KPMG and Consulting have determined in good faith and
agreed that certain of the Excluded Assets more properly belong to Consulting,
and certain of the Retained Liabilities should be assumed by Consulting; and
WHEREAS, Section 5.4(b) of the Separation Agreement permits
the conveyance of such assets and liabilities without additional consideration.
NOW, THEREFORE, in consideration of the mutual undertakings
contained herein and pursuant to Section 5.4 of the Separation Agreement, KPMG
and Consulting agree as follows:
Section 1. Conveyance of Assets and Liabilities. Effective as
of June 30, 2000 (the "Transfer Date"), KPMG hereby conveys, assigns, transfers,
contributes and sets over to Consulting (i) the tangible and intangible assets,
properties, rights and interests of the valuation services practice of KPMG,
including, but not limited to, the tangible and intangible assets, personnel and
client contracts set forth on Schedule A hereto (the "Valuation Services
Assets"), and (ii) the liabilities of the valuation services practice of KPMG,
including, but not limited to, the liabilities set forth on Schedule B hereto
(the "Valuation Services Liabilities"), and Consulting hereby accepts and
receives all of the right, title and interest of KPMG in and to the Valuation
Services Assets and assumes and agrees to perform, comply with, and discharge
the Valuation Services Liabilities. The definition of "Consulting Business"
under the Separation Agreement, from and after the Transfer Date, shall be
deemed to include the valuation services practice of KPMG.
Section 2. Balance of Assets and Liabilities. (a) KPMG and
Consulting estimate that the value of the Valuation Services Assets as carried
on the books of KPMG as of the
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Transfer Date is equal to the value of the Valuation Services Liabilities as
carried on the books of KPMG as of the Transfer Date. In the event any
adjustment is required to ensure that the difference between the value of the
Valuation Services Assets and the Valuation Services Liabilities as carried on
the books of KPMG is zero (a "Required Adjustment"), KPMG and Consulting shall
use their reasonable efforts to resolve by written agreement any such Required
Adjustment.
(b) If an adjustment is required pursuant to Section 2(a)
hereof and KPMG and Consulting are unable to agree on such adjustment within
ninety (90) days of the Transfer Date, then KPMG and Consulting agree to proceed
in a manner consistent with Section 3.7 of the Separation Agreement to make an
appropriate adjustment.
(c) Promptly after the determination of the value of the
Valuation Services Assets and Valuation Services Liabilities is made pursuant to
Section 2(a) and (b):
(i) if the Required Adjustment is a positive number (i.e., the
value of the Valuation Services Assets exceeded the value of the
Valuation Services Liabilities as of the Transfer Date), Consulting
shall issue a demand note ("Note") to KPMG in a principal amount equal
to the amount of the Required Adjustment, plus accrued interest on such
amount from the Transfer Date to the date of issuance thereof at the
Agreed Rate in effect on the Transfer Date; or
(ii) if the Required Adjustment is a negative number (i.e.,
the value of the Valuation Services Liabilities exceeded the value of
the Valuation Services Assets as of the Transfer Date), KPMG shall, at
its sole option, transfer Receivables or cash to Consulting in an
amount equal to the amount of the Required Adjustment plus interest on
such amount from the Transfer Date to the date of payment or transfer
thereof at the Agreed Rate in effect on the Transfer Date; or
(iii) if the Required Adjustment equals zero (i.e., the value
of the Valuation Services Assets equals the value of the Valuation
Services Liabilities as of the Transfer Date), the Note shall not be
issued and no payment shall be made.
(d) Any receivables relating to the valuation services
practices which are retained by KPMG shall be treated as Section 6.10
Receivables and shall be treated in accordance with Section 6.10 of the
Separation Agreement, except that the June 29, 2000 date in Section 6.10(c)
shall be extended to September 29, 2000 with respect to these receivables.
Section 3. Consideration. KPMG and Consulting hereby
acknowledge and agree, in accordance with Section 5.4(b) of the Separation
Agreement, that the transfer of the Valuation Services Assets and Valuation
Services Liabilities shall be made without any additional consideration, other
than as contemplated by Section 2.
Section 4. Governing Law. This Agreement shall be governed by
and construed and enforced in accordance with the laws of the State of New York.
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Section 5. Counterparts. For the convenience of the parties,
this Agreement may be executed in one or more counterparts, each of which shall
be deemed an original for all purposes.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered as of the date first written above.
KPMG LLP
By: /s/ Joseph E. Heintz
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Name: Joseph E. Heintz
Title: Chief Financial Officer
KPMG CONSULTING, LLC
By: /s/ David W. Black
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Name: David W. Black
Title: Executive Vice President,
Secretary and General Counsel
KPMG CONSULTING, INC.
By: /s/ David W. Black
------------------------------------
Name: David W. Black
Title: Executive Vice President,
Secretary and General Counsel
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