<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
---------------
FORM 10-Q
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 1996
------------------------------
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
------------ -----------
***************************************************
Commission file number 1-10756
CARLISLE PLASTICS, INC.
-----------------------
(Exact name of registrant as specified in its Charter)
DELAWARE 04-2891825
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
***************************************************
1314 NORTH THIRD STREET, PHOENIX, AZ 85004-1751
- ---------------------------------------- ----------------
(Address of principal executive offices) (Zip Code)
(602) 407-2100
----------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days: YES X NO
--- ---
AT MARCH 31, 1996, 8,353,973 AND 9,500,312 SHARES OF CARLISLE PLASTICS, INC.
CLASS A COMMON STOCK AND CLASS B COMMON STOCK, RESPECTIVELY, WERE OUTSTANDING.
<PAGE> 2
CARLISLE PLASTICS, INC.
FORM 10-Q
QUARTER ENDED MARCH 31, 1996
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I - FINANCIAL INFORMATION:
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
PART II - OTHER INFORMATION:
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Defaults Upon Senior Securities 11
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURES 12
INDEX TO EXHIBITS 13
</TABLE>
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CARLISLE PLASTICS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(In thousands, except share and per share amounts) March 31, December 31,
1996 1995
---- ----
<S> <C> <C>
ASSETS
Current assets:
Cash and equivalents $ 1,968 $ 1,842
Receivables--net of allowances of $3,552 as of
March 31, 1996 and $3,311 as of December 31, 1995 22,241 49,171
Inventories 39,565 41,885
Net assets held for sale 1,124 --
Deferred income taxes 5,233 6,054
Other current assets 5,954 5,782
--------- ---------
Total current assets 76,085 104,734
Property, plant and equipment--net of accumulated
depreciation of $77,531 as of March 31, 1996
and $85,268 as of December 31, 1995 122,116 124,443
Goodwill--net 58,961 59,517
Other assets--net 4,324 5,745
--------- ---------
TOTAL ASSETS $ 261,486 $ 294,439
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 28,049 $ 8,910
Accounts payable 41,537 31,785
Accrued interest 3,499 863
Other accrued liabilities 7,482 10,259
Restructuring accrual 3,661 8,086
--------- ---------
Total current liabilities 84,228 59,903
--------- ---------
Long-term debt--net of current portion 125,017 183,784
--------- ---------
Deferred income taxes 4,376 4,306
--------- ---------
Other noncurrent liabilities 1,464 1,580
--------- ---------
Commitments and contingencies
Stockholders' equity:
Preferred stock--par value $.01; 10,000,000 shares
authorized, no shares issued
Class A common stock--par value $.01; 50,000,000 shares
authorized, 8,353,973 issued and outstanding 84 84
Class B common stock--par value $.01; 20,000,000 shares
authorized, 9,500,312 issued and outstanding 95 95
Additional paid-in capital 69,107 69,107
Retained deficit (22,885) (24,420)
--------- ---------
Total stockholders' equity 46,401 44,866
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 261,486 $ 294,439
========= =========
</TABLE>
See notes to unaudited condensed consolidated financial statements and
independent accountants' report.
3
<PAGE> 4
CARLISLE PLASTICS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
1996 1995
--------- ---------
<S> <C> <C>
Net sales $ 94,618 $ 103,160
Cost of goods sold 72,141 79,786
--------- ---------
Gross profit 22,477 23,374
Operating expenses 13,626 15,700
Goodwill and other amortization 648 777
--------- ---------
Operating income 8,203 6,897
Interest expense 5,423 5,807
Interest and other income (17) (12)
--------- ---------
Income before provision for income taxes 2,797 1,102
Provision for income taxes 1,259 469
--------- ---------
Net income $ 1,538 $ 633
========= =========
Net income per common share $ .09 $ .04
========= =========
Average number of common and common
equivalent shares outstanding 17,877 17,721
========= =========
</TABLE>
See notes to unaudited condensed consolidated financial statements and
independent accountants' report.
4
<PAGE> 5
CARLISLE PLASTICS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
(In thousands)
THREE MONTHS ENDED MARCH 31,
1996 1995
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,538 $ 633
Adjustments to reconcile net income to
net cash flows from operating activities:
Depreciation and amortization 5,252 6,128
Deferred income taxes 891 146
Bad debt expense 214 684
Changes in assets and liabilities:
Receivables (2,434) (3,538)
Inventories 2,320 (8,959)
Other current assets (41) (8)
Accounts payable 9,752 4,594
Other accrued liabilities (1,976) 465
Other assets 209 (473)
-------- --------
Net cash provided by (used for) operating activities 15,725 (328)
-------- --------
CASH FLOWS USED FOR INVESTING ACTIVITIES:
Acquisition of property, plant and equipment (6,464) (2,198)
Proceeds from sale of fixed assets 1,371 --
-------- --------
Net cash used for investing activities (5,093) (2,198)
-------- --------
CASH FLOWS USED FOR FINANCING ACTIVITIES:
Repayments of long-term debt (4,289) (2,244)
Net (repayments) borrowings under long-term
working capital lines of credit (6,217) 3,772
Deferred financing costs -- (121)
-------- --------
Net cash (used for) provided by financing activities (10,506) 1,407
-------- --------
CASH AND EQUIVALENTS:
Net increase (decrease) 126 (1,119)
BEGINNING OF PERIOD 1,842 4,488
-------- --------
END OF PERIOD $ 1,968 $ 3,369
======== ========
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Interest paid $ 1,766 $ 2,266
Income taxes paid $ 145 $ 187
Sale of accounts receivable and reduction of
working capital line of credit $ 29,150 --
</TABLE>
See notes to unaudited condensed consolidated financial statements and
independent accountants' report.
5
<PAGE> 6
CARLISLE PLASTICS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollar amounts in thousands, except per share amounts)
(Unaudited--See Independent Accountants' Report)
A. BASIS OF PRESENTATION
The condensed consolidated financial statements have been prepared by Carlisle
Plastics, Inc. (the "Company") pursuant to the rules and regulations of the
Securities and Exchange Commission. In the opinion of management, the statements
reflect the adjustments, which are of a normal recurring nature, necessary to
present fairly the Company's financial position as of March 31, 1996 and
December 31, 1995 and the results of operations and cash flows for the three
months ended March 31, 1996 and 1995. While the interim financial statements and
accompanying notes are unaudited, they have been reviewed by Deloitte & Touche
LLP, the Company's independent certified public accountants.
Results of operations are not necessarily indicative of the results expected for
the full year. Certain amounts in prior periods' financial statements have been
reclassified to conform to the current period's presentation.
These condensed consolidated financial statements should be read in conjunction
with the consolidated financial statements and notes included in the Company's
Form 10-K for the year ended December 31, 1995.
B. INVENTORIES
Inventories consisted of the following at March 31, 1996 and December 31, 1995:
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
---- ----
<S> <C> <C>
Raw materials $ 12,567 $ 12,553
Finished Goods 26,998 29,332
-------- --------
Total $ 39,565 $ 41,885
======== ========
</TABLE>
C. RELATED PARTY TRANSACTIONS
Management fees incurred with respect to services rendered by affiliates of a
major stockholder were $188 for the three months ended March 31, 1996 and 1995.
D. SALE OF ACCOUNTS RECEIVABLE
On March 26, 1996, the Company terminated its Receivables Funding and
Servicing agreement and entered into a Receivables Purchase and Servicing
Agreement. Under the Receivables Purchase and Servicing Agreement, the Company
sells its receivables into a defined pool of trade accounts receivable. A yield
discount rate is charged to the Company which is based on the average
commercial paper rate (5.4% at March 31, 1996) plus 1.25%. As collections
reduce accounts receivable included in the pool, the Company sells new
receivables up to the maximum permitted under the agreement of $45 million or
85% of eligible accounts receivable or the Company's desired funding level,
whichever is less. Under the terms of the agreement the Company has retained
6
<PAGE> 7
substantially the same risk of credit loss as if the receivables had not been
sold. The Company, as servicing agent for the purchaser, retains collection and
administrative responsibilities. The Company sold $29.2 million of accounts
receivable at March 31, 1996 and the proceeds from the sales were used to
reduce borrowings under its accounts receivable working capital line of credit.
E. RESTRUCTURING STATUS
During the first quarter of 1996, the Company continued to implement its
restructuring plan and successfully exited its remaing private label customer
relationships and disposed of its remaining private label inventory. In
addition, the Company has completed the sale of property and equipment for two
more of its container manufacturing facilities. Principal items charged
against the restructuring reserve for the three months ended March 31, 1996
were losses related to the disposal of property and equipment, severance, and
lease termination costs.
7
<PAGE> 8
INDEPENDENT ACCOUNTANTS' REPORT
Carlisle Plastics, Inc.
We have reviewed the accompanying condensed consolidated balance sheet of
Carlisle Plastics, Inc. and subsidiaries (the Company) as of March 31, 1996 and
the related condensed consolidated statements of operations and cash flows for
the three month periods ended March 31, 1996 and 1995. These financial
statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and of making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to such condensed consolidated financial statements for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Carlisle Plastics, Inc. and
subsidiaries as of December 31, 1995, and the related consolidated statements of
operations, stockholders' equity, and cash flows for the year then ended (not
presented herein); and in our report dated February 16, 1996, we expressed an
unqualified opinion on those consolidated financial statements. In our opinion,
the information set forth in the accompanying condensed consolidated balance
sheet as of December 31,1995 is fairly stated, in all material respects, in
relation to the consolidated balance sheet from which it has been derived.
DELOITTE & TOUCHE LLP
Phoenix, Arizona
April 18, 1996
8
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
NET SALES
The Company's net sales for the three months ended March 31, 1996 decreased 8.3%
to $94.6 million from $103.2 million for the three months ended March 31, 1995.
The decrease in net sales is primarily attributable to he Company's exit from
the private label grocery and containers businesses.
GROSS PROFIT
Gross profit decreased to $22.5 million from $23.4 million and increased to
23.8% as a percentage of sales from 22.7% for the three months ended March 31,
1996 and 1995, respectively. The increase in gross profit as a percentage of
sales is attributable to product mix changes and a more favorable resin cost
mix.
OPERATING EXPENSES
Operating expenses, exclusive of goodwill and other amortization, decreased
13.2% to $13.6 million from $15.7 million for the three months ended March 31,
1996 and 1995, respectively. The decrease in operating expenses for the three
month period is primarily attributable to decreases in selling and
advertising and promotions. Such decreases are primarily the result of the
Company's exit from the private label grocery and containers businesses and
other cost reduction measures implemented during 1995.
INTEREST EXPENSE
Interest expense decreased 6.6% to $5.4 million for the three months ended March
31, 1996 from $5.8 million for the comparable three month period in 1995. The
decrease in interest expense is attributable to a decrease in the Company's
average outstanding debt. Cash paid for interest decreased 22.1% from $2.3
million for the three months ended March 31, 1995 to $1.8 million for the three
months ended March 31, 1996.
INCOME TAXES
The Company recorded a tax provision of $1.3 million reflecting an effective tax
rate of 45% for the three months ended March 31, 1996.
NET INCOME
Net income for the three months ended March 31, 1996 increased to $1.5 million
from $.6 million for the three months ended March 31, 1995.
RESTRUCTURING STATUS
During the first quarter of 1996, the Company continued to implement its
restructuring plan and successfully exited its remaing private label customer
relationships and disposed of its remaining private label inventory. In
addition, the Company has completed the sale of property and equipment for two
more of its container manufacturing facilities. Principal items charged
against the restructuring reserve for the three months ended March 31, 1996
were losses related to the disposal of property and equipment, severance, and
lease termination costs.
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital decreased to a deficit of $8.1 million as of
March 31, 1996 from $44.8 million as of December 31, 1995. The decrease in
working capital is primarily the net effect of decreases in accounts
receivable and increases in the current portion of long-term debt. The decrease
in accounts receivable is attributable to the sale of accounts receivable in the
amount of $29.2 million to reduce long-term working capital lines of credit in
9
<PAGE> 10
accordance with the Receivables Purchase and Servicing Agreement executed on
March 26, 1996 (discussed below). The increase in the current portion of
long-term debt is attributable to re-classification of the $19.1 million
Senior Variable Rate Notes which become due in March 1997.
For the three months ended March 31, 1996, net cash provided by operations was
$15.7 million compared to net cash used by operations of $.3 million for the
comparable period in 1995. The increase in net cash provided by operations is
attributable to reduced cash requirements to meet working capital needs. During
the comparable period in 1995, accounts receivable and inventories increased
significantly primarily as a result of increased resin raw material costs and
unit selling prices.
Net cash used for investing activities increased $2.9 million to $5.1 million
for the three months ended March 31, 1996 from $2.2 million for the comparable
1995 period. During the first quarter of 1996, the Company continued to invest
in production equipment in order to improve manufacturing efficiency and
capacity. The 1996 period also includes proceeds received from the sale of
property and equipment related to the Company's container business. The Company
anticipates that capital expenditures for fiscal year 1996 will approximate the
annual charge for depreciation.
Net cash used for financing activities was $10.5 million compared to net cash
provided by financing activities of $1.4 million for the three months ended
March 31, 1996 and 1995, respectively. The 1996 use of cash primarily represents
utilization of cash provided by operations to reduce outstanding debt.
On March 26, 1996, the Company terminated its Receivables Funding and
Servicing agreement and entered into a Receivables Purchase and Servicing
Agreement. Under the Receivables Purchase and Servicing Agreement, the Company
sells its receivables into a defined pool of trade accounts receivable. A yield
discount rate is charged to the Company which is based on the average
commercial paper rate (5.4% at March 31, 1996) plus 1.25%. As collections
reduce accounts receivable included in the pool, the Company sells new
receivables up to the maximum permitted under the agreement of $45 million or
85% of eligible accounts receivable or the Company's desired funding level,
whichever is less. Under the terms of the agreement the Company has retained
substantially the same risk of credit loss as if the receivables had not been
sold. The Company, as servicing agent for the purchaser, retains collection and
administrative responsibilities. The Company sold $29.2 million of accounts
receivable at March 31, 1996 and the proceeds from the sales were used to
reduce borrowings under its accounts receivable working capital line of credit.
The Company had available funding through the sale of accounts receivable under
its Receivables Purchase and Servicing Agreement of $ 5.5 million at March 31,
1996. At March 31, 1996 the Company's revolving inventory credit facility had
available borrowings of $17.2 million and no outstanding borrowings.
Management currently expects its cash on hand, funds from operations and
borrowings available under existing credit facilities will be sufficient to
cover future operating requirements in 1996. In 1997 the Company has $136.0
million in principal indebtedness which becomes due. The Company has several
options to refinance the debt this calendar year and expects to complete a
refinancing in 1996 provided capital market rates remain attractive to the
Company.
10
<PAGE> 11
PART II - OTHER INFORMATION
Item 1. Legal Proceedings:
None.
Item 2. Changes in Securities:
None.
Item 3. Defaults Upon Senior Securities:
None.
Item 4. Submission of Matters to a Vote of Security Holders:
None.
Item 5. Other Information:
None.
Item 6. Exhibits and Reports on Form 8-K:
The Index to Exhibits as set forth on page 12.
11
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CARLISLE PLASTICS, INC.
Date May 10, 1996 /s/ Patrick J. O'Leary
------------ ----------------------
Patrick J. O'Leary
Chief Financial Officer
(Principal Financial and
Accounting Officer) and
Director
12
<PAGE> 13
CARLISLE PLASTICS, INC. AND SUBSIDIARIES
QUARTERLY PERIOD ENDED MARCH 31, 1996
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
<S> <C>
10.7 Sixth Amendment to the Credit Agreement dated as of March 11,
1996 and effective as of December 31, 1995 between the
Company, as borrower, A&E Products (Far East) Ltd. ("Far
East"), Plasticos Bajacal S.A. de C.V. ("Plasticos"), Rhino-X
Industries, Inc. ("Rhino-X"), A&E Korea, Ltd. "(Korea"),
American Western Corporation ("American Western"), as
co-obligors, and General Electric Capital Corporation
("GECC"), as agent and lender.
10.13 Amendment No. 7 to Equipment Lease Agreement dated as of
December 31, 1995 by and between the Company and GECC.
10.14(a) Amendment No. 5 to Equipment Sublease Agreements dated as of
December 31, 1995 by and between the Company and American
Western.
10.14(b) Amendment No. 5 to Equipment Sublease Agreements dated as of
December 31, 1995 by and between the Company and Rhino-X.
10.18(a) Termination of Receivables Funding and Servicing Agreement
dated as of March 26, 1996 among Carlisle Plastics, Inc. (the
"Servicer"), Carlisle Plastics Funding Corporation (the
"Borrower"), Redwood Receivables Corporation (the "Lender")
and General Electric Capital corporation (the "Operating
Agent").
10.18(b) Receivables Purchase and Servicing Agreement dated as of March
26, 1996 by and among Carlisle Plastics Funding Corporation
(as "Seller"), Redwood Receivables Corporation (as
"Purchaser"), Carlisle Plastics, Inc. (as "Servicer"), and
General Electric Capital Corporation (as "Operating Agent and
Collateral Agent").
10.20 Amendment No. 2 to Receivables Sale Agreement dated as of
March 26, 1996 between Carlisle Plastics, Inc. (the "Parent")
and Carlisle Plastics Funding Corporation (the "RFC")
27 Financial Data Schedule
</TABLE>
13
<PAGE> 1
EXHIBIT 10.7
SIXTH AMENDMENT TO CREDIT AGREEMENT
This SIXTH AMENDMENT TO CREDIT AGREEMENT (this "Sixth
Amendment"), executed as of March 11, 1996 and effective as of December 31,
1995, is by and among CARLISLE PLASTICS, INC., a Delaware corporation, as
Borrower (the "Borrower"), A&E PRODUCTS (FAR EAST) LTD., a Hong Kong
corporation, PLASTICOS BAJACAL S.A. DE C.V., a Mexican corporation, RHINO-X
INDUSTRIES, INC., a Delaware corporation, A&E KOREA, LTD., a Delaware
corporation, and AMERICAN WESTERN CORPORATION, a Delaware corporation,
collectively as the Co-Obligors (the "Co-Obligors"), and GENERAL ELECTRIC
CAPITAL CORPORATION, a New York corporation, as Agent and as Lender (the
"Agent").
RECITALS
A. The parties hereto are parties to that certain Credit
Agreement dated as of March 9, 1994, as amended by that certain First Amendment
to Credit Agreement and Security Agreement dated as of April 14, 1994, that
certain Second Amendment to Credit Agreement dated as of April 15, 1994, that
certain Third Amendment to Credit Agreement dated as of October 25, 1994, that
certain Fourth Amendment to Credit Agreement dated as of June 14, 1995 and that
certain Fifth Amendment to Credit Agreement effective as of September 30, 1995
(as amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"), pursuant to which Lender has made and may hereafter make
loans and advances and other extensions of credit to Borrower; and
B. Borrower and Co-Obligors desire, and Agent is willing, to
further amend certain provisions of the Credit Agreement, all on the terms and
conditions set forth in this Sixth Amendment. These Recitals shall be construed
as part of this Sixth Amendment.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants hereinafter contained and for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Defined Terms; Loan Document. Each capitalized term used in
this Sixth Amendment and not otherwise defined in this Sixth Amendment shall
have the meaning ascribed thereto in Schedule A to the Credit Agreement. This
Sixth Amendment shall constitute a Loan Document.
2. Amendments to the Credit Agreement.
2.1 SCHEDULE A.
(a) Definition of Operating Cash Flow. Schedule A to the
Credit Agreement is hereby amended by inserting the following
definition between the definitions of "Obligations" and
"Patent License" contained therein:
"'Operating Cash Flow' shall mean, with respect to
Borrower and its Subsidiaries on a consolidated basis, for any
fiscal period of Borrower, the sum of (i) EBITDA minus (ii)
Capital Expenditures."
(b) Definition of Commitment Termination Date. The
definition of "Commitment Termination Date" contained in
Schedule A to the Credit Agreement is hereby amended by
deleting the date "March 9, 1997" from the second line thereof
and inserting the date "April 15, 1999" in substitution
therefor.
2.2 SECTION (a) OF SCHEDULE 6.11. Schedule 6.11 to the
Credit Agreement is hereby amended by deleting in its entirety clause
(a) thereof and by substituting therefor the following:
"(a) Annual Maximum Capital Expenditures. Borrower and its
Subsidiaries on a consolidated basis shall not make annual
Capital Expenditures during the following periods that exceed
in the aggregate the amounts set forth opposite each of such
periods:
<PAGE> 2
<TABLE>
<CAPTION>
Aggregate Annual Maximum
Period Covered Capital Expenditures
-------------- --------------------
<S> <C>
January 1, 1994 through December $ 19,400,000
31, 1994
January 1, 1995 through December $ 16,000,000
31, 1995
January 1, 1996 through March 31, $ 18,000,000"
1999
</TABLE>
2.3 SECTION (b) OF SCHEDULE 6.11. Schedule 6.11 to the
Credit Agreement is hereby amended by deleting in its entirety clause
(b) thereof and by substituting therefor the following:
"(b) Minimum Net Worth. Borrower and its Subsidiaries on a
consolidated basis shall have, as at each of the dates set
forth below (and shall maintain at all times during the period
from and including such date through but excluding the next
date immediately succeeding such date), Net Worth equal to or
greater than the amount set forth opposite such date:
<TABLE>
<CAPTION>
Date Minimum Net Worth
---- -----------------
<S> <C>
June 30, 1994 The higher of $66,000,000 or Equity
as of April 30, 1994
September 30, 1994 The higher of $66,000,000 or Equity
as of April 30, 1994
December 31, 1994 $ 68,000,000
March 31, 1995 $ 69,400,000
June 30, 1995 $ 71,300,000
September 30, 1995 $ 70,000,000
December 31, 1995 $ 40,000,000
March 31, 1996 $ 40,000,000
June 30, 1996 $ 40,000,000
September 30, 1996 $ 42,000,000
December 31, 1996 $ 44,000,000
March 31, 1997 $ 45,000,000
June 30, 1997 $ 46,000,000
September 30, 1997 $ 48,000,000
December 31, 1997 $ 49,000,000
March 31, 1998 $ 50,000,000
June 30, 1998 $ 51,000,000
September 30, 1998 $ 53,000,000
</TABLE>
-2-
<PAGE> 3
<TABLE>
<CAPTION>
Date Minimum Net Worth
---- -----------------
<S> <C>
December 31, 1998 $ 54,000,000
March 31, 1999 $ 55,000,000"
</TABLE>
2.4 SECTION (c) OF SCHEDULE 6.11. Schedule 6.11 to the
Credit Agreement is hereby amended by deleting in its entirety clause
(c) thereof and by substituting therefor the following:
"(c) Minimum Interest and Taxes Coverage Ratio. Borrower
and its Subsidiaries on a consolidated basis shall have a
ratio of (i) EBITDA to (ii) Interest Expense and taxes (as
stated in Borrower's consolidated statement of income), in
each case measured as at each of the dates set forth below,
for each of the periods set forth opposite such dates, of not
less than the amount set forth opposite each such period and
date:
<TABLE>
<CAPTION>
Minimum Interest and
Date Period Covered Taxes Coverage Ratio
---- -------------- --------------------
<S> <C> <C>
June 30, 1994 July 1, 1993 through June 30, 2.2 to 1.0
1994
September 30, 1994 October 1, 1993 through 2.2 to 1.0
September 30, 1994
December 31, 1994 January 1, 1994 through 2.2 to 1.0
December 31, 1994
March 31, 1995 April 1, 1994 through March 2.1 to 1.0
31, 1995
June 30, 1995 July 1, 1994 through June 30, 2.1 to 1.0
1995
September 30, 1995 October 1, 1994 through 2.1 to 1.0
September 30, 1995
December 31, 1995 January 1, 1995 through Not Applicable
December 31, 1995
January 1, 1996 through ____ Not Applicable
March 30, 1998
March 31, 1998 April 1, 1997 through March 2.0 to 1.0
31, 1998
June 30, 1998 July 1, 1997 through June 30, 2.0 to 1.0
1998
September 30, 1998 October 1, 1997 through 2.0 to 1.0
September 30, 1998
December 31, 1998 January 1, 1998 through 2.0 to 1.0
December 31, 1998
March 31, 1999 April 1, 1998 through March 2.0 to 1.0"
31, 1999
</TABLE>
-3-
<PAGE> 4
2.5 SECTION (d) OF SCHEDULE 6.11. Schedule 6.11 to the
Credit Agreement is hereby amended by deleting in its entirety clause
(d) thereof and by substituting therefor the following:
"(d) Minimum Fixed Charges Coverage Ratio. Borrower and
its Subsidiaries on a consolidated basis shall have a ratio of
(i) EBITDA to (ii) Fixed Charges, in each case measured as at
each of the dates set forth below, for each of the periods set
forth opposite such dates, of not less than the amount set
forth opposite each such period and date:
<TABLE>
<CAPTION>
Minimum Fixed Charges
Date Period Covered Coverage Ratio
---- -------------- --------------
<S> <C> <C>
June 30, 1994 July 1, 1993 through 1.5 to 1.0
June 30, 1994
September 30, 1994 October 1, 1993 through 1.5 to 1.0
September 30, 1994
December 31, 1994 January 1, 1994 through 1.5 to 1.0
December 31, 1994
March 31, 1995 April 1, 1994 through March 1.4 to 1.0
31, 1995
June 30, 1995 July 1, 1994 through 1.4 to 1.0
June 30, 1995
September 30, 1995 October 1, 1994 through 1.4 to 1.0
September 30, 1995
December 31, 1995 January 1, 1995 through Not Applicable
December 31, 1995
January 1, 1996 through ____ Not Applicable
March 30, 1998
March 31, 1998 April 1, 1997 through March 1.3 to 1.0
31, 1998
June 30, 1998 July 1, 1997 through June 30, 1.3 to 1.0
1998
September 30, 1998 October 1, 1997 through 1.3 to 1.0
September 30, 1998
December 31, 1998 January 1, 1998 through 1.3 to 1.0
December 31, 1998
March 31, 1999 April 1, 1998 through March 1.3 to 1.0"
31, 1999
</TABLE>
2.6 SECTION (e) OF SCHEDULE 6.11. Schedule 6.11 to the
Credit Agreement is hereby amended by deleting in its entirety clause
(e) thereof and by substituting therefor the following:
"(e) Minimum Operating Cash Flow. Borrower and its
Subsidiaries on a consolidated basis shall have, at each of
the dates set forth below (and shall maintain at all times
during the period from and including such date through but
excluding the next date immediately succeeding such date),
Operating Cash Flow equal to or greater than the amount set
forth opposite such date:
-4-
<PAGE> 5
<TABLE>
<CAPTION>
Minimum Operating
Date Cash Flow
---- ---------
<S> <C>
for the fiscal quarter ended: $ 4,000,000
March 31, 1996
for the two fiscal quarter period ended: $ 9,000,000
June 30, 1996
for the three fiscal quarter period ended: $15,000,000
September 30, 1996
for the four fiscal quarter period ended: $22,000,000
December 31, 1996
for the four fiscal quarter period ended: $24,000,000
March 31, 1997
for the four fiscal quarter period ended: $24,000,000
June 30, 1997
for the four fiscal quarter period ended: $24,000,000
September 30, 1997
for the four fiscal quarter period ended: $24,000,000"
December 31, 1997
</TABLE>
2.7 SECTION 6.16. Section 6.16 of the Credit Agreement is
hereby amended by deleting in its entirety the table which is contained
at the end thereof and substituting therefor the following table:
<TABLE>
<CAPTION>
Fiscal Year Amount
----------- ------
<S> <C>
1994 $23,134,000
1995 $25,448,000
1996 $27,992,000
1997 $30,791,000
1998 $33,870,000
</TABLE>
3. Conditions to Effectiveness. This Sixth Amendment shall not
become effective, and Agent and Lenders shall have no obligation hereunder,
until the following conditions shall have been satisfied in full, in Agent's
sole discretion:
(a) Agent shall have received original counterparts of this
Sixth Amendment, duly executed by each party hereto;
(b) Agent shall have received such agreements, schedules,
exhibits, certificates, documents or other instruments as Agent may
request; and
(c) on and as of the date hereof, the representations and
warranties of Borrower made pursuant to Section 4 hereof shall be true,
accurate and complete in all respects.
4. Representations and Warranties of Borrower. In order to
induce Agent and Lender to enter into this Sixth Amendment, Borrower hereby
makes the following representations and warranties, each of which shall survive
the execution and delivery of this Sixth Amendment:
-5-
<PAGE> 6
(a) as of the date hereof, no Default or Event of Default has
occurred and is continuing and, after giving effect to this Sixth
Amendment and the transactions contemplated hereby, no Default or Event
of Default shall have occurred and be continuing;
(b) as of the date hereof and after giving effect to this
Sixth Amendment and the transactions contemplated hereby, the
representations and warranties of Borrower and each of the Co-Obligors
contained in the Loan Documents are true, accurate and complete in all
respects on and as of the date hereof to the same extent as though made
on and as of the date hereof, except to the extent that any such
representation or warranty expressly relates to an earlier date; and
(c) the execution, delivery and performance by Borrower and
each of the Co-Obligors of this Sixth Amendment and each of the
agreements, schedules, exhibits, certificates, documents and other
instruments attached hereto, described herein or contemplated hereby to
which such Person is a party are within its corporate power and have
been duly authorized by all necessary corporate action on the part of
such Person (including, without limitation, resolutions of the board of
directors and, as applicable, the stockholders, of such Person), and
this Sixth Amendment and such agreements, schedules, exhibits,
certificates, documents and instruments are the legal, valid and
binding obligation of each such Person enforceable against each such
Person in accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency or other
similar laws affecting the rights of creditors generally or by
application of general principles of equity.
5. Reference to and Effect on the Credit Agreement.
5.1 Except as specifically amended above, the Credit
Agreement and each of the Schedules thereto shall remain in full force and
effect and the Credit Agreement (including Schedule 6.11, Financial Covenants),
as amended by this Sixth Amendment, is hereby ratified and confirmed in all
respects.
5.2 Except to the extent the Credit Agreement has been
amended by the terms hereof or as otherwise expressly provided herein, the
execution, delivery and effectiveness of this Sixth Amendment shall not operate
as a waiver of any right, power or remedy of Agent under the Credit Agreement or
any of the other Loan Documents, or constitute a waiver of any provision of the
Credit Agreement or any of the other Loan Documents.
5.3 Upon the effectiveness of this Sixth Amendment each
reference in (a) the Credit Agreement to "this Agreement," "hereunder,"
"hereof," or words of similar import and (b) any other Loan Document to "the
Credit Agreement," shall, in each case, mean and be a reference to the Credit
Agreement (including Schedule 6.11, Financial Covenants), as amended hereby.
6. Miscellaneous.
6.1 Fees and Expenses. Borrower agrees to pay on demand
all fees, costs and expenses incurred by or otherwise due to Agent in connection
with the preparation, execution and delivery of this Sixth Amendment, together
with all fees, costs and expenses incurred by or otherwise due to Agent prior to
the date hereof which are payable by Borrower pursuant to the Credit Agreement.
6.2 Headings. Section headings in this Sixth Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Sixth Amendment for any other purpose.
6.3 Counterparts. This Sixth Amendment may be executed in any
number of separate counterparts, each of which shall collectively and separately
constitute one agreement.
6.4 GOVERNING LAW. IN ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS SIXTH AMENDMENT AND THE OBLIGATIONS
ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE LAWS AND DECISIONS OF THE STATE OF NEW YORK (WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES) APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH
STATE, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
* * * *
-6-
<PAGE> 7
IN WITNESS WHEREOF, each party hereto has caused this Sixth
Amendment to be duly executed and delivered by its proper and duly authorized
officer. This Sixth Amendment is executed as of March 11, 1996 but shall be
deemed effective as of December 31, 1995.
GENERAL ELECTRIC CAPITAL CORPORATION,
a New York corporation,
as Agent and Lender
By: /s/ CATHERINE L. MIDKIFF
-----------------------------------------
Name: Catherine L. Midkiff
---------------------------------------
Title: VP - Commercial Finance
--------------------------------------
CARLISLE PLASTICS, INC.,
a Delaware corporation
By: /s/ CHERYL SAUTER
-----------------------------------------
Name: Cheryl Sauter
---------------------------------------
Title: Treasurer
--------------------------------------
AMERICAN WESTERN CORPORATION,
a Delaware corporation
By: /s/ CHERYL SAUTER
-----------------------------------------
Name: Cheryl Sauter
---------------------------------------
Title: Treasurer
--------------------------------------
-7-
<PAGE> 8
A&E - KOREA, LTD.,
a Delaware corporation
By: /s/ LEAH SEWELL
-----------------------------------------
Name: Leah Sewell
---------------------------------------
Title: V.P. Accounting
--------------------------------------
A&E PRODUCTS (FAR EAST) LTD.,
a Hong Kong corporation
By: /s/ LEAH SEWELL
-----------------------------------------
Name: Leah Sewell
---------------------------------------
Title: V.P. Accounting
--------------------------------------
PLASTICOS BAJACAL S.A. DE C.V.,
a Mexican corporation
By: /s/ CLIFFORD A. DEUPREE
-----------------------------------------
Name: Clifford A. Deupree
---------------------------------------
Title: Sole Administrator
--------------------------------------
RHINO-X INDUSTRIES, INC.,
a Delaware corporation
By: /s/ CHERYL SAUTER
-----------------------------------------
Name: Cheryl Sauter
---------------------------------------
Title: Treasurer
--------------------------------------
-8-
<PAGE> 1
EXHIBIT 10.13
AMENDMENT NO. 7 TO EQUIPMENT LEASE AGREEMENT
This Amendment No. 7 to Equipment Lease Agreement (this
"Amendment") dated as of December 31, 1995 is by and between Carlisle Plastics,
Inc., a Delaware corporation ("Lessee"), and General Electric Capital
Corporation, a New York corporation, as Agent for itself and certain
Participants ("Lessor").
RECITALS
A. Lessee and Lessor are parties to an Equipment Lease
Agreement dated as of April 4, 1994, as amended by that certain First Amendment
to Equipment Lease Agreement dated as of August 17, 1994, that certain Amendment
No. 2 to Equipment Lease Agreement dated as of October 25, 1994, that certain
Amendment No. 3 to Equipment Lease Agreement dated as of June 14, 1995, that
certain Amendment No. 4 to Equipment Lease Agreement executed as of November 13,
1995 and effective as of September 30, 1995, that certain Amendment No. 5 to
Equipment Lease Agreement executed as of December 1, 1995 and effective as of
November 4, 1995 and that certain Amendment No. 6 to Equipment Lease Agreement
executed as of December 29, 1995 and effective as of December 4, 1995 (as the
same may be hereafter further amended, restated, supplemented or otherwise
modified from time to time, the "Lease").
B. In order to change certain financial covenants of Lessee,
Lessee and Lessor have agreed to further amend the Lease in the manner set forth
herein.
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. DEFINED TERMS. Capitalized terms used herein and not
otherwise defined shall have their meaning as defined in Exhibit B to the Lease.
2. AMENDMENTS TO LEASE.
2.1 EXHIBIT B. Exhibit B to the Lease is hereby amended by
inserting the following definition between the definitions of
"Obligations" and "Option to Convert" contained therein:
"'Operating Cash Flow' shall mean, with respect to Lessee
and its subsidiaries on a Consolidated basis, for any fiscal
period of Lessee, the sum of (i) EBITDA minus (ii) Capital
Expenditures."
2.2 SECTION (a) OF EXHIBIT G-1. Exhibit G-1 to the Lease is
hereby amended by deleting in its entirety clause (a) thereof and by
substituting therefor the following:
"(a) Annual Maximum Capital Expenditures. Lessee and
its subsidiaries on a Consolidated basis shall not make annual
Capital Expenditures during the following periods that exceed
in the aggregate the amounts set forth opposite each of such
periods:
<TABLE>
<CAPTION>
Aggregate Annual Maximum
Period Covered Capital Expenditures
-------------- --------------------
<S> <C>
January 1, 1994 through December 31, 1994 $ 19,400,000
January 1, 1995 through December 31, 1995 $ 16,000,000
January 1, 1996 through March 31, 1999 $ 18,000,000"
</TABLE>
2.3 SECTION (b) OF EXHIBIT G-1. Exhibit G-1 to the Lease is
hereby amended by deleting in its entirety clause (b) thereof and by
substituting therefor the following:
<PAGE> 2
"(b) Minimum Net Worth. Lessee and its subsidiaries on a
Consolidated basis shall have, as at each of the dates set
forth below (and shall maintain at all times during the period
from and including such date through but excluding the next
date immediately succeeding such date), Net Worth equal to or
greater than the amount set forth opposite such date:
<TABLE>
<CAPTION>
Date Minimum Net Worth
---- -----------------
<S> <C>
June 30, 1994 The higher of $66,000,000 or Equity
as of April 30, 1994
September 30, 1994 The higher of $66,000,000 or Equity
as of April 30, 1994
December 31, 1994 $ 68,000,000
March 31, 1995 $ 69,400,000
June 30, 1995 $ 71,300,000
September 30, 1995 $ 70,000,000
December 31, 1995 $ 40,000,000
March 31, 1996 $ 40,000,000
June 30, 1996 $ 40,000,000
September 30, 1996 $ 42,000,000
December 31, 1996 $ 44,000,000
March 31, 1997 $ 45,000,000
June 30, 1997 $ 46,000,000
September 30, 1997 $ 48,000,000
December 31, 1997 $ 49,000,000
March 31, 1998 $ 50,000,000
June 30, 1998 $ 51,000,000
September 30, 1998 $ 53,000,000
December 31, 1998 $ 54,000,000
March 31, 1999 $ 55,000,000"
</TABLE>
2.4 SECTION (c) OF EXHIBIT G-1. Exhibit G-1 to the Lease is
hereby amended by deleting in its entirety clause (c) thereof and by
substituting therefor the following:
"(c) Minimum Interest and Taxes Coverage Ratio. Lessee and
its subsidiaries on a Consolidated basis shall have a ratio of
(i) EBITDA to (ii) Interest Expense and taxes (as stated in
Lessee's consolidated statement of income), in each case
measured as at each of the dates set forth below, for each of
the periods set forth opposite such dates, of not less than
the amount set forth opposite each such period and date:
-2-
<PAGE> 3
<TABLE>
<CAPTION>
Minimum Interest and Taxes
Date Period Covered Coverage Ratio
---- -------------- --------------
<S> <C> <C>
June 30, 1994 July 1, 1993 through June 30, 2.2 to 1.0
1994
September 30, 1994 October 1, 1993 through 2.2 to 1.0
September 30, 1994
December 31, 1994 January 1, 1994 through 2.2 to 1.0
December 31, 1994
March 31, 1995 April 1, 1994 through March 2.1 to 1.0
31, 1995
June 30, 1995 July 1, 1994 through June 30, 2.1 to 1.0
1995
September 30, 1995 October 1, 1994 through 2.1 to 1.0
September 30, 1995
December 31, 1995 January 1, 1995 through Not Applicable
December 31, 1995
January 1, 1996 through ____ Not Applicable
March 30, 1998
March 31, 1998 April 1, 1997 through March 2.0 to 1.0
31, 1998
June 30, 1998 July 1, 1997 through June 30, 2.0 to 1.0
1998
September 30, 1998 October 1, 1997 through 2.0 to 1.0
September 30, 1998
December 31, 1998 January 1, 1998 through 2.0 to 1.0
December 31, 1998
March 31, 1999 April 1, 1998 through March 2.0 to 1.0"
31, 1999
</TABLE>
2.5 SECTION (d) OF EXHIBIT G-1. Exhibit G-1 to the Lease is
hereby amended by deleting in its entirety clause (d) thereof and by
substituting therefor the following:
"(d) Minimum Fixed Charges Coverage Ratio. Lessee and its
subsidiaries on a Consolidated basis shall have a ratio of (i)
EBITDA to (ii) Fixed Charges, in each case measured as at each
of the dates set forth below, for each of the periods set
forth opposite such dates, of not less than the amount set
forth opposite each such period and date:
-3-
<PAGE> 4
<TABLE>
<CAPTION>
Minimum Fixed Charges
Date Period Covered Coverage Ratio
---- -------------- --------------
<S> <C> <C>
June 30, 1994 July 1, 1993 through June 30, 1.5 to 1.0
1994
September 30, 1994 October 1, 1993 through 1.5 to 1.0
September 30, 1994
December 31, 1994 January 1, 1994 through 1.5 to 1.0
December 31, 1994
March 31, 1995 April 1, 1994 through March 1.4 to 1.0
31, 1995
June 30, 1995 July 1, 1994 through June 30, 1.4 to 1.0
1995
September 30, 1995 October 1, 1994 through 1.4 to 1.0
September 30, 1995
December 31, 1995 January 1, 1995 through Not Applicable
December 31, 1995
January 1, 1996 through ____ Not Applicable
March 30, 1998
March 31, 1998 April 1, 1997 through March 1.3 to 1.0
31, 1998
June 30, 1998 July 1, 1997 through June 30, 1.3 to 1.0
1998
September 30, 1998 October 1, 1997 through 1.3 to 1.0
September 30, 1998
December 31, 1998 January 1, 1998 through 1.3 to 1.0
December 31, 1998
March 31, 1999 April 1, 1998 through March 1.3 to 1.0"
31, 1999
</TABLE>
2.6 SECTION (e) OF EXHIBIT G-1. Exhibit G-1 to the Lease is
hereby amended by deleting in its entirety clause (e) thereof and by
substituting therefor the following:
"(e) Minimum Operating Cash Flow. Lessee and its
subsidiaries on a Consolidated basis shall have, at each of
the dates set forth below (and shall maintain at all times
during the period from and including such date through but
excluding the next date immediately succeeding such date),
Operating Cash Flow equal to or greater than the amount set
forth opposite such date:
-4-
<PAGE> 5
<TABLE>
<CAPTION>
Minimum Operating
Date Cash Flow
---- -----------------
<S> <C>
for the fiscal quarter ended: $ 4,000,000
March 31, 1996
for the two fiscal quarter period ended: $ 9,000,000
June 30, 1996
for the three fiscal quarter period $15,000,000
ended: September 30, 1996
for the four fiscal quarter period ended: $22,000,000
December 31, 1996
for the four fiscal quarter period ended: $24,000,000
March 31, 1997
for the four fiscal quarter period ended: $24,000,000
June 30, 1997
for the four fiscal quarter period ended: $24,000,000
September 30, 1997
for the four fiscal quarter period ended: $24,000,000"
December 31, 1997
</TABLE>
3. CONDITIONS TO EFFECTIVENESS. This Amendment shall not
become effective, and Lessor shall have no obligation hereunder, until the
following conditions shall have been satisfied in full, in Lessor's sole
discretion:
(a) Lessor shall have received original counterparts of this
Amendment, duly executed by each party hereto;
(b) Lessor shall have received original counterparts of (i)
that certain Amendment No. 5 to Equipment Sublease Agreement (AWC)
dated as of the date hereof by and between Lessee, as sublessor, and
American Western Corporation, as sublessee, and (ii) that certain
Amendment No. 5 to Equipment Sublease Agreement (Rhino-X) dated as of
the date hereof by and between Lessee, as sublessor, and Rhino-X
Industries, Inc., as sublessee, each duly executed by each party
thereto; and
(c) on and as of the date hereof, the representations and
warranties of Lessee made pursuant to Section 4 hereof shall be true,
accurate and complete in all respects.
4. REPRESENTATIONS AND WARRANTIES OF LESSEE. In order to
induce Lessor to enter into this Amendment, Lessee makes the following
representations and warranties, each of which shall survive the execution and
delivery of this Amendment:
(a) as of the date hereof, no Default or Potential Default has
occurred and is continuing under the Lease and, after giving effect to
this Amendment and the transactions contemplated hereby, no Default or
Potential Default shall have occurred and be continuing under the
Lease;
(b) as of the date hereof and after giving effect to this
Amendment and the transactions contemplated hereby, the representations
and warranties of Lessee contained in the Lease Documents are true,
accurate and complete in all respects on and as of the date hereof to
the same extent as though made on and as of the date hereof, except to
the extent that any such representation or warranty expressly relates
to an earlier date; and
-5-
<PAGE> 6
(c) the execution, delivery and performance by Lessee of this
Amendment and each of the agreements, schedules, exhibits,
certificates, documents and other instruments attached hereto,
described herein or contemplated hereby to which such Person is a party
are within its corporate power and have been duly authorized by all
necessary corporate action on the part of such Person (including,
without limitation, resolutions of the board of directors and, as
applicable, the stockholders, of such Person), and this Amendment and
such agreements, schedules, exhibits, certificates, documents and
instruments are the legal, valid and binding obligation of each such
Person enforceable against each such Person in accordance with their
respective terms, except as enforceability may be limited by
bankruptcy, insolvency or other similar laws affecting the rights of
creditors generally or by application of general principles of equity.
5. REFERENCE TO AND EFFECT ON THE LEASE.
5.1 This Amendment shall be effective upon (i) the receipt
by Lessee and Lessor of executed counterparts hereof or of telecopied
confirmation of the execution and mailing of this Amendment, and the
satisfaction, in the opinion of Lessor, of all conditions to the
termination contained or referred to herein. On or after the effective
date hereof, each reference in the Lease to "this Lease," "hereunder,"
"hereof," "herein," or words of like import and each reference to the
Lease in each document executed in connection therewith shall mean and
be a reference to the Lease as amended hereby.
5.2 All of the terms, conditions and covenants of the Lease
and the other documents executed in connection therewith shall remain
unaltered and in full force and effect and shall be binding upon Lessee
in all respects and are hereby ratified and confirmed.
5.3 Except as specifically amended hereby, the execution,
delivery and effectiveness of this Amendment shall not operate as a
waiver of (a) any right, power or remedy of Lessor under the Lease or
any of the documents executed in connection therewith, or (b) any
Default or Potential Default under the Lease.
6. COSTS AND EXPENSES. Lessee agrees to pay on demand all
reasonable and documented costs and expenses of Lessor in connection with the
preparation, execution and delivery of this Amendment and the transactions
contemplated hereby, including the reasonable fees and out-of-pocket expenses of
counsel for Lessor with respect thereto.
7. CHOICE OF LAW. THIS AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF
NEW YORK.
8. EXECUTION IN COUNTERPARTS. This Amendment 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 taken together shall constitute one and the same agreement.
9. RATIFICATION. Except as expressly amended hereby, all of
the representations, warranties, provisions, covenants, terms and conditions of
the Lease shall remain unaltered and in full force and effect as amended hereby.
[signature page to follow]
-6-
<PAGE> 7
IN WITNESS WHEREOF, Lessee and Lessor have caused this
Amendment to be duly executed as of the date first written above.
GENERAL ELECTRIC CAPITAL CORPORATION,
a New York corporation,
as Agent for itself and certain Participants
By: /s/ JENNIFER L. AGNES
-----------------------------------------
Name: Jennifer L. Agnes
---------------------------------------
Its: Assistant Vice President
----------------------------------------
CARLISLE PLASTICS, INC.,
a Delaware corporation
By: /s/ CHERYL SAUTER
-----------------------------------------
Name: Cheryl Sauter
---------------------------------------
Its: Treasurer
----------------------------------------
<PAGE> 1
EXHIBIT 10.14(a)
AMENDMENT NO. 5 TO EQUIPMENT SUBLEASE AGREEMENT
(AWC)
This Amendment No. 5 to Equipment Sublease Agreement (this
"Amendment") dated as of December 31, 1995 is by and between Carlisle Plastics,
Inc., a Delaware corporation ("Sublessor"), and American Western Corporation,
a Delaware corporation ("Sublessee").
RECITALS
A. General Electric Capital Corporation, as Agent for itself
and certain Participants ("Lessor"), and Sublessor are parties to that certain
Equipment Lease Agreement dated as of April 4, 1994, as amended by that certain
First Amendment to Equipment Lease Agreement dated as of August 17, 1994, that
certain Amendment No. 2 to Equipment Lease Agreement dated as of October 25,
1994, that certain Amendment No. 3 to Equipment Lease Agreement dated as of June
14, 1995, that certain Amendment No. 4 to Equipment Lease Agreement executed as
of November 13, 1995 and effective as of September 30, 1995, that certain
Amendment No. 5 to Equipment Lease Agreement executed as of December 1, 1995 and
effective as of November 4, 1995, that certain Amendment No. 6 to Equipment
Lease Agreement executed as of December 29, 1995 and effective as of December 4,
1995 and that certain Amendment No. 7 to Equipment Lease Agreement executed as
of March 11, 1996 and effective as of December 31, 1995 (as the same may be
amended, restated, supplemented or otherwise modified and in effect from time to
time, the "Lease") whereby Lessor agreed to lease to Sublessor, and Sublessor
agreed to lease from Lessor, the equipment described in Equipment Schedule No. 1
thereto (as subsequently replaced by Equipment Schedule No. 2 effective as of
November 4, 1995 and thereafter replaced by Equipment Schedule No. 3 effective
as of December 4, 1995, and as the same may be amended, restated, supplemented
or otherwise modified and in effect from time to time, the "Lease Equipment
Schedule");
B. Sublessor and Sublessee are parties to that certain
Equipment Sublease Agreement dated as of April 4, 1994, as amended by that
certain First Amendment to Equipment Sublease Agreement dated as of August 17,
1994, that certain Amendment No. 2 to Equipment Sublease Agreement dated as of
October 25, 1994, that certain Amendment No. 3 to Equipment Sublease Agreement
dated as of June 14, 1995 and that certain Amendment No. 4 to Equipment Sublease
Agreement executed as of November 13, 1995 and effective as of September 30,
1995 (as the same may be amended, restated, supplemented or otherwise modified
and in effect from time to time, the "Sublease") whereby Sublessor agreed to
lease to Sublessee, and Sublessee agreed to lease from Sublessor, certain items
of equipment described on Exhibit A thereto (the "Sublease Equipment"), which
Sublease Equipment was comprised of equipment leased by Sublessor from Sublessee
pursuant to the Lease;
C. Lessor and Sublessor are parties to that certain Consent to
Sublease dated April 4, 1994 (as the same may be amended, restated, supplemented
or otherwise modified and in effect from time to time, the "Consent") pursuant
to which Lessor consented to the sublease of the Sublease Equipment by Sublessor
to Sublessee;
D. In order to change certain financial covenants Sublessee
and Sublessor have agreed to further amend the Sublease in the manner set forth
herein.
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. DEFINED TERMS. Capitalized terms used herein and not
otherwise defined shall have their meaning as defined in Exhibit B to the
Sublease.
2. AMENDMENTS TO SUBLEASE.
2.1 EXHIBIT B. Exhibit B to the Sublease is hereby amended
by inserting the following definition between the definitions of
"Obligations" and "Option to Convert" contained therein:
"'Operating Cash Flow' shall mean, with respect to Lessee
and its subsidiaries on a Consolidated basis, for any fiscal
period of Lessee, the sum of (i) EBITDA minus (ii) Capital
Expenditures."
<PAGE> 2
2.2 SECTION (a) OF EXHIBIT G-1. Exhibit G-1 to the Sublease
is hereby amended by deleting in its entirety clause (a) thereof and by
substituting therefor the following:
"(a) Annual Maximum Capital Expenditures. Lessee and its
subsidiaries on a Consolidated basis shall not make annual
Capital Expenditures during the following periods that exceed
in the aggregate the amounts set forth opposite each of such
periods:
<TABLE>
<CAPTION>
Aggregate Annual Maximum
Period Covered Capital Expenditures
-------------- --------------------
<S> <C>
January 1, 1994 through December 31, 1994 $ 19,400,000
January 1, 1995 through December 31, 1995 $ 16,000,000
January 1, 1996 through March 31, 1999 $ 18,000,000"
</TABLE>
2.3 SECTION (b) OF EXHIBIT G-1. Exhibit G-1 to the Sublease
is hereby amended by deleting in its entirety clause (b) thereof and by
substituting therefor the following:
"(b) Minimum Net Worth. Lessee and its subsidiaries on a
Consolidated basis shall have, as at each of the dates set
forth below (and shall maintain at all times during the period
from and including such date through but excluding the next
date immediately succeeding such date), Net Worth equal to or
greater than the amount set forth opposite such date:
<TABLE>
<CAPTION>
Date Minimum Net Worth
---- -----------------
<S> <C>
June 30, 1994 The higher of $66,000,000 or Equity
as of April 30, 1994
September 30, 1994 The higher of $66,000,000 or Equity
as of April 30, 1994
December 31, 1994 $ 68,000,000
March 31, 1995 $ 69,400,000
June 30, 1995 $ 71,300,000
September 30, 1995 $ 70,000,000
December 31, 1995 $ 40,000,000
March 31, 1996 $ 40,000,000
June 30, 1996 $ 40,000,000
September 30, 1996 $ 42,000,000
December 31, 1996 $ 44,000,000
March 31, 1997 $ 45,000,000
June 30, 1997 $ 46,000,000
September 30, 1997 $ 48,000,000
</TABLE>
-2-
<PAGE> 3
<TABLE>
<CAPTION>
Date Minimum Net Worth
---- -----------------
<S> <C>
December 31, 1997 $ 49,000,000
March 31, 1998 $ 50,000,000
June 30, 1998 $ 51,000,000
September 30, 1998 $ 53,000,000
December 31, 1998 $ 54,000,000
March 31, 1999 $ 55,000,000"
</TABLE>
2.4 SECTION (c) OF EXHIBIT G-1. Exhibit G-1 to the Sublease
is hereby amended by deleting in its entirety clause (c) thereof and by
substituting therefor the following:
"(c) Minimum Interest and Taxes Coverage Ratio. Lessee and
its subsidiaries on a Consolidated basis shall have a ratio of
(i) EBITDA to (ii) Interest Expense and taxes (as stated in
Lessee's consolidated statement of income), in each case
measured as at each of the dates set forth below, for each of
the periods set forth opposite such dates, of not less than
the amount set forth opposite each such period and date:
<TABLE>
<CAPTION>
Minimum Interest and Taxes
Date Period Covered Coverage Ratio
---- -------------- --------------
<S> <C> <C>
June 30, 1994 July 1, 1993 through June 30, 2.2 to 1.0
1994
September 30, 1994 October 1, 1993 through 2.2 to 1.0
September 30, 1994
December 31, 1994 January 1, 1994 through 2.2 to 1.0
December 31, 1994
March 31, 1995 April 1, 1994 through March 2.1 to 1.0
31, 1995
June 30, 1995 July 1, 1994 through June 30, 2.1 to 1.0
1995
September 30, 1995 October 1, 1994 through 2.1 to 1.0
September 30, 1995
December 31, 1995 January 1, 1995 through Not Applicable
December 31, 1995
January 1, 1996 through ____ Not Applicable
March 30, 1998
March 31, 1998 April 1, 1997 through March 2.0 to 1.0
31, 1998
June 30, 1998 July 1, 1997 through June 30, 2.0 to 1.0
1998
September 30, 1998 October 1, 1997 through 2.0 to 1.0
September 30, 1998
December 31, 1998 January 1, 1998 through 2.0 to 1.0
December 31, 1998
</TABLE>
-3-
<PAGE> 4
<TABLE>
<CAPTION>
Minimum Interest and Taxes
Date Period Covered Coverage Ratio
---- -------------- --------------
<S> <C> <C>
March 31, 1999 April 1, 1998 through March 2.0 to 1.0"
31, 1999
</TABLE>
2.5 SECTION (d) OF EXHIBIT G-1. Exhibit G-1 to the Sublease
is hereby amended by deleting in its entirety clause (d) thereof and by
substituting therefor the following:
"(d) Minimum Fixed Charges Coverage Ratio. Lessee and its
subsidiaries on a Consolidated basis shall have a ratio of (i)
EBITDA to (ii) Fixed Charges, in each case measured as at each
of the dates set forth below, for each of the periods set
forth opposite such dates, of not less than the amount set
forth opposite each such period and date:
<TABLE>
<CAPTION>
Minimum Fixed Charges
Date Period Covered Coverage Ratio
---- -------------- --------------
<S> <C> <C>
June 30, 1994 July 1, 1993 through 1.5 to 1.0
June 30, 1994
September 30, 1994 October 1, 1993 through 1.5 to 1.0
September 30, 1994
December 31, 1994 January 1, 1994 through 1.5 to 1.0
December 31, 1994
March 31, 1995 April 1, 1994 through March 1.4 to 1.0
31, 1995
June 30, 1995 July 1, 1994 through 1.4 to 1.0
June 30, 1995
September 30, 1995 October 1, 1994 through 1.4 to 1.0
September 30, 1995
December 31, 1995 January 1, 1995 through Not Applicable
December 31, 1995
January 1, 1996 through ____ Not Applicable
March 30, 1998
March 31, 1998 April 1, 1997 through March 1.3 to 1.0
31, 1998
June 30, 1998 July 1, 1997 through 1.3 to 1.0
June 30, 1998
September 30, 1998 October 1, 1997 through 1.3 to 1.0
September 30, 1998
December 31, 1998 January 1, 1998 through 1.3 to 1.0
December 31, 1998
</TABLE>
-4-
<PAGE> 5
<TABLE>
<CAPTION>
Minimum Fixed Charges
Date Period Covered Coverage Ratio
---- -------------- --------------
<S> <C> <C>
March 31, 1999 April 1, 1998 through March 1.3 to 1.0"
31, 1999
</TABLE>
2.6 SECTION (e) OF EXHIBIT G-1. Exhibit G-1 to the Sublease
is hereby amended by deleting in its entirety clause (e) thereof and by
substituting therefor the following:
"(e) Minimum Operating Cash Flow. Lessee and its
subsidiaries on a Consolidated basis shall have, at each of
the dates set forth below (and shall maintain at all times
during the period from and including such date through but
excluding the next date immediately succeeding such date),
Operating Cash Flow equal to or greater than the amount set
forth opposite such date:
<TABLE>
<CAPTION>
Minimum Operating
Date Cash Flow
---- ---------
<S> <C>
for the fiscal quarter ended: $ 4,000,000
March 31, 1996
for the two fiscal quarter period ended: $ 9,000,000
June 30, 1996
for the three fiscal quarter period ended: $15,000,000
September 30, 1996
for the four fiscal quarter period ended: $22,000,000
December 31, 1996
for the four fiscal quarter period ended: $24,000,000
March 31, 1997
for the four fiscal quarter period ended: $24,000,000
June 30, 1997
for the four fiscal quarter period ended: $24,000,000
September 30, 1997
for the four fiscal quarter period ended: $24,000,000"
December 31, 1997
</TABLE>
3. CONDITIONS TO EFFECTIVENESS. This Amendment shall not
become effective until the following conditions shall have been satisfied in
full, in Lessor's sole discretion:
(a) Lessor shall have received original counterparts of this
Amendment, duly executed by each party hereto; and
(b) on and as of the date hereof, the representations and
warranties of Sublessor and Sublessee made pursuant to Section 4 hereof
shall be true, accurate and complete in all respects.
-5-
<PAGE> 6
4. REPRESENTATIONS AND WARRANTIES OF SUBLESSOR AND SUBLESSEE.
Sublessor and Sublessee make the following representations and warranties, each
of which shall survive the execution and delivery of this Amendment:
(a) as of the date hereof, no Default or Potential Default has
occurred and is continuing under the Sublease or the Lease and, after
giving effect to this Amendment and the transactions contemplated
hereby, no Default or Potential Default shall have occurred and be
continuing under the Sublease or the Lease;
(b) as of the date hereof and after giving effect to this
Amendment and the transactions contemplated hereby, the representations
and warranties of Sublessor and Sublessee contained in the Lease
Documents are true, accurate and complete in all respects on and as of
the date hereof to the same extent as though made on and as of the date
hereof, except to the extent that any such representation or warranty
expressly relates to an earlier date; and
(c) the execution, delivery and performance by Sublessor and
Sublessee of this Amendment and each of the agreements, schedules,
exhibits, certificates, documents and other instruments attached
hereto, described herein or contemplated hereby to which such Person is
a party are within its corporate power and have been duly authorized by
all necessary corporate action on the part of such Person (including,
without limitation, resolutions of the board of directors and, as
applicable, the stockholders, of such Person), and this Amendment and
such agreements, schedules, exhibits, certificates, documents and
instruments are the legal, valid and binding obligation of each such
Person enforceable against each such Person in accordance with their
respective terms, except as enforceability may be limited by
bankruptcy, insolvency or other similar laws affecting the rights of
creditors generally or by application of general principles of equity.
5. REFERENCE TO AND EFFECT ON THE LEASE.
5.1 This Amendment shall be effective upon the receipt by
Lessor of executed counterparts hereof or of telecopied confirmation of
the execution and mailing of this Amendment and shall be deemed
effective as of the effective date first written above. On or after the
effective date hereof, each reference in the Sublease to "this
Sublease," "hereunder," "hereof," "herein," or words of like import and
each reference to the Sublease in each document executed in connection
therewith shall mean and be a reference to the Sublease as amended
hereby.
5.2 All of the terms, conditions and covenants of the
Sublease and the other documents executed in connection therewith shall
remain unaltered and in full force and effect and shall be binding upon
Sublessor and Sublessee in all respects and are hereby ratified and
confirmed.
5.3 Except as specifically amended hereby, the execution,
delivery and effectiveness of this Amendment shall not operate as a
waiver of (a) any right, power or remedy of Lessor under the Lease or
the Sublease or any of the documents executed in connection therewith,
or (b) any Default or Potential Default under the Lease or the
Sublease.
6. COSTS AND EXPENSES. Sublessor agrees to pay on demand all
reasonable and documented costs and expenses of Lessor in connection with the
preparation, execution and delivery of this Amendment and the transactions
contemplated hereby, including the reasonable fees and out-of-pocket expenses of
counsel for Lessor with respect thereto.
7. CHOICE OF LAW. THIS AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF
NEW YORK.
-6-
<PAGE> 7
8. EXECUTION IN COUNTERPARTS. This Amendment 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 taken together shall constitute one and the same agreement.
9. RATIFICATION. Except as expressly amended hereby, all of
the representations, warranties, provisions, covenants, terms and conditions of
the Sublease and the Lease shall remain unaltered and in full force and effect
as amended hereby.
[signature page to follow]
-7-
<PAGE> 8
IN WITNESS WHEREOF, Sublessor and Sublessee have caused this
Amendment to be duly executed as of the date first written above.
CARLISLE PLASTICS, INC.,
a Delaware corporation
By: /s/ CHERYL SAUTER
---------------------------------
Name: Cheryl Sauter
-------------------------------
Its: Treasurer
--------------------------------
AMERICAN WESTERN CORPORATION,
a Delaware corporation
By: /s/ CHERYL SAUTER
---------------------------------
Name: Cheryl Sauter
-------------------------------
Its: Treasurer
--------------------------------
<PAGE> 1
EXHIBIT 10.14(b)
AMENDMENT NO. 5 TO EQUIPMENT SUBLEASE AGREEMENT
(RHINO-X INDUSTRIES, INC.)
This Amendment No. 5 to Equipment Sublease Agreement (this
"Amendment") dated as of December 31, 1995 is by and between Carlisle Plastics,
Inc., a Delaware corporation ("Sublessor"), and Rhino-X Industries, Inc., a
Delaware corporation ("Sublessee").
RECITALS
A. General Electric Capital Corporation, as Agent for itself
and certain Participants ("Lessor"), and Sublessor are parties to that certain
Equipment Lease Agreement dated as of April 4, 1994, as amended by that certain
First Amendment to Equipment Lease Agreement dated as of May 23, 1994, that
certain Second Amendment to Equipment Sublease Agreement dated as of August 17,
1994, that certain Amendment No. 2 to Equipment Lease Agreement dated as of
October 25, 1994, that certain Amendment No. 3 to Equipment Lease Agreement
dated as of June 14, 1995, that certain Amendment No. 4 to Equipment Lease
Agreement executed as of November 13, 1995 and effective as of September 30,
1995, that certain Amendment No. 5 to Equipment Lease Agreement executed as of
December 1, 1995 and effective as of November 4, 1995, that certain Amendment
No. 6 to Equipment Lease Agreement executed as of December 29, 1995 and
effective as of December 4, 1995 and that certain Amendment No. 7 to Equipment
Lease Agreement executed as of March 11, 1996 and effective as of December 31,
1995 (as the same may be amended, restated, supplemented or otherwise modified
and in effect from time to time, the "Lease") whereby Lessor agreed to lease to
Sublessor, and Sublessor agreed to lease from Lessor, the equipment described in
Equipment Schedule No. 1 thereto (as subsequently replaced by Equipment Schedule
No. 2 effective as of November 4, 1995 and thereafter replaced by Equipment
Schedule No. 3 effective as of December 4, 1995, and as the same may be amended,
restated, supplemented or otherwise modified and in effect from time to time,
the "Lease Equipment Schedule");
B. Sublessor and Sublessee are parties to that certain
Equipment Sublease Agreement dated as of April 4, 1994, as amended by that
certain First Amendment to Equipment Sublease Agreement dated as of August 17,
1994, that certain Amendment No. 2 to Equipment Sublease Agreement dated as of
October 25, 1994, that certain Amendment No. 3 to Equipment Sublease Agreement
dated as of June 14, 1995 and that certain Amendment No. 4 to Equipment Sublease
Agreement executed as of November 13, 1995 and effective as of September 30,
1995 (as the same may be amended, restated, supplemented or otherwise modified
and in effect from time to time, the "Sublease") whereby Sublessor agreed to
lease to Sublessee, and Sublessee agreed to lease from Sublessor, certain items
of equipment described on Exhibit A thereto (the "Sublease Equipment"), which
Sublease Equipment was comprised of equipment leased by Sublessor from Sublessee
pursuant to the Lease;
C. Lessor and Sublessor are parties to that certain Consent to
Sublease dated April 4, 1994 (as the same may be amended, restated, supplemented
or otherwise modified and in effect from time to time, the "Consent") pursuant
to which Lessor consented to the sublease of the Sublease Equipment by Sublessor
to Sublessee;
D. In order to change certain financial covenants Sublessee
and Sublessor have agreed to further amend the Sublease in the manner set forth
herein.
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. DEFINED TERMS. Capitalized terms used herein and not
otherwise defined shall have their meaning as defined in Exhibit B to the
Sublease.
2. AMENDMENTS TO SUBLEASE.
2.1 EXHIBIT B. Exhibit B to the Sublease is hereby amended
by inserting the following definition between the definitions of
"Obligations" and "Option to Convert" contained therein:
"'Operating Cash Flow' shall mean, with respect to Lessee
and its subsidiaries on a Consolidated basis, for any fiscal
period of Lessee, the sum of (i) EBITDA minus (ii) Capital
Expenditures."
<PAGE> 2
2.2 SECTION (a) OF EXHIBIT G-1. Exhibit G-1 to the Sublease
is hereby amended by deleting in its entirety clause (a) thereof and by
substituting therefor the following:
"(a) Annual Maximum Capital Expenditures. Lessee and its
subsidiaries on a Consolidated basis shall not make annual
Capital Expenditures during the following periods that exceed
in the aggregate the amounts set forth opposite each of such
periods:
<TABLE>
<CAPTION>
Aggregate Annual Maximum
Period Covered Capital Expenditures
-------------- --------------------
<S> <C>
January 1, 1994 through December 31, 1994 $ 19,400,000
January 1, 1995 through December 31, 1995 $ 16,000,000
January 1, 1996 through March 31, 1999 $ 18,000,000"
</TABLE>
2.3 SECTION (b) OF EXHIBIT G-1. Exhibit G-1 to the Sublease
is hereby amended by deleting in its entirety clause (b) thereof and by
substituting therefor the following:
"(b) Minimum Net Worth. Lessee and its subsidiaries on a
Consolidated basis shall have, as at each of the dates set
forth below (and shall maintain at all times during the period
from and including such date through but excluding the next
date immediately succeeding such date), Net Worth equal to or
greater than the amount set forth opposite such date:
<TABLE>
<CAPTION>
Date Minimum Net Worth
---- -----------------
<S> <C>
June 30, 1994 The higher of $66,000,000 or Equity
as of April 30, 1994
September 30, 1994 The higher of $66,000,000 or Equity
as of April 30, 1994
December 31, 1994 $ 68,000,000
March 31, 1995 $ 69,400,000
June 30, 1995 $ 71,300,000
September 30, 1995 $ 70,000,000
December 31, 1995 $ 40,000,000
March 31, 1996 $ 40,000,000
June 30, 1996 $ 40,000,000
September 30, 1996 $ 42,000,000
December 31, 1996 $ 44,000,000
March 31, 1997 $ 45,000,000
June 30, 1997 $ 46,000,000
September 30, 1997 $ 48,000,000
December 31, 1997 $ 49,000,000
</TABLE>
-2-
<PAGE> 3
<TABLE>
<CAPTION>
Date Minimum Net Worth
---- -----------------
<S> <C>
March 31, 1998 $ 50,000,000
June 30, 1998 $ 51,000,000
September 30, 1998 $ 53,000,000
December 31, 1998 $ 54,000,000
March 31, 1999 $ 55,000,000"
</TABLE>
2.4 SECTION (c) OF EXHIBIT G-1. Exhibit G-1 to the Sublease
is hereby amended by deleting in its entirety clause (c) thereof and by
substituting therefor the following:
"(c) Minimum Interest and Taxes Coverage Ratio. Lessee and
its subsidiaries on a Consolidated basis shall have a ratio of
(i) EBITDA to (ii) Interest Expense and taxes (as stated in
Lessee's consolidated statement of income), in each case
measured as at each of the dates set forth below, for each of
the periods set forth opposite such dates, of not less than
the amount set forth opposite each such period and date:
<TABLE>
<CAPTION>
Minimum Interest and Taxes
Date Period Covered Coverage Ratio
---- -------------- --------------
<S> <C> <C>
June 30, 1994 July 1, 1993 through June 30, 2.2 to 1.0
1994
September 30, 1994 October 1, 1993 through 2.2 to 1.0
September 30, 1994
December 31, 1994 January 1, 1994 through 2.2 to 1.0
December 31, 1994
March 31, 1995 April 1, 1994 through March 2.1 to 1.0
31, 1995
June 30, 1995 July 1, 1994 through June 30, 2.1 to 1.0
1995
September 30, 1995 October 1, 1994 through 2.1 to 1.0
September 30, 1995
December 31, 1995 January 1, 1995 through Not Applicable
December 31, 1995
January 1, 1996 through ____ Not Applicable
March 30, 1998
March 31, 1998 April 1, 1997 through March 2.0 to 1.0
31, 1998
June 30, 1998 July 1, 1997 through June 30, 2.0 to 1.0
1998
September 30, 1998 October 1, 1997 through 2.0 to 1.0
September 30, 1998
December 31, 1998 January 1, 1998 through 2.0 to 1.0
December 31, 1998
March 31, 1999 April 1, 1998 through March 2.0 to 1.0"
31, 1999
</TABLE>
-3-
<PAGE> 4
2.5 SECTION (d) OF EXHIBIT G-1. Exhibit G-1 to the Sublease
is hereby amended by deleting in its entirety clause (d) thereof and by
substituting therefor the following:
"(d) Minimum Fixed Charges Coverage Ratio. Lessee and its
subsidiaries on a Consolidated basis shall have a ratio of (i)
EBITDA to (ii) Fixed Charges, in each case measured as at each
of the dates set forth below, for each of the periods set
forth opposite such dates, of not less than the amount set
forth opposite each such period and date:
<TABLE>
<CAPTION>
Minimum Fixed Charges
Date Period Covered Coverage Ratio
---- -------------- --------------
<S> <C> <C>
June 30, 1994 July 1, 1993 through 1.5 to 1.0
June 30, 1994
September 30, 1994 October 1, 1993 through 1.5 to 1.0
September 30, 1994
December 31, 1994 January 1, 1994 through 1.5 to 1.0
December 31, 1994
March 31, 1995 April 1, 1994 through March 1.4 to 1.0
31, 1995
June 30, 1995 July 1, 1994 through 1.4 to 1.0
June 30, 1995
September 30, 1995 October 1, 1994 through 1.4 to 1.0
September 30, 1995
December 31, 1995 January 1, 1995 through Not Applicable
December 31, 1995
January 1, 1996 through ____ Not Applicable
March 30, 1998
March 31, 1998 April 1, 1997 through March 1.3 to 1.0
31, 1998
June 30, 1998 July 1, 1997 through 1.3 to 1.0
June 30, 1998
September 30, 1998 October 1, 1997 through 1.3 to 1.0
September 30, 1998
December 31, 1998 January 1, 1998 through 1.3 to 1.0
December 31, 1998
March 31, 1999 April 1, 1998 through March 1.3 to 1.0"
31, 1999
</TABLE>
-4-
<PAGE> 5
2.6 SECTION (e) OF EXHIBIT G-1. Exhibit G-1 to the Sublease
is hereby amended by deleting in its entirety clause (e) thereof and by
substituting therefor the following:
"(e) Minimum Operating Cash Flow. Lessee and its
subsidiaries on a Consolidated basis shall have, at each of
the dates set forth below (and shall maintain at all times
during the period from and including such date through but
excluding the next date immediately succeeding such date),
Operating Cash Flow equal to or greater than the amount set
forth opposite such date:
<TABLE>
<CAPTION>
Minimum Operating
Date Cash Flow
---- ---------
<S> <C>
for the fiscal quarter ended: $ 4,000,000
March 31, 1996
for the two fiscal quarter period ended: $ 9,000,000
June 30, 1996
for the three fiscal quarter period ended: $15,000,000
September 30, 1996
for the four fiscal quarter period ended: $22,000,000
December 31, 1996
for the four fiscal quarter period ended: $24,000,000
March 31, 1997
for the four fiscal quarter period ended: $24,000,000
June 30, 1997
for the four fiscal quarter period ended: $24,000,000
September 30, 1997
for the four fiscal quarter period ended: $24,000,000"
December 31, 1997
</TABLE>
3. CONDITIONS TO EFFECTIVENESS. This Amendment shall not
become effective until the following conditions shall have been satisfied in
full, in Lessor's sole discretion:
(a) Lessor shall have received original counterparts of this
Amendment, duly executed by each party hereto; and
(b) on and as of the date hereof, the representations and
warranties of Sublessor and Sublessee made pursuant to Section 4 hereof
shall be true, accurate and complete in all respects.
4. REPRESENTATIONS AND WARRANTIES OF SUBLESSOR AND SUBLESSEE.
Sublessor and Sublessee make the following representations and warranties, each
of which shall survive the execution and delivery of this Amendment:
(a) as of the date hereof, no Default or Potential Default has
occurred and is continuing under the Sublease or the Lease and, after
giving effect to this Amendment and the transactions contemplated
hereby, no Default or Potential Default shall have occurred and be
continuing under the Sublease or the Lease;
-5-
<PAGE> 6
(b) as of the date hereof and after giving effect to this
Amendment and the transactions contemplated hereby, the representations
and warranties of Sublessor and Sublessee contained in the Lease
Documents are true, accurate and complete in all respects on and as of
the date hereof to the same extent as though made on and as of the date
hereof, except to the extent that any such representation or warranty
expressly relates to an earlier date; and
(c) the execution, delivery and performance by Sublessor and
Sublessee of this Amendment and each of the agreements, schedules,
exhibits, certificates, documents and other instruments attached
hereto, described herein or contemplated hereby to which such Person is
a party are within its corporate power and have been duly authorized by
all necessary corporate action on the part of such Person (including,
without limitation, resolutions of the board of directors and, as
applicable, the stockholders, of such Person), and this Amendment and
such agreements, schedules, exhibits, certificates, documents and
instruments are the legal, valid and binding obligation of each such
Person enforceable against each such Person in accordance with their
respective terms, except as enforceability may be limited by
bankruptcy, insolvency or other similar laws affecting the rights of
creditors generally or by application of general principles of equity.
5. REFERENCE TO AND EFFECT ON THE LEASE.
5.1 This Amendment shall be effective upon the receipt by
Lessor of executed counterparts hereof or of telecopied confirmation of
the execution and mailing of this Amendment and shall be deemed
effective as of the effective date first written above. On or after the
effective date hereof, each reference in the Sublease to "this
Sublease," "hereunder," "hereof," "herein," or words of like import and
each reference to the Sublease in each document executed in connection
therewith shall mean and be a reference to the Sublease as amended
hereby.
5.2 All of the terms, conditions and covenants of the
Sublease and the other documents executed in connection therewith shall
remain unaltered and in full force and effect and shall be binding upon
Sublessor and Sublessee in all respects and are hereby ratified and
confirmed.
5.3 Except as specifically amended hereby, the execution,
delivery and effectiveness of this Amendment shall not operate as a
waiver of (a) any right, power or remedy of Lessor under the Lease or
the Sublease or any of the documents executed in connection therewith,
or (b) any Default or Potential Default under the Lease or the
Sublease.
6. COSTS AND EXPENSES. Sublessor agrees to pay on demand all
reasonable and documented costs and expenses of Lessor in connection with the
preparation, execution and delivery of this Amendment and the transactions
contemplated hereby, including the reasonable fees and out-of-pocket expenses of
counsel for Lessor with respect thereto.
7. CHOICE OF LAW. THIS AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF
NEW YORK.
8. EXECUTION IN COUNTERPARTS. This Amendment 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 taken together shall constitute one and the same agreement.
9. RATIFICATION. Except as expressly amended hereby, all of
the representations, warranties, provisions, covenants, terms and conditions of
the Sublease and the Lease shall remain unaltered and in full force and effect
as amended hereby.
[signature page to follow]
-6-
<PAGE> 7
IN WITNESS WHEREOF, Sublessor and Sublessee have caused this
Amendment to be duly executed as of the date first written above.
CARLISLE PLASTICS, INC.,
a Delaware corporation
By: /s/ CHERYL SAUTER
---------------------------------
Name: Cheryl Sauter
-------------------------------
Its: Treasurer
--------------------------------
RHINO-X INDUSTRIES, INC.,
a Delaware corporation
By: /s/ CHERYL SAUTER
---------------------------------
Name: Cheryl Sauter
-------------------------------
Its: Treasurer
--------------------------------
<PAGE> 1
EXHIBIT 10.18(a)
TERMINATION OF RECEIVABLES FUNDING AND SERVICING AGREEMENT
TERMINATION OF RECEIVABLES FUNDING AND SERVICING AGREEMENT
dated as of March 26, 1996 among Carlisle Plastics, Inc. (the "Servicer"),
Carlisle Plastics Funding Corporation (the "Borrower"), Redwood Receivables
Corporation (the "Lender") and General Electric Capital Corporation (the
"Operating Agent").
WHEREAS, the Servicer, the Borrower, the Lender and the
Operating Agent are parties to a Receivables Funding and Servicing Agreement
dated as of April 14, 1994 (as amended, the "Funding Agreement"), such parties
have executed, as of the date hereof, a Receivables Purchase and Servicing
Agreement and such parties desire to terminate the Funding Agreement.
THE PARTIES AGREE AS FOLLOWS:
SECTION 1. Definitions. All capitalized terms used herein,
unless otherwise defined, are used as defined in the Funding Agreement.
SECTION 2. Termination of Funding Agreement. The Funding
Agreement is terminated effective as of the date hereof.
SECTION 3. Counterparts. Delivery of an executed counterpart
of a signature page to this Termination by facsimile shall be effective as
delivery of a manually executed counterpart of this Termination. This
Termination 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 taken together shall constitute one
and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Termination to be duly executed by their respective authorized officers as of
the day and year first above written.
CARLISLE PLASTICS, INC.
as Servicer
By: /s/ PATRICK J. O'LEARY
----------------------------------------
Title: Chief Financial Officer
-------------------------------------
Name: Patrick J. O'Leary
--------------------------------------
CARLISLE PLASTICS FUNDING
CORPORATION, as Borrower
By: /s/ PATRICK J. O'LEARY
----------------------------------------
Title: Chief Financial Officer
-------------------------------------
Name: Patrick J. O'Leary
--------------------------------------
REDWOOD RECEIVABLES CORPORATION,
as Lender
By: /s/ CATHARINE L. MIDKIFF
----------------------------------------
Title: Assistant Secretary
-------------------------------------
Name: Catharine L. Midkiff
--------------------------------------
GENERAL ELECTRIC CAPITAL CORPORATION,
as Operating Agent and Collateral Agent
By: /s/ THOMAS E. JOHNSTONE
----------------------------------------
Title: VP - Commercial Finance, Inc.
-------------------------------------
Name: Thomas E. Johnstone
--------------------------------------
<PAGE> 1
EXHIBIT 10.18(b)
RECEIVABLES PURCHASE AND SERVICING AGREEMENT
Dated as of March 26, 1996
by and among
CARLISLE PLASTICS FUNDING CORPORATION,
as Seller,
REDWOOD RECEIVABLES CORPORATION,
as Purchaser,
CARLISLE PLASTICS, INC.,
as Servicer
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Operating Agent and Collateral Agent
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
ARTICLE I.
DEFINITIONS AND INTERPRETATION
<S> <C>
Section 1.01. Definitions........................................................................ 1
Section 1.02. Other Terms........................................................................16
Section 1.03. Interpretation.....................................................................16
ARTICLE II.
AMOUNTS AND TERMS OF THE PURCHASES
Section 2.01. Purchases..........................................................................16
Section 2.02. Optional Changes in Purchase Limit.................................................16
Section 2.03. Notices Relating to Purchases......................................................17
Section 2.04. Conveyance of Receivables..........................................................17
Section 2.05. Facility Termination Date..........................................................18
Section 2.06. Repayment of Capital Investment....................................................18
Section 2.07. Daily Yield........................................................................18
Section 2.08. Fees...............................................................................18
Section 2.09. Time and Method of Payments........................................................18
Section 2.10. Further Action Evidencing Purchases................................................18
Section 2.11. Additional Costs; Capital Requirements.............................................19
Section 2.12. Breakage Costs.....................................................................20
Section 2.13. Purchase Excess....................................................................20
ARTICLE III.
CONDITIONS TO PURCHASE
Section 3.01. Conditions Precedent to Effectiveness of Agreement.................................20
Section 3.02. Conditions Precedent to All Purchases..............................................22
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations and Warranties of the Seller.......................................23
Section 4.02. Representations and Warranties of the Servicer.....................................27
ARTICLE V.
GENERAL COVENANTS OF THE SELLER
Section 5.01. Affirmative Covenants of the Seller................................................28
Section 5.02. Reporting Requirements of the Seller...............................................29
Section 5.03. Negative Covenants of the Seller...................................................30
ARTICLE VI.
COLLECTIONS AND DISBURSEMENTS
Section 6.01. Establishment of Accounts..........................................................31
Section 6.02. Funding of Collection Account......................................................33
Section 6.03. Daily Disbursements From the Collection Account - Revolving Period.................34
Section 6.04. Disbursements From the Retention Account - Settlement Date Procedures -
Revolving Period................................................................35
Section 6.05. Liquidation Settlement Procedures..................................................36
Section 6.06. Investment of Accounts.............................................................38
Section 6.07. Termination Procedure..............................................................38
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
ARTICLE VII.
APPOINTMENT OF THE SERVICER
Page
----
<S> <C>
Section 7.01. Appointment of the Servicer...........................................................38
Section 7.02. Duties and Responsibilities of the Servicer...........................................38
Section 7.03. Collections on Receivables............................................................39
Section 7.04. Authorization of the Servicer.........................................................39
Section 7.05. Servicing Fees........................................................................39
Section 7.06. Covenants of the Servicer.............................................................39
Section 7.07. Reporting.............................................................................40
Section 7.08. Annual Statement as to Compliance.....................................................41
Section 7.09. Annual Independent Public Accountants' Servicing and Compliance Report................41
ARTICLE VIII.
GRANT OF SECURITY INTERESTS
Section 8.01. Seller's Grant of Security Interest...................................................41
Section 8.02. Seller's Certification................................................................42
Section 8.03. Consent to Assignment.................................................................42
Section 8.04. Delivery of Collateral................................................................43
Section 8.05. Seller Remains Liable.................................................................43
Section 8.06. Covenants of the Seller and Servicer Regarding the Collateral.........................43
ARTICLE IX.
TERMINATION EVENTS
Section 9.01. Termination Events....................................................................45
Section 9.02. Events of Servicer Termination........................................................47
ARTICLE X.
REMEDIES
Section 10.01. Actions Upon Termination Event.......................................................48
Section 10.02. Exercise of Remedies.................................................................49
Section 10.03. Severability of Remedies.............................................................49
Section 10.04. Power of Attorney....................................................................49
Section 10.05. Continuing Security Interest.........................................................50
ARTICLE XI.
SUCCESSOR SERVICER
Section 11.01. Servicer Not to Resign...............................................................50
Section 11.02. Appointment of the Successor Servicer................................................50
Section 11.03. Duties of the Servicer...............................................................50
Section 11.04. Effect of Termination or Resignation.................................................50
ARTICLE XII.
INDEMNIFICATION
Section 12.01. Indemnities by the Seller............................................................51
Section 12.02. Indemnities by the Servicer..........................................................51
ARTICLE XIII.
OPERATING AGENT
Section 13.01. Authorization and Action.............................................................52
Section 13.02. Reliance, etc........................................................................52
</TABLE>
<PAGE> 4
<TABLE>
Page
----
<S> <C>
Section 13.03. GE Capital and Affiliates.........................................................53
ARTICLE XIV.
MISCELLANEOUS
Section 14.01. Notices, Etc......................................................................53
Section 14.02. Binding Effect; Assignability.....................................................53
Section 14.03. Costs, Expenses and Taxes.........................................................53
Section 14.04. Confidentiality...................................................................54
Section 14.05. No Proceedings....................................................................54
Section 14.06. Amendments; Waivers; Consents.....................................................54
Section 14.07. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL......................55
Section 14.08. Execution in Counterparts; Severability...........................................55
Section 14.09. Descriptive Headings..............................................................55
Section 14.10. Limited Recourse..................................................................55
Schedule 1 - Concentration Limits
Schedule 2 - Excluded Obligors
Annex A to
Schedule 2 - Form of Amending Letter
Schedule 3 - Determination of "Daily Yield"
Schedule 4 - Yield Discount Amount
Schedule 5 - Addresses of the Seller
Schedule 6 - List of Lockboxes and Lockbox Accounts
Schedule 7 - List of Seller Agreements
Schedule 8 - List of Originator/Servicer Trade, Fictitious, Assumed and "Doing Business as"
Names
Exhibit A-1 - Form of Seller Notice (Request for Purchase)
Exhibit A-2 - Form of Seller Notice (Reduction of Commitment)
Exhibit A-3 - Form of Seller Notice (Termination of Commitment)
Exhibit A-4 - Form of Seller Notice (Repayment of Capital Investment)
Exhibit B - Form of Purchase Assignment
Exhibit C - Form of Investment Base Certificate
Exhibit D - Form of Officer's Certificate as to Solvency
Exhibit E - Form of Officer's Certificate of Seller
(Bringdown Certificate)
Exhibit F - Form of Officer's Certificate of Servicer
Exhibit G - Form of Monthly Report
Exhibit H - Financial Covenants
</TABLE>
<PAGE> 5
RECEIVABLES PURCHASE AND SERVICING AGREEMENT, dated as of March 26, 1996 (the
"AGREEMENT") by and among CARLISLE PLASTICS FUNDING CORPORATION, a Delaware
corporation (the "SELLER"), REDWOOD RECEIVABLES CORPORATION, a Delaware
corporation, as Purchaser (as such, together with its successors and assigns,
the "PURCHASER"), 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 Purchaser
Secured Parties (as such, together with its successors and assigns, the
"COLLATERAL AGENT"), and CARLISLE PLASTICS, INC., a Delaware corporation, as
servicer hereunder (as such, together with its successors and permitted assigns,
the "SERVICER").
RECITALS
A. The Seller is a wholly-owned bankruptcy remote Subsidiary
of the Originator.
B. The Seller has been formed for the sole purpose of
purchasing or otherwise acquiring certain trade receivables originated by
Carlisle Plastics, Inc. (the "Originator").
C. The Seller intends that such trade receivables shall be
purchased by or contributed to the Seller pursuant to the Receivables Sale
Agreement, dated as of April 14, 1994 as amended by Amendment No. 1 to
Receivables Sale Agreement dated October 25, 1994 and by Amendment No. 2 thereto
dated as of the date hereof (as amended, the "TRANSFER AGREEMENT"), by and among
the Originator and the Seller.
D. The Seller and the Purchaser intend that the Purchaser
purchase the Receivables.
E. The Operating Agent has been requested and is willing to
act as operating agent on behalf of the Purchaser in connection with the making
and financing of such advances.
F. In order to effectuate the purposes of this Agreement, the
Purchaser and the Operating Agent desire that a servicer be appointed to perform
certain servicing, administrative and collection functions in respect of the
receivables acquired by the Purchaser under this Agreement.
G. The Originator has been requested and is willing to act as
the Servicer.
NOW, THEREFORE, the parties agree as follows:
ARTICLE I.
DEFINITIONS AND INTERPRETATION
Section 1.01. Definitions. Except as otherwise expressly provided
herein or unless the context otherwise requires, capitalized terms not otherwise
defined herein shall have the following meanings:
"Accrued Monthly Yield" means for any day within a Settlement
Period, the Daily Yield 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.
"Accrued Servicing Fee" means for any day within a Settlement
Period, the Servicing Fee 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.
"Accrued Unused Commitment Fee" means for any day within a
Settlement Period, the Unused Commitment Fee 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.
"Accumulated Funding Deficiency" has the meaning provided in
Section 412 of the Internal Revenue Code and Section 302 of ERISA, whether or
not waived.
1
<PAGE> 6
"Additional Amounts" means any amounts payable to any Affected
Party under Sections and 2.11 and 2.12.
"Additional Costs" has the meaning specified in Section
2.11(b).
"Administration Fee" means a fee payable by the Seller to the
Purchaser in respect of each Settlement Period as set out in the Fee Letter
between the Seller and the Purchaser.
"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 ownership or security interest
created under the Purchase Agreement, the Collateral Agent Agreement or the
Credit Agreement.
"Affected Party" means the Purchaser, 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.
"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 Purchase and Servicing
Agreement.
"Authorized Officer" means, with respect to any corporation,
the Chairman or Vice-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 lesser of:
(a) an amount equal to:
(i) the Investment Base
times
(ii) the Purchase Discount Rate
minus
(iii) the Yield Discount Amount,
and
(b) the Maximum Purchase Limit then in effect.
"Billed Amount" means, with respect to any Receivable, the
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.
"Breakage Costs" has the meaning specified in Section 2.12.
"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.
2
<PAGE> 7
"Capital Investment" means, as of the date of any calculation,
an amount equal to (a) the aggregate deposits made in the Collection Account
pursuant to Section 2.04(b)(i) on or before such date minus (b) any amount
disbursed to the Purchaser in reduction of Capital Investment pursuant to
Section 6.02, 6.03 or 6.05 on or before such date.
"Capital Investment Available" means, as of the date of any
calculation, the excess, if any of Availability over Capital Investment at the
opening of business on such date.
"Capital Investment Shortfall" means, for any day with respect
to which the prior day the Deferred Purchase Price Adjustment for the prior day
was greater than zero and was not satisfied, the amount, if any, by which the
Deferred Purchase Price Adjustment calculated as of such prior day exceeded the
amount of Collections on deposit in the Capital Investment Sub-Account of the
Collection Account as of such prior day after disbursement of amounts set forth
in Sections 6.03(c)(i) and (ii).
"Capital Investment Sub-Account" means a sub-account of the
Collection Account designated as such.
"Cash Purchase Price" means, as of any date of Purchase, the
amount distributable to the Seller pursuant to Section 6.03(c)(vi).
"Collateral" means the Seller Collateral assigned and pledged
by the Seller in Section 8.01.
"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 Second Amended and
Restated Collateral Agent and Security Agreement, dated as of June 29, 1995 as
amended by Amendment No. 1 dated as of February 27, 1996, among the Redwood, the
Collateral Agent, the Letter of Credit Agent, the Liquidity Agent and the
Depositary as such Agreement may be amended or modified.
"Collection Account" means the account maintained with the
Depositary described in Section 6.01(b).
"Collections" means, with respect to any Receivable, all cash
collections and other Proceeds of such Receivable (including late charges, fees
and interest arising thereon, and all recoveries with respect to Receivables
that have been written off as uncollectible).
"Commercial Paper" means promissory notes issued by the
Purchaser.
"Commonly Controlled Entity" means the Originators and any
entity, whether or not incorporated, affiliated with the Originators pursuant to
Section 414(b), (c), (m) or (o) of the Internal Revenue Code.
"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 the lesser of either (a) the dollar
amount (if any) set forth on Schedule 1, or (b) the product of (i) such
Obligor's percentage set forth on Schedule 1 and (ii) the Outstanding Balance of
all Transferred Receivables that are Eligible Receivables on such date. The
Concentration Discount Amount may be changed at any time at the sole discretion
of the Operating Agent and upon satisfaction of the Rating Agency Condition.
"Contract" means an agreement (including an invoice) pursuant
to, or under which, an Obligor shall be obligated to pay for Receivables of such
Obligor to the Originator from time to time.
3
<PAGE> 8
"CP Holder" means any Person holding record or beneficial
ownership of Commercial Paper.
"CP Interest" has the meaning specified in Schedule 3.
"Credit Agreement" shall mean, the Credit Agreement, as
amended, between and among the Servicer, as Borrower, Poly-Tech, Inc., A&E
Products (Far East) Ltd., Plasticos Bajacal S.A. de C.V., Rhino-X Industries,
Inc., A&E Korea, Ltd., American Western Corporation and AWC Transportation
Corporation, as Co-Obligors, and General Electric Capital Corporation, as Agent
and Lender.
"Credit and Collection Policies" means the credit and
collection policies of the Originator in effect on the Effective Date as such
policies may hereafter be amended, modified or supplemented from time to time
with the written consent of the Operating Agent.
"Daily Yield" has the meaning specified in Schedule 3.
"Daily Yield Rate" has the meaning specified in Schedule 3.
"Dealer" means any dealer under a Dealer Agreement.
"Dealer Agreement" means any dealer agreement entered into by
the Purchaser for the distribution of Commercial Paper.
"Debt" of any Person means indebtedness, obligations and
liabilities of such Person (a) for borrowed money, (b) evidenced by bonds,
debentures, notes or other similar instruments (excluding accrued interest), (c)
to pay the deferred purchase price of property or services (it being understood
that Debt shall not include obligations both (i) classified as accounts payable,
accrued liabilities or income taxes payable under GAAP, (ii) incurred in the
ordinary course of business and (iii) not delinquent or otherwise past due), (d)
principal obligations as lessee under leases which have been or should be, in
accordance with GAAP, recorded as capital leases, (e) secured by any lien or
other charge upon property or assets owned by such Person, even though such
Person has not assumed or become liable for the payment of such obligations (but
only to the extent of the fair market value of such property or assets), (f)
under any interest rate, swap, "cap", "collar" or other hedging agreement, (g)
under reimbursement agreements or similar agreements with respect to the
issuance of letters of credit (other than obligations in respect of letters of
credit opened to provide for payment of goods and services purchased in the
ordinary course of business), (h) under direct or indirect guaranties in respect
of, and obligations (contingent or otherwise) to purchase or otherwise acquire,
or otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clauses (a) through (h) above,
and (i) liabilities in respect of unfunded vested benefits under plans covered
by ERISA, provided that no obligation, indebtedness or liability included in
Debt shall be included in more than one of clauses (a) through (i). For the
purposes hereof, the term "guarantee" shall include any agreement, whether such
agreement is on a contingency or otherwise, to purchase, repurchase or otherwise
acquire Debt of any other Person, or to purchase, sell or lease, as lessee or
lessor, property or services, in any such case primarily for the purpose of
enabling another person to make payment of Debt, or to make any payment (whether
as an advance, capital contribution, purchase of an equity interest or
otherwise) to assure a minimum equity, asset base, working capital or other
balance sheet or financial condition, in connection with the Debt of another
Person, or to supply funds to or in any manner invest in another Person in
connection with Debt of such Person.
"Deemed Defaults" means for any Settlement Period, the sum of
(i) the aggregate Outstanding Balance of Transferred Receivables which were from
91 to 120 days past Maturity Date as of the last day of such Settlement Period,
plus (ii) the aggregate Outstanding Balances of Transferred Receivables which
were (A) written off as uncollectible during such Settlement Period and (B) not
more than 90 days past Maturity Date of the time of such write-off.
"Default Ratio" means, as of any date, the ratio (expressed as
a percentage) computed by dividing:
4
<PAGE> 9
(a) the sum of the Outstanding Balance of Transferred
Receivables which became Defaulted Receivables during the three Settlement
Periods preceding such date
by
(b) the sum of the Outstanding Balance of all Transferred
Receivables on the last day of each of the three Settlement Periods preceding
such date.
"Defaulted Receivable" means a Receivable (a) as to which any
payment, or part thereof, remains unpaid for more than 90 days after the
Maturity Date of such Receivable, or (b) as to which the Obligor thereof has
taken any action, or suffered any event to occur, of the type described in
Section 9.01(c) in respect of the Obligor, or (c) which otherwise would be
determined to be uncollectible and written off in accordance with the Credit and
Collection Policies.
"Deferred Purchase Price" means, as of any date of Purchase,
an amount equal to the product of (a) the Outstanding Balance of Receivables to
be sold and (b) the Deferred Purchase Price Rate, in each case as of such date.
"Deferred Purchase Price Adjustment" means, as of the end of
any date during the Revolving Period, an amount (positive or negative) equal to
(a) the product of (i)(A) the Deferred Purchase Price Rate calculated as of the
end of the previous date on which a Deferred Purchase Price Adjustment was
calculated minus (B) the Deferred Purchase Price Rate as of the end of such
date; and (ii) (A) the aggregate Outstanding Balance of Transferred Receivables
as of the end of the previous date on which a Deferred Purchase Price Adjustment
was calculated, minus (B) Collections received since the end of the previous
date on which a Deferred Purchase Price Adjustment was calculated minus (C)
Defaults and other non-cash dilutions since the end of the previous date on
which a Deferred Purchase Price Adjustment was calculated, minus (b) the
Deferred Purchase Price Shortfall, if any, plus (c) the Capital Investment
Shortfall, if any.
"Deferred Purchase Price Collections" means, as of the end of
the previous date, an amount equal to the product of (a) Collections and (b) the
Deferred Purchase Price Rate, in each case as of such date.
"Deferred Purchase Price Outstanding" means, as of the end of
any date, an amount equal to the product of (a) the Outstanding Balance of
Transferred Receivables and (b) the Deferred Purchase Price Rate, in each case
of such date.
"Deferred Purchase Price Rate" means:
(a) as of the end of any date during the Revolving Period, a
fraction (expressed as a percentage) (i) the numerator of which equals the
Outstanding Balance of Transferred Receivables minus Availability, in each case
on such date, and (ii) the denominator of which is the Outstanding Balance of
Transferred Receivables on such date; and
(b) on any date after the Facility Termination Date, the
Deferred Purchase Price Rate calculated according to clause (a) immediately
prior to the Facility Termination Date.
"Deferred Purchase Price Shortfall" means, for any day with
respect to which the prior day the Deferred Purchase Price Adjustment for the
prior day was less than zero and was not satisfied, the amount, if any, by which
the Deferred Purchase Price Adjustment calculated as of such prior day exceeded
the amount of Collections on deposit in the Deferred Purchase Price Sub-Account
of the Collection Account as of such prior day after disbursement of amounts set
forth in Sections 6.03(b)(i) and (ii).
"Deferred Purchase Price Sub-Account" means a sub-account of
the Collection Account designated as such.
5
<PAGE> 10
"Delinquency Ratio" means, on any date of determination, the
ratio (expressed as a percentage) computed by dividing:
(a) the Outstanding Balance of all Transferred Receivables
that were Delinquent Receivables on the last day of each of the three Settlement
Periods preceding such date
by
(b) the sum of the Outstanding Balance of all Transferred
Receivables on the last day of each of the three such Settlement Periods
preceding such date.
"Delinquent Receivable" means any Receivable, other than a
Defaulted Receivable, as to which any payment, or part thereof, remains unpaid
for more than 60 days past its Maturity Date.
"Depositary" means Bankers Trust Company, or any other Person
designated as the successor Depositary from time to time in its capacity as
issuing and paying agent or trustee in connection with the issuance of
Commercial Paper by Redwood.
"Dilution Factors" means, with respect to the Transferred
Receivables, any net credits, rebates, freight charges, cash discounts, volume
discounts, cooperative advertising expenses, royalty payments, warranties, cost
of parts required to be maintained by agreement (whether express or implied),
warehouse and other allowances, disputes, chargebacks, defective returns, other
returned or repossessed goods, inventory transfers, allowances for early
payments and other similar allowances that are made or coordinated with the
Originator's usual practices (other than deductions for promotional allowances,
discounts or similar deductions or rebates that may be charged against such
Transferred Receivables), in each case after, in the case of any Receivable,
such Receivable first became a "Receivable" hereunder; provided that any
allowances or adjustments in accordance with the Credit and Collection Policies
made on account of an Obligor's insolvency or inability to pay shall not
constitute a Dilution Factor.
"Dilution Funded Amount" means, for any date, an amount equal
to (a) (i) (A) the Outstanding Balance of previously Transferred Receivables
which have become Defaulted Receivables plus (B) other non-cash reductions of
the Outstanding Balance of Transferred Receivables since the preceding Business
Day, times (ii) 1 minus the Deferred Purchase Price Rate as of the end of the
preceding Business Day, plus (b) the Dilution Funded Amount Shortfall, if any,
outstanding at the end of the preceding Business Day.
"Dilution Funded Amount Shortfall" means, for any date, an
amount equal to the amount, if any, by which (a) the Dilution Funded Amount
exceeds (b) (i) the amount, if any, by which Deferred Purchase Price Collections
exceed the sum of the amounts set forth in Section 6.03(b)(i).
"Dilution Ratio" means, on any date of determination, the
ratio (expressed as a percentage) computed by dividing:
(a) an amount equal to the aggregate amount of Dilution
Factors, as reflected on the books of the Originator during the Settlement
Period preceding such date
by
(b) Generated Receivables recorded during the third Settlement
Period preceding such date.
"Dilution Reserve Ratio" means, on any date of determination,
an amount (expressed as a percentage) calculated in accordance with the
following formula:
6
<PAGE> 11
[(ADR x 2.00) + [(HDR - ADR) x HDR OVER ADR ]] x DILHOR OVER NRPB
where:
ADR = the ratio (expressed as a percentage) computed by
dividing:
(a) an amount equal to the aggregate amount
of Dilution Factors, as reflected on the books of the
Originator during the prior twelve Settlement Periods
by
(b) Generated Receivables during the period
commencing on the first day of the fourteenth
Settlement Period prior to such day and ending on the
last day of the third Settlement Period prior to such
day.
HDR = the highest Dilution Ratio within the last twelve
Settlement Periods
DILHOR = Generated Receivables recorded during the prior two
Settlement Periods
NRPB = the Outstanding Balance of Eligible Receivables on
the last day of the preceding Settlement Period.
The Dilution Reserve Ratio from the closing until the first month shall be
established by the Operating Agent at closing and the underlying calculations
for each of the twelve months preceding the first month after closing to be used
in future calculations of the Dilution Reserve Ratio shall be established by the
Operating Agent at closing.
"Dilutions-to-Collections Ratio" means, as of any Settlement
Date, the ratio (expressed as a percentage) computed by dividing:
(a) the aggregate unpaid amounts on all Transferred
Receivables resulting from credits, discounts, rescissions, merchandise returns,
contractual allowances, compromises, adjustments, extensions or other non-cash
deductions (other than Promotional Allowances) during the preceding three
Settlement Periods
by
(b) the aggregate amount of all Collections on Transferred
Receivables during such Settlement Periods.
"Effective Date" means the date of this Agreement.
"Eligible Receivable" means, at any time, a Transferred
Receivable:
(a) which is not the liability of an Excluded Obligor;
(b) which is a liability of an Obligor organized under the
laws of any jurisdiction in the United States and having its principal office in
the United States;
(c) which is denominated and payable in United States dollars;
(d) which is not a Delinquent Receivable or a Defaulted
Receivable;
7
<PAGE> 12
(e) as to which the representations and warranties of Section
4.01(c) of the Transfer Agreement are true and correct in all respects as of the
related Transfer Date; and
(f) which complies with such other criteria and requirements
as the Operating Agent may from time to time specify to the Seller following 30
days' notice or, if so required by either Rating Agency, upon the number of days
notice specified by such Rating Agency.
"ERISA" means the Employee Retirement Income Security Act of
1974, as it may be amended from time to time, and the regulations promulgated
thereunder.
"Event of Servicer Termination" has the meaning specified in
Section 9.02.
"Excluded Obligor" means an Obligor which is (a) an Affiliate
of the Originator or the Seller, (b) a Governmental Authority, (c) an Obligor of
which more than 50% of its Receivables are Delinquent Receivables or Defaulted
Receivables, or (d) an Obligor listed on Schedule 2 as revised from time to time
pursuant to a letter in the form of Annex A thereto.
"Facility 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) 90 days prior to the Final Purchase Date.
"Fee Letter" means the letter dated March 26, 1996 between the
Seller and the Purchaser.
"Final Purchase Date" means July 14, 1999.
"GAAP" means generally accepted accounting principles as in
effect in the United States, consistently applied, as of the date of such
application.
"GE Capital" means General Electric Capital Corporation.
"Generated Receivables" means the Outstanding Balance of all
Transferred Receivables generated during the Settlement Period.
"Governmental Authority" means the United States of America,
any state, local or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions thereof or pertaining thereto.
"Incipient Event" means an event which, upon the giving of
notice or the passage of time, or both, may become a Termination Event.
"Indemnified Amounts" has the meaning specified in Section
12.01(a).
"Indemnified Party" has the meaning specified in Section
12.01(a).
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended from time to time.
"Investment Base" means, for any date, as disclosed in the
most recently submitted Investment Base Certificate, an amount equal to the
Outstanding Balance of Transferred Receivables that are Eligible Receivables
minus the Concentration Discount Amount in respect of such Eligible Receivables.
"Investment Base Certificate" means an Officer's Certificate
in the form of Exhibit C to the Purchase Agreement.
"Investments" means, with respect to any Seller Account
Collateral, the certificates, instruments or other Permitted Investments in
which amounts in such account are invested from time to time.
8
<PAGE> 13
\ "Letter of Credit" means the letter of credit, dated June 29,
1995, provided by the Letter of Credit Providers pursuant to the Letter of
Credit Agreement.
"Letter of Credit Agent" means GE Capital, in its capacity as
agent for the Letter of Credit Providers under the Letter of Credit Agreement,
and its successors and permitted assigns in such capacity.
"Letter of Credit Agreement" means the Second Amended and
Restated Letter of Credit Reimbursement Agreement, dated as of June 29, 1995 as
amended by Amendment No. 1 dated as of February 27, 1996, among the Redwood, the
Letter of Credit Agent and the Letter of Credit Providers as such Agreement may
be amended or modified.
"Letter of Credit Providers" means, initially, GE Capital, as
provider of the Letter of Credit under the Letter of Credit Agreement, and
thereafter its successors and any permitted assigns in such capacity.
"Liquidity Agent" means GE Capital and its successors and
assigns as agent for the Liquidity Lenders pursuant to the Liquidity Loan
Agreement.
"Liquidity Lenders" means, collectively, GE Capital and any
other provider of Liquidity Loans under the Liquidity Loan Agreement.
"Liquidity Loan Agreement" means the Second Amended and
Restated Liquidity Loan Agreement, dated as of June 29, 1995 as amended by
Amendment No. 1 dated as of February 27, 1996 among Redwood, the Liquidity
Lenders and the Liquidity Agent in connection with the provision of liquidity
support for Redwood as such Agreement may be amended or modified.
"Liquidity Loans" means borrowings by Redwood under the
Liquidity Loan Agreement with respect to the Seller.
"LOC Draw" means a draw under the Letter of Credit Agreement.
"Lockbox" has the meaning specified in Section 6.01(a)(ii).
"Lockbox Account" means one or more segregated deposit
accounts described in Section 6.01(a) in the name of the Operating Agent, into
which all Collections in respect of Transferred Receivables shall be deposited.
"Lockbox Agreement" means one or more agreements among the
Originator, the Seller, the Operating Agent, the Purchaser and a Lockbox Bank
with respect to a Lockbox Account, (a) providing that all Collections therein
shall be remitted directly to the Collection Account within one Business Day of
receipt, (b) providing that such depositary institution waives its rights of
set-off with respect to such Lockbox Account, and (c) otherwise satisfactory to
the Operating Agent.
"Lockbox Bank" means any of the banks or other financial
institutions holding one or more Lockbox Accounts.
"Loss Reserve Ratio" means, on any date of determination, an
amount (expressed as a percentage) calculated in accordance with the following
formula:
2.00 x ARR x {DEFHOR}OVER{NRPB}
where:
ARR = the highest Three Month Aged Receivables Ratio that
occurred during the last twelve Settlement Periods.
9
<PAGE> 14
DEFHOR = Generated Receivables recorded during the prior
three Settlement Periods.
NRPB = the Outstanding Balance of Eligible Receivables on
the last day of the preceding Settlement Period.
The underlying calculations for the Loss Reserve Ratio for each of the twelve
months preceding the first month after closing to be used in future calculations
of the Loss Reserve Ratio shall be established by the Operating Agent at
closing.
"Margin" means, for any period, the sum of the "Daily Margin
Amounts" for each day in such period, where the "Daily Margin Amount" equals the
Daily Margin (as specified in Schedule 3) for each such day multiplied by the
Capital Investment on each such day.
"Maturity Date", for any Receivable, means the due date for
payment specified in the related Contract, or, if no date is specified, 60 days
from the Billing Date.
"Maximum Purchase Limit" means $45,000,000, as such amount may
be subject to reduction in accordance with Section 2.02(a).
"Monthly Report" means the Monthly Report in the form of
Exhibit G.
"Moody's" means Moody's Investors Service, Inc. or any
successor thereto.
"Multiemployer Plan" means a multiemployer plan (within the
meaning of Section 4001(a)(3) of ERISA) in respect of which a Commonly
Controlled Entity makes contributions or has liability.
"Net Proceeds Amount" means the face amount of Commercial
Paper minus the discount on the price to the public and Dealer fees for such
Commercial Paper.
"Obligor" means a Person (other than the Seller or the
Originator) which is obligated to make payments pursuant to a Contract of the
type described in the definition of the term "Contract" contained in this
Section 1.01.
"Officer's Certificate" means, with respect to any Person, a
certificate signed by an Authorized Officer solely in such person's capacity as
an Authorized Officer.
"Operating Agent" means GE Capital, as Operating Agent under
the Purchase Agreement, together with its successors and assigns.
"Operating Agent Agreement" means the Operating Agent
Agreement, dated as of March 15, 1994, between Redwood and the Operating Agent.
"Originator" means Carlisle Plastics, Inc., a Delaware
corporation.
"Other Purchase Agreements" means other agreements for the
purchase or funding of receivables entered into from time to time by the
Purchaser in which it is contemplated that such purchases or fundings will be
financed in a similar manner as contemplated hereunder.
"Outstanding Balance" of any Receivable at any time means an
amount (not less than zero) equal to (a) its Billed Amount, minus (b) all
payments received from the Obligor with respect thereto, minus (c) all discounts
to or any other modifications that reduce the Billed Amount; provided, that if
the Operating Agent or the Servicer makes a determination that all payments by
the Obligor with respect to such Billed Amount have been made, the Outstanding
Balance shall be zero.
"Parent" means Carlisle Plastics, Inc., a Delaware
corporation.
10
<PAGE> 15
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor agency, corporation or instrumentality of the United States to which
the duties and powers of the Pension Benefit Guaranty Corporation are
transferred.
"Permitted Investments" means one or more of the following:
(a) obligations of, or guaranteed as to the full and timely
payment of principal and interest by, the United States or obligations of any
agency or instrumentality thereof, when such obligations are backed by the full
faith and credit of the United States;
(b) repurchase agreements on obligations specified in clause
(a); provided, that the short-term debt obligations of the party agreeing to
repurchase are rated at least A-1+ by S&P and P-1 by Moody's;
(c) federal funds, certificates of deposit, time deposits and
bankers' acceptances (which shall each have an original maturity of not more
than 90 days or, in the case of bankers' acceptances, shall in no event have an
original maturity of more than 365 days) of any United States depository
institution or trust company incorporated under the laws of the United States or
any state; provided, that the short-term obligations of such depository
institution or trust company are rated at least A-1+ by S&P and P-1 by Moody's;
(d) commercial paper (having original maturities of not more
than 30 days) of any corporation incorporated under the laws of the United
States or any state thereof which on the date of acquisition are rated at least
A-1+ by S&P and P-1 by Moody's;
(e) securities of money market funds rated at least Aam by S&P
and P-1 by Moody's; and
(f) such other investments with respect to which each Rating
Agency shall have confirmed in writing to the Purchaser and Collateral Agent
that such investments shall not result in a withdrawal or reduction of the then
current rating by such Rating Agency of the Commercial Paper.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust, association, joint
venture, Governmental Authority or any other entity of whatever nature.
"Plan" means any pension plan (other than a Multiemployer
Plan) covered by Title IV of ERISA, which is maintained by a Commonly Controlled
Entity or in respect of which a Commonly Controlled Entity has liability.
"Proceeds" means, with respect to any Collateral, whatever is
receivable or received when such Collateral is sold, collected, exchanged or
otherwise disposed of, whether such disposition is voluntary or involuntary, and
includes all rights to payment, including returned premiums, with respect to any
insurance relating to such Collateral.
"Program Documents" means the Letter of Credit Agreement, the
Liquidity Loan Agreement, the Collateral Agent Agreement, the Depositary
Agreement, Commercial Paper Notes, the Operating Agent Agreement, each Accession
Agreement and the Dealer Agreements.
"Purchase" means a purchase of Receivables (or interests
therein) by the Purchaser from the Seller pursuant to Section 2.01.
"Purchase Assignment" means the Assignment entered into by the
Seller and the Purchaser in the form attached as Exhibit B.
"Purchase Date" means each day on which a Purchase is made.
11
<PAGE> 16
"Purchase Discount Rate" means a rate, as of any date, equal
to 100% minus the greater of (a) (i) the sum of the Loss Reserve Ratio and the
Dilution Reserve Ratio minus (ii) 15%, or (b) 15%.
"Purchase Excess" means, for any date, as disclosed in the
most recently submitted Investment Base Certificate, the extent to which the
then Capital Investment exceeds the Availability as of such date.
"Purchaser" means Redwood Receivables Corporation, a Delaware
corporation.
"Purchaser Secured Parties" means the CP Holders, the
Depositary, the Liquidity Agent, the Liquidity Lenders, the Letter of Credit
Agent and the Letter of Credit Providers.
"Rating Agency" means each of Moody's and S&P.
"Rating Agency Condition" means, with respect to any action,
that each Rating Agency has notified the Operating Agent and the Purchaser in
writing that such action will not result in a reduction or withdrawal of the
rating of any outstanding Commercial Paper.
"Receivable" means:
(a) indebtedness of an Obligor (whether constituting an
account, chattel paper, instrument or general intangible) arising from the
provision of merchandise, goods or services by the Originator to such Obligor,
including the right to payment of any interest or finance charges and other
obligations of such Obligor with respect thereto;
(b) all security interests or liens and property subject
thereto from time to time securing or purporting to secure payment by the
Obligor;
(c) all rights under all guarantees, indemnities and
warranties and proceeds thereof, proceeds of insurance policies, financing
statements and other agreements or arrangements of whatever character, in each
case from time to time supporting or securing payment of such Receivable whether
pursuant to the Contract related to such Receivable or otherwise;
(d) all Collections with respect to any of the foregoing;
(e) all Records with respect to any of the foregoing; and
(f) all Proceeds of any of the foregoing.
"Receivable Collection Turnover" means, on any date of
determination, a number of days equal to:
(a) a fraction, the numerator of which is equal to the average
of the Outstanding Balance of Transferred Receivables on the first day of each
Settlement Period during the prior twelve Settlement Periods and the denominator
of which is equal to aggregate Collections received during such twelve
Settlement Periods with respect to all Receivables originated by the Originator,
multiplied by
(b) the number of days in such prior twelve month period.
"Records" means all Contracts and other documents, books,
records and other information (including, without limitation, computer programs,
tapes, disks, data processing software and related property and rights) prepared
and maintained by the Originator, the Servicer or the Seller with respect to
Receivables and the related Obligors.
"Redwood" means Redwood Receivables Corporation, a Delaware
corporation.
12
<PAGE> 17
"Redwood Yield" for any period means the sum of the Daily
Yield for each day in such period, as more fully specified in Schedule 3.
"Regulatory Change" means any change after the Effective Date
in federal, state or foreign law or regulations (including, without limitation,
Regulation D of the Federal Reserve Board) or the adoption or making after such
date of any interpretation, directive or request applying to any Affected Party
of or under any federal, state or foreign law or regulations (whether or not
having the force of law) by any Governmental Authority charged with the
interpretation or administration thereof.
"Rejected Amount" means the amount of the capital contribution
which the Originator is required to make to the Seller (as determined by the
Operating Agent) as a result of breaches of representations and warranties with
respect to Receivables transferred to the Seller by the Originator pursuant to
Section 4.04 of the Transfer Agreement.
"Related Documents" means each Lockbox Agreement, the Transfer
Agreement, the Purchase Agreement, the Assignment and all agreements,
instruments, certificates, financing statements or other documents required to
be delivered thereunder.
"Reportable Event" means any of the events set forth in
Section 4043(c) of ERISA or the regulations thereunder.
"Requested Amount" means the amount which the Originator
wishes to receive from the sale of Receivables on any Transfer Date.
"Request Notice" means, as more fully described in Section
2.01(b) of the Transfer Agreement, a notice in the form of a computer print-out,
tape or other form of communication acceptable to the Operating Agent, which (a)
enables identification of the amount of Receivables sold and contributed on a
Transfer Date by the Originator to the Seller, (b) sets forth the amount of
payments received with respect to the Transferred Receivables since the prior
Transfer Date, and (c) sets forth the Requested Amount for the following
Transfer Date.
"Retained Monthly Yield" means, for any day within a
Settlement Period, the sum of all amounts transferred to or retained in the
Retention Account with respect to Daily Yield calculated as of the previous day
in accordance with Section 6.03(b)(i)(A).
"Retained Servicing Fee" means, for any day within a
Settlement Period, the sum of all amounts transferred to or retained in the
Retention Account with respect to the Servicing Fee calculated as of the
previous day in accordance with Section 6.03(b)(i)(C).
"Retained Unused Commitment Fee" means, for any day within a
Settlement Period, the sum of all amounts transferred to or retained in the
Retention Account with respect to the Unused Commitment Fee calculated as of the
previous day in accordance with Section 6.03(b)(i)(E).
"Retention Account" means the account maintained with the
Depositary described in Section 6.01(c).
"Retention Account Deficiency" means, for any Settlement Date,
any deficiency in the amounts on deposit in the Retention Account necessary to
make the payments required under Sections 6.04(a)(i), (ii) and (iii).
"Revolving Period" means the period commencing on the
Effective Date and ending on the day prior to the Facility Termination Date.
"S&P" means Standard & Poor's Ratings Services, a division of
The McGraw-Hill Companies, Inc. or any successor thereto.
"Seller" means Carlisle Plastics Funding Corporation, a wholly
owned Subsidiary of the Originator.
13
<PAGE> 18
"Seller Account Collateral" has the meaning specified in
Section 8.01(c).
"Seller Assigned Agreements" has the meaning specified in
Section 8.01(b).
"Seller Collateral" has the meaning specified in Section 8.01.
"Seller LOC Draws" means any payments made to the Purchaser in
connection with the Letter of Credit and allocated to the Seller.
"Seller Notice" means a notice in the form of Exhibit A,
setting forth the information required by Section 2.03(b).
"Seller Secured Obligations" means all obligations of every
nature of the Seller (other than to the Originator or Servicer), now or
hereafter existing, under the Purchase Agreement and any promissory note or
other document or instrument delivered pursuant to such documents, and all
amendments, extensions or renewals 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 Redwood, the Operating Agent or the Collateral Agent as a preference,
fraudulent transfer or otherwise.
"Seller's Share" means the ratio of the Maximum Purchase Limit
under the Purchase Agreement to the aggregate maximum purchase limits or
commitments under the Purchase Agreement and all Other Purchase Agreements.
"Servicer" means the Originator, or any Person designated as
Successor Servicer, and its successors and assigns from time to time hereunder.
"Servicer Termination Notice" means notice by the Operating
Agent to the Servicer that an Event of Servicer Termination has occurred and
that the Servicer's appointment hereunder has been terminated.
"Servicing Fee" means a fee payable by the Seller to the
Servicer on each Settlement Date equal to the product of (i) the Servicing Fee
Rate, (ii) the Outstanding Balance of all Transferred Receivables on such
Settlement Date, and (iii) the actual number of days in such period divided by
360.
"Servicing Fee Rate" means 1%.
"Servicing Fee Shortfall" means, for any day within a
Settlement Period, the amount, if any, by which the Accrued Servicing Fee
calculated as of that day exceeds the Retained Servicing Fee as of that same
day.
"Servicing Officer" means any officer of the Servicer involved
in, or responsible for, the administration and servicing of the Transferred
Receivables whose name appears on an Officer's Certificate listing servicing
officers furnished to the Operating Agent by the Servicer, as amended from time
to time.
"Servicing Records" means all documents, books, records and
other information (including, without limitation, computer programs, tapes,
disks, data processing software and related property and rights) prepared and
maintained by the Servicer with respect to the Transferred Receivables and the
related Obligors.
"Settlement Date" means the tenth Business Day following the
end of each Settlement Period.
14
<PAGE> 19
"Settlement Period" means, in the case of the initial
Settlement Period, the period beginning with the Effective Date to and including
the last day of the fiscal month in which such Effective Date occurs; with
respect to the final Settlement Period, the period ending on the Final Purchase
Date and beginning with the first day of the fiscal month in which the Final
Purchase Date occurs; and with respect to all other Settlement Periods, each
fiscal month.
"Sub-Servicer" means any Person with whom the Servicer enters
into a Sub-Servicing Agreement.
"Sub-Servicing Agreement" means any written contract between
the Servicer and any Sub-Servicer, relating to servicing, administration or
collection of Transferred Receivables as provided in Section 7.01.
"Subsidiary" means, as to any Person, any corporation or other
entity (a) of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other Persons
performing similar functions are at the time directly or indirectly owned by
such Person, or (b) is directly or indirectly controlled by such Person within
the meaning of control under Section 15 of the Securities Act of 1933, as
amended.
"Successor Servicer" has the meaning specified in Section
11.02.
"Successor Servicing Fees and Expenses" means the fees and
expenses payable by the Seller to the Purchaser, as agreed to by the Seller, the
Purchaser, the Operating Agent, the Liquidity Agent and the Letter of Credit
Agent.
"Termination Event" has the meaning specified in Section 9.01.
"Three Month Aged Receivables Ratio" means, on any date of
determination, the ratio (expressed as a percentage) equal to a fraction,
(a) the numerator of which equals the sum of the Deemed
Defaults for the three Settlement Periods preceding such day;
(b) the denominator of which equals sum of the Generated
Receivables for the fourth, fifth and sixth Settlement Periods
immediately preceding such day.
The underlying calculations for the Three Month Aged Receivables Ratio for each
of the twelve Settlement Periods preceding the first Settlement Period after
closing to be used in future calculations of the Aged Receivables Ratio shall be
established by the Operating Agent at closing.
"Transfer Agreement" means the Receivables Sale Agreement,
dated April 14, 1994, between the Originator and the Seller, as amended by
Amendment No. 1 to Receivables Sale Agreement dated as of October 25, 1994 and
by Amendment No. 2 thereto dated as of the date hereof.
"Transferred Receivable" means any Sold Receivable or
Contributed Receivable provided that any Receivable repurchased by the
Originator pursuant to Section 4.04(i) of the Transfer Agreement shall not be
deemed a Transferred Receivable from and after the date of repurchase unless
such Receivable has been repurchased by or recontributed to the Seller.
"UCC" means, for any jurisdiction, the Uniform Commercial Code
as from time to time in effect in such jurisdiction.
"Underfunded Plan" means any Plan that has an Underfunding.
"Underfunding" means, with respect to any Plan, the excess, if
any, of (a) the present value of all benefits under the Plan (based on the
assumptions used to fund the Plan pursuant to Section 412 of the Code) as of the
most recent valuation date over (b) the fair market value of the assets of such
Plan as of such valuation date.
15
<PAGE> 20
"Unused Commitment Fee" has the meaning set forth in the Fee
Letter.
"Unused Commitment Fee Shortfall" means, for any day within a
Settlement Period, the amount, if any, by which the Accrued Unused Commitment
Fee calculated as of that day exceeds the Retained Unused Commitment Fee as of
that same day.
"Yield Discount Amount" means the amount calculated by the
Operating Agent, from time to time at its discretion, as set forth on Schedule
4.
"Yield Shortfall" means, for any day within a Settlement
Period, the amount, if any, by which the Accrued Monthly Yield calculated as of
that day exceeds the Retained Monthly Yield as of that same day.
Section 1.02. Other Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP. All terms used in
Article 9 of the UCC of the State of New York, and not specifically defined
herein, are used herein as defined in such Article 9. All hourly references
herein shall refer to New York City time. All references to "dollar" or "$" are
to the lawful currency of the United States of America.
Section 1.03. Interpretation. Unless the context otherwise requires:
(a) All references to agreements and acts refer to the same as
from time to time amended or supplemented or as the terms of such agreements are
waived or modified in accordance with their terms.
(b) The words "hereof", "herein" and "hereunder" and words of
similar import when used in the Transfer Agreement or the Purchase Agreement
shall refer to such Agreement as a whole and not to any particular provision of
such Agreement.
(c) References to any Section, Schedule or Exhibit are
references to Sections, Schedules and Exhibits in or to the Agreement in which
the reference is made.
(d) The term "including" means "including without limitation."
(e) Definitions of terms are applicable to the singular forms
of such terms as well as the plural forms and vice versa.
(f) References to a gender include references to each other
gender.
ARTICLE II.
AMOUNTS AND TERMS OF THE PURCHASES
Section 2.01. Purchases. On the terms and conditions hereinafter set
forth, the Purchaser shall purchase Transferred Receivables (each, a "PURCHASE")
from the Seller from time to time during the Revolving Period. Under no
circumstances shall the Purchaser make any Purchase if, after giving effect to
such Purchase, the aggregate outstanding Capital Investment would exceed the
Availability. The aggregate price for each such Purchase shall consist of the
Cash Purchase Price and the Deferred Purchase Price.
Section 2.02. Optional Changes in Purchase Limit.
(a) The Seller may, not more than twice during each calendar
year, reduce the Maximum Purchase Limit permanently; provided that (i) the
Seller shall give notice of such reduction to the Purchaser in the form of
Exhibit A-2, (ii) any partial reduction of the Maximum Purchase Limit shall be
in an amount equal to Five Million Dollars ($5,000,000) or an integral multiple
thereof, and (iii) no such reduction shall reduce the Maximum Purchase Limit
below Capital Investment.
16
<PAGE> 21
(b) The Seller shall be entitled at its option to terminate
the Maximum Purchase Limit, provided that the Purchaser shall be given no less
than 30 days' prior notice by the Seller of such termination in the form of
Exhibit A-3. Any such termination shall be permanent and irrevocable.
(c) Each written notice required to be delivered pursuant to
clauses (a) and (b) above shall be irrevocable and shall be effective only if
received by the Purchaser and the Operating Agent not later than 5:00 p.m., New
York City time on the Business Day prior to the date of the related termination
or reduction. Each such notice of termination or reduction shall specify the
amount thereof.
(d) Upon early termination or reduction of the Maximum
Purchase Limit the Seller shall pay to the Purchaser an amount (the "Early
Termination Premium") equal to the product of (i) the amount by which the
Maximum Purchase Limit is reduced and (ii) one of the following percentages: if
such termination or reduction occurs during the 12 month period ended (A) April
30, 1996, 0.25%; and (B) thereafter, 0%; provided, however, that no Early
Termination Premium shall be due if the Maximum Purchase Limit is terminated (x)
within 30 days after a Change in Control, or (y) upon a public offering by the
Parent of its common stock, the proceeds of which are used to pay any Capital
Investment.
Section 2.03. Notices Relating to Purchases.
(a) On the third Business Day of each week, the Seller shall
file with the Operating Agent an Investment Base Certificate and, upon request,
copies of all applicable Request Notices under the Transfer Agreement delivered
since the date of the most recent Investment Base Certificate filed with the
Operating Agent. Availability will be calculated based on the most recent
Investment Base Certificate delivered to the Purchaser and the Operating Agent.
(b) The Seller shall give the Purchaser and the Operating
Agent written notice of each Purchase resulting in an increase in Capital
Investment (in each case, a "SELLER NOTICE"). Each such written notice shall be
substantially in the form of Exhibit A-1, shall be irrevocable and shall be
effective only if received by the Purchaser and the Operating Agent not later
than 12:00 p.m., New York City time on the Business Day prior to the date of the
related Purchase. Each such notice requesting a Purchase shall specify the
amount by which the Seller wishes the Capital Investment of the Purchaser to be
increased and the Purchase Date (which shall be a Business Day).
Section 2.04. Conveyance of Receivables.
(a) On the Effective Date, the Seller will complete, execute
and deliver a Purchase Assignment in the form of Exhibit B to the Purchaser.
(b) (i) Following receipt of a Seller Notice, subject to the
satisfaction of the conditions set forth in Section 3.02, the Purchaser shall
make available to or on behalf of the Seller, in same day funds, in accordance
with the Seller's instructions (after taking into account amounts on deposit in
the Collection Account which may be applied to any Capital Investment pursuant
to Section 6.03(a)(iii)) the lesser of the amount specified in such Seller
Notice and Capital Investment Available.
(ii) On each Business Day during the Revolving
Period, subject to the terms of Section 6.03, the Purchaser shall make available
to or on behalf of the Seller, in same day funds, amounts on deposit in the
Collection Account which may be disbursed to the Seller as payment for the
Transferred Receivables.
(c) Effective on the date of each Purchase, the ownership of
all Transferred Receivables (including Transferred Receivables transferred prior
to the Purchase Date) will be vested in the Purchaser. The Seller shall not take
any action inconsistent with such ownership and shall not claim any ownership
interest in any such Transferred Receivable. The Seller shall indicate in its
Records that ownership of the Transferred Receivable is held by the Purchaser.
In addition, the Seller shall respond to any inquiries with respect to ownership
of a Transferred Receivable by stating that it is no longer the owner of such
Transferred Receivable and that ownership of such Transferred Receivable is held
by the Purchaser. Documents relating to the Transferred Receivables shall be
held in trust by the Seller and the Servicer, for the benefit of the Purchaser
as the owner thereof, and possession of any incident relating to
17
<PAGE> 22
the Transferred Receivables so retained is for the sole purpose of facilitating
the servicing of the Transferred Receivables. Such retention and possession is
at the will of the Purchaser and in a custodial capacity for the benefit of the
Purchaser only.
Section 2.05. Facility Termination Date. Notwithstanding anything to
the contrary herein, on and after the Facility Termination Date, the Purchaser
shall have no obligation to purchase any additional Receivables.
Section 2.06. Repayment of Capital Investment. The Capital Investment
may be repaid at any time and from time to time, in whole or in part, upon prior
written notice to the Purchaser and Operating Agent substantially in the form of
Exhibit A-4 and as provided in Section 2.03(b) provided, however, that all
repayments of Capital Investment or any portion thereof shall be made together
with payment of (i) all Daily Yield accrued on the amount repaid to (but
excluding) the date of such repayment, and (ii) any and all Breakage Costs
payable under Section 2.12.
Section 2.07. Daily Yield.
(a) The Seller shall pay to the Purchaser, as set forth in
Sections 6.03, 6.04 and 6.05, Daily Yield on the Capital Investment of the
Purchaser.
(b) Notwithstanding the foregoing, the Seller shall pay
interest on unpaid Daily Yield and on any other amount payable by the Seller
hereunder (to the extent permitted by law) that shall not be paid in full when
due (whether at stated maturity, by acceleration or otherwise) for the period
commencing on the due date thereof to (but excluding) the date the same is paid
in full at the applicable Daily Yield Rate.
Section 2.08. Fees.
(a) The Seller shall pay to the Purchaser the fees set forth
in the Fee Letter.
(b) On each Settlement Date, the Seller shall pay to the
Servicer, the Servicing Fee, or to the Successor Servicer, the Successor
Servicing Fees and Expenses.
Section 2.09. Time and Method of Payments. Subject to the provisions of
Sections 6.02, 6.03, 6.04 and 6.05, all payments of Capital Investment,
interest, fees and other amounts payable by the Seller hereunder shall be made
in dollars, in immediately available funds, to the Purchaser not later than 2:00
p.m., New York City time, on the date on which such payment shall become due.
Any such payment made on such date but after such time shall be deemed to have
been made on, and Daily Yield shall continue to accrue and be payable thereon
until, the next succeeding Business Day. If any payment becomes due on a day
other than a Business Day, such payment may be made on the next succeeding
Business Day and such extension shall be included in computing Daily Yield in
connection with such payment. All payments hereunder shall be made without
setoff or counterclaim and in such amounts as may be necessary in order that all
such payments shall not be less than the amounts otherwise specified to be paid
under this Agreement (after withholding for or on account of any present or
future taxes, levies, imposts, duties or other similar charges of whatever
nature imposed upon an Affected Party by any Governmental Authority, other than
any tax on or measured by the net income of the Affected Party to which any such
payment is due pursuant to applicable foreign, federal, state and local income
tax laws).
Section 2.10. Further Action Evidencing Purchases.
(a) The Seller agrees that, from time to time, at its expense,
it will promptly execute and deliver all further instruments and documents, and
take all further action, that may be necessary or appropriate, in the opinion of
the Purchaser, or that the Purchaser or the Operating Agent may request, in
order to perfect, protect or more fully evidence the transfer of ownership of
Transferred Receivables or to enable the Purchaser to exercise or enforce any of
its rights hereunder or under any Purchase Assignment. Without limiting the
generality of the foregoing, the Seller will, upon the request of the Purchaser,
(i) 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, or as
18
<PAGE> 23
the Purchaser may request, (ii) mark, or cause the Servicer to mark,
conspicuously each invoice evidencing each Transferred Receivable with a legend,
acceptable to the Purchaser, evidencing that the Purchaser has purchased all
right and title thereto and interest therein as provided in the Transfer
Agreement, (iii) send notification to Obligors as to the transfer of Transferred
Receivables, and (iv) mark, or cause the Servicer to mark, its master data
processing records evidencing such Transferred Receivables with such legend.
(b) The Seller hereby authorizes the Purchaser to file one or
more financing or continuation statements, and amendments thereto and
assignments thereof, relating to all or any of the Transferred Receivables and
Collections with respect thereto without the signature of the Seller where
permitted by law. A carbon, photographic or other reproduction of this Agreement
or any notice or financing statement covering the Transferred Receivables or any
part thereof shall be sufficient as a notice or financing statement where
permitted by law. The Purchaser will promptly send to the Seller after receipt
of any acknowledgment copies from the appropriate governmental agency any
financing or continuation statements thereto which it files without the
signature of the Seller except, in the case of filings of copies of this
Agreement as financing statements, the Purchaser will promptly send the Seller
after receipt from the appropriate governmental agency the filing or recordation
information with respect thereto.
Section 2.11. Additional Costs; Capital Requirements.
(a) In the event that any existing or future law, regulation
or guideline, or interpretation thereof, by any court or administrative or
governmental authority charged with the administration thereof, or compliance by
any Affected Party with any request or directive (whether or not having the
force of law) of any such authority shall impose, modify or deem applicable or
result in the application of, any capital maintenance, capital ratio or similar
requirement against commitments made by any Affected Party under this Agreement
or a Program Document, and the result of any event referred to above is to
impose upon any Affected Party or increase any capital requirement applicable as
a result of the making or maintenance of, such Affected Party's commitment
(which imposition of capital requirements may be determined by each Affected
Party's allocation of the aggregate of such capital increases or impositions),
then, upon demand made by the Operating Agent on behalf of such Affected Party
as promptly as practicable after it obtains knowledge that such law, regulation,
guideline, interpretation, request or directive exists and determines to make
such demand, the Seller shall immediately pay to the Collateral Agent on behalf
of such Affected Party from time to time as specified by the Operating Agent,
additional amounts which shall be sufficient to compensate such Affected Party
for the Seller's Share of such imposition of or increase in capital requirements
together with interest on each such amount from the date demanded until payment
in full thereof at the Daily Yield Rate. A certificate setting forth in
reasonable detail the amount necessary to compensate such Affected Party as a
result of an imposition of or increase in capital requirements submitted by the
Operating Agent to the Seller shall be conclusive, absent manifest error, as to
the amount thereof.
(b) In the event that any Regulatory Change shall: (i) change
the basis of taxation of any amounts payable to any Affected Party in respect of
any Purchases, Capital Investment, LOC Draws or Liquidity Loans (other than
taxes imposed on the overall net income of such Affected Party for any such
Purchases, Capital Investment, LOC Draws or Liquidity Loans by the United States
of America or the jurisdiction in which such Affected Party has its principal
office); (ii) impose or modify any reserve, Federal Deposit Insurance
Corporation premium or assessment, special deposit or similar requirements
relating to any extensions of credit or other assets of, or any deposits with or
other liabilities of, such Affected Party; or (iii) impose any other conditions
affecting this Agreement in respect of Purchases, Capital Investment, LOC Draws
and Liquidity Loans (or any of such extensions of credit, assets, deposits or
liabilities); and the result of any event referred to in clause (i), (ii) or
(iii) above shall be to increase such Affected Party's costs of making or
maintaining any Purchases, Capital Investment, LOC Draws or Liquidity Loans or
its commitment under a Program Document, or to reduce any amount receivable by
such Affected Party hereunder in respect of any of its Purchases, Capital
Investment, LOC Draws and Liquidity Loans or its commitment (such increases in
costs and reductions in amounts receivable are hereinafter referred to as
"ADDITIONAL COSTS") then, upon demand made by the Operating Agent on behalf of
such Affected Party, as promptly as practicable after it obtains knowledge that
such a Regulatory Change exists and determines to make such demand, the Seller
shall pay to the Collateral Agent on behalf of such Affected
19
<PAGE> 24
Party, from time to time as specified by the Operating Agent, additional
commitment fees or other amounts which shall be sufficient to compensate such
Affected Party for the Seller's Share of such increased cost or reduction in
amounts receivable by such Affected Party from the date of such change, together
with interest on each such amount from the date demanded until payment in full
thereof at the Daily Base Yield Rate.
(c) Determinations by any Affected Party for purposes of this
Section 2.10 of the effect of any Regulatory Change on its costs of making or
maintaining Purchases, Capital Investment, LOC Draws or Liquidity Loans or on
amounts receivable by it in respect of Purchases, Capital Investment, LOC Draws
or Liquidity Loans and of the additional amounts required to compensate such
Affected Party in respect of any Additional Costs, shall be set forth in a
written notice to the Seller in reasonable detail and shall be conclusive,
absent manifest error.
Section 2.12. Breakage Costs. The Seller shall pay to the Collateral
Agent for the account of the Purchaser, upon the request of the Purchaser, such
amount or amounts as shall compensate the Purchaser for any loss, cost or
expense incurred by the Purchaser (as determined by the Purchaser) as a result
of any repayment of a Purchase (and interest thereon) other than on the maturity
date of the Commercial Paper funding such Purchase, such compensation to
include, without limitation, an amount equal to any loss or expense suffered by
the Purchaser during the period from the date of receipt of such repayment to
(but excluding) the maturity date of such Commercial Paper, if the rate of
interest obtainable by the Purchaser upon the redeployment of an amount of funds
equal to the amount of such repayment is less than the rate of interest
applicable to such Commercial Paper (such expense to be referred to as "BREAKAGE
COSTS"). The determination by the Purchaser of the amount of any such loss or
expense shall be set forth in a written notice to the Seller in reasonable
detail and shall be conclusive, absent manifest error.
Section 2.13. Purchase Excess. After completion of the disbursements
specified in Subsections 6.03(a), (b) and (c), the Operating Agent shall notify
the Seller of any remaining Purchase Excess, and the Seller shall deposit the
amount of such Purchase Excess remaining in the Collection Account by 11:00 a.m.
on the following Business Day.
ARTICLE III.
CONDITIONS TO PURCHASE
Section 3.01. Conditions Precedent to Effectiveness of Agreement. The
effectiveness of this Agreement is subject to the condition precedent that the
Purchaser, the Operating Agent and the Collateral Agent shall each have received
on or before the Effective Date the following, in form and substance
satisfactory to the Operating Agent:
(a) An executed copy of Amendment No. 2 to the Transfer
Agreement.
(b) A certificate from an officer of the Originator in the
form of Exhibit D (Solvency Certificate as to Seller).
(c) With respect to the Seller:
(i) the certificate or articles of incorporation of the
Seller certified, as of a date no more than ten (10) days prior to the
Effective Date, by the Secretary of State of its state of
incorporation;
(ii) a good standing certificate, dated no more than ten
(10) days prior to the Effective Date, from the respective Secretary of
State of its state of incorporation and each state in which the Seller
is required to qualify, or represents that it is qualified, to do
business;
20
<PAGE> 25
(iii) a certificate of the Secretary or Assistant
Secretary of the Seller certifying as of the Effective Date: (A) the
names and true signatures of the officers authorized on its behalf to
sign this Agreement, (B) a copy of the Seller's by-laws, and (C) a copy
of the resolutions of the board of directors of the Seller approving
this Agreement, the Related Documents to which it is a party and the
transactions contemplated hereby and thereby; and
(iv) an Officer's Certificate in the form of Exhibit E
(Bringdown Certificate).
(d) With respect to the Servicer:
(i) the certificate or articles of incorporation of the
Servicer certified, as of a date no more than ten (10) days prior to
the Effective Date, by the Secretary of State of its state of
incorporation;
(ii) a good standing certificate, dated no more than ten
(10) days prior to the Effective Date, from the respective Secretary of
State of its state of incorporation and each state in which the
Servicer is required to qualify, or represents that it is qualified, to
do business;
(iii) a certificate of the Secretary or Assistant
Secretary of the Servicer certifying as of the Effective Date: (A) the
names and true signatures of the officers authorized on its behalf to
sign this Agreement, (B) a copy of the Servicer's by-laws, and (C) a
copy of the resolutions of the board of directors of the Servicer
approving this Agreement, the Related Documents to which it is a party
and the transactions contemplated thereby and hereby; and
(iv) an Officer's Certificate in the form of Exhibit F
(Servicer's Certificate).
(e) Certified copies of requests for information or copies on
form UCC-11 (or a similar search report certified by a party acceptable to the
Operating Agent), dated a date no more than fourteen (14) days prior to the
Effective Date listing all effective financing statements and other similar
instruments and documents which name the Originator and the Seller (under their
present names and any previous names) as debtor, together with copies of such
financing statements none of which shall cover any Transferred Receivables
unless termination statements or statements of release are provided with respect
thereto pursuant to subsection (f) below.
(f) Executed termination statements (form UCC-3), if any,
necessary to release all security interests and other rights of any Person in
Transferred Receivables previously granted by the Originator including, without
limitation, all such releases specified by the Originator prior to the date
hereof.
(g) Any necessary third party consents to the closing of the
transactions contemplated hereby.
(h) Executed financing statements (form UCC-1), in respect of
Transferred Receivables, (i) pursuant to the Transfer Agreement, naming the
Originator as the assignor and the Seller as the assignee, and (ii) pursuant to
Article VIII, naming the Seller as the debtor/seller, the Purchaser as secured
party/purchaser and the Collateral Agent as the assignee, or other, similar
instruments or documents, as may be necessary or, in the opinion of the
Operating Agent, desirable under the UCC of all appropriate jurisdictions or any
other applicable law (including the Assignment of Claims Act) to perfect the
Purchaser's and the Collateral Agent's interests in all Transferred Receivables
in which an interest may be assigned hereunder.
(i) Fully executed copies of each Lockbox Agreement.
(j) The favorable opinion of counsel to the Seller and the
Originator as to corporate and security interest/perfection matters and such
other matters as the Operating Agent may require.
21
<PAGE> 26
(k) Payment of all fees due hereunder or under the Fee Letter.
(l) (i) Consolidated balance sheets, statements of income and
statements of cash flow of the Parent and its Subsidiaries for each of
the years in the three year period ended December 31, 1994, audited by
a nationally recognized accounting firm (accompanied by consolidating
financial information and a satisfactory management letter, together
with management's response thereto); and
(ii) Unaudited consolidated and consolidating balance
sheets and statements of income and statements of cash flow of the
Parent and its Subsidiaries for the 9 month period ended September 30,
1995.
(m) Confirmation of the ratings of the Commercial Paper as
A-1+ by S&P and P-1 by Moody's.
(n) A copy of the Servicer's Credit and Collection Policies.
(o) An Investment Base Certificate as of March 26, 1996.
(p) All taxes (other than income taxes) including without
limitation, any stamp duty, imposed on any party hereto as a result of this
transaction, shall have been paid by the Originator.
(q) Such other approvals, consents, opinions, documents and
instruments, as the Operating Agent may request.
Section 3.02. Conditions Precedent to All Purchases. Each Purchase
(including the initial Purchase) shall be subject to the further conditions
precedent as follows:
(a) On the related Purchase Date, the Seller shall have
certified in the related Investment Base Certificate that, except as
specifically disclosed in writing to the Purchaser, and specifically consented
to by the Purchaser in its sole discretion:
(i) the representations and warranties of the Seller, the
Originator and the Servicer set forth in Sections 4.01 and 4.02 are
true and correct in all material respects (except with respect to those
already so qualified which are true and correct in all respects) on and
as of such date, before and after giving effect to such Purchase and to
the application of the proceeds therefrom, as though made on and as of
such date;
(ii) no event has occurred, or would result from such
Purchase or from the application of the proceeds therefrom, which is
continuing and constitutes a Termination Event or would constitute a
Termination Event but for the requirement that notice be given or time
elapse or both;
(iii) the Seller is in compliance with each of its
covenants set forth herein; and
(iv) no event has occurred which constitutes an Event of
Servicer Termination or would constitute an Event of Servicer
Termination but for the requirement that notice be given or time elapse
or both.
(b) The Facility Termination Date has not occurred.
(c) Before and after giving effect to such purchase and to the
application of proceeds therefrom, there exists no Purchase Excess.
22
<PAGE> 27
(d) The Originator and Seller shall have taken such other
action, including delivery of approvals, consents, opinions, documents and
instruments to the Purchaser and the Operating Agent, as the Operating Agent may
request.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations and Warranties of the Seller. The Seller
represents and warrants to the Purchaser, the Operating Agent and the Collateral
Agent as of the date hereof, as of the Effective Date and on each subsequent
Purchase Date as follows:
(a) The Seller is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and is duly qualified to do business, and is in good standing, in
each jurisdiction in which the nature of its business requires it to be so
qualified.
(b) The Seller has the power and authority to own, pledge,
mortgage, operate and convey all of its properties, to conduct its business as
now or proposed to be conducted and to execute and deliver this Agreement and
the Related Documents and to perform the transactions contemplated hereby and
thereby.
(c) The Seller is and has been a wholly-owned subsidiary of
Carlisle Plastics, Inc.
(d) The Seller is and has been operated as follows:
(i) the Seller is and has been a limited purpose
corporation whose activities are restricted in its certificate or
articles of incorporation;
(ii) neither the Originator nor any Affiliate of the
Originator is nor has been involved in the day-to-day management of the
Seller;
(iii) other than the purchase and contribution of
Receivables, the payment of dividends and the return of capital to the
Originator, any lease or sub-lease of office space or equipment and the
payment of Servicing Fees to the Servicer under this Agreement, the
Seller engages or has engaged in no intercorporate transactions with
the Originator or any Affiliate of the Originator;
(iv) the Seller maintains separate corporate records and
books of account from the Originator, holds regular corporate meetings
and otherwise observes corporate formalities and has a separate
business office from the Originator;
(v) the financial statements and books and records of the
Seller and the Originator prepared after the Effective Date reflect the
separate corporate existence of the Seller;
(vi) the Seller maintains its assets separately from the
assets of the Originator and any other Affiliate of the Originator
(including through the maintenance of separate bank accounts and except
for any Records to the extent necessary for the servicing of the
Transferred Receivables), the Seller's funds and assets, and records
relating thereto, have not been and are not commingled with those of
the Originator or any other Affiliate of the Originator and the
separate creditors of the Seller will be entitled to be satisfied out
of the Seller's assets prior to any value in the Seller becoming
available to the Seller's equityholders;
(vii) except as permitted under this Agreement and the
Related Documents, neither the Originator nor any Affiliate of the
Originator (excluding the Seller) (A) pays the Seller's expenses; (B)
guarantees the Seller's obligations, or (C) advances funds to the
Seller for the payment of expenses or otherwise;
23
<PAGE> 28
(viii) all business correspondence of the Seller and other
communications are conducted in the Seller's own name, on its own
stationery and through a separately-listed telephone number;
(ix) the Seller does not act as agent for the Originator
or any Affiliates of the Originator, but instead presents itself to the
public as a corporation separate from the Originator, independently
engaged in the business of purchasing and financing Receivables;
(x) the Seller maintains at least two independent
directors each of whom, at all times after the Effective Date, shall
not be a shareholder, director, officer, employee or associate of the
Originator or any Affiliate of the Originator (other than the Seller)
as provided in its certificate of incorporation; and
(xi) the bylaws or Certificate of Incorporation of the
Seller require it to maintain (A) correct and complete books and
records of account, and (B) minutes of the meetings and other
proceedings of its shareholders and board of directors.
(e) The Seller has not engaged, and does not presently engage,
in any activity other than the activities undertaken pursuant to this Agreement
and the Related Documents, nor has the Seller entered into any agreement other
than this Agreement and the Related Documents, and any agreement necessary to
undertake any activity pursuant to this Agreement and the Related Documents.
(f) The execution, delivery and performance by the Seller of
this Agreement, the Related Documents and the transactions contemplated hereby
and thereby (i) have been duly authorized by all necessary corporate or other
action on the part of the Seller, (ii) do not contravene or cause the Seller to
be in default under (A) the Seller's certificate or articles of incorporation or
by-laws, (B) any contractual restriction contained in any (or, in the case of
the Originator only, any material) indenture, loan or credit agreement, lease,
mortgage, security agreement, bond, note, or other (or, in the case of the
Originator only, any material) agreement or instrument binding on or affecting
the Seller or its property or the Originator or its property, or (C) any law,
rule, regulation, order, license requirement, writ, judgment, award, injunction,
or decree applicable to, binding on or affecting the Seller or its property or
the Originator or its property, and (iii) do not result in or require the
creation of any Adverse Claim upon or with respect to any of the property of the
Seller or the Originator (other than in favor of the Purchaser and the
Collateral Agent as contemplated hereunder).
(g) This Agreement and the Related Documents have each been
duly executed and delivered by the Seller.
(h) No consent of, notice to, filing with or permits,
qualifications or other action by any Governmental Authority or any other party
is required (i) for the due execution, delivery and performance by the Seller of
this Agreement or any of the Related Documents, (ii) for the perfection of or
the exercise by each of the Purchaser, the Operating Agent or the Collateral
Agent of any of its rights or remedies hereunder or thereunder, (iii) for the
grant by the Seller of the security interests granted under Section 8.01 of this
Agreement, (iv) for the perfection of or the exercise by each of the Purchaser
or the Collateral Agent of its rights and remedies provided for in this
Agreement, or (v) to ensure the legality, validity, enforceability or
admissibility into evidence of this Agreement in any jurisdiction in which any
of the Collateral is located, in each case other than consents, notices, filings
and other actions which have been obtained or made and complete copies of which
have been provided to the Purchaser, the Operating Agent or the Collateral Agent
and continuation statements in respect of any such filings.
(i) No transaction contemplated by this Agreement requires
compliance with any bulk sales act or similar law.
(j) Each of this Agreement and each Related Document is the
legal, valid and binding obligation of the Seller enforceable against the Seller
in accordance with its respective terms. Each of the Seller Assigned Agreements
to which the Originator or the Seller is a party constitutes the
24
<PAGE> 29
legal, valid and binding obligation of such Person, enforceable against such
Person in accordance with its terms, subject to any applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to or affecting the enforceability of creditors' rights
generally and general equitable principles, whether applied in a proceeding at
law or in equity.
(k) There is no pending or threatened, nor any reasonable
basis for any, action, suit or proceeding against or affecting the Seller, its
officers or directors, or the property of the Seller, in any court or tribunal,
before any arbitrator of any kind or before or by any Governmental Authority.
(l) No injunction, writ, restraining order or other order of
any nature adverse to the Seller or the conduct of its business or which is
inconsistent with the due consummation of the transactions contemplated by this
Agreement or the Related Documents has been issued by a Governmental Authority
nor been sought by any Person.
(m) The principal place of business and chief executive office
of the Seller, and the offices where the Seller keeps its Records and the
original copies of the Seller Assigned Agreements are located at the address of
the Seller for notices under Section 14.01 and as set forth on Schedule 5 and
there are currently no, and during the past four months (or such shorter time as
the Seller has been in existence) there have not been, any other locations where
the Seller is located (as that term is used in the UCC of the jurisdiction where
such principal place of business is located) or keeps Records.
(n) The Seller does not have and has never conducted business
using tradenames, fictitious names, assumed names or "doing business as" names
and has not changed its name during the last five years.
(o) The Seller does not have any Subsidiaries.
(p) The Seller is solvent and will not become insolvent after
giving effect to the transactions contemplated by this Agreement and the Related
Documents. The Seller has no Debts to any Person other than pursuant to this
Agreement and the Related Documents. The Seller, after giving effect to the
transactions contemplated by this Agreement and the Related Documents, will have
an adequate amount of capital to conduct its business in the foreseeable future.
(q) For federal income tax, reporting and accounting purposes,
the Seller will treat the purchase or assignment of each Transferred Receivable
pursuant to the Transfer Agreement as a purchase or absolute assignment of the
Originator's full right, title and ownership interest in such Transferred
Receivable to the Seller (and those Receivables contributed to the Seller by the
Originator pursuant to the Transfer Agreement shall be accounted for as an
increase in the stated capital of the Seller) and the Seller has not in any
other manner accounted for or treated the transactions in Transferred
Receivables.
(r) The Seller has complied and will comply in all respects
with all applicable laws, rules, regulations, judgments, agreements, decrees and
orders with respect to its business and properties and all Collateral.
(s) The Seller has filed on a timely basis all tax returns
(federal, state and local) required to be filed, is not liable for taxes payable
by any other Person (other than Affiliates of the Seller with whom the Seller
files a consolidated tax return for which the Seller is liable on a consolidated
basis) and has paid or made adequate provisions for the payment of all taxes,
assessments and other governmental charges due from the Seller (other than
taxes, fees, amendments or governmental charges which the Seller is contesting
in good faith with such taxing authority and in respect of which no final
unappealable order has been made against the Seller). No tax lien or similar
Adverse Claim has been filed, and no claim is being asserted, with respect to
any such tax, assessment or other governmental charge. Any taxes, fees and other
governmental charges payable by the Originator in connection with the execution
and delivery of this Agreement and the Related Documents and the transactions
contemplated
25
<PAGE> 30
hereby or thereby have been paid or shall have been paid if and when due at or
prior to such Transfer Date.
(t) Each Investment Base Certificate and Request Notice is
accurate in all material respects and the Investment Base as of the Effective
Date is not materially different than the Investment Base as reported in the
Investment Base Certificate delivered pursuant to 3.01(o).
(u) Each Transferred Receivable is owned by the Seller free
and clear of any Adverse Claim and the Seller has the full right, corporate
power and lawful authority to assign, transfer and pledge the same and interests
therein and all substitutions therefor and additions thereto pursuant to Section
8.01, and upon making each Purchase, the Purchaser will have acquired a
perfected, first priority and valid ownership interest in such Transferred
Receivables, free and clear of any Adverse Claim. No effective financing
statement or other instrument similar in effect covering all or any part of the
Seller Collateral is on file in any recording office, except such as may have
been filed in favor of the Purchaser as "Secured Party/Purchaser" and the
Collateral Agent as "Assignee" pursuant to Article VIII of this Agreement or,
with respect to the Transferred Receivables, in favor of the Seller pursuant to
the Transfer Agreement unless termination statements or statements of release
are provided thereto with respect to Section 3.01(f).
(v) Each Transferred Receivable was purchased by or
contributed to the Seller on the relevant Transfer Date pursuant to the Transfer
Agreement.
(w) Each purchase of Receivables under the Transfer Agreement
will constitute (i) a "current transaction" within the meaning of Section
3(a)(3) of the Securities Act of 1933, as amended, and (ii) a purchase or other
acquisition of notes, drafts, acceptances, open accounts receivable or other
obligations representing part or all of the sales price of merchandise,
insurance or services within the meaning of Section 3(c)(5) of the Investment
Company Act of 1940, as amended.
(x) All information heretofore or hereafter furnished by or on
behalf of the Seller to the Collateral Agent, the Operating Agent or the
Purchaser in connection with this Agreement or any transaction contemplated
hereby is and will be true and complete in all material respects and does not
and will not omit to state a material fact necessary to make the statements
contained therein not misleading, provided that any projections, pro forma or
preliminary financial information furnished are based on good faith estimates
and assumptions believed by the Seller to be reasonable at the time made and the
Collateral Agent, the Operating Agent and the Purchaser each acknowledge that
such projections as to future events are not to be viewed as facts and that
actual results for such period may differ from the projected results.
(y) The Seller is in compliance with ERISA and has not
incurred and does not expect to incur any liabilities (except for premium
payments arising in the ordinary course of business) payable to the PBGC (or any
successor thereto) under ERISA.
(z) (i) The Seller is not a party to any indenture, loan or
credit agreement or any lease or other agreement or instrument or subject to any
charter or corporation restriction that could have, and no provision of
applicable law or governmental regulation is reasonably likely to have, a
material adverse effect on the condition (financial or otherwise), business,
operations or properties of the Seller, or could have such an effect on the
ability of the Seller to carry out its obligations under this Agreement and the
other Related Documents to which the Seller is a party, (ii) the Seller is not
in default under or with respect to any contract, agreement, lease or other
instrument to which the Seller is a party and which is material to the Seller's
condition (financial or otherwise), business, operations or properties, and the
Seller has not delivered or received any notice of default thereunder, and (iii)
each contract, agreement, lease or other instrument to which the Seller is a
party is listed on Schedule 7.
(aa) The Seller is not an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the Investment Company Act of 1940, as
amended. The making of the Purchases by the Purchaser, the
26
<PAGE> 31
application of the proceeds and repayment thereof by the Seller and the
consummation of the transactions contemplated by this Agreement and the other
Related Documents to which the Seller is a party will not violate any provision
of such Act or any rule, regulation or order issued by the Securities and
Exchange Commission thereunder.
(bb) There is not now, nor will there be at any time in the
future, any agreement or understanding between the Originator or any other
Affiliate of the Originator and the Seller (other than as expressly set forth
herein) providing for the allocation or sharing of obligations to make payments
or otherwise in respect of any taxes, fees, assessments or other governmental
charges.
(cc) Each of the representations and warranties of the Seller
contained in the Related Documents (other than this Agreement) is true and
correct in all material respects and the Seller hereby makes each such
representation and warranty to, and for the benefit of, the Collateral Agent,
the Operating Agent and the Purchaser as if the same were set forth in full
herein.
Section 4.02. Representations and Warranties of the Servicer. The
Servicer represents and warrants to the Purchaser, the Operating Agent and the
Collateral Agent as follows as of the date hereof:
(a) The Servicer is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and is duly qualified to do business, and is in good standing, in
every jurisdiction in which the nature of its business requires it to be so
qualified except where the failure to be so qualified would not materially and
adversely affect (1) the performance by the Servicer of its obligations under
this Agreement or any of the Related Documents, (2) the validity or
enforceability of this Agreement or any of the Related Documents, (3) the
Transferred Receivables, the Contracts or the interests of the Seller, Purchaser
or their assigns therein, or (4) the business, operations, financial condition
or prospects of the Servicer.
(b) The Servicer has the power and authority to execute and
deliver this Agreement and to perform the transactions contemplated hereby.
(c) The execution, delivery and performance by the Servicer of
this Agreement, each other Related Document to which it is a party and the
transactions contemplated hereby and thereby (i) have been duly authorized by
all necessary corporate or other action on the part of the Servicer, (ii) do not
contravene or cause the Servicer to be in default under (A) its charter or
by-laws, (B) any contractual restriction contained in any or, in the case of the
Originator only, any material indenture, loan or credit agreement, lease,
mortgage, security agreement, bond, note or other or, in the case of the
Originator only, any material agreement or instrument binding on or affecting it
or its property, or (C) any law, rule, regulation, order, writ, judgment, award,
injunction or decree binding on or affecting it or its property, and (iii) do
not result in or require the creation of any Adverse Claim upon or with respect
to any of its properties (other than in favor of the Seller, Redwood and the
Collateral Agent).
(d) This Agreement and each other Related Document to which it
is a party has been duly executed and delivered by the Servicer.
(e) No consent of, notice to, filing with or permits,
qualifications or other action by any Governmental Authority or any other party
is required for the due execution, delivery and performance by the Servicer of
this Agreement, any Related Document to which it is a party other than any
consents, notices, permits, qualifications, filings or other actions which have
been obtained or made and complete copies of which have been provided to the
Purchaser, the Operating Agent and the Collateral Agent.
(f) This Agreement and each other Related Document to which it
is a party is the legal, valid and binding obligation of the Servicer
enforceable against the Servicer in accordance with its terms subject to any
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to or affecting the enforceability of
creditors' rights generally and general equitable principles, whether applied in
a proceeding at law or in equity.
27
<PAGE> 32
(g) There is no pending or, to the knowledge of the Servicer,
threatened, nor any reasonable basis for any, action, suit, investigation or
proceeding of a material nature against or affecting the Servicer, its officers
or directors, or the property of the Servicer, in any court or tribunal, before
any arbitrator of any kind or before or by any Governmental Authority (i)
asserting the invalidity of this Agreement or any Related Document, or (ii)
seeking any determination or ruling that might materially and adversely affect
(A) the performance by the Servicer of its obligations under this Agreement or
other Related Document, or (B) the validity or enforceability of this Agreement
or any Related Document.
(h) No injunction, writ, restraining order or other order of
any material nature adverse to the Servicer or the conduct of its business or
which is inconsistent with the due consummation of the transactions contemplated
by this Agreement and the Related Documents has been issued by a Governmental
Authority or, to the knowledge of the Servicer, has been sought by any other
Person.
(i) The Servicer has filed all tax returns (federal, state and
local) required to be filed by it and has paid or has made adequate provision
for the payment of all taxes, fees, assessments and other governmental charges
due from the Servicer, no tax lien or other similar Adverse Claim has been
filed, and no claim has been filed, and no claim is being asserted, with respect
to any such tax, fee, assessment or other governmental charge (other than (i)
taxes, fees, amendments or governmental charges which the Servicer is contesting
in good faith with such taxing authority and in respect of which no final
unappealable order has been made against the Servicer, or (ii) taxes, fees,
amendments or governmental charges which do not have a material adverse effect
on the business, prospects, operation or financial condition of the Servicer,
its ability to perform its obligations hereunder or under any other Related
Document or the collectibility of the Transferred Receivables). Any taxes, fees
and other governmental charges payable by the Servicer in connection with the
transactions contemplated by this Agreement and the Related Documents and the
execution and delivery of this Agreement and the Related Documents have been
paid or shall have been paid at or prior to the Effective Date.
(j) The Servicer is not required to be registered as an
"investment company" under the Investment Company Act of 1940.
(k) Each of the representations and warranties of the Servicer
contained in this Agreement and the Related Documents is true and correct in all
material respects and the Servicer hereby makes each such representation and
warranty contained in the Related Documents to, and for the benefit of, the
Purchaser, the Operating Agent and the Collateral Agent.
ARTICLE V.
GENERAL COVENANTS OF THE SELLER
Section 5.01. Affirmative Covenants of the Seller. The Seller shall,
unless the Operating Agent shall otherwise consent in writing:
(a) perform each of its obligations under this Agreement and
the Related Documents and comply in all respects with all of its obligations
under this Agreement and the Related Documents and comply with all material
requirements of applicable law, rules, regulations and orders with respect to
this Agreement, the Related Documents, to its business and properties and all
Transferred Receivables, related Contracts and Collections with respect thereto;
(b) preserve and maintain its corporate existence, rights,
franchises and privileges in the jurisdiction of its incorporation and shall
conduct its business in accordance with the terms of its certificate of
incorporation and bylaws;
(c) continue to operate its business in the manner set forth
in Sections 4.01(d) and (e);
28
<PAGE> 33
(d) deposit all Collections it may receive in respect of
Transferred Receivables into the Collection Account within one Business Day of
receipt;
(e) use the proceeds of the Purchases made hereunder solely
for (i) the purchase of Receivables from the Originator, (ii) payment of
dividends to its shareholder, (iii) payment of administrative fees or Servicing
Fees or expenses to the Originator or the Parent or routine administrative
expenses pursuant to this Agreement or the Related Documents;
(f) permit the Purchaser, the Operating Agent and the
Collateral Agent to make or cause to be made (and, after the occurrence of and
during the continuance of a Termination Event, at the Seller's expense)
inspections and audits of any books, records and papers of the Seller and the
Servicer and to make extracts therefrom and copies thereof, or to make
inspections and examinations of any properties and facilities of the Seller and
the Servicer, on reasonable notice, at all such reasonable times and as often as
reasonably required in order to assure that the Seller is and will be in
compliance with its obligations under this Agreement and the Related Documents;
(g) pay, perform and discharge all of its obligations and
liabilities, including, without limitation, all taxes, assessments and
governmental charges upon its income and properties when due, unless and to the
extent only that such obligations, liabilities, taxes, assessments and
governmental charges shall be contested in good faith and by appropriate
proceedings and that, to the extent required by GAAP, proper and adequate book
reserves relating thereto are established by the Seller and then only to the
extent that a bond is filed in cases where the filing of a bond is necessary to
avoid the creation of an Adverse Claim against any of its properties;
(h) upon request of the Purchaser, the Collateral Agent or the
Operating Agent, mark its Records to show the interests of the Purchaser and
Collateral Agent; and
(i) pay the Purchaser's attorney's fees and disbursements and
rating agency fees.
Section 5.02. Reporting Requirements of the Seller. The Seller shall
furnish, or cause to be furnished, to the Purchaser, the Operating Agent, the
Collateral Agent and (in the case of Section 5.02(f) only) the Rating Agencies:
(a) no less frequently than the second Business Day of each
week, an Investment Base Certificate in the form of Exhibit C;
(b) monthly, as soon as available, and in any event, within 10
business days after the end of each fiscal month, a Monthly Report in the form
of Exhibit G;
(c) as soon as available and in any event within 90 days after
the end of each fiscal year, a copy of the audited consolidated financial
statements (exclusive of the management letter) for such year for the Parent and
its consolidated Subsidiaries, certified, in a manner acceptable to the
Operating Agent and the Collateral Agent, by Deloitte & Touche, LLP or other
nationally recognized independent public accountants acceptable to the Operating
Agent and the Collateral Agent (accompanied by consolidating financial
information, a satisfactory management letter, together with management's
response) and each other report or statement sent to shareholders or publicly
filed by the Parent, the Originator or the Seller;
(d) as soon as available and in any event within (i) 30 days
after the end of each fiscal month of each fiscal year of the Parent or (ii) 45
days after the end of each of the first three quarters of each fiscal year of
the Parent, in each case, a consolidated balance sheet of the Parent and its
consolidated Subsidiaries as of the end of such quarter and including the prior
comparable period, and consolidated statements of income and retained earnings,
and of cash flow, of the Parent and its consolidated Subsidiaries for such
quarter and for the period commencing at the end of the previous fiscal year and
ending with the end of such quarter, certified by the chief financial officer,
chief accounting officer or treasurer of the Parent identifying such documents
as being the documents described in this paragraph
29
<PAGE> 34
(d) and stating that the information set forth therein fairly presents the
financial condition of the Parent and its consolidated Subsidiaries as of and
for the periods then ended, subject to year-end adjustments consisting only of
normal, recurring accruals and confirming that the Servicer is in compliance
with all financial covenants in this Agreement;
(e) as soon as possible and in any event within five days
after the occurrence of a Termination Event or an Incipient Event, the statement
of the chief executive officer, chief financial officer or treasurer of the
Seller setting forth complete details of such Termination Event or Incipient
Event and the action which the Seller has taken, is taking and proposes to take
with respect thereto;
(f) as soon as available and in any event within 90 days after
the end of each fiscal year, the Seller shall cause a firm of nationally
recognized independent public accountants to furnish a statement (on which the
Purchaser, the Operating Agent and the Collateral Agent may rely) to the
Collateral Agent and the Operating Agent to the effect that such firm has
applied the agreed upon procedures agreed to by the Seller and the Operating
Agent with respect to (a) the Seller's compliance with the Seller's financial
covenants in this Agreement and (b) the substantial compliance with this
Agreement in the preparation of the Monthly Reports (including the Investment
Base Certificates attached thereto) delivered during the previous fiscal year,
and that, on the basis of such procedures, such firm has reported that there are
no exceptions, except as set forth in such statement;
(g) promptly, from time to time, such other information,
documents, records or reports respecting the Transferred Receivables or the
Contracts or the condition or operations, financial or otherwise, of the Seller,
or the Originator or any of its Subsidiaries, as the Purchaser, the Operating
Agent or the Collateral Agent may request from time to time;
(h) on or before 90 days after the end of each fiscal year,
(i) an Officer's Certificate of the Seller, dated the date of such delivery,
bringing down to such date the matters set forth in the Officer's Certificate in
the form of Exhibit E, and (ii) an Officer's Certificate of the Servicer, dated
the date of such delivery, bringing down to such date the matters set forth in
the Officer's Certificate in the form of Exhibit F; and
(i) promptly, notification in writing of any litigation, legal
proceeding or dispute, whether or not in the ordinary course of business,
affecting the Seller, whether or not fully covered by insurance, and regardless
of the subject matter thereof.
Section 5.03. Negative Covenants of the Seller. The Seller shall not,
without the written consent of the Purchaser, the Operating Agent and the
Collateral Agent:
(a) sell, assign (by operation of law or otherwise) or
otherwise dispose of, or create or suffer to exist any Adverse Claim upon or
with respect to, or assign any right to receive income in respect of, (i) any
Transferred Receivable or related Contract with respect thereto, or upon or with
respect to any Lockbox Account, any Lockbox, the Collection Account, the
Retention Account or other account in which any Collections of any Transferred
Receivable are deposited, or (ii) except as permitted in the Seller's
certificate of incorporation, any of the Seller's property;
(b) extend, amend, forgive, discharge, compromise, waive,
cancel or otherwise modify the terms of the Transfer Agreement, any Related
Document, the Credit and Collection Policies or of any Transferred Receivable,
or amend, modify or waive any term or condition of any Contract related thereto
provided that the foregoing shall not prohibit the Seller from authorizing the
Servicer to take such actions to the extent permitted hereunder, under the
Transfer Agreement or by the Credit and Collection Policy;
(c) make any change in its instructions to Obligors regarding
payments to be made to the Seller or payments to be deposited to the Lockbox
Account or any Lockbox;
30
<PAGE> 35
(d) amend its certificate of incorporation, its by-laws or
this Agreement or the Transfer Agreement;
(e) merge with or into, consolidate with or into, convey,
transfer, lease or otherwise dispose of all or substantially all of its assets
(whether now owned or hereafter acquired) to, or acquire all or substantially
all of the assets of, or any capital stock or other ownership interest of, any
Person (whether in one transaction or in a series of transactions), or own any
Subsidiary;
(f) prepare any financial statements which shall account for
the transactions contemplated by the Transfer Agreement in any manner other than
as a true sale or absolute assignment of the Transferred Receivables to the
Seller from the Originator, or in any other respect account for or treat the
transactions contemplated hereby (including but not limited to, for accounting,
tax and reporting purposes) in any manner other than as a true sale or absolute
assignment of the Transferred Receivables to the Seller from the Originator;
(g) at any time (i) advance credit to any Person, or (ii)
declare any dividends, repurchase any stock, return any capital, or otherwise
make any distribution of cash or any other property, if after giving effect to
such distribution, there would be a Purchase Excess;
(h) create, incur, permit to exist or have outstanding any
indebtedness, except:
(i) indebtedness of the Seller to the Purchaser, any
Affected Party, any Indemnified Party, the Servicer, the Originator or
any other Person under the Transfer Agreement and this Agreement;
(ii) taxes, assessments and governmental charges; and
(iii) the endorsement of negotiable instruments for
deposit or collection in the ordinary course of business;
(i) issue any additional shares or any right or option to
acquire any shares, or any security convertible into any shares, of the capital
stock of the Seller;
(j) enter into, or be a party to, any transaction with any
Person, other than pursuant to this Agreement or the Transfer Agreement; or
(k) make or suffer to exist any purchases of assets or
investments in any Person, including, without limitation, any shareholder,
director, officer or employee of the Seller or any of the Originator's other
Subsidiaries, except Transferred Receivables.
ARTICLE VI.
COLLECTIONS AND DISBURSEMENTS
Section 6.01. Establishment of Accounts.
(a) The Lockbox Account.
(i) The Seller has established with a Lockbox Bank each
Lockbox Account, into which the Servicer shall deposit from time to
time all monies, instruments and other property received by it as
Proceeds of the Transferred Receivables. The Seller agrees that prior
to a Termination Event the Operating Agent, and upon the occurrence and
during the continuation of a Termination Event the Collateral Agent,
shall have exclusive dominion and control of each Lockbox Account and
all monies, instruments and other property from time to time in each
Lockbox Account. The Seller will not make or cause to be made, or have
any ability to make or
31
<PAGE> 36
cause to be made any withdrawals from any Lockbox Account, except as
provided in Section 6.01(b)(ii).
(ii) The Seller and the Servicer have instructed all
existing Obligors of Transferred Receivables, and will instruct all
future Obligors, to make payments in respect of Transferred Receivables
only (A) by check or money order mailed to one or more lockboxes or
post office boxes under the control of the Operating Agent (each such
box being a "LOCKBOX"), or (B) by wire transfer or moneygram directly
to a Lockbox Account, or (C) by direct debit from such Obligor's
account to the Lockbox Account. The Lockboxes and Lockbox Accounts to
which mail payments are made as of the date hereof are listed on the
attached Schedule 6. The Seller and the Servicer shall endorse, to the
extent necessary, all checks or other instruments received in any
Lockbox so that the same can be deposited in the Lockbox Account, in
the form so received (with all necessary endorsements), on the next
Business Day after the Business Day on which such check or other
instruments are received. In addition, the Seller and Servicer shall
deposit or cause to be deposited in the Lockbox Account all cash,
checks, money orders or other Proceeds of Collateral received other
than in a Lockbox or by wire payments, in the form so received (with
all necessary endorsements), not later than the close of business on
the Business Day following the date of such receipt, and until so
deposited all such items or other Proceeds shall be held in trust for
the Collateral Agent. Neither the Seller nor the Servicer shall deposit
any moneys not required or permitted under this Agreement or the
Related Documents into the Lockboxes or Lockbox Accounts.
(iii) If a Lockbox Agreement terminates for any reason or
any Lockbox Bank fails to comply with its obligations under the related
Lockbox Agreement for any reason, then the Seller shall promptly notify
all Obligors to make all future wire payments to a new Lockbox Account
with another Lockbox Bank. The Seller shall not close the Lockbox
Account unless it shall have (1) received the prior written consent of
the Operating Agent and the Collateral Agent, (2) established a new
account with the same Lockbox Bank or with a new depositary institution
satisfactory to the Operating Agent and the Collateral Agent, (3)
entered into an agreement covering such new account with the Lockbox
Bank or with such new depositary institution substantially in the form
of the Lockbox Agreement or which is otherwise satisfactory in all
respects to the Operating Agent and the Collateral Agent (whereupon,
for all purposes of this Agreement and the Related Documents, such new
account shall become the Lockbox Account, such new agreement shall
become the Lockbox Agreement and any new depositary institution shall
become the Lockbox Bank), and (4) taken all such action as the
Collateral Agent shall require to grant and perfect a first priority
security interest in such new Lockbox Account to the Collateral Agent
under Section 8.01 of this Agreement. Other than pursuant to this
Section 6.01(a), the Seller or Servicer shall not open any new Lockbox
or Lockbox Account without the consent of the Operating Agent, the
Collateral Agent and the Purchaser.
(b) Collection Account.
(i) The Purchaser has established and shall maintain a
segregated deposit account with the Depositary titled "Redwood
Receivables Corporation - Collection Account (Carlisle Plastics Funding
Corporation)" (the "COLLECTION ACCOUNT"). The Seller agrees that the
Operating Agent shall have exclusive dominion and control of the
Collection Account and all monies, instruments and other property from
time to time in the Collection Account.
(ii) Pursuant to Section 6.02, the Seller shall instruct
the Lockbox Bank to transfer, and the Seller hereby grants each of the
Operating Agent and the Collateral Agent the authority to instruct each
Lockbox Bank to transfer, on each Business Day in same day funds, all
available funds deposited in the Lockbox Account before such Business
Day to the Collection Account. The Purchaser, the Operating Agent and
the Collateral Agent may deposit into the Collection Account from time
to time all monies, instruments and other property received by any of
them as Proceeds of the Transferred Receivables. On each Business Day
before the Facility Termination Date, so long as no Termination Event
shall have occurred and be continuing, the
32
<PAGE> 37
Operating Agent shall instruct and cause the Depositary (which
instruction may be in writing or by telephone confirmed promptly
thereafter in writing) to release funds on deposit in the Collection
Account in the order of priority set forth in Section 6.03. On each
Business Day on and after the Facility Termination Date and on each
Business Day during any period while a Termination Event has occurred
and is continuing, the Collateral Agent may and the Operating Agent
shall apply all amounts when received in the Collection Account in the
order of priority set forth in Section 6.05.
(iii) If the Depositary wishes to resign as depositary of
the Collection Account for any reason or fails to carry out the
instructions of the Operating Agent or the Collateral Agent for any
reason, then the Purchaser or the Operating Agent shall promptly notify
the Purchaser Secured Parties. The Purchaser shall not close the
Collection Account unless it shall have (1) received the prior written
consent of the Operating Agent and the Collateral Agent, (2)
established a new account with the Depositary or with a new depositary
institution satisfactory to the Operating Agent and the Collateral
Agent, (3) entered into an agreement covering such new account with
such new depositary institution satisfactory in all respects to the
Operating Agent and the Collateral Agent (whereupon such new account
shall become the Collection Account for all purposes of this Agreement
and the Related Documents), and (4) taken all such action as the
Collateral Agent shall require to grant and perfect a first priority
security interest in such new Collection Account to the Collateral
Agent under this Agreement.
(c) Retention Account. The Purchaser has established and shall
maintain a segregated deposit account with the Depositary and controlled by the
Operating Agent titled "Redwood Receivables Corporation - Retention Account
(Carlisle Plastics Funding Corporation)" (the "RETENTION ACCOUNT").
(d) Collateral Account. The Purchaser has established and
shall maintain a segregated deposit account with the Depositary and controlled
by the Operating Agent titled "Redwood Receivables Corporation - Collateral
Account" (the "COLLATERAL ACCOUNT").
Section 6.02. Funding of Collection Account.
(a) As soon as practicable and in any event, no later than
10:00 a.m., on each Business Day:
(i) the Operating Agent shall transfer all Collections
deposited in any Lockbox Account prior to such Business Day to the
Collection Account;
(ii) the Purchaser shall, or shall cause the Collateral
Agent to, deposit in the Collection Account the amount required,
pursuant to Section 2.04(b)(i);
(iii) the Purchaser shall, or shall cause the Collateral
Agent to, deposit any Seller LOC Draws made on such Business Day to the
Collection Account;
(iv) if, on the prior Business Day, the Operating Agent
has notified the Seller of any Purchase Excess, the Seller shall
deposit cash in the amount of such Purchase Excess in the Collection
Account;
(v) if, pursuant to a Seller Notice, the Seller has
requested to reduce the Capital Investment of the Purchaser, the Seller
shall deposit cash in the amount specified in such Seller Notice in the
Collection Account;
(vi) if on such Business Day the Seller is required to
make other payments under this Agreement not previously retained out of
Collections (including Indemnified Amounts not previously paid), the
Seller shall deposit an amount equal to such payments in the Collection
Account;
33
<PAGE> 38
(vii) if, on the prior Business Day, the Originator made a
capital contribution of a Rejected Amount pursuant to the Transfer
Agreement, the Seller shall deposit cash in the amount received from
the Originator for such contribution in the Collection Account; and
(viii) the Servicer shall deposit into the Collection
Account the Outstanding Balance of any Transferred Receivable it elects
to pay pursuant to Section 7.04.
(b) If, two Business Days prior to any Settlement Date, the
Operating Agent notifies the Seller of any Retention Account Deficiency pursuant
to Section 6.04(b), the Seller shall deposit cash in the amount of such
deficiency into the Collection Account no later than 1:00 p.m. on such
Settlement Date.
(c) On and after the Facility Termination Date, the Operating
Agent shall transfer all amounts held in the Retention Account as of that date
to the Collection Account.
Section 6.03. Daily Disbursements From the Collection Account -
Revolving Period. On each Business Day, as soon as practicable and in any event
no later than 12:00 p.m., during the Revolving Period, following the transfers
made in accordance with Section 6.02, the Operating Agent shall disburse all
amounts in the Collection Account in the following priority:
(a) transfer all amounts in the Collection Account in the
following priority:
(i) to the Retention Account for the account of the
Purchaser, the amount of any Retention Account Deficiency deposited
pursuant to Section 6.02(b);
(ii) to the Deferred Purchase Price Sub-Account, all
Deferred Purchase Price Collections;
(iii) to the Capital Investment Sub-Account, the balance;
(b) transfer all amounts in the Deferred Purchase Price
Sub-Account, in the following priority:
(i) to the Retention Account for the account of the
Purchaser, an amount equal to the sum of
(A) Daily Yield;
(B) the Yield Shortfall for the prior Business Day;
(C) the Servicing Fee;
(D) the Servicing Fee Shortfall for the prior Business
Day;
(E) the Unused Commitment Fee; and
(F) the Unused Commitment Fee Shortfall for the prior
Business Day;
(ii) to the Capital Investment Sub-Account, an amount
equal to the Dilution Funded Amount;
(iii) if the Deferred Purchase Price Adjustment is less
than zero, to the Capital Investment Sub-Account an amount equal to the
absolute value of the Deferred Purchase Price Adjustment; and
34
<PAGE> 39
(iv) to an account previously designated by the Seller, in
partial payment of the Deferred Purchase Price, the balance, if any;
and
(c) transfer all amounts in the Capital Investment
Sub-Account, in the following priority:
(i) to the Retention Account for the account of the
Purchaser, the Yield Shortfall, the Servicing Fee Shortfall and the
Unused Commitment Fee Shortfall, if any, following the transfer made
pursuant to Section 6.03(b)(i);
(ii) to the Collateral Account for the account of the
Purchaser (or in the case of Indemnified Amounts, for the account of
the Indemnified Party), amounts deposited into the Collection Account
pursuant to Section 6.02(a)(vi);
(iii) to the Collateral Account for the account of the
Purchaser, in reduction of its Capital Investment if, as disclosed in
the most recently submitted Investment Base Certificate, there is a
Purchase Excess, by transfer of such Purchase Excess;
(iv) if, pursuant to a Seller Notice, the Seller has
requested to reduce the Capital Investment of the Purchaser, to the
Collateral Account for the account of the Seller, the lesser of (A) the
amount of such request, in reduction of Capital Investment and the (B)
the balance;
(v) if the Deferred Purchase Price Adjustment is greater
than zero, to the Seller an amount equal to the Deferred Purchase Price
Adjustment, as partial payment of the Deferred Purchase Price;
(vi) the balance, to an account previously designated by
the Seller, as payment of the Cash Purchase Price for Purchases made on
such day.
Section 6.04. Disbursements From the Retention Account - Settlement
Date Procedures - Revolving Period.
(a) As soon as practicable and in any event no later than 1:00
p.m. on each Settlement Date during the Revolving Period, the amounts held in
the Retention Account shall be disbursed or retained by the Operating Agent in
the following priority:
(i) to the Collateral Account for the account of the
Purchaser (or, if applicable, any Indemnified Party), in an amount
equal to:
(A) an amount equal to the accrued and unpaid Daily
Yield to the end of the preceding Settlement Period;
(B) all Additional Amounts incurred and payable to any
Affected Party through the end of the preceding Settlement
Period;
(C) all other amounts accrued and payable under this
Agreement (including Indemnified Amounts incurred and payable
to any Indemnified Party) through the end of the preceding
Settlement Period to the extent not already transferred
pursuant to Section 6.03(c)(ii); and
(D) if there is a Purchase Excess, an amount equal to
such excess, in reduction of Capital Investment;
(ii) to the Servicer on behalf of the Seller, in an amount
equal to its accrued and unpaid Servicing Fee to the end of the
preceding Settlement Period;
35
<PAGE> 40
(iii) retained in the Retention Account, the Accrued
Monthly Yield, Accrued Unused Commitment Fee and Accrued Servicing Fee
as of that date; and
(iv) to the extent that the balance in the Retention
Account exceeds the amount to be retained or disbursed under Sections
6.04(a)(i) through (iii), the excess to an account previously
designated by the Seller.
(b) No later than two Business Days prior to each Settlement
Date, the Operating Agent shall determine and notify the Seller of any Retention
Account Deficiency for the preceding Settlement Period, and the Seller shall
deposit funds in the amount of such Retention Account Deficiency to the
Collection Account pursuant to Section 6.02(b).
Section 6.05. Liquidation Settlement Procedures. On each Business Day
on and after the Facility Termination Date, the Collateral Agent shall:
(a) transfer all amounts in the Collection Account in the
following priority:
(i) to the Deferred Purchase Price Sub-Account, all
Deferred Purchase Price Collections; and
(ii) to the Capital Investment Sub-Account, the balance;
(b) transfer all amounts in the Deferred Purchase Price
Sub-Account, in the following priority:
(i) if an Event of Servicer Termination has occurred and a
Successor Servicer has been appointed, to the Successor Servicer in an
amount equal to its accrued and unpaid Successor Servicing Fees and
Expenses;
(ii) to the Collateral Account for the account of the
Purchaser, in an amount equal to, on any such Business Day on which
Capital Investment is being maintained through the issuance of
Commercial Paper (to the extent such Capital Investment exceeds
Liquidity Loans then outstanding), accrued and unpaid CP Interest
through and including such date;
(iii) if there are Liquidity Loans outstanding, to the
Liquidity Agent on behalf of the Liquidity Providers, in an amount
equal to accrued and unpaid interest on the Liquidity Loans;
(iv) to the Capital Investment Sub-Account:
(A) an amount equal to the Dilution Funded Amount; and
(B) if there are Liquidity Loans then outstanding or
Capital Investment exceeds the Liquidity Loans then
outstanding, all amounts remaining in the Deferred Purchase
Price Sub-Account, if any;
(v) to the Letter of Credit Agent, if there are any
outstanding LOC Draws in respect of the Seller, in an amount equal to
accrued and unpaid interest on such outstanding LOC Draws;
(vi) to the Collateral Account, an amount equal to (A)
accrued and unpaid Daily Yield minus (B) the sum of (1) amounts paid
pursuant to Section 6.05(b)(ii), (2) amounts paid pursuant to
6.05(b)(iii) and (3) amounts paid under 6.05(b)(v);
(vii) if an Event of Servicer Termination has not
occurred, to the Servicer in an amount equal to its accrued and unpaid
Servicing Fee;
36
<PAGE> 41
(viii) upon payment in full of all amounts set forth in
clauses (c)(i)-(c)(v) below, to an account previously designated by the
Seller, in partial payment of the Deferred Purchase Price, the balance,
if any; and
(c) transfer all amounts in the Capital Investment
Sub-Account, in the following priority:
(i) to the Collateral Account for the account of the
Purchaser, in an amount equal to,
(A) on any such Business Day on which Capital
Investment is being maintained through the issuance of
Commercial Paper (to the extent such Capital Investment
exceeds Liquidity Loans then outstanding), accrued and unpaid
CP Interest through and including such date, to the extent not
paid pursuant to Sections 6.05(b)(ii) and 6.05(b)(vi); and
(B) on any such Business Day on which Capital
Investment is being maintained through the issuance of
Commercial Paper (to the extent such Capital Investment
exceeds Liquidity Loans then outstanding), the principal of
all Capital Investment in excess of such Liquidity Loans;
(ii) if there are Liquidity Loans outstanding, to the
Liquidity Agent on behalf of the Liquidity Providers, in an amount
equal to:
(A) accrued and unpaid interest on the Liquidity Loans
to the extent not paid pursuant to Section 6.05(b)(iii);
(B) the principal of outstanding Liquidity Loans; and
(C) any other amounts, including any fees, owing to
the Liquidity Agent or Liquidity Providers in connection with
the Liquidity Loans to the extent not paid pursuant to Section
6.05(b)(iii);
(iii) to the Collateral Account for the account of the
Purchaser, in an amount equal to:
(A) all Additional Amounts incurred and payable to any
Affected Party; and
(B) all Indemnified Amounts incurred and payable to
any Indemnified Party;
(iv) to the Letter of Credit Agent, if there are any
outstanding LOC Draws in respect of the Seller, in an amount equal to:
(A) accrued and unpaid interest on such outstanding
LOC Draws;
(B) the principal of such outstanding LOC Draws; and
(C) including fees, owing to the Letter of Credit
Agent in connection with such outstanding LOC Draws; and
(v) to the Collateral Account, an amount equal to (A)
accrued and unpaid Daily Yield minus (B) the sum of (1) amounts paid
pursuant to Section 6.05(c)(i)(A), (2) amounts paid pursuant to
6.05(c)(ii)(A) and (3) amounts paid under 6.05(c)(iv)(A);
37
<PAGE> 42
(vi) if an Event of Servicer Termination has not occurred,
to the Servicer in an amount equal to its accrued and unpaid Servicing
Fee; and
(vii) upon payment in full of all amounts set forth in
clauses (c)(i)-(c)(vi) above, to an account previously designated by
the Seller, the balance, if any.
(d) after the Facility Termination Date, on each day by no
later than 11:00 a.m. the Operating Agent shall transfer all amounts then on
deposit in the Retention Account to the Collateral Account;
Section 6.06. Investment of Accounts. During the Revolving Period, to
the extent there are uninvested amounts deposited in the Collateral Account or
the Retention Account, the Operating Agent shall invest all such amounts in
Permitted Investments selected by the Operating Agent that mature no later than
the immediately succeeding Business Day, in the case of the Collateral Account,
and the immediately succeeding Settlement Date, in the case of the Retention
Account. On or after the Facility Termination Date, any investment of such
amounts shall be solely at the discretion of the Operating Agent, subject to the
restrictions described above.
Section 6.07. Termination Procedure.
(a) On the earlier of (i) the first Business Day after the
Facility Termination Date on which the Capital Investment has been reduced to
zero or (ii) the Final Purchase Date, if the payments required to be made
pursuant to Sections 6.05(a), (b) and (c) have not been made in full, the Seller
shall immediately deposit into the Collection Account an amount sufficient to
make such payments in full.
(b) On the first Business Day after the Facility Termination
Date on which the payments required pursuant to Subsections 6.05(a), (b) and (c)
have been made in full, all amounts held in the Collection Account and the
Retention Account, if any, shall be disbursed in immediately available funds to
the Seller and all security interests of the Purchaser and the Collateral Agent
in all Transferred Receivables owned by the Seller or other Seller Collateral
shall be released by the Purchaser and the Collateral Agent. Such disbursement
shall constitute the final payment to which the Seller is entitled pursuant to
the terms of this Agreement.
ARTICLE VII.
APPOINTMENT OF THE SERVICER
Section 7.01. Appointment of the Servicer. The Purchaser hereby
appoints the Servicer as its agent to service the Transferred Receivables and
enforce its rights and interests in and under each Transferred Receivable and
each related Contract and to serve in such capacity until the termination of its
responsibilities pursuant to Sections 9.02 or 11.01. The Servicer hereby agrees
to perform the duties and obligations with respect thereto set forth herein. The
Servicer may, with the prior consent of the Purchaser, the Operating Agent, and
the Collateral Agent subcontract with a Sub-Servicer for collection, servicing
or administration of the Transferred Receivables, provided, that (a) the
Servicer shall remain liable for the performance of the duties and obligations
of the Sub-Servicer pursuant to the terms hereof, and (b) any Sub-Servicing
Agreement that may be entered into and any other transactions or services
relating to the Transferred Receivables involving a Sub-Servicer shall be deemed
to be between the Sub-Servicer and the Servicer alone and the Purchaser,
Operating Agent and the Collateral Agent shall not be deemed parties thereto and
shall have no obligations, duties or liabilities with respect to the
Sub-Servicer.
Section 7.02. Duties and Responsibilities of the Servicer.
(a) The Servicer shall conduct the servicing, administration
and collection of the Transferred Receivables and shall take, or cause to be
taken, all such actions (i) as may be necessary or advisable to service,
administer and collect each Transferred Receivable from time to time; (ii) as
the
38
<PAGE> 43
Servicer would take if the Transferred Receivables were owned and serviced by
the Servicer, and (iii) as are consistent with industry practice for the
servicing of such Transferred Receivables.
(b) The Purchaser, the Operating Agent and the Collateral
Agent shall not have any obligation or liability with respect to any Transferred
Receivables or related Contracts, nor shall any of them be obligated to perform
any of the obligations of the Servicer hereunder.
Section 7.03. Collections on Receivables. In the event that the
Servicer is unable to determine the specific Receivables on which Collections
have been received from an Obligor, for the purposes of this Agreement only, the
parties agree that such Collections shall be deemed to have been received on the
Receivables in the order in which they were originated with respect to such
Obligor. In the event that the Servicer is unable to determine the specific
Receivables on which discounts, offsets or other non-cash reductions have been
granted or made with respect to an Obligor, the parties agree that such
reductions shall be deemed to have been granted or made (i) prior to a
Termination Event, in the discretion of the Servicer, and (ii) after a
Termination Event, in the reverse order in which they were originated with
respect to such Obligor.
Section 7.04. Authorization of the Servicer. Each of the Seller and the
Purchaser hereby authorizes the Servicer (including any successor thereto) to
take any and all steps in its name and on its behalf necessary or desirable and
not inconsistent with the ownership of the Transferred Receivables by the
Purchaser and the pledge to the Collateral Agent, in the determination of the
Servicer, to collect all amounts due under any and all such Transferred
Receivables, including, without limitation, endorsing any of their names on
checks and other instruments representing Collections, executing and delivering
any and all instruments of satisfaction or cancellation, or of partial or full
release or discharge, and all other comparable instruments, with respect to such
Transferred Receivables and, after the delinquency of any such Transferred
Receivable and to the extent permitted under and in compliance with applicable
law and regulations, to commence proceedings with respect to enforcing payment
of such Transferred Receivables and the related Contracts, and adjusting,
settling or compromising the account or payment thereof, to the same extent as
the Originator could have done if it had continued to own such Receivable. The
Originator, the Seller and the Purchaser shall furnish the Servicer (and any
successors thereto) with any powers of attorney and other documents necessary or
appropriate to enable the Servicer to carry out its servicing and administrative
duties hereunder, and shall cooperate with the Servicer to the fullest extent in
order to ensure the collectibility of the Transferred Receivables.
Notwithstanding anything to the contrary contained herein, the Purchaser, the
Collateral Agent and the Operating Agent shall have the absolute and unlimited
right to direct the Servicer (whether the Servicer is the Originator or
otherwise) to commence or settle any legal action to enforce collection of any
such Transferred Receivable or to foreclose upon, repossess or take any other
action which the Collateral Agent or the Operating Agent deems necessary or
advisable with respect thereto; provided, that the Servicer may, rather than
commencing such action or taking other enforcement action, at its option elect
to pay the Purchaser the Outstanding Balance of such Transferred Receivable. In
no event shall the Servicer be entitled to make the Purchaser, the Collateral
Agent or the Operating Agent a party to any litigation without such party's
express prior written consent, or to make the Seller a party to any litigation
without the Operating Agent's consent.
Section 7.05. Servicing Fees. As compensation for its servicing
activities and as reimbursement for its expenses in connection therewith, the
Servicer shall be entitled to receive the Servicing Fees in the manner set forth
in Sections 6.04 and 6.05, payable monthly in arrears on each Settlement Date
with respect to the preceding Settlement Period. The Servicer shall be required
to pay for all expenses incurred by the Servicer in connection with its
activities hereunder (including any payments to accountants, counsel or any
other Person) and shall not be entitled to any payment therefor other than the
Servicing Fees.
Section 7.06. Covenants of the Servicer. The Servicer shall (unless
having previously received the prior written consent of the Operating Agent and
the Collateral Agent):
39
<PAGE> 44
(a) not sell, assign (by operation of law or otherwise) or
otherwise dispose of, or create or suffer to exist any Adverse Claim upon or
with respect to (and any such purported disposition shall be null and void), any
Transferred Receivable or related Contract with respect thereto, or upon or with
respect to the Lockbox Account, the Lockboxes, the Collection Account, the
Retention Account or any other account to which any Collections of any
Transferred Receivable are deposited, or assign any right to receive income in
respect thereof;
(b) not extend, amend or otherwise modify the terms of any
Transferred Receivable (other than adjusting, settling or compromising the
account or payment of a Transferred Receivable pursuant to Section 7.04 and
except for deferments in the ordinary course of business which are consistent
with the Credit and Collection Policies), or amend, modify or waive any term or
condition of any Contract related thereto;
(c) not make any changes in the nature of its business,
purposes or operations which could result in a material adverse effect on its
ability to perform its servicing obligations hereunder;
(d) not make any change in its instructions to Obligors to
make payments to the Lockboxes or Lockbox Accounts;
(e) not merge with or into (unless the Servicer is the
surviving corporation), consolidate with or into, or convey, transfer, lease or
otherwise dispose of all or substantially all of its assets (whether now owned
or hereafter acquired) (whether in one transaction or in a series of
transactions);
(f) not make any change to its corporate name or use any
tradenames, fictitious names, assumed names or "doing business as" names except
those disclosed on Schedule 1 to the Transfer Agreement and after at least
thirty days' prior written notice to the Operating Agent, Collateral Agent and
Redwood;
(g) identify the Transferred Receivables clearly and
unambiguously in its Servicing Records to reflect that such Transferred
Receivables are owned by the Seller;
(h) comply in all material respects with the Credit and
Collection Policies in regard to each Transferred Receivable and the related
Contracts; and
(i) comply in all material respects with all applicable laws,
rules, regulations and orders with respect to it, its business and properties
and all Transferred Receivables, related Contracts and Collections with respect
thereto.
Section 7.07. Reporting. During the term of this Agreement, if Carlisle
Plastics, Inc. or any Affiliate thereof is not the Servicer, the Servicer shall
furnish to the Collateral Agent, the Operating Agent and the Purchaser:
(a) as soon as available and in any event within 90 days after
the end of each fiscal year of the Servicer, a copy of the audited consolidated
financial statement of the Servicer and its consolidated Subsidiaries as of the
end of such year and the related consolidated statements of income and retained
earnings, and of cash flow, of the Servicer and its consolidated Subsidiaries
for such year, in each case reported on by Deloitte & Touche or other firm of
nationally recognized independent public accountants acceptable to the Operating
Agent (accompanied by consolidating financial information received by such
accounting firm and a satisfactory management letter) and each other report or
statement sent to shareholders or publicly filed by the Servicer;
(b) on or before the 45th day after each quarter, an Officer's
Certificate stating, as to each signer thereof, that (i) a review of the
activities of the Servicer during the preceding calendar quarter and of its
performance under this Agreement has been made under such officer's supervision,
(ii) to the best of such officer's knowledge, based on such review, the Servicer
has fulfilled all its obligations under
40
<PAGE> 45
this Agreement throughout such quarter, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof, (iii) the Servicer has complied with
the covenants set forth in Section 7.06 and Exhibit H, and (iv) the
representations and warranties of the Servicer in Section 4.02 are true and
correct as if made on the date of such Officer's Certificate;
(c) written notification of the occurrence of a Termination
Event (including, without limitation, a material adverse change in the financial
condition of the Originator) or an Incipient Event;
(d) written notification of any action, suit, proceeding,
dispute, offset deduction, defense or counterclaim that is or may be asserted by
an Obligor with respect to any Transferred Receivable; and
(e) such other periodic, special or other reports or
information as the Purchaser, the Operating Agent or the Collateral Agent may
reasonably require.
Section 7.08. Annual Statement as to Compliance. The Servicer shall
deliver to the Collateral Agent, the Operating Agent and the Purchaser on or
before 90 days after the end of each fiscal year, an Officer's Certificate
stating, as to each signer thereof, that (a) a review of the activities of the
Servicer during the preceding calendar year and of its performance under this
Agreement has been made under such officer's supervision, (b) to the best of
such officer's knowledge, based on such review, the Servicer has fulfilled all
its obligations under this Agreement throughout such year or, if there has been
a default in the fulfillment of any such obligation, specifying each such
default known to such officer and the nature and status thereof, (c) the
Servicer has complied with the covenants set forth in Section 7.06 and Exhibit
H, and (d) the representations and warranties of the Servicer in Section 4.02
are true and correct as if made on the date of such Officer's Certificate.
Section 7.09. Annual Independent Public Accountants' Servicing and
Compliance Report. On or before March 31 of each year, the Servicer at its
expense shall cause a firm of nationally recognized independent public
accountants to furnish a statement (on which the Purchaser, the Operating Agent
and the Collateral Agent may rely) to the Collateral Agent and the Operating
Agent to the effect that such firm has applied the agreed upon procedures
referred to in Section 5.02(f) with respect to (a) the Servicer's compliance
with the Servicer's financial covenants in this Agreement and (b) the Servicer's
substantial compliance with this Agreement (including the Credit and Collection
Policies), and that, on the basis of such procedures, such firm has reported
that there are no exceptions, except as set forth in such statement.
ARTICLE VIII.
GRANT OF SECURITY INTERESTS
Section 8.01. Seller's Grant of Security Interest. It is the intention
of the parties hereto that each payment by the Purchaser to the Seller with
respect to Transferred Receivables to be made hereunder shall constitute a
purchase and sale of such Transferred Receivables and not a loan. If, however, a
court of competent jurisdiction holds that the transaction evidenced hereby
constitutes a loan and not a purchase and sale, it is the intention of the
parties hereto that this Agreement shall constitute a security agreement under
applicable law. In such regard and, in any event, as security for the prompt
payment or performance in full when due, whether at stated maturity, by
acceleration or otherwise, of all Seller Secured Obligations, the Seller hereby
assigns and pledges to the Purchaser, and grants to the Purchaser a security
interest in and lien upon, all of the Seller's right, title and interest in and
to the following, in each case whether now or hereafter existing or in which
Seller now has or hereafter acquires an interest and wherever the same may be
located (collectively, the "SELLER COLLATERAL"):
(a) all Transferred Receivables, Contracts and Collections;
41
<PAGE> 46
(b) the Transfer Agreement, all Lockbox Agreements and all
other Related Documents now or hereafter in effect relating to the purchase,
servicing or processing of such Transferred Receivables (the "SELLER ASSIGNED
AGREEMENTS"), including (i) all rights of the Seller to receive moneys due and
to become due under or pursuant to the Seller Assigned Agreements, (ii) all
rights of the Seller to receive proceeds of any insurance, indemnity, warranty
or guaranty with respect to the Seller Assigned Agreements, (iii) claims of the
Seller for damages arising out of or for breach of or default under the Seller
Assigned Agreements, and (iv) the right of the Seller to amend, waive or
terminate the Seller Assigned Agreements, to perform under the Seller Assigned
Agreements and to compel performance and otherwise exercise all remedies under
the Seller Assigned Agreements;
(c) all of the following (the "SELLER ACCOUNT COLLATERAL"):
(i) the Lockbox Account, the Lockboxes and all funds held
in the Lockbox Account and the Lockboxes and all certificates and
instruments, if any, from time to time representing or evidencing the
Lockbox Account, the Lockboxes or such funds,
(ii) the Collection Account and the Retention Account, all
funds held in the Collection Account and the Retention Account, and all
certificates and instruments, if any, from time to time representing or
evidencing the Collection Account, the Retention Account or such funds,
(iii) all Investments from time to time of amounts in the
Collection Account and the Retention Account, and all certificates and
instruments, if any, from time to time representing or evidencing such
Investments,
(iv) all notes, certificates of deposit and other
instruments related to the Receivables or the Related Documents from
time to time delivered to or otherwise possessed by the Purchaser or
any assignee or agent on behalf of the Purchaser in substitution for or
in addition to any of the then existing Seller Account Collateral, and
(v) all interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any and all of the then
existing Seller Account Collateral;
(d) all additional property related to the Receivables and the
Related Documents that may from time to time hereafter be granted and pledged by
the Seller or by anyone on its behalf under this Agreement, including the
deposit with the Purchaser, the Operating Agent or the Collateral Agent of
additional moneys by the Seller; and
(e) all Proceeds, accessions, substitutions, rents and profits
of any and all of the foregoing Seller Collateral (including Proceeds that
constitute property of the types described in Sections 8.01(a) through (d)
above) and, to the extent not otherwise included, all payments under insurance
(whether or not the Purchaser or any assignee or agent on behalf of the
Purchaser is the loss payee thereof) or any indemnity, warranty or guaranty
payable by reason of loss or damage to or otherwise with respect to any of the
foregoing Seller Collateral.
Section 8.02. Seller's Certification. The Seller hereby certifies that
(a) the benefits of the representations and warranties of the Originator made
under the Transfer Agreement have been assigned to the Purchaser and the
Collateral Agent; (b) the rights of the Seller under the Transfer Agreement to
require a capital contribution or payment of a Rejected Amount from the
Originator may be enforced by the Purchaser and the Collateral Agent; and (c)
the Transfer Agreement provides that the representations, warranties and
covenants described in Sections 4.01 and 4.02 shall survive the sale of the
Transferred Receivables and the termination of the Transfer Agreement and this
Agreement.
Section 8.03. Consent to Assignment. Each of the Seller, the Originator
and the Servicer acknowledges and consents to the security interest over the
Seller Collateral created pursuant to the
42
<PAGE> 47
Collateral Agent Agreement and acknowledges the rights of the Collateral Agent
and the covenants given by the Purchaser in favor of the Collateral Agent set
forth in the Collateral Agent Agreement, and further acknowledges and consents
that the Collateral Agent shall be entitled to enforce the provisions of the
Seller Assigned Agreements to which the Seller, the Originator or the Servicer
is a party and shall be entitled to all the rights and remedies of the Purchaser
thereunder. In addition, each of the Seller, the Originator and the Servicer
hereby authorizes the Collateral Agent to rely on the representations and
warranties of the Seller, the Originator or the Servicer, respectively,
contained in the Seller Assigned Agreements to which the Seller, the Originator
or the Servicer is a party and in any other certificates and documents furnished
by the Seller, the Originator or the Servicer to any party in connection
therewith.
Section 8.04. Delivery of Collateral. All certificates or instruments
representing or evidencing Collateral shall be delivered to and held by or on
behalf of the Collateral Agent pursuant to the Collateral Agent Agreement and
shall be in suitable form for transfer by delivery or shall be accompanied by
duly executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to the Collateral Agent, and to the extent not
constituting an assignment shall be irrevocable powers of attorney coupled with
an interest. The Collateral Agent shall have the right, at any time in its
discretion following the occurrence of and during the continuation of a
Termination Event and without prior notice to the Seller or the Purchaser, to
transfer to or to register in the name of the Collateral Agent or any of its
nominees any or all of the Collateral. In addition, the Collateral Agent shall
have the right at any time to exchange certificates or instruments representing
or evidencing Collateral for certificates or instruments of smaller or larger
denominations.
Section 8.05. Seller Remains Liable. Notwithstanding anything in this
Agreement, (a) each of the Seller and the Originator shall remain liable under
the Transferred Receivables, Contracts, Seller Assigned Agreements and other
agreements included in the Collateral to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by the Purchaser or the Collateral Agent of any of
its rights under this Agreement or the Collateral Agent Agreement shall not
release the Seller or the Servicer from any of their respective duties or
obligations under the Transferred Receivables, Contracts, Seller Assigned
Agreements or other agreements included in the Collateral, (c) the Purchaser,
the Collateral Agent and the Purchaser Secured Parties shall not have any
obligation or liability under the Transferred Receivables, Contracts, Seller
Assigned Agreements or other agreements included in the Collateral by reason of
this Agreement or the Collateral Agent Agreement, and (d) neither the Collateral
Agent nor any of the other Secured Parties shall be obligated to perform any of
the obligations or duties of the Seller or the Servicer under the Transferred
Receivables, Contracts, Seller Assigned Agreements or other agreements included
in the Collateral or to take any action to collect or enforce any claim for
payment assigned under this Agreement or the Collateral Agent Agreement.
Section 8.06. Covenants of the Seller and Servicer Regarding the
Collateral.
(a) Offices and Records. The Seller shall keep its chief place
of business and chief executive offices and the office where it keeps its
Records at the respective locations specified in Schedule 5 or, upon at least 30
days prior written notice to the Collateral Agent, at such other location in a
jurisdiction where all action required by Section 8.06(f) shall have been taken
with respect to the Collateral. The Seller and the Servicer shall, for not less
than three years or for such longer period as may be required by law, from the
date on which any Transferred Receivable arose, maintain adequate Records with
respect to each Transferred Receivable, including records of all payments
received, credits granted and merchandise returned. Upon prior notice to the
Seller and the Servicer, except after the occurrence of any Termination Event,
the Seller and the Servicer will permit representatives of the Operating Agent
and the Collateral Agent at any time and from time to time during normal
business hours, and at such times outside of normal business hours as the
Operating Agent and the Collateral Agent shall request, (i) to inspect and make
copies of and abstracts from such records, and (ii) to visit the properties of
the Seller or the Servicer utilized in connection with the collection,
processing or servicing of the Transferred Receivables for the purpose of
examining such Records, and to discuss matters relating to the Receivables or
the Seller's or Servicer's performance under this Agreement with any officer or
employee of the Seller or Servicer having knowledge of such matters. In
connection therewith, the
43
<PAGE> 48
Operating Agent or the Collateral Agent may institute procedures to permit it to
confirm the Obligor balances in respect of any Transferred Receivables. Each of
the Seller and the Servicer agrees to render to the Operating Agent and the
Collateral Agent such clerical and other assistance as may be requested with
regard to the foregoing. If a Termination Event shall have occurred and be
continuing, promptly upon request therefor, the Seller or the Servicer shall
deliver to the Collateral Agent records reflecting activity through the close of
business on the immediately preceding Business Day.
(b) Collection of Transferred Receivables. Except as otherwise
provided in this Section 8.06(b), the Seller shall continue to collect or cause
to be collected, at its own expense, all amounts due or to become due to the
Seller under the Transferred Receivables, the Seller Assigned Agreements and any
other Seller Collateral. In connection with such collections, the Seller may
take (and at the Collateral Agent's direction after a Termination Event has
occurred and is continuing, shall take) such action as the Seller or the
Collateral Agent may deem necessary or advisable to enforce collection of the
Transferred Receivables and the Seller Assigned Agreements; provided, however,
that the Collateral Agent may, at any time that a Termination Event has occurred
and is continuing, notify any Obligor with respect to any Transferred
Receivables or obligors under the Seller Assigned Agreements of the assignment
of such Transferred Receivables or Seller Assigned Agreements, as the case may
be, to the Collateral Agent and direct that payments of all amounts due or to
become due to the Seller thereunder be made directly to the Collateral Agent or
any servicer, collection agent or lockbox or other account designated by the
Collateral Agent and, upon such notification and at the expense of the Seller,
the Collateral Agent may enforce collection of any such Transferred Receivables
or the Seller Assigned Agreements and adjust, settle or compromise the amount or
payment thereof, provided that the Seller may, rather than commencing such
action or taking other enforcement action, at its option, elect to cause such
Transferred Receivable to be subject to Section 4.04 of the Transfer Agreement.
(c) Maintain Records of Transferred Receivables. The Seller
and the Servicer shall, at their own cost and expense, maintain satisfactory and
complete records of the Collateral, including a record of all payments received
and all credits granted with respect to the Collateral and all other dealings
with the Collateral. Each of the Seller and the Servicer will mark conspicuously
with a legend, in form and substance satisfactory to the Collateral Agent, its
aged receivables report, to evidence this Agreement and the assignment and
security interest granted by this Article VIII. Upon the occurrence and during
the continuation of a Termination Event, the Seller and Servicer shall (i)
deliver and turn over to the Collateral Agent or to its representatives, or at
the option of the Collateral Agent shall provide the Collateral Agent or its
representatives with access to, after the occurrence of a Termination Event, at
any time, and during all other times, during ordinary business hours, on demand
of the Collateral Agent, all of the Seller's and Servicer's facilities,
personnel, books and records pertaining to the Collateral, including all
Records, and (ii) allow the Collateral Agent to occupy the premises of the
Seller and the Servicer where such books, records and Records are maintained,
and utilize such premises, the equipment thereon and any personnel of the Seller
or the Servicer that the Collateral Agent may wish to employ to administer,
service and collect the Transferred Receivables.
(d) Performance of Seller Assigned Agreements. The Seller or
the Servicer, as applicable, shall (i) perform and observe all the terms and
provisions of the Seller Assigned Agreements to be performed or observed by it,
maintain the Seller Assigned Agreements in full force and effect, enforce the
Seller Assigned Agreements in accordance with their terms and take all such
action to such end as may be from time to time requested by the Collateral
Agent, and (ii) upon request of the Operating Agent or the Collateral Agent,
make to any other party to the Seller Assigned Agreements such demands and
requests for information and reports or for action as the Seller is entitled to
make under the Seller Assigned Agreements.
(e) Notice of Adverse Claim. Each of the Seller and the
Servicer shall advise the Purchaser, the Operating Agent and the Collateral
Agent promptly, in reasonable detail, (i) of any Adverse Claim known to it made
or asserted against any of the Seller Collateral and (ii) of the occurrence of
any event which would have a material adverse effect on the aggregate value of
the Seller Collateral or on the assignments and security interests granted by
the Seller in this Agreement.
44
<PAGE> 49
(f) Further Assurances; Financing Statements.
(i) Each of the Seller and the Servicer severally agrees
that at any time and from time to time, at its expense, it shall
promptly execute and deliver all further instruments and documents, and
take all further action, that may be necessary or desirable or that the
Purchaser, the Operating Agent or the Collateral Agent may request to
perfect and protect the assignments and security interests granted or
purported to be granted by this Article VIII or to enable the
Purchaser, the Operating Agent or the Collateral Agent to exercise and
enforce its rights and remedies under this Agreement and the Collateral
Agent Agreement with respect to any Collateral. Without limiting the
generality of the foregoing, the Seller shall execute and file such
financing or continuation statements, or amendments thereto, and such
other instruments or notices as may be necessary or, in the opinion of
the Purchaser, the Operating Agent or the Collateral Agent, desirable
or that the Purchaser, the Operating Agent or the Collateral Agent may
request to protect and preserve the assignments and security interests
granted by this Agreement and the Collateral Agent Agreement.
(ii) The Seller and the Purchaser hereby severally
authorize the Collateral Agent to file one or more financing or
continuation statements, and amendments thereto, relating to all or any
part of the Collateral without the signature of the Seller or the
Purchaser where permitted by law. A carbon, photographic or other
reproduction of this Agreement or any financing statement covering the
Collateral or any part thereof shall be sufficient as a financing
statement where permitted by law. The Collateral Agent will promptly
send to the Seller any financing or continuation statements thereto
which it files without the signature of the Seller and will promptly
send to the Purchaser any financing or continuation statements thereto
which it files without the signature of the Purchaser except, in the
case of filings of copies of this Agreement as financing statements,
the Collateral Agent will promptly send the Seller or the Purchaser, as
the case may be, the filing or recordation information with respect
thereto.
(iii) Each of the Seller and the Servicer shall furnish to
the Collateral Agent from time to time such statements and schedules
further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Collateral Agent may
request, all in reasonable detail.
ARTICLE IX.
TERMINATION EVENTS
Section 9.01. Termination Events. If any of the following events (each,
a "TERMINATION EVENT") shall occur and be continuing:
(a) (i) the Seller shall default in the payment of any amount
owed by it hereunder and such failure shall remain unremedied for one Business
Day, or (ii) the Seller shall fail to perform or observe any other term,
covenant or agreement contained in this Agreement or the Related Documents and
such failure shall remain unremedied for five days, in each case after written
notice thereof shall have been given by the Operating Agent or the Collateral
Agent to the Seller; or
(b) a default has occurred (and any applicable grace period
has elapsed) and be continuing under any instrument or agreement evidencing,
securing or providing for the issuance of Debt of the Parent or the Seller and
such default has not been waived by the non-defaulting party; or
(c) the Originator or the Seller shall generally not pay any
of its respective Debts as such Debts become due, or shall admit in writing its
inability to pay its Debts generally, or shall make a general assignment for the
benefit of creditors, or any proceeding shall be instituted by or against the
Originator or the Seller seeking to adjudicate it bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or any of its Debts under any law
relating to bankruptcy, insolvency, reorganization or relief of debtors, or
seeking the entry of an
45
<PAGE> 50
order for relief or the appointment of a receiver, trustee, custodian or other
similar official for it or for any substantial part of its property, or any of
the actions sought in such proceeding (including, without limitation, the entry
of an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or for any substantial part of its
property) shall occur, or the Originator or the Seller shall take any corporate
action to authorize any of the actions set forth in this subsection; or
(d) judgments or orders for the payment of money (other than
such judgments or orders in respect of which adequate insurance is maintained
for the payment thereof) in excess of $500,000 in the aggregate against the
Originator or any Affiliate of the Originator shall remain unpaid, unstayed on
appeal, undischarged, unbonded or undismissed for a period of 30 days or more;
or
(e) a judgment or order for the payment of money is rendered
against the Seller; or
(f) there is a material breach of any of the representations
and warranties of the Seller set forth in Section 4.01; or
(g) any Governmental Authority (including the Internal Revenue
Service or the PBGC) shall file notice of a lien in an aggregate amount with
regard to any assets of the Originator (other than lien (i) limited by its terms
to assets other than Receivables and (ii) not materially adversely affecting the
financial condition of the Parent or the parent's ability to perform as Servicer
hereunder); or
(h) any Governmental Authority (including the Internal Revenue
Service or the PBGC) shall file notice of a lien with regard to any of the
assets of the Seller; or
(i) there shall occur a failure of the Originator to make any
payment, repurchase any Transferred Receivables or substitute any Transferred
Receivables with Eligible Receivables as required under Section 4.04 of the
Transfer Agreement for one Business Day, or if the Transfer Agreement shall for
any reason cease to evidence the transfer to the Seller (or its assignees or
transferees) of the legal and equitable title to, and ownership of, the
Transferred Receivables; or
(j) any Lockbox Agreement or the Transfer Agreement have been
amended or terminated without the written consent of the Purchaser, the
Operating Agent and the Collateral Agent; or
(k) an Event of Servicer Termination has occurred; or
(l) the Operating Agent has determined that the funding of
Receivables hereunder is impracticable due to a drop in or withdrawal of any of
the ratings assigned to the Purchaser's Commercial Paper, the imposition of
Additional Amounts, restrictions on the amount of Transferred Receivables it may
finance or the inability of the Purchaser to issue Commercial Paper; or
(m) the Purchaser and the Collateral Agent cease to hold a
first priority, perfected ownership interest in the Transferred Receivables; or
(n) a Seller LOC Draw has occurred; or
(o) the obligations of the Liquidity Providers to make
Liquidity Loans, the proceeds of which may be used by the Purchaser to make
Purchases to the Seller, have terminated; or
(p) a breach of the covenants in Exhibit H has occurred; or
(q) a breach of a provision of the Transfer Agreement has
occurred that is not remedied within 1 Business Day in accordance with Section
4.04 thereof; or
(r) an Event of Default under the Collateral Agent Agreement
has occurred; or
46
<PAGE> 51
(s) the short term debt rating of a Liquidity Provider has
been downgraded by a Rating Agency and such Liquidity Provider has not been
replaced in accordance with the Liquidity Agreement within 30 days; or
(t) the Purchase Discount Rate shall be less than 50% for two
consecutive Settlement Periods;
then and in any such event, the Operating Agent shall, at the request, or may
with the consent, of the Purchaser or the Collateral Agent, by notice to the
Seller declare the Facility Termination Date to have occurred, whereupon the
Facility Termination Date shall forthwith occur, without demand, protest or
further notice of any kind, all of which are hereby expressly waived by the
Seller; provided, that in the event that any of the Termination Events described
in subsections (b), (c), (n), (o), (r) or (s) have occurred or the Termination
Event described in subsection (a)(i) has occurred and remained unremedied for
four days, the Facility Termination Date shall automatically occur, without
demand, protest or any notice of any kind, all of which are hereby expressly
waived by the Seller. The Operating Agent shall (i) give notice to the Servicer
of any downgrade of a Liquidity Provider pursuant to subsection (s), and (ii)
give notice as soon as practicable, but no later than the later of (x) 60 days'
before the date of termination or (y) promptly after receipt of notice by the
Liquidity Provider of termination of the obligations of the Liquidity Provider
to make Liquidity Loans, the proceeds of which may be used by the Purchaser to
make Purchases to the Seller shall have terminated, notify the Seller and
Servicer, provided that the failure to give notice pursuant to (i) and (ii)
above shall not affect the operation of this Section 9.01.
Section 9.02. Events of Servicer Termination. If any of the following
events (each, an "EVENT OF SERVICER TERMINATION") shall occur and be continuing:
(a) the Servicer shall fail to perform or observe any term,
covenant or agreement contained in this Agreement and such failure shall remain
unremedied for ten days after written notice thereof shall have been given by
the Purchaser, the Collateral Agent or the Operating Agent to the Servicer; or
(b) (i) a default has occurred and is continuing under any
instrument or agreement to which GE Capital or any of its Affiliates is a party,
evidencing, securing or providing for the issuance of Debt of the Servicer, or
(ii) a party has accelerated any payment of Debt under any instrument or
agreement evidencing, securing or providing for the issuance of Debt of the
Servicer in an amount exceeding $1,000,000; or
(c) the Servicer shall generally not pay any of its Debts as
such Debts become due, or shall admit in writing its inability to pay its Debts
generally, or shall make a general assignment for the benefit of creditors, or
any proceeding shall be instituted by or against the Servicer seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or composition of it
or any of its Debts under any law relating to bankruptcy, insolvency,
reorganization or relief of debtors, or seeking the entry of an order for relief
or the appointment of a receiver, trustee, custodian or other similar official
for it or for any substantial part of its property, or any of the actions sought
in such proceeding (including, without limitation, the entry of an order for
relief against, or the appointment of a receiver, trustee, custodian or other
similar official for, it or for any substantial part of its property) shall
occur, or the Servicer shall take any corporate action to authorize any of the
actions set forth in this subsection; or
(d) judgments or orders for the payment of money (other than
such judgments or orders in respect of which adequate insurance is maintained
for the payment thereof) in excess of $500,000 in the aggregate against the
Servicer or any of its Affiliates shall remain unpaid, unstayed on appeal,
undischarged, unbonded or undismissed for a period of 30 days or more; or
(e) there is a breach of any of the representations and
warranties of the Servicer set forth in Section 4.02 that is not remedied within
1 Business Day in accordance with Section 4.04 of the Transfer Agreement; or
47
<PAGE> 52
(f) the Operating Agent or the Collateral Agent shall have
determined that any event which materially adversely affects the ability of the
Servicer to collect Receivables or to otherwise perform hereunder has occurred;
or
(g) a Termination Event shall have occurred or this Agreement
shall have been terminated; or
(h) the Servicer shall assign or purport to assign any of its
obligations hereunder or under the Transfer Agreement without the prior written
consent of the Operating Agent and the Collateral Agent; or
(i) the Seller's board of directors has determined that it is
in the best interests of the Seller to terminate the Servicer and shall have
given the Servicer, the Operating Agent, the Purchaser and the Collateral Agent
at least 30 days written notice thereof,
then, and in any such event, the Operating Agent shall (on behalf of the
Seller), at the request, or may with the consent, of the Purchaser or the
Collateral Agent, by delivery of a Servicer Termination Notice to the Seller and
the Servicer, terminate the servicing responsibilities of the Servicer
hereunder, without demand, protest or further notice of any kind, all of which
are hereby waived by the Servicer. Upon any such declaration, all authority and
power of the Servicer under this Agreement and the Transfer Agreement shall pass
to and be vested in the Successor Servicer appointed pursuant to Section 11.02;
provided, that notwithstanding anything to the contrary herein, the Seller
agrees that it will continue to follow the procedures set forth in Section
7.02(a) with respect to Collections on Transferred Receivables.
ARTICLE X.
REMEDIES
Section 10.01. Actions Upon Termination Event. If any Termination Event
shall have occurred and be continuing and the Operating Agent shall have
declared the Facility Termination Date to have occurred or the Facility
Termination Date shall have been deemed to have occurred pursuant to Section
9.01, then the Collateral Agent may exercise in respect of the Seller
Collateral, in addition to any and all other rights and remedies otherwise
available to it, all of the rights and remedies of a secured party upon default
under the UCC (such rights and remedies to be cumulative and nonexclusive), and,
in addition, may take the following remedial actions:
(a) The Collateral Agent may, without notice to the Seller
except as required by law and at any time or from time to time, charge, set-off
and otherwise apply all or any part of the Seller Secured Obligations against
amounts payable to the Seller from the Collection Account, the Lockbox Account,
the Retention Account or any part of such accounts in accordance with the
priorities required by Sections 6.03, 6.04 and 6.05.
(b) The Collateral Agent may, without notice except as
specified below, solicit and accept bids for and sell the Seller Collateral or
any part of the Seller Collateral in one or more parcels at public or private
sale, at any exchange, broker's board or at any of the Purchaser's, Operating
Agent's or Collateral Agent's offices or elsewhere, for cash, on credit or for
future delivery, and upon such other terms as the Collateral Agent may deem
commercially reasonable. The Seller agrees that, to the extent notice of sale
shall be required by law, at least ten Business Days' notice to the Seller of
the time and place of any public sale or the time after which any private sale
is to be made shall constitute reasonable notification. The Collateral Agent
shall not be obligated to make any sale of Seller Collateral regardless of
notice of sale having been given. The Collateral Agent may adjourn any public or
private sale from time to time by announcement at the time and place fixed for
such sale, and such sale may, without further notice, be made at the time and
place to which it was so adjourned. Every such sale shall operate to divest all
right, title, interest, claim and demand whatsoever of the Seller in and to the
Seller Collateral so sold, and shall be a perpetual bar, both at law and in
equity, against the Seller, the Originator, any Person
48
<PAGE> 53
claiming the Seller Collateral sold through the Seller, the Originator and their
respective successors or assigns.
(c) Upon the completion of any sale under Section 10.01(b),
the Seller or the Servicer will deliver or cause to be delivered all of the
Seller Collateral sold to the purchaser or purchasers at such sale on the date
of sale, or within a reasonable time thereafter if it shall be impractical to
make immediate delivery, but in any event full title and right of possession to
such property shall pass to such purchaser or purchasers forthwith upon the
completion of such sale. Nevertheless, if so requested by the Collateral Agent
or by any purchaser, the Seller shall confirm any such sale or transfer by
executing and delivering to such purchaser all proper instruments of conveyance
and transfer and releases as may be designated in any such request.
(d) At any public sale under Section 10.01(b), the Purchaser,
the Collateral Agent or any Purchaser Secured Party may bid for and purchase the
property offered for sale and, upon compliance with the terms of sale, may hold,
retain and dispose of such property without further accountability therefor.
(e) The Collateral Agent may exercise at the Seller's expense
any and all rights and remedies of the Seller under or in connection with the
Seller Assigned Agreements or the other Seller Collateral, including any and all
rights of the Seller to demand or otherwise require payment of any amount under,
or performance of any provisions of, the Seller Assigned Agreements.
Section 10.02. Exercise of Remedies. No failure or delay on the part of
the Collateral Agent to exercise any right, power or privilege under this
Agreement and no course of dealing between the Seller, the Servicer, the
Originator or the Operating Agent, on the one hand, and the Collateral Agent, on
the other hand, shall operate as a waiver of such right, power or privilege, nor
shall any single or partial exercise of any right, power or privilege under this
Agreement preclude any other or further exercise of such right, power or
privilege or the exercise of any other right, power or privilege. The rights and
remedies expressly provided in this Agreement are cumulative and not exclusive
of any rights or remedies which the Collateral Agent or the Secured Parties
would otherwise have pursuant to law or equity. No notice to or demand on any
party in any case shall entitle such party to any other or further notice or
demand in similar or other circumstances, or constitute a waiver of the right of
the other party to any other or further action in any circumstances without
notice or demand.
Section 10.03. Severability of Remedies. The invalidity of any remedy
in any jurisdiction shall not invalidate such remedy in any other jurisdiction.
The invalidity or unenforceability of the remedies herein provided in any
jurisdiction shall not in any way affect the right of the enforcement in such
jurisdiction or elsewhere of any of the other remedies herein provided.
Section 10.04. Power of Attorney. Each of the Originator and the
Servicer hereby irrevocably appoints the Collateral Agent its true and lawful
attorney (with full power of substitution) in its name, place and stead and at
its expense, in connection with the enforcement of the rights and remedies
provided for in this Article X, such power of attorney to take effect from the
date and during the continuance of any Termination Event, including with the
following powers: (a) to give any necessary receipts or acquittance for amounts
collected or received hereunder, (b) to make all necessary transfers of the
Originator Collateral in connection with any sale or other disposition made
pursuant hereto, (c) to execute and deliver for value all necessary or
appropriate bills of sale, assignments and other instruments in connection with
any such sale or other disposition, the Originator and the Servicer hereby
ratifying and confirming all that such attorney (or any substitute) shall
lawfully do hereunder and pursuant hereto, and (d) to sign any agreements,
orders or other documents in connection with or pursuant to this Agreement and
any Related Document. Nevertheless, if so requested by the Collateral Agent or a
purchaser of Originator Collateral, the Originator shall ratify and confirm any
such sale or other disposition by executing and delivering to the Collateral
Agent or such purchaser all proper bills of sale, assignments, releases and
other instruments as may be designated in any such request.
49
<PAGE> 54
Section 10.05. Continuing Security Interest. This Agreement shall
create a continuing security interest in the Collateral until the satisfaction
of Section 6.07(b).
ARTICLE XI.
SUCCESSOR SERVICER
Section 11.01. Servicer Not to Resign. The Servicer shall not resign
from the obligations and duties hereby imposed on it except upon determination
that (a) the performance of its duties hereunder has become impermissible under
applicable law or regulation, and (b) there is no reasonable action which the
Servicer could take to make the performance of its duties hereunder become
permissible under applicable law. Any such determination permitting the
resignation of the Servicer shall be evidenced as to clause (a) above by an
opinion of counsel to such effect delivered to the Purchaser, the Collateral
Agent and the Operating Agent. No such resignation shall become effective until
a successor servicer shall have assumed the responsibilities and obligations of
the Servicer in accordance with Section 11.02.
Section 11.02. Appointment of the Successor Servicer. In connection
with the termination of the Servicer's responsibilities under this Agreement
pursuant to Section 9.02 or 11.01, the Operating Agent shall (a) succeed to and
assume all of the Servicer's responsibilities, rights, duties and obligations as
Servicer (but not in any other capacity, including specifically not its
obligations under Section 12.02) under this Agreement (and except that the
Operating Agent makes no representations and warranties pursuant to Section
4.02), or (b) appoint a successor servicer to the Servicer which shall be
acceptable to the Collateral Agent and shall succeed to all rights and assume
all of the responsibilities, duties and liabilities of the Servicer under this
Agreement (the Operating Agent, in such capacity, or such successor servicer
being referred to as the "SUCCESSOR SERVICER"); provided, that the Successor
Servicer shall have no responsibility for any actions of the Servicer prior to
the date of its appointment as Successor Servicer. In selecting a Successor
Servicer, the Operating Agent may obtain bids from any potential Successor
Servicer and may agree to any bid it deems appropriate. The Successor Servicer
shall accept its appointment by executing, acknowledging and delivering to the
Operating Agent and the Collateral Agent an instrument in form and substance
acceptable to the Operating Agent and the Collateral Agent.
Section 11.03. Duties of the Servicer. At any time following the
appointment of a Successor Servicer:
(a) The Servicer agrees that it will terminate its activities
as Servicer hereunder in a manner acceptable to the Collateral Agent so as to
facilitate the transfer of servicing to the Successor Servicer including,
without limitation, timely delivery (i) to the Collateral Agent of any funds
that were required to be remitted to the Collateral Agent for deposit in the
Collection Account, and (ii) to the Successor Servicer, at a place selected by
the Successor Servicer, of all Servicing Records and other information with
respect to the Transferred Receivables. The Servicer shall account for all funds
and shall execute and deliver such instruments and do such other things as may
be required to more fully and definitely vest and confirm in the Successor
Servicer all rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer.
(b) The Servicer shall terminate each Sub-Servicing Agreement
that may have been entered into and the Successor Servicer shall not be deemed
to have assumed any of the Servicer's interest therein or to have replaced the
Servicer as a party to any such Sub-Servicing Agreement.
Section 11.04. Effect of Termination or Resignation. Any termination or
resignation of the Servicer under this Agreement shall not affect any claims
that the Originator, the Collateral Agent, the Purchaser or the Operating Agent
may have against the Servicer for events or actions taken or not taken by the
Servicer arising prior to any such termination or resignation.
50
<PAGE> 55
ARTICLE XII.
INDEMNIFICATION
Section 12.01. Indemnities by the Seller.
(a) Without limiting any other rights that the Collateral
Agent, the Purchaser, the Operating Agent, the Liquidity Agent, any Liquidity
Lender, the Letter of Credit Agent or any Letter of Credit Provider or any
director, officer, employee, agent or incorporator of such party (each an
"INDEMNIFIED PARTY") may have hereunder or under applicable law, the Seller
hereby agrees to indemnify each Indemnified Party from and against any and all
claims, losses, liabilities, obligations, damages, penalties, actions,
judgments, suits, and costs and expenses of any nature whatsoever related
thereto, including attorneys' fees and disbursements (all of the foregoing being
collectively referred to as "INDEMNIFIED AMOUNTS"), which may be imposed on,
incurred by or asserted against an Indemnified Party in any way arising out of
or relating to (i) any breach of the Seller's obligations under this Agreement
or any Related Document, (ii) the sale or the pledge of the Transferred
Receivables, or (iii) any Receivable or any Contract, excluding, however, (A)
Indemnified Amounts to the extent resulting solely from gross negligence or
willful misconduct on the part of such Indemnified Party or (B) consequential,
indirect, punitive or exemplary damages. Without limiting or being limited by
the foregoing, the Seller shall pay on demand to each Indemnified Party any and
all amounts necessary to indemnify such Indemnified Party from and against any
and all Indemnified Amounts relating to or resulting from:
(A) reliance on any representation or warranty made or deemed
made by the Seller (or any of its officers) under or in connection with
this Agreement, any Related Document or any report or other information
delivered by the Seller pursuant hereto which shall have been incorrect
in any material respect when made or deemed made or delivered;
(B) the failure by the Seller to comply with any term,
provision or covenant contained in this Agreement, any Related Document
or any agreement executed by it in connection with this Agreement or
with any applicable law, rule or regulation with respect to any
Transferred Receivable or its related Contract, or the nonconformity of
any Transferred Receivable or its related Contract with any such
applicable law, rule or regulation; or
(C) the failure to vest and maintain vested in the Purchaser
legal and equitable title to and ownership of the Receivables which
are, or are purported to be, Transferred Receivables, together with all
Collections in respect thereof, free and clear of any Adverse Claim
(except as permitted hereunder) whether existing at the time of the
purchase of such Receivable or at any time thereafter, and to maintain
or transfer to the Collateral Agent a first priority, perfected
security interest therein.
(b) Any Indemnified Amounts subject to the indemnification
provisions of this Section 12.01 not paid in accordance with Article VI, to the
extent that funds are available therefor in accordance with the provisions of
Article VI, shall be paid to the Indemnified Party within five Business Days
following demand therefor.
(c) If indemnification is to be sought hereunder by an
Indemnified Party, then such Indemnified Party shall promptly notify the Seller
of the commencement of any litigation, proceeding or other action in respect
thereof; provided, however, that the failure to notify the Seller shall not
relieve the Seller from any liability or obligation that it may have hereunder
or otherwise to such Indemnified Party, except to the extent the Seller is
actually prejudiced thereby.
Section 12.02. Indemnities by the Servicer.
(a) Without limiting any other rights that an Indemnified
Party may have hereunder or under applicable law, the Servicer hereby agrees to
indemnify each Indemnified Party from and against any and all Indemnified
Amounts which may be imposed on, incurred by or asserted against an
51
<PAGE> 56
Indemnified Party in any way arising out of or relating to any breach of the
Servicer's obligations under this Agreement, excluding, however, (A) Indemnified
Amounts to the extent resulting from gross negligence or willful misconduct on
the part of such Indemnified Party, (B) recourse solely for uncollectible and
uncollected Transferred Receivables and (C) consequential, indirect, punitive or
exemplary damages. Without limiting or being limited by the foregoing, the
Servicer shall pay on demand to each Indemnified Party any and all amounts
necessary to indemnify such Indemnified Party from and against any and all
Indemnified Amounts relating to or resulting from:
(i) reliance on any representation or warranty made or
deemed made by the Servicer (or any of its officers) under or in
connection with this Agreement, any Related Document or any report or
other information delivered by the Servicer pursuant hereto which shall
have been incorrect in any material respect when made or deemed made or
delivered; or
(ii) the failure by the Servicer to comply with any term,
provision or covenant contained in this Agreement, any Related Document
or any agreement executed by it in connection with this Agreement or
with any applicable law, rule or regulation with respect to any
Transferred Receivable or its related Contract, or the imposition of
any Adverse Claim (except as permitted hereunder) with respect to a
Transferred Receivable as a result of the Servicer's actions hereunder.
(b) Any Indemnified Amounts subject to the indemnification
provisions of this Section 12.02 shall be paid to the Indemnified Party within
five Business Days following demand therefor.
(c) If indemnification is to be sought hereunder by an
Indemnified Party, then such Indemnified Party shall promptly notify the
Servicer of the commencement of any litigation, proceeding or other action in
respect thereof; provided, however, that the failure to notify the Servicer
shall not relieve the Servicer from any liability or obligation that it may have
hereunder or otherwise to such Indemnified Party, except to the extent the
Servicer is actually prejudiced thereby.
ARTICLE XIII.
OPERATING AGENT
Section 13.01. Authorization and Action. The Operating Agent may take
such action and carry out such functions under this Agreement as are delegated
to it by the terms hereof, pursuant to the Operating Agent Agreement or
otherwise contemplated hereby or thereby or are reasonably incidental thereto;
provided, that the duties of the Operating Agent shall be determined solely by
the express provisions of this Agreement and other than the duties set forth in
Section 13.02 any permissive right of the Operating Agent hereunder shall not be
construed as a duty.
Section 13.02. Reliance, etc. None of the Operating Agent, any
Affiliate thereof nor any of their respective directors, officers, agents or
employees will be liable for any action taken or omitted to be taken by any of
them under or in connection with this Agreement, the Program Documents or the
Related Documents, except when caused solely by their own gross negligence or
willful misconduct. Without limiting the generality of the foregoing, and
notwithstanding any term or provision hereof to the contrary, the Seller, the
Servicer and the Purchaser hereby acknowledge and agree that the Operating Agent
(a) acts as agent hereunder for the Purchaser and has no duties or obligations
to, will incur no liabilities or obligations to, and does not act as an agent in
any capacity for, the Seller or the Originator, (b) may consult with legal
counsel, independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts, (c)
makes no warranty or representation hereunder and shall not be responsible for
any statements, warranties or representations made in or in connection with this
Agreement, the Program Documents or the Related Documents, (d) shall not have
any duty to ascertain or to inquire as to the performance or observance of any
of the terms, covenants or conditions of this Agreement, the Program Documents
or Related Documents on the part of the Seller, the Servicer or the Purchaser or
to inspect the property (including the books and records) of the Seller, the
Servicer or the
52
<PAGE> 57
Purchaser, (e) shall not be responsible to the Seller, the Servicer or the
Purchaser for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other instrument or
document furnished pursuant hereto (including the Related Documents), (f) shall
incur no liability under or in respect of this Agreement, the Program Documents
or the Related Documents by acting upon any notice or communication (including a
communication by telephone), consent, certificate or other instrument or writing
believed by it to be genuine and signed, sent or communicated by the proper
party or parties and (g) shall not be bound to make any investigation into the
facts or matters stated in any notice or other communication hereunder and may
rely on the accuracy of such facts or matters.
Section 13.03. GE Capital and Affiliates. GE Capital and its Affiliates
may generally engage in any kind of business with the Seller, the Originator,
the Servicer, the Purchaser or any Obligor, any of their respective Affiliates
and any Person who may do business with or own securities of such parties or any
of their respective Affiliates, all as if GE Capital were not the Operating
Agent, and without the duty to account therefor to the Seller, the Originator,
the Servicer, the Purchaser or any other Person.
ARTICLE XIV.
MISCELLANEOUS
Section 14.01. Notices, Etc. All notices and other communications
provided for hereunder, unless otherwise stated herein, shall be in writing and
mailed or telecommunicated, or delivered as to each party hereto, at its address
set forth below or at such other address as shall be designated by such party in
a written notice to the other parties hereto. All such notices and
communications shall not be effective until received by the party to whom such
notice or communication is addressed.
Section 14.02. Binding Effect; Assignability. This Agreement shall be
binding upon and inure to the benefit of the Seller, the Servicer, the
Purchaser, the Operating Agent and their respective permitted successors and
assigns. Neither the Seller nor the Servicer may assign any of their rights and
obligations hereunder or any interest herein without the prior written consent
of the Purchaser, the Collateral Agent and the Operating Agent and unless the
Rating Agency Condition has been fulfilled. The Purchaser, the Collateral Agent
and the Operating Agent may, at any time, without the consent of the Seller, the
Originator or the Servicer, assign any of their respective rights and
obligations hereunder or interest herein to any Affiliate of GE Capital or any
party to any Program Document. Any such assignee may further assign at any time
its rights and obligations hereunder or interests herein to any other Affiliate
of GE Capital or any party to any Program Document without the consent of the
Seller, the Originator or the Servicer. Otherwise, the Purchaser, the Collateral
Agent and the Operating Agent may not assign any of their rights hereunder or
their interests herein without the prior written consent of the Seller. This
Agreement shall create and constitute the continuing obligations of the parties
hereto in accordance with its terms, and shall remain in full force and effect
until its termination; provided, that the rights and remedies with respect to
any breach of any representation and warranty made by the Seller or the Servicer
pursuant to Article IV and the indemnification and payment provisions of Article
XII shall be continuing and shall survive any termination of this Agreement.
Section 14.03. Costs, Expenses and Taxes.
(a) In addition to the rights of indemnification under Article
XII hereof, the Seller agrees to pay upon demand all costs and expenses and
taxes (excluding income and similar taxes) incurred by the Purchaser, the
Operating Agent or the Collateral Agent in connection with the administration
(including periodic auditing after a Termination Event, Rating Agency
requirements, modification and amendment) of this Agreement, the Related
Documents and the other documents to be delivered hereunder. The Seller further
agrees to pay on demand fees and out-of-pocket expenses of counsel for the
Purchaser, the Operating Agent and the Collateral Agent incurred after the
Effective Date with respect thereto and with respect to advising the Purchaser,
the Operating Agent or the Collateral Agent as to its rights and remedies under
this Agreement, the Related Documents and the other agreements executed pursuant
hereto. The Seller further agrees to pay within five Business Days after demand
all costs, counsel fees and expenses in connection with the enforcement (whether
through
53
<PAGE> 58
negotiation, legal proceedings or otherwise) of this Agreement, the Related
Documents and the other agreements and documents to be delivered hereunder,
including, without limitation, counsel fees and expenses in connection with the
enforcement of rights under this Section 14.03 in accordance with the provisions
of Article VI to the extent that funds are available therefor in accordance
therewith.
(b) In addition, the Seller shall pay on demand any and all
stamp, sales, excise and other taxes and fees payable or determined to be
payable in connection with the execution, delivery, filing or recording of this
Agreement, the Related Documents or the other agreements and documents to be
delivered hereunder, and agrees to indemnify and save each Indemnified Party
from and against any and all liabilities with respect to or resulting from any
delay in paying or omission to pay such taxes and fees.
(c) In the event that the Operating Agent determines that any
of the costs referred to in paragraphs (a) or (b) above were in any part
incurred on behalf of, or are attributable to the actions of, borrowers or
sellers under Other Purchase Agreements, the Seller shall have no liability
hereunder in excess of the Seller's Share of such costs.
(d) If the Seller or the Servicer fails to perform any
agreement or obligation contained herein, the Purchaser, the Collateral Agent or
the Operating Agent may (but shall not be required to) itself perform, or cause
performance of, such agreement or obligation, and the expenses of such party
incurred in connection therewith shall be payable by the party which has failed
to so perform upon such party's demand therefor.
Section 14.04. Confidentiality.
(a) Except to the extent otherwise required by applicable law
or unless the Operating Agent shall otherwise consent in writing, the Seller and
the Servicer agree to maintain the confidentiality of this Agreement (and all
drafts hereof and documents ancillary thereto) in its communications with third
parties and otherwise and not to disclose, deliver or otherwise make available
to any third party (other than its directors, officers, employees, accountants
or counsel) the original or any copy of all or any part of this Agreement (or
any draft hereof and documents ancillary thereto).
(b) Each of the Purchaser and the Operating Agent agrees to
exercise reasonable efforts to keep any non-public information delivered or made
available to it pursuant to this Agreement or any other Related Document, which
the Parent has identified in writing as confidential information, confidential
from any Person other than officers, employees, agents, designees or
representatives of such Purchaser or the Operating Agent who are or are expected
to become engaged in evaluating, approving, structuring or administering this
Agreement or any of the other related Documents or any other transaction
contemplated hereby or thereby; provided, that nothing herein shall prevent the
Operating Agent or the Purchaser from disclosing such information (i) to any
bona fide prospective or actual Liquidity Lender or Letter of Credit Provider
that has agreed in writing to comply with this Section 14.04; (ii) to any of its
Affiliates to the extent any such Affiliate requires such information in the
ordinary course of the Operating Agent's or the Purchaser's credit committee or
asset management procedures; (iii) to any rating agency, or any of the Operating
Agent's or the Purchaser's legal counsel, accountants, and other professional
advisors; (iv) as required or requested by any Governmental Authority or
representative thereof or pursuant to legal process; or (v) as required in
connection with the exercise of any remedy under this Agreement or any of the
other Related Documents; provided, further, that a determination by the
Operating Agent or the Purchaser as to the application of the circumstances
described in the foregoing clauses (i) through (v) will be conclusive if made in
good faith.
Section 14.05. No Proceedings. The Seller and the Servicer each hereby
agrees that it will not, directly or indirectly, institute, or cause to be
instituted, against the Purchaser any proceeding of the type referred to in
Section 9.01(c) so long as there shall not have elapsed one year plus one day
since the latest maturing Commercial Paper has been paid in full in cash.
Section 14.06. Amendments; Waivers; Consents. No modification,
amendment or waiver of or with respect to any provision of this Agreement, the
Related Documents or any other agreements,
54
<PAGE> 59
instruments and documents delivered pursuant hereto or thereto, nor consent to
any departure by the Seller or the Servicer from any of the terms or conditions
hereof or thereof, shall be effective unless it shall be in writing and signed
by each of the parties hereto and with respect to any material modification,
amendment or waiver, satisfies the Rating Agency Condition. Any waiver or
consent shall be effective only in the specific instance and for the purpose for
which given. No consent to or demand on the Seller, the Originator or the
Servicer in any case shall, in itself, entitle it to any other consent or
further notice or demand in similar or other circumstances. This Agreement, the
Related Documents and the documents referred to therein embody the entire
agreement among the Seller, the Purchaser, the Operating Agent, the Collateral
Agent and the Servicer and supersede all prior agreements and understandings
relating to the subject hereof.
Section 14.07. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY
TRIAL.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE
CONFLICT OF LAW PROVISIONS THEREOF).
(b) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY SUBMITS TO
THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED
STATES DISTRICT COURT LOCATED IN THE BOROUGH OF MANHATTAN, AND EACH WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH
SERVICE OF PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO THE ADDRESSES SET
FORTH BELOW, AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE DAYS AFTER
THE SAME SHALL HAVE BEEN DEPOSITED IN THE U.S. MAILS, POSTAGE PREPAID. EACH OF
THE PARTIES TO THIS AGREEMENT HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON
CONVENIENS AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER, AND
CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY THE COURT. NOTHING IN THIS SECTION 14.07(b) SHALL AFFECT THE
RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY WAIVES ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR IN
CONNECTION WITH THIS AGREEMENT. INSTEAD, ANY DISPUTE RESOLVED IN COURT WILL BE
RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
Section 14.08. Execution in Counterparts; Severability. This Agreement
may be executed by the 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. In case any provision in
or obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation shall not in any
way be affected or impaired thereby in such jurisdiction and the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation shall not be impaired thereby in any other
jurisdiction.
Section 14.09. Descriptive Headings. The descriptive headings of the
various sections of this Agreement are inserted for convenience of reference
only and shall not be deemed to affect the meaning or construction of any of the
provisions hereof.
Section 14.10. Limited Recourse. The obligations of the Purchaser under
this Agreement and all Related Documents are solely the corporate obligations of
the Purchaser. No recourse shall be had for the payment of any amount owing in
respect of Purchases or for the payment of any fee hereunder or any other
obligation or claim arising out of or based upon this Agreement or any other
Related Document against any shareholder, employee, officer, director, agent or
incorporator of the Purchaser. Any accrued obligations owing by the Purchaser
under this Agreement shall be payable by the Purchaser solely to the
55
<PAGE> 60
extent that funds are available therefor from time to time in accordance with
the provisions of Article VI of the Collateral Agent Agreement and Article VI of
this Agreement (and such accrued obligations shall not be extinguished until
paid in full).
56
<PAGE> 61
IN WITNESS WHEREOF, the parties have caused this Receivables Purchase and
Servicing Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
CARLISLE PLASTICS, INC., as Servicer
By /s/ Patrick J. O'Leary
------------------------------------
Name: Patrick J. O'Leary
-------------------------------
Title: Chief Financial Officer
------------------------------
Address: 1314 North Third Street
Phoenix, AZ 85004
Attention: Treasurer
Phone number: (602) 407-2100
Telecopier number: (602) 407-2177
REDWOOD RECEIVABLES CORPORATION, as Purchaser
By /s/ Catharine L. Midkiff
------------------------------------
Name: Catharine L. Midkiff
--------------------------------
Title: Assistant Secretary
--------------------------------
Address: c/o General Electric Capital
Corporation
260 Long Ridge Road
Stamford, Connecticut 06927
Attention: Redwood Administrator
Phone number: (203) 961-5488
Telecopier number: (203) 357-6330
or (203) 961-2953
CARLISLE PLASTICS FUNDING
CORPORATION, as Seller
By /s/ Cheryl J. Sauter
------------------------------------
Name: Cheryl J. Sauter
--------------------------------
Title: Treasurer
--------------------------------
Address: 1314 North Third Street
Phoenix, AZ 85004
Attention: Treasurer
Phone number: (602) 407-2206
Telecopier number: (602) 407-2177
GENERAL ELECTRIC CAPITAL CORPORATION,
as Operating Agent and Collateral Agent
By: /s/ THOMAS E. JOHNSTONE
------------------------------------------
Title: VP - Commercial Finance, Inc.
--------------------------------------
Name: Thomas E. Johnstone
---------------------------------------
Address: 201 High Ridge Road
Stamford, Connecticut 06927
Attention: Vice President -
Portfolio/Carlisle
Phone number: (203) 316-7606
Telecopier number: (203) 316-7821
<PAGE> 62
Schedule 1
CONCENTRATION LIMITS
<TABLE>
<CAPTION>
Short-Term Concentration Limit
Obligor Debt Rating Percentage
- ------- ----------- ----------
<S> <C> <C>
Wal-Mart A-1 and P-1 15%
A-2 and P-2 8%
Any Other Rating 3%
Home Depot A-1 and P-1 5%
May Company
Sysco Any Other Rating 3%
Target (Dayton-Hudson
Corporation) A-2 and P-2 5%
Any Other Rating 3%
Ace 4%
Cotter 4%
Any Other Obligor 3%
</TABLE>
S-1
<PAGE> 63
Schedule 2
EXCLUDED OBLIGORS
None
S-2
<PAGE> 64
Annex A
to
Schedule 2
FORM OF AMENDING LETTER
[Insert Date]
Carlisle Plastics Funding Corporation
1314 North Third Street
Phoenix, AZ 85004
Attention: Treasurer
Redwood Receivables Corporation
c/o General Electric Capital Corporation
260 Long Ridge Road
Stamford, CT 06927
Attention: Redwood Administrator
Carlisle Plastics, Inc.
1314 North Third Street
Phoenix, AZ 85004
Attention: Treasurer
Re: Receivables Purchase and Servicing Agreement,
dated as of March __, 1996
Ladies and Gentlemen:
This notice is given pursuant to the Receivables Purchase and
Servicing Agreement, dated as of March __, 1996 (the "Purchase Agreement"),
between Redwood Receivables Corporation, General Electric Capital Corporation,
as agent for the Company (in such capacity, the "Operating Agent") and as
collateral agent for the Purchaser Secured Parties, Carlisle Plastics Funding
Corporation and Carlisle Plastics, Inc. Capitalized terms used but not defined
in this notice have the meanings ascribed to such terms in the Purchase
Agreement.
The Operating Agent hereby amends Schedule 2 to the Purchase
Agreement as follows:
[The following Obligors are added to Schedule 2 as "Excluded
Obligors":]
[The following Obligors are removed from Schedule 2:]
The effective date of this amendment to Schedule 2 is
____________, 199_.
Very truly yours,
GENERAL ELECTRIC CAPITAL
CORPORATION
By:__________________________________
Name:
Title:
S-2-A-1
<PAGE> 65
Schedule 3
DETERMINATION OF "DAILY YIELD"
<TABLE>
<S> <C>
MONTHLY YIELD = SUM OF DAILY YIELD
FOR THE SETTLEMENT PERIOD
#1) DAILY YIELD = CP Interest + Liquidity Interest + LOC Interest + Margin
Amount Amount Amount Amount
#2) DAILY YIELD RATE = (Daily Yield/Capital Investment) x 360
#3) CP INTEREST AMOUNT = Carlisle Funding x Daily Weighted x Redwood Funding
CP Net Amount Average CP Rate Factor
#3a) CARLISLE FUNDING = Capital Investment - Carlisle Funding Liquidity Loans Outstanding +
CP NET AMOUNT Carlisle Funding Liquidity Deposits - Carlisle Funding LOC Draws
Outstanding + Carlisle Funding LOC Deposits
#3b) WEIGHTED = Average of the rate of interest for all tranches of CP Outstanding
CP RATE issued by the Purchaser, weighted by CP Outstanding in each
tranche
#3c) DAILY WEIGHTED = Weighted Average CP Rate / 360
AVERAGE CP RATE
#3d) REDWOOD FUNDING = Net Proceeds Amount / Aggregate CP Net Amount
FACTOR
#4) LIQUIDITY INTEREST = Carlisle Funding Outstanding x (Liquidity Interest Rate/360)
AMOUNT Liquidity Loans
#5) LOC INTEREST = Carlisle Funding LOC Draws x Carlisle Funding Daily LOC
AMOUNT Outstanding Rate
#5a) CARLISLE FUNDING = (CP Interest Amount + Liquidity Interest Amount) / Carlisle Funding
DAILY LOC RATE Senior Debt
#6) MARGIN AMOUNT = Prior to the Commitment Termination Date:
Capital Investment x Daily Margin
Subsequent to the Commitment Termination Date:
Capital Investment x Daily Default Margin
</TABLE>
S-3-1
<PAGE> 66
Definitions
Where otherwise not defined below, capitalized terms shall have the meaning
assigned to those terms in Section 1.01.
"Aggregate CP Net Amount" means the sum of the CP Net Amounts
for all Borrowers and Sellers.
"Borrower" has the meaning specified in the Liquidity Loan
Agreement.
"Carlisle Funding Liquidity Deposits" means, for any day, the
amount, if any, of proceeds of Liquidity Loans made in respect of Carlisle
Plastics Funding Corporation, not used to pay maturing Commercial Paper and
remaining in the Collateral Account at the end of such day.
"Carlisle Funding Liquidity Loans Outstanding" means, for any
day, all Liquidity Loans made in respect of Carlisle Plastics Funding
Corporation pursuant to the Liquidity Loan Agreement.
"Carlisle Funding LOC Deposits" means, for any day, the
amount, if any, of proceeds from LOC Draws Outstanding (as defined in the
Liquidity Loan Agreement) not used to pay maturing Commercial Paper or Liquidity
Loans and remaining in the Collateral Account at the end of such day.
"Carlisle Funding LOC Draws Outstanding" means at any time,
(a) any LOC Draws made in respect of Carlisle Plastics Funding Corporation to
date minus (b) any payments received by the Letter of Credit Providers or
deposited in the Reserve Account (as defined in the Liquidity Loan Agreement) in
repayment of LOC Draws made in respect of Carlisle Plastics Funding Corporation
made prior to such time, as allocated to Carlisle Plastics Funding Corporation
by the Operating Agent in accordance with the applicable RFC Supplement as
defined in and issued pursuant to the Letter of Credit Agreement and Section
6.07 of the Collateral Agent Agreement.
"Carlisle Funding Senior Debt" means the sum of Carlisle
Funding CP Net Amount and Carlisle Funding Liquidity Loans Outstanding.
"CP Net Amount" means, for any Borrower or Seller, an amount
equal to (i) Advances Outstanding or Capital Investment, as the case may be,
minus (ii) Liquidity Loans Outstanding, plus (iii) Liquidity Deposits, minus
(iv) LOC Draws Outstanding, plus (v) LOC Deposits, each of (ii), (iii), (iv) and
(v) with respect to such Borrower or Seller.
"Daily Margin" and "Daily Default Margin" mean the percentage
corresponding to the Net Worth, divided by 360:
<TABLE>
<CAPTION>
Net Worth Daily Margin Daily Default Margin
- --------- ------------ --------------------
<S> <C> <C>
Less than $50,000,000 1.25 4.25
$50,000,000 to less than 1.00 4.00
$60,000,000
$60,000,000 and over 0.75 3.75
</TABLE>
"Liquidity Interest Rate" has the meaning specified in the
Liquidity Loan Agreement.
"Net Proceeds Amount" has the meaning specified in the
Liquidity Loan Agreement.
"Net Worth" has the meaning specified in Exhibit H.
"Seller" has the meaning specified in the Liquidity Loan
Agreement.
S-3-2
<PAGE> 67
Schedule 4
YIELD DISCOUNT AMOUNT
<TABLE>
<S> <C>
Yield Discount Amount = Purchase Rate Discount Amount
+ Yield Volatility Discount Amount
+ Unused Commitment Fee Discount Amount
+ Servicing Fee Discount Amount
#1 Purchase Rate = Capital Investment
Discount Amount x Daily Yield Rate (see Schedule 3)
x Liquidation Term Factor
x 360
#2 Yield Volatility = Capital Investment
Discount Amount x Yield Volatility Percentage
x Liquidation Term Factor
#3 Unused Commitment Fee = Capital Investment Available
Discount Amount x Unused Commitment Fee Rate
x Liquidation Term Factor
#4 Servicing Fee = Outstanding Balances of Transferred
Discount Amount Receivables
x Servicing Fee Rate
x Liquidation Term Factor
#5 Liquidation Term = Expected Liquidation Period/360
Factor
#6 Unused Purchase = Purchase Limit
Amount - Capital Investment Outstanding
</TABLE>
"Expected Liquidation Period" means the weighted average number of
days from the date of the Investment Base Certificate to the invoice due date
for the Outstanding Balance of Transferred Receivables.
"Yield Volatility Percentage" means the maximum increase in
interest rates anticipated over the Expected Liquidation Period, as determined
from time to time by the Collateral Agent.
S-4
<PAGE> 68
Schedule 5
ADDRESSES OF THE SELLER
Carlisle Plastics Funding Corporation
1401 West 94th Street
Minneapolis, MN 55431
Carlisle Plastics Funding Corporation
1314 North 3rd Street
Phoenix, AZ 85004
S-5
<PAGE> 69
Schedule 6
LOCKBOXES AND LOCKBOX ACCOUNTS
<TABLE>
<CAPTION> Lockbox Lockbox
Bank ABA Number Number Address Street Address
- ---- ---------- -------------- --------------- --------------
<S> <C> <C> <C> <C>
Bank of Boston 011-000-390 530-96748
Branch Banking & 053-101-121 176-1016500
Trust
Midlantic National 021-200-012 225-4117-1
Bank
Wells Fargo 122-000-247 4755-026283
First Bank 091-000-022 602-3402347
Minneapolis
</TABLE>
S-6
<PAGE> 70
Schedule 7
LIST OF SELLER AGREEMENTS
None
S-7
<PAGE> 71
Schedule 8
LIST OF ORIGINATOR/SERVICER TRADE,
FICTITIOUS, ASSUMED AND "DOING BUSINESS
AS" NAMES
----------------------------------------
Carlisle Plastics, Inc.
Carlisle Plastics, Inc. dba A & E Products Group
Carlisle Plastics, Inc. dba Bercon Packaging
Carlisle Plastics, Inc. dba Film Products Group
Carlisle Plastics, Inc. dba Molded Products Group
Carlisle Plastics, Inc. dba Plastic Films Group
Carlisle Plastics, Inc. dba Rex Plastics
S-8
<PAGE> 72
Exhibit A-1
to
Purchase Agreement
FORM OF SELLER NOTICE - Request for Purchase
[Insert Date]
Redwood Receivables Corporation
C/o General Electric Capital Corporation
260 Long Ridge Road
Stamford, CT 06927
Attention: Redwood Administrator
General Electric Capital Corporation,
as Operating Agent
C/o General Electric Capital Corporation
201 High Ridge Road
Stamford, CT 06927
Attention: Vice President - Portfolio/Carlisle
Re: Receivables Purchase and Servicing Agreement,
dated as of March __, 1996
Ladies and Gentlemen:
This notice is given pursuant to Section 2.03(b) of the Receivables
Purchase and Servicing Agreement, dated as of March __, 1996 (the "Purchase
Agreement"), between Redwood Receivables Corporation (the "Purchaser"), General
Electric Capital Corporation, as agent for the Company (in such capacity, the
"Operating Agent") and as collateral agent for the Purchaser Secured Parties,
Carlisle Plastics Funding Corporation (the "Seller") and Carlisle Plastics, Inc.
Capitalized terms used but not defined in this notice have the meanings ascribed
to such terms in the Purchase Agreement.
The Seller hereby requests that the Purchaser make a Purchase from
the Seller on ___________, 19__ pursuant to Section 2.01 of the Purchase
Agreement in the amount of $____________ to be disbursed to the Seller in
accordance with Section 2.04 of the Purchase Agreement. The Company hereby
confirms that the conditions set forth in Section 3.02 of the Purchase Agreement
for the making of such Purchase have been met.
Very truly yours,
CARLISLE PLASTICS FUNDING CORPORATION
By:____________________________
Name:
Title:
A-1-1
<PAGE> 73
Exhibit A-2
to
Purchase Agreement
FORM OF SELLER NOTICE - Reduction of Commitment
[Insert Date]
Redwood Receivables Corporation
C/o General Electric Capital Corporation
260 Long Ridge Road
Stamford, CT 06927
Attention: Redwood Administrator
General Electric Capital Corporation,
as Operating Agent
C/o General Electric Capital Corporation
201 High Ridge Road
Stamford, CT 06927
Attention: Vice President - Portfolio/Carlisle
Re: Receivables Purchase and Servicing Agreement,
dated as of March __, 1996
Ladies and Gentlemen:
This notice is given pursuant to Section 2.03(b) of the Receivables
Purchase and Servicing Agreement, dated as of March __, 1996 (the "Purchase
Agreement"), between Redwood Receivables Corporation (the "Purchaser"), General
Electric Capital Corporation, as agent for the Company (in such capacity, the
"Operating Agent") and as collateral agent for the Purchaser Secured Parties,
Carlisle Plastics Funding Corporation (the "Seller") and Carlisle Plastics, Inc.
Capitalized terms used but not defined in this notice have the meanings ascribed
to such terms in the Purchase Agreement.
The Seller hereby irrevocably notifies the Purchaser and the
Operating Agent pursuant to Section 2.02(a) of the Purchase Agreement that on
____________, 19__ (which is a Business Day) the Maximum Purchase Limit shall be
reduced to $_________ This reduction is the [first] [second] reduction permitted
by Section 2.02(a) of the Purchase Agreement. After such reduction, the Maximum
Purchase Limit will not be less than the Capital Investment [after giving effect
to, and conditioned upon, the repayment of Purchases set forth in the attached
notice].
Very truly yours,
CARLISLE PLASTICS FUNDING CORPORATION
By:____________________________
Name:
Title:
A-2-1
<PAGE> 74
Exhibit A-3
to
Purchase Agreement
FORM OF SELLER NOTICE - Termination of Commitment
[Insert Date]
Redwood Receivables Corporation
C/o General Electric Capital Corporation
260 Long Ridge Road
Stamford, CT 06927
Attention: Redwood Administrator
General Electric Capital Corporation,
as Operating Agent
C/o General Electric Capital Corporation
201 High Ridge Road
Stamford, CT 06927
Attention: Vice President - Portfolio/Carlisle
Re: Receivables Purchase and Servicing Agreement,
dated as of March __, 1996
Ladies and Gentlemen:
This notice is given pursuant to Section 2.03(b) of the Receivables
Purchase and Servicing Agreement, dated as of March __, 1996 (the "Purchase
Agreement"), between Redwood Receivables Corporation (the "Purchaser"), General
Electric Capital Corporation, as agent for the Company (in such capacity, the
"Operating Agent") and as collateral agent for the Purchaser Secured Parties,
Carlisle Plastics Funding Corporation (the "Seller") and Carlisle Plastics, Inc.
Capitalized terms used but not defined in this notice have the meanings ascribed
to such terms in the Purchase Agreement.
The Seller hereby irrevocably notifies the Purchaser and the
Operating Agent pursuant to Section 2.02(a) of the Purchase Agreement that on
____________, 19__ (which is a Business Day at least 90 days after the date this
notice is given) the Maximum Purchase Limit shall be terminated.
Very truly yours,
CARLISLE PLASTICS FUNDING CORPORATION
By:____________________________
Name:
Title:
A-3-1
<PAGE> 75
Exhibit A-4
to
Purchase Agreement
FORM OF SELLER NOTICE - Repayment of Capital Investment
[Insert Date]
Redwood Receivables Corporation
C/o General Electric Capital Corporation
260 Long Ridge Road
Stamford, CT 06927
Attention: Redwood Administrator
General Electric Capital Corporation,
as Operating Agent
C/o General Electric Capital Corporation
201 High Ridge Road
Stamford, CT 06927
Attention: Vice President - Portfolio/Carlisle
Re: Receivables Purchase and Servicing Agreement,
dated as of March __, 1996
Ladies and Gentlemen:
This notice is given pursuant to Section 2.03(b) of the Receivables
Purchase and Servicing Agreement, dated as of March __, 1996 (the "Purchase
Agreement"), between Redwood Receivables Corporation (the "Purchaser"), General
Electric Capital Corporation, as agent for the Company (in such capacity, the
"Operating Agent") and as collateral agent for the Purchaser Secured Parties,
Carlisle Plastics Funding Corporation (the "Seller") and Carlisle Plastics, Inc.
Capitalized terms used but not defined in this notice have the meanings ascribed
to such terms in the Purchase Agreement.
The Seller hereby notifies the Purchaser and the Operating Agent
that on ___________, 19__ (which is a Business Day) the Seller intends to repay
$__________ of Purchases currently outstanding to the Seller pursuant to Section
2.06(b) of the Purchase Agreement, including (i) all Interest accrued on the
principal amount of Purchases being repaid through the date of repayment, and
(ii) any and all Breakage Costs payable under Section 2.11 of the Purchase
Agreement.
Very truly yours,
CARLISLE PLASTICS FUNDING CORPORATION
By:____________________________
Name:
Title:
A-4-1
<PAGE> 76
Exhibit B
to
Purchase Agreement
FORM OF PURCHASE ASSIGNMENT
ASSIGNMENT, dated as of March __, 1996 between CARLISLE PLASTICS
FUNDING CORPORATION (the "Seller") and REDWOOD RECEIVABLES CORPORATION (the
"Purchaser").
1. We refer to the Receivables Purchase and Servicing Agreement
(the "PURCHASE AGREEMENT") dated as of March __, 1996 among the Seller, the
Purchaser, Carlisle Plastics, Inc. and General Electric Capital Corporation. All
provisions of such Purchase Agreement are incorporated herein by reference. All
capitalized terms shall have the meanings set forth in the Purchase Agreement.
2. The Seller does hereby sell to the Purchaser all right, title
and interest of the Seller in and to all Transferred Receivables transferred to
the Seller from time to time pursuant to the Receivables Transfer Agreement
dated as of March __, 1996 between Carlisle Plastics, Inc. and the Seller.
3. THIS CERTIFICATE OF ASSIGNMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
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.
CARLISLE PLASTICS REDWOOD RECEIVABLES
FUNDING CORPORATION CORPORATION
By: ________________________ By: _________________________
Name: Name:
Title: Title:
B-1
<PAGE> 77
Exhibit C
to
Purchase Agreement
FORM OF INVESTMENT BASE CERTIFICATE
C-1
<PAGE> 78
Exhibit D
to
Purchase Agreement
FORM OF OFFICER'S CERTIFICATE AS TO SOLVENCY
CARLISLE PLASTICS, INC.
Officer's Certificate
I, [Name of Officer], the duly elected [Insert Title] of Carlisle
Plastics, Inc. (the "Originator"), hereby certify in connection with the
Receivables Purchase and Servicing Agreement, dated as of March __, 1996 (the
"Purchase Agreement"; capitalized terms used but not defined in this Officer's
Certificate having the meaning set forth in the Purchase Agreement), between
Carlisle Plastics Funding Corporation (the "Seller"), the Originator, Redwood
Receivables Corporation (the "Purchaser") and General Electric Capital
Corporation, as agent for the Purchaser (in such capacity, the "Operating
Agent") and as collateral agent for the Purchaser Secured Parties (in such
capacity, the "Collateral Agent"), and for the benefit of the Purchaser, the
Operating Agent and the Collateral Agent, as follows:
(1) the performance of the Transfer Agreement, dated as of
March __, 1996, between the Originator, as seller, and the Seller, as
buyer, will not render the Seller insolvent; and
(2) the Seller will be able to remain economically viable
without further investments by the Originator for the foreseeable
future.
IN WITNESS WHEREOF, I have signed and delivered this Officer's
Certificate this _____ day of ___________, 1996;
CARLISLE PLASTICS, INC.
By:____________________________
Name:
Title:
D-1
<PAGE> 79
Exhibit E
to
Purchase Agreement
FORM OF OFFICER'S CERTIFICATE OF SELLER
CARLISLE PLASTICS FUNDING CORPORATION
Officer's Certificate
I, [Name of Officer], the duly elected [Insert Title] of Carlisle
Plastics Funding Corporation (the "Seller"), hereby certify pursuant to Section
3.01(c)(iv) of the Receivables Purchase and Servicing Agreement, dated as of
March __, 1996 (the "Purchase Agreement"; capitalized terms used but not defined
in this Officer's Certificate having the meaning set forth in the Purchase
Agreement), between the Seller, Carlisle Plastics, Inc., Redwood Receivables
Corporation (the "Purchaser") and General Electric Capital Corporation, as agent
for the Purchaser (in such capacity, the "Operating Agent") and as collateral
agent (in such capacity, the "Collateral Agent") for the Purchaser Secured
Parties (as defined in the Purchase Agreement), and for the benefit of the
Purchaser, the Operating Agent and the Collateral Agent, as follows:
(1) after giving effect to the effectiveness of the Purchase
Agreement, no Termination Event or Incipient Event will have occurred
and be continuing; and
(2) the representations and warranties of the Seller contained
in Section 4.01 of the Purchase Agreement, in the Transfer Agreement
and in any other document, certificate or financial or other statement
delivered by the Seller in connection with the Purchase Agreement or
the Transfer Agreement are true and correct in all material respects
and with the same force and effect as though such representations and
warranties had been made as of such date, except to the extent any such
representations and warranties relate solely to an earlier date.
IN WITNESS WHEREOF, I have signed and delivered this Officer's
Certificate this _____ day of ___________, 1996.
CARLISLE PLASTICS FUNDING CORPORATION
By:____________________________
Name:
Title:
E-1
<PAGE> 80
Exhibit F
to
Purchase Agreement
FORM OF OFFICER'S CERTIFICATE OF SERVICER
CARLISLE PLASTICS, INC.
Officer's Certificate
I, [Name of Officer], the duly elected [Insert Title] of Carlisle
Plastics, Inc. (the "Servicer"), hereby certify pursuant to Section 3.01(d)(iv)
of the Receivables Purchase and Servicing Agreement, dated as of March __, 1996
(the "Purchase Agreement"; capitalized terms used but not defined in this
Officer's Certificate having the meaning set forth in the Purchase Agreement),
between Carlisle Plastics Funding Corporation (the "Seller"), the Servicer,
Redwood Receivables Corporation (the "Purchaser") and General Electric Capital
Corporation, as agent for the Purchaser (in such capacity, the "Operating
Agent") and as collateral agent (in such capacity, the "Collateral Agent") for
the Purchaser Secured Parties (as defined in the Purchase Agreement), and for
the benefit of the Purchaser, the Operating Agent and the Collateral Agent, as
follows:
(1) after giving effect to the effectiveness of the Purchase
Agreement, no Event of Servicer Termination or event which, with the
giving of notice or lapse of time, or both, will have occurred and be
continuing; and
(2) the representations and warranties of the Servicer
contained in Section 4.02 of the Purchase Agreement and in any other
document, certificate or financial or other statement delivered by the
Servicer in connection with the Purchase Agreement are true and correct
in all material respects and with the same force and effect as though
such representations and warranties had been made as of such date,
except to the extent any such representations and warranties relate
solely to an earlier date.
IN WITNESS WHEREOF, I have signed and delivered this Officer's
Certificate this _____ day of _____________, 1996.
CARLISLE PLASTICS, INC.
By:____________________________
Name:
Title:
F-1
<PAGE> 81
Exhibit G
to
Purchase Agreement
FORM OF MONTHLY REPORT
CARLISLE PLASTICS FUNDING CORPORATION
G-1
<PAGE> 82
Exhibit H
to
Purchase Agreement
FINANCIAL COVENANTS
1. The Servicer shall not breach or fail to comply with any of the
following financial covenants, each of which shall be calculated in accordance
with GAAP, consistently applied:
(a) Maximum Capital Expenditures. The Servicer and its
Subsidiaries on a consolidated basis shall not make Capital Expenditures during
the following periods that exceed in the aggregate the amounts set forth
opposite each of such periods:
<TABLE>
<CAPTION>
Aggregate Annual Maximum
Period Covered Capital Expenditures
-------------- --------------------
<S> <C>
January 1, 1995 through $16,000,000
December 31, 1995
January 1, 1996 through $18,000,000
December 31, 1999
</TABLE>
(b) Minimum Net Worth. The Servicer and its Subsidiaries on a
consolidated basis shall have, as at each of the dates set forth below (and
shall maintain at all times during the period from and including such date
through but excluding the next date immediately succeeding such date), Net Worth
equal to or greater than the amount set forth opposite such date:
<TABLE>
<CAPTION>
Date Minimum Net Worth
---- -----------------
<S> <C>
June 30, 1994 The higher of $66,000,000 or Equity as of
April 30, 1994
September 30, 1994 The higher of $66,000,000 or Equity as of
April 30, 1994
December 31, 1994 $68,000,000
March 31, 1995 $69,400,000
June 30, 1995 $71,300,000
September 30, 1995 $70,000,000
December 31, 1995 $40,000,000
March 31, 1996 $40,000,000
June 30, 1996 $40,000,000
September 30, 1996 $42,000,000
December 31, 1996 $44,000,000
March 31, 1997 $45,000,000
June 30, 1997 $46,000,000
September 30, 1997 $48,000,000
December 31, 1997 $49,000,000
</TABLE>
H-1
<PAGE> 83
<TABLE>
<CAPTION>
Date Minimum Net Worth
---- -----------------
<S> <C>
March 31, 1998 $50,000,000
June 30, 1998 $51,000,000
September 30, 1998 $53,000,000
December 31, 1998 $54,000,000
March 31, 1999 $55,000,000
</TABLE>
(c) Minimum Interest and Taxes Coverage Ratio. The Servicer
and its Subsidiaries on a consolidated basis shall have a ratio of (i) EBITDA to
(ii) Interest Expense and taxes (as stated in the Servicer's consolidated
statement of income), in each case measured as at each of the dates set forth
below, for each of the periods set forth opposite such dates, of not less than
the amount set forth opposite each such period and date:
<TABLE>
<CAPTION>
Minimum Interest and Taxes
Date Period Covered Coverage Ratio
---- -------------- --------------
<S> <C> <C>
June 30, 1994 July 1, 1993 through June 30, 2.2 to 1.0
1994
September 30, 1994 October 1, 1993 through 2.2 to 1.0
September 30, 1994
December 31, 1994 January 1, 1994 through 2.2 to 1.0
December 31, 1994
March 31, 1995 April 1, 1994 through March 31, 2.1 to 1.0
1995
June 30, 1995 July 1, 1994 through June 30, 2.1 to 1.0
1995
September 30, 1995 October 1, 1994 through 2.1 to 1.0
September 30, 1995
December 31, 1995 January 1, 1995 through Not Applicable
December 31, 1995
January 1, 1996 through _____ Not Applicable
March 30, 1998
March 31, 1998 April 1, 1997 through March 31, 2.0 to 1.0
1998
June 30, 1998 July 1, 1997 through June 30, 2.0 to 1.0
1998
September 30, 1998 October 1, 1997 through 2.0 to 1.0
September 30, 1998
December 31, 1998 January 1, 1998 through 2.0 to 1.0
December 31, 1998
March 31, 1999 April 1, 1998 through March 31, 2.0 to 1.0
1999
</TABLE>
H-2
<PAGE> 84
(d) Minimum Fixed Charges Coverage Ratio. The Servicer and its
Subsidiaries on a consolidated basis shall have a ratio of (i) EBITDA to (ii)
Fixed Charges, in each case measured as at each of the dates set forth below,
for each of the periods set forth opposite such dates, of not less than the
amount set forth opposite each such period and date:
<TABLE>
<CAPTION>
Minimum Fixed Charges
Date Period Covered Coverage Ratio
---- -------------- --------------
<S> <C> <C>
June 30, 1994 July 1, 1993 through June 30, 1.5 to 1.0
1994
September 30, 1994 October 1, 1993 through 1.5 to 1.0
September 30, 1994
December 31, 1994 January 1, 1994 through December 1.5 to 1.0
31, 1994
March 31, 1995 April 1, 1994 through March 31, 1.4 to 1.0
1995
June 30, 1995 July 1, 1994 through June 30, 1.4 to 1.0
1995
September 30, 1995 October 1, 1994 through 1.4 to 1.0
September 30, 1995
December 31, 1995 January 1, 1995 through December Not Applicable
31, 1995
January 1, 1996 through ______ Not Applicable
March 30, 1998
March 31, 1998 April 1, 1997 through March 31, 1.3 to 1.0
1998
June 30, 1998 July 1, 1997 through June 30, 1.3 to 1.0
1998
September 30, 1998 October 1, 1997 through 1.3 to 1.0
September 30, 1998
December 31, 1998 January 1, 1998 through December 1.3 to 1.0
31, 1998
March 31, 1999 April 1, 1998 through March 31, 1.3 to 1.0
1999
</TABLE>
(e) Minimum Operating Cash Flow. Servicer and its subsidiaries on a
Consolidated basis shall have, at each of the dates set forth below (and shall
maintain at all times during the period from and including such date through but
excluding the next date immediately succeeding such date), Operating Cash Flow
equal to or greater than the amount set forth opposite such date:
<TABLE>
<CAPTION>
Minimum Operating
Date Cash Flow
---- ---------
<S> <C>
for the fiscal quarter ended: March $ 4,000,000
31, 1996
</TABLE>
H-3
<PAGE> 85
<TABLE>
<CAPTION>
Minimum Operating
Date Cash Flow
---- ---------
<S> <C>
for the two fiscal quarter period $ 9,000,000
ended: June 30, 1996
for the three fiscal quarter period $15,000,000
ended: September 30, 1996
for the four fiscal quarters ended: $22,000,000
December 31, 1996
for the four fiscal quarters ended: $24,000,000
March 31, 1997
for the four fiscal quarters ended: $24,000,000
June 30, 1997
for the four fiscal quarters ended: $24,000,000
September 30, 1997
for the four fiscal quarters ended: $24,000,000
December 31, 1997
</TABLE>
2. The Seller shall not breach or fail to comply with each of the
following financial covenants as of any Settlement Date:
(i) Default Ratio less than 6%;
(ii) Delinquency Ratio less than 8%;
(iii) Dilutions-to-Collections Ratio less than 5%;
(iv) Receivable Collection Turnover less than 70 days;
(v) Seller Net Worth Percentage at least 5%.
3. (a) Capitalized terms used in this Exhibit H and not defined in
the Purchase Agreement shall have the following respective meanings:
"Capital Expenditures" shall mean all payments for any fixed
assets or improvements, or for replacements, substitutions or additions thereto,
that have a useful life of more than one year and that are required to be
capitalized under GAAP, and, in any event, shall include Capital Lease
Obligations and all asset purchases secured by purchase money security
interests.
"Capital Lease" shall mean, with respect to any Person, any
lease of any property (whether real, personal or mixed) by such Person as lessee
that, in accordance with GAAP, either would be required to be classified and
accounted for as a capital lease on a balance sheet of such Person or otherwise
be disclosed as such in a note to such balance sheet, other than, any such lease
under which such Person is the lessor.
"Capital Lease Obligation" shall mean, with respect to any
Capital Lease, the amount of the obligation of the lessee thereunder that, in
accordance with GAAP, would appear on a balance sheet of such lessee in respect
of such Capital Lease or otherwise be disclosed in a note to such balance sheet.
"Debt Service Charges" shall mean, with respect to the
Servicer and its Subsidiaries on a consolidated basis, for any fiscal period of
the Servicer, the sum of (i) Interest Expense in respect of
H-4
<PAGE> 86
Funded Debt plus (ii) regularly scheduled payments of principal on Funded Debt,
in each case of the Servicer and its Subsidiaries for such period.
"EBITDA" shall mean, with respect to the Servicer and its
Subsidiaries on a consolidated basis, for any fiscal period of the Servicer (i)
Net Income plus (ii) to the extent deducted in determining Net Income, Interest
Expense and taxes (as stated in the Servicer's consolidated statement of income)
plus (iii) to the extent deducted in determining Net Income, depreciation,
amortization and other similar non-cash charges minus (iv) to the extent added
in determining Net Income, extraordinary gains plus (v) to the extent deducted
in determining Net Income, extraordinary losses.
"Equity" shall mean the assets of the Servicer and its
Subsidiaries on a consolidated basis less (i) reserves applicable thereto and
(ii) the liabilities of the Servicer and its Subsidiaries on a consolidated
basis, all as determined in accordance with GAAP.
"Fixed Charges" shall mean, with respect to the Servicer and
its Subsidiaries on a consolidated basis, for any fiscal period of the Servicer,
the sum of (i) Debt Service Charges plus (ii) taxes (as stated in the Servicer's
consolidated statement of income), in each case of the Servicer for such period.
"Funded Debt" shall mean, with respect to the Servicer and its
Subsidiaries, on a consolidated basis, all of its Indebtedness which by the
terms of the agreement governing or instrument evidencing such Indebtedness
matures more than one year from or is directly or indirectly renewable or
extendible at its option under a revolving credit or similar agreement
obligating the lender or lenders to extend credit over a period of more than one
year from the date of creation thereof, including in each instance current
maturities of long-term debt (and the current portion of long-term debt in the
last year of its term), revolving credit and short-term debt extendible beyond
one year at the option of the debtor, and shall also include, without
limitation, Indebtedness arising under or in connection with any interest rate
swap agreement or arrangements, the Revolving Credit Loan, the Letter of Credit
Obligations and the other Obligations.
"GAAP" shall mean generally accepted accounting principles in
the United States of America as in effect from time to time, consistently
applied.
"Indebtedness" of any Person shall mean (i) all indebtedness
of such Person for borrowed money or for the deferred purchase price of property
or services (including reimbursement and all other obligations with respect to
surety bonds, letters of credit and bankers' acceptances, whether or not
matured, but excluding obligations to trade creditors incurred in the ordinary
course of business), (ii) all obligations evidenced by notes, bonds, debentures
or similar instruments, (iii) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (iv) all Capital Lease Obligations, (v) all
obligations arising under or in connection with any interest rate swap agreement
or arrangements, (vi) all Indebtedness referred to in clause (i), (ii), (iii),
(iv) or (v) above secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) any Lien upon or
in property or other assets (including accounts and contract rights) owned by
such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness, (vii) the Obligations, and (viii) all liabilities
under Title IV of ERISA.
"Interest Expense" shall mean, for any fiscal period of the
Servicer, interest expense of the Servicer for such period in respect of Funded
Debt, excluding the amortization of capitalized debt transaction costs.
"Net Income" shall mean, with respect to the Servicer and its
Subsidiaries on a consolidated basis, for any fiscal period, the Servicer's
consolidated net income (or loss) after income and franchise taxes and shall
have the meaning given such term by GAAP; provided, that, there shall be
H-5
<PAGE> 87
specifically excluded therefrom net income of any Person that is not a, direct
or indirect, wholly-owned Subsidiary of the Servicer, unless received by the
Servicer in cash.
"Net Worth" shall mean the sum of (i) the higher of
$66,000,000 or Equity as of April 30, 1994 plus (ii) Net Income since April 30,
1994 through and including the applicable measurement date.
"Operating Cash Flow" shall mean EBITDA less Capital
Expenditures.
"Revolving Credit Advance" shall have the meaning assigned to
it in Section 1.1(a) of the Credit Agreement.
"Seller's Net Worth Percentage" shall mean (i) shareholders'
equity, divided by (ii) total assets, in each case of the Seller.
"Subordinated Debt" shall mean any Indebtedness issued or
otherwise owing by the Servicer in favor of any Subsidiary or by any Subsidiary
in favor of the Servicer (a) the payment of which is subordinated to the payment
of the Obligations in form and substance satisfactory to Agent in its sole
discretion and (b) which is incurred pursuant to documentation or entry in the
financial records of the Servicer or a Subsidiary, as applicable, in form and
substance satisfactory to Agent in its sole discretion. Subordinated Debt shall
include, without limitation, Indebtedness of the Subsidiaries in favor of the
Servicer set forth on Schedule 6.3A of the Credit Agreement and any extensions,
renewals, substitutions, refinancings or replacements permitted by Section 6.3
of the Credit Agreement and Indebtedness of the Subsidiaries in favor of the
Servicer expressly permitted by Section 6.3 of the Credit Agreement.
"Subsidiary" shall mean, with respect to any Person, (i) any
corporation of which an aggregate of more than fifty percent (50%) of the
outstanding Stock having ordinary voting power to elect a majority of the board
of directors of such corporation (irrespective of whether, at the time, Stock of
any other class or classes of such corporation shall have or might have voting
power by reason of the happening of any contingency) is at the time, directly or
indirectly, owned legally or beneficially by such Person and/or one or more
Subsidiaries of such Person, or with respect to which any such Person has the
right to vote or designate the vote of fifty percent (50%) or more of such Stock
whether by proxy, agreement, operation of law or otherwise and (ii) any
partnership in which such Person and/or one or more Subsidiaries of such Person
shall have an interest (whether in the form of voting or participation in
profits or capital contribution) of more than fifty percent (50%) or of which
any such Person is a general partner or may exercise the powers of a general
partner. Unless otherwise expressly provided, all references in this Exhibit H
to a "Subsidiary" shall mean a Subsidiary of the Servicer.
"Taxes" shall mean taxes, levies, imposts, duties, deductions,
Charges or withholdings of whatsoever nature, and all liabilities with respect
thereto, imposed by any domestic or foreign government or any subdivision or
taxing authority thereof.
(b) Any accounting term used in this Exhibit H shall have,
unless otherwise specifically provided in this Exhibit H, the meaning
customarily given such term in accordance with GAAP, and all financial
computations shall be computed, unless otherwise specifically provided in this
Exhibit H, in accordance with GAAP consistently applied. That certain items or
computations are explicitly modified by the phrase "in accordance with GAAP"
shall in no way be construed to limit the foregoing. In the event that any
"Accounting Changes" (as defined below) occur and such changes result in a
change in the calculation of the financial covenants, standards or terms used in
this Exhibit H then the Servicer, parties to the Purchase Agreement agree to
enter into negotiations in order to amend such provisions of this Agreement so
as to equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating the Servicer's and its Subsidiaries' financial condition
shall be the same after such Accounting Changes as if such Accounting Changes
had not been made. "Accounting Changes" means (i) changes in accounting
principles required by the promulgation of any rule, regulation, pronouncement
or opinion by the Financial Accounting Standards Board of the American Institute
of Certified Public Accountants (or successor thereto or any agency with similar
functions), and (ii) changes in accounting principles concurred in by the
Servicer's certified public accountants. In the event, if any, that the parties
to the
H-6
<PAGE> 88
Purchase Agreement shall have agreed upon the required amendments, then
after such agreement has been evidenced in writing and the underlying
Accounting Change with respect thereto has been implemented, any reference to
GAAP contained in this Exhibit H shall, only to the extent of such Accounting
Change, refer to GAAP, consistently applied after giving effect to the
implementation of such Accounting Change. If the parties to the Purchase
Agreement cannot agree upon the required amendments within thirty (30) days
following the date of implementation of any Accounting Change, then all
financial statements delivered and all calculations of financial covenants and
other standards and terms in accordance with this Exhibit H shall be prepared,
delivered and made without regard to the underlying Accounting Change.
(c) All other undefined terms contained in this Schedule
shall, unless the context indicates otherwise, have the meanings provided for by
the Code as in effect in the State of New York to the extent the same are used
or defined therein. References to Persons include their respective permitted
successors and assigns or, in the case of a Governmental Authority, Persons
succeeding to the relevant functions of such Persons. All references to statutes
and related regulations shall include all amendments of same and any successor
or replacement statutes and regulations.
H-7
<PAGE> 1
EXHIBIT 10.20
AMENDMENT NO. 2
TO RECEIVABLES SALE AGREEMENT
AMENDMENT NO. 2 dated as of March 26, 1996 between Carlisle
Plastics, Inc. (the "Parent") and Carlisle Plastics Funding Corporation (the
"RFC").
WHEREAS, the Parent and the RFC are parties to a Receivables
Sale Agreement dated April 14, 1994 as amended by an amendment dated October 25,
1994 (as amended, the "Sale Agreement") and such parties desire to amend the
Sale Agreement further.
THE PARTIES AGREE AS FOLLOWS:
SECTION 1. Definitions. All capitalized terms used herein,
unless otherwise defined, are used as defined in the Sale Agreement.
SECTION 2. Amendment to Sale Agreement. The Sale Agreement is
amended effective as of the date hereof as follows:
(a) The second "Whereas" clause is deleted in its entirety and
the following substituted therefor:
"WHEREAS, the RFC has been formed for the sole purpose of
purchasing all trade receivables owned by the Parent and selling such
trade receivables to Redwood Receivables Corporation ("Redwood"); and"
(b) The definition of "Funding Agreement" in Section 1.01 is
deleted in its entirety and the following substituted therefor in alphabetical
order:
"Purchase Agreement" means the Receivables Purchase and
Servicing Agreement, dated as of March 26, 1996 among the RFC (as
Borrower), Redwood (as Purchaser), the Operating Agent, the Collateral
Agent and the Parent, as Servicer."
(c) The definition of "Funding Excess" in Section 1.01 is
deleted in its entirety and the following substituted therefor:
"Purchase Excess" means a Purchase Excess as defined in the
Purchase Agreement."
(d) The words "Schedule 2" in Section 4.02(b) are deleted and
the words "Schedule 3" substituted therefor.
(e) The words "Section 5.01" in Section 4.02(g) is deleted and
the words "Section 4.04" substituted therefor.
(f) The second reference to "Section 4.04" in Section 4.02(g)
is deleted and the words "Section 4.01" substituted therefor.
(g) The word "Borrower" throughout the Agreement is deleted
and the word "RFC" substituted therefor.
(h) The words "Funding Agreement" throughout the Agreement is
deleted and the words "Purchase Agreement" substituted therefor.
(i) The words "Funding Excess" throughout the Agreement are
deleted and the words "Purchase Excess" substituted therefor.
<PAGE> 2
SECTION 3. Conditions Precedent.
(a) The effectiveness of this Amendment is subject to the
conditions precedent that the Parent, the RFC, the Collateral Agent, the
Operating Agent and the Purchaser shall have received each of the following, in
form and substance satisfactory to each such party:
(i) A certificate of the Secretary of the Parent and the
RFC, dated as of the date of this Amendment and certifying (A) that
attached thereto is a true and complete copy of a resolution of the
Board of Directors of the Parent or the RFC, as the case may be,
authorizing the execution, delivery and performance of this Amendment
and all other documents required or necessary to be delivered hereunder
and that such resolution has not been modified, rescinded or amended
and is in full force and effect, and (B) as to the incumbency and
specimen signature of each Person's officers executing this Amendment
and all other documents required or necessary to be delivered
hereunder.
(ii) Such other approvals, opinions or documents as the
Parent, the RFC, the Collateral Agent, the Operating Agent or the
Purchaser may reasonably request.
SECTION 4. Confirmation of Sale Agreement. Except as herein
expressly amended, the Sale Agreement and each of the other documents executed
in connection therewith are ratified and confirmed in all respects and shall
remain in full force and effect in accordance with its terms. Each reference in
the Sale Agreement to "this Agreement" and in each of the other documents
executed in connection therewith to the "Sale Agreement" shall mean the Sale
Agreement as amended by this Amendment, and as hereinafter amended or restated.
SECTION 5. Parent's and RFC's Representations and Warranties.
The Parent and the RFC represent and warrant that:
(a) this Amendment has been duly authorized, executed and
delivered by the Parent and the RFC pursuant to its corporate power; and
(b) this Amendment constitutes the legal, valid and binding
obligation of the Parent and the RFC, as the case may be.
SECTION 6. Expenses. The Parent and the RFC jointly and
severally agree to pay on demand all reasonable fees and out-of-pocket expenses
of the Parent, the RFC, the Purchaser, the Collateral Agent and the Operating
Agent incurred in connection with the preparation, execution and delivery of
this Amendment and any documents referred to herein and any due diligence and
collateral examinations arising hereunder (including, without limitation, travel
and living expenses, attorneys' fees, appraisal fees, search and filing fees).
SECTION 7. Counterparts. Delivery of an executed counterpart
of a signature page to this Amendment by facsimile shall be effective as
delivery of a manually executed counterpart of this Amendment. This Amendment
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 taken together shall constitute one and the same
agreement.
2
<PAGE> 3
IN WITNESS WHEREOF, Parent and the RFC have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
CARLISLE PLASTICS, INC.,
as Parent
By: /s/ PATRICK J. O'LEARY
------------------------
Title: CFO
------------------
Name: Patrick J. O'Leary
-------------------
CARLISLE PLASTICS FUNDING
CORPORATION, as RFC
By:/s/ CHERYL SAUTER
------------------------
Title: Treasurer
------------------
Name: Cheryl Sauter
------------------
Acknowledged as of the date above:
GENERAL ELECTRIC CAPITAL CORPORATION,
as Operating Agent and Collateral Agent
By: /s/ THOMAS E. JOHNSTONE
-------------------------------------
Title: VP - Commercial Finance, Inc.
-------------------------------
Name: Thomas E. Johnstone
-------------------------------
REDWOOD RECEIVABLES CORPORATION,
as Purchaser
By: /s/ CATHARINE L. MIDKIFF
--------------------------------------
Title: Assistant Secretary
-------------------------------
Name: Catharine L. Midkiff
-------------------------------
3
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<EXCHANGE-RATE> 1
<CASH> 1,968
<SECURITIES> 0
<RECEIVABLES> 25,793
<ALLOWANCES> 3,552
<INVENTORY> 39,565
<CURRENT-ASSETS> 76,085
<PP&E> 199,647
<DEPRECIATION> 77,531
<TOTAL-ASSETS> 261,486
<CURRENT-LIABILITIES> 84,228
<BONDS> 125,017
0
0
<COMMON> 179
<OTHER-SE> 46,222
<TOTAL-LIABILITY-AND-EQUITY> 261,486
<SALES> 94,618
<TOTAL-REVENUES> 94,618
<CGS> 72,141
<TOTAL-COSTS> 72,141
<OTHER-EXPENSES> 14,043
<LOSS-PROVISION> 214
<INTEREST-EXPENSE> 5,423
<INCOME-PRETAX> 2,797
<INCOME-TAX> 1,259
<INCOME-CONTINUING> 1,538
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,538
<EPS-PRIMARY> .09
<EPS-DILUTED> .09
</TABLE>
