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Receivables Funding & Servicing Agreement

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Sectors: Materials and Construction
Governing Law: New York, View New York State Laws
Effective Date: April 14, 1994
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Exhibit 10.25


EXECUTION COPY


RECEIVABLES FUNDING AND SERVICING AGREEMENT


Dated as of April 14, 1994


by and among


CARLISLE PLASTICS FUNDING CORPORATION,


as Borrower,


REDWOOD RECEIVABLES CORPORATION,


as Lender,


CARLISLE PLASTICS, INC.,


as Servicer


and


GENERAL ELECTRIC CAPITAL CORPORATION,


as Operating Agent and Collateral Agent 2
TABLE OF CONTENTS


Page


ARTICLE I


DEFINITIONS


SECTION 1.01. Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 SECTION 1.02. Other Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 SECTION 1.03. Interpretation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 SECTION 1.04. Rounding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

ARTICLE II

COMMITMENT; ADVANCES SECTION 2.01. Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 SECTION 2.02. Optional Changes in
Commitment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 SECTION 2.03. Notices Relating to Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 SECTION 2.04. Disbursement of Loan Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 SECTION 2.05. Note. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 SECTION 2.06. Principal Repayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 SECTION 2.07. Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 SECTION 2.08. Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 SECTION 2.09. Time and Method of Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 SECTION 2.10. Additional Costs; Capital Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 SECTION 2.11. Breakage Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29


ARTICLE III

CONDITIONS TO LENDING


SECTION 3.01. Conditions Precedent to Effectiveness of
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 SECTION 3.02. Conditions Precedent to All Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33


ARTICLE IV

REPRESENTATIONS AND WARRANTIES


SECTION 4.01. Representations and Warranties of the
Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 SECTION 4.02. Representations and Warranties of the
Borrower With Respect to the Parent and
the Transferred Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 SECTION 4.03. Representations and Warranties of the
Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48


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ARTICLE V


GENERAL COVENANTS OF THE BORROWER


SECTION 5.01. Affirmative Covenants of the Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 SECTION 5.02. Reporting Requirements of the Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 SECTION 5.03. Negative Covenants of the Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53


ARTICLE VI


COLLECTIONS AND DISBURSEMENTS


SECTION 6.01. Establishment of Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 SECTION 6.02. Funding of Collection Account. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 SECTION 6.03. Daily Disbursements From the Collection
Account - Revolving Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 SECTION 6.04. Disbursements From the Retention Account
- Settlement Date Procedures - Revolving
Period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 SECTION 6.05. Liquidation Settlement Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 SECTION 6.07. Investment of Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 SECTION 6.08. Termination Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62


ARTICLE VII


APPOINTMENT OF THE SERVICER


SECTION 7.01. Appointment of the Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 SECTION 7.02. Duties and Responsibilities of the
Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 SECTION 7.03. Authorization of the Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 SECTION 7.04. Servicing Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 SECTION 7.05. Negative Covenants of the Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 SECTION 7.06. Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 SECTION 7.07. Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 SECTION 7.08. Annual Statement as to Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68


SECTION 7.09. Annual Independent Public
Accountants' Servicing and
Compliance Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 SECTION 7.10. Termination of Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69


ARTICLE VIII


GRANT OF SECURITY INTERESTS


SECTION 8.01. Borrower's Grant of Security Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 SECTION 8.02. Lender's Assignment and Grant of Security
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 SECTION 8.03. Consent to Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72


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SECTION 8.04. Delivery of Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 SECTION 8.05. Borrower Remains Liable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 SECTION 8.06. Covenants of the Borrower and Servicer
Regarding the Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73


ARTICLE IX


TERMINATION EVENTS


SECTION 9.01. Termination Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 SECTION 9.02. Events of Servicer Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79


ARTICLE X


REMEDIES


SECTION 10.01. Actions Upon Termination Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 SECTION 10.02. Receipt of Payments in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 SECTION 10.03. Application of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 SECTION 10.04. Exercise of Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 SECTION 10.05. Severability of Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 SECTION 10.06. Waiver of Appraisement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 SECTION 10.07. Power of Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 SECTION 10.08. Continuing Security Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84


ARTICLE XI


SUCCESSOR SERVICER


SECTION 11.01. Servicer Not to Resign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 SECTION 11.02. Appointment of the Successor Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 SECTION 11.03. Duties of the Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 SECTION 11.04. Effect of Termination or Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85


ARTICLE XII


INDEMNIFICATION


SECTION 12.01. Indemnities by the Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 SECTION 12.02. Indemnities by the Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87


ARTICLE XIII


OPERATING AGENT


SECTION 13.01. Authorization and Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 SECTION 13.02. Reliance, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 SECTION 13.03. GE Capital and Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89


-iii- 5


ARTICLE XIV


MISCELLANEOUS

SECTION 14.01. Notices, Etc. . . . . . . . . . . . . . . . . . . . . . . 89
SECTION 14.02. Binding Effect; Assignability . . . . . . . . . . . . . . 89
SECTION 14.03. Costs, Expenses and Taxes . . . . . . . . . . . . . . . . 90
SECTION 14.04. Confidentiality . . . . . . . . . . . . . . . . . . . . . 91
SECTION 14.05. No Proceedings . . . . . . . . . . . . . . . . . . . . . 91
SECTION 14.06. Amendments; Waivers; Consents . . . . . . . . . . . . . . 92
SECTION 14.07. GOVERNING LAW; CONSENT TO
JURISDICTION; WAIVER OF JURY
TRIAL. . . . . . . . . . . . . . . . . . . . . . . . . . 92
SECTION 14.08. Execution in Counterparts; Severability . . . . . . . . . 93
SECTION 14.09. Descriptive Headings . . . . . . . . . . . . . . . . . . 93


EXHIBITS - - --------


A. Borrower Notice
B. Borrowing Base Certificate
C. Receivables Sale Agreement
D. Form of Note
E. Officer's Certificate of Parent
as to Borrower's Solvency
F. Officer's Certificate of Borrower
G. Officer's Certificate of Servicer
H. Opinion of Counsel
I. Monthly Report


SCHEDULES - - ---------


1. Concentration Limits
2. Additional Criteria and Requirements for Eligible
Receivables
3. List of Excluded Customers (including Annex A - Form of amending letter)
4. Calculation of Income Discount Amount
5. Calculation of Daily Interest
6. Addresses for Notices and other Offices of the Borrower
7. Former names, assumed names, "dba" names, etc.
Borrower
8. List of Lockboxes and Lockbox Accounts
9. Servicer Financial Covenants


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RECEIVABLES FUNDING AND SERVICING AGREEMENT, dated as of April 14, 1994 (the "Agreement") by and among CARLISLE PLASTICS FUNDING CORPORATION, a Delaware corporation (the "Borrower"), REDWOOD RECEIVABLES CORPORATION, a Delaware corporation, as Lender (as such, together with its successors and assigns, the "Lender"), GENERAL ELECTRIC CAPITAL CORPORATION, in its capacity as operating agent hereunder (as such, together with its successors and assigns, the "Operating Agent") and in its capacity as Collateral Agent for the Liquidity Agent, the Liquidity Lenders, the Letter of Credit Agent, the Letter of Credit Providers and the CP Holders (as such, together with its successors and assigns, the "Collateral Agent") and CARLISLE PLASTICS, INC., a Delaware corporation (as such, together with its successors and assigns, the "Parent"), as servicer hereunder (as such, together with its successors and permitted assigns, the "Servicer").


W I T N E S S E T H:


WHEREAS, the Borrower is a wholly-owned, bankruptcy-remote subsidiary of the Parent;


WHEREAS, the Borrower has been formed for the sole purpose of purchasing and financing certain trade and other receivables owned by the Parent and purchased by or contributed to the Borrower pursuant to the Receivables Sale Agreement, dated as of April 14, 1994 (the "Receivables Sale Agreement"), by and between the Parent and the Borrower;


WHEREAS, the Borrower and the Lender intend that the Lender will make advances to the Borrower from time to time, such advances to be secured by all receivables and other collateral owned by the Borrower;


WHEREAS, the Operating Agent has been requested and is willing to act as operating agent on behalf of the Lender in connection with the making and financing of such advances;


WHEREAS, in order to effectuate the purposes of this Agreement, the Lender and the Operating Agent desire that a servicer be appointed to perform certain servicing, administrative and collection functions in respect of the receivables financed by the Lender under this Agreement;


WHEREAS, the Parent has been requested and is willing to act as the Servicer; and


WHEREAS, in order to secure the advances made to the Borrower by the Lender, the Borrower intends to grant to the Lender a security interest in such receivables and other collateral owned by the Borrower, and the Lender intends to assign such security interest to the Collateral Agent and to grant to the Collateral Agent a security interest in certain other collateral.


NOW, THEREFORE, the parties agree as follows: 7


ARTICLE I


DEFINITIONS


SECTION 1.01. Certain Defined Terms. As used herein, the following terms shall have the following meanings:


"Accrued Monthly Interest and Unused Facility Fees" means for any day within a Settlement Period, the sum of the Daily Interest and Daily Unused Facility Fees calculated for each day from and including the first day of the Settlement Period through and including the day for which the calculation is being made.


"Additional Amounts" means any amounts payable to any Affected Party under Sections 2.10 and 2.11.


"Additional Costs" has the meaning specified in Section 2.10(b).


"Administration Fee" means a fee payable by the Borrower to the Lender in the amount of $25,000 on the Effective Date and thereafter upon each anniversary of the Effective Date.


"Advance" has the meaning set forth in Section 2.01.


"Advance Rate" means, for any date within a Settlement Period, a percentage equal to 100% minus the Lender Discount Rate then in effect.


"Advances Available" means, on any day, an amount equal to the excess of Availability over Advances Outstanding (prior to giving effect to any Advances to be issued on such day).


"Advances Outstanding" means, for any day, the aggregate principal amount of Advances outstanding on such day, after giving effect to all repayments and issuances of Advances on such day.


"Adverse Claim" means any claim of ownership or any lien, security interest, title retention, trust or other charge or encumbrance, or other type of preferential arrangement having the effect or purpose of creating a lien or security interest, other than the security interest created under this Agreement or the Collateral Agent Agreement.


"Affected Party" means the Lender, any of the Liquidity Lenders, the Operating Agent, any of the Letter of Credit Providers, the Collateral Agent, or any affiliate of the foregoing persons.


-2- 8


"Affiliate" means, as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person within the meaning of control under Section 15 of the Securities Act of 1933, as amended.


"Agreement" means this Receivables Funding and Servicing Agreement, among the Borrower, the Lender, the Servicer, the Operating Agent and the Collateral Agent.


"Authorized Officer" means, with respect to any corporation, the Chairman of the Board, the President, any Vice President, the Secretary, the Treasurer, any Assistant Secretary, any Assistant Treasurer and each other officer of such corporation specifically authorized in resolutions of the Board of Directors of such corporation to sign agreements, instruments or other documents in connection with this Agreement.


"Availability" means, as of any date, the least of (a) (i) the Borrowing Base as of such date, times (ii) the Advance Rate, minus (iii) the Income Discount Amount, (b) the Maximum Facility Commitment then in effect, or (c) 80% of the Outstanding Balance of Eligible Receivables determined as of the end of the previous month.


"Average Outstanding Balance of all Transferred Receivables" means, for any period, the sum of the Outstanding Balance of Transferred Receivables (other than Defaulted Receivables) on each day during such period, divided by the number of days in such period.


"Billed Amount" means, with respect to any Receivable, the net amount billed on the Billing Date to the related Obligor with respect thereto.


"Billing Date" means the date on which the invoice with respect to a Receivable was generated by the related Obligor.


"Borrower" means Carlisle Plastics Funding Corporation, a Delaware corporation.


"Borrower Account Collateral" has the meaning specified in Section 8.01(c).


"Borrower Assigned Agreements" has the meaning specified in Section 8.01(b).


"Borrower Collateral" has the meaning specified in Section 8.01.


-3- 9


"Borrower LOC Draws" means any payments made to the Lender in connection with the Letter of Credit and allocated to the Borrower.


"Borrower Notice" means a notice in the form of Exhibit A, setting forth the information required by Section 2.03(b).


"Borrower Secured Obligations" means all obligations of every nature of the Borrower (other than to the Parent or Servicer), now or hereafter existing, under this Agreement, the Note, and any promissory note or other document or instrument delivered pursuant to such documents, and all amendments, extensions or renewals hereof or thereof, whether for principal, interest, fees, expenses or otherwise, whether now existing or hereafter arising, voluntary or involuntary, whether or not jointly owed with others, direct or indirect, absolute or contingent, liquidated or unliquidated, and whether or not from time to time decreased or extinguished and later increased, created or incurred and all or any portion of such obligations that are paid, to the extent all or any part of such payment is avoided or recovered directly or indirectly from the Lender, the Operating Agent or the Collateral Agent as a preference, fraudulent transfer or otherwise.


"Borrower's Net Worth" means, with respect to the Borrower, the total assets less the total liabilities of the Borrower.


"Borrower's Share" means the ratio of the Maximum Facility Commitment to the aggregate maximum commitments under this Agreement and all Other Funding Agreements.


"Borrowing Base" means, as of the date of its computation, an amount equal to (a) the aggregate Outstanding Balance of Transferred Receivables that are Eligible Receivables, plus (b) an amount equal to the Outstanding Balance of Eligible Receivables to be purchased by or contributed to the Borrower on that date, minus (c) the sum of the Concentration Discount Amounts for all Obligors in respect of such Eligible Receivables, minus (d) the total amount of Promotional Allowance Reserve and Deductions in respect of such Eligible Receivables, minus (e) Collections received in respect of Transferred Receivables since the end of the period covered by the most recent Borrowing Base Certificate, plus (f) the Estimated Outstanding Balance of New Receivables.


"Borrowing Base Certificate" means an Officer's Certificate in the form of Exhibit B, computing for any Business Day the Borrowing Base, the Availability and any net increase or decrease in the Availability since the date of the previous Borrowing Base Certificate and New Advances Available.


-4- 10


"Borrowing Excess" means, for any date, as disclosed in the most recently submitted Borrowing Base Certificate, the extent to which the then Advances Outstanding exceeds the Availability as of such date.


"Breakage Costs" has the meaning specified in Section 2.11.


"Business Day" means any day of the year other than a Saturday, Sunday or any day on which banks generally are required, or authorized, to close in New York, New York.


"Cash Interest Expense" means, with respect to any Person for any period, the amount of cash interest payable on all Debt of such Person and its consolidated Subsidiaries.


"Change in Control" means the time when (i) any Person or "group" has acquired "beneficial ownership" (as such terms are defined under Section 13d-3 of and Regulation 13D under the Securities Exchange Act of 1934, as amended), either directly or indirectly, of outstanding shares of Stock of the Parent having more than fifty percent (50%) of the voting power for the election of directors of the Parent under ordinary circumstances or (ii) more than fifty percent (50%) of the members of the Parent's board of directors shall have been replaced by new directors not nominated for membership on the board by a majority of directors who were directors on the Effective Date.


"Collateral" means, collectively, the Borrower Collateral pledged by the Borrower in Section 8.01 and the Lender Collateral pledged and assigned by the Lender in Section 8.02.


"Collateral Account" means the account maintained with the Depositary described in Section 6.01(d).


"Collateral Agent" means GE Capital or such other party designated as agent for the secured parties under the Collateral Agent Agreement.


"Collateral Agent Agreement" means the Collateral Agent Agreement, dated as of March 15, 1994, entered into by the Lender with the Collateral Agent, the Letter of Credit Agent, the Liquidity Agent and the Depositary.


"Collateral Agent Fees" means the fees paid to the Collateral Agent under the Collateral Agent Agreement.


"Collection Account" means the Eligible Bank Account maintained with the Depositary described in Section 6.01(b).


-5- 11


"Collections" means, with respect to any Receivable, all cash collections and other cash proceeds of such Receivable.


"Commercial Paper" means commercial paper issued by the Lender.


"Commercial Paper Notes" mean promissory notes of the Lender issued with respect to Commercial Paper.


"Commitment Termination Date" means the earlier of (a) the date so designated pursuant to Section 9.01 as a result of a Termination Event, and (b) the Final Maturity Date; provided, however, that if the Borrower has not on or before the 90th day prior to the Final Maturity Date (i) entered into an agreement with the Lender and the Operating Agent renewing or extending the Final Maturity Date, or (ii) entered into a firm commitment with a counterparty, acceptable to the Operating Agent, to purchase from the Lender at par plus accrued Interest all Advances Outstanding as of the Final Maturity Date, then the Commitment Termination Date shall be the date that is 90 days prior to the Final Maturity Date.


"Concentration Discount Amount" means, with respect to any Obligor, on any date after giving effect to all Eligible Receivables to be purchased on such date, the amount by which the Outstanding Balance of Eligible Receivables payable by such Obligor exceeds either (a) the Dollar amount set forth on Schedule 1, or
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