EXHIBIT 10(i)(a)
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PURCHASE AND SALE AGREEMENT
DATED AS OF JUNE 20, 2001
BETWEEN
VARIOUS ENTITIES LISTED ON SCHEDULE I,
AS THE ORIGINATORS
AND
CMC RECEIVABLES, INC.
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THIS PURCHASE AND SALE AGREEMENT (this "Agreement"), dated as of June
20, 2001, is entered into between VARIOUS ENTITIES LISTED ON SCHEDULE I (each,
an "Originator"; and collectively, the "Originators"), and CMC RECEIVABLES,
INC., a Delaware corporation (the "Company").
DEFINITIONS
Unless otherwise indicated herein, capitalized terms used in this
Agreement are defined in the Receivables Purchase Agreement dated of even date
herewith (as the same may be amended, supplemented or otherwise modified from
time to time, the "Receivables Purchase Agreement") among the Company, as
Seller, Three Rivers Funding Corporation, as Buyer (the "Buyer"), and Commercial
Metals Company (herein sometimes referred to as CMC ("CMC")), as Servicer. 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 CMC;
2. The Originators generate Receivables in the ordinary course of their
businesses;
3. The Originators, in order to finance their respective businesses,
wish to sell certain of their Receivables to the Company, and the Company is
willing to purchase such Receivables from the Originators, on the terms and
subject to the conditions set forth herein; and
4. The Originators and the Company intend this transaction to be a true
sale of certain Receivables by each Originator to the Company, providing the
Company with the full benefits of ownership of such Receivables, and the
Originators and the Company do not intend the transactions hereunder to be
characterized as loans from the Company to any Originator.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto hereby agree as follows:
ARTICLE I
AGREEMENT TO PURCHASE AND SELL
SECTION 1.1 Agreement To Purchase and Sell. On the terms and subject to
the conditions set forth in this Agreement, each Originator, severally and for
itself, agrees to sell to the Company, and the Company agrees to purchase from
such Originator, from time to time on or after the Closing Date, but before the
Purchase and Sale Termination Date, all of such Originator's right, title and
interest in and to:
(a) each Receivable of such Originator (but only if, in the
case of CMC, such Receivable was generated by or owing to an Operating Division,
and only if, in the case of CMC Steel Fabricators, Inc., such Receivable was
generated by the sale of goods or services by its Hope, Arkansas facility),
other than Receivables generated by any Obligor that (i) is a government or a
government subdivision, affiliate, or agency, (ii) is not a U.S. resident, or
(iii) is listed on Schedule 1.1 attached hereto, which, so long as no
Termination Event or Potential Termination Event under the Receivable Purchase
Agreement shall have occurred and be continuing, may be amended or supplemented
from time to time by any Originator in a writing delivered by the Originator to
the Company and the Buyer setting forth the reasons for such amendment or
supplement (each such Receivable, a "Purchased Receivable"), that existed and
was owing to such Originator at the closing of such Originator's business on May
31, 2001 (the "Cut-off Date"); any Receivable once purchased by the Company will
continue to be owned by the Company, notwithstanding any subsequent listing of
the Receivable's Obligor on Schedule 1.1 (it being understood and agreed that
the effect of listing on Schedule 1.1 pursuant to any such amendment or
supplement an Obligor the Receivables of which were previously included in the
pool of Purchased Receivables, together with all such previous listings pursuant
to amendments or supplements to Schedule 1.1, will not result in the pool of
Purchased Receivables, taken as a whole, having credit or collection
characteristics which, based solely on the facts known to the Company and the
applicable Originator at the time of such amendment or supplement, are
reasonably anticipated to be materially worse than those which would have
prevailed in the absence of such amendments and supplements; provided, that this
parenthetical shall not apply to an amendment or supplement if, after giving
effect to the exclusion of all Receivables of Obligors listed on Schedule 1.1
from the existing pool of Purchased Receivables as of the last day of the most
recently completed Accounting Period, the aggregate Account Balances of all
Purchased Receivables which constitute Eligible Receivables would equal or
exceed $200,000,000 and the Buyer's Allocation would be less than or equal to
80%);
(b) each Purchased Receivable generated by such Originator
from and including the Cut-off Date to and including the Purchase and Sale
Termination Date;
(c) all monies due or to become due to such Originator with
respect to any of the foregoing;
(d) all books and records of such Originator related to any of
the foregoing, and all Purchase Documents to which such Originator is a party,
together with all rights (but not obligations) of such Originator thereunder;
and
(e) all products and proceeds of any of the foregoing,
including, without limitation, (i) all funds received by such Originator, the
Company or CMC, as Servicer (as defined in the Receivables Purchase Agreement
and herein so called), 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 Purchased Receivables; (ii) all
amounts (including any insurance proceeds) to be applied by the Company or the
Servicer to any amount owed in respect of any Purchased Receivable; and (iii)
all net proceeds of sale or other disposition of repossessed goods or
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other collateral or property of the Obligors in respect of Purchased Receivables
or any other parties directly or indirectly liable for payment of such Purchased
Receivables.
All purchases shall be made without recourse, but shall be made pursuant to, and
in reliance upon, the representations, warranties and covenants of the
Originators set forth in this Agreement and in each other Purchase Document. No
obligation or liability to any Obligor on any Purchased Receivable is intended
to be assumed by the Company hereunder, and any such assumption is expressly
disclaimed. The Company's foregoing commitment to purchase Purchased Receivables
and the proceeds and rights described in clauses (c) through (e) (collectively,
the "Related Rights") is herein called the "Purchase Facility."
SECTION 1.2 Timing of Purchases.
(a) Closing Date Purchases. Each Purchased Receivable and
Related Rights generated by each Originator prior to the Cut-off Date shall be
deemed to have been sold by such Originator to the Company on the Closing Date.
(b) Subsequent Purchases. After the Closing Date, until the
Purchase and Sale Termination Date, each Purchased Receivable and the Related
Rights generated by each Originator shall be deemed to have been sold by such
Originator to the Company immediately (and without further action) upon the
creation of such Purchased Receivable.
SECTION 1.3 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 Originators in accordance with Article III.
SECTION 1.4 Purchase and Sale Termination Date. The "Purchase and Sale
Termination Date" shall be the earliest to occur of (a) the date the Purchase
Facility is terminated pursuant to Section 8.2 and (b) the Payment Date 10 days
following the day on which Originators shall have given written notice to the
Company at or prior to 10:00 a.m. (Dallas, Texas time) that the Originators
desire to terminate this Agreement; provided, that in either case the Company
shall have satisfied all of its obligations under the Receivables Purchase
Agreement and such agreement shall have been terminated in accordance with its
terms.
SECTION 1.5 Intention of the Parties. It is the express intent of the
parties hereto that the sale and transfers of the Purchased Receivables and
Related Rights by the Originators to the Company, as contemplated by this
Agreement, shall be treated as sales (without recourse except as provided
herein) of all of the Originators' right, title and interest in, to and under
the Purchased Receivables and Related Rights, and not as loans secured by the
Purchased Receivables and Related Rights. If, however, notwithstanding the
intent of the parties, such transactions are deemed to be loans, each Originator
hereby grants to the Company a first priority security interest in all of such
Originator's right, title and interest in and to (i) the Purchased Receivables
and the Related Rights now existing and hereafter created by such Originator,
(ii) all monies due or to become due and all
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amounts received with respect thereto, (iii) all books and records of such
Originator related to any of the foregoing, and all Purchase Documents to which
such Originator is a party, together with all rights (but not obligations) of
such Originator thereunder, and (iv) all products and proceeds of any of the
foregoing.
SECTION 1.6 Additional Originators. Additional Persons may be added as
Originators hereunder, with the prior written consent of the Company and Mellon
Bank, N.A. (the "Administrator"), which consent may be given or withheld in each
of the Company's and the Administrator's sole discretion; provided, that the
following conditions are satisfied on or before the date of such addition:
(a) The Servicer shall have given the Administrator and the
Company at least ten Business Days prior written notice of such proposed
addition and the identity of the proposed additional Originator and shall have
provided such other information with respect to such proposed additional
Originator as the Administrator may reasonably request;
(b) such proposed additional Originator has executed and
delivered to the Company and the Administrator an agreement substantially in the
form attached hereto as Exhibit C (a "Joinder Agreement");
(c) such proposed additional Originator has delivered to the
Company and the Administrator each of the documents with respect to such
Originator described in Sections 4.1 and 4.2;
(d) the receivables intended to be sold by such additional
Originator to the Company hereunder shall be Purchased Receivables; and
(e) no Purchase and Sale Termination Event shall have occurred
and be continuing.
ARTICLE II
PURCHASE REPORT; CALCULATION OF PURCHASE PRICE
SECTION 2.1 Purchase Report. On the Closing Date and at least two (2)
Business Days prior to each Settlement Date, the Servicer shall deliver to the
Company and each Originator a report in substantially the form of Exhibit A
(each such report being herein called a "Purchase Report") setting forth, among
other things:
(a) Purchased Receivables purchased by the Company from each
Originator on the Closing Date (in the case of the Purchase Report to be
delivered on the Closing Date);
(b) Purchased Receivables purchased by the Company from each
Originator during the most recently completed Accounting Period;
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(c) the calculation of the Purchase Price for all Purchased
Receivables; and
(d) the calculation of any reductions of the Purchase Price
for any Purchased Receivables as provided in Sections 3.3 (a), (b) and (c).
SECTION 2.2 Calculation of Purchase Price. The "Purchase Price" to be
paid to each Originator for each Purchased Receivable that is purchased
hereunder from such Originator shall be equal to the product of (a) the Account
Balance of such Purchased Receivable on the relevant Payment Date and (b) the
difference, expressed as a percentage, of (i) one minus (ii) the Fair Market
Value Discount on the relevant Payment Date.
As used herein, "Fair Market Value Discount" means 2.0094%, as such
percentage may be increased, decreased or otherwise adjusted by the Company from
time to time (without retroactive effect) and with the prior consent of each
Originator, such consent not to be unreasonably withheld; and "Payment Date"
means (i) the Closing Date and (ii) each Business Day thereafter that
Originators are open for business.
SECTION 2.3 Payment of Fees. Each Originator hereby agrees to pay to
the Company its Pro Rata Share of all reasonable fees and expenses now or
hereafter incurred by the Company in connection with this Agreement, including
but not limited to all attorneys', directors' and facility fees and expenses
(including without limitation any Program Fees and other costs, indemnities, and
expenses incurred by the Company under, and any "deemed collections" of the
Company pursuant to Sections 5.03(c) or 6.04 of, the Receivables Purchase
Agreement).
As used herein, "Pro Rata Share" means, at any time as to any
Originator, the ratio of (i) the sum of the Account Balances of the Purchased
Receivables from such Originator, to (ii) the aggregate Account Balances of all
Purchased Receivables from all Originators.
ARTICLE III
PAYMENT OF PURCHASE PRICE
SECTION 3.1 Initial Purchase Price Payment. On the terms and subject to
the conditions set forth in this Agreement, the Company agrees to pay to each
Originator the Purchase Price for the purchase to be made from such Originator
on the Closing Date partially in cash (in an amount to be agreed between the
Company and such Originator and set forth in the initial Purchase Report) and
partially by issuing a promissory note in the form of Exhibit B to such
Originator with an initial principal balance equal to the remaining Purchase
Price (each such promissory note, as it may be amended, supplemented, endorsed
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 Purchase Documents, being herein called a "Company Note").
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SECTION 3.2 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 each Originator the Purchase
Price for the Purchased Receivables generated by such Originator on such Payment
Date:
(a) First, 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 applicable Company
Note shall be increased by an amount equal to such remaining Purchase Price.
The Servicer shall make all appropriate record keeping entries with respect to
each of the Company Notes to reflect the foregoing payments and reductions made
pursuant to Section 3.3, and the Servicer's books and records shall constitute
rebuttable presumptive evidence of the principal amount of, and accrued interest
on, each Company Note at any time. Furthermore, the Servicer shall hold the
Company Notes for the benefit of the applicable Originator. Each Originator
hereby irrevocably authorizes the Servicer to ▇▇▇▇ the Company Notes "CANCELED"
and to return such Company Notes to the Company upon the final payment thereof
after the Purchase and Sale Termination Date.
SECTION 3.3 Settlement as to Specific Purchased Receivables and
Dilution.
(a) If, on the day of purchase of any Purchased Receivable
from an Originator hereunder, any of the representations or warranties set forth
in Sections 5.4, 5.12 and 5.21 are not true with respect to such Purchased
Receivable or as a result of any action or inaction of such Originator, on any
subsequent day, any of such representations or warranties set forth in Sections
5.4, 5.12 and 5.21 is no longer true with respect to such Purchased Receivable,
then the Purchase Price with respect to such Purchased Receivable shall be
reduced by an amount equal to the Account Balance of such Purchased Receivable
and shall be accounted to such Originator as provided in clause (d) below;
provided, that if the Company thereafter receives payment on account of
Collections due with respect to such Purchased Receivable, the Company promptly
shall deliver such funds to such Originator.
(b) If, on any day, the Account Balance of any Purchased
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 any Originator, the Company or the Servicer or any setoff or
dispute between any 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 such Originator), then the Purchase Price with respect to such Purchased
Receivable shall be reduced by the amount of such net reduction and shall be
accounted to such Originator as provided in clause (d) below.
(c) If, on any day, the Company incurs any costs, indemnities,
expenses or deemed collections set forth in Section 2.3 herein, then the
Purchase Price of the Purchased
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Receivables shall be reduced with respect to each Originator in an amount equal
to such Originator's Pro Rata Share of such reduction or, in the case of a
reduction that is solely attributable to an Originator, shall be reduced with
respect to such Originator, and shall be accounted to any such Originator as
provided in clause (d) below.
(d) Any reduction in the Purchase Price of any Purchased
Receivable pursuant to clause (a), (b) or (c) 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 such Originator hereunder; provided,
however if there have been no purchases of Purchased Receivables from such
Originator (or insufficiently large purchases of Purchased Receivables) to
create a Purchase Price sufficient to so apply such credit against, the amount
of such credit shall be deemed to be a payment under, and shall be deducted from
the principal amount outstanding under, the Company Note payable to such
Originator.
SECTION 3.4 Reconveyance of Purchased Receivables. In the event that an
Originator has paid to the Company the full Account Balance of any Purchased
Receivable pursuant to Section 3.3, the Company shall reconvey such Purchased
Receivable to such Originator, without representation or warranty, but free and
clear of all liens, security interests, charges, and encumbrances created by the
Company.
ARTICLE IV
CONDITIONS OF PURCHASES
SECTION 4.1 Conditions Precedent to Initial Purchase. The initial
purchase hereunder is subject to the condition precedent that the 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 the Servicer (acting on the Company's
behalf):
(a) A copy of the resolutions of the Board of Directors of
each Originator approving the Purchase Documents to be delivered by it and the
transactions contemplated hereby and thereby, certified by the Secretary or
Assistant Secretary of such Originator;
(b) Good standing certificates for each Originator issued as
of a recent date acceptable to the Servicer by the Secretary of State of the
jurisdiction of such Originator's incorporation;
(c) A certificate of the Secretary or Assistant Secretary of
each Originator certifying the names and true signatures of the officers
authorized on such Person's behalf to sign the Purchase Documents to be
delivered by it (on which certificate the 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 clause (d));
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(d) The certificate or articles of incorporation of each
Originator, together with a copy of the by-laws of such Originator, each duly
certified by the Secretary or an Assistant Secretary of such Originator;
(e) Originals of the proper financing statements (Form UCC-1)
that have been duly executed and name each Originator as the debtor/seller and
the Company as the secured party/purchaser (and Three Rivers Funding
Corporation, as assignee of the Company) of the Purchased Receivables generated
by such Originator as may be necessary or desirable under the UCC of all
appropriate jurisdictions to perfect the Company's ownership interest in all
Purchased Receivables and such other rights, accounts, instruments and moneys in
which an ownership or security interest may be assigned to it hereunder;
(f) A written search report from a Person satisfactory to the
Servicer listing all effective financing statements that name the Originators as
debtors or sellers and that are filed in the jurisdictions in which filings were
made pursuant to the foregoing clause (f), together with copies of such
financing statements (none of which, except for those described in the foregoing
clause (f), shall cover any Purchased 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 any Originator;
(g) Favorable opinions of (a) ▇▇▇▇▇ ▇. Sudbury, General
Counsel of CMC, and (b) ▇▇▇▇▇▇ and ▇▇▇▇▇, LLP, counsel to the Originators and
the Company, in form and substance satisfactory to the Servicer and the
Administrator; and
(h) A Company Note in favor of each Originator, duly executed
by the Company.
SECTION 4.2 Certification as to Representations and Warranties. Each
Originator, by accepting the Purchase Price related to each purchase of
Purchased Receivables generated by such Originator and listed in a Purchase
Report, 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, each Originator hereby makes, with respect to itself, the
representations and warranties set forth in this Article V.
SECTION 5.1 Organization and Good Standing. Such Originator has been
duly incorporated and is validly existing as a corporation, in good standing
under the laws of its jurisdiction of incorporation, 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.
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SECTION 5.2 Due Qualification. Such Originator is located and is
qualified to transact business as a foreign corporation and is in good standing
in all jurisdictions in which (a) the ownership or lease of its property or the
conduct of its business requires such licensing or qualifica tion and (b) the
failure to be so licensed or qualified could have a Material Adverse Effect.
SECTION 5.3 Power and Authority; Due Authorization. Such Originator has
(a) all necessary power, authority and legal right to (i) execute and deliver,
and perform its obligations under, each Purchase Document to which it is a party
and (ii) 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 and assignment and the performance of
such obligations by all necessary corporate action.
SECTION 5.4 Valid Sale; Binding Obligations. Each sale of Purchased
Receivables made by such Originator pursuant to this Agreement shall constitute
a valid sale, transfer, and assignment of Purchased Receivables to the Company,
enforceable against creditors of, and purchasers from, such Originator; and this
Agreement constitutes, and each other Purchase Document to be signed by such
Originator, when duly executed and delivered, will constitute, a legal, valid,
and binding obligation of such 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.
SECTION 5.5 No Violation. The consummation of the transactions
contemplated by this Agreement and the other Purchase 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) such Originator's
certificate or articles of incorporation or bylaws, or (ii) any indenture, loan
agreement, mortgage, deed of trust, or other 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 Purchase 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 instru
mentality having jurisdiction over it or any of its properties that could have a
material adverse effect on such Originator's ability to perform its obligations
under this Agreement (a "Material Adverse Effect").
SECTION 5.6 Proceedings. Except as set forth in Schedule 5.6 or as
otherwise disclosed in CMC's public filings with the Securities and Exchange
Commission, 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 Purchase
Document, (b) seeking to prevent such Originator from transferring any Purchased
Receivable hereunder (or in the case such transfer does not constitute a sale
under any applicable law, from
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granting or maintaining the security interest in any Purchased Receivable) to
the Purchaser or the consummation of any of the transactions contemplated by any
Purchase Document, or (c) seeking any determination or ruling that could have a
Material Adverse Effect.
SECTION 5.7 Bulk Sales Acts. No transaction contemplated hereby
requires compliance with, or will be subject to avoidance under, any bulk sales
act or similar law.
SECTION 5.8 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 each
Originator's due execution, delivery and performance of any Purchase Document to
which it is a party.
SECTION 5.9 Financial Condition.
(a) Material Adverse Effect. Since February 28, 2001, 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), (i)
the fair market value of such Originator's assets exceeds its liabilities
(whether contingent, subordinated, unmatured, unliquidated or otherwise), (ii)
such Originator has sufficient cash flow to enable it to pay its debt as it
matures, and (iii) such Originator does not have unreasonably small capital to
conduct its business.
SECTION 5.10 Licenses, Contingent Liabilities, and Labor Controversies.
(a) Such 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 could have a Material Adverse Effect.
(b) There are no labor controversies pending against such
Originator that have had (or could have) a Material Adverse Effect.
SECTION 5.11 Margin Regulations. No use of any funds acquired by
Originator 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.
SECTION 5.12 Quality of Title.
(a) Each Purchased Receivable of such Originator (together
with the Related Rights with respect to such Purchased Receivable) which is to
be sold to the Company hereunder is or shall be owned by such Originator, free
and clear of any lien, security interest or other charge
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or encumbrance, or any other type of preferential arrangement (each, an "Adverse
Claim"), except as provided herein 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 Purchased Receivables generated by such
Originator and all Collections related thereto, and in Originator'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 Purchased Receivable generated by such Originator
or any Related Rights is on file in any recording office except such as may be
filed in favor of the Company or the Originators, as the case may be, in
accordance with this Agreement or in favor of Three Rivers Funding Corporation
in accordance with the Receivables Purchase Agreement.
(c) Each Purchased Receivable purchased hereunder is on the
date of purchase an Eligible Receivable.
SECTION 5.13 Accuracy of Information. All factual written information
heretofore or contemporaneously furnished (and prepared) by such Originator to
the Company, the Administrator or the Buyer for purposes of or in connection
with any Purchase Document or any transaction contemplated hereby or thereby is,
and all other such factual written information hereafter furnished by such
Originator to the Company or the Administrator pursuant to or in connection with
any Purchase Document will be, true and accurate in all material respects on the
date as of which such information is dated or certified.
SECTION 5.14 Offices. Such Originator's principal place of business and
chief executive office is located at the address set forth in Schedule 5.14A,
and the offices where such Originator keeps all its books, records and documents
evidencing its Purchased Receivables, the related Contracts and all other
agreements related to such Purchased Receivables are located at the addresses
specified in Schedule 5.14B (or at such other locations, notified to the
Servicer and the Buyer in accordance with Section 6.1(f), in jurisdictions where
all action required by Section 7.3 has been taken and completed).
SECTION 5.15 Trade Names. Such Originator does not use any trade name
other than its actual corporate name and the trade names set forth in Schedule
5.15. From and after the date that fell five (5) years before the date hereof,
except as set forth in Schedule 5.15, such Originator has not been known by any
legal name other than its corporate name as of the date hereof, nor has such
Originator been the subject of any merger or other corporate reorganization.
SECTION 5.16 Taxes. Such 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.
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SECTION 5.17 Compliance with Applicable Laws. Such 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, could have a Material Adverse Effect.
SECTION 5.18 Reliance on Separate Legal Identity. Such Originator
acknowledges that Three Rivers Funding Corporation is entering into the
Receivables Purchase Agreement in reliance upon the Company's identity as a
legal entity separate from such Originator.
SECTION 5.19 No Termination Event. No event has occurred and is
continuing and no condition exists which constitutes a Termination Event or a
Potential Termination Event under the Receivables Purchase Agreement.
SECTION 5.20 Not an Investment Company. Each Originator is not, and
will not become as a result of the transactions contemplated by the Purchase
Documents, an "investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
SECTION 5.21 Account Balances; Purchase Notice. The Account Balances
related to the sale of the Purchased Receivables are the respective amounts set
forth in the Purchase Report, and all information set forth therein, is true and
correct in all material respects as of such Settlement Date.
SECTION 5.22 Consideration. Each Originator has sold the Purchased
Receivables in exchange for payment (made by the Company in accordance with the
provisions herein) in an amount which constitutes fair consideration and
approximate market value for the Purchased Receivables and in a sale the terms
and conditions of which (including, without limitation, the purchase price
thereof) reasonably approximate an arm's-length transaction between unaffiliated
parties. No such sale has been made for or on account of an antecedent debt owed
to the Company and no such sale is or may be voidable or subject to avoidance
under any section of the U.S. Bankruptcy Code.
SECTION 5.23 Data Processing Legends. Each Originator and the Servicer
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
generated for such Originator which are of the type that a proposed purchaser or
lender would use to evaluate the Purchased Receivables, the following legend (or
the substantive equivalent thereof): "CERTAIN OF THE RECEIVABLES DESCRIBED
HEREIN HAVE BEEN SOLD PURSUANT TO A PURCHASE AND SALE AGREEMENT DATED AS OF JUNE
20, 2001, AS THE SAME MAY FROM TO TIME TO TIME BE AMENDED, SUPPLEMENTED OR
OTHERWISE MODIFIED, BETWEEN CERTAIN ENTITIES LISTED ON SCHEDULE I THERETO AND
CMC RECEIVABLES, INC., AND AN UNDIVIDED, FRACTIONAL OWNERSHIP INTEREST IN SUCH
RECEIVABLES
12
DESCRIBED HEREIN HAS BEEN SOLD TO THREE RIVERS FUNDING CORPORATION PURSUANT TO
THE RECEIVABLES PURCHASE AGREEMENT DATED AS OF JUNE 20, 2001, AS THE SAME MAY
FROM TO TIME TO TIME BE AMENDED, SUPPLEMENTED OR OTHERWISE MODIFIED, AMONG CMC
RECEIVABLES, INC., THREE RIVERS FUNDING CORPORATION AND COMMERCIAL METALS
COMPANY."
ARTICLE VI
COVENANTS OF THE ORIGINATORS
SECTION 6.1 Affirmative Covenants. From the date hereof until the first
day following the Purchase and Sale Termination Date, each Originator will,
unless the Company, acting in a manner consistent with its duties and
responsibilities under the Receivables Purchase Agreement shall otherwise
consent:
(a) Compliance with Laws, Etc. Comply in all material respects
with all applicable laws, rules, regulations and orders with respect to the
Purchased Receivables generated by it and the Contracts and other agreements
related thereto.
(b) Preservation of Corporate Existence. Preserve and maintain
its existence as a corporation, and all rights, franchises and privileges in the
jurisdiction of its incorporation, and qualify and remain qualified in good
standing as a foreign corporation in each jurisdiction where the failure to
preserve and maintain such existence, rights, franchises, privileges and
qualification could have a Material Adverse Effect.
(c) Receivables Examinations. (i) At any time and from time to
time during regular business hours, upon reasonable prior notice, and at each
Originator's expense, as applicable, 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, disks and other electronic media) in possession or
under the control of each Originator relating to Purchased Receivables,
including, without limitation, the related Contracts and purchase orders and
other agreements related thereto, and (B) to visit the offices and properties of
such Originator for the purpose of examining such materials described in clause
(i)(A) next above and to discuss matters relating to Purchased Receivables
originated by it or the performance hereunder with any of the officers or
employees of each Originator having knowledge of such matters, and (ii) without
limiting the foregoing clause (i) above, from time to time on reasonable request
of the Administrator, permit certified public accountants or other auditors
acceptable to the Company and Administrator to conduct, at the Company's
expense, certain agreed upon procedures with regard to such Originator's books
and records pertaining to such Purchased 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 Purchased Receivables it
generates in the event of the destruction of the originals
13
thereof), and keep and maintain all documents, books, records and other
information reasonably necessary or advisable for the collection of such
Purchased Receivables (including, without limitation, records adequate to permit
the daily identification of each new Purchased Receivable and all Collections of
and adjustments to each existing Purchased Receivable).
(e) Performance and Compliance with Purchased Receivables and
Contracts. Timely and fully perform and comply, in all material respects, with
all provisions, covenants and other promises required to be observed by it under
the Contracts and all other agreements related to the Purchased 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 Purchased Receivables, at the address(es) referred to
in Schedule 5.14 or, upon 15 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 Purchased
Receivables that it generates and all Contracts and other agreements related
thereto.
(h) Purchase Documents. Comply in all material respects with
the Purchase Documents to which it is a party.
(i) Notice of Material Adverse Change. Promptly upon becoming
aware thereof, each Originator shall give the Company and the Buyer notice of
any material adverse change in the business, operations or financial condition
of such Originator which could affect adversely the collectibility of the
Purchased Receivables or the ability to service the Purchased Receivables.
(j) Customer List. Each Originator shall at all times maintain
(or cause the Servicer to maintain) a current list (which may be stored on
magnetic tapes or disks or other form of electronic media) of all Obligors under
Contracts related to Purchased Receivables, including the name, address,
telephone number and account number of each such Obligor, Such Originator shall
deliver or cause to be delivered a copy of such list to the Buyer as soon as
practicable following the their request.
(k) Notice of Relocation. Each Originator shall give the Buyer
sixty (60) days' prior written notice of any relocation of its Chief Executive
Office if, as a result of such relocation, the applicable provisions of the
Uniform Commercial Code of any applicable jurisdiction or other applicable Laws
would require the filing of any amendment of any previously filed financing
statement or continuation statement or of any new financing statement. Each
Originator will at all times maintain its Chief Executive Office within a
jurisdiction in the United States in which Article Nine of the Uniform
Commercial Code (1972 or later revision) is in effect.
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(l) Administrative and Operating Procedures. Each Originator
shall maintain and implement administrative and operating procedures adequate to
permit the identification of the Receivables Pool and all collections and
adjustments attributable to each Receivables Pool.
(m) Certificates of Title.
(A) If any amount payable under or in connection with
any Purchased Receivable shall be or become evidenced by any
promissory note, chattel paper or other instrument, such note,
chattel paper or instrument shall be duly endorsed in a manner
satisfactory to the Company and delivered to the Company or
its agent.
(B) Each Originator shall deliver to the Company any
certificate of title or other evidence of ownership issued by
the United States or any state or any political subdivision
thereof relating to any chattel held as security for any
amount payable under or in connection with any Purchased
Receivable, with evidence of perfection of the security
interest in such property noted thereon, if such notation is
required under the laws of the jurisdiction in which such
property is located in order to perfect a security interest in
such property.
(C) If the Contract relating to any Purchased
Receivable requires the related Obligor to maintain insurance
upon the chattel security relating to such Contract, such
Originator shall deliver to the Company all documents or
certificates relating to such insurance.
(D) Such Originator shall deliver to the Company any
other document required by the terms of the related Contracts.
SECTION 6.2 Reporting Requirements. From the date hereof until
the first day following the Purchase and Sale Termination Date, each Originator
will, unless the Servicer (on behalf of the Company) and the Buyer shall
otherwise consent in writing, furnish to the Company and the Buyer:
(a) Purchase and Sale Termination Events. As soon as possible
after the Originator has knowledge of the occurrence of, and in any event within
three Business Days after the Originator has knowledge of the occurrence of,
each Purchase and Sale Termination Event or each event which, with the giving of
notice or the passage of time, or both, would constitute a Purchase and Sale
Termination Event (a "Potential Purchase and Sale Termination Event") in respect
of such Originator, the statement of the chief financial officer or chief
accounting officer of such Originator describing such Purchase and Sale
Termination Event or Potential Purchase and Sale Termination Event, and the
action that such 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
15
after Originator otherwise has knowledge thereof, written notice of (i) material
litigation, investigation or proceeding of the type described in Section 5.6 not
previously disclosed to the Company and (ii) all adverse developments that have
occurred with respect to any previously disclosed litigation, proceedings and
investigations that could have a Material Adverse Effect; and
(c) Other. Promptly, from time to time, such other
information, documents, records or reports respecting the Purchased Receivables
as the Administrator may from time to time reasonably request in order to
protect the interests of the Company, the Buyer or the Administrator with
respect to the Purchased Receivables.
SECTION 6.3 Negative Covenants. From the date hereof until the
date following the Purchase and Sale Termination Date, each Originator agrees
that, unless the Servicer (on behalf of the Company and acting in a manner
consistent with its duties and responsibilities under the Receivables Purchase
Agreement), shall otherwise consent, it shall not:
(a) Sales, Liens, Etc. Except as otherwise provided herein or
in any other Purchase Document, sell, assign (by operation of law or otherwise)
or otherwise dispose of, or create or suffer to exist any Adverse Claim or any
Collections with respect to any Purchased Receivable, or assign any right to
receive income in respect thereof.
(b) Extension or Amendment of Purchased Receivables. Extend,
amend or otherwise modify the terms of any Purchased Receivable in any material
respect generated by it, or amend, modify or waive, in any material respect, any
Contract related thereto (which term or condition relates to payments under, or
the enforcement of, such Contract), except for any extension, amendment or
modification that is permitted under the Receivables Purchase Agreement and is
consistent with its Credit and Collection Policy.
(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 or alteration could, in either case, materially
adversely change the credit standing required of particular Obligors or
potential Obligors or impair the collectibility of a material portion of
Purchased Receivables generated by it.
(d) Purchased Receivables Not to be Evidenced by Promissory
Notes or Chattel Paper. Take any action to cause or permit any Purchased
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 such Originator
is the surviving entity or is merged or consolidated with another Originator, or
(ii) directly or indirectly sell, transfer, assign, convey or lease (other than
to another Originator or wholly-owned subsidiary thereof) (A) whether in one or
a series of transactions, all or substantially all of its assets or (B) any
Purchased Receivables or any interest therein (other than pursuant to this
Agreement).
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SECTION 6.4 Permitted Lockbox Banks. Make any changes in its
instructions to Obligors regarding Collections or add or terminate any bank as a
Permitted Lockbox Bank unless the requirements of Section 9.02(f) of the
Receivables Purchase Agreement have been met.
SECTION 6.5 Accounting for Purchases. Account for or treat the
transactions contemplated hereby in any manner other than as sales of the
Purchased Receivables and Related Rights by such Originator to the Company.
SECTION 6.6 Substantive Consolidation. Each Originator hereby
acknowledges that this Agreement and the other Purchase Documents are being
entered into in reliance upon the Company's identity as a legal entity separate
from such Originator and its Affiliates. Therefore, from and after the date
hereof, each Originator shall take all reasonable steps necessary (including
without limitation all of the steps set forth in Section 9.01(f) of the
Receivables Purchase Agreement) to make it apparent to third Persons that the
Company is an entity with assets and liabilities distinct from those of such
Originator and any other Person, and is not a division of such 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,
such Originator shall take such actions as shall be required in order that:
(a) such Originator shall not be involved in the day to day
management of the Company;
(b) such Originator shall maintain separate corporate records
and books of account from the Company and otherwise will observe corporate
formalities;
(c) the financial statements and books and records of such
Originator shall be prepared after the date of creation of the Company to
reflect and shall reflect the separate existence of the Company;
(d) except as permitted by the Receivables Purchase Agreement,
(i) such Originator shall maintain its assets separately from the assets of the
Company, and (ii) the Company's 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) such Originator shall not act as an agent for the Company,
other than as Servicer or its subservicer under the Receivables Purchase
Agreement, 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) such Originator shall not conduct any of the business of
the Company in its own name;
17
(h) such Originator shall not pay any liabilities of the
Company out of its own funds or assets;
(i) such Originator shall maintain an arm's-length
relationship with the Company;
(j) such Originator 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) such Originator shall not acquire obligations of the
Company;
(l) such Originator shall allocate fairly and reasonably
overhead or other expenses that are properly shared with the Company, including,
without limitation, shared office space;
(m) such Originator shall identify and hold itself out as a
separate and distinct entity from the Company;
(n) such Originator 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
(o) such Originator shall not pay the salaries of the
Company's employees, if any.
ARTICLE VII
ADDITIONAL RIGHTS AND OBLIGATIONS IN
RESPECT OF PURCHASED RECEIVABLES
SECTION 7.1 Rights of the Company. Each Originator hereby authorizes
the Company, the Servicer or their respective designees to take any and all
steps in such Originator's name necessary or desirable, in their respective
determination, to collect all amounts due under any and all Purchased
Receivables, including, without limitation, indorsing the name of such
Originator on checks and other instruments representing Collections and
enforcing such Purchased Receivables and the provisions of the related Contracts
that concern payment and/or enforcement of rights to payment.
SECTION 7.2 Responsibilities of the Originators. Anything herein to
the contrary notwithstanding:
18
(a) Collection Procedures. Each Originator agrees to direct
its respective Obligors to make payments of Purchased Receivables directly to a
post office box related to the relevant Lockbox Account at a Permitted Lockbox
Bank. Each 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 Originator
until transfer of such Collections to the Servicer.
(b) Each Originator shall perform its obligations hereunder,
and the exercise by the Company or its designee of its rights hereunder shall
not relieve such Originator 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 Purchased Receivables, Contracts related thereto or any
other related agreements, nor shall the Company, the Servicer, the Buyer or the
Administrator be obligated to perform any of the obligations of such Originator
thereunder.
(d) Each Originator hereby grants to the Servicer an
irrevocable power of attorney, with full power of substitution, coupled with an
interest, to take in the name of such Originator all steps necessary or
advisable to endorse, negotiate or otherwise realize on any writing or other
right of any kind held or transmitted by such Originator or transmitted or
received by the Company (whether or not from such Originator) in connection with
any Purchased Receivable.
SECTION 7.3 Further Action Evidencing Purchases. Each 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 Purchased Receivables and 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 Purchase Document. Without limiting the generality
of the foregoing, upon the request of the Servicer, such 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) ▇▇▇▇ the master data processing records that evidence or
list (i) such Purchased Receivables and (ii) related Contracts with the legend
set forth in Section 5.23.
Each 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 Purchased Receivables and
Related Rights now existing or hereafter generated by Originator. If any
Originator fails to perform any of its agreements or obligations under this
Agreement, the
19
Company or its designee may (but shall not be required to) itself perform, or
cause the performance of, such agreement or obligation, and the expenses of the
Company or its designee incurred in connection therewith shall be payable by
Originator as provided in Section 9.1.
SECTION 7.4 Application of Collections. Any payment by an
Obligor in respect of any indebtedness owed by it to any Originator in
connection with a Purchased Receivable shall, except as otherwise specified by
such Obligor or required by applicable law and unless otherwise instructed by
the Servicer (with the prior written consent of the Administrator) or the
Administrator, be applied as a Collection of any such Purchased Receivable 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
PURCHASE AND SALE TERMINATION EVENTS
SECTION 8.1 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 shall have occurred and, except for
the Termination Event described in Section 10.01(j) of the Receivables Purchase
Agreement, the Buyer shall have declared the Purchase and Sale Termination Date
to have occurred; or
(b) Any Originator shall fail to make any payment or deposit
to be made by it hereunder when due; or
(c) Any representation or warranty made or deemed to be made
by any Originator (or any of its officers) under or in connection with this
Agreement, any other Purchase Documents, or any other information or report
delivered pursuant hereto or thereto shall prove to have been false or incorrect
in any material respect when made or deemed made; or
(d) Any 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 20 days after
written notice thereof shall have been given by the Servicer to such Originator.
SECTION 8.2 Remedies.
(a) Optional Termination. Upon the occurrence of a Purchase
and Sale Termination Event, the Company (but not the Servicer) shall have the
option, by notice to the Originators (with a copy to the Administrator), to
declare the Purchase Facility as terminated; provided, that the Company shall
have satisfied all of its obligations under the Receivables Purchase Agreement
and such agreement shall have been terminated in accordance with its terms.
20
(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 IX
INDEMNIFICATION
SECTION 9.1 Indemnities by the Originators. Without limiting
any other rights which the Company may have hereunder or under applicable law,
each 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 "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 such
Originator to perform its obligations under this Agreement or any other Purchase
Document, or arising out of the claims asserted against a Purchase and Sale
Indemnified Party relating to the transactions contemplated herein or therein or
the use of proceeds thereof or therefrom, INCLUDING PURCHASE AND SALE
INDEMNIFIED AMOUNTS RESULTING FROM THE NEGLIGENCE OF THE PURCHASE AND SALE
INDEMNIFIED PARTIES, but 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 Purchased 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, property or gross
receipts. Without limiting the foregoing, each Originator, 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 such Originator of an interest in any
Purchased Receivable to any Person other than the Company;
(b) the breach of any representation or warranty made by such
Originator (or any of its officers) under or in connection with this Agreement
or any other Purchase Document, or any information or report delivered by
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 such Originator to comply with any
applicable law, rule or regulation with respect to any Purchased Receivable
generated by such Originator or the related Contract, or the nonconformity of
any Purchased Receivable generated by such Originator or the related Contract
with any such applicable law, rule or regulation;
21
(d) the failure to vest and maintain vested in the Company an
ownership interest in the Purchased Receivables generated by such Originator
free and clear of any Adverse Claim, other than an Adverse Claim arising solely
as a result of an act of the Company or the Administrator, whether existing at
the time of the purchase of such Purchased 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 Purchased
Receivables or purported Purchased Receivables generated by such 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 Purchased
Receivable or purported Purchased Receivable generated by such Originator
(including, without limitation, a defense based on such Purchased 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 Purchased Receivable or
the furnishing of or failure to furnish such services, and any claim for
indemnification by the Buyer or any Affected Party under the Receivables
Purchase Agreement arising out of any action or inaction by or the Receivables
of such Originator, including without limitation under Sections 11.03 and 11.04
thereof;
(g) any product liability claim arising out of or in
connection with services that are the subject of any Purchased Receivable
generated by such 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 Purchased Receivables generated by such Originator.
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 each of the Originators,
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 X
MISCELLANEOUS
SECTION 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 executed by the Company and each Originator (with the prior written
consent of the Buyer, which consent shall not be unreasonably withheld).
22
(b) No failure or delay on the part of the Company, the
Servicer, any 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 any 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 Purchase 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.
SECTION 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 mailing 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.
SECTION 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, each 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 such Originator to the Company
arising in connection with the Purchase 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 such Originator.
SECTION 10.4 Binding Effect; Assignability. This Agreement shall be binding upon
and inure to the benefit of the Company and each Originator and their respective
successors and permitted assigns. Each of the Administrator and the Buyer is a
third party beneficiary of all of the provisions of this Agreement, entitled to
enforce such provisions directly against the parties hereto. No Originator may
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,
23
and shall remain in full force and effect until such time as the parties hereto
shall agree.
SECTION 10.5 Governing Law. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.
SECTION 10.6 Costs, Expenses and Taxes. In addition to the
obligations of the Originators under Article IX, each Originator, severally and
for itself alone, agrees to pay on demand:
(a) to the Company (and any successor and permitted assigns
thereof) all costs and expenses incurred by such Person in connection with the
enforcement of this Agreement and the other Purchase 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 Purchase Documents to be delivered hereunder, and
agrees to indemnify each Purchase 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.
SECTION 10.7 SUBMISSION TO JURISDICTION. EACH PARTY HERETO
HEREBY IRREVOCABLY (a) SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE OF
NEW YORK OR ANY FEDERAL COURT OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF
NEW YORK OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY
PURCHASE 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 ANY ORIGINATOR OR ITS PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTIONS.
SECTION 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 PURCHASE DOCUMENT, OR
ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN
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CONNECTION HEREWITH OR ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH
THIS AGREEMENT OR ANY OTHER PURCHASE 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.
SECTION 10.9 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.
SECTION 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.
SECTION 10.11 Acknowledgment and Agreement. By execution
below, each 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 pursuant to the Receivables
Purchase Agreement, and each Originator consents to such assignment. Each of the
parties hereto acknowledges and agrees that the Administrator is a third party
beneficiary of the rights of the Company arising hereunder and under the other
Purchase Documents to which any Originator is a party.
SECTION 10.12 No Proceeding. Each Originator hereby agrees
that it will not institute, or join any other Person in instituting, against the
Company any insolvency proceeding so long as any of the Company Notes remains
outstanding and for at least one year and one day following the later of (i) the
day on which the aggregate outstanding principal amount of each Company Note is
paid in full and (ii) the day on which all of the obligations of the Company
under the Receivables Purchase Agreement are paid in full.
SECTION 10.13 Limited Recourse. Except as explicitly set forth
herein, the obligations of the Company under this Agreement or any other
Purchase Documents to which it is a party are solely the obligations of the
Company. No recourse under any Purchase Document shall be had against, and no
liability shall attach to, any officer, employee, director, or beneficiary,
whether directly or indirectly, of the Company.
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[SIGNATURE PAGES FOLLOW]
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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.
CMC STEEL FABRICATORS, INC.
D/B/A/ SMI JOIST COMPANY,
as an Originator
By:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
S-1
COMMERCIAL METALS COMPANY,
as an Originator
By:
---------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
S-2
▇▇▇▇▇▇ METAL COMPANY,
as an Originator
By:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
S-3
▇▇▇▇ ELECTRIC STEEL COMPANY
OF SOUTH CAROLINA D/B/A
SMI STEEL SOUTH CAROLINA,
as an Originator
By:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
S-4
SMI STEEL INC.,
as an Originator
By:
-----------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
S-5
STRUCTURAL METALS, INC.,
as an Originator
By:
-----------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
S-6
CMC RECEIVABLES, INC.
By:
-----------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
S-7