<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934 for the quarterly period ended
June 26, 1998
[ ] 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: 333-19495
RADNOR HOLDINGS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 23-2674715
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
Three Radnor Corporate Center, Suite 300
100 Matsonford Road, Radnor, Pennsylvania 19087
(address of principal executive offices) (Zip Code)
Registrant's telephone number, including area
code: 610-341-9600
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 [ ]
The number of shares outstanding of the Registrant's common stock as of
August 5, 1998:
Number
Class of Shares
- --------------------------------- -----------
Voting Common Stock; $.10 par value 600
Nonvoting Common Stock; $.10 par value 245
Class B Nonvoting Common Stock; $.01 par value 5,400
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
<TABLE>
<CAPTION>
June 26, December 26,
1998 1997
-------------- --------------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 4,970 $ 8,810
Accounts receivable, net 35,383 28,589
Inventories, net 33,111 28,451
Prepaid expenses and other 4,476 3,520
Deferred income taxes 1,705 1,708
-------------- --------------
Total current assets 79,645 71,078
-------------- --------------
PROPERTY, PLANT AND EQUIPMENT 186,238 176,981
LESS - ACCUMULATED DEPRECIATION (16,782) (11,868)
-------------- --------------
NET PROPERTY, PLANT AND EQUIPMENT 169,456 165,113
-------------- --------------
OTHER ASSETS 14,242 13,627
-------------- --------------
Total assets $ 263,343 $ 249,818
============= ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 26,829 $ 28,565
Accrued liabilities 19,986 18,151
Current portion of long-term debt and capitalized
lease obligations 853 226
-------------- --------------
Total current liabilities 47,668 46,942
-------------- --------------
LONG-TERM DEBT, net of current portion 183,555 178,947
-------------- --------------
CAPITALIZED LEASE OBLIGATIONS, net of current portion 4,216 -
-------------- --------------
DEFERRED INCOME TAXES 10,296 8,543
-------------- --------------
OTHER NONCURRENT LIABILITIES 411 411
-------------- --------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Voting and nonvoting common stock, 22,700 shares authorized,
6,245 shares issued and outstanding 1 1
Additional paid-in capital 19,387 19,387
Retained earnings (deficit) 788 (2,809)
Cumulative translation adjustment (2,979) (1,604)
-------------- --------------
Total stockholders' equity 17,197 14,975
-------------- --------------
Total liabilities and stockholders' equity $ 263,343 $ 249,818
============= =============
The accompanying notes are an integral part of these condensed consolidated financial statements.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands)
For the three months ended For the six months ended
-------------------------- ------------------------
June 26, June 27, June 26, June 27,
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales $ 84,063 $ 60,427 $155,877 $114,455
Costs of goods sold 58,907 44,777 111,692 85,431
-------- -------- -------- --------
Gross profit 25,156 15,650 44,185 29,024
Operating expenses:
Distribution 6,033 4,557 11,206 8,545
Selling, general and administrative 9,734 5,951 18,260 11,440
-------- -------- -------- --------
Income from operations 9,389 5,142 14,719 9,039
Other (income) expense:
Interest, net 4,613 2,964 9,172 5,788
Other, net 35 (71) (246) (138)
-------- -------- -------- --------
Income before income taxes 4,741 2,249 5,793 3,389
Provision for income taxes
Current 357 131 435 206
Deferred 1,439 113 1,761 113
-------- -------- -------- --------
1,796 244 2,196 319
-------- -------- -------- --------
Net income $ 2,945 $ 2,005 $ 3,597 $ 3,070
======== ======== ======== ========
The accompanying notes are an integral part of these condensed consolidated financial statements.
</TABLE>
3
<PAGE>
RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
For the six months ended
-------------------------------------------
June 26, June 27,
1998 1997
-------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 3,597 $ 3,070
Adjustments to reconcile net income to cash provided by
(used in) operating activities-
Depreciation 4,933 3,262
Amortization 1,021 867
Deferred income taxes 1,761 113
Changes in operating assets and liabilities, net of
acquisition of business-
Accounts receivable, net (7,209) 2,192
Inventories (5,177) (3,488)
Prepaid expenses and other (996) 607
Accounts payable (1,393) (4,244)
Accrued liabilities 2,834 (1,556)
-------------- --------------
Net cash provided by (used in) operating activities (629) 823
-------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (8,435) (6,981)
Acquisition of Epsilevy Oy, net of cash acquired (1,049) --
Additional acquisition costs for StyroChem Europe (345) --
Increase in other assets (1,782) (1,294)
-------------- --------------
Net cash used in investing activities (11,611) (8,275)
-------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net borrowings on bank financed debt and
unsecured notes payable 4,710 10,946
Net borrowings on capital lease obligations 4,871 --
Cash dividends -- (3,000)
-------------- --------------
Net cash provided by financing activities 9,581 7,946
-------------- --------------
EFFECTS OF EXCHANGE RATE CHANGES ON CASH (1,181) --
-------------- --------------
NET (DECREASE) INCREASE IN CASH (3,840) 494
CASH, beginning of period 8,810 855
-------------- --------------
CASH, end of period $ 4,970 $ 1,349
============== ==============
SUPPLEMENTAL CASH FLOW DISCLOSURES
Interest Paid $ 8,649 $ 5,272
============== ==============
Income Taxes Paid $ -- $ 515
============== ==============
The accompanying notes are an integral part of these condensed consolidated financial statements.
</TABLE>
4
<PAGE>
RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) BASIS OF PRESENTATION
The condensed consolidated financial statements included herein have been
prepared by Radnor Holdings Corporation and subsidiaries (collectively,
"Radnor" or the "Company") pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in consolidated financial statements prepared in
accordance with generally accepted accounting principles have been condensed
or omitted pursuant to such rules and regulations. In the opinion of the
Company, the statements include all adjustments (which include only normal
recurring adjustments) required for a fair statement of financial position,
results of operations and cash flows for such periods. The results of
operations for the interim periods are not necessarily indicative of the
results for a full year.
(2) INVENTORIES
The components of inventories were as follows (in thousands):
June 26, December 26,
1998 1997
------- -------
Raw Materials $10,927 $ 9,612
Work in Process 1,525 1,303
Finished Goods 20,659 17,536
------- -------
$33,111 $28,451
======= =======
(3) INTEREST EXPENSE
Included in interest expense is $266,000 and $136,000 of amortization of
deferred financing costs for the three months ended June 26, 1998 and June 27,
1997, respectively, and $543,000 and $276,000 of amortization of deferred
financing costs for the six months ended June 26, 1998 and June 27, 1997,
respectively. Premium amortization of $76,000 and $146,000 related to the
issuance of the Company's 10% Series B Senior Notes due 2003 is included in
interest expense for the three months ended June 26, 1998 and six months ended
June 26, 1998, respectively.
5
<PAGE>
(4) COMPREHENSIVE INCOME
In 1998, the Company adopted Statement of Financial Accounting Standard No.
130, Reporting Comprehensive Income, which establishes standards for the
reporting and display of comprehensive income and its components.
Comprehensive income is the total of net income and non-owner changes in
equity. The Company had comprehensive income as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
----------------- -------------------
June 26, June 27, June 26, June 27,
1998 1997 1998 1997
------ ------ ------- ------
<S> <C> <C> <C> <C>
Net Income $2,945 $2,005 $ 3,597 $3,070
Foreign Currency Translation Adjustment 98 7 (1,375) (21)
------ ------ ------- ------
Comprehensive Income $3,043 $2,012 $ 2,222 $3,049
====== ====== ======= ======
</TABLE>
(5) SUPPLEMENTAL FINANCIAL INFORMATION
Radnor Holdings Corporation is a holding company which has no operations
separate from its investment in subsidiaries. The Company's $100 million 10%
Senior Notes due 2003 and $60 million 10% Series B Senior Notes due 2003 are
guaranteed by substantially all of the Company's domestic subsidiaries. The
following represents summarized combining financial information of the holding
company, combined guarantor subsidiaries and the combined non-guarantor
subsidiaries as of and for the three months and six months ended June 26, 1998
(in thousands):
<TABLE>
<CAPTION>
Holding Guarantor Non-Guarantor
Company Subsidiaries Subsidiaries Eliminations Consolidated
------------ ------------ ------------ ------------ ------------
THREE MONTHS ENDED JUNE 26, 1998
--------------------------------
<S> <C> <C> <C> <C> <C>
Net Sales $ - $ 56,373 $ 31,408 $ (3,718) $ 84,063
Gross Profit - 15,789 9,367 - 25,156
Income from Operations - 5,220 4,169 - 9,389
Net Income - 1,595 2,575 (1,225) 2,945
SIX MONTHS ENDED JUNE 26, 1998
------------------------------
Net Sales $ - $ 105,805 $ 54,462 $ (4,390) $ 155,877
Gross Profit - 28,593 15,592 - 44,185
Income from Operations - 8,740 5,979 - 14,719
Net Income - 2,676 3,352 (2,431) 3,597
JUNE 26, 1998
-------------
Current Assets $ 389 $ 51,451 $ 35,228 $ (7,423) $ 79,645
Non-Current Assets 146,738 180,838 49,175 (193,053) 183,698
Current Liabilities 1,132 31,047 16,363 (874) 47,668
Non-Current Liabilities 162,014 84,671 60,315 (108,522) 198,478
</TABLE>
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
GENERAL
Radnor manufactures and distributes worldwide a variety of specialty chemical
and foam products for the foodservice, insulation and protective packaging
industries. In the foodservice industry, the Company is the second largest
manufacturer of foam cup and container products, with an estimated 35% share
of the U.S. foam cup and container market segment. The Company is also the
fifth largest producer worldwide of expandable polystyrene. The Company
manufactures, markets and sells its products through five operating units
comprised of twenty-three manufacturing locations in the U.S., Canada and
Europe.
COMPARABILITY OF PERIODS
Financial results for the periods presented are not fully comparable because
of the October 1997 acquisition of the polystyrene production and conversion
operations of Neste Oy ("StyroChem Europe").
THREE MONTHS ENDED JUNE 26, 1998 COMPARED TO THREE MONTHS ENDED JUNE 27, 1997
Net sales increased to $84.1 million for the three months ended June 26, 1998
from $60.4 million for the same period in 1997, an increase of $23.7 million
or 39.2%. The increase was due to the acquisition of StyroChem Europe on
October 15, 1997.
Cost of goods sold as a percentage of net sales decreased to 70.1% for the
three months ended June 26, 1998, from 74.1% for the same period in 1997.
This decrease was primarily due to a decline in raw material prices, higher
levels of production and improved manufacturing efficiencies.
Gross profit increased to $25.2 million or 29.9% of net sales for the three
months ended June 26, 1998, from $15.7 million or 25.9% of net sales for the
same period in 1997.
Distribution expense as a percentage of net sales decreased to 7.1% for the
three months ended June 26, 1998, from 7.6% of net sales for the same period
in 1997. This decrease was primarily due to increased efficiencies in the
North American operations resulting from the realignment of shipping points
and an increase in the percentage of full truckload shipments.
Selling, general and administrative expenses as a percentage of net sales
increased to 11.6% for the three months ended June 26, 1998, from 9.8% of net
sales for the same period in 1997. This increase was due to higher selling
and marketing expenses as well as additional administrative costs associated
with StyroChem Europe.
Income from operations increased to $9.4 million or 11.2% of net sales for the
three months ended June 26, 1998, from $5.1 million or 8.5% of net sales for
the same period in 1997.
Interest increased to $4.6 million for the three months ended June 26, 1998,
from $3.0 million for the same period in 1997. This increase was primarily
due to an increase in borrowings related to the acquisition of StyroChem
Europe in October 1997.
Income taxes were $1.8 million for the three months ended June 28, 1998,
compared to $0.2 million for the same period in 1997. This increase relates
to the elimination, in the prior year, of an income tax valuation allowance
that was recorded against the Company's loss carryforward tax benefits.
7
<PAGE>
Net income increased to $2.9 million or 3.5% of net sales for the three months
ended June 26, 1998, from $2.0 million or 3.3% of net sales for the same
period in 1997 due to the reasons described above.
SIX MONTHS ENDED JUNE 26, 1998 COMPARED TO SIX MONTHS ENDED JUNE 27, 1997
Net sales increased to $155.9 million for the six months ended June 26, 1998
from $114.5 million for the same period in 1997, an increase of $41.4 million
or 36.2%. The increase was due to the acquisition of StyroChem Europe on
October 15, 1997.
Cost of goods sold as a percentage of net sales decreased to 71.7% for the six
months ended June 26, 1998, from 74.6% for the same period in 1997. This
decrease was primarily due to a decline in raw material prices, higher levels
of production and improved manufacturing efficiencies.
Gross profit increased to $44.2 million or 28.3% of net sales for the six
months ended June 26, 1998, from $29.0 million or 25.4% of net sales for the
same period in 1997.
Distribution expense as a percentage of net sales decreased to 7.2% for the
six months ended June 26, 1998, from 7.5% of net sales for the same period in
1997. This decrease was primarily due to increased efficiencies in the North
American operations resulting from the realignment of shipping points and an
increase in the percentage of full truckload shipments.
Selling, general and administrative expenses as a percentage of net sales
increased to 11.7% for the six months ended June 26, 1998, from 10.0% of net
sales for the same period in 1997. This increase was due to higher selling
and marketing expenses as well as additional administrative costs associated
with StyroChem Europe.
Income from operations increased to $14.7 million or 9.4% of net sales for the
six months ended June 26, 1998, from $9.0 million or 7.9% of net sales for the
same period in 1997.
Interest increased to $9.2 million for the six months ended June 26, 1998,
from $5.8 million for the same period in 1997. This increase was primarily
due to an increase in borrowings related to the acquisition of StyroChem
Europe in October 1997.
Income taxes were $2.2 million for the six months ended June 28, 1998,
compared to $0.3 million for the same period in 1997. This increase relates
to the elimination, in the prior year, of an income tax valuation allowance
that was recorded against the Company's loss carryforward tax benefits.
Net income increased to $3.6 million or 2.3% of net sales for the six months
ended June 26, 1998, from $3.1 million or 2.7% of net sales for the same
period in 1997 due to the reasons described above.
LIQUIDITY AND CAPITAL RESOURCES
During the six months ended June 26, 1998 and June 27, 1997, the Company's
principal source of funds consisted of cash from financing sources. During the
1998 period, after tax cash flow of $11.3 million, borrowings under the
Company's credit facilities of $4.7 million, capital lease financing of $4.9
million and a decrease in cash of $3.8 million were primarily used to fund
capital expenditures of $8.4 million and a $11.9 million increase in working
capital.
8
<PAGE>
As of June 26, 1998, the Company had $21.3 million outstanding and $15.1
million of availability under its revolving credit agreements. The Company's
principal uses of cash for the next several years will be working capital
requirements and capital expenditures.
As a holding company, Radnor Holdings Corporation is dependent upon dividends
and other payments from its subsidiaries to generate the funds necessary to
meet its obligations. Subject to certain limitations under applicable state
law and the Company's credit agreements, Radnor Holdings Corporation is, and
will continue to be, able to control its receipt of dividends and other
payments from its subsidiaries. Management believes that cash generated from
operations, together with available borrowings under the revolving credit
facilities, will be sufficient to meet the Company's expected operating needs,
planned capital expenditures and debt service requirements.
YEAR 2000 COMPLIANCE
The Company is currently in the process of evaluating its information
technology infrastructure for Year 2000 compliance. The Company does not
expect that the cost to modify its information technology infrastructure to be
Year 2000 compliant will be material to its financial condition or results of
operations. The Company does not anticipate any material disruptions in its
operations as a result of any failure by the Company to be in compliance. The
Company does not currently have any information concerning the Year 2000
compliance status of its suppliers and customers and there can be no assurance
that such suppliers and customers are or will be Year 2000 compliant. In the
event that any of the Company's significant suppliers or customers does not
successfully and timely achieve Year 2000 compliance, the Company's business
operations could be adversely affected.
Forward Looking Statements
All statements contained herein that are not historical facts are based on
current expectations. These statements are forward looking in nature and
involve a number of risks and uncertainties. Such risks and uncertainties are
described in detail in the Company's Report on Form 10-K for the year ended
December 26, 1997, Commission File No. 333-19495, to which reference is hereby
made.
9
<PAGE>
PART II OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
On November 25, 1996, Jackson National Life Insurance Company ("Jackson")
and Benchmark Holdings, Inc. ("Holdings") filed suit in Cook County,
Illinois Circuit Court against Michael T. Kennedy, Radnor Holdings
Corporation ("Radnor"), WinCup Holdings, Inc. ("WinCup"), WinCup Holdings
L.P. ("WinCup L.P."), James River Paper Company, Inc. ("James River") and
James River Corporation of Virginia. The suit related to the November
1995 sale to James River by Holdings of substantially all of Holdings'
assets, consisting of its cutlery and straws operations, and by WinCup of
its plastic cup operations. See Note 1 to the Company's Consolidated
Financial Statements contained in the Company's Report on Form 10-K for
the year ended December 26, 1997, Commission File No. 333-19495.
Holdings had issued to Jackson certain shares of nonvoting preferred
stock in connection with the May 1991 acquisition of the cutlery and
straws operations, in which Jackson previously held an unsecured
subordinated position. On February 27, 1998, the court dismissed the
suit on the basis of forum non conveniens.
On June 24, 1998, Jackson and Holdings filed an action against the same
defendants asserting similar claims relating to the November 1995 sale in
the Court of Chancery for the State of Delaware in and for New Castle
County. The suit alleges, among other things, that, in connection with
the November 1995 sale to James River, Radnor and certain defendants (i)
breached or participated in breaching certain fiduciary duties to Jackson
and Holdings, (ii) improperly interfered in certain alleged contractual
rights of the nonvoting preferred shareholders to prevent the sale from
occurring, (iii) committed fraud against Jackson and Holdings in
structuring the transaction and in failing to disclose the transaction to
Jackson in a timely manner and (iv) usurped Holdings' corporate
opportunity in connection with the 1992 acquisition of WinCup. The suit
seeks a broad range of remedies including the imposition of a
constructive trust, payment to Holdings of the profits received by James
River and WinCup L.P. since the sale and WinCup L.P's formation and
damages of not less than $30.0 million.
The Company believes that the allegations in the complaint are without
merit. Holdings, through its investment banker, actively solicited a
large number of prospective purchasers regarding the sale of the cutlery
and straws operations. The Company believes that Jackson had no right to
prevent the sale of Holdings' assets. In connection with the sale,
Holdings obtained opinions from independent investment banking firms as
to the fairness, from a financial point of view, of the transaction to
Holdings' stockholders and as to the reasonableness of the negotiated
value of the noncompetition agreements. The proceeds received by
Holdings from the sale of the cutlery and straws operations, together
with all the remaining assets of Holdings, were significantly less than
the aggregate outstanding indebtedness of Holdings. As a result, no
proceeds were available for distribution to any of Holdings'
stockholders, including Jackson. Although it is not possible to predict
with certainty the outcome of any legal proceeding, the Company intends
to defend this suit vigorously and does not believe that the suit will
have a material adverse effect on the Company's financial condition or
results of operations.
The Company is involved in various legal actions arising in the normal
course of business. After taking into consideration legal counsel's
evaluation of such actions, management believes that these actions will
not have a material effect on the Company's financial position or results
of operations.
10
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
4.1 Fourth Supplemental Indenture, dated as of July 16, 1998 among
Radnor Holdings Corporation, WinCup Holdings, Inc., Radnor
Chemical Corporation, StyroChem U.S., Inc., Radnor Management,
Inc., Radnor Delaware, Inc. and First Union National Bank
10.1 Amendment No. 1 to Second Amended and Restated Revolving Credit
and Security Agreement among BNY Financial Corporation,
NationsBank, N.A., WinCup Holdings, Inc., Radnor Chemical
Corporation, StyroChem U.S., Inc., Radnor Delaware, Inc. and
Radnor Holdings Corporation, dated as of March 9, 1998
27.1 Financial Data Schedule
(b) Reports on Form 8-K
There were no reports filed on Form 8-K during the three month period
ended June 26, 1998.
11
<PAGE>
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, its duly authorized officer and chief financial officer.
RADNOR HOLDINGS CORPORATION
(registrant)
/s/ Michael V. Valenza
---------------------------------------
Date: August 5, 1998 By:
Michael V. Valenza
Senior Vice President-Finance and
Chief Financial Officer
12
<PAGE>
Exhibit 4.1
- --------------------------------------------------------------------------------
RADNOR HOLDINGS CORPORATION
as Issuer,
WINCUP HOLDINGS, INC.
RADNOR CHEMICAL CORPORATION
STYROCHEM U.S., INC.
RADNOR MANAGEMENT, INC.
RADNOR DELAWARE, INC.
as Guarantors
and
FIRST UNION NATIONAL BANK
as Trustee
-------------------
FOURTH SUPPLEMENTAL INDENTURE
Dated as of July 16, 1998
(Supplementing a Trust Indenture Dated as of December 5, 1996,
as amended by a First Supplemental Indenture Dated
as of December 17, 1996, Second Supplemental
Indenture Dated as of October 15, 1997 and
Third Supplemental Trust Indenture
dated February 9, 1998)
-------------------
$100,000,000
10% Senior Notes due 2003
- --------------------------------------------------------------------------------
<PAGE>
THIS FOURTH SUPPLEMENTAL INDENTURE, dated as of the 16th day of July
1998, (this "Fourth Supplemental Indenture") is among RADNOR HOLDINGS
CORPORATION, a Delaware corporation (the "Company"), WINCUP HOLDINGS, INC., a
Delaware corporation, RADNOR CHEMICAL CORPORATION (formerly SP Acquisition Co.),
a Delaware corporation, STYROCHEM U.S., INC. (formerly StyroChem International,
Inc.), a Texas corporation, RADNOR MANAGEMENT, INC., a Delaware corporation and
RADNOR DELAWARE, INC., a Delaware corporation (collectively, the "Guarantors")
and FIRST UNION NATIONAL BANK, as trustee (the "Trustee").
RECITALS:
The Company, the Guarantors and the Trustee are parties to a certain
Indenture dated December 5, 1996, as amended by a First Supplemental Indenture
dated December 17, 1996, a Second Supplemental Indenture dated as of October 15,
1997 and a Third Supplemental Trust Indenture dated as of February 9, 1998 (as
amended, the "Indenture") relating to the creation by the Company of an issue of
$100,000,000 of its 10% Senior Notes, due 2003 (the "Securities");
Each Guarantor has issued a guarantee of the Securities (collectively,
the "Guarantees") pursuant to which the Guarantors have guaranteed, in
accordance with Article Thirteen of the Indenture, all Indenture Obligations (as
such term is defined in the Indenture);
Each Foreign Subsidiary as of the date hereof was acquired by the
Company on or after the Issue Date (as such term is defined in the Indenture),
and accordingly, is a Restricted Subsidiary; and
The Company, the Guarantors and the Trustee now desire to enter into
this Fourth Supplemental Indenture pursuant to Section 902 of the Indenture,
with the consent of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities, by act of said Holders delivered
to the Company, each Guarantor and the Trustee, in order to (i) amend the
Indenture to conform the covenants of the Company provided for therein to
certain of the covenants of the Company set forth in the Indenture dated as of
October 15, 1997 entered into by the Company, the Guarantors and the Trustee
relating to the creation by the Company of an issue of $60,000,000 of its 10%
Series B Senior Notes due 2003 (the "Series B Indenture") and (ii) release
certain Foreign Subsidiaries from their guarantees of the Securities;
Capitalized terms used herein without definition shall have the
meanings given such terms in the Indenture as amended by this Fourth
Supplemental Indenture.
2
<PAGE>
NOW, THEREFORE, THIS FOURTH SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and for other good and
valuable consideration, it is covenanted and agreed, for the benefit of each
other and for the equal and proportionate benefit of the Holders of the
Securities issued under the Indenture, as follows:
SECTION 1 DEFINITIONS
1.1 Amended Definitions. The definitions of the following terms,
-------------------
which are defined in Section 101 of the Indenture, are amended and restated to
read as follows:
(a) "Amended Credit Agreement" means the Second Amended and Restated
Credit and Security Agreement dated as of October 15, 1997 among the Company,
WinCup Holdings, Inc., Radnor Chemical Corporation (formerly SP Acquisition
Co.), and StyroChem U.S., Inc. (formerly StyroChem International, Inc.), as
borrowers("U.S. Borrowers") and BNY Financial Corporation (successor in interest
to the Bank of New York Commercial Corporation), as agent and lender, and the
supplement thereto, among StyroChem Europe (The Netherlands) B.V., StyroChem
Finland Oy, ThermiSol Denmark ApS, ThermiSol Finland Oy, and ThermiSol Sweden
AB, as borrowers, the U.S. Borrowers as guarantors and BNY Financial Ltd. as
agent and lender, dated as of December 12, 1997, as amended from time to time.
(b) " Permitted Investment" means (i) any Investment in Cash
Equivalents, (ii) any Investment in the Company, (iii) Investments in existence
on the Issue Date, (iv) intercompany notes permitted under clause (f) of the
definition of "Permitted Indebtedness" in this Section 101, (v) Investments in
any Controlled Subsidiary or any Guarantor, or any Person which, as a result of
such Investment, becomes a Controlled Subsidiary or a Guarantor, and (vi)
Investments that do not at one time outstanding exceed $20,000,000 in joint
ventures, corporations, limited liability companies, partnerships or
Unrestricted Subsidiaries.
(c) " Restricted Subsidiary" means (i) any Guarantor, (ii) any
Subsidiary of the Company in existence on the date hereof to which any line of
business or division (and the assets associated therewith) of any Guarantor are
transferred after the Issue Date, (iii) any Subsidiary of the Company organized
or acquired on or after the Issue Date, unless such Subsidiary has been
designated as an Unrestricted Subsidiary by a resolution of the Board of
Directors as provided in the definition of "Unrestricted Subsidiary" and (iv)
any Unrestricted Subsidiary which is designated as a Restricted Subsidiary by
the Board of Directors; provided, that immediately after giving
3
<PAGE>
effect to any such designation (A) no Default of Event of Default has occurred
and is continuing and (B) in the case of any designation referred to in clause
(iii) or (iv) hereof, the Company could incur at least $1.00 of Indebtedness
pursuant to the covenant described in the initial paragraph under Section 1008
hereof, on a pro forma basis taking into account such designation. The Company
shall evidence any such designation to the Trustee by promptly filing with the
Trustee an officer's certificate certifying that such designation has been made
and complies with the requirements of the immediately preceding sentence.
Notwithstanding any provision of this Indenture to the contrary, each Guarantor
shall be a Restricted Subsidiary.
1.2 New Definitions. The following new definitions are added to
---------------
Section 101 of the Indenture:
(a) "Controlled Subsidiary" means a Restricted Subsidiary (i) 80% or
more of the total Equity Interests or other ownership interests of which (other
than directors' qualifying shares or shares required to be held by foreign
nationals, in each case to the extent mandated by applicable law) is at the time
owned by the Company (directly or through one or more Controlled Subsidiaries of
the Company) and (ii) of which the Company possesses, directly or indirectly,
the power to direct or cause the direction of the management or policies,
whether through the ownership of voting securities, by agreement or otherwise.
(b) " Domestic Subsidiary" means, with respect to any Person, any
Subsidiary of such Person which is not incorporated or organized in any
jurisdiction outside of the United States of America.
(c) " Foreign Subsidiary" means, with respect to any Person, any
Subsidiary of such Person other than a Domestic Subsidiary of such Person.
SECTION 2 AMENDMENTS
2.1 Events of Default. Section 501 of the Indenture is amended and
-----------------
restated to read as follows:
An "Event of Default" shall occur if:
(1) there shall be a default in the payment of interest on any
Security when the same becomes due and payable and the Default continues
for a period of thirty (30) days;
(2) there shall be a default in the payment of the principal of, or
premium with respect to, any Security when
4
<PAGE>
the same becomes due and payable, at maturity, upon redemption, in
connection with a Change of Control, an Asset Sale or otherwise;
(3) the Company or any Guarantor fails to observe or perform any
covenant, condition or agreement on the part of the Company or such
Guarantor to be observed or performed pursuant to Article Eight hereof;
(4) the Company or any Guarantor fails to observe or perform any
covenant, condition or agreement on the part of the Company or such
Guarantor to be observed or performed pursuant to Section 1006, 1008, 1009,
1010, 1012, 1014, 1019 or 1020 hereof and such failure continues for a
period of thirty (30) days;
(5) the Company or any Guarantor fails to observe or perform any
other covenant, condition or agreement in this Indenture or the Securities
and such failure continues for the period and after the notice specified
below;
(6) the Company denies or disaffirms its obligations under this
Indenture or the Securities;
(7) a Guarantor denies or disaffirms its obligations under its
Guarantee, or any Guarantee for any reason ceases to be, or is asserted in
writing by any Guarantor or the Company not to be, in full force and effect
and enforceable in accordance with its terms, except to the extent
contemplated by this Indenture and any such Guarantee;
(8) a default occurs under any Indebtedness of the Company or any of
its Subsidiaries (other than the Securities or the Guarantees), whether
such Indebtedness now exists or is created after the Closing Date if either
(A) such default results from the failure to pay the final scheduled
principal installment in respect of any such Indebtedness on the stated
maturity date thereof (after giving effect to any grace period) or (B) as a
result of such default, the maturity of such Indebtedness has been
accelerated prior to its express maturity and, in each case, the principal
amount of such Indebtedness, together with the principal amount of all
other Indebtedness with respect to which the principal amount remains
unpaid at its final maturity (after giving effect to any grace period in
respect of such final scheduled principal installment) or the maturity of
which has been so accelerated, aggregates $5,000,000 or more;
(9) a final judgment or final judgments for the payment of money are
entered by a court or courts of competent jurisdiction against the Company
or any of its
5
<PAGE>
Restricted Subsidiaries and such judgment or judgments remain undischarged,
unbonded or unstayed for a period of sixty (60) days, provided that the
aggregate of all such judgments (other than any judgment as to which and
only to the extent, a reputable insurance company has acknowledged coverage
of such claim in writing) exceeds $5,000,000;
(10) the Company, any Guarantor or any other Restricted Subsidiary
pursuant to or within the meaning of any Bankruptcy Law:
(a) commences a voluntary case,
(b) consents to the entry of an order for relief against it in
an involuntary case in which it is a debtor,
(c) consents to the appointment of a Custodian of it or for all
or substantially all of its property,
(d) makes a general assignment for the benefit of its creditors,
or
(e) admits in writing its inability to pay debts as the same
become due; or
(11) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(a) is for relief against the Company, any Guarantor or any other
Restricted Subsidiary in an involuntary case in which it is a debtor,
(b) appoints a Custodian of the Company, any Guarantor or any
other Restricted Subsidiary or for all or substantially all of their
property,
(c) orders the liquidation of the Company, any Guarantor or any
other Restricted Subsidiary,
and the order or decree remains unstayed and in effect for sixty (60) days.
The term "Custodian" means any receiver, trustee, assignee, liquidator
or similar official under any Bankruptcy Law.
A Default under clause (5) is not an Event of Default until the
Trustee notifies the Company, or the Holders of at least 25% in principal amount
of the Securities then Outstanding notify the Company and the Trustee, of the
Default and the Company does not cure the Default within sixty (60) days after
6
<PAGE>
receipt of such notice. The notice must specify the Default, demand that it be
remedied and state that the notice is a "Notice of Default."
The failure to make any payment on the Securities when due shall,
after the expiration date of any applicable grace period, constitute an Event of
Default under this Indenture.
2.2 Cross References. References in this Indenture to clauses (9)
----------------
and (10) of Section 501 shall be deemed to refer instead to clauses (10) and
(11) of Section 501.
2.3 Subsidiary Guarantees. Section 1019 of the Indenture is amended
---------------------
to read as follows:
(a) If (i) any Domestic Subsidiary of the Company becomes a
Restricted Subsidiary after the Issue Date, (ii) the Company or any Subsidiary
of the Company that is a Guarantor transfers or causes to be transferred, in one
transaction or a series of related transactions, property or assets (including,
without limitation, businesses, divisions, real property, assets or equipment)
which in the aggregate have a value equal to or greater than 15% of the
Company's total assets determined on a consolidated basis as of the time of
transfer to any Subsidiary or Subsidiaries of the Company that is not a
Guarantor or are not Guarantors, or (iii) any Domestic Subsidiary of the Company
which has a value equal to or greater than 5% of the Company's total assets
determined on a consolidated basis as of the time of determination directly or
indirectly guarantees any Senior Indebtedness of the Company, or (iv) any
Foreign Subsidiary of the Company which has a value equal to or greater than 5%
of the Company's total assets determined on a consolidated basis as of the time
of determination and is not a Guarantor (x) directly or indirectly guarantees
any Senior Indebtedness of the Company or (y) causes more than two-thirds of its
Capital Stock to be pledged to secure any Senior Indebtedness of the Company,
the Company shall cause such Subsidiary or Subsidiaries to execute and deliver
to the Trustee a supplemental indenture pursuant to which such Subsidiary or
Subsidiaries shall unconditionally guarantee, in accordance with Article
Thirteen hereof, all of the Company's obligations under the Indenture and the
Securities on the same terms as the other Guarantors, which Guarantee shall rank
pari passu with any Senior Indebtedness of such Subsidiary. The provisions of
clauses (ii) and (iii) of this paragraph shall not apply to any transaction
permitted by Section 1009. The Company may, at its option, cause any Subsidiary
of the Company which is a Foreign Subsidiary to execute and deliver a Guarantee
in accordance with the provisions of Article XIII of this Indenture.
(b) Each guarantee created pursuant to the provisions described in
the foregoing paragraph is referred to as
7
<PAGE>
a "Guarantee" and the issuer of each such Guarantee is referred to as a
"Guarantor." Notwithstanding the foregoing, any Guarantee shall be automatically
and unconditionally released and discharged upon (i) any sale, exchange,
transfer or other disposition (by way of merger, consolidation or otherwise), to
any Person(provided, that if such Person is a Guarantor, the Guarantee of such
Person shall not also be released and discharged) of all of the Equity Interests
of any Guarantor, or all or substantially all of the assets of any Guarantor,
which is in compliance with this Indenture, or (ii) the release of the guarantee
or other obligation of any Guarantor with respect to any other Senior
Indebtedness of the Company which caused such Guarantor to guarantee the
Company's obligations under this Indenture and the Securities in accordance with
clause (iii) or (iv) of paragraph (a) of this section.
SECTION 3 RELEASE OF FOREIGN SUBSIDIARIES
3.1 In accordance with the requirements of Section 1019 of the
Indenture, prior to its amendment by this Fourth Supplemental Indenture,
StyroChem International, Ltd., StyroChem Europe (The Netherlands) B.V.,
StyroChem Finland OY, Thermisol Finland OY, Thermisol Denmark APS, and Thermisol
Sweden AB (collectively, the "Foreign Guarantors") guaranteed all of the
Indenture Obligations pursuant to, in the case of StyroChem International, Ltd.,
the Indenture, and, in the case of the other Foreign Guarantors, a Second
Supplemental Indenture dated as of October 15, 1997 (the "Second Supplemental
Indenture") executed and delivered by certain of the Foreign Guarantors to the
Trustee. The Indenture, as amended by this Fourth Supplemental Indenture, does
not require the Foreign Guarantors to guarantee the Indenture Obligations.
Accordingly, the Company has requested, and the Trustee hereby agrees, pursuant
to the consent of the Holders of not less than a majority in aggregate principal
amount of the Outstanding Securities, that the Foreign Guarantors are released
from the Indenture and the Second Supplemental Indenture and from all
obligations and liabilities in connection with their guarantee of the Indenture
Obligations under the Indenture, effective as of October 15, 1997.
8
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Fourth
Supplemental Indenture to be duly executed, all as of the day and year first
above written.
RADNOR HOLDINGS CORPORATION
Attest:/s/ CJWilliamson By: /s/ Michael T. Kennedy
--------------------- ------------------------
Name: CJWilliamson Michael T. Kennedy
Title: Secretary President
WINCUP HOLDINGS, INC.
Attest:/s/ CJWilliamson By: /s/ Michael T. Kennedy
--------------------- ------------------------
Name: CJWilliamson Michael T. Kennedy
Title: Secretary President
RADNOR CHEMICAL CORPORATION
Attest:/s/ CJWilliamson By: /s/ Michael T. Kennedy
--------------------- ------------------------
Name: CJWilliamson Michael T. Kennedy
Title: Secretary President
STYROCHEM U.S., INC.
Attest:/s/ CJWilliamson By: /s/ Michael T. Kennedy
--------------------- ------------------------
Name: CJWilliamson Michael T. Kennedy
Title: Secretary President
RADNOR MANAGEMENT, INC.
Attest:/s/ CJWilliamson By: /s/ Michael T. Kennedy
--------------------- ------------------------
Name: CJWilliamson Michael T. Kennedy
Title: Secretary President
9
<PAGE>
RADNOR DELAWARE, INC.
Attest:/s/ CJWilliamson By: /s/ Michael T. Kennedy
--------------------- ------------------------
Name: CJWilliamson Michael T. Kennedy
Title: Secretary President
FIRST UNION NATIONAL BANK,
as Trustee
Attest: /s/ Ralph E. Jones By: /s/ Alan G. Finn
--------------------- ------------------------
Name: Ralph E. Jones Alan G. Finn
Title: C.T.O. Assistant Vice President
10
<PAGE>
Exhibit 10.1
AMENDMENT NO. 1
TO
SECOND AMENDED AND RESTATED REVOLVING
CREDIT AND SECURITY AGREEMENT
THIS AMENDMENT NO. 1 ("Amendment") is entered into as of March 9, 1998, by
and among WinCup Holdings, Inc., Radnor Chemical Corporation (formerly SP
Acquisition Co.), StyroChem U.S., Inc. (formerly StyroChem International, Inc.),
Radnor Holdings Corporation and Radnor Delaware, Inc. (collectively,
"Borrowers"), BNY Financial Corporation ("BNYFC"), NationsBank, N.A.
("NationsBank") and each of the other financial institutions which are or become
parties thereto (collectively, "Lenders") and BNYFC, as administrative and
collateral agent for the Lenders (in such capacity, "Agent").
BACKGROUND
----------
Borrowers, Lenders and Agent are parties to a Second Amended and Restated
Revolving Credit and Security Agreement dated as of October 15, 1997 (as
amended, supplemented or otherwise modified from time to time, the "Loan
Agreement") pursuant to which Lenders provide Borrowers with certain financial
accommodations. Styrochem Europe (the Netherlands) B.V., Styrochem Finland Oy,
Thermisol Denmark APS, Thermisol Sweden AB, Thermisol Finland Oy (collectively
"European Borrowers"), BNY Financial Limited ("BNY UK") and NationsBank are
parties to a certain Supplement Revolving Multicurrency Credit Agreement dated
December 12, 1997 (the "European Supplement") which is guaranteed by the U.S.
Guarantors (as defined in the European Supplement).
Borrowers and the European Borrowers have requested that Lenders amend
certain provisions of the Loan Agreement and Lenders are willing to do so on the
terms and conditions hereafter set forth. This Amendment shall also be deemed
to amend the same provisions in the European Supplement as referenced herein.
NOW, THEREFORE, in consideration of any loan or advance or grant of credit
heretofore or hereafter made to or for the account of Borrowers and European
Borrowers by any Lender, and for other good and valuable consideration, the
receipt end sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Definitions. All capitalized terms not otherwise defined herein shall
-----------
have the meanings given to them in the Loan Agreement.
2. Amendments to Loan Agreement and the European Supplement. Subject to
--------------------------------------------------------
satisfaction of the conditions precedent set forth in Section 3 below, the Loan
Agreement and the European Supplement are hereby amended as follows:
<PAGE>
2.1. The Fixed Charge Coverage Ratio required by Section 6.7 of the
Loan Agreement (Section 6(f) of the European Supplement) is amended to be not
less than "0.75 to 1.00" as at the end of and for the four fiscal quarters
ending December 31, 1997, March 30, 1998, June 30, 1998 and September 30, 1998,
but otherwise to remain as provided in the Loan Agreement.
2.2. Subsection 7.1(a) of the Loan Agreement is hereby amended in its
entirety to read as follows:
"Enter into any merger, consolidation or other reorganization with or
into any other Person (other than another Borrower) or acquire all or a
substantial portion of the assets or stock of any Person (other than
another Borrower) or permit any other Person (other than another Borrower)
to consolidate with or merge with it; provided, however, that the Borrowers
--------
shall be permitted to acquire (by merger or otherwise, and notwithstanding
the limitations set forth in Section 7.6 hereof) all or substantially all
of the assets or all or substantially all of the shares of capital stock of
a Person, provided that no such acquisition shall be permitted hereunder
unless (i) at the time of and after giving effect to such acquisition, no
Event of Default or Default shall have occurred and be continuing, (ii) the
aggregate purchase price of all such acquisitions plus amounts expended
pursuant to Section 7.12(b) hereof shall not exceed $5,000,000 during any
fiscal year, and (iii) Agent shall have a perfected first priority security
interest in the Collateral of the acquired entity."
2.3. Subsection 7(a)(i) of the European Supplement is hereby amended
in its entirety to read as follows:
"Enter into any merger, consolidation or other reorganization with or
into any other Person (other than another Borrower) or acquire all or a
substantial portion of the assets or stock of any Person (other than
another Borrower) or permit any other Person (other than another Borrower)
to consolidate with or merge with it; provided, however, that the Borrowers
--------
shall be permitted to acquire (by merger or otherwise, and notwithstanding
the limitations set forth in Section 7(f) hereof) all or substantially all
of the assets or all or substantially all of the shares of capital stock of
a Person, provided that no such acquisition shall be permitted hereunder
unless (i) at the time of and after giving effect to such acquisition, no
Event of Default or Default shall have occurred and be continuing, (ii) the
aggregate purchase price of all such acquisitions plus amounts expended
pursuant to Section 7(k)(ii) hereof shall not exceed $5,000,000 during any
fiscal year, and (iii) at Agent's option, Agent shall have a perfected
first priority security interest in the assets of the acquired entity
comparable to security currently granted by existing European Borrowers."
2
<PAGE>
2.4. The amount of capital expenditures permitted by Section 7.6 of
the Loan Agreement (Section 7(f) of the European Supplement) for the fiscal year
ended December 31, 1997 is amended to increase the maximum amount permitted for
such year to $18,500,000.
2.5. The amount of capital expenditures permitted by Section 7.6 of
the Loan Agreement (Section 7(f) of the European Supplement) for the fiscal year
ended December 31, 1998 is amended to increase the maximum amount permitted for
such year to $22,500,000.
2.6. The amount of annual rental payments for leased property
permitted by Section 7.11 of the Loan Agreement (Section 7(j) of the European
Supplement) for any one fiscal year is increased to $7,500,000.
2.7. Subsection 7.12(a) of the Loan Agreement is hereby amended in its
entirety to read as follows:
"(a) Form any Subsidiary unless (A) (i) such Subsidiary either
expressly joins in this Agreement as a borrower and becomes jointly and
severally liable for the Obligations pursuant to the form of Joinder
attached hereto as Exhibit 7.12-A or executes a guaranty of the Obligations
in the form attached hereto as Exhibit 7.12-B, each in form satisfactory to
Agent and (ii) Agent shall have received all documents, including legal
opinions, it may reasonably require to establish compliance with each of
the foregoing conditions or (B) such Subsidiary is formed pursuant to the
provisions of Section 7.4 hereof."
2.8. Subsection 7(k)(i) of the European Supplement is hereby amended
in its entirety to read as follows:
"(a) Form any Subsidiary unless (A) (i) such Subsidiary either
expressly joins in this Agreement as either a European or U.S. Guarantor
and becomes jointly and severally liable for, or executed a guaranty of,
the obligations of Borrowers and the European Guarantor and/or as the case
may be of the U.S. Guarantors hereunder and under any other agreement
between the European and U.S. Guarantors, Agent and Lenders, each in form
satisfactory to Agent and (ii) Agent shall have received all documents,
including legal opinions, it may reasonably require to establish compliance
with each of the foregoing conditions or (B) such Subsidiary is formed
pursuant to the provisions of Section 7(d) hereof."
2.9. Subsection 7.12(b) of the Loan Agreement (Section 7(k)(ii) of the
European Supplement, provided that the reference to Section 7.1(a) below shall
be deemed to refer to Section 7(a)(i) of the European Supplement) is hereby
amended in its entirety to read as follows:
"(b) Enter into any partnership, joint venture or similar arrangement
unless (i) at the time of and after giving effect to such arrangement no
Event of Default or Default shall have occurred and be continuing and (ii)
the aggregate amount invested therein plus
3
<PAGE>
amounts expended pursuant to Section 7.1(a) hereof shall not exceed
$5,000,000 during any fiscal year."
3. Conditions of Effectiveness. This Amendment shall become effective
---------------------------
upon satisfaction of the following conditions precedent:
(i) Agent, on behalf of the Lenders and the lenders under the European
Supplement, shall have received four (4) copies of this Amendment executed by
Borrowers and Lenders and ratified by the parties to the European Supplement.
(ii) Agent, on behalf of the Lenders and the lenders under the
European Supplement, shall have received such other certificates, instruments,
documents and agreements as may be required by Agent or its counsel, each of
which shall be in form and substance satisfactory to Agent and its counsel.
4. Representations and Warranties. Borrowers and European Borrowers
------------------------------
hereby represent and warrant as follows:
(a) This Amendment, the Loan Agreement and the European Supplement, as
amended hereby, constitute legal, valid and binding obligations of Borrowers and
are enforceable against Borrowers and the European Borrowers in accordance with
their respective terms.
(b) Upon the effectiveness of this Amendment, Borrowers and the
European Borrowers hereby reaffirm all covenants, representations and warranties
made the Loan Agreement and the European Supplement, respectively, to the extent
the same are not amended hereby and agree that all such covenants,
representations and warranties shall be deemed to have been remade as of the
effective date of this Amendment.
(c) No Event of Default or Default has occurred and is continuing or
would exist after giving effect to this Amendment.
(d) Borrowers and European Borrowers have no defense, counterclaim or
offset with respect to the Loan Agreement and the European Supplement.
5. Effect on the Loan Agreement.
----------------------------
(a) Upon the effectiveness of this Amendment, each reference in the
Loan Agreement or the European Supplement to "this Agreement," "hereunder,"
"hereof," "herein" or words of like import shall mean and be a reference to the
Loan Agreement and the European Supplement, respectively, as amended hereby.
(b) Except as specifically amended herein, the Loan Agreement, the
European Supplement and all other documents, instruments and agreements executed
and/or delivered in connection therewith, shall remain in full force and effect,
and are hereby ratified and confirmed.
4
<PAGE>
(c) The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided in Section 3, operate as a waiver of any
---------
right, power or remedy of Lenders, nor constitute a waiver of any provision of
the Loan Agreement or the European Supplement, as the case may be, or any other
documents, instruments or any other documents, or agreements executed and/or
delivered under or on correction therewith.
(d) Each of the U.S. Guarantors and the European Guarantors hereby
confirms and agrees that after the execution of this Amendment its guarantee
under the European Supplement is and will remain in full force and effect.
6. Governing Law. This Amendment shall be binding upon and inure to the
-------------
benefit of the parties hereto and their respective successors and assigns and
shall be governed by and construed in accordance with the laws of the State of
New York provided that any amendments and agreements herein relating solely to
the European Supplement shall be governed by English law.
7. Headings. Section headings in this Agreement are included herein for
--------
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose.
8. Counterparts; Telecopied Signatures. This Amendment may be executed
-----------------------------------
in any number of and by different parties hereto, on separate counterparts, all
of which when so executed shall be deemed an original, but all such counterparts
shall constitute one and the same agreement. Any signature delivered by a party
by facsimile transmission shall be deemed to be an original signature hereto.
5
<PAGE>
IN WITNESS WHEREOF, this Amendment has been duly executed as of the day and
year first written above.
WINCUP HOLDINGS, INC.
By:/s/ Michael T. Kennedy
----------------------
Michael T. Kennedy
President
RADNOR CHEMICAL CORPORATION
By:/s/ Michael T. Kennedy
----------------------
Michael T. Kennedy
President
STYROCHEM U.S., INC.
By:/s/ Michael T. Kennedy
----------------------
Michael T. Kennedy
President
RADNOR DELAWARE, INC. RADNOR HOLDINGS CORPORATION
By:/s/ Michael T. Kennedy By:/s/ Michael T. Kennedy
---------------------- ----------------------
Michael T. Kennedy Michael T. Kennedy
Chairman President
BNY FINANCIAL CORPORATION, AS
AGENT AND A LENDER
By: SIGNATURE APPEARS HERE
------------------------
Name:
Title: Vice President
NATIONSBANK, N.A., AS A LENDER
By: /s/ Vickie Tillman
-------------------
Name: Vickie Tillman
Title: VP
6
<PAGE>
RATIFICATION
The undersigned parties to the European Supplement referenced in the
foregoing Amendment No. 1 hereby ratify and approve the same and agree that the
European Supplement is modified as provided therein and ratify each of the
representations, warranties and conditions set forth therein as if made by the
European Borrowers. The European Borrowers further represent and warrant that
the total purchase price to be paid for the proposed acquisition of Epsilevy Oy
shall not result in an Event of Default under the European Supplement. This
ratification agreement shall become a part of the European Supplement and shall
be governed by and construed in accordance with the laws of England.
STYROCHEM EUROPE (THE NETHERLANDS)
B.V.
By:/s/ Michael T. Kennedy
----------------------
Michael T. Kennedy
Managing Director A
STYROCHEM FINLAND OY
By:/s/ Michael T. Kennedy
----------------------
Michael T. Kennedy
Director
THERMISOL DENMARK APS
By:/s/ Michael T. Kennedy
----------------------
Michael T. Kennedy
Director
THERMISOL SWEDEN AB
By:/s/ Michael T. Kennedy
----------------------
Michael T. Kennedy
Director
THERMISOL FINLAND OY
By:/s/ Michael T. Kennedy
----------------------
Michael T. Kennedy
Director
WINCUP HOLDINGS, INC.
By:/s/ Michael T. Kennedy
----------------------
Michael T. Kennedy
President
RADNOR CHEMICAL CORPORATION
By:/s/ Michael T. Kennedy
----------------------
Michael T. Kennedy
President
7
<PAGE>
STYROCHEM U.S., INC.
By:/s/ Michael T. Kennedy
----------------------
Michael T. Kennedy
President
RADNOR HOLDINGS CORPORATION
By:/s/ Michael T. Kennedy
----------------------
Michael T. Kennedy
President
BNY FINANCIAL LIMITED
By: SIGNATURE APPEARS HERE
------------------------
NATIONSBANK, N.A.
By: /s/ Vickie Tillman
-------------------
RADNOR DELAWARE, INC.
By:/s/ Michael T. Kennedy
----------------------
Michael T. Kennedy
Chairman
8
<PAGE>
EXHIBIT 7.12-A
JOINDER
_______________________________, a _________________________
corporation, hereby joins in the Second Amended and Restated Revolving Credit
and Security Agreement dated as of October 15, 1997 ("Loan Agreement") between
WinCup Holdings, Inc., Radnor Chemical Corporation (formerly SP Acquisition
Co.), StyroChem Inc. (formerly StyroChem International, Inc.), Radnor Holdings
Corporation and _____________________________ (collectively, "Borrowers"), the
financial institutions which are or became parties thereto (collectively,
"Lenders") and BNY Financial Corporation as administrative and collateral agent
for the Lenders (in such capacity, "Agent") as a "Borrower" thereunder and
agrees to assume in full and become jointly and severally liable for all of the
Obligations (as defined in the Loan Agreement) of the Borrowers thereunder and
under any other agreement between Borrowers, Agent and Lenders.
__________________________ also hereby joins in the European Supplement (as
defined in the Loan Agreement) as one of the U.S. Guarantors referenced therein
and agrees to become jointly and severally liable for the obligations of the
U.S. Guarantors thereunder and under any other agreement between U.S. Guarantors
and the lenders acting under the European Supplement. Without limiting the
generality of the foregoing, in order to secure the prompt payment and
performance to Agent and Lenders of the Obligations, ________________________
hereby assigns, pledges and grants to Agent a continuing security interest in
and to all of its Collateral (as defined in the Loan Agreement), whether now
owned or existing or hereafter acquired or arising and wheresoever located. The
undersigned further agrees to deliver to Agent each of the documents described
on Exhibit A attached hereto.
IN WITNESS WHEREOF, and intending to be legally bound hereby,____________
has duly executed this Joinder as of the___________ day of March, 1998.
------------------------------
By:
______________________________
Exhibit 7.12-A
<PAGE>
ACKNOWLEDGEMENT OF JOINDER
The undersigned parties to the Loan Agreement and the European Supplement
hereby acknowledge and agree to the joinder of ______________________________ as
a "Borrower" under the Loan Agreement and as a "U.S. Guarantor" under the
European Supplement.
IN WITNESS WHEREOF, and intending to be legally bound hereby, each of the
undersigned has duly executed this acknowledgement as of the ________ day of
March, 1998.
PARTIES TO LOAN AGREEMENT:
-------------------------
WINCUP HOLDINGS, INC.
By:
------------------------
Michael T. Kennedy
President
RADNOR CHEMICAL CORPORATION
By:
------------------------
Michael T. Kennedy
President
STYROCHEM U.S., INC.
By:
------------------------
Michael T. Kennedy
President
RADNOR HOLDINGS CORPORATION
By:
------------------------
Michael T. Kennedy
President
Exhibit 7.12-A
<PAGE>
BNY FINANCIAL CORPORATION, AS AGENT AND A LENDER
By:
----------------------
Name:
--------------------
Title:
-------------------
NATIONSBANK, N.A., AS A LENDER
By:
----------------------
Name:
--------------------
Title:
-------------------
PARTIES TO EUROPEAN SUPPLEMENT:
------------------------------
STYROCHEM EUROPE (THE NETHERLANDS) B.V.
By:
----------------------
STYROCHEM FINLAND OY
By:
----------------------
THERMISOL DENMARK APS
By:
----------------------
Exhibit 7.12-A
<PAGE>
THERMISOL SWEDEN AB
By:
----------------------
THERMISOL FINLAND OY
By:
----------------------
WINCUP HOLDINGS, INC.
By:
----------------------
RADNOR CHEMICAL CORPORATION
By:
----------------------
STYROCHEM U.S., INC.
By:
----------------------
RADNOR HOLDINGS CORPORATION
By:
----------------------
BNY FINANCIAL LIMITED
By:
----------------------
NATIONSBANK, N.A.
By:
----------------------
Exhibit 7.12-A
<PAGE>
Exhibit A
(1) Schedules to the Loan Agreement and European Supplement updated to
reflect the joinder of ______________________ as an additional Borrower thereto
and additional U.S. Guarantor, respectively.
(2) A copy of resolutions in form and substance reasonably satisfactory to
Agent, of the Board of Directors of _____________________ authorizing the
execution, delivery and performance of the Joinder, the Loan Agreement and the
granting Liens upon its Collateral, each certified by the Secretary or an
Assistant Secretary of ___________________________ as of the date of this
Joinder.
(3) A copy of the Articles or Certificate of Incorporation of
__________________________, and all amendments thereto, certified by the
Secretary of State or other appropriate official of its jurisdiction of
incorporation together with copies of the By-Laws of __________________________
certified as accurate and complete by the Secretary or an Assistant Secretary of
___________________________________.
(4) Good standing certificates for ______________________________ dated not
more than thirty (30) days prior to the date of this Joinder, issued by the
Secretary of State or other appropriate official of
_______________________________'s jurisdiction of incorporation and each
jurisdiction where the conduct of __________________________'s business
activities or the ownership of its properties necessitates qualification.
(5) Executed legal opinion of Duane, Morris & Heckscher, counsel to
_____________________________________________, in form and substance
satisfactory to Agent regarding the due authorization, enforceability and
validity of the joinder and the transactions contemplated herein.
(6) Executed UCC-1 Financing Statements.
Exhibit 7.12-A
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM RADNOR
HOLDINGS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-25-1998
<PERIOD-START> DEC-27-1997
<PERIOD-END> JUN-26-1998
<CASH> 4,970
<SECURITIES> 0
<RECEIVABLES> 35,383
<ALLOWANCES> 0
<INVENTORY> 33,111
<CURRENT-ASSETS> 79,645
<PP&E> 186,238
<DEPRECIATION> 16,782
<TOTAL-ASSETS> 263,343
<CURRENT-LIABILITIES> 47,668
<BONDS> 187,771
0
0
<COMMON> 1
<OTHER-SE> 17,196
<TOTAL-LIABILITY-AND-EQUITY> 263,343
<SALES> 155,877
<TOTAL-REVENUES> 155,877
<CGS> 111,692
<TOTAL-COSTS> 111,692
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,172
<INCOME-PRETAX> 5,793
<INCOME-TAX> 2,196
<INCOME-CONTINUING> 3,597
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,597
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
