<PAGE>
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
for the fiscal year ended December 31, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
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
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE
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 [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]
As of March 24, 2000 there were 600 shares of the Registrant's Voting Common
Stock ($.10 par value), 245 shares of the Registrant's Nonvoting Common Stock
($.10 par value) and 5,400 shares of the Registrant's Class B Nonvoting Common
Stock ($.01 par value) outstanding. The aggregate market value of voting stock
held by non-affiliates of the Registrant as of such date was $0.
DOCUMENT INCORPORATED BY REFERENCE:
Portions of the Registrant's Prospectus dated February 6, 1998, included in
Amendment No. 1 to the Company's Registration Statement on Form S-4, Commission
File No. 333-42101, are incorporated by reference in Item 8.
================================================================================
<PAGE>
RADNOR HOLDINGS CORPORATION
1999 FORM 10-K
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ITEM Page
------ ------
PART I
---------------
<S> <C> <C> <C>
1. Business 1
Packaging & Insulation
Food Packaging Products 1
Insulation Products 2
Specialty Chemicals 2
General
Raw Materials 2
Risks Attendant to Foreign Operations 3
Proprietary Technology and Trademarks 3
Competition 3
Employees 4
Year 2000 4
Environmental Matters 4
2. Properties
Packaging & Insulation 7
Specialty Chemicals 7
3. Legal Proceedings 8
4. Submission of Matters to a Vote of Security Holders 8
PART II
---------------
5. Market for Registrant's Common Equity and Related Stock 9
Matters
6. Selected Financial Data 10
7. Management's Discussion and Analysis of Financial Condition
and Results of Operations 11
7A. Quantitative and Qualitative Disclosures About Market Risk 14
8. Financial Statements and Supplementary Data 16
9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure 17
PART III
---------------
10. Directors and Executive Officers of the Registrant 18
11. Executive Compensation 20
12. Security Ownership of Certain Beneficial Owners and Management 22
13. Certain Relationships and Related Transactions 24
PART IV
--------------
14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K 25
</TABLE>
<PAGE>
PART I
ITEM 1. BUSINESS
Radnor Holdings Corporation, through acquisition and internal development, has
established itself as a leading worldwide manufacturer and distributor of
specialty chemicals and foam packaging and insulation products for the
foodservice, insulation and packaging industries.
The packaging and insulation business segment manufactures and distributes
foam cup and container products for the foodservice industry as well as a
variety of standard and specialized insulation products. Through its WinCup
Holdings, Inc. ("WinCup") subsidiary, the Company is the second largest producer
in the United States of foam cups and containers for the foodservice industry.
The specialty chemicals business segment primarily manufactures and distributes
expandable polystyrene ("EPS") bead for internal consumption and distribution to
the insulation and packaging industries. Through its Radnor Chemical Corporation
("Radnor Chemical") subsidiary, the Company is the third largest worldwide
producer of EPS.
Financial information concerning the Company's business segments appears in
Note 10 to the Consolidated Financial Statements included under Item 8 herein.
As used in this Report, the term "Radnor" or "Company" includes subsidiaries,
unless the context indicates otherwise.
PACKAGING & INSULATION
Radnor's downstream operations consist of food packaging and insulation
products where the Company is able to differentiate itself by its product
quality, customer service and production technology. The downstream operations
obtain nearly 100% of their external EPS requirements from the specialty
chemicals segment.
FOOD PACKAGING PRODUCTS
The foam sector of the U.S. disposable cup and container market, which the
Company believes had sales in excess of $600 million in 1999, is highly
concentrated, with the Company and its primary competitor accounting for more
than 80% of the sector.
The Company manufactures a broad range of foam cups, bowls, containers,
packaging products and thermoformed plastic lids. The use of foam provides an
insulating feature to the Company's products, allowing them to be used for both
hot and cold beverages and food products while enhancing comfort for the end
user. Foam cups are manufactured in varying sizes for both hot and cold
beverages and are sold under the Dixie/R/, COMpac/TM/, Profit Pals/R/,
STYROcup/R/, Handi-Kup HK/R/, and Simplicity/R/ brand names. Foam bowls and
other containers are made in varying sizes for both hot and cold food products
and are sold under the STYROcontainers/R/ brand name. The Company also
manufactures thermoformed leak-resistant plastic lids for its cups, bowls and
containers.
The Company sells its disposable food packaging products through a 63-person
sales organization and through an extensive network of more than 71 independent
sales representatives. Sales and marketing efforts are directed by the Company's
Senior Vice President of Sales and Marketing and are supported by 13 senior
sales managers with an average of more than 15 years experience in the
foodservice industry. The Company believes its experienced sales team and long-
term representative relationships enhance the Company's ability to provide high
levels of customer service and specialized marketing programs, including custom-
designed foam products.
The Company's food packaging products are made with custom-designed foam cup
molding machines, lid production machines and foam cup and container printing
machines. The Company operates ten plants throughout the U.S. that produce foam
cups, containers and lids.
The Company supplies food packaging products to a number of large national
companies and foodservice distributors. No customer represented more than 6.0%
of the Company's net sales for 1999. In addition, the five largest accounts
represented approximately 22.5% of the Company's net sales for 1999. Although
the Company has
1
<PAGE>
not lost sales from its key customers in 1997, 1998, 1999 or 2000 to date, if
any of such customers substantially reduces its level of purchases from the
Company, the Company's profitability may be adversely affected. Moreover,
continued consolidation among distributors in the foodservice industry could
result in an increasingly concentrated customer base or the loss of certain
customers.
INSULATION PRODUCTS
The Company's insulation operations directly convert EPS produced by the
specialty chemicals segment into a full range of building insulation panels,
such as roof, wall and floor panels for the building industry, as well as
specialized insulation products. These products are sold primarily in Finland
and the Scandinavian countries of Denmark, Sweden and Norway and accounted for
approximately 13% of the Company's consolidated net sales for 1999.
The Company maintains its own direct sales force for insulation products,
which sells to more than 2,000 customers, including large building wholesalers,
residential and commercial construction companies and distributors. A portion of
the insulation sales force is decentralized, allowing the Company to effectively
market specialized products in addition to its standard product offerings.
The Company operates seven plants located in Finland, Sweden and Denmark that
manufacture insulation panels from EPS. These plants convert approximately 30%
of the Company's production of EPS in Europe into insulation products.
SPECIALTY CHEMICALS
The EPS industry is generally comprised of three grades of material: block
grade for rigid board insulation and molded parts, shape grade for a broad range
of packaging and specialty applications and T-grade for foodservice containers
and lost foam casting. The North American market for EPS products is estimated
at approximately 940 million pounds annually, including insulation, packaging
and foodservice grades. The European market is estimated at approximately 1.7
billion pounds annually consisting primarily of block and shape grades.
Worldwide, there are in excess of 20 manufacturers with the top five accounting
for approximately 60% of the market.
The Company manufactures EPS for its internal consumption in addition to
selling directly to third party manufacturers. The specialty chemicals segment
supplies nearly 100% of the packaging and insulation segment's external EPS
requirements. Sales to the packaging and insulation operations were $24.3
million or 22.3% of the specialty chemicals segment's total sales for 1999. The
Company's EPS includes a range of bead sizes and densities for conversion into
foam containers, light and heavy insulation boards, and various shape products.
In North America, the Company sells EPS through a dedicated sales force to
manufacturers of foam packaging and insulation products. In Europe, the Company
markets its EPS and other polystyrene products through a combination of its own
sales force, sales agency arrangements with third-party sales offices and
manufacturers' representatives. In support of these sales and marketing efforts,
the Company employs individuals who are knowledgeable of chemical engineering
and manufacturing processes in order to provide technical assistance to
customers.
The Company operates four plants in North America and two plants in Europe
that manufacture EPS from styrene monomer. These plants produced more than 296
million pounds or 134,300 metric tons of EPS during 1999.
GENERAL
RAW MATERIALS
The Company's packaging and insulation products are manufactured from EPS,
which is produced from styrene monomer. Styrene monomer is a commodity
petrochemical that is readily available in bulk quantities from
2
<PAGE>
numerous large, vertically integrated chemical companies. Historically, styrene
monomer prices have fluctuated as a result of changes in petrochemical prices,
capacity, utilization and in supply and demand for styrene monomer. Styrene
monomer prices ranged from $.24 to $.29 per pound during 1998. During 1999 and
2000 to date, styrene monomer prices have ranged from $.23 to $.37 per pound.
The specialty chemicals business does not insulate the Company's packaging and
insulation operations from styrene monomer price fluctuations, although it
mitigates the impact of such fluctuations by increasing the Company's
flexibility to purchase styrene monomer. Radnor purchases styrene monomer from
various suppliers through long-term contracts as well as through spot market
transactions.
The raw materials used by the Company for the manufacture of thermoformed lids
are primarily plastic resins such as high-impact polystyrene ("HIPS"). Most of
the plastic resins used by the Company, including HIPS, are available from a
variety of sources.
RISKS ATTENDANT TO FOREIGN OPERATIONS
The Company conducts its businesses in numerous foreign countries and, as a
result, is subject to risks customarily encountered in foreign operations,
including fluctuations in foreign currency exchange rates and controls, import
and export controls, and other economic, political and regulatory policies of
local governments. The Company's foreign entities report their assets,
liabilities and results of operations in the currency in which the entity
primarily conducts its businesses. The foreign currencies are ultimately
translated into U.S. dollars for financial reporting purposes.
Note 10 to the Company's financial statements included under Item 8 herein
contains information with respect to the geographic composition of the Company's
operations and financial position as of and for the years ended December 31,
1999, December 25, 1998 and December 26, 1997.
PROPRIETARY TECHNOLOGY AND TRADEMARKS
The Company has developed a broad array of proprietary technology that is
utilized in various stages of its manufacturing operations. The Company relies
primarily upon confidentiality agreements and restricted plant access to protect
its proprietary technology. The Company owns or holds license rights with
respect to numerous patents relating to its lid design in manufacturing,
embossed cup design and continuous formed foam cup manufacturing processes. The
Company, however, does not consider these patents material to its operations.
The Company holds approximately 38 registered trademarks that are not
considered material to its operations.
COMPETITION
The Company's businesses face strong competition from others, some of which
are larger and have greater resources than Radnor.
Radnor's food packaging business competes in the U.S. principally with Dart
Container Corp., which has significantly greater financial resources than the
Company and controls the largest share of this market segment. In Europe,
Radnor's insulation business competes primarily with several regional
manufacturers who have financial resources and market share similar to that of
the Company.
Competition in the packaging and insulation segment is based primarily on
customer service, product quality and the price at which the products are
offered. The Company believes that its market position is attributable to its
high level of customer service and product quality, strategically located
manufacturing facilities, proprietary technology and experienced management
team. The Company does not believe that other companies operating in related
markets are likely to enter the packaging and insulation segment due to the
significant investment that would be required.
3
<PAGE>
In North America, the specialty chemicals business segment competes with Nova
Chemicals, Inc., Huntsman Chemical Corp. and BASF Corporation, which are larger
and have greater financial resources than the Company and which control a
significant share of the market for supplying EPS to manufacturers of insulation
and packaging products. In Europe, the Company competes with several companies
including Nova Chemicals, Inc., BASF Corporation and B.P. Amoco PLC. which are
larger and have substantially greater financial resources than Radnor.
The Company believes that competition within the EPS market is primarily based
on price, although customer service and support and high quality products can be
significant competitive factors, particularly among the smaller manufacturers of
foam insulation and packaging products.
EMPLOYEES
As of December 31, 1999, the Company had approximately 1,875 full-time
employees. Except for employees in Europe, Radnor's employees are not
represented by any union. The Company has never experienced a material labor
strike or other material labor-related work stoppage and considers its relations
with its employees to be good.
In Finland, over 90% of the Company's employees are represented by one of
three unions and the Company is subject to three collective bargaining
agreements. In Sweden, over 90% of the Company's employees are represented by
one of two unions and the Company is subject to two collective bargaining
agreements. The Company is represented in Swedish collective bargaining
negotiations by Byggnadamnesforbundet (Construction Materials Federation). The
European Union directives regarding employment are applicable to the Company in
Finland and Sweden; however, the terms of the collective bargaining agreements
will control employment relationships in these countries to the extent that
these agreements address relevant issues in a more detailed manner and include
benefits exceeding the minimum standards established by the directives.
In Denmark, the Company is a member of Dansk Industri, a large Danish employer
association, which has negotiated collective bargaining agreements with various
trade unions throughout Denmark. Most of the Company's blue collar employees in
Denmark are represented by the trade union SID (semi-skilled workers union). In
addition, the Company has negotiated local agreements with its Danish workers
that supplement the collective bargaining agreements. Moreover, all contracts
for white collar employees in Denmark must include provisions that are at least
as favorable as those provided in the Danish Employees Act.
The Company is dependent on the management experience and continued services
of the Company's executive officers, including its Chief Executive Officer,
Michael T. Kennedy. The loss of the services of these officers could have a
material adverse effect on the Company's business. In addition, the Company's
continued growth depends on its ability to attract and retain experienced key
employees.
YEAR 2000
The Company has not experienced Year 2000 noncompliance issues that could have
a material adverse effect on the Company's business, financial condition, cash
flows or results of operations. Additional information related to Year 2000
compliance is included under Item 7 herein.
ENVIRONMENTAL MATTERS
The Company's facilities are used for manufacturing or warehousing foam
conversion products or the EPS from which such products are manufactured. Many
of these facilities are subject to federal, state, foreign and local laws and
regulations relating to, among other things, emissions to air, discharges to
water and the generation, handling, storage, transportation and disposal of
hazardous and non-hazardous materials and wastes.
Certain of the Company's manufacturing facilities generate air emissions,
including volatile organic compounds and particulate matter, that are regulated
and require permits and/or emissions control equipment. While the Company
believes that the majority of the air emissions from its facilities are properly
permitted and controlled, certain of the Company's facilities have been cited
for instances of noncompliance, although no material
4
<PAGE>
citations were issued within the periods covered by the financial statements
included in this Annual Report and all of these citations have been resolved
without a material adverse effect to the Company's financial condition or
results of operations. Certain of the Company's facilities also have failed to
report certain emissions as required, and it is possible that certain of the
Company's facilities lack proper air emission permits, that these permits do not
address all regulated emissions and/or that certain of the facilities are not in
full compliance with all permit conditions. Certain of the Company's Finnish and
Scandinavian facilities could be required in the future to reduce emissions of
pentane and styrene. The requirement to reduce such air emissions is subject to
negotiation with Finnish and Scandinavian regulatory authorities and could
require significant capital expenditures. The Company believes, however, that
the costs of achieving and maintaining compliance with laws and regulations
regarding air emissions are not reasonably likely to have a material adverse
effect on the Company's financial condition or results of operations, based on
its prior experience in addressing compliance matters that raised potentially
similar issues for other facilities. Furthermore, the Company has no knowledge
of any claims regarding air emissions that could be expected to have a material
adverse effect on the Company's financial condition or results of operations.
However, it is possible that the Company could incur significant fines,
penalties or capital costs associated with any confirmed noncompliance. There
can be no assurance that recently promulgated or future environmental laws or
regulations, or permit requirements under Title V of the Clean Air Act, will not
require substantial expenditures by the Company or significant modifications of
the Company's operations.
Certain of the Company's manufacturing facilities generate wastewater that is
regulated and requires permits for discharge. While the Company believes that
the majority of the wastewater discharges from its facilities are properly
permitted, certain of the Company's facilities have been cited for instances of
past noncompliance. All of these citations have been resolved without a material
adverse effect on the Company's financial condition or results of operations.
Moreover, one of the Company's facilities has failed to report wastewater
pretreatment system upset conditions as required, and it is possible that
certain of the Company's facilities currently lack proper wastewater discharge
permits and/or are not in full compliance with all permit conditions. The
Company has no knowledge of any claims regarding wastewater discharge that could
be expected to have a material adverse effect on the Company's financial
condition or results of operations. The Company believes that the costs of
achieving and maintaining compliance with laws and regulations regarding
wastewater discharges are not reasonably likely to have a material adverse
effect on the Company's financial condition or results of operations, based both
on the Company's prior experience in obtaining similar permits or addressing
compliance matters that raised potentially similar issues for other facilities
and on preliminary estimates of the cost of addressing such potential permit
issues. It is possible, however, that the Company could become subject to
significant fines, penalties or capital costs associated with any confirmed
noncompliance. Furthermore, there can be no assurance that recently promulgated
or future environmental laws or regulations will not require substantial
expenditures by the Company or significant modifications of the Company's
operations.
The Company generates and handles certain hazardous substances, including
petroleum products, and wastes in connection with its manufacturing processes.
The handling and disposal of these substances and wastes is subject to federal,
state, foreign and local regulations, and site contamination originating from
the release or disposal of such substances or wastes can lead to significant
liabilities. It is possible that certain of the Company's current or former
facilities are or were not in full compliance with applicable laws regarding the
handling and disposal of these substances and wastes. The soil and shallow
groundwater at the Company's domestic EPS facilities are known to contain
elevated levels of various contaminants. However, the Company does not believe,
based on the results of soil and groundwater testing, that material remediation
efforts with respect to these conditions will be required. Although the Company
believes that the elevated levels of various contaminants in the soil and
shallow groundwater at the Company's domestic EPS facilities and any confirmed
noncompliance with applicable laws regarding the handling and disposal of
certain hazardous substances have not had, and are not reasonably likely to
have, either individually or in the aggregate, a material adverse effect on the
Company's financial condition or results of operations, and the Company has no
knowledge of claims that could be expected to have a material adverse effect on
its financial condition or results of operations, there can be no assurance that
the Company will not incur significant costs, fines or penalties in connection
with historical on- or off-site handling or disposal of such substances and
wastes or cleanup costs for site contamination.
5
<PAGE>
The Company owns and operates underground storage tanks ("USTs") at four of
its facilities for the storage of liquid pentane and heavy fuel oil. Leak
detection or containment systems are in place at all four facilities. One of the
tanks, located at the Fort Worth, Texas facility, was pressure tested in 1996
and no leaks were detected. USTs are generally subject to federal, state, local
and foreign laws and regulations that require testing and upgrading of USTs and
remediation of polluted soils and groundwater resulting from leaking USTs. In
addition, if leakage from the Company's USTs migrates onto the property of
others, the Company may be subject to civil liability to third parties for
remediation costs or other damages. Based on historical experience, the Company
believes that its liabilities associated with UST testing, upgrades and
remediation are unlikely to have a material adverse effect on its financial
condition or results of operations.
Certain of the Company's current and former facilities are located in
industrial areas and have been in operation for many years. As a consequence, it
is possible that historical or neighboring activities have affected properties
currently or formerly owned by the Company and that, as a result, additional
environmental issues may arise in the future, the precise nature of which the
Company cannot now predict.
6
<PAGE>
ITEM 2. PROPERTIES
The following tables set forth, as of December 31, 1999, the Company's major
manufacturing, warehouse, machine assembly, utility and office facilities, all
of which are owned except as otherwise noted:
PACKAGING & INSULATION
----------------------
<TABLE>
<CAPTION>
APPROXIMATE
FLOOR SPACE
LOCATION USE SQ. FT.
- -------- --- -----------
<S> <C> <C> <C>
Corte Madera, California..................... Manufacturing, warehouse, machine assembly and office 85,000
(leased)
Richmond, California......................... Warehouse (leased) 103,000
El Campo, Texas.............................. Manufacturing and warehouse 91,000
Higginsville, Missouri....................... Manufacturing and warehouse 68,000
Warrensburg, Missouri........................ Warehouse (leased) 10,000
Jacksonville, Florida........................ Manufacturing and warehouse (leased) 128,000
Edison, New Jersey........................... Warehouse (leased) 95,000
Metuchen, New Jersey......................... Manufacturing 85,000
Mount Sterling, Ohio......................... Manufacturing and warehouse 50,000
Shreveport, Louisiana........................ Manufacturing and warehouse 73,000
Stone Mountain, Georgia...................... Manufacturing and warehouse (partially leased) 315,000
Phoenix, Arizona............................. Machine assembly (leased) 20,000
Tolleson, Arizona............................ Manufacturing, warehouse, and office 170,000
West Chicago, Illinois....................... Manufacturing, warehouse and office (partially leased) 287,000
Nurmijarvi, Finland.......................... Manufacturing, warehouse and office 49,000
Vammala, Finland............................. Manufacturing, warehouse and office 172,000
Muurola, Finland............................. Manufacturing, warehouse and office (leased) 11,000
Pietarsaari, Finland......................... Manufacturing, warehouse and office (leased) 36,000
Norrtalje, Sweden............................ Manufacturing, warehouse and office (leased) 63,000
Vargarda, Sweden............................. Manufacturing, warehouse and office 63,000
Lodz, Poland................................. Manufacturing and warehouse (leased) 30,500
Hedensted, Denmark........................... Manufacturing, warehouse and office 44,000
</TABLE>
SPECIALTY CHEMICALS
-------------------
<TABLE>
<CAPTION>
APPROXIMATE
FLOOR SPACE
LOCATION USE SQ. FT.
- -------- --- -----------
<S> <C> <C> <C>
Fort Worth, Texas............................ Manufacturing, warehouse and office (partially leased) 76,000
Saginaw, Texas............................... Manufacturing, warehouse and office 106,000
Baie D'Urfe, Quebec.......................... Manufacturing, warehouse and office 90,000
Porvoo, Finland.............................. Manufacturing, warehouse, machine assembly, utility and 112,000
office (partially leased)
Kokemaki, Finland............................ Manufacturing, warehouse, utility and office (leased) 52,000
</TABLE>
7
<PAGE>
In addition, the Company leases approximately 8,000 square feet in Radnor,
Pennsylvania for its executive offices. The Company believes that its present
facilities are adequate for its current operations and that it will be able to
lease or otherwise acquire any additional facilities as may be required for its
future operations.
ITEM 3. LEGAL PROCEEDINGS
On June 24, 1998, Jackson National Life Insurance Company ("Jackson") and
Benchmark Holdings, Inc. ("Holdings") filed suit in the Court of Chancery for
the State of Delaware in and for New Castle County, against Michael T. Kennedy,
Radnor Holdings Corporation ("Radnor"), 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.
In October 1999, the Company settled the litigation filed by Jackson and
Holdings. Although the Company believed it had meritorious defenses and was
prepared to assert such defenses vigorously, the Company determined it was in
its best interests to settle the litigation due to the expense of such
litigation and the attendant diversion and disruption of management resources,
as well as the inherent uncertainties of litigation.
The Company is also 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
adverse effect on the Company's financial position or results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There are no matters to be reported hereunder.
8
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCK MATTERS
MARKET INFORMATION
- ------------------
There currently exists no established public trading market for the Company's
Voting Common Stock, $.10 par value, Nonvoting Common Stock, $.10 par value, or
Class B Nonvoting Common Stock, $.01 par value.
HOLDERS
- -------
As of March 24, 2000, there were 3 holders of record of the Company's Voting
Common Stock, 11 holders of record of the Company's Nonvoting Common Stock and 7
holders of record of the Company's Class B Nonvoting Common Stock.
DIVIDENDS
- ---------
No dividends were declared or paid during the year ended December 31, 1999. As
with any company, the declaration and payment of dividends are subject to the
discretion of the Company's Board of Directors and will depend on various
factors, including restrictions on dividends contained in the Company's credit
agreements and the indentures pursuant to which the Company issued its 10%
Senior Notes due 2003 on December 5, 1996 (the "Series A Notes") and its 10%
Series B Senior Notes due 2003 on October 15, 1997 (the "Series B Notes").
9
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
The following table presents summary consolidated financial data for the
Company. The following data should be read in conjunction with the consolidated
financial statements and the related notes thereto and Management's Discussion
and Analysis of the Financial Condition and Results of Operations, included
elsewhere herein.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
------------------------------------------------------------------------------------
DEC. 29, DEC. 27, DEC. 26, DEC. 25, DEC. 31,
1995(1) 1996(2) 1997(2) 1998 1999(3)
------------- -------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
($ in thousands, except per share amounts)
RESULTS OF OPERATIONS:
Net sales $ 86,239 $177,395 $243,583 $311,137 $318,115
Cost of goods sold 75,690 135,982 181,404 220,691 226,509
------------- -------------- ------------- ------------- -------------
Gross profit 10,549 41,413 62,179 90,446 91,606
Distribution expense 6,027 14,099 18,076 23,004 24,535
Selling, general and administrative expenses 9,051 18,676 30,137 38,965 43,922
Restructuring charges - 910 - - -
------------- -------------- ------------- ------------- -------------
Income (loss) from operations (4,529) 7,728 13,966 28,477 23,149
Interest 2,822 4,496 13,004 18,776 21,070
Other (income) expense, net 526 374 (133) 965 1,363
------------- -------------- ------------- ------------- -------------
Income (loss) from continuing operations
before income taxes and minority interest (7,877) 2,858 1,095 8,736 716
Income tax expense (benefit) (4) - 121 (2,516) 3,340 241
------------- -------------- ------------- ------------- -------------
Income (loss) from continuing operations
before minority interest (7,877) 2,737 3,611 5,396 475
Minority interest in income (5) - 1,348 - - -
------------- -------------- ------------- ------------- -------------
Income (loss) from continuing operations $ (7,877) $ 1,389 $ 3,611 $ 5,396 $ 475
============= ============== ============= ============= =============
BALANCE SHEET DATA (AT END OF PERIOD):
Working capital (deficit) $(10,362) $ 8,684 $ 24,136 $ 23,909 $ 12,884
Total assets 46,588 172,369 249,818 278,796 293,683
Total debt (including current portion) 16,252 104,599 179,173 195,998 215,417
Stockholders' equity 6,554 14,329 14,975 20,949 7,574
Cash dividends per share - - 480 240 -
</TABLE>
- -------------------
(1) The Company's financial data do not include the results from the cutlery,
straws and plastic cup operations which were sold in 1995 and reflected as
discontinued operations in the Company's consolidated financial statements.
(2) The financial data include the Company and its consolidated subsidiaries,
excluding discontinued operations, as of and for the years ended December
27, 1996 and December 26, 1997, respectively. Prior to January 20, 1996,
the Company's results from continuing operations do not include the results
of the foam cup and container operations purchased from Fort James
Corporation on that date. Prior to December 5, 1996 the Company's results
from continuing operations do not include the results of Radnor Chemical
Corporation, formerly S.P. Acquisition Co., which was acquired on that
date. Prior to October 15, 1997, the Company's results from continuing
operations do not include the results of StyroChem Europe (as such term is
defined in Item 7), which was acquired on that date. See Note 1 to the
Company's consolidated financial statements included herein.
(3) The Company's fiscal year is the fifty-two or fifty-three week period that
ends on the last Friday of December of each year. The years presented in
the above table are 52 week years with the exception of 1999 which is a 53
week year.
(4) See Note 6 to the Company's consolidated financial statements included
herein.
(5) Amount represents minority interest in the income of the Company's
partnership with Fort James Corporation in conjunction with the J.R. Cup
acquisition for the period January 20, 1996 through December 5, 1996.
10
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
- ---------------------
The following discussion and analysis should be read in conjunction with Item
6, "Selected Financial Data" and Item 8, "Financial Statements and Supplementary
Data" included elsewhere herein. In addition, financial results for 1997, 1998,
and 1999 are not fully comparable because of the October 1997 acquisition of the
polystyrene production and conversion operations of Fortum Oyj, formerly Neste
Oy ("StyroChem Europe").
In January 1999, the EPS production operations located in Minton, Texas were
sold by the Company's Radnor Chemical subsidiary to its WinCup subsidiary. This
facility manufactures a substantial portion of the EPS utilized by the Company's
domestic food packaging operations with the remainder purchased from Radnor
Chemical's Canadian EPS manufacturing facility. The Company's segment analysis
for 1997 and 1998 has been restated to reflect the impact of this transaction
for purposes of Management's Discussion and Analysis of Financial Condition and
Results of Operations.
CONSOLIDATED
<TABLE>
<CAPTION>
(Millions of dollars) 1999 1998 1997
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales $318.1 $311.1 $243.6
- ------------------------------------------------------------------------------------------------
Gross profit 91.6 90.4 62.2
- ------------------------------------------------------------------------------------------------
Operating expenses 68.5 61.9 48.2
- ------------------------------------------------------------------------------------------------
Income from continuing operations 23.1 28.5 14.0
- ------------------------------------------------------------------------------------------------
</TABLE>
- -
The Company achieved record sales for the year ended December 31, 1999. Net
sales increased $7.0 million to $318.1 million as a result of growth in the
Company's domestic food packaging business. Gross profit increased to $91.6
million from $90.4 million in 1998 as a result of increased sales and
manufacturing efficiencies at the Company's packaging and insulation operations,
offset by the impact of reduced specialty chemical selling prices. Operating
expenses increased to 21.5% of net sales in 1999 from 19.9% of net sales in
1998. This change was primarily attributable to increased distribution costs
resulting from higher sales volumes at both the specialty chemicals and
packaging and insulation segments combined with increased amortization and
administrative costs at the Company's executive offices.
Fiscal 1998 net sales increased by $67.5 million or 27.7% over 1997. This
increase was attributable to the acquisition of StyroChem Europe on October 15,
1997 and growth in the Company's domestic specialty chemicals business. Gross
profit increased to $90.4 million or 29.1% of net sales for 1998, from $62.2
million or 25.5% of net sales in 1997. This increase was primarily attributable
to the acquisition of StyroChem Europe, increased manufacturing efficiencies and
favorable raw material pricing within the specialty chemicals segment. Operating
expenses increased marginally in 1998 to 19.9% of net sales from 19.8% of net
sales in 1997.
SEGMENT ANALYSIS
Packaging & Insulation
<TABLE>
<CAPTION>
(Millions of dollars) 1999 1998 1997
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales $231.3 $221.6 $187.9
- -----------------------------------------------------------------------------------------------
Gross profit 71.6 66.3 53.8
- ------------------------------------------------------------------------------------------------
Operating expenses 46.6 43.0 37.1
- ------------------------------------------------------------------------------------------------
Income from continuing operations 25.0 23.3 16.7
- ------------------------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
Net sales in the packaging and insulation business segment increased by $9.7
million in fiscal 1999 to $231.3 million. This 4.4% increase over 1998 was
primarily due to growth within the domestic packaging operations. Gross profit
increased to 31.0% of net sales in 1999 from 29.9% of net sales in 1998 due
primarily to increased manufacturing efficiencies in both the packaging and
insulation operations. Operating expenses increased to 20.1% of net sales in
1999 from 19.4% of net sales in 1998 as a result of higher distribution and
administrative costs within the domestic packaging operations. The packaging and
insulation segment had record income from operations in 1999 of $25.0 million as
compared to $23.3 million in 1998.
Fiscal 1998 net sales increased by $33.7 million over 1997. This 17.9%
increase was due to the acquisition of the insulation operations of StyroChem
Europe on October 15, 1997. Gross profit increased to 29.9% of net sales in 1998
from 28.6% of net sales in 1997 as a result of the acquisition of StyroChem
Europe. Operating expenses declined to 19.4% of net sales in 1998 from 19.7% of
net sales in 1997 as a result of lower distribution costs within the domestic
packaging operations.
Specialty Chemicals
<TABLE>
<CAPTION>
(Millions of dollars) 1999 1998 1997
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales $108.9 $112.4 $59.0
- -------------------------------------------------------------------------------------------------
Gross profit 16.8 24.1 8.9
- -------------------------------------------------------------------------------------------------
Operating expenses 18.6 17.8 11.0
- -------------------------------------------------------------------------------------------------
Income (loss) from continuing operations (1.8) 6.3 (2.1)
- -------------------------------------------------------------------------------------------------
</TABLE>
Fiscal 1999 net sales in the specialty chemicals business segment decreased
by $3.5 million to $108.9 million. Net sales include $24.3 million, $23.6
million and $3.3 million of sales to the packaging and insulation segment for
fiscal 1999, 1998 and 1997, respectively, that are eliminated in consolidation.
This decrease in net sales from 1998 to 1999 was primarily due to reduced
selling prices resulting from excess supply in the EPS market, partially offset
by a 13.7% increase in sales volume. Gross profit decreased to 15.4 % of net
sales in 1999 from 21.4% in 1998. This decrease was caused by the reduction in
selling prices described above, partially offset by increased sales volume and
manufacturing efficiencies. Operating expenses increased $0.8 million to $18.6
million for the year ended December 31, 1999 primarily due to increased
distribution costs and depreciation expense in the European specialty chemicals
business.
Net sales increased to $112.4 million for 1998 from $59.0 million for 1997, an
increase of $53.4 million or 90.5%. The increase in net sales from 1997 to 1998
was the result of increased sales in the Company's domestic specialty chemical
operations as well as the acquisition of StyroChem Europe. Gross profit
increased to 21.4% of net sales in 1998 from 15.1% in 1997. This increase was
the result of increased operating efficiencies and favorable raw material prices
in the Company's domestic and foreign specialty chemical operations. Operating
expenses increased to $17.8 million in 1998 from $11.0 million in 1997 as a
result of increased selling and administrative costs associated with the
acquisition and operation of StyroChem Europe.
Corporate and Other
Corporate operating expenses increased by $2.1 million and $1.0 million during
fiscal 1999 and 1998, respectively. These increases were primarily due to
increased amortization of intangible assets and increased operating costs at the
Company's executive offices in Radnor, Pennsylvania.
12
<PAGE>
INTEREST EXPENSE
- ----------------
<TABLE>
<CAPTION>
(Millions of dollars) 1999 1998 1997
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Interest expense $21.1 $18.8 $13.0
- ------------------------------------------------------------------------------------------------
</TABLE>
Interest expense for the year ended December 31, 1999 increased by $2.3
million over the prior year. This increase was primarily due to increased
borrowings related to the purchase of the Company's Tolleson, Arizona food
packaging facility and the reengineering of the Company's Stone Mountain,
Georgia food packaging facility. Also included in interest expense is the
amortization of deferred financing fees and debt issuance premium of $1.2
million and $1.0 million in 1999 and 1998, respectively. In 1998, interest
expense rose by $5.8 million due to higher average debt balances resulting from
the acquisition of StyroChem Europe in October 1997, as well as the amortization
of deferred financing fees and debt issuance premium of $1.0 million and $0.8
million in 1998 and 1997, respectively.
OTHER EXPENSES
- --------------
<TABLE>
<CAPTION>
(Millions of dollars) 1999 1998 1997
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Other (income) expense $ 1.4 $ 1.0 ($ 0.1)
- -----------------------------------------------------------------------------------------
</TABLE>
Other expenses for the years ended December 31, 1999 and December 25, 1998
include $0.4 million and $0.6 million in costs, respectively, related to
corporate development activities. Excluding the effect of these costs, other
expenses fluctuated by relatively insignificant amounts in both 1999 and 1998.
INCOME TAXES
- ------------
<TABLE>
<CAPTION>
(Millions of dollars) 1999 1998 1997
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Income tax expense (benefit) $ 0.2 $ 3.3 ($ 2.5)
- -----------------------------------------------------------------------------------------
</TABLE>
Income tax expenses decreased to $0.2 million in 1999 due to an $8.0 million
decrease in pre-tax income for the reasons described above. During 1998, income
tax expense increased to $3.3 million from a benefit of $2.5 million in 1997.
This increase was primarily due to a $7.6 million increase in pre-tax income in
1998 as well as the prior year elimination of a valuation allowance that had
been recorded at December 27, 1996. The elimination of the valuation allowance
resulted in a tax benefit of $4.8 million that was reflected in the 1997
financial statements.
As of December 31, 1999, the Company had approximately $44.5 million of net
operating loss carryforwards for federal income tax purposes, which expire
through 2019.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
During fiscal 1998 and 1999, the Company's principal sources of funds
consisted of cash from operations and financing sources. During the year ended
December 31, 1999, after tax cash flow was $17.5 million, reductions in working
capital provided cash of $7.1 million and discontinued operations used cash of
$8.4 million. In addition to cash flows from operations, net borrowings of $11.4
million under the credit facilities, capital leases and term loans were
primarily used to fund capital expenditures of $20.0 million and a $3.6 million
increase in cash. The Company has managed its growth in working capital and
capital expenditures through a combination of working capital financing and
proceeds of long-term debt financing.
As of December 31, 1999, the Company had $26.0 million outstanding and $11.7
million available 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. The Company's capital expenditures for fiscal years 1997,
1998 and 1999 were $18.4 million, $17.7 million and $20.0 million, respectively.
By completing the sale of the Series B
13
<PAGE>
Notes and by amending its credit facility to an aggregate commitment of $40.0
million in 1997, the Company believes that it has increased its flexibility over
the next five years to make capital expenditures that management believes will
provide an attractive return on investment.
As a holding company, the Company is dependent upon dividends and other
payments from its subsidiaries to generate the funds necessary to meet its
obligations. Subject to certain limitations, the Company 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 its revolving credit facilities will be
sufficient to meet the Company's expected operating needs, planned capital
expenditures and debt service requirements. However, there can be no assurance
that sufficient funds will be available from operations or borrowings under its
credit agreements to meet the Company's cash needs.
OTHER FINANCIAL DATA
- --------------------
Cost of Goods Sold
Raw material costs represent a large portion of the Company's cost of goods
sold and are susceptible to price fluctuations based upon supply and demand and
general market conditions. Beginning in June 1999 and continuing through March
2000, prices of the Company's primary raw material rose by almost 60%. Although
future raw material prices cannot be predicted with accuracy, prices for raw
materials used in the Company's products are forecasted by independent industry
surveys and producer reports to remain stable or increase marginally over the
next year. While the Company has been able to pass on the majority of these
increases to customers, there can be no assurance that the Company will be able
to increase prices if raw material costs continue to rise.
In connection with the Company's engineering initiatives, the Company has
invested significant resources in research and development. The Company expenses
all research and development costs in the period incurred and includes such
costs in cost of goods sold. As a percentage of net sales, these costs have
represented 1.8%, 2.2% and 1.7% in 1997, 1998 and 1999, respectively.
Year 2000 Readiness Disclosure
The Company expended approximately $325,000 in preparation for Year 2000
readiness. During the rollover into 2000, none of the Company's information
technology systems, processes, customers or suppliers experienced Year 2000
events that had a material adverse impact on the Company's operations or
financial condition. Contingency plans remain in place as part of the Company's
normal business procedures to address operational issues that may arise from
time to time, including those caused by Year 2000 events.
Forward Looking Statements
The statements contained in this Annual Report that are not historical facts,
including but not limited to the Company's plans for expansion, facility
consolidation, acquisition and raw material prices, are based on current
expectations. These statements are forward looking (as defined in the U.S.
Private Securities Litigation Reform Act of 1995) in nature and involve a number
of risks and uncertainties. Actual results may vary materially due to risks
relating to raw material price volatility, dependence on key customers,
international operations, dependence on key personnel and environmental matters,
as well as general business and economic conditions, both domestic and
international, and other risks that may be described from time to time in the
reports that the Company files with the Securities and Exchange Commission. See
"Business--Raw Materials", "Business--Risks Attendant to Foreign Operations",
"Business--Competition", "Business--Employees", "Business--Environmental
Matters," "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Year 2000 Readiness Disclosure" and "Quantitative and
Qualitative Disclosures about Market Risk."
14
<PAGE>
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's market risk is the potential loss arising from adverse changes
in interest rates. The Company's long-term debt obligations are mostly at fixed
interest rates and denominated in U.S. dollars. The Company manages its interest
rate risk by monitoring trends in interest rates as a basis for determining
whether to enter into fixed rate or variable rate agreements. Market risk is
estimated as the potential increase in fair value of the Company's long-term
debt obligations resulting from a hypothetical one-percent decrease in interest
rates and amounts to approximately $5.3 million over the term of the debt.
Although the Company continues to evaluate derivative financial instruments to
manage foreign currency exchange rate changes, the Company does not currently
hold derivatives for managing these risks or for trading purposes.
15
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES
<S> <C>
Report of Independent Public Accountants F-1
Consolidated Balance Sheets as of December 25, 1998 and December 31, 1999 F-2
Consolidated Statements of Income for the Fiscal Years Ended December 26, 1997, December 25,
1998 and December 31, 1999 F-3
Consolidated Statements of Stockholders' Equity for the Fiscal Years Ended December 26, 1997,
December 25, 1998 and December 31, 1999 F-4
Consolidated Statements of Cash Flows for the Fiscal Years Ended December 26, 1997, December
25, 1998 and December 31, 1999 F-5
Notes to Consolidated Financial Statements F-7
The following financial statements are incorporated by reference to the pages indicated of the
Company's Prospectus dated February 6, 1998 included in the Company's Registration Statement on
Form S-4, Commission File No. 333-42101 and filed as Exhibit 99.1 to this Form 10-K:
NESTE OY POLYSTYRENE UPSTREAM BUSINESS IN PORVOO AND KOKEMAKI
Report of Independent Public Accountants F-48
Balance Sheets as of December 31, 1995 and 1996 and September 30, 1997 (unaudited) F-49
Statements of Operations for the Years ended December 31, 1994, 1995 and 1996 and the
Nine Month Periods Ended September 30, 1996 and 1997 (unaudited) F-50
Statements of Changes in Owner's Investment for the Years Ended December 31, 1994, 1995
and 1996 and the Nine Month Period Ended September 30, 1997 (unaudited) F-51
Statements of Cash Flows for the Years Ended December 31, 1994, 1995 and 1996 and the
Nine Month Periods Ended September 30, 1996 and 1997 (unaudited) F-52
Notes to Financial Statements F-53
ISORA OY
Report of Independent Public Accountants F-57
Balance Sheets as of December 31, 1995 and 1996 and September 30, 1997 (unaudited) F-58
Statements of Operations for the Years Ended December 31, 1994, 1995 and 1996 and the Nine Month
Periods Ended September 30, 1996 and 1997 unaudited) F-59
Statements of Changes in Stockholder's Equity for the Years Ended December 31, 1994,
1995 and 1996 and the Nine Month Period Ended September 30, 1997 (unaudited) F-60
Statements of Cash Flows for the Years Ended December 31, 1994, 1995 and 1996 and the
Nine Month Periods Ended September 30, 1996 and 1997 (unaudited) F-61
Notes to Financial Statements F-62
NESTE CELLPLAST AB
Report of Independent Public Accountants F-66
Auditors' Report on Neste Cellplast AB F-67
Auditors' Report on Neste Cellplast Aktiebolag F-68
Balance Sheets as of December 31, 1995 and 1996 and September 30, 1997 (unaudited) F-69
Statements of Operations for the Years Ended December 31, 1994, 1995 and 1996 and the
Nine Month Periods Ended September 30, 1996 and 1997 (unaudited) F-70
Statements of Changes in Stockholders' Equity for the Years Ended December 31, 1994,
1995 and 1996 and the Nine Month Period Ended September 30, 1997 (unaudited) F-71
Statements of Cash Flows for the Years Ended December 31, 1994, 1995 and 1996 and the
Nine Month Periods Ended September 30, 1996 and 1997 (unaudited) F-72
Notes to Financial Statements F-73
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
NESTE THERMISOL A/S
Report of Independent Public Accountants F-77
Balance Sheets as of December 31, 1995 and 1996 and September 30, 1997 (unaudited) F-78
Statements of Operations for the Years Ended December 31, 1994, 1995 and 1996 and the
Nine Month Periods Ended September 30, 1996 and 1997 (unaudited) F-79
Statements of Changes in Shareholder's Equity for the Years Ended December 31, 1994,
1995 and 1996 and the Nine Month Period Ended September 30, 1997 (unaudited) F-80
Statements of Cash Flows for the Years Ended December 31, 1994, 1995 and 1996 and the
Nine Month Periods Ended September 30, 1996 and 1997 (unaudited) F-81
Notes to Financial Statements F-82
</TABLE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There are no matters to be reported hereunder.
17
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
DIRECTORS AND EXECUTIVE OFFICERS
The directors and executive officers of the Company and their ages as of March
24, 2000 are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
------ ----- --------------
<S> <C> <C>
Michael T. Kennedy........ 45 President, Chief Executive Officer and Director
Michael V. Valenza........ 40 Senior Vice President - Finance and Chief Financial
Officer
Richard C. Hunsinger...... 51 Senior Vice President - Sales and Marketing
Donald D. Walker.......... 58 Senior Vice President - Operations
John P. McNiff............ 39 Senior Vice President - Corporate Development and
Director
R. Radcliffe Hastings..... 49 Senior Vice President, Treasurer and Director
Donald C. Rogalski........ 54 Senior Vice President - Administration
John P. McKelvey.......... 59 Vice President - Human Resources
Van D. Groenewold......... 67 Vice President - Engineering
Caroline J. Williamson.... 32 Vice President and Corporate Counsel
Thomas J. Hopkins......... 43 Director
Vincent F. Garrity, Jr.... 62 Director
</TABLE>
Michael T. Kennedy has served as President, Chief Executive Officer and as a
director of the Company since its formation in November 1991. Between March 1985
and July 1990, Mr. Kennedy served as Chief Financial Officer of Airgas, Inc., a
New York Stock Exchange-listed distributor of industrial gases. Mr. Kennedy is
also a director of Commonwealth Bancorp and Chartwell Investment Partners, LP.
Michael V. Valenza has served as Senior Vice President - Finance and Chief
Financial Officer of the Company since April 1993. He joined the Company in
September 1992 as Director of Finance. From 1984 until joining the Company, Mr.
Valenza served in a variety of positions with Arthur Andersen LLP, most recently
as a manager in the Enterprise Group.
Richard C. Hunsinger has served as Senior Vice President - Sales and
Marketing of the Company since its formation in November 1991. From 1979 through
August 1991, Mr. Hunsinger served in various management positions, including
Vice President of Sales and Marketing for Winkler/Flexible Products, Inc., a
former division of The Coca Cola Company.
Donald D. Walker has served as Senior Vice President - Operations of the
Company since November 1992. Mr. Walker served as Vice President of
Manufacturing and as Director of Manufacturing of the Company from February 1992
through November 1992. From 1969 until February 1992, Mr. Walker served in
various management positions with Scott Container Products Group, Inc. (WinCup's
predecessor), WMF Corporation and Thompson Industries.
John P. McNiff has served as Senior Vice President - Corporate Development of
the Company since its formation in November 1991 and as a director since May
1997. Previously Mr. McNiff was Vice President-Corporate Development of Airgas,
Inc., a New York Stock Exchange-listed distributor of industrial gases. Mr.
McNiff is also a director of Chartwell Investment Partners, LP.
18
<PAGE>
R. Radcliffe Hastings has served as Senior Vice President and Treasurer of the
Company since June 1996 and as a director since May 1997. Previously, Mr.
Hastings was with Continental Bank, N.A. and its successor, Bank of America, for
18 years. Mr. Hastings has held a variety of management positions in the U.S.
banking group and in Bank of America's securities operation, BA Securities,
Inc., and was most recently Managing Director of the Money Manager Group.
Donald C. Rogalski has served as Senior Vice President - Administration of the
Company since July 1993. Previously Mr. Rogalski held the positions of Chief
Financial Officer and Vice President of Finance for Stiffel Lamp Co. for seven
years. Prior to that, Mr. Rogalski worked for Packard Instrument Company for
nine years, with his last position there as Controller.
John P. McKelvey has served as Vice President - Human Resources for the
Company since October 1992. From February 1992 until October 1992, Mr. McKelvey
was Director of Human Resources for the Company. From 1971 until joining the
Company, Mr. McKelvey served in a variety of human resources management
positions for Scott Container Products Group, Inc., Texstyrene Corporation, WMF
Corporation and Thompson Industries.
Van D. Groenewold has served as Vice President - Engineering for the Company
since November 1992. From February 1992 until November 1992, Mr. Groenewold was
Director of Engineering for the Company. From 1982 until joining the Company,
Mr. Groenewold held various engineering and quality assurance management
positions with Scott Container Products Group, Inc., WMF Corporation and
Thompson Industries.
Caroline J. Williamson has served as Vice President and Corporate Counsel of
the Company since March 1997. From March 1996 to March 1997, Ms. Williamson
served as counsel for Aetna U.S. Healthcare. From September 1992 to March 1996,
Ms. Williamson was an associate with Duane, Morris & Heckscher LLP.
Thomas J. Hopkins has served as a director of the Company since May 1997. Mr.
Hopkins is a Senior Managing Director of Bear, Stearns & Co. Inc. where he has
been employed since March 1997. Mr. Hopkins was employed by Alex. Brown & Sons
Incorporated from August 1991 to February 1997, most recently as a Principal.
Vincent F. Garrity, Jr. has served as a director of the Company since May
1997. Mr. Garrity has been a partner in the law firm of Duane, Morris &
Heckscher LLP since 1970.
19
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
The directors do not receive separate compensation for their service as
directors of the Company. The following table sets forth certain information
concerning the compensation paid to the Company's chief executive officer and
the Company's four other most highly compensated executive officers whose total
annual salary and bonus exceeded $100,000 for the year ended December 31, 1999:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-AWARDS
-------------------------------- ------------
SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS(#) COMPENSATION
- ------------------------------- ------ -------- ------- -------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Michael T. Kennedy 1999 $2,500,000 $1,400,000 $126,906(1) - 99,205(2)
President and Chief 1998 2,000,000 1,400,000 61,459(1) - 99,183(2)
Executive Officer............. 1997 1,500,000 875,000 - - 99,214(2)
R. Radcliffe Hastings 1999 250,000 150,000 - - 4,480(3)
Senior Vice President and 1998 225,000 150,000 - - 4,480(3)
Treasurer..................... 1997 175,000 125,000 - - 1,666,613(4)
Michael V. Valenza 1999 250,000 210,000 - - 4,480(3)
Senior Vice President-Finance 1998 225,000 150,000 - - 4,480(3)
and Chief Financial Officer... 1997 175,000 125,000 - 100 4,480(3)
Richard C. Hunsinger 1999 250,000 120,000 - - 4,480(3)
Senior Vice President- 1998 225,000 100,000 - - 4,480(3)
Sales and Marketing........... 1997 175,000 75,000 - 50 4,480(3)
Donald D. Walker 1999 250,000 120,000 - - 4,480(3)
Senior Vice President- 1998 225,000 100,000 - - 4,480(3)
Operations.................... 1997 175,000 75,000 - 50 4,480(3)
</TABLE>
- ------------
(1) Represents transportation costs paid by the Company on behalf of Mr.
Kennedy.
(2) Includes $4,480 of matching contributions by the Company under the 401(k)
Retirement Savings Plan and premiums of $94,725, $94,703 and $94,734 in
1999, 1998 and 1997, respectively, paid by the Company with respect to a
supplemental life insurance policy for the benefit of Mr. Kennedy.
(3) Represents a matching contribution by the Company under the 401(k)
Retirement Savings Plan.
(4) Represents compensation resulting from the transfer of 60 shares of Voting
Common Stock and 540 shares of Class B Nonvoting Common Stock from the
majority stockholder.
20
<PAGE>
The following table sets forth information with respect to options held at
December 31, 1999 by the persons named in the Summary Compensation Table above.
No options were granted to or exercised by such persons during the fiscal year
ended December 31, 1999.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDERLYING
UNEXERCISED OPTIONS AT
DECEMBER 31, 1999 (1)
-------------------------------
NAME EXERCISABLE UNEXERCISABLE
- ---- ------------- ---------------
<S> <C> <C>
Michael T. Kennedy............................. - -
R. Radcliffe Hastings.......................... - -
Michael V. Valenza............................. 78 60
Richard C. Hunsinger........................... 120 30
Donald D. Walker............................... 120 30
</TABLE>
- -------------
(1) Based on the estimated per share value of the securities underlying the
unexercised options, as determined by the Company's Board of Directors,
there were no in-the-money options at December 31, 1999.
EMPLOYMENT AGREEMENTS
- ----------------------
In May 1993, the Company entered into an employment agreement with Richard C.
Hunsinger, which was amended in January 1996, pursuant to which Mr. Hunsinger
serves as Senior Vice President - Sales and Marketing of the Company. The
agreement is for an initial term of seven years and six months and, absent 180
days prior written notice by either party before the end of the initial or any
renewal term, renews from year to year thereafter. Under the agreement as
amended, Mr. Hunsinger is entitled to an annual salary of not less than $145,000
beginning in 1996, subject to annual cost of living increases. The agreement
contains a covenant not to engage in any business that is competitive with the
business of the Company in any geographical area in which it does business
during the term of the agreement and for a period of two years immediately
following the termination of the agreement.
In April 1996, the Company entered into an employment agreement with R.
Radcliffe Hastings, pursuant to which Mr. Hastings serves as Senior Vice
President and Treasurer of the Company. The agreement is for an initial term of
three years and, absent 90 days prior written notice by either party before the
end of the initial or any renewal term, renews from year to year thereafter. Mr.
Hastings is entitled to an annual salary of not less than $125,000, subject to
annual review by the Board of Directors. The agreement contains a covenant not
to compete in any business that is competitive with the business of the Company
in the U.S. during the term of the agreement.
21
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of March 24, 2000, with
respect to each person who is known by the Company to own beneficially 5% or
more of each class of voting securities of the Company.
<TABLE>
<CAPTION>
NUMBER OF
SHARES
TITLE OF CLASS OF BENEFICIALLY PERCENT
NAME OF INDIVIDUAL OR IDENTITY OF GROUP CAPITAL STOCK OWNED OF CLASS
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Michael T. Kennedy........................ Voting Common Stock 480 80.0%
Three Radnor Corporate Center
Suite 300
Radnor, PA 19087
John P. McNiff............................ Voting Common Stock 60 10.0%
Three Radnor Corporate Center
Suite 300
Radnor, PA 19087
R. Radcliffe Hastings..................... Voting Common Stock 60 10.0%
Three Radnor Corporate Center
Suite 300
Radnor, PA 19087
</TABLE>
22
<PAGE>
The following table sets forth certain information as of March 24, 2000, with
respect to beneficial ownership of each class of equity securities of the
Company by (a) the directors of the Company, (b) the Named Executive Officers
and (c) the directors and all executive officers of the Company as a group.
<TABLE>
<CAPTION>
NUMBER OF
SHARES PERCENT
BENEFICIALLY OF
NAME OF INDIVIDUAL OR IDENTITY OF GROUP TITLE OF CLASS OF CAPITAL STOCK OWNED/(1)/ CLASS/(2)/
- ----------------------------------------- ----------------------------------- ---------------- -----------
<S> <C> <C> <C>
Michael T. Kennedy....................... Voting Common Stock 480 80.0%
Class B Nonvoting Common Stock 3,760/(3)/ 69.6%
Nonvoting Common Stock - -
Michael V. Valenza....................... Voting Common Stock - -
Class B Nonvoting Common Stock - -
Nonvoting Common Stock 98 30.3%
Richard C. Hunsinger..................... Voting Common Stock - -
Class B Nonvoting Common Stock - -
Nonvoting Common Stock 170 46.6%
Donald D. Walker......................... Voting Common Stock - -
Class B Nonvoting Common Stock - -
Nonvoting Common Stock 177 48.5%
R. Radcliffe Hastings.................... Voting Common Stock 60 10.0%
Class B Nonvoting Common Stock 540 10.0%
Nonvoting Common Stock - -
John P. McNiff........................... Voting Common Stock 60 10.0%
Class B Nonvoting Common Stock 540 10.0%
Nonvoting Common Stock - -
Vincent F. Garrity, Jr................... Voting Common Stock - -
Class B Nonvoting Common Stock 3,383/(4)/ 62.6%
Nonvoting Common Stock - -
Thomas J. Hopkins........................ Voting Common Stock - -
Class B Nonvoting Common Stock - -
Nonvoting Common Stock - -
Directors and all executive officers as
a group (12 persons).................... Voting Common Stock 600 100.0%
Class B Nonvoting Common Stock 5,400 100.0%
Nonvoting Common Stock 725 94.8%
</TABLE>
- --------------
(1) Includes shares of Nonvoting Common Stock that certain individuals have the
right to acquire, on or before May 24, 2000, upon the exercise of stock
options granted pursuant to the Company's Equity Incentive Plan, as
follows: Michael V. Valenza-78; Richard C. Hunsinger-120; Donald D. Walker-
120; and the directors and all executive officers as a group-520.
(2) Based upon 600, 5,400 and 245 outstanding shares of Voting Common Stock,
Class B Nonvoting Common Stock and Nonvoting Common Stock, respectively.
(3) Includes 2,823 shares held in a grantor retained annuity trust created by
Mr. Kennedy. Mr. Kennedy retained the right to acquire these shares from
the trust under certain circumstances specified in the instrument governing
the trust.
(4) Represents 560 shares held in various trusts for the benefit of Mr.
Kennedy's children of which Mr. Garrity is a trustee and the 2,823 shares
held in the trust that is the subject of footnote 3 above of which Mr.
Garrity is also trustee. Mr. Garrity disclaims beneficial ownership of all
of these shares.
23
<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has advanced $623,000 on a non-interest-bearing basis to Michael
T. Kennedy, the Company's Chief Executive Officer, $284,000 of which is for
certain incurred insurance costs.
During 1999, Michael V. Valenza, the Company's Senior Vice President - Finance
and Chief Financial Officer, repaid $75,000 that the Company had advanced to him
on a non-interest bearing basis for certain incurred relocation expenses.
The Company provides certain management services and rights to a related
company. For the management services and rights the Company receives a fee and
royalties and is reimbursed for all expenses advanced on behalf of the entity.
During 1999, the Company earned management fees and royalties of $0.7 million.
At December 31, 1999 unpaid management fees, royalties and expense advances
totaled $5.5 million.
24
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) DOCUMENTS FILED AS PART OF THIS ANNUAL REPORT
1. The consolidated financial statements of the Company and its subsidiaries
are listed in Item 8.
2. Financial Statement Schedules - None.
3. Exhibits:
3.1 Restated Certificate of Incorporation of Radnor Holdings Corporation,
as amended (Incorporated by reference to Exhibit No. 3.1 filed with
the Form 10-K for the year ended December 25, 1998 filed by Radnor
Holdings Corporation)
3.2 Bylaws of Radnor Holdings Corporation (Incorporated by reference to
Exhibit 3.2 filed with Form S-4 Registration Statement, filed by
Radnor Holdings Corporation, WinCup Holdings, Inc., Radnor Chemical
Corporation (formerly SP Acquisition Co.), [StyroChem U.S., Ltd.
(formerly StyroChem U.S., Ltd. and StyroChem International, Inc.)],
StyroChem Canada, Ltd. (formerly StyroChem International, Ltd.) and
Radnor Management, Inc., Commission File No. 333-19495 (the "Original
S-4"))
4.1 Indenture, dated as of December 5, 1996 among Radnor Holdings
Corporation, WinCup Holdings, Inc., Radnor Chemical Corporation,
StyroChem U.S., Ltd., StyroChem Canada, Ltd. and First Union National
Bank, including form of Notes and Guarantees (Incorporated by
reference to Exhibit 4.1 filed with the Original S-4)
4.2 First Supplemental Indenture, dated as of December 17, 1996 among
Radnor Holdings Corporation, WinCup Holdings, Inc., Radnor Chemical
Corporation, StyroChem U.S., Ltd., StyroChem Canada, Ltd., Radnor
Management, Inc. and First Union National Bank (Incorporated by
reference to Exhibit No. 4.2 filed with the Form 10-K for the year
ended December 26, 1997 filed by Radnor Holdings Corporation)
4.3 Second Supplemental Indenture, dated as of October 15, 1997 among
Radnor Holdings Corporation, WinCup Holdings, Inc., Radnor Chemical
Corporation, StyroChem U.S., Ltd., StyroChem Canada, Ltd., Radnor
Management, Inc., StyroChem Europe (The Netherlands) B.V., StyroChem
Finland Oy, ThermiSol Denmark ApS, ThermiSol Finland Oy, ThermiSol
Sweden AB and First Union National Bank (Incorporated by reference to
Exhibit No. 4.3 filed with the Form 10-K for the year ended December
26, 1997 filed by Radnor Holdings Corporation)
4.4 Third Supplemental Indenture, dated as of February 9, 1998 among
Radnor Holdings Corporation, WinCup Holdings, Inc., Radnor Chemical
Corporation, StyroChem U.S., Ltd., StyroChem Canada, Ltd., Radnor
Management, Inc., StyroChem Europe (The Netherlands) B.V., StyroChem
Finland Oy, ThermiSol Denmark ApS, ThermiSol Finland Oy, ThermiSol
Sweden AB, Radnor Delaware, Inc. and First Union National Bank
(Incorporated by reference to Exhibit No. 4.4 filed with the Form 10-K
for the year ended December 26, 1997 filed by Radnor Holdings
Corporation)
4.5 Fourth Supplemental Indenture, dated as of July 16, 1998 among Radnor
Holdings Corporation, WinCup Holdings, Inc., Radnor Chemical
Corporation, StyroChem U.S., Ltd., Radnor Management, Inc., Radnor
Delaware, Inc. and First Union National Bank (Incorporated by
reference to Exhibit No. 4.1 filed with the Form 10-Q for the quarter
ended June 26, 1998 filed by Radnor Holdings Corporation)
25
<PAGE>
4.6 Fifth Supplemental Indenture, dated as of January 21, 1999 among
Radnor Holdings Corporation, WinCup Holdings, Inc., Radnor Chemical
Corporation, Radnor Delaware, Inc., Radnor Management, Inc., StyroChem
U.S., Ltd., WinCup Texas, Ltd., StyroChem GP, L.L.C., StyroChem LP,
L.L.C., WinCup GP, L.L.C. and WinCup LP, L.C.C. and First Union
National Bank (Incorporated by reference to Exhibit No. 4.6 filed with
the Form 10-K for the year ended December 25, 1998 filed by Radnor
Holdings Corporation)
4.7 Sixth Supplemental Indenture, dated as of March 23, 1999 among Radnor
Holdings Corporation, WinCup Holdings, Inc., Radnor Chemical
Corporation, Radnor Delaware, Inc., Radnor Management, Inc., StyroChem
U.S., Ltd., WinCup Texas, Ltd., StyroChem GP, L.L.C., StyroChem LP,
L.L.C., WinCup GP, L.L.C. and WinCup LP, L.C.C., Radnor Management
Delaware, Inc., StyroChem Delaware, Inc. and WinCup Europe Delaware
and First Union National Bank
4.8 Exchange and Registration Rights Agreement, dated as of December 5,
1996 among Radnor Holdings Corporation, WinCup Holdings, Inc., Radnor
Chemical Corporation, StyroChem U.S., Ltd., StyroChem Canada, Ltd.,
Alex. Brown & Sons Incorporated and NatWest Capital Markets Limited
(Incorporated by reference to Exhibit 4.2 filed with the Original S-4)
4.9 Indenture, dated as of October 15, 1997 among Radnor Holdings
Corporation, WinCup Holdings, Inc., Radnor Chemical Corporation,
StyroChem U.S., Ltd., Radnor Management, Inc. and First Union National
Bank, including form of Notes and Guarantees (Incorporated by
reference to Exhibit 4.1 filed with Form S-4 Registration Statement,
filed by Radnor Holdings Corporation, WinCup Holdings, Inc., Radnor
Chemical Corporation, StyroChem U.S., Ltd., and Radnor Management,
Inc., Commission File No. 333-42101 (the "Series B S-4"))
4.10 First Supplemental Indenture, dated as of February 9, 1998 among
Radnor Holdings Corporation, WinCup Holdings, Inc., Radnor Chemical
Corporation, StyroChem U.S., Ltd., Radnor Management, Inc., Radnor
Delaware, Inc. and First Union National Bank (Incorporated by
reference to Exhibit 4.7 filed with the Form 10-K for the year ended
December 26, 1997 filed by Radnor Holdings Corporation)
4.11 Second Supplemental Indenture, dated as of January 21, 1999 among
Radnor Holdings Corporation, WinCup Holdings, Inc., Radnor Chemical
Corporation, Radnor Delaware, Inc., Radnor Management, Inc., StyroChem
U.S., Ltd., WinCup Texas, Ltd., StyroChem GP, L.L.C., StyroChem LP,
L.L.C., WinCup GP, L.L.C. and WinCup LP, L.C.C. and First Union
National Bank (Incorporated by reference to Exhibit No. 4.10 filed
with the Form 10-K for the year ended December 25, 1998 filed by
Radnor Holdings Corporation)
4.12 Third Supplemental Indenture, dated as of March 23, 1999 among Radnor
Holdings Corporation, WinCup Holdings, Inc., Radnor Chemical
Corporation, Radnor Delaware, Inc., Radnor Management, Inc., StyroChem
U.S., Ltd., WinCup Texas, Ltd., StyroChem GP, L.L.C., StyroChem LP,
L.L.C., WinCup GP, L.L.C. and WinCup LP, L.C.C., Radnor Management
Delaware, Inc., StyroChem Delaware, Inc. and WinCup Europe Delaware
and First Union National Bank
4.13 Exchange and Registration Rights Agreement, dated as of October 15,
1997 among Radnor Holdings Corporation, WinCup Holdings, Inc., Radnor
Chemical Corporation, StyroChem U.S., Ltd., Radnor Management, Inc.,
Bear, Stearns & Co. Inc., NatWest Capital Markets Limited and BT Alex.
Brown Incorporated (Incorporated by reference to Exhibit 4.2 filed
with the Series B S-4)
* 10.1 Sales Agent Agreement, dated January 20, 1996, between James River
Paper Company, Inc. and WinCup Holdings, Inc. (as successor in
interest to WinCup Holdings, L.P.), as amended by a Sales Agent
Extension and Modification Agreement dated December 5, 1996
(Incorporated by reference to Exhibit No. 10.7 filed with Amendment
No.1 to the Original S-4)
* 10.2 Equipment Use Agreement, dated January 20, 1996, as amended by an
Equipment Use Extension and Modification Agreement dated December 5,
1996 (Incorporated by reference to Exhibit No. 10.8 filed with
Amendment No.1 to the Original S-4)
26
<PAGE>
10.3 License Agreement, dated January 20, 1996, among James River
Corporation of Virginia, James River Paper Company, Inc., and WinCup
Holdings, Inc. (as successor in interest to WinCup Holdings, L.P.), as
amended by a License Extension and Modification Agreement dated
December 5, 1996 (Incorporated by reference to Exhibit No. 10.9 filed
with Amendment No.1 to the Original S-4)
10.4 Patent License Agreement, dated January 20, 1996, among James River
Corporation of Virginia, James River Paper Company, Inc., and WinCup
Holdings, Inc. (as successor in interest to WinCup Holdings, L.P.), as
amended by an Amendment to Patent License Agreement dated December 5,
1996 (Incorporated by reference to Exhibit No. 10.10 filed with
Amendment No.1 to the Original S-4)
* 10.5 Contract of Sale, dated as of December 5, 1996, among Chevron Chemical
Company, Radnor Chemical Corporation, StyroChem U.S., Ltd. and
StyroChem Canada, Ltd. (Incorporated by reference to Exhibit No. 10.11
filed with Amendment No.1 to the Original S-4)
** 10.6 First Amendment to Styrene Monomer Contract of Sale, dated as of
October 1, 1998, among Chevron Chemical Company LLC, Radnor Chemical
Corporation, StyroChem U.S., Ltd. and StyroChem Canada, Ltd.
(Incorporated by reference to Exhibit No. 10.6 filed with the Form 10-
K for the year ended December 25, 1998 filed by Radnor Holdings
Corporation)
* 10.7 Contract between ARCO Chemical Company and WinCup Holdings, Inc. (as
successor in interest to WinCup Holdings, L.P.), dated April 1, 1996,
as amended on September, 1996 (Incorporated by reference to Exhibit
No. 10.12 filed with Amendment No.1 to the Original S-4)
10.8 Noncompetition Agreement by and between Radnor Holdings Corporation
and Richard Davidovich, dated December 5, 1996 (Incorporated by
reference to Exhibit No. 10.18 filed with the Original S-4)
10.9 Amended Lease between Patricia M. Dunnell and James River Paper
Company, Inc., dated September 29, 1989, as amended in September,
1994, assigned to WinCup Holdings, Inc. (as successor in interest to
WinCup Holdings, L.P.) on January 20, 1996 (Incorporated by reference
to Exhibit No. 10.26 filed with Amendment No. 1 to the Original S-4)
10.10 Warehouse Lease between Etzioni Partners and James River Corporation,
dated February 13, 1992, as amended on April 13, 1992 and on December
9, 1992, assigned to WinCup Holdings, Inc. (as successor in interest
to WinCup Holdings, L.P.) on January 20, 1996 (Incorporated by
reference to Exhibit No. 10.27 filed with Amendment No. 1 to the
Original S-4)
10.11 Lease between Stone Mountain Industrial Park, Inc. and Scott Container
Group, Inc., dated December 16, 1991, as amended on February 28, 1994,
assigned to WinCup Holdings on January 20, 1996 (Incorporated by
reference to Exhibit No. 10.30 filed with Amendment No. 1 to the
Original S-4)
10.12 Standard Form Multi-Tenancy Industrial Lease between WinCup Holdings,
Inc. and CK Airpark Associates, dated June 1, 1994, assigned to WinCup
Holdings, Inc. (as successor in interest to WinCup Holdings, L.P.) on
January 20, 1996 (Incorporated by reference to Exhibit No. 10.32 filed
with Amendment No. 1 to the Original S-4)
10.13 Industrial Building Lease between Centerpoint Properties Corporation
and WinCup Holdings, Inc. (as successor in interest to WinCup
Holdings, L.P.) dated May 1996 (Incorporated by reference to Exhibit
10.33 filed with the Series B S-4)
10.14 Radnor Corporate Center Office Lease by and between Radnor Center
Associates and WinCup Holdings, Inc. (as successor in interest to
WinCup Holdings, L.P.), dated May 31, 1996 (Incorporated by reference
to Exhibit No. 10.34 filed with Amendment No. 1 to the Original S-4)
10.15 Standard Commercial Lease by and between Bradford Management Company
of Dallas, Inc. and StyroChem U.S., Ltd., dated June 22, 1994, as
amended on April 5, 1996, and as renewed on October
27
<PAGE>
22, 1996 (Incorporated by reference to Exhibit No. 10.35 filed with
Amendment No. 1 to the Original S-4)
***10.16 Executive Employment Agreement by and between Radnor Holdings
Corporation and Richard Hunsinger, dated May 1, 1993, as amended in
October, 1995 (Incorporated by reference to Exhibit No. 10.38 filed
with the Original S-4)
***10.17 Radnor Holdings Corporation Equity Incentive Plan, dated April 24,
1992, as amended on November 1, 1993 (Incorporated by reference to
Exhibit No. 10.39 filed with Amendment No. 1 to the Original S-4)
***10.18 Radnor Holdings Corporation Management Equity Participation Plan,
dated March 10, 1993, as amended on November 1, 1993 (Incorporated by
reference to Exhibit No. 10.40 filed with Amendment No. 1 to the
Original S-4)
10.19 Third Amended and Restated Revolving Credit and Security Agreement
dated as of December 29, 1999, among WinCup Holdings, Inc., Radnor
Chemical Corporation, StyroChem U.S., Ltd., Radnor Holdings
Corporation, Radnor Delaware, Inc., StyroChem Delaware, Inc., WinCup
Texas, Ltd., StyroChem Europe (The Netherlands) B.V., StyroChem
Finland Oy, Thermisol Denmark A/S, Thermisol Sweden AB, Thermisol
Finland OY, Bank of America, N.A. and First Union National Bank
10.20 Amended and Restated U.S. Revolving Credit Note dated December 29,
1999, made by WinCup Holdings, Inc., Radnor Chemical Corporation,
Radnor Holdings Corporation, Radnor Delaware, Inc., StyroChem U.S.,
Ltd., StyroChem Delaware, Inc. and WinCup Texas, Ltd. in favor of Bank
of America, N.A.
10.21 Amended and Restated U.S. Revolving Credit Note dated December 29,
1999, made by WinCup Holdings, Inc., Radnor Chemical Corporation,
Radnor Holdings Corporation, Radnor Delaware, Inc., StyroChem U.S.,
Ltd., StyroChem Delaware, Inc. and WinCup Texas, Ltd. in favor of
First Union National Bank
10.22 Swingline Note dated December 29, 1999, made by WinCup Holdings, Inc.,
Radnor Chemical Corporation, Radnor Holdings Corporation, Radnor
Delaware, Inc., StyroChem U.S., Ltd., StyroChem Delaware, Inc. and
WinCup Texas, Ltd. in favor of Bank of America, N.A.
10.23 Assignment Agreement dated as of December 29, 1999, among GMAC
Commercial Credit LLC (formerly BNY Factoring LLC, successor by merger
to BNY Financial Corporation), GMAC Commercial Credit Development
Limited (formerly BNY Financial Limited) and Bank of America, N.A.
10.24 Trademark Collateral Security Agreement, dated December 5, 1996,
between StyroChem U.S., Ltd. and The Bank of New York Commercial
Corporation (Incorporated by reference to Exhibit No. 10.44 filed with
Amendment No. 1 to the Original S-4)
10.25 Trademark Assignment of Security, dated December 5, 1996, between
StyroChem U.S., Ltd. and The Bank of New York Commercial Corporation
(Incorporated by reference to Exhibit No. 10.45 filed with Amendment
No. 1 to the Original S-4)
10.26 Trademark Collateral Security Agreement, dated December 5, 1996,
between WinCup Holdings, Inc. and The Bank of New York Commercial
Corporation (Incorporated by reference to Exhibit No. 10.46 filed with
Amendment No. 1 to the Original S-4)
10.27 Trademark Assignment of Security, dated December 5, 1996, between
WinCup Holdings, Inc. and The Bank of New York Commercial Corporation
(Incorporated by reference to Exhibit No. 10.47 filed with Amendment
No. 1 to the Original S-4)
28
<PAGE>
10.28 Patent Collateral Security Agreement, dated December 5, 1996, between
StyroChem U.S., Ltd. and The Bank of New York Commercial Corporation
(Incorporated by reference to Exhibit No. 10.48 filed with Amendment
No. 1 to the Original S-4)
10.29 Patent Assignment of Security, dated December 5, 1996, between
StyroChem U.S., Ltd. and The Bank of New York Commercial Corporation
(Incorporated by reference to Exhibit No. 10.49 filed with Amendment
No. 1 to the Original S-4)
10.30 Collateral Assignment, dated as of December 5, 1996, among Radnor
Holdings Corporation and The Bank of New York Commercial Corporation
(Incorporated by reference to Exhibit No. 10.50 filed with Amendment
No. 1 to the Original S-4)
10.31 Amended and Restated Guaranty dated December 29, 1999, made by
StyroChem GP, L.L.C., StyroChem LP, L.L.C., WinCup GP, L.L.C., WinCup
LP, L.L.C., Radnor Management Delaware, Inc. and WinCup Europe
Delaware, Inc. in favor of Bank of America, N.A. and certain other
lenders
10.32 Agreement Respecting a Term Loan and Other Credit Facilities, dated
February 25, 1994, between Bank of Montreal and StyroChem Canada,
Ltd., as amended (Incorporated by reference to Exhibit No. 10.63 filed
with Amendment No. 1 to the Original S-4)
10.33 Letter of Undertaking, dated December 5, 1996, made by StyroChem
Canada, Ltd. and Radnor Holdings Corporation in favor of Bank of
Montreal (Incorporated by reference to Exhibit No. 10.64 filed with
the Original S-4)
10.34 Guaranty, dated February 25, 1994, made by Radnor Chemical Corporation
in favor of Bank of Montreal (Incorporated by reference to Exhibit No.
10.65 filed with Amendment No. 1 to the Original S-4)
***10.35 Employment Agreement, dated April 5, 1996, between WinCup Holdings,
Inc. and R. Radcliffe Hastings (Incorporated by reference to Exhibit
No. 10.66 filed with the Original S-4)
10.36 Neste Service Agreement by and between Neste Oy and StyroChem Finland
Oy and Radnor Holdings Corporation dated as of October 15, 1997
(Incorporated by reference to Exhibit 10.68 filed with the Series B
S-4)
10.37 Land Lease Agreement by and between Neste Oy and StyroChem Finland Oy
and Radnor Holdings Corporation dated as of October 15, 1997
(Incorporated by reference to Exhibit 10.69 filed with the Series B
S-4)
10.38 Plant Lease 195 Tamal Vista Boulevard, Corte Madera, California,
between Hunt Brothers Leasing, L.L.C. and WinCup Holdings, Inc. (as
successor in interest to WinCup Holdings, L.P.), dated May 1, 1997
(Incorporated by reference to Exhibit 10.70 filed with the Series B
S-4)
10.39 Engineering Lease 201 Tamal Vista Boulevard, Corte Madera, California,
between Hunt Brothers Leasing, L.L.C. and WinCup Holdings, Inc. (as
successor in interest to WinCup Holdings, L.P.), dated May 1, 1997
(Incorporated by reference to Exhibit 10.71 filed with the Series B
S-4)
10.40 Warehouse Lease 205 Tamal Vista Boulevard, Corte Madera, California,
between Hunt Brothers Leasing, L.L.C. and WinCup Holdings, Inc. (as
successor in interest to WinCup Holdings, L.P.), dated May 1, 1997
(Incorporated by reference to Exhibit 10.72 filed with the Series B
S-4)
10.41 Security Agreement dated as of December 29, 1999, between Thermisol
Finland Oy and Bank of America
10.42 Security Agreement dated as of December 29, 1999, between Styrochem
Finland Oy and Bank of America
29
<PAGE>
10.43 European Revolving Note dated December 29, 1999, made by StyroChem
Europe (The Netherlands) B.V., StyroChem Finland OY, ThermiSol Denmark
A/S, ThermiSol Finland OY and ThermiSol Sweden AB in favor of Bank of
America, N.A.
10.44 European Revolving Note dated December 29, 1999, made by StyroChem
Europe (The Netherlands) B.V., StyroChem Finland OY, ThermiSol Denmark
A/S, ThermiSol Finland OY and ThermiSol Sweden AB in favor of First
Union National Bank
10.45 Lease Agreement between Oy KWH Plast Ab, Jakobstad and Isora Oy dated
January 24, 1995 (Incorporated by reference to Exhibit 10.74 filed
with the Series B S-4)
10.46 Lease and Cooperation Agreement between Suomen Polystyreeni Tehdas
Oy/Finska Polystyren Fabriken Ab and Borough of Kokemaki dated
February 27, 1971, as amended by Subcontract dated October 13, 1976,
Subcontract II dated February 26, 1981, Subcontract III dated August
13, 1985, Transfer of Lease Agreement between City of Kokemaki and
Neste Oy dated December 29, 1987, Lease dated April 15, 1994 and Lease
Agreement II dated September 26, 1996 (Incorporated by reference to
Exhibit 10.75 filed with the Series B S-4)
10.47 Lease Agreement between Avena Siilot Oy and Neste Oy Polystyreeni
dated March 13, 1997 (Incorporated by reference to Exhibit 10.76 filed
with the Series B S-4)
10.48 Office Lease Agreement between Keharakenpajat Oy and Neste Oy
Polystyreeni dated July 1, 1995 (Incorporated by reference to Exhibit
10.77 filed with Amendment No. 1 to the Series B S-4)
10.49 Lease Contract between Lokalo Fastighetsfarvaltning and Neste
Cellplast AB dated August 16, 1996 (Incorporated by reference to
Exhibit 10.78 filed with Amendment No. 1 to the Series B S-4)
10.50 Lease Contract between Norrtalje Industri- och Hantverkshus AB (NIHAB)
and Neste Cellplast AB dated June 26, 1996 (Incorporated by reference
to Exhibit 10.79 filed with Amendment No. 1 to the Series B S-4)
* 10.51 Styrene Monomer Supply Agreement dated as of October 15, 1997 between
StyroChem Finland Oy and Elf Atochem SA (Incorporated by reference to
Exhibit 10.80 filed with Amendment No. 1 to the Series B S-4)
***10.52 Employment Agreement dated February 21, 1997 between Radnor Holdings
Corporation and Caroline J. Williamson (Incorporated by reference to
Exhibit 10.81 filed with Amendment No. 1 to the Series B S-4)
** 10.53 Agreement of Sale dated as of January 1, 1998 between ARCO Chemie
Nederland, Ltd. and StyroChem Finland Oy (Incorporated by reference
to Exhibit No 10.49 filed with the Form 10-K for the year ended
December 25, 1998 filed by Radnor Holdings Corporation)
***10.54 Radnor Holdings Corporation Key Executive Retirement Plan
(Incorporated by reference to Exhibit No. 10.50 filed with the Form
10-K for the year ended December 25, 1998 filed by Radnor Holdings
Corporation)
***10.55 Radnor Holdings Corporation Senior Executive Retirement Plan, amended
as of September 1, 1999
***10.56 Executive Employment Agreement dated as of July 1, 1993 between Radnor
Holdings Corporation and Don Rogalski (Incorporated by reference to
Exhibit No. 10.51 filed with the Form 10-K for the year ended December
25, 1998 filed by Radnor Holdings Corporation)
30
<PAGE>
***10.57 Letter Agreement dated as of December 10, 1998 between Radnor Holdings
Corporation and Van D. Groenewold (Incorporated by reference to
Exhibit No. 10.52 filed with the Form 10-K for the year ended December
25, 1998 filed by Radnor Holdings Corporation)
21.1 List of Subsidiaries of the Registrant
27.1 Financial Data Schedule (Radnor Holdings Corporation)
99.1 Pages F-48 to F-84 of the Company's Prospectus dated February 6, 1998,
included in Amendment No. 1 to the Company's Registration Statement on
Form S-4, Commission File No. 333-42101
* Portions of this Exhibit have been deleted pursuant to an Order
Granting the Company's Application under Securities Act and Rule 406
Promulgated Thereunder for Confidential Treatment.
** Portions of this Exhibit have been deleted pursuant to an Order
Granting the Company's Application under Exchange Act and Rule 24b-2
Promulgated Thereunder for Confidential Treatment.
*** This exhibit represents a management contract or compensatory plan or
arrangement.
(b) REPORTS ON FORM 8-K
There were no reports filed on Form 8-K during the fiscal year ended December
31, 1999.
31
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
RADNOR HOLDINGS CORPORATION
Date: March 24, 2000 By:/s/ MICHAEL T. KENNEDY
-----------------------------------
Michael T. Kennedy
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the Registrant in
the capacities and on the dates indicated.
/s/ MICHAEL T. KENNEDY Chairman of the Board and March 24, 2000
- ---------------------------- Chief Executive Officer
Michael T. Kennedy
/s/ R. RADCLIFFE HASTINGS Senior Vice President, March 24, 2000
- ---------------------------- Treasurer and Director
R. Radcliffe Hastings
/s/ MICHAEL V. VALENZA Senior Vice President - Finance, March 24, 2000
- ---------------------------- Chief Financial Officer and
Michael V. Valenza Chief Accounting Officer
/s/ JOHN P. MCNIFF Senior Vice President - Corporate March 24, 2000
- ---------------------------- Development and Director
John P. McNiff
/s/ VINCENT F. GARRITY, JR. Director March 24, 2000
- ----------------------------
Vincent F. Garrity, Jr.
/s/ THOMAS J. HOPKINS Director March 24, 2000
- ----------------------------
Thomas J. Hopkins
32
<PAGE>
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
15(D) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO
SECTION 12 OF THE ACT
Registrant has not sent and does not anticipate sending any annual report to
its security holders other than a copy of this Form 10-K report. Registrant has
not sent and does not anticipate sending any proxy statement, form of proxy or
other proxy solicitation material to more than ten of its security holders with
respect to any annual or other meeting of security holders, as it has only three
holders of voting securities. If any annual report other than this Form 10-K
report is hereafter furnished to Registrant's security holders, or if any proxy
statement, form of proxy or other proxy solicitation material is hereafter sent
to more than ten of its security holders with respect to any annual or other
meeting of security holders, Registrant will furnish four copies thereof to the
Securities and Exchange Commission when it is so sent.
33
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Radnor Holdings Corporation:
We have audited the accompanying consolidated balance sheets of Radnor Holdings
Corporation (a Delaware corporation) and subsidiaries as of December 25, 1998
and December 31, 1999, and the related consolidated statements of income,
stockholders' equity and cash flows for each of the three years in the period
ended December 31, 1999. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Radnor Holdings Corporation and
subsidiaries as of December 25, 1998 and December 31, 1999, and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1999, in conformity with accounting principles generally
accepted in the United States.
Arthur Andersen LLP
Philadelphia, Pennsylvania
March 13, 2000
F-1
<PAGE>
RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES
--------------------------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
DECEMBER 25, 1998 AND DECEMBER 31, 1999
---------------------------------------
(In thousands, except share amounts)
<TABLE>
<CAPTION>
ASSETS 1998 1999
------ ----------------- -----------------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 3,975 $ 7,579
Marketable securities 546 --
Accounts receivable, net 28,655 29,135
Inventories, net 35,267 34,781
Prepaid expenses and other 4,075 6,480
Deferred tax asset 2,255 1,660
-------- --------
74,773 79,635
-------- --------
PROPERTY, PLANT AND EQUIPMENT, at cost:
Land 5,813 7,253
Supplies and spare parts 3,223 5,277
Buildings and improvements 32,952 45,046
Machinery and equipment 161,925 168,771
-------- --------
203,913 226,347
Less- Accumulated depreciation (22,536) (34,235)
-------- --------
181,377 192,112
-------- --------
OTHER ASSETS 22,646 21,936
-------- --------
$278,796 $293,683
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 28,756 $ 39,447
Accrued liabilities 20,618 23,486
Current portion of long-term debt 729 2,755
Current portion of capitalized lease obligations 761 1,063
-------- --------
50,864 66,751
-------- --------
LONG-TERM DEBT, net of current portion 189,653 206,264
-------- --------
CAPITALIZED LEASE OBLIGATIONS, net of current portion 4,855 5,335
-------- --------
DEFERRED TAX LIABILITY 11,839 7,245
-------- --------
OTHER NONCURRENT LIABILITIES 636 514
-------- --------
COMMITMENTS AND CONTINGENCIES (Note 4)
STOCKHOLDERS' EQUITY:
Voting and nonvoting common stock, 22,700 shares authorized, 6,245 shares 1 1
issued and outstanding
Additional paid-in capital 19,387 19,387
Retained earnings (deficit) 1,087 (5,297)
Cumulative translation adjustment 474 (6,517)
-------- --------
Total stockholders' equity 20,949 7,574
-------- --------
$278,796 $293,683
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
F-2
<PAGE>
RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES
--------------------------------------------
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
FOR THE FISCAL YEARS ENDED DECEMBER 26, 1997, DECEMBER 25, 1998
---------------------------------------------------------------
AND DECEMBER 31, 1999
---------------------
(In thousands)
<TABLE>
<CAPTION>
1997 1998 1999
-------------- ------------- --------------
<S> <C> <C> <C>
NET SALES $243,583 $311,137 $318,115
COST OF GOODS SOLD 181,404 220,691 226,509
-------- -------- --------
GROSS PROFIT 62,179 90,446 91,606
-------- -------- --------
OPERATING EXPENSES:
Distribution 18,076 23,004 24,535
Selling, general and administrative 30,137 38,965 43,922
-------- -------- --------
48,213 61,969 68,457
-------- -------- --------
INCOME FROM CONTINUING OPERATIONS 13,966 28,477 23,149
-------- -------- --------
OTHER (INCOME) EXPENSE:
Interest 13,004 18,776 21,070
Other, net (133) 965 1,363
-------- -------- --------
12,871 19,741 22,433
-------- -------- --------
Income before income taxes and discontinued operations 1,095 8,736 716
PROVISION (BENEFIT) FOR INCOME TAXES (2,516) 3,340 241
-------- -------- --------
Income before discontinued operations 3,611 5,396 475
-------- -------- --------
LOSS FROM DISCONTINUED OPERATIONS -- -- 6,859
-------- -------- --------
NET INCOME (LOSS) $ 3,611 $ 5,396 $ (6,384)
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
F-3
<PAGE>
RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES
--------------------------------------------
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
-----------------------------------------------
FOR THE FISCAL YEARS ENDED DECEMBER 26, 1997, DECEMBER 25, 1998
---------------------------------------------------------------
AND DECEMBER 31, 1999
---------------------
(In thousands, except share amounts)
<TABLE>
<CAPTION>
VOTING AND
NONVOTING
COMMON STOCK ADDITIONAL RETAINED CUMULATIVE
-------------- PAID-IN EARNINGS/ TRANSLATION
SHARES AMOUNT CAPITAL (DEFICIT) ADJUSTMENT TOTAL
------ ------ ---------- ---------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 28, 1996 6,245 $1 $17,720 $(3,420) $ 28 $ 14,329
Comprehensive income-
Net income -- -- -- 3,611 -- 3,611
Translation adjustment -- -- -- -- (1,632) (1,632)
--------
Total comprehensive income 1,979
--------
Transfer of stock ownership -- -- 1,667 -- -- 1,667
Cash dividends - $480 per share -- -- -- (3,000) -- (3,000)
------ ------ ------- ------- ------- --------
BALANCE, DECEMBER 26, 1997 6,245 1 19,387 (2,809) (1,604) 14,975
Comprehensive income-
Net income -- -- -- 5,396 -- 5,396
Translation adjustment -- -- -- -- 2,078 2,078
--------
Total comprehensive income 7,474
--------
Cash dividends - $240 per share -- -- -- (1,500) -- (1,500)
------ ------ ------- ------- ------- --------
BALANCE, DECEMBER 25, 1998 6,245 1 19,387 1,087 474 20,949
Comprehensive income-
Net loss -- -- -- (6,384) -- (6,384)
Translation adjustment -- -- -- -- (6,991) (6,991)
--------
Total comprehensive loss (13,375)
--------
BALANCE, DECEMBER 31, 1999 6,245 $1 $19,387 $(5,297) $(6,517) $ 7,574
====== ====== ======= ======= ======= ========
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
F-4
<PAGE>
RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES
--------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
FOR THE FISCAL YEARS ENDED DECEMBER 26, 1997, DECEMBER 25, 1998
---------------------------------------------------------------
AND DECEMBER 31, 1999
---------------------
(In thousands)
<TABLE>
<CAPTION>
1997 1998 1999
--------------- --------------- --------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 3,611 $ 5,396 $ (6,384)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities-
Depreciation and amortization 9,530 13,857 17,137
Unrealized loss (gain) on marketable securities -- (46) 46
Deferred income taxes (2,627) 2,612 (115)
Transfer of stock ownership 1,667 -- --
Discontinued operations -- -- 6,859
Changes in operating assets and liabilities, net of effects of
acquisition and disposition of businesses--
Accounts receivable, net 9,540 394 (1,718)
Inventories, net (3,666) (6,815) (558)
Prepaid expenses and other (766) (921) (2,988)
Accounts payable (6,511) 328 11,230
Accrued liabilities 2,196 2,339 1,123
-------- -------- --------
Net cash provided by continuing operations 12,974 17,144 24,632
Net cash used in discontinued operations -- -- (8,360)
-------- -------- --------
Net cash provided by operating activities 12,974 17,144 16,272
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (18,411) (17,661) (20,032)
Acquisition of StyroChem Europe, net of cash acquired (52,299) (345) --
Acquisition of Epsilevy Oy, net of cash acquired -- (794) --
Increase in other assets (1,368) (10,141) (3,599)
-------- -------- --------
Net cash used in investing activities (72,078) (28,941) (23,631)
-------- -------- --------
</TABLE>
(Continued)
F-5
<PAGE>
RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES
--------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
FOR THE FISCAL YEARS ENDED DECEMBER 26, 1997, DECEMBER 25, 1998
---------------------------------------------------------------
AND DECEMBER 31, 1999
---------------------
(In thousands)
(Continued)
<TABLE>
<CAPTION>
1997 1998 1999
-------------- -------------- --------------
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings on revolving credit lines and unsecured
notes payable $12,663 $ 5,820 $ 3,602
Borrowings on term debt and mortgage notes -- 259 10,607
Payments on term debt and mortgage notes (248) (252) (2,159)
Borrowings on capitalized lease obligations -- 4,871 158
Payments on capitalized lease obligations -- (373) (784)
Issuance of senior notes 62,203 -- --
Payments of dividends (3,000) (1,500) --
Other (3,808) (1,956) --
------- ------- -------
Net cash provided by financing activities 67,810 6,869 11,424
------- ------- -------
EFFECT OF EXCHANGE RATE CHANGES ON CASH (751) 93 (461)
------- ------- -------
NET INCREASE (DECREASE) IN CASH 7,955 (4,835) 3,604
CASH, beginning of period 855 8,810 3,975
------- ------- -------
CASH, end of period $ 8,810 $ 3,975 $ 7,579
======= ======= =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest, including
discontinued operations $11,667 $17,619 $19,330
======= ======= =======
Cash paid during the period for income taxes, net of refunds of
$415 in 1997, $132 in 1998 and $7 in 1999 $ 196 $ (48) $ 438
======= ======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
F-6
<PAGE>
RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES
--------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
1. ORGANIZATION, ACQUISITIONS AND DISCONTINUED OPERATIONS:
-------------------------------------------------------
The Company
- -----------
Radnor Holdings Corporation ("Radnor") was incorporated in Delaware on November
6, 1991 to acquire the outstanding stock of Benchmark Holdings, Inc.
("Benchmark") and WinCup Holdings, Inc. ("WinCup"). Radnor, through its WinCup
subsidiary, is the second largest producer in the United States of foam cups and
containers for the foodservice industry. Through its Radnor Chemical
Corporation subsidiary, Radnor is the third largest worldwide producer of
expandable polystyrene ("EPS"). Radnor and its subsidiaries (collectively the
"Company") sell their products primarily to national, institutional, retail and
wholesale customers throughout the U.S., Canada, Mexico, and Europe. The
Company markets its products under a variety of brand and trade names, including
"WinCup," "Handi-Kup," "StyroChem" and "ThermiSol."
The Company has a number of large national accounts and supplies products to a
number of large foodservice distributors. The five largest accounts represented
approximately 22% and 23% of the Company's net sales for fiscal years 1998 and
1999, respectively. Although the Company has not lost sales from its key
customers in fiscal years 1998 and 1999, if any of such customers substantially
reduces its level of purchases from the Company, the Company's profitability
could be adversely affected. Moreover, continued consolidation among
distributors in the foodservice industry could result in an increasingly
concentrated customer base or the loss of certain customers.
StyroChem Europe Acquisition
- ----------------------------
On October 15, 1997, the Company acquired the polystyrene production and
conversion operations of Fortum Oyj , formerly Neste Oy ("StyroChem Europe").
The acquisition was accounted for as a purchase and, accordingly, the purchased
assets and assumed liabilities of StyroChem Europe were recorded at estimated
fair values at the date of acquisition. The purchase price was 213.0 million
Finnish Markkas (approximately $40.8 million as of the date of closing) plus the
net working capital of 60.0 million Finnish Markkas (approximately $11.5 million
as of the date of closing). The purchase price was allocated to accounts
receivable ($13.8 million), inventory ($6.5 million), property, plant and
equipment ($40.8 million), accounts payable ($6.4 million) and accrued
liabilities ($2.4 million). A portion of the proceeds from the Company's
offering of $60.0 million 10% Series B Senior Notes due 2003 was utilized to
fund the purchase price.
Pro Forma Results of Operations
- -------------------------------
Operating results of the acquired business are included in consolidated results
only from the date of acquisition. Unaudited pro forma data reflecting results
as if the acquisition was effective at the beginning of 1997 follow (in
thousands):
<TABLE>
<CAPTION>
1997
---------------
<S> <C>
Net sales $312,410
Income from operations 21,317
Income before extraordinary item 6,811
</TABLE>
F-7
<PAGE>
Pro forma results are unaudited and are based on historical results, adjusted
for the impact of certain acquisition related items, such as: increased
depreciation of property, plant and equipment, increased interest expense on
acquisition debt, and the related income tax effects. Pro forma results do not
reflect any synergies that might be achieved from combined operations and
therefore, in management's opinion, are not indicative of what actual results
would have been if the acquisitions had occurred at the beginning of 1997. In
addition, they are not intended to be a projection of future results.
Discontinued Operations
- ------------------------
Pursuant to an asset purchase agreement among Benchmark Holdings, Inc.
("Benchmark"), WinCup Holdings, Inc. ("WinCup"), and the Fort James Corporation,
formerly James River Paper Company, Inc. ("Fort James"), dated October 31, 1995,
Benchmark and WinCup sold to Fort James all of the assets of Benchmark's cutlery
and straws business and all of the assets of WinCup's thermoformed cup business,
except for cash, accounts receivable and prepaid assets. The operations of
Benchmark's cutlery and straws business and WinCup's thermoformed cup business
were accounted for as discontinued operations. The current period loss, net of a
tax benefit of $3.8 million, represents the settlement of a contingent liability
related to the discontinued operations.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
-------------------------------------------
Fiscal Year
- -----------
The Company's fiscal year is the fifty-two or fifty-three week period that ends
on the last Friday of December of each year. The fiscal years ended December
26, 1997 and December 25, 1998 were fifty-two week periods, while the fiscal
year ended December 31, 1999 was a fifty-three week period.
Principles of Consolidation
- ---------------------------
The accompanying consolidated financial statements include the accounts of
Radnor and all of its majority-owned subsidiaries. All material intercompany
balances and transactions have been eliminated in consolidation. The equity
method of accounting is used when the Company has a 20% to 50% ownership
interest in other companies. Under the equity method, original investments are
recorded at cost and adjusted for the Company's share of undistributed earnings
or losses of these companies.
Accounts Receivable, Net
- ------------------------
Accounts receivable are net of allowances for doubtful accounts of $764,000 and
$899,000 at December 25, 1998 and December 31, 1999, respectively. Bad debt
expense was $179,000, $150,000 and $213,000 for fiscal years 1997, 1998, and
1999, respectively. The related write-offs of accounts receivable were $63,000,
$215,000 and $78,000 for those years, respectively.
F-8
<PAGE>
Inventories
- -----------
Inventories are recorded at the lower of cost (first-in, first-out) or market.
Inventories at December 25, 1998 and December 31, 1999, consist of the following
(in thousands):
<TABLE>
<CAPTION>
1998 1999
--------------- ---------------
<S> <C> <C>
Raw materials $12,576 $10,632
Work in process 1,251 1,054
Finished goods 21,440 23,095
------- -------
$35,267 $34,781
======= =======
</TABLE>
Property, Plant and Equipment
- -----------------------------
Property, plant and equipment are stated at cost and depreciated using the
straight-line method over estimated useful lives which range from 5 to 40 years.
Leasehold improvements are amortized over the lesser of their estimated useful
lives or the term of the lease using the straight-line method. Maintenance and
repairs are charged to operations currently, and replacements and significant
improvements are capitalized. Depreciation expense in fiscal 1997, 1998 and
1999 was $7,504,000, $10,933,000 and $12,421,000, respectively.
Supplies and Spare Parts
- ------------------------
Supplies and spare parts include maintenance parts maintained in a central
stores locations. When needed at the manufacturing facilities, parts are
shipped and expensed.
Other Assets
- ------------
Other assets include deferred financing costs of $7.4 million and $5.9 million
as of December 25, 1998 and December 31, 1999, respectively, related to the
financing arrangements and note offerings executed in 1996 and 1997. Such costs
are being amortized over the terms of the related debt instruments.
Amortization of deferred financing costs of $836,000, $1,286,000 and $1,564,000
is included in interest expense for the years ended December 26, 1997, December
25, 1998, and December 31, 1999, respectively. In addition, other assets
include a noncompete agreement of $1.9 million, net of amortization of $2.9
million, resulting from the acquisition of Radnor Chemical Corporation, formerly
S.P. Acquisition Co., which is being amortized over five years.
Environmental Expenditures
- --------------------------
Environmental expenditures that relate to an existing condition caused by past
operations and that do not contribute to current or future revenue generation
are expensed. Liabilities are recorded when environmental assessments and/or
cleanups are probable, and the costs can be reasonably estimated.
Income Taxes
- ------------
The Company accounts for income taxes under the liability method. Under this
method, deferred tax assets and liabilities are recognized for the tax effects
of temporary differences between the financial reporting and tax bases of assets
and liabilities using enacted tax law and statutory tax rates applicable to the
periods in which the temporary differences are expected to affect taxable
income.
Revenue Recognition
- -------------------
Revenue is recognized when goods are shipped.
F-9
<PAGE>
Currency Translation
- --------------------
The Company conducts business in a number of foreign countries and as a result
is subject to the risk of fluctuations in foreign currency exchange rates and
other political and economic risks associated with international business. The
Company's foreign entities report their assets, liabilities and results of
operations in the currency in which the entity primarily conducts its business.
Foreign assets and liabilities are translated into U.S. dollars at current
exchange rates- that is, the rates in effect at the end of the fiscal period.
The revenue and expense accounts of foreign subsidiaries are translated into
U.S. dollars at the average exchange rates that prevailed during the period.
Adjustments resulting from the translation of the financial statements are
reflected as a currency translation adjustment in stockholders' equity.
Currency transaction gains and losses, which are included in operating results,
are not significant.
Research and Development
- ------------------------
Research and development costs are charged to expense as incurred and are
included in cost of goods sold. These costs have represented 1.8%, 2.2% and
1.7% of net sales in 1997, 1998 and 1999, respectively.
Use of Estimates
- ----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Fair Value of Financial Instruments
- -----------------------------------
The estimated fair value of financial instruments was determined by the Company
using market quotes, if available, or discounted cash flows using market
interest rates. The carrying values of cash, accounts receivable, accounts
payable and accrued liabilities approximate fair value due to the short-term
nature of these items. The carrying amounts of the Company's bank term loans
and the lines of credit approximate fair value because they have variable
interest rates based on either the prime rate or the interbank offering rate of
the currency in which the Company borrows. The fair value of the senior notes
was $160.0 million at December 31, 1999.
F-10
<PAGE>
3. LONG-TERM DEBT:
---------------
Long-term debt consists of the following (in thousands):
<TABLE>
<CAPTION>
1998 1999
------------- -------------
<S> <C> <C>
Series A Senior Notes bearing interest at 10%, interest payable semi-
annually, due December 1, 2003 $100,000 $100,000
Series B Senior Notes, including a premium of $1,540 at December 31,
1999 bearing interest at 10%, interest payable semi-annually, due
December 1, 2003 61,862 61,540
Outstanding balance under the $40 million Third Amended and Restated
Revolving Credit and Security Agreement (the "Amended Credit
Agreement"), which includes an $8 million European subsidiary
sublimit, bearing interest at the Company's option at a rate based
upon various formulae as defined within the agreement. At December
31, 1999, the domestic rate was based on 14-day LIBOR (7.50%) plus
2.0%. There was no outstanding balance pertaining to the European
sublimit at December 31, 1999. The revolving loans under the
Amended Credit Agreement will mature on October 15, 2002. All the
obligations of the Company under the Amended Credit Agreement are
secured by a lien on substantially all of the Company's U.S. and
European subsidiaries' inventory, receivables, and general
intangibles. 22,801 25,000
Outstanding balance under the Canadian Revolving Credit Facility
(borrowing capacity of $2.5 million Canadian including a letter of
credit subfacility and a Foreign Exchange Future Contracts
subfacility), Canadian dollar advances bearing interest at Canadian
prime rate (6.5% at December 31, 1999). There was no outstanding
balance pertaining to U.S. dollar advances at December 31, 1999.
Loans under the Canadian Revolving Credit Facility are payable on
demand and secured by substantially all of the assets of the
Company's Canadian subsidiary. 80 952
Outstanding balance under a Canadian term loan, bearing interest at
Canadian prime (6.5% at December 31, 1999) plus 1.0%, secured by
substantially all assets of the Company's Canadian subsidiary,
payable in quarterly installments of approximately $13,350 over a
maximum of five years. 233 193
Outstanding balance under a Canadian term loan, bearing interest at
Canadian prime (6.5% at December 31, 1999) plus 1%, collateralized
by substantially all assets of the Company's Canadian subsidiary,
payable in monthly installments of approximately $3,243 plus
interest, over a maximum of seven years. - 267
Outstanding balance under a Canadian term loan, bearing interest at
7.375% for the first year and at a negotiated rate for the remaining
years, collateralized by a mortgage agreement, payable in monthly
principal installments of principal and interest of approximately
$4,000, commencing January 2000 with final payment due December 2025. - 468
</TABLE>
F-11
<PAGE>
<TABLE>
<CAPTION>
1998 1999
------------- -------------
<S> <C> <C>
Outstanding balance under a capital expenditure loan bearing interest
at a weighted average rate of 8.31%, payable in quarterly principal
and interest installments of $478,403 through February 2005,
$288,419 due in May 2005, $155,813 due in August 2005, and $55,611
due in December 2005, secured by equipment purchased with the
proceeds of the advances. - 8,384
Outstanding balance under a term loan facility (the "Stone Mountain
Facility"), bearing interest at the Company's option at a rate based
upon various formulae as defined within the agreement. At December
31, 1999, the rate was based upon LIBOR rates with various
maturities (6.04%) plus margin (2.25%). The term loan is payable in
quarterly principal installments of $150,000 plus interest with
final payment due September 2003. The term loan is secured by a
mortgage agreement. 5,066 4,466
Outstanding balance under a term loan facility (the "Tolleson
Facility"), bearing interest at the Company's option at a rate based
upon various formulae as defined within the agreement. At December
31, 1999, the rate was based upon LIBOR rates with various
maturities (5.93%) plus margin (2.25%), collateralized by a mortgage
agreement, payable in quarterly principal installments of $186,000
plus interest, commencing June 1, 1999 with final payment of
outstanding principal and interest due March 2009. - 6,882
Outstanding balance under a term loan facility, bearing interest at
3-month EURIBOR (3.39% at December 31, 1999) plus margin (1.25% at
December 31, 1999) payable in semi-annual principal installments of
approximately $20,000 plus interest with final payment due January
2004. 216 -
Outstanding balance under a term loan facility, bearing interest at
6.0252%, payable in quarterly installments of approximately $18,135
including principal and interest, commencing March 31, 1999 with
final payment due March 2019. The term loan is secured by a
mortgage agreement. - 790
Outstanding balance under a term loan facility, bearing interest at
6-month EURIBOR (3.59% at December 31, 1999) plus margin (1.25% at
December 31, 1999) payable in semi-annual principal installments of
approximately $17,000 plus interest with final payment due January
2002. 124 77
-------- --------
190,382 209,019
Less- Current portion (729) (2,755)
-------- --------
$189,653 $206,264
======== ========
</TABLE>
On December 29, 1999 the Company entered into the Amended Credit Agreement with
two banks, as agents and lenders, pursuant to which the Second Amended and
Restated Revolving Credit and Security Agreement dated as of October 15, 1997
was amended and restated. The Amended Credit Agreement includes the Company and
certain of its U.S. and European subsidiaries as borrowers. The Amended Credit
Agreement provides for a fee of 0.50% per annum on the undrawn amount of the
credit facility and letter of credit fees of 1.75% or 1.50% of the aggregate
face amounts of standby
F-12
<PAGE>
letters of credit and documentary letters of credit, respectively. There is a $5
million sub-limit on standby letters of credit and a $1 million sub-limit on
documentary letters of credit. At December 25, 1998 and December 31, 1999, the
Company had outstanding $1.8 million and $1.7 million of standby letters of
credit, respectively.
In March 1999, the Company entered into the Tolleson Facility to finance the
purchase of its Tolleson, Arizona, manufacturing facility.
In July 1998, the Company entered into the Stone Mountain Facility to finance
the purchase of its Stone Mountain, Georgia manufacturing facility.
On October 15, 1997, the Company completed a $60 million Series B Senior Note
offering. The proceeds were used to finance the StyroChem Europe acquisition
and repay a portion of the outstanding principal and accrued interest under the
revolving credit facility. The debt issuance premium on the Series B Notes is
being amortized over the life of the notes. For fiscal years 1997, 1998 and 1999
premium amortization of $44,000, $297,000 and $322,000 respectively, has been
recorded as a reduction of interest expense.
Each of the above agreements contain certain restrictive covenants which
include, among other things, restrictions on the declaration or payment of
dividends, the repurchase of stock, the incurrence of additional debt, the
amount of capital expenditures and additional investments and the sale or
disposition of assets. The Company is also required to maintain a minimum net
worth and certain financial ratios including debt to equity, current, debt
coverage and earnings to interest expense. The Company is currently in
compliance with all financial covenants.
Future debt maturities, excluding the debt premium, are as follows (in
thousands):
<TABLE>
<S> <C>
2000 $ 2,755
2001 2,863
2002 28,918
2003 163,052
2004 3,163
2005 and thereafter 6,728
--------
$207,479
========
</TABLE>
4. COMMITMENTS AND CONTINGENCIES:
------------------------------
Leases
- ------
The Company leases certain of its manufacturing, warehouse and office facilities
and transportation equipment under noncancelable operating and capital lease
arrangements.
The future minimum payments under noncancelable operating leases are as follows
(in thousands):
<TABLE>
<S> <C>
2000 $ 6,060
2001 5,075
2002 4,347
2003 3,607
2004 2,774
2005 and thereafter 4,665
-------
$26,528
=======
</TABLE>
F-13
<PAGE>
Rental expense for all operating leases was $6,144,000, $7,249,000 and
$7,470,000 for fiscal years 1997, 1998 and 1999, respectively.
The future minimum payments under capital leases are as follows (in thousands):
<TABLE>
<S> <C>
2000 $1,504
2001 1,504
2002 1,504
2003 1,504
2004 985
2005 and thereafter 780
------
Total minimum lease payments 7,781
Less interest 1,383
------
Present value of net minimum lease payments 6,398
Less current maturities 1,063
------
Capital lease obligations $5,335
======
</TABLE>
Litigation
- ----------
In October 1999, the Company settled the litigation filed by Jackson National
Life Insurance Company and Benchmark Holdings, Inc. in the Court of Chancery for
the State of Delaware in and for New Castle County. See Item 3 of the Company's
Report on Form 10-K for the year ended December 31, 1999. Although the Company
believed it had meritorious defenses and was prepared to assert such defenses
vigorously, the Company determined it was in its best interests to settle the
litigation due to the expense of such litigation and the attendant diversion and
disruption of management resources, as well as the inherent uncertainties of
litigation.
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.
Supply Agreements
- -----------------
In October 1998, the Company amended its primary North American styrene monomer
supply contract. The initial term of the contract extends through December
2003. Under the amended contract, the Company is required to purchase the first
160 million pounds of its North American styrene monomer requirements from one
supplier and has certain rights to purchase additional styrene monomer.
In October 1997, in connection with the StyroChem Europe Acquisition, the
Company negotiated a contract to provide a long-term supply of styrene monomer
at a reduced price and with volume discounts to its European operations. The
initial term of the new agreement extends for three years.
5. STOCKHOLDERS' EQUITY:
---------------------
The Company is currently authorized to issue up to 11,650 shares of Voting
Common Stock, 5,400 shares of Class B Nonvoting Common Stock, 5,650 shares of
Nonvoting Common Stock and 2,000 shares of series preferred stock. At December
31, 1999, there are issued and outstanding 600 shares of Voting Common Stock,
5,400 shares of Class B Nonvoting Common Stock and 245 shares of Nonvoting
Common Stock. All shares have a par value of $.10 except for shares of Class B
Nonvoting Common Stock, which have a par value of $.01.
F-14
<PAGE>
The Company's principal stockholder transferred ownership of 60 shares of Voting
Common Stock and 540 shares of Class B Nonvoting Common Stock to an officer of
the Company, and the estimated fair value of such stock has been reflected as
compensation expense in the 1997 financial statements.
6. INCOME TAXES:
---------------
The components of income before taxes by source of income are as follows (in
thousands):
<TABLE>
<CAPTION>
1997 1998 1999
------------- ------------ -------------
<S> <C> <C> <C>
United States $ (282) $4,261 $ (625)
Non-U.S. 1,377 4,475 1,341
------ ------ ------
$1,095 $8,736 $ 716
====== ====== ======
</TABLE>
The provision (benefit) for income taxes for each of the three years in the
period ended December 31, 1999 is as follows (in thousands):
<TABLE>
<CAPTION>
1997 1998 1999
------------- ------------- --------------
<S> <C> <C> <C>
Current:
Federal $ 20 $ 47 $ --
State 34 176 20
Foreign -- 505 336
Deferred 5,972 3,061 3,953
Generation of net operating loss
carryforwards (excluding generation of net
operating loss due to discontinued
operations in 1999) (3,785) (449) (4,068)
Change in valuation allowance (4,757) -- --
------- ------ -------
$(2,516) $3,340 $ 241
======= ====== =======
</TABLE>
The components of deferred taxes at December 25, 1998 and December 31, 1999 are
as follows (in thousands):
<TABLE>
<CAPTION>
1998 1999
-------------- --------------
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforwards including loss
from discontinued operations $ 8,991 $16,834
Vacation pay and compensation accruals 601 495
Bad debt, inventory and returns and
allowances 900 679
Other accruals 932 920
------- -------
11,424 18,928
Deferred tax liabilities:
Accelerated tax depreciation 20,145 24,513
Other 863 --
Net deferred tax liability ------- -------
$ 9,584 $ 5,585
======= =======
</TABLE>
F-15
<PAGE>
The provision (benefit) for income taxes varies from the amount determined by
applying the United States federal statutory rate to pre-tax income as a result
of the following (in thousands):
<TABLE>
<CAPTION>
1997 1998 1999
------------- ------------- -------------
<S> <C> <C> <C>
United States federal statutory income tax $ 372 $2,970 $ 243
State income taxes, net of federal benefit 50 177 44
Change in valuation allowance (4,757) -- --
Nondeductible expenses 2 77 14
Dividends received from foreign affiliate 214 -- --
Foreign tax rate differential -- (141) (53)
Other 1,603 257 (7)
------- ------ -----
$(2,516) $3,340 $ 241
======= ====== =====
</TABLE>
As of December 31, 1999, the Company had approximately $44.5 million of net
operating loss carryforwards for federal income tax purposes, which expire
through 2019. A valuation allowance was provided for substantially all of the
loss carryforward tax benefit at December 27, 1996. In 1997, as a result of
management's reevaluation of the Company's future profitability outlook, the
valuation allowance was eliminated and a tax benefit of $4.8 million was
reflected in the 1997 financial statements.
7. STOCK OPTION PLAN:
------------------
The 1992 Equity Incentive Plan (the "Plan") provides for the grant of
nonqualified options to purchase shares of the Nonvoting Common Stock subject to
certain limitations. Nonqualified stock options are issuable only to eligible
officers and employees of the Company. The Company has reserved 1,249 shares of
its Nonvoting Common Stock for issuance under the Plan.
The per share exercise price of a stock option may not be less than 75% of the
fair market value of the Nonvoting Common Stock, as determined by the board of
directors, on the date the option is granted. Such options may be exercised
only if the option holder remains continuously associated with the Company from
the date of grant to a date not less than three months prior to the date of
exercise. The exercise date of an option granted under the plan cannot be later
than ten years from the date of the grant. Any options that expire unexercised
or that terminate upon an optionee's ceasing to be employed by the Company
become available once again for issuance.
The following summarizes the stock option activity under the Plan:
<TABLE>
<CAPTION>
1997 1998 1999
------------- ------------- -------------
<S> <C> <C> <C>
Options outstanding at beginning of period 700 1,115 1,113
Granted 440 -- --
Exercised -- -- --
Canceled (25) (2) (2)
----- ----- -----
Options outstanding at end of period 1,115 1,113 1,111
===== ===== =====
Options available for grant 134 136 138
===== ===== =====
Exercisable at end of period 584 761 847
===== ===== =====
</TABLE>
The exercise price for all options granted prior to 1997 is $3,350 per share
while the exercise price for all options granted during 1997 is $6,985. These
amounts represent the fair market value as determined by the board of directors
on the grant dates. There were no options granted during 1998 or 1999.
F-16
<PAGE>
The Company applies Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees," and related interpretations in accounting for its
stock options plans. Accordingly, no compensation expense has been recognized
related to the plans described above. If compensation cost for these plans had
been determined using the fair-value method prescribed by Statement of Financial
Accounting Standards No. 123, "Accounting for Stock Based Compensation," the
Company's net income would have been reduced to the pro forma amounts indicated
below.
<TABLE>
<CAPTION>
(in thousands) 1997 1998 1999
--------------- --------------- ----------------
<S> <C> <C> <C>
Net income (loss)- as reported $3,611 $5,396 $(6,384)
Net income (loss)- pro forma 3,492 5,110 (6,670)
</TABLE>
This pro forma impact may not be representative of the effects for future years
and is likely to increase as additional options are granted and amortized over
the vesting period.
As the Company's stock is not publicly traded, the fair value of each option was
estimated on the grant date using the minimum value method (which excludes a
volatility assumption), with the following assumptions:
<TABLE>
<CAPTION>
1997 1998 1999
---------------- ---------------- ----------------
<S> <C> <C> <C>
Risk-free rate of interest 6.31% 6.31% 6.31%
Expected life in years 10 10 10
Dividend yield 0% 0% 0%
</TABLE>
8. EMPLOYEE BENEFIT PLAN:
----------------------
The Company sponsors a 401(k) savings and profit sharing plan, which covers all
employees who have at least 1,000 hours of service during the year. The Company
will match employee contributions up to 2.8% of an employee's annual salary.
The Company may also, at the discretion of the board of directors, elect to make
a profit sharing contribution. There have been no profit sharing contributions
for the three years in the period ended December 31, 1999. Employer matching
contributions to the plan amounted to approximately $591,000, $689,000 and
$688,000 for each of the three years in the period ended December 31, 1999,
respectively.
Certain of the Company's European subsidiaries maintain benefit plans. Pension
expense related to these plans was $181,000 in 1997, $1,375,000 in 1998 and
$1,984,000 in 1999.
9. RELATED PARTY TRANSACTIONS:
---------------------------
A director of the Company is a partner in the law firm which serves as the
Company's primary legal counsel. During 1997, 1998 and 1999, the Company paid
fees of $831,000, $471,000 and $652,000 to this firm. A director of the Company
is a Senior Managing Director of an investment banking firm that performed
services for the Company in 1997 and 1998. During 1997 and 1998, the Company
paid total fees of $1,050,000 and $252,000 to this firm, respectively.
The Company licenses certain rights and provides administrative support to a
related company from which approximately $3.0 million and $5.5 million was due
at December 25, 1998 and December 31, 1999, respectively. The Company has also
advanced $623,000 on a non-interest-bearing basis to Michael T. Kennedy, the
Company's Chief Executive Officer.
F-17
<PAGE>
10. SEGMENT INFORMATION:
--------------------
The Company has two business segments that operate within three distinct
geographic regions. The packaging and insulation segment produces food
packaging and insulation products for distribution to the foodservice,
insulation and packaging industries. The specialty chemicals segment produces
EPS for internal consumption by the packaging and insulation segment in addition
to selling to third-party manufacturers. Each of these segments operates in the
United States, Canada and Europe.
In January 1999, the EPS production operations located in Minton, Texas were
sold by the Company's Radnor Chemical subsidiary to its WinCup subsidiary. This
facility manufactures a substantial portion of the EPS utilized by the Company's
domestic food packaging operations with the remainder purchased from Radnor
Chemical's Canadian EPS manufacturing facility. The Company's segment
information for 1997 and 1998 have been restated to reflect the impact of this
transaction.
The following tables summarize the Company's financial information and results
of operations by segment and geographic region for fiscal years 1997 through
1999 (in thousands):
OPERATING:
<TABLE>
<CAPTION>
PACKAGING
AND SPECIALTY CORPORATE
1997 INSULATION CHEMICALS AND OTHER ELIMINATIONS CONSOLIDATED
- ------------------------- ---------------- ------------- --------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
Sales to Unaffiliated
Customers $187,931 $55,652 $ -- $ -- $243,583
Transfers Between
Operating Segments -- 3,381 -- (3,381) --
Income (Loss) from
Continuing Operations 16,660 (2,093) (601) -- 13,966
Identifiable Assets 161,678 78,731 9,409 -- 249,818
Capital Expenditures 13,712 3,710 989 -- 18,411
Depreciation Expense 6,518 986 -- -- 7,504
PACKAGING
AND SPECIALTY CORPORATE
1998 INSULATION CHEMICALS AND OTHER ELIMINATIONS CONSOLIDATED
- ------------------------- ---------------- ------------- --------------- ---------------- ----------------
Sales to Unaffiliated
Customers $221,573 $88,861 $ 703 $ -- $311,137
Transfers Between
Operating Segments -- 23,559 -- (23,559) --
Income (Loss) from
Continuing Operations 23,257 6,273 (1,053) -- 28,477
Identifiable Assets 172,754 85,013 21,029 -- 278,796
Capital Expenditures 10,816 6,490 355 -- 17,661
Depreciation Expense 8,002 2,845 86 -- 10,933
</TABLE>
F-18
<PAGE>
OPERATING, continued:
<TABLE>
<CAPTION>
PACKAGING
AND SPECIALTY CORPORATE
1999 INSULATION CHEMICALS AND OTHER ELIMINATIONS CONSOLIDATED
- ------------------------- ---------------- ------------- --------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
Sales to Unaffiliated
Customers $231,253 $84,644 $ 2,218 $ -- $318,115
Transfers Between
Operating Segments -- 24,298 -- (24,298) --
Income (Loss)from
Continuing Operations 25,016 (1,780) (87) -- 23,149
Identifiable Assets 185,840 83,511 24,332 -- 293,683
Capital Expenditures 12,643 6,915 474 -- 20,032
Depreciation Expense 9,240 3,076 105 -- 12,421
GEOGRAPHIC:
UNITED
1997 STATES CANADA EUROPE/(1)/ ELIMINATIONS CONSOLIDATED
- ------------------------- ---------------- ------------- --------------- ---------------- ----------------
Sales to Unaffiliated
Customers $210,788 $16,314 $16,481 $ -- $243,583
Transfers Between
Geographic Segments -- 2,252 -- (2,252) --
Income from Continuing
Operations 10,431 1,739 1,796 -- 13,966
Identifiable Assets 174,581 8,182 67,055 -- 249,818
UNITED
1998 STATES CANADA EUROPE ELIMINATIONS CONSOLIDATED
- ------------------------- ---------------- ------------- --------------- ---------------- ----------------
Sales to Unaffiliated
Customers $212,004 $13,013 $86,120 $ -- $311,137
Transfers Between
Geographic Segments -- 8,190 -- (8,190) --
Income from Continuing
Operations 15,322 2,539 10,616 -- 28,477
Identifiable Assets 198,269 8,248 72,279 -- 278,796
</TABLE>
F-19
<PAGE>
GEOGRAPHIC, CONTINUED:
<TABLE>
<CAPTION>
UNITED
1999 STATES CANADA EUROPE ELIMINATIONS CONSOLIDATED
- ------------------------- ---------------- ------------- --------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
Sales to Unaffiliated
Customers $218,090 $15,363 $84,662 $ -- $318,115
Transfers Between
Geographic Segments 1,207 7,692 -- (8,899) --
Income from Continuing
Operations 14,939 1,276 6,934 -- 23,149
Identifiable Assets 217,291 11,102 65,290 -- 293,683
</TABLE>
(1) Represents the results of operations of StyroChem Europe from October 15,
1997 (date of acquisition) through December 26, 1997.
11. SUPPLEMENTAL FINANCIAL INFORMATION:
-------------------------------------
Radnor Holdings Corporation is a holding company which has no operations or
assets separate from its investments in subsidiaries. The $100 million Series A
Senior Notes and the $60 million Series B Senior Notes 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 years ended December 26, 1997, December 25, 1998 and December 31,
1999 (in thousands):
<TABLE>
<CAPTION>
HOLDING GUARANTOR NON-GUARANTOR
1997 COMPANY SUBSIDIARIES SUBSIDIARIES/(1)/ ELIMINATIONS CONSOLIDATED
- -------------------------- --------------- --------------- ------------------ ----------------- ----------------
<S> <C> <C> <C> <C> <C>
Net Sales $ -- $210,788 $ 35,047 $ (2,252) $243,583
Gross Profit -- 53,132 9,047 -- 62,179
Income from Continuing
Operations -- 10,438 3,528 -- 13,966
Net Income -- 2,506 1,105 -- 3,611
Current Assets 1,166 42,273 28,775 (1,136) 71,078
Noncurrent Assets 147,334 180,938 48,997 (198,529) 178,740
Current Liabilities 1,135 29,025 18,120 (1,338) 46,942
Noncurrent Liabilities 162,159 61,421 55,447 (91,126) 187,901
HOLDING GUARANTOR NON-GUARANTOR
1998 COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
- -------------------------- --------------- --------------- ------------------ ----------------- ----------------
Net Sales $ -- $212,004 $107,323 $ (8,190) $311,137
Gross Profit -- 56,966 33,480 -- 90,446
Income from Continuing
Operations -- 14,869 13,184 424 28,477
Net Income -- 2,605 3,990 (1,199) 5,396
Current Assets 550 47,107 30,324 (3,208) 74,773
Noncurrent Assets 142,145 199,186 54,524 (191,832) 204,023
Current Liabilities 1,096 36,601 17,085 (3,918) 50,864
Noncurrent Liabilities 161,862 69,369 58,867 (83,115) 206,983
</TABLE>
F-20
<PAGE>
<TABLE>
<CAPTION>
HOLDING GUARANTOR NON-GUARANTOR
1999 COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
- -------------------------- --------------- --------------- ------------------ ----------------- ----------------
<S> <C> <C> <C> <C> <C>
Net Sales $ -- $219,493 $107,521 $ (8,899) $318,115
Gross Profit -- 62,904 28,702 -- 91,606
Income from Continuing
Operations -- 14,711 8,438 -- 23,149
Net Income (Loss) (6,859)(2) 10,982 1,341 (11,848) (6,384)
Current Assets 330 53,440 29,999 (4,134) 79,635
Noncurrent Assets 135,184 206,028 52,818 (179,982) 214,048
Current Liabilities 3,590 46,368 22,274 (5,481) 66,751
Noncurrent Liabilities 158,808 96,527 50,691 (86,668) 219,358
</TABLE>
(1) Includes the results of operations of StyroChem Europe from October 15,
1997 (date of acquisition) through December 26, 1997.
(2) Amount represents charge related to discontinued operations. See Note 1 to
Consolidated Financial Statements.
F-21
<PAGE>
Exhibit 4.7
- --------------------------------------------------------------------------------
RADNOR HOLDINGS CORPORATION
as Issuer,
WINCUP HOLDINGS, INC.
RADNOR CHEMICAL CORPORATION
RADNOR DELAWARE, INC.
RADNOR MANAGEMENT, INC.
STYROCHEM U.S., LTD.
WINCUP TEXAS, LTD.
STYROCHEM GP, L.L.C.
STYROCHEM LP, L.L.C.
WINCUP GP, L.L.C.
WINCUP LP, L.L.C.
RADNOR MANAGEMENT DELAWARE, INC.
STYROCHEM DELAWARE, INC.
and
WINCUP EUROPE DELAWARE, INC.
as Guarantors
and
FIRST UNION NATIONAL BANK
as Trustee
________________________
SIXTH SUPPLEMENTAL INDENTURE
Dated as of March 23, 1999
(Supplementing a Trust Indenture dated as of December 5, 1996, as amended by a
First Supplemental Indenture dated as of December 17, 1996, and as amended by a
Second Supplemental Indenture dated as of October 15, 1997, and as amended by a
Third Supplemental Indenture dated as of February 9, 1998, and as amended by a
Fourth Supplemental Indenture dated as of July 8, 1998, and as amended by a
Fifth Supplemental Indenture dated as of January 21, 1999)
$100,000,000
10% Senior Notes due 2003
- --------------------------------------------------------------------------------
<PAGE>
THIS SIXTH SUPPLEMENTAL INDENTURE, dated as of the 23rd day of March,
1999 (this "Sixth Supplemental Indenture"), is among RADNOR HOLDINGS
CORPORATION, a Delaware corporation (the "Company"), WINCUP HOLDINGS, INC., a
Delaware corporation, RADNOR CHEMICAL CORPORATION (formerly known as SP
Acquisition Co.), a Delaware corporation, RADNOR DELAWARE, INC., a Delaware
corporation, RADNOR MANAGEMENT, INC., a Delaware corporation, STYROCHEM U.S.,
LTD. (formerly known as StyroChem International, Inc. and StyroChem U.S., Inc.),
a Texas limited partnership WINCUP TEXAS, LTD., a Texas limited partnership,
STYROCHEM GP, L.L.C., a Delaware limited liability company, STYROCHEM LP,
L.L.C., a Delaware limited liability company, WINCUP GP, L.L.C., a Delaware
limited liability company, WINCUP LP, L.L.C., a Delaware limited liability
company (collectively, the "Guarantors"), RADNOR MANAGEMENT DELAWARE, INC., a
Delaware corporation, STYROCHEM DELAWARE, INC., a Delaware corporation, and
WINCUP EUROPE DELAWARE, INC., a Delaware corporation (collectively the "New
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 as of December 17, 1996, as amended by a Second Supplemental Indenture
dated as of October 15, 1997, as amended by a Third Supplemental Indenture dated
as of February 9, 1998, as amended by a Fourth Supplemental Indenture dated as
of July 8, 1998, as amended by a Fifth Supplemental Indenture dated as of
January 21, 1999 (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); and
The Company, the Guarantors, the New Guarantors and the Trustee now
desire to enter into this Sixth Supplemental Indenture pursuant to Section
901(vi) of the Indenture, without the consent of the Holders, in order to add
the New Guarantors as Guarantors and Restricted Subsidiaries under the
Indenture;
Capitalized terms used herein without definition shall have the
meanings given such terms in the Indenture.
NOW, THEREFORE, THIS SIXTH 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:
2
<PAGE>
ARTICLE ONE
JOINDER AND GUARANTEE OF THE NEW GUARANTORS
Section 101. The New Guarantors hereby absolutely, unconditionally and
irrevocably guarantee, on a joint and several basis with the Guarantors, to the
Trustee and the Holders, as if each New Guarantor was the principal debtor, the
punctual payment and performance when due of all Indenture Obligations (which
for purposes of this Guarantee shall also be deemed to include all commissions,
fees, charges, costs and expenses (including reasonable legal fees and
disbursements of one counsel) arising out of or incurred by the Trustee or the
Holders in connection with the enforcement of this Guarantee). This Guarantee
shall rank pari passu with any Senior Indebtedness of New Guarantors and shall
be subject in all respects to, and governed by all of the terms and provisions
applicable to Guarantees in, the Indenture, including without limitation Article
Thirteen thereof.
Section 102. As of the date hereof, all references to the "Guarantors"
in the Indenture shall be deemed to refer collectively to: (i) the Guarantors in
existence on the date hereof and (ii) New Guarantors.
IN WITNESS WHEREOF, the parties hereto have caused this Sixth
Supplemental Indenture to be duly executed, all as of the day and year first
above written.
RADNOR HOLDINGS CORPORATION
Attest: /s/ Caroline J. Williamson By: /s/ Michael T. Kennedy
--------------------------- ---------------------------
Caroline J. Williamson Michael T. Kennedy
Secretary President
WINCUP HOLDINGS, INC.
Attest: /s/ Caroline J. Williamson By: /s/ Michael T. Kennedy
--------------------------- ---------------------------
Caroline J. Williamson Michael T. Kennedy
Secretary President
RADNOR CHEMICAL CORPORATION
Attest: /s/ Caroline J. Williamson By: /s/ Michael T. Kennedy
--------------------------- ---------------------------
Caroline J. Williamson Michael T. Kennedy
Secretary President
3
<PAGE>
RADNOR DELAWARE, INC.
Attest: /s/ Caroline J. Williamson By: /s/ Michael T. Kennedy
--------------------------- ---------------------------
Caroline J. Williamson Michael T. Kennedy
Secretary President
RADNOR MANAGEMENT, INC.
Attest: /s/ Caroline J. Williamson By: /s/ Michael T. Kennedy
--------------------------- ---------------------------
Caroline J. Williamson Michael T. Kennedy
Secretary President
STYROCHEM U.S., LTD.
By: StyroChem GP, L.L.C.,
its general partner,
By: Radnor Chemical Corporation,
its sole member
Attest: /s/ Caroline J. Williamson By: /s/ Michael T. Kennedy
--------------------------- ---------------------------
Caroline J. Williamson Michael T. Kennedy
Secretary President
WINCUP TEXAS, LTD.
By: WinCup GP, L.L.C.,
its general partner,
By: WinCup Holdings, Inc.,
its sole member
Attest: /s/ Caroline J. Williamson By: /s/ Michael T. Kennedy
--------------------------- ---------------------------
Caroline J. Williamson Michael T. Kennedy
Secretary President
4
<PAGE>
STYROCHEM GP, L.L.C.
By: Radnor Chemical Corporation,
its sole member
Attest: /s/ Caroline J. Williamson By: /s/ Michael T. Kennedy
--------------------------- ---------------------------
Caroline J. Williamson Michael T. Kennedy
Secretary President
STYROCHEM LP, L.L.C.
By: Radnor Chemical Corporation,
its sole member
Attest: /s/ Caroline J. Williamson By: /s/ Michael T. Kennedy
--------------------------- ---------------------------
Caroline J. Williamson Michael T. Kennedy
Secretary President
WINCUP GP, L.L.C.
By: WinCup Holdings, Inc.,
its sole member
Attest: /s/ Caroline J. Williamson By: /s/ Michael T. Kennedy
--------------------------- ---------------------------
Caroline J. Williamson Michael T. Kennedy
Secretary President
WINCUP LP, L.L.C.
By: WinCup Holdings, Inc.,
its sole member
Attest: /s/ Caroline J. Williamson By: /s/ Michael T. Kennedy
--------------------------- ---------------------------
Caroline J. Williamson Michael T. Kennedy
Secretary President
RADNOR MANAGEMENT DELAWARE, INC.
Attest: /s/ Caroline J. Williamson By: /s/ Michael T. Kennedy
--------------------------- ---------------------------
Caroline J. Williamson Michael T. Kennedy
Secretary President
5
<PAGE>
STYROCHEM DELAWARE, INC.
Attest: /s/ Caroline J. Williamson By: /s/ Michael T. Kennedy
------------------------------ ---------------------------
Caroline J. Williamson Michael T. Kennedy
Secretary President
WINCUP EUROPE DELAWARE, INC.
Attest: /s/ Caroline J. Williamson By: /s/ Michael T. Kennedy
------------------------------ ---------------------------
Caroline J. Williamson Michael T. Kennedy
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: Corporate Trust Officer Assistant Vice President
6
<PAGE>
Exhibit 4.12
- --------------------------------------------------------------------------------
RADNOR HOLDINGS CORPORATION
as Issuer,
WINCUP HOLDINGS, INC.
RADNOR CHEMICAL CORPORATION
RADNOR DELAWARE, INC.
RADNOR MANAGEMENT, INC.
STYROCHEM U.S., LTD.
WINCUP TEXAS, LTD.
STYROCHEM GP, L.L.C.
STYROCHEM LP, L.L.C.
WINCUP GP, L.L.C.
WINCUP LP, L.L.C.
RADNOR MANAGEMENT DELAWARE, INC.
STYROCHEM DELAWARE, INC.
and
WINCUP EUROPE DELAWARE, INC
as Guarantors
and
FIRST UNION NATIONAL BANK
as Trustee
________________
THIRD SUPPLEMENTAL INDENTURE
Dated as of March 23, 1999
(Supplementing a Trust Indenture dated as of October 15, 1997 as amended
by a First Supplemental Indenture dated as of February 9, 1998, as amended by
a Second Supplemental Indenture dated as of January 21, 1999)
________________
$60,000,000
10% Series B Senior Notes due 2003
- --------------------------------------------------------------------------------
<PAGE>
THIS THIRD SUPPLEMENTAL INDENTURE, dated as of the 23rd day of March, 1999
(this "Third Supplemental Indenture"), is among RADNOR HOLDINGS CORPORATION, a
Delaware corporation (the "Company"), WINCUP HOLDINGS, INC., a Delaware
corporation, RADNOR CHEMICAL CORPORATION (formerly known as SP Acquisition Co.),
a Delaware corporation, RADNOR DELAWARE, INC., a Delaware corporation, RADNOR
MANAGEMENT, INC., a Delaware corporation, STYROCHEM U.S., LTD. (formerly known
as StyroChem International, Inc. and StyroChem U.S., Inc.), a Texas limited
partnership, WINCUP TEXAS, LTD., a Texas limited partnership, STYROCHEM GP,
L.L.C., a Delaware limited liability company, STYROCHEM LP, L.L.C., a Delaware
limited liability company, WINCUP GP, L.L.C., a Delaware limited liability
company and WINCUP LP, L.L.C., a Delaware limited liability company,
(collectively, the "Guarantors"), RADNOR MANAGEMENT DELAWARE, INC., a Delaware
corporation, STYROCHEM DELAWARE, INC., a Delaware corporation and WINCUP EUROPE
DELAWARE, INC., a Delaware corporation, (collectively, the "New 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 October 15, 1997, as amended by a First Supplemental Indenture
dated as of February 9, 1998, as amended by a Second Supplemental Indenture
dated as of January 21, 1999 (as amended, the "Indenture") relating to the
creation by the Company of an issue of $60,000,000 of its 10% Series B 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); and
The Company, the Guarantors, the New Guarantors and the Trustee now desire
to enter into this Third Supplemental Indenture pursuant to Section 901(vi) of
the Indenture, without the consent of the Holders, in order to add the New
Guarantors as Guarantors and Restricted Subsidiaries under the Indenture;
Capitalized terms used herein without definition shall have the meanings
given such terms in the Indenture.
NOW, THEREFORE, THIS THIRD 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:
2
<PAGE>
ARTICLE ONE
JOINDER AND GUARANTEE OF THE NEW GUARANTORS
Section 101. The New Guarantors hereby absolutely, unconditionally and
irrevocably guarantee, on a joint and several basis with the Guarantors, to the
Trustee and the Holders, as if each New Guarantor was the principal debtor, the
punctual payment and performance when due of all Indenture Obligations (which
for purposes of this Guarantee shall also be deemed to include all commissions,
fees, charges, costs and expenses (including reasonable legal fees and
disbursements of one counsel) arising out of or incurred by the Trustee or the
Holders in connection with the enforcement of this Guarantee). This Guarantee
shall rank pari passu with any Senior Indebtedness of the New Guarantors and
shall be subject in all respects to, and governed by all of the terms and
provisions applicable to Guarantees in, the Indenture, including without
limitation Article Thirteen thereof.
Section 102. As of the date hereof, all references to the "Guarantors" in
the Indenture shall be deemed to refer collectively to: (i) the Guarantors in
existence on the date hereof and (ii) the New Guarantors.
IN WITNESS WHEREOF, the parties hereto have caused this Third Supplemental
Indenture to be duly executed, all as of the day and year first above written.
RADNOR HOLDINGS CORPORATION
Attest: /s/ Caroline J. Williamson By: /s/ Michael T. Kennedy
----------------------------- ----------------------------
Caroline J. Williamson Michael T. Kennedy
Secretary President
WINCUP HOLDINGS, INC.
Attest: /s/ Caroline J. Williamson By: /s/ Michael T. Kennedy
----------------------------- ----------------------------
Caroline J. Williamson Michael T. Kennedy
Secretary President
RADNOR CHEMICAL CORPORATION
Attest: /s/ Caroline J. Williamson By: /s/ Michael T. Kennedy
----------------------------- ----------------------------
Caroline J. Williamson Michael T. Kennedy
Secretary President
3
<PAGE>
RADNOR DELAWARE, INC.
Attest: /s/ Caroline J. Williamson By: /s/ Michael T. Kennedy
----------------------------- ----------------------------
Caroline J. Williamson Michael T. Kennedy
Secretary President
RADNOR MANAGEMENT, INC.
Attest: /s/ Caroline J. Williamson By: /s/ Michael T. Kennedy
----------------------------- ----------------------------
Caroline J. Williamson Michael T. Kennedy
Secretary President
STYROCHEM U.S., LTD.
By: StyroChem GP, L.L.C.,
its general partner,
By: Radnor Chemical Corporation,
its sole member
Attest: /s/ Caroline J. Williamson By: /s/ Michael T. Kennedy
----------------------------- ----------------------------
Caroline J. Williamson Michael T. Kennedy
Secretary President
WINCUP TEXAS, LTD.
By: WinCup GP, L.L.C.,
its general partner,
By: WinCup Holdings, Inc.,
its sole member
Attest: /s/ Caroline J. Williamson By: /s/ Michael T. Kennedy
----------------------------- ----------------------------
Caroline J. Williamson Michael T. Kennedy
Secretary President
4
<PAGE>
STYROCHEM GP, L.L.C.
By: Radnor Chemical Corporation,
its sole member
Attest: /s/ Caroline J. Williamson By: /s/ Michael T. Kennedy
----------------------------- ----------------------------
Caroline J. Williamson Michael T. Kennedy
Secretary President
STYROCHEM LP, L.L.C.
By: Radnor Chemical Corporation,
its sole member
Attest: /s/ Caroline J. Williamson By: /s/ Michael T. Kennedy
----------------------------- ----------------------------
Caroline J. Williamson Michael T. Kennedy
Secretary President
WINCUP GP, L.L.C.
By: WinCup Holdings, Inc.,
its sole member
Attest: /s/ Caroline J. Williamson By: /s/ Michael T. Kennedy
----------------------------- ----------------------------
Caroline J. Williamson Michael T. Kennedy
Secretary President
WINCUP LP, L.L.C.
By: WinCup Holdings, Inc.,
its sole member
Attest: /s/ Caroline J. Williamson By: /s/ Michael T. Kennedy
----------------------------- ----------------------------
Caroline J. Williamson Michael T. Kennedy
Secretary President
RADNOR MANAGEMENT DELAWARE, INC.
Attest: /s/ Caroline J. Williamson By: /s/ Michael T. Kennedy
----------------------------- ----------------------------
Caroline J. Williamson Michael T. Kennedy
Secretary President
5
<PAGE>
STYROCHEM DELAWARE, INC.
Attest: /s/ Caroline J. Williamson By: /s/ Michael T. Kennedy
----------------------------- ----------------------------
Caroline J. Williamson Michael T. Kennedy
Secretary President
WINCUP EUROPE DELAWARE, INC.
Attest: /s/ Caroline J. Williamson By: /s/ Michael T. Kennedy
----------------------------- ----------------------------
Caroline J. Williamson Michael T. Kennedy
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: Corporate Trust Officer Assistant Vice President
6
<PAGE>
EXHIBIT 10.19
EXECUTION COPY
THIRD AMENDED AND RESTATED REVOLVING CREDIT
AND
SECURITY AGREEMENT
BANK OF AMERICA, N.A.
(AS AGENT)
WITH
WINCUP HOLDINGS, INC.
RADNOR CHEMICAL CORPORATION
STYROCHEM U.S., LTD.
RADNOR HOLDINGS CORPORATION
RADNOR DELAWARE, INC.
STYROCHEM DELAWARE, INC.
WINCUP TEXAS, LTD.
(AS U.S. BORROWERS)
AND
STYROCHEM EUROPE (THE NETHERLANDS) B.V.
STYROCHEM FINLAND OY
THERMISOL DENMARK A/S
THERMISOL SWEDEN AB
THERMISOL FINLAND OY
(AS EUROPEAN BORROWERS)
AND
THE LENDERS
December 29, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
I. DEFINITIONS......................................................... 2
1.1. Accounting Terms.............................................. 2
1.2. General Terms................................................. 2
1.3. Uniform Commercial Code Terms................................. 21
1.4. Certain Matters of Construction............................... 21
II. ADVANCES, PAYMENTS.................................................. 21
2.1. U.S. Revolving Advances....................................... 21
2.1A. European Revolving Advances................................... 22
2.2. Procedure for Borrowing....................................... 23
2.3. Disbursement of Advance Proceeds.............................. 25
2.4. Optional Currencies........................................... 25
2.5. Maximum Advances.............................................. 27
2.6. Repayment of Advances......................................... 27
2.7. Currency...................................................... 27
2.8. Statement of Account.......................................... 28
2.9. Letters of Credit............................................. 28
2.10. Issuance of Letters of Credit................................. 29
2.11. Requirements For Issuance of Letters of Credit................ 29
2.12. Additional Payments........................................... 31
2.13. Manner of Borrowing and Payment............................... 31
2.14. Swingline Loans............................................... 34
2.15. Utilization of Advances in Optional Currencies................ 36
III INTEREST AND FEES.................................................... 36
3.1. Interest...................................................... 36
3.2. Letter of Credit Fees......................................... 36
3.3. Fees.......................................................... 37
3.4. Collateral Monitoring Fee..................................... 38
3.5. Computation of Interest and Fees.............................. 38
3.6. Maximum Charges............................................... 38
3.7. Increased Costs............................................... 38
3.8. Basis For Determining Interest Rate Inadequate or Unfair...... 39
3.9. Capital Adequacy.............................................. 40
IV. COLLATERAL; GENERAL TERMS........................................... 40
4.1. Acknowledgement and Grant of Security Interests............... 40
4.2. Perfection of Security Interest............................... 41
4.3. Disposition of Collateral..................................... 42
4.4. Preservation of Collateral.................................... 42
4.5. Ownership of Collateral....................................... 42
4.6. Defense of Agent's and Lender's Interests..................... 43
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
4.7. Books and Records............................................. 43
4.8. Financial Disclosure.......................................... 43
4.9. Compliance with Laws.......................................... 44
4.10. Inspection of Premises........................................ 44
4.11. Insurance..................................................... 44
4.12. Failure to Pay Insurance...................................... 45
4.13. Payment of Taxes.............................................. 45
4.14. Payment of Leasehold Obligations.............................. 46
4.15. Receivables................................................... 46
4.16. Inventory..................................................... 48
4.17. Intentionally Omitted......................................... 48
4.18. Exculpation of Liability...................................... 49
4.19. Environmental Matters......................................... 49
4.20. Financing Statements.......................................... 50
4.21. ThermiSol Sweden.............................................. 50
V. REPRESENTATIONS AND WARRANTIES....................................... 51
5.1. Authority..................................................... 51
5.2. Formation and Qualification................................... 51
5.3. Survival of Representations and Warranties.................... 51
5.4. Tax Returns................................................... 51
5.5. Financial Statements.......................................... 52
5.6. Corporate Name................................................ 52
5.7. O.S.H.A. and Environmental Compliance......................... 53
5.8. Solvency: No Litigation, Violation, Indebtedness or Default... 53
5.9. Patents, Trademarks, Copyrights and Licenses.................. 55
5.10. Licenses and Permits.......................................... 55
5.11. Default of Indebtedness....................................... 55
5.12. No Default.................................................... 55
5.13. No Burdensome Restrictions.................................... 55
5.14. No Labor Disputes............................................. 55
5.15. Margin Regulations............................................ 56
5.16. Investment Company Act........................................ 56
5.17. Disclosure.................................................... 56
5.18. Intentionally Omitted......................................... 56
5.19. Swaps......................................................... 56
5.20. Conflicting Agreements........................................ 56
5.21. Application of Certain Laws and Regulations................... 56
5.22. Business and Property of Borrowers............................ 57
5.23. Acquisition................................................... 57
5.24. Year 2000 Matters............................................. 57
VI. AFFIRMATIVE COVENANTS............................................... 57
6.1. Payment of Fees............................................... 57
6.2. Conduct of Business and Maintenance of Existence and Assets... 57
6.3. Violations.................................................... 58
6.4. Government Receivables........................................ 58
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
6.5. Net Worth..................................................... 58
6.6. Current Ratio................................................. 58
6.7. Fixed Charge Coverage......................................... 58
6.8. Interest Coverage............................................. 59
6.9. Net Income.................................................... 59
6.10. Funded Indebtedness to EBITDA Ratio........................... 59
6.11. Execution of Supplemental Instruments......................... 59
6.12. Payment of Indebtedness....................................... 59
6.13. Standards of Financial Statements............................. 59
6.14. Exercise of Rights............................................ 60
6.15. Landlord Waivers; Bailee Letters.............................. 60
VII. NEGATIVE COVENANTS.................................................. 60
7.1. Merger, Consolidation, Acquisition and Sale of Assets......... 60
7.2. Creation of Liens............................................. 61
7.3. Guarantees.................................................... 61
7.4. Investments................................................... 61
7.5. Loans......................................................... 61
7.6. Capital Expenditures.......................................... 62
7.7. Dividends: Distributions...................................... 62
7.8. Indebtedness.................................................. 63
7.9. Nature of Business............................................ 63
7.10. Transactions with Affiliates.................................. 63
7.11. Leases........................................................ 63
7.12. Subsidiaries.................................................. 64
7.13. Fiscal Year and Accounting Changes............................ 64
7.14. Pledge of Credit.............................................. 64
7.15. Amendment of Certificate of Incorporation, Etc................ 64
7.16. Compliance with ERISA......................................... 64
7.17. Senior Notes.................................................. 65
7.18. Second Senior Notes........................................... 65
7.19. Prepayment of Indebtedness.................................... 65
VIII. CONDITIONS PRECEDENT................................................ 65
8.1. Conditions to Initial Advances................................ 65
8.2. Conditions to Each Advance.................................... 69
IX. INFORMATION......................................................... 70
9.1. Disclosure of Material Matters................................ 70
9.2. Schedules..................................................... 70
9.3. Intentionally Omitted......................................... 70
9.4. Litigation.................................................... 70
9.5. Material Occurrences.......................................... 70
9.6. Government Receivables........................................ 71
9.7. Annual Financial Statements................................... 71
9.8. Quarterly Financial Statements................................ 71
9.9. Monthly Financial Statements.................................. 72
</TABLE>
iii
<PAGE>
<TABLE>
<S> <C>
9.10. Other Reports................................................. 72
9.11. Additional Information........................................ 72
9.12. Projected Operating Budget.................................... 73
9.13. Intentionally Omitted......................................... 73
9.14. Notice of Suits, Adverse Events............................... 73
9.15. ERISA Notices and Requests.................................... 73
9.16. Additional Documents.......................................... 74
XI. LENDERS' RIGHTS AND REMEDIES AFTER DEFAULT.......................... 77
11.1. Rights and Remedies........................................... 77
11.2. Agent's Discretion............................................ 78
11.3. Setoff........................................................ 78
11.4. Rights and Remedies not Exclusive............................. 78
11.5. Actions in Concert............................................ 78
XII. WAIVERS AND JUDICIAL PROCEEDINGS.................................... 78
12.1. Waiver of Notice.............................................. 78
12.2. Delay......................................................... 79
12.3. Jury Waiver................................................... 79
XIII. EFFECTIVE DATE AND TERMINATION...................................... 79
13.1. Term.......................................................... 79
13.2. Termination................................................... 79
XIV. REGARDING AGENT..................................................... 80
14.1. Appointment................................................... 80
14.2. Nature of Duties.............................................. 80
14.3. Lack of Reliance on Agent and Resignation..................... 81
14.4. Certain Rights of Agent....................................... 81
14.5. Reliance...................................................... 82
14.6. Notice of Default............................................. 82
14.7. Indemnification............................................... 82
14.8. Agent in its Individual Capacity.............................. 82
14.9. Delivery of Documents......................................... 83
14.10.Borrowers' Undertaking to Agent............................... 83
XV. MISCELLANEOUS....................................................... 83
15.1. Governing Law................................................. 83
15.2. Entire Understanding.......................................... 84
15.3. Successors and Assigns; Participations; New Lenders........... 85
15.4. Application of Payments....................................... 86
15.5. Indemnity..................................................... 86
15.6. Notice........................................................ 87
15.7. Survival...................................................... 88
15.8. Severability.................................................. 88
15.9. Expenses...................................................... 88
15.10.Injunctive Relief............................................. 89
</TABLE>
iv
<PAGE>
<TABLE>
<S> <C>
15.11. Consequential Damages......................................... 89
15.12. Captions...................................................... 89
15.13. Counterparts: Telecopied Signatures.......................... 89
15.14. Construction.................................................. 89
15.15. Currency Indemnity............................................ 89
XVI. BORROWING AGENCY..................................................... 90
16.1. Borrowing Agency Provisions.................................... 90
16.2. Waiver of Subrogation.......................................... 91
XVII. GUARANTY............................................................. 91
17.1. Cross-Guaranty................................................. 91
17.2. Contribution with Respect to Guaranty Obligations.............. 92
17.3. Obligations Absolute........................................... 93
17.4. Waiver......................................................... 94
17.5. Recovery....................................................... 94
17.6. Liability Cumulative........................................... 95
</TABLE>
v
<PAGE>
EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit 2.1 - Form of Amended and Restated U.S. Revolving Credit Note
Exhibit 2.1A - Form of European Revolving Note
Exhibit 2.2(a) - Form of Notice of Borrowing
Exhibit 2.9 - Form of Letter of Credit and Security Agreement
Exhibit 2.14(b)(i) - Form of Swingline Request
Exhibit 2.14(d) - Form of Swingline Note
Exhibit 5.5(b) - Financial Projections
Exhibit 7.12-A - Form of Joinder Agreement
Exhibit 7.12-B - Form of Guaranty (Corporate)
Exhibit 8.1(j) - Form of Officers' Certificate
Exhibit 15.3 - Form of Commitment Transfer Supplement
SCHEDULES
Schedule 1.2 - Permitted Encumbrances
Schedule 4.5 - Locations of Equipment and Inventory
Schedule 4.15(c) - Location of Borrowers' Executive Offices
Schedule 4.20 - Financing Statements
Schedule 5.2(a) - Formation and Qualification
Schedule 5.2(b) - Subsidiaries
Schedule 5.4 - Federal Tax Identification Numbers
Schedule 5.6 - Corporate Names
Schedule 5.7 - Environmental Releases, Spills, etc.
Schedule 5.8 (b) - Pending Litigation
Schedule 5.8(d) - Multiemployer Plans
Schedule 5.9 - Licenses, Trademarks, Patents, Copyrights, Source Code
Escrow Agreements
Schedule 5.10 - Licenses and Permits
Schedule 5.14 - Labor Disputes
Schedule 7.3 - Guarantees
vi
<PAGE>
EXECUTION COPY
THIRD AMENDED AND RESTATED REVOLVING CREDIT
AND
SECURITY AGREEMENT
Third Amended and Restated Revolving Credit and Security Agreement dated as
of December 29, 1999 between WINCUP HOLDINGS, INC. ("WinCup"), RADNOR CHEMICAL
CORPORATION ("Radnor Chemical"), STYROCHEM U.S., LTD. ("StyroChem"), RADNOR
HOLDINGS CORPORATION ("Radnor"), RADNOR DELAWARE, INC. ("Radnor Delaware"),
STYROCHEM DELAWARE, INC. ("StyroChem Delaware") and WINCUP TEXAS, LTD. ("WinCup
Texas") (WinCup, Radnor Chemical, StyroChem, Radnor, Radnor Delaware, StyroChem
Delaware and WinCup Texas each, a "U.S. Borrower" and jointly and severally, the
"U.S. Borrowers") and STYROCHEM EUROPE (THE NETHERLANDS) B.V. ("StyroChem
Europe"), STYROCHEM FINLAND OY ("StyroChem Finland"), THERMISOL DENMARK A/S
("ThermiSol Denmark"), THERMISOL SWEDEN AB ("ThermiSol Sweden") and THERMISOL
FINLAND OY ("ThermiSol Finland") (StyroChem Europe, StyroChem Finland, ThermiSol
Denmark, ThermiSol Sweden and ThermiSol Finland each, a "European Borrower" and
jointly and severally, the "European Borrowers"; the European Borrowers,
together with the U.S. Borrowers each, a "Borrower" and collectively, the
"Borrowers"), BANK OF AMERICA, N.A., a national banking association ("Bank of
America") and each of the other financial institutions which are and such
financial institutions which become a party hereto pursuant to Section 15.3
(Bank of America and such other financial institutions, collectively, the
"Lenders" and individually a "Lender") and Bank of America, as administrative
and collateral agent for the Lenders (Bank of America, in such capacity, the
"Agent").
BACKGROUND
----------
WinCup, Radnor Chemical (formerly known as SP Acquisition Co.), StyroChem
(formerly known as StyroChem International, Inc.), Radnor, Radnor Delaware,
StyroChem Delaware and WinCup Texas entered into a Second Amended and Restated
Revolving Credit and Security Agreement dated as of October 15, 1997 (as same
may have been amended, modified or supplemented, the "Existing Loan Agreement")
and the European Borrowers, the Prior U.K. Agent (as defined herein) and Bank of
America were parties to a Supplement Revolving Multicurrency Credit Agreement
dated as of December 12, 1997 (the "Supplement"). GMAC Commercial Credit LLC
(formerly BNY Factoring LLC, formerly BNY Financial Corporation) (the "Prior
Agent") and GMAC Commercial Credit Development Limited (formerly BNY Financial
Limited) (the "Prior U.K. Agent") resigned as Agent under the Existing Loan
Agreement and the Supplement and has assigned all of its rights, obligations and
interests as Agent and as a Lender under the Existing Loan Agreement and the
Supplement, respectively to Bank of America pursuant to an Assignment Agreement
dated as of the date hereof. By execution of this Agreement, WinCup, Radnor
Chemical, StyroChem, Radnor, Radnor Delaware, StyroChem Delaware, WinCup Texas,
Agent and Lenders wish to amend and restate the Existing Loan Agreement on the
terms and conditions hereinafter set forth and the European Borrowers agree to
the extension of the loans hereunder to the European Borrowers on the terms and
conditions hereinafter set forth.
<PAGE>
IN CONSIDERATION of the mutual covenants and undertakings herein contained,
the U.S. Borrowers, the European Borrowers, Agent and Lenders hereby agree as
follows:
I. DEFINITIONS.
-----------
1.1. Accounting Terms.
----------------
As used in this Agreement or any certificate, report, note or other
document made or delivered pursuant to this Agreement, accounting terms not
defined in Section 1.2 or elsewhere in this Agreement and accounting terms
partly defined in Section 1.2 to the extent not defined, shall have the
respective meanings given to them under GAAP; provided, however, whenever such
-------- -------
accounting terms are used for the purposes of determining compliance with
financial covenants in this Agreement, such accounting terms shall be defined in
accordance with GAAP applied in preparation of the audited financial statements
of Borrowers on a consolidated basis for the fiscal period ended December 27,
1998.
1.2. General Terms.
-------------
For purposes of this Agreement the following terms shall have the following
meanings:
"Acquisition Agreement" shall mean the Stock Purchase Agreement including
---------------------
all exhibits and schedules thereto dated as of October 28, 1996 among Richard
Davidovich, Richard Davidovich Charitable Trust, James River Paper Company,
Inc., Grupo Industrial Hermes, S.A. de C.V., E.M. Rosenthal, Rozanne Rosenthal,
Ashli M. Rosenthal Trust, Benjamin A. Rosenthal Trust, Madelyn E. Rosenthal
Trust, JMC Family Investment Ltd. Partnership and Richard C. Penshorn
(collectively, "Sellers") as sellers and Radnor as buyer.
"Advances" shall mean and include the Revolving Advances, Letters of Credit
--------
and Swingline Loans.
"Affiliate" of any Person shall mean (a) any Person (other than a
---------
Subsidiary) which, directly or indirectly) is in control of, is controlled by,
or is under common control with such Person, or (b) any Person who is a partner,
shareholder, director or officer (i) of such Person, (ii) of any Subsidiary of
such Person or (iii) of any Person described in clause (a) above. For purposes
of this definition, control of a Person shall mean the power, direct or
indirect, (x) to vote 5% or more of the securities having ordinary voting power
for the election of directors of such Person, or (y) to direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise.
"Agent" shall mean the Bank, in its capacity as administrative and
-----
collateral agent for the Lenders, or any successor agent designated pursuant to
Section 14.3 hereof.
"Agent's Spot Rate of Exchange" shall mean the Agent's spot rate of
-----------------------------
exchange for the purchase of the relevant Optional Currency in the London
foreign exchange market with Dollars
2
<PAGE>
(as supplied to it at its request by the Reference Banks) at or about 11 a.m.
(London time) on a particular day.
"Alternate Base Rate" shall mean, for any day, a rate per annum equal to
-------------------
the higher of (i) the Prime Rate in effect on such day and (ii) the Federal
Funds Rate in effect on such day plus 1/2 of 1%.
"Applicable Margin" for any period shall be determined by the ratio of
-----------------
Funded Indebtedness to EBITDA calculated for the most recent fiscal quarter with
respect to the four fiscal quarters then ended which shall be subject to
adjustment from time to time as set forth in Section 3.1 and Section 3.3(b).
The Applicable Margin with respect to Eurodollar Rate Loans, Domestic Rate Loans
and the Facility Fee provided for in Section 3.3(b) hereof, as the case may be,
shall be the percentage set forth below as corresponds to the applicable ratio
set forth below:
<TABLE>
<CAPTION>
Funded Indebtedness Domestic Eurodollar Facility
To EBITDA Rate Margin Rate Margin Fee
--------- ----------- ----------- ---
<S> <C> <C> <C>
Greater than 5.0 to 1.0 .50% 2.00% .50%
Greater than 4.1 to 1.0 but equal to .25% 1.75% .375%
or less than 5.0 to 1.0
Greater than 3.1 to 1.0 but equal to 0% 1.50% .25%
or less than 4.1 to 1.0
Greater than 2.1 to 1.0 but equal to 0% 1.25% .125%
or less than 3.1 to 1.0
Equal to or less than 2.1 to 1.0 0% 1.00% .125%
</TABLE>
In the event of a Default or Event of Default hereunder, the Applicable
Margin shall be .50% in the case of the Domestic Rate Margin, 2.00% in the case
of the Eurodollar Rate Margin and .50% in the case of the Facility Fee.
"Authority" shall have the meaning set forth in Section 4.19(c).
---------
"Average Monthly Eurodollar Rate" shall mean, as to any one month Interest
-------------------------------
Period, the average one month LIBOR as published in the Wall Street Journal over
the course of such one month Interest Period.
"Bank" shall mean Bank of America, N.A. or its successor.
----
"Blocked Accounts" shall have the meaning set forth in Section 4.15(h).
----------------
"Borrower" or "Borrowers" shall have the meaning set forth in the preamble
-------- ---------
to this Agreement and shall include all permitted successors and assigns of such
Persons.
3
<PAGE>
"Borrowers on a consolidated basis" shall mean the consolidation in
---------------------------------
accordance with GAAP of the accounts or other items of Borrowers.
"Borrowing Agent" shall mean Radnor.
---------------
"Borrowing Base" shall mean the sum of the U.S. Borrowing Base and the
--------------
European Borrowing Base.
"Business Day" shall mean with respect to Eurodollar Rate Loans, any day on
------------
which commercial banks are open for domestic and international business,
including dealings in Dollar deposits in London, England and New York, New York
and with respect to all other loans, any day other than a day on which
commercial banks in New York, New York or Charlotte, North Carolina are
authorized or required by law to close.
"CERCLA" shall mean the Comprehensive Environmental Response, Compensation
------
and Liability Act of 1980, as amended, 42 U.S.C. (S)(S)9601 et seq.
-- ---
"Change of Control" shall mean (a) the occurrence of any event (whether in
-----------------
one or more transactions) which results in a transfer of control of any Borrower
to a Person who is not an Original Owner or an Affiliate of an Original Owner or
(b) any merger or consolidation of or with any Borrower or sale or transfer of
all or substantially all of the property or assets of any Borrower with or to a
Person that is not a Borrower hereunder. For purposes of this definition,
"control of any Borrower" shall mean the power, direct or indirect, (x) to vote
50% or more of the securities having ordinary voting power for the election of
directors of any Borrower or (y) to direct or cause the direction of the
management and policies of Borrower, by contract or otherwise.
"Change of Ownership" shall mean (a) any transfer (whether in one or more
-------------------
transactions) of ownership of 50% or more of the common stock of any Borrower
(including for the purposes of the calculation of percentage ownership, any
shares of common stock into which any capital stock of any Borrower held by any
Original Owner is convertible or for which any such shares of the capital stock
of any Borrower or of any other Person may be exchanged and any shares of common
stock issuable to its Parent upon exercise of any warrants, options or similar
rights which may at the time of calculation be held by such Original Owners) to
a Person who is neither (at the time of such transfer) an Original Owner nor an
Affiliate of an Original Owner or (b) any merger, consolidation or sale of
substantially all of the property or assets of any Borrower with or to a Person
that is not a Borrower hereunder.
"Charges" shall mean all taxes, charges, fees, imposts, levies or other
-------
assessments, including, without limitation, all net income, gross income, gross
receipts, sales, use, ad valorem, value added, transfer, franchise, profits,
inventory, capital stock, license, withholding, payroll, employment, social
security, unemployment, excise, severance, stamp, occupation and property taxes,
custom duties, fees, assessments, liens, claims and charges of any kind
whatsoever, together with any interest and any penalties, additions to tax or
additional amounts, imposed by any taxing or other authority, domestic or
foreign (including, without limitation, the PBGC or
4
<PAGE>
any environmental agency or superfund), upon the Collateral, any Borrower or any
of its Affiliates.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
----
to time and the regulations promulgated thereunder.
"Collateral" with respect to the European Borrowers shall be determined in
----------
accordance with the European Security Documents and with respect to the U.S.
Borrowers, shall mean and include:
(a) all Receivables;
(b) all General Intangibles;
(c) all Inventory;
(d) all of each Borrower's right, title and interest in and to (i)
all merchandise returned or rejected by Customers, relating to or securing
any of the Receivables; (ii) all of each Borrower's rights with respect to
Inventory as a consignor, a consignee, an unpaid vendor, mechanic, artisan,
or other lienor, including stoppage in transit, setoff, detinue, replevin,
reclamation and repurchase; (iii) all additional amounts due to any
Borrower from any Customer relating to the Receivables; (iv) other
property, including warranty claims, relating to any goods securing this
Agreement; (v) all of each Borrower's contract rights, rights of payment
which have been earned under a contract right, instruments, documents,
chattel paper, warehouse receipts, deposit accounts, money and securities;
(vi) if and when obtained by any Borrower, all real and personal property
of third parties in which such Borrower has been granted a lien or security
interest as security for the payment or enforcement of Receivables; and
(vii) any other goods, personal property or real property now owned or
hereafter acquired in which any Borrower has expressly granted a security
interest or may in the future grant a security interest to Agent for the
ratable benefit of the Lenders hereunder, or in any amendment or supplement
hereto or thereto, or under any other agreement between Agent and any
Borrower (it being understood that any such security interest shall arise
only as of the date it is expressly granted to the Agent and that this
subclause (vii) shall not be interpreted so as to grant to the Agent a
prior or priming security interest ahead of a security interest
constituting a Permitted Encumbrance granted to a purchase money lender or
other creditor in connection with Indebtedness permitted to be incurred
hereunder);
(e) all of each Borrower's ledger sheets, ledger cards, files,
correspondence, records, books of account, business papers, computers,
computer software (whether owned by any Borrower or in which it has an
interest), computer programs, tapes, disks and documents relating to (a),
(b), (c) or (d) of this Paragraph; and
(f) all proceeds and products of (a), (b), (c), (d) and (e) in
whatever form, including, but not limited to: cash, deposit accounts
(whether or not comprised solely of
5
<PAGE>
proceeds), certificates of deposit, insurance proceeds (including hazard,
flood and credit insurance), negotiable instruments and other instruments
for the payment of money, chattel paper, security agreements, documents,
eminent domain proceeds, condemnation proceeds and tort claim proceeds.
"Commitment Percentage" shall mean (i) as to each Lender, the percentage
---------------------
set forth below such Lender's name on the signature page hereof as same may be
adjusted upon any assignment by a Lender pursuant to Section 15.3(b) hereof and
(ii) with respect to the Swingline Lender, the Swingline Commitment.
"Commitment Transfer Supplement" shall mean a document in the form of
------------------------------
Exhibit 15.3 hereto, properly completed and otherwise in form and substance
- ------------
satisfactory to Agent by which the Purchasing Lender purchases and assumes a
portion of the obligation of Lenders to make Advances under this Agreement.
"Consents" shall mean all filings and all licenses, permits, consents,
--------
approvals, authorizations, qualifications and orders of governmental authorities
and other third parties, domestic or foreign, necessary to carry on a Borrower's
business, including, without limitation, any Consents required under all
applicable federal, state or other applicable law.
"Contract Rate" shall mean, as applicable, the Revolving Interest Rate or
-------------
the Default Rate.
"Controlled Group" shall mean all members of a controlled group of
----------------
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with any Borrower, are treated as a single
employer under Section 414 of the Code.
"Current Assets" at a particular date, shall mean all cash, cash
--------------
equivalents, accounts and inventory of Radnor on a Consolidated Basis and all
other items which would, in conformity with GAAP, be included under current
assets on a balance sheet of Radnor on a Consolidated Basis as at such date;
provided, however, that such amounts shall not include (a) any amounts for any
- -------- -------
Indebtedness owing by an Affiliate of Radnor or any of its consolidated
subsidiaries, unless such Indebtedness arose in connection with the sale of
goods or rendition of services in the ordinary course of business and would
otherwise constitute current assets in conformity with GAAP, (b) any shares of
stock issued by an Affiliate of Radnor or any of its consolidated subsidiaries,
or (c) the cash surrender value of any life insurance policy.
"Current Liabilities" at a particular date, shall mean all amounts which
-------------------
would, in conformity with GAAP, be included under current liabilities on a
balance sheet of Radnor on a Consolidated Basis as at such date, but in any
event including, without limitation, the amounts of (a) all Indebtedness of any
Borrower payable on demand, or, at the option of the Person to whom such
Indebtedness is owed, not more than twelve (12) months after such date, (b) any
payments in respect of any Indebtedness of any Borrower (whether installment,
serial maturity, sinking fund payment or otherwise) required to be made not more
than twelve (12) months after such date, (c) all reserves in respect of
liabilities or Indebtedness payable on demand or, at the option of the Person to
whom such Indebtedness is owed, not more than twelve (12) months after such
6
<PAGE>
date, the validity of which is not contested at such date, and (d) all accruals
for federal or other taxes measured by income payable within a twelve (12) month
period.
"Customer" shall mean and include the account debtor with respect to any
--------
Receivable and/or the prospective purchaser of goods, services or both with
respect to any contract or contract right, and/or any party who enters into or
proposes to enter into any contract or other arrangement with any Borrower,
pursuant to which any Borrower is to deliver any personal property or perform
any services.
"Debt Payments" shall mean and include all cash actually expended by Radnor
-------------
on a Consolidated Basis to make (a) total interest payments on any Indebtedness,
plus, (b) scheduled principal payments on all Indebtedness.
- ----
"Default" shall mean an event which, with the giving of notice or passage
-------
of time or both, would constitute an Event of Default.
"Default Rate" shall have the meaning set forth in Section 3.1 hereof.
------------
"Depository Accounts" shall have the meaning set forth in Section 4.15(h)
-------------------
hereof.
"Determination Date" shall have the meaning set forth in Section 2.15
------------------
hereof.
"Deutschemarks" shall mean the national currency unit of Germany.
-------------
"Documents" shall have the meaning set forth in Section 8.1(c) hereof.
---------
"Dollars" and the sign "$" shall mean lawful money of the United States of
-------
America.
"Domestic Rate Loan" shall mean any Advance that bears interest based upon
------------------
the Alternate Base Rate.
"EBITDA" shall mean Net Income (calculated in accordance with Section 6.9
------
below) plus interest expense, taxes, depreciation and amortization deducted in
calculating net income for such period, determined on a pro forma basis after
giving effect to acquisitions of operating businesses made in compliance with
subsection 7.1(a) of this Agreement or otherwise approved by the Lenders.
"Effective Date" shall mean December 29, 1999 or such other date as may be
--------------
agreed to by the parties hereto.
"Eligible Inventory" shall mean and include Inventory excluding work in
------------------
process, with respect to each Borrower, valued at the lower of cost or market
value, determined on a first-in-first-out basis, which is not, in Agent's
opinion, obsolete, slow moving or unmerchantable and which Agent, in its sole
discretion, shall not deem ineligible Inventory, based on such considerations as
Agent may from time to time deem appropriate including, without limitation,
whether the Inventory is subject to a perfected, first priority security
interest in favor of Agent
7
<PAGE>
for the ratable benefit of the Lenders and whether the Inventory conforms to all
standards imposed by any governmental agency, division or department thereof
which has regulatory authority over such goods or the use or sale thereof
"Eligible Receivables" shall mean and include, with respect to each
--------------------
Borrower, each Receivable arising in the ordinary course of such entity's
business and which Agent, in its sole credit judgment, shall deem to be an
Eligible Receivable, based on such considerations as Agent may from time to time
deem appropriate. A Receivable shall not be deemed eligible unless such
Receivable is subject to Agent's first priority perfected security interest (or,
in the case of the European Borrowers, a floating charge) for the ratable
benefit of the Lenders and no other Lien other than Permitted Encumbrances, and
is evidenced by an invoice, bill of lading or other documentary evidence
satisfactory to Agent. In addition, no Receivable shall be an Eligible
Receivable if:
(a) it arises out of a sale made by any Borrower to an Affiliate of
any Borrower or to a Person controlled by an Affiliate of any Borrower;
(b) it is due or unpaid more than ninety (90) days after the original
invoice date;
(c) twenty-five percent (25%) or more of the Receivables from the
Customer are not deemed Eligible Receivables hereunder. Such percentage
may, in Agent's sole discretion, be increased or decreased from time to
time;
(d) any covenant, representation or warranty contained in this
Agreement with respect to such Receivable has been breached;
(e) the Customer shall (i) apply for, suffer, or consent to the
appointment of, or the taking of possession by, a receiver, custodian,
trustee or liquidator of itself or of all or a substantial part of its
property or call a meeting of its creditors, (ii) admit in writing its
inability, or be generally unable, to pay its debts as they become due or
cease operations of its present business, (iii) make a general assignment
for the benefit of creditors, (iv) commence a voluntary case under any
state or federal bankruptcy laws (as now or hereafter in effect), (v) be
adjudicated a bankrupt or insolvent, (vi) file a petition seeking to take
advantage of any other law providing for the relief of debtors, (vii)
acquiesce to, or fail to have dismissed, any petition which is filed
against it in any involuntary case under such bankruptcy laws, or (viii)
take any action for the purpose of effecting any of the foregoing;
(f) except in the case of a Borrower that is a European Borrower, the
sale is to a Customer outside the continental United States of America,
unless the sale is on letter of credit, guaranty or acceptance terms, in
each case acceptable to Agent in its sole discretion;
8
<PAGE>
(g) the sale to the Customer is on a bill-and-hold, guaranteed sale,
sale-and-return, sale on approval, consignment or any other repurchase or
return basis or is evidenced by chattel paper;
(h) Agent believes, in its sole judgment, that collection of such
Receivable is insecure or that such Receivable may not be paid by reason of
the Customer's financial inability to pay;
(i) the Customer is the United States of America, any state or any
department, agency or instrumentality of any of them, unless the applicable
Borrower effectuates an assignment of its right to payment of such
Receivable to Agent pursuant to the Assignment of Claims Act of 1940, as
amended (31 U.S.C. Sub-Section 3727 et seq. and 41 U.S.C. Sub-Section 15 et
-- --- --
seq.) or has otherwise complied with other applicable statutes or
---
ordinances;
(j) the goods giving rise to such Receivable have not been shipped and
delivered to and accepted by the Customer or the services giving rise to
such Receivable have not been performed by the applicable Borrower and
accepted by the Customer or the Receivable otherwise does not represent a
final sale;
(k) the Receivables of the Customer exceed a credit limit determined
by Agent, in its sole discretion, to the extent such Receivable exceeds
such limit;
(l) the Receivable is subject to any offset, deduction, defense,
dispute, or counterclaim to the extent of such offset, deduction, defense,
dispute or counterclaim, the Customer is also a creditor or supplier of a
Borrower or the Receivable is contingent in any respect or for any reason;
(m) the applicable Borrower has made any agreement with a Customer for
any deduction therefrom, except for discounts or allowances made in the
ordinary course of business for prompt payment, all of which discounts or
allowances are reflected in the calculation of the face value of each
respective invoice related thereto;
(n) shipment of the merchandise or the rendition of services has not
been completed;
(o) any return, rejection or repossession of the merchandise has
occurred;
(p) such Receivable is not payable to a Borrower; or
(q) such Receivable is not otherwise satisfactory to Agent as
determined in good faith by Agent in the exercise of its discretion in a
reasonable manner.
"Environmental Laws" shall mean all federal, state and local environmental,
------------------
land use, zoning, health, chemical use, safety and sanitation laws, statutes,
ordinances and codes relating to the protection of the environment and/or
governing the use, storage, treatment, generation,
9
<PAGE>
transportation, processing, handling, production or disposal of Hazardous
Substances and the rules, regulations, policies, guidelines, interpretations,
decisions, orders and directives of federal, state and local governmental
agencies and authorities with respect thereto.
"Equipment" shall mean and include as to each Borrower all of such
---------
Borrower's goods (excluding Inventory) whether now owned or hereafter acquired
and wherever located including, without limitation, all equipment, machinery,
apparatus, motor vehicles, fittings, furniture, furnishings, fixtures, parts,
accessories and all replacements and substitutions therefor or accessions
thereto.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time and the rules and regulations promulgated thereunder.
"Eurodollar Rate Loan" shall mean an Advance at any time that bears
--------------------
interest based on the Eurodollar Rate or the Average Monthly Eurodollar Rate.
"Eurodollar Rate" shall mean for any Eurodollar Rate Loan for the then
---------------
current Interest Period relating thereto the rate per annum (such Eurodollar
Rate to be adjusted to the next higher 1/100 of one (1%) percent) equal to the
quotient of (a) LIBOR, divided by (b) a number equal to 1.00 minus the aggregate
of the rates (expressed as a decimal) of reserve requirements current on the day
that is two Business Days prior to the beginning of the Interest Period
(including without limitation basic, supplemental, marginal and emergency
reserves) under any regulation promulgated by the Board of Governors of the
Federal Reserve System (or any other governmental authority having jurisdiction
over the Bank) as in effect from time to time, dealing with reserve requirements
prescribed for Eurocurrency funding including any reserve requirements with
respect to "Eurocurrency liabilities" under Regulation D of the Board of
Governors of the Federal Reserve System.
"European Advances" shall mean European Revolving Advances and European
-----------------
Letters of Credit.
"European Advance Rates" shall have the meaning set forth in Section
----------------------
2.1A(a) hereof.
"European Borrower" shall have the meaning set forth in the recitals
-----------------
hereto.
"European Borrowing Base" shall have the meaning set forth in Section 2.1A
-----------------------
hereof.
"European Collateral" shall mean all Collateral provided by the European
-------------------
Borrowers.
"European Inventory Advance Rate" shall have the meaning set forth in
-------------------------------
Section 2.1A(a)(ii).
"European Letters of Credit" shall have the meaning set forth in Section
--------------------------
2.9 hereof.
10
<PAGE>
"European Obligations" shall mean all obligations of each of the European
--------------------
Borrowers (in their capacity as such) hereunder, under the European Revolving
Notes, in connection with European Letters of Credit or otherwise in connection
with the European Advances.
"European Receivables Advance Rate" shall have the meaning set forth in
---------------------------------
Section 2.1(A)(a)(i) hereof.
"European Revolving Advances" shall mean the Advances made to the European
---------------------------
Borrowers pursuant to Section 2.1A hereunder.
"European Revolving Notes" shall mean the promissory notes referred to in
------------------------
Section 2.1A hereof.
"European Security Documents" shall mean each agreement executed by
---------------------------
StyroChem Finland or ThermiSol Finland pursuant to which promissory notes
secured by a floating charge (yrityskiinnitys) and pledged in favor of the Prior
U.K. Agent are assigned and pledged to the Agent, for the benefit of the
Lenders, pursuant to which the Agent, for the benefit of the Lenders, is granted
a floating charge upon the European Collateral as security for the European
Obligations, as such documents may be amended, restated or supplemented from
time to time, and the term "European Security Documents" shall also include
documents substantially similar to the foregoing and executed by any other
European Borrower.
"Euros" shall mean the lawful currency of the European Union as constituted
-----
by the Treaty of European Union.
"Event of Default" shall mean the occurrence and continuance of any of the
----------------
events set forth in Article X hereof
"Federal Funds Rate" shall mean, for any day, the weighted average of the
------------------
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or if such rate is not so published for any
day which is a Business Day, the average of quotations for such day on such
transactions received by the Bank from three Federal funds brokers of recognized
standing selected by the Bank.
"Finnish Markka" shall mean the national currency unit of Finland.
--------------
"Fixed Charge Coverage" for any period shall mean the ratio for such period
---------------------
of (1) EBITDA to (2) all Debt Payments plus (a) the aggregate amount of capital
----
expenditures actually made plus (b) the aggregate amount of cash payments of
----
taxes made.
"Funded Indebtedness" means as to any Person and its Subsidiaries on a
-------------------
consolidated basis, as of any date of determination, (i) the aggregate of all
Indebtedness for Borrowed Money of such Person and its Subsidiaries, whether
secured or unsecured (but excluding, without duplication, loans by such Person
to one or more of its Subsidiaries), having a final maturity (or
11
<PAGE>
which by the terms thereof is renewable or extendible at the option of the
obligor for a period ending) more than one year after that date, including
current maturities of long-term Indebtedness for Borrowed Money (as determined
in accordance with GAAP), less (ii) the aggregate amount of all cash balances
and cash equivalents of such Person and/or any of its Subsidiaries. Unless
otherwise provided, the term "Funded Indebtedness" as used herein refers to the
Funded Indebtedness of Radnor on a Consolidated Basis.
"GAAP" shall mean generally accepted accounting principles in the United
----
States of America in effect from time to time.
"General Intangibles" shall mean and include as to each Borrower all of
-------------------
such Borrower's general intangibles, whether now owned or hereafter acquired
including, without limitation, all choses in action, causes of action, corporate
or other business records, inventions, designs, patents, patent applications,
trademarks, service marks, trade secrets, goodwill, copyrights, design rights,
registrations, licenses, franchises, customer lists, tax refunds, tax refund
claims, computer programs, all claims under guaranties, security interests or
other security held by or granted to such Borrower to secure payment of any of
the Receivables by a Customer, all rights of indemnification and all other
intangible property of every kind and nature (other than Receivables).
"Governmental Body" shall mean any nation or government, any state or other
-----------------
political subdivision thereof or any entity exercising the legislative,
judicial, regulatory or administrative functions of or pertaining to a
government.
"Hazardous Discharge" shall have the meaning set forth in Section 4.19(d)
-------------------
hereof.
"Hazardous Substance" shall mean, without limitation, any flammable
-------------------
explosives, radon, radioactive materials, asbestos, urea formaldehyde foam
insulation, polychlorinated biphenyls, petroleum and petroleum products,
methane, hazardous materials, Hazardous Wastes, hazardous or toxic substances or
related materials as defined in CERCLA, the Hazardous Materials Transportation
Act, as amended (49 U.S.C. Sections 1801, et seq.), RCRA or any other
-- ---
applicable Environmental Law and in the regulations adopted pursuant thereto.
"Hazardous Wastes" shall mean all waste materials subject to regulation
----------------
under CERCLA, RCRA or applicable state law, and any other applicable Federal and
state laws now in force or hereafter enacted relating to hazardous waste
disposal.
"Indebtedness" of a Person at a particular date shall mean all obligations
------------
of such Person which in accordance with GAAP would be classified upon a balance
sheet as liabilities (except capital stock and surplus earned or otherwise) and
in any event, without limitation by reason of enumeration, shall include all
indebtedness, debt and other similar monetary obligations of such Person whether
direct or guaranteed, and all premiums, if any, due at the required prepayment
dates of such indebtedness, and all indebtedness secured by a Lien on assets
owned by such Person, whether or not such indebtedness actually shall have been
created, assumed or incurred by such Person. Any indebtedness of such Person
resulting from the acquisition by such Person of any assets subject to any Lien
shall be deemed, for the purposes hereof, to be the equivalent of
12
<PAGE>
the creation, assumption and incurring of the indebtedness secured thereby,
whether or not actually so created, assumed or incurred.
"Indebtedness for Borrowed Money" of a person means at any time the sum at
-------------------------------
such time of (a) Indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services, (b) any obligations of such
Person in respect of letters of credit, banker's or other acceptances or similar
obligations issued or created for the account of such Person, (c) lease
obligations of such Person with respect to capital leases, (d) all liabilities
secured by any Lien on any property owned by such Person, to the extent attached
to such Person's interest in such property, even though such Person has not
assumed or become personally liable for the payment thereof, (e) obligations of
third parties which are being guarantied or indemnified against by such Person
or which are secured by the property of such Person; (f) any obligation of such
Person or a member of Controlled Group to a Multiemployer Plan; and (h) any
obligations, liabilities or indebtedness, contingent or otherwise, under or in
connection with, any interest rate or currency swap agreements, cap, floor, and
collar agreements, currency spot, foreign exchange and forward contracts and
other similar agreements and arrangements; but excluding trade and other
accounts payable in the ordinary course of business.
"Indenture" shall mean the Indenture dated as of December 5, 1996 between
---------
Radnor, as issuer, WinCup, Radnor Chemical Corporation f/k/a/ SP Acquisition
Co., Radnor Delaware, Radnor Management, Inc., StyroChem, WinCup Texas,
StyroChem GP, L.L.C., StyroChem LP, L.L.C., WinCup GP, L.L.C., WinCup LP,
L.L.C., Radnor Management Delaware, Inc., StyroChem Delaware and WinCup Europe
Delaware, Inc. as guarantors and First Union National Bank, as trustee, as
amended through the date hereof.
"Interest Coverage" for any period shall mean the ratio of (1) EBITDA to
-----------------
(2) Total Interest.
"Interest Period" shall mean (i), as to any Eurodollar Rate Loan, the
---------------
period provided for any Eurodollar Rate Loan pursuant to Section 2.2(b) and (ii)
as to any Swingline Loan, a period commencing in each case on the date of the
borrowing and ending on the date agreed to by one or more of the Borrowers and
the Swingline Lender in accordance with Section 2.14.
"Inventory" shall mean and include as to each Borrower all of such
---------
Borrower's now owned or hereafter acquired goods, merchandise and other personal
property, wherever located, to be furnished under any contract of service or
held for sale or lease, all raw materials, work in process, finished goods and
materials and supplies of any kind, nature or description which are or might be
used or consumed in such Borrower's business or used in selling or furnishing
such goods, merchandise and other personal property, and all documents of title
or other documents representing them.
"James River" shall mean Fort James Operating Company f/k/a James River
-----------
Paper Company, Inc.
13
<PAGE>
"Lender" and "Lenders" shall have the meaning ascribed to such term in the
------
Preamble, each Purchasing Lender and shall include each person which is a
transferee, successor or assign of any Lender or any Purchasing Lender.
"Letters of Credit" shall have the meaning set forth in Section 2.9.
-----------------
"Letter of Credit Fees" shall mean the fees set forth in Section 3.2.
---------------------
"LIBOR" shall mean for the Interest Period for each Eurodollar Rate Loan
-----
comprising part of the same borrowing (including conversions, extensions and
renewals), a per annum interest rate (rounded upwards, if necessary, to the
nearest whole multiple of 1/100 of 1%) equal to the rate of interest, determined
by the Agent on the basis of the offered rates for deposits in dollars for a
period of time corresponding to such Interest Period (and commencing on the
first day of such Interest Period), appearing on Telerate Page 3750 (or, if, for
any reason, Telerate Page 3750 is not available, the Reuters Screen LIBO Page)
as of approximately 11:00 A.M. (London time) two (2) Business Days before the
first day of such Interest Period. As used herein, "Telerate Page 3750" means
the display designated as page 3750 by Dow Jones Telerate, Inc. (or such other
page as may replace such page on that service for the purpose of displaying the
British Bankers Association London interbank offered rates) and "Reuters Screen
LIBO Page" means the display designated as page "LIBO" on the Reuters Monitor
Money Rates Service (or such other page as may replace the LIBO page on that
service for the purpose of displaying London interbank offered rates of major
banks).
"Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,
----
assignment, security interest, lien (whether statutory or otherwise), Charge,
claim or encumbrance, or preference, priority or other security agreement or
preferential arrangement held or asserted in respect of any asset of any kind or
nature whatsoever including, without limitation, any conditional sale or other
title retention agreement, any lease having substantially the same economic
effect as any of the foregoing, and the filing of, or agreement to give, any
financing statement under the Uniform Commercial Code or comparable law of any
jurisdiction.
"Material Adverse Effect" shall mean a material adverse effect on (a) the
-----------------------
condition, operations, assets, business or prospects of the applicable Person or
Persons, (b) any Borrower's ability to pay the Obligations in accordance with
the terms thereof, (c) the value of the Collateral, the Liens on the Collateral
or the priority of any such Lien, or (d) the practical realization of the
benefits of Agent and Lenders' rights and remedies under this Agreement and the
Other Documents, all as determined by the Required Lenders in the good faith
exercise of their sole and absolute discretion.
"Maximum European Loan Amount" shall mean $8,000,000.
----------------------------
"Maximum U.S. Loan Amount" shall mean $32,000,000.
------------------------
"Monthly Advances" shall have the meaning set forth in Section 3.1 hereof.
----------------
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
------------------
Sections 3(37) and 4001(a)(3) of ERISA.
14
<PAGE>
"Net Income" shall mean the net income of Radnor on a Consolidated Basis,
----------
determined in accordance with GAAP.
"Net Worth" at a particular date, shall mean the aggregate amount of all
---------
assets of Radnor on a Consolidated Basis as may properly be classified as such
in accordance with GAAP consistently applied and such other assets as are
properly classified as "intangible assets", less (b) the aggregate amount of all
Indebtedness of Radnor on a Consolidated Basis.
"Notes" shall mean collectively, the U.S. Revolving Credit Notes, the
-----
European Revolving Notes and the Swingline Note.
"Obligations" shall mean and include any and all of each Borrower's
-----------
Indebtedness and/or liabilities to Agent, the Swingline Lender or any of the
Lenders or any corporation that directly or indirectly controls or is controlled
by or is under common control with any Lender of every kind, nature and
description, direct or indirect, secured or unsecured, joint, several, joint and
several, absolute or contingent, due or to become due, now existing or hereafter
arising, contractual or tortious, liquidated or unliquidated under this
Agreement or under any Other Document and all obligations of any Borrower to
Agent or the Lenders to perform acts or refrain from taking any action under
this Agreement or any Other Document.
"Optional Currencies" shall mean Deutschemarks, Euros and Finnish Markkas.
-------------------
"Original Dollar Amount" in relation to an Advance, means (a) if the
----------------------
Advance is denominated in Dollars, the amount of that Advance, or (b) if the
Advance is denominated in an Optional Currency, the equivalent in Dollars of the
amount of that Advance at the Agent's Spot Rate of Exchange two Business Days
prior to the proposed day of borrowing.
"Other Documents" shall mean the Notes, the Questionnaire and any and all
---------------
other agreements, instruments and documents, including, without limitation,
guaranties, pledges, powers of attorney, consents, letter of credit applications
and agreements and all other writings heretofore, now or hereafter executed
and/or delivered by any Borrower to Agent or any Lender in respect of the
transactions contemplated by this Agreement, as such documents may be amended,
restated or supplemented from time to time.
"Parent" shall mean with respect to any Person, a corporation or other
------
entity owning, directly or indirectly at least 50% of the shares of stock or
other ownership interests having ordinary voting power to elect a majority of
the directors of the Person, or other Persons performing similar functions for
any such Person.
"Participant" shall mean each Person who shall be granted the right by any
-----------
Lender to participate in any of the Advances and who shall have entered into a
participation agreement in form and substance satisfactory to such Lender.
15
<PAGE>
"Payment Office" shall mean initially Independence Center, 15th Floor,
--------------
Charlotte, North Carolina 28255; thereafter, such other office of Agent, if any,
which it may designate by notice to Borrowing Agent and each Lender to be the
Payment Office.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
----
"Permitted Encumbrances" shall mean (a) Liens in favor of Agent for the
----------------------
ratable benefit of the Lenders; (b) Liens for taxes, assessments or other
governmental charges not delinquent or being contested in good faith and by
appropriate proceedings and with respect to which proper reserves have been
taken by Borrowers; provided, that, the Lien shall have no effect on the
-------- ----
priority of the Liens in favor of Agent for the ratable benefit of the Lenders
or the value of the assets in which Agent has such a Lien and a stay of
enforcement of any such Lien for the ratable benefit of the Lenders shall be in
effect; (c) Liens disclosed in the financial statements referred to in Section
5.5; (d) deposits or pledges to secure obligations under worker's compensation,
social security or similar laws, or under unemployment insurance; (e) deposits
or pledges to secure bid tenders, contracts (other than contracts for the
payment of money), leases, statutory obligations, surety and appeal bonds and
other obligations of like nature arising in the ordinary course of any
Borrower's business; (f) judgment Liens that have been stayed or bonded and
mechanics', worker's, materialmen's or other like Liens arising in the ordinary
course of any Borrower's business with respect to obligations which are not due
or which are being contested in good faith by the applicable Borrower; (g) Liens
placed upon fixed assets hereafter acquired to secure a portion of the purchase
price thereof, provided that (x) any such lien shall not encumber any other
property of any Borrower (other than replacements and additions to the acquired
fixed assets) and (y) the aggregate amount of Indebtedness secured by such Liens
incurred as a result of such purchases during any fiscal year shall not exceed
the amount provided for in Section 7.6; and (g) Liens disclosed on Schedule 1.2.
------------
"Person" shall mean any individual, sole proprietorship, partnership,
------
corporation, business trust, joint stock company, trust, unincorporated
organization, association, limited liability company, institution, public
benefit corporation, joint venture, entity or government (whether Federal,
state, county, city, municipal or otherwise, including any instrumentality,
division, agency, body or department thereof).
"Plan" shall mean any employee benefit plan within the meaning of Section
----
3(3) of ERISA, maintained for employees of a U.S. Borrower or any U.S. member of
the Controlled Group or any such Plan to which a U.S. Borrower or any U.S.
member of the Controlled Group is required to contribute on behalf of any of its
employees.
"Prepayment Date" shall have the meaning set forth in Section 13.1 hereof.
---------------
"Prime Rate" shall mean the prime commercial lending rate of the Bank as
----------
publicly announced to be in effect from time to time, such rate to be adjusted
automatically, without notice, on the effective date of any change in such rate.
This rate of interest is determined from time to time by the Bank as a means of
pricing some loans to its customers and is neither tied to any external rate of
interest or index nor does it necessarily reflect the lowest rate of interest
actually charged by the Bank to any particular class or category of customers of
the Bank.
16
<PAGE>
"Prior Agent" shall mean GMAC Commercial Credit LLC, formerly BNY Factoring
-----------
LLC, formerly BNY Financial Corporation.
"Prior U.K. Agent" shall mean GMAC Commercial Credit Development Limited,
----------------
formerly BNY Financial Limited.
"Projections" shall have the meaning set forth in Section 5.5(b) hereof .
-----------
"Purchasing Lender" shall have the meaning set forth in Section 15.3
-----------------
hereof.
"Questionnaire" shall mean the Perfection Certificate and the responses
-------------
thereto provided by Borrowers and delivered to Agent and/or its counsel.
"Radnor" shall mean Radnor Holdings Corporation, a corporation organized
------
and existing under the laws of the State of Delaware.
"Radnor Chemical" shall mean Radnor Chemical Corporation, a corporation
---------------
organized and existing under the laws of the State of Delaware.
"Radnor Delaware" shall mean Radnor Delaware, Inc., a corporation organized
---------------
and existing under the laws of the State of Delaware.
"Radnor on a Consolidated Basis" shall mean the consolidation in accordance
------------------------------
with GAAP of the accounts or other items of Radnor and its Subsidiaries.
"RCRA" shall mean the Resource Conservation and Recovery Act, 42 U.S.C.
----
(S)(S) 6901 et seq., as same may be amended from time to time.
-- ---
"Receivables" shall mean and include as to each Borrower all of such
-----------
Borrower's accounts, contract rights, instruments (including those evidencing
indebtedness among Borrowers and its Affiliates), documents, chattel paper,
general intangibles relating to accounts, drafts and acceptances, and all other
forms of obligations owing to such Borrower arising out of or in connection with
the sale or lease of Inventory or the rendition of services, all guarantees and
other security therefor, whether secured or unsecured, now existing or hereafter
created, and whether or not specifically sold or assigned to the Agent for the
ratable benefit of the Lenders hereunder.
"Reference Bank" shall mean the London offices of Bank of America, N.A.,
--------------
First Union National Bank and The Chase Manhattan Bank or such other bank as the
Agent and the Borrowing Agent may agree.
"Related Person" shall mean as to any Person, any other Person which,
--------------
together with such Person, is treated as a single employer under Section 414(c)
of the Code.
"Release" shall have the meaning set forth in Section 5.7(c)(i) hereof
-------
17
<PAGE>
"Reportable Event" shall mean a reportable event described in Section
----------------
4043(b) of ERISA or the regulations promulgated thereunder.
"Required Lenders" shall mean Lenders holding at least fifty one percent
----------------
(51%) of the Advances or if no Advances are outstanding, fifty one percent (51%)
of the Commitment Percentages.
"Revolving Advances" shall mean collectively, the U.S. Revolving Advances
------------------
and the European Revolving Advances.
"Revolving Interest Rate" shall mean an interest rate per annum equal to
-----------------------
(a) the sum of the Alternate Base Rate plus the Applicable Margin with respect
to Domestic Rate Loans, (b) the sum of the Eurodollar Rate plus the Applicable
Margin with respect to Eurodollar Rate Loans (other than Eurodollar Rate Loans
made pursuant to Section 2.2(b) hereof) or (c) the sum of the Average Monthly
Eurodollar Rate plus the Applicable Margin with respect to Eurodollar Rate Loans
made pursuant to Section 2.2(h) hereof.
"Second Indenture" shall mean the Indenture dated as of October 15, 1997
----------------
between Radnor, as Issuer, WinCup, Radnor Chemical, StyroChem, Radnor
Management, Inc., Radnor Delaware, WinCup Texas, StyroChem GP, L.L.C., StyroChem
LP, L.L.C., WinCup GP, L.L.C., WinCup LP, L.L.C., Radnor Management Delaware,
Inc., StyroChem Delaware and WinCup Europe Delaware, Inc. as guarantors and
First Union National Bank, as trustee.
"Second Senior Notes" shall mean the 10% Series B Senior Notes due 2003
-------------------
issued by Radnor pursuant to the Second Indenture and any notes issued in
exchange or substitution therefor.
"Senior Notes" shall mean the 10% Senior Notes due 2003 issued by Radnor
------------
pursuant to the Indenture in conjunction with the transactions contemplated by
the Acquisition Agreement and any notes issued in exchange or substitution
therefor.
"Settlement Date" shall mean the Effective Date and thereafter Wednesday of
---------------
each week unless such day is not a Business Day in which case it shall be the
next succeeding Business Day.
"StyroChem" shall mean StyroChem US, Ltd. formerly StyroChem International,
---------
Inc., a limited partnership organized and existing under the laws of the State
of Texas.
"StyroChem Delaware" shall mean StyroChem Delaware, Inc., a corporation
------------------
organized and existing under the laws of the State of Delaware.
"Subsidiary" shall mean a corporation or other entity of whose shares of
----------
stock or other ownership interests having ordinary voting power (other than
stock or other ownership interests having such power only by reason of the
happening of a contingency) to elect a majority of the
18
<PAGE>
directors of such corporation, or other Persons performing similar functions for
such entity, are owned, directly or indirectly, by such Person.
"Swingline Commitment" means the commitment of the Swingline Lender to make
--------------------
Swingline Loans in an aggregate principal amount at any time outstanding of up
to the Swingline Committed Amount.
"Swingline Committed Amount" shall have the meaning assigned to such term
--------------------------
in Section 2.14(a).
"Swingline Lender" means Bank of America.
----------------
"Swingline Loan" shall have the meaning assigned to such term in Section
--------------
2.14(a).
"Swingline Loan Request" means a request by one or more of the U.S.
----------------------
Borrowers for a Swingline Loan in substantially the form of Exhibit 2.14(b)(i).
"Swingline Note" means the promissory note of the U.S. Borrowers in favor
--------------
of the Swingline Lender in the original principal amount of $5,000,000, as such
promissory note may be amended, modified, restated or replaced from time to
time.
"Term" shall mean the Effective Date through October 15, 2002.
----
"Termination Event" shall mean (i) a Reportable Event with respect to any
-----------------
Plan or Multiemployer Plan; (ii) the withdrawal of either Borrower or any member
of the Controlled Group from a Plan or Multiemployer Plan during a plan year in
which such entity was a "substantial employer" as defined in Section 4001(a)(2)
of ERISA; (iii) the providing of notice of intent to terminate a Plan in a
distress termination described in Section 4041(c) of ERISA; (iv) the institution
by the PBGC of proceedings to terminate a Plan or Multiemployer Plan; (v) any
event or condition (a) which might constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Plan or Multiemployer Plan, or (b) that may result in termination of a
Multiemployer Plan pursuant to Section 4041A of ERISA; or (vi) the partial or
complete withdrawal within the meaning of Sections 4203 and 4205 of ERISA, of
either Borrower or any member of the Controlled Group from a Multiemployer Plan.
"Total Interest" for any period shall mean the accrued and unpaid interest
--------------
obligations of Radnor on a Consolidated Basis with respect to its outstanding
Indebtedness during such period.
"Toxic Substance" shall mean and include any material present on any real
---------------
property owned by any Borrower or any leasehold interests of any Borrower which
has been shown to have significant adverse effect on human health or which is
subject to regulation under the Toxic Substances Control Act (TSCA), 15 U.S.C.
(S)(S) 2601 et seq., applicable state law, or any other applicable Federal or
-- ---
state laws now in force or hereafter enacted relating to toxic substances.
"Toxic substance" includes but is not limited to asbestos, polychlorinated
biphenyls (PCBs) and lead-based paints.
"Transferee" shall have the meaning set forth in Section 15.3(b) hereof.
----------
19
<PAGE>
"Treaty of European Union" shall mean the treaty of Rome of March 25, 1957,
------------------------
as amended by the Single European Act of 1986 and the Maastricht Treaty (which
was signed at Maastricht on February 7, 1992, and came into force on November 1,
1993), as amended from time to time.
"Undrawn Availability" at a particular date shall mean an amount equal to
--------------------
(a) the Borrowing Base, minus (b) the sum of (i) the outstanding amount of
-----
Advances plus (ii) all amounts due and owing to Borrowers' trade creditors which
are outstanding more than sixty (60) days past the due date therefor.
"U.S. Advance Rates" shall have the meaning set forth in Section 2.1
------------------
hereof.
"U.S. Advances" shall mean U.S. Revolving Advances, U.S. Letters of Credit
-------------
and Swingline Loans.
"U.S. Borrowing Base" shall have the meaning set forth in Section 2.1
-------------------
hereof.
"U.S. Collateral" shall mean all Collateral provided by the U.S. Borrowers.
---------------
"U.S. Inventory Advance Rate" shall have the meaning ascribed to such term
---------------------------
in Section 2.1(a)(ii).
"U.S. Letters of Credit" shall have the meaning set forth in Section 2.9
----------------------
hereof.
"U.S. Obligations" shall mean all obligations of each of the U.S. Borrowers
----------------
(in their capacity as such) hereunder, under the U.S. Revolving Credit Notes, in
connection with U.S. Letters of Credit, under the Swingline Loans or otherwise
in connection with the U.S. Advances.
"U.S. Receivables Advance Rate" shall have the meaning set forth in Section
-----------------------------
2.1(a) hereof.
"U.S. Revolving Advances" shall mean Advances made pursuant to Section
-----------------------
2.1(a) hereof.
"U.S. Revolving Credit Notes" shall mean the promissory notes referred to
---------------------------
in Section 2.1 hereof.
"Week" shall mean the time period commencing with a Wednesday and ending on
----
the following Tuesday.
"WinCup" shall mean WinCup Holdings, Inc., a corporation organized and
------
existing under the laws of the State of Delaware.
20
<PAGE>
"WinCup L.P." shall mean WinCup Holdings, L.P., a limited partnership
-----------
organized under the laws of the State of Delaware which was dissolved effective
July 7, 1997 pursuant to that certain Certificate of Dissolution dated August
25, 1997.
"WinCup Texas" shall mean WinCup Texas, Ltd., a limited partnership
------------
organized and existing under the laws of the State of Texas.
"Working Capital" at a particular date, shall mean the excess, if any, of
---------------
Current Assets over Current Liabilities at such date.
1.3. Uniform Commercial Code Terms.
-----------------------------
All terms used herein and defined in the Uniform Commercial Code as adopted
in the State of New York shall have the meaning given therein unless otherwise
defined herein.
1.4. Certain Matters of Construction.
-------------------------------
The terms "herein", "hereof" and "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular section,
paragraph or subdivision. Any pronoun used shall be deemed to cover all
genders. Wherever appropriate in the context, terms used herein in the singular
also include the plural and vice versa. All references to statutes and related
regulations shall include any amendments of same and any successor statutes and
regulations. All references to any instruments or agreements to which Agent is
a party, including, without limitation, references to any of the Other Documents
shall include any and all modifications or amendments thereto and any and all
extensions or renewals thereof.
II. ADVANCES, PAYMENTS
------------------
2.1. U.S. Revolving Advances.
-----------------------
(a) U.S. Borrowing Base. Subject to the terms and conditions set
-------------------
forth in this Agreement, each Lender, severally and not jointly, agrees to
make U.S. Revolving Advances to U.S. Borrowers in accordance with the
procedures provided for herein in an aggregate amount outstanding at any
time not greater than such Lender's Commitment Percentage of the U.S.
Borrowing Base (as defined below) minus (1) the undrawn or unreimbursed
-----
amount of outstanding U.S. Letters of Credit and (2) Swingline Loans
outstanding. For purposes hereof, "U.S. Borrowing Base" shall mean the
lesser of (x) the Maximum U.S. Loan Amount or (y) the sum of:
(i) up to 85%, subject to the provisions of Section 2.1(b)
hereof ("U.S. Receivables Advance Rate"), of Eligible Receivables of
U.S. Borrowers, plus
----
(ii) the lesser of (x) $15,000,000 or (y) up to 60%, subject to
the provisions of Section 2.1(b) hereof ("U.S. Inventory Advance
Rate"), of Eligible Inventory of U.S. Borrowers (the U.S. Receivables
Advance Rate and the U.S.
21
<PAGE>
Inventory Advance Rate shall be referred to, collectively, as the
"U.S. Advance Rates"), minus
-----
(iii) such reserves as Agent may, in a commercially reasonable
manner, reasonably deem proper and necessary.
The U.S. Revolving Advances shall otherwise be evidenced by a U.S.
Revolving Credit Note in the form attached hereto as Exhibit 2.1.
-----------
(b) Discretionary Rights. The U.S. Advance Rates may be increased by
--------------------
the Agent, with the consent of the Required Lenders, or decreased by the
Agent, with the consent of the Required Lenders, at any time and from time
to time in the exercise of its reasonable discretion. U.S. Borrowers
consent to any such increases or decreases and acknowledge that decreasing
the Advance Rates or increasing the reserves may limit or restrict Advances
requested by any U.S. Borrower.
2.1A. European Revolving Advances.
---------------------------
(a) European Borrowing Base. Subject to the terms and conditions set
-----------------------
forth in this Agreement, each Lender, severally and not jointly, agrees to
make European Advances to European Borrowers in accordance with the
procedures provided for herein in an aggregate amount outstanding at any
time not greater than such Lender's Commitment Percentage of the European
Borrowing Base (as defined below) minus the undrawn or unreimbursed amount
-----
of outstanding European Letters of Credit. For purposes hereof, "European
Borrowing Base" shall mean the lesser of (x) the Maximum European Loan
Amount or (y) the sum of:
(i) up to 85%, subject to the provisions of Section 2.1A(b)
hereof ("European Receivables Advance Rate"), of Eligible Receivables
of European Borrowers, plus
----
(ii) the lesser of (x) $5,000,000 or (y) up to 60%, subject to
the provisions of Section 2.1A(b) hereof ("European Inventory Advance
Rate"), of Eligible Inventory of European Borrowers (the European
Receivables Advance Rate and the European Inventory Advance Rate
shall be referred to, collectively, as the "European Advance Rates"),
minus
-----
(iii) such reserves as Agent may, in a commercially reasonable
manner, reasonably deem proper and necessary.
The European Revolving Advances shall otherwise be evidenced by a
European Revolving Note in the form attached hereto as Exhibit 2.1A.
------------
(b) Discretionary Rights. The European Advance Rates may be
--------------------
increased by the Agent, with the consent of the Required Lenders, or
decreased by the Agent, with the consent of the Required Lenders, at any
time and from time to time in the exercise of its
22
<PAGE>
reasonable discretion. European Borrowers consent to any such increases or
decreases and acknowledge that decreasing the European Advance Rates or
increasing the reserves may limit or restrict European Advances requested
by any European Borrower.
2.2. Procedure for Borrowing.
-----------------------
(a) Borrowing Agent on behalf of any Borrower may notify Agent prior to
11:00 a.m. on a Business Day of a Borrower's request to incur by delivery of a
Notice of Borrowing, substantially in the form of Exhibit 2.2(a) attached
--------------
hereto, on that day, a Revolving Advance hereunder. Should any amount required
to be paid as interest hereunder, or as fees or other charges under this
Agreement or any other agreement with Agent or any Lender, or with respect to
any other Obligation, become due, same shall be deemed a request for a Revolving
Advance as of the date such payment is due, in the amount required to pay in
full such interest, fee, charge or Obligation under this Agreement or any other
agreement with Agent or any Lender, and such request shall be irrevocable. Any
request for a Revolving Advance shall be deemed reduced automatically and
without notice so as not to be in excess of, after giving effect to the
requested Revolving Advance, (i) in the case of a request for a U.S. Revolving
Advance, an amount which would cause the aggregate amount of all U.S. Advances
outstanding to be greater than the U.S. Borrowing Base or (ii) in the case of a
request for a European Revolving Advance, an amount which would cause the
aggregate amount of all European Advances outstanding to be greater than the
European Borrowing Base.
(b) Notwithstanding the provisions of (a) above, in the event any Borrower
desires to obtain a Eurodollar Rate Loan, it shall give Agent at least three (3)
Business Days' prior written notice; specifying (i) the date of the proposed
borrowing (which shall be a Business Day), (ii) the amount on the date of such
Revolving Advance to be borrowed, which amount shall be an integral multiple of
$500,000 in the case of Finnish Markka and $1,000,000 in the case of any other
currency, and (iii) the duration of the first Interest Period therefor.
Interest Periods for Eurodollar Loans shall be for 7 days, 14 days, one (1), two
(2), three (3) or six (6) months. There shall not be outstanding more than ten
(10) Eurodollar Rate Loans, in the aggregate.
(c) Each Interest Period of a Eurodollar Rate Loan shall commence on the
date such Eurodollar Rate Loan is made and shall end on such date as a Borrower
may elect as set forth in (b)(iii) above provided that:
(i) any Interest Period which would otherwise end on a day which is
not a Business Day shall be the next preceding or succeeding Business Day
as is Bank's custom in the market to which such Eurodollar Rate Loan
relates;
(ii) no Interest Period shall end after the last day of the Term; and
(iii) any Interest Period which begins on a day for which there is no
numerically corresponding day in the calendar month during which such
Interest Period is to end, shall (subject to clause (i) above) end on the
last day of such calendar month.
23
<PAGE>
Borrowing Agent shall elect the initial Interest Period applicable to a
Eurodollar Rate Loan by its notice of borrowing given to Agent pursuant to
Section 2.2(b) or by its notice of conversion given to Agent pursuant to Section
2.2(d), as the case may be. Borrowing Agent shall elect the duration of each
succeeding Interest Period by giving irrevocable written notice to Agent of such
duration not less than three (3) Business Days prior to the last day of the then
current Interest Period applicable to such Eurodollar Rate Loan. If Agent does
not receive timely notice of the Interest Period elected by Borrowing Agent,
Borrowers shall be deemed to have elected to convert to a Domestic Rate Loan
subject to Section 2.2(d) hereinbelow.
(d) Provided that no Event of Default shall have occurred and be
continuing, any Borrower may, on the last Business Day of the then current
Interest Period applicable to any outstanding Eurodollar Rate Loan or Domestic
Rate Loan convert any such loan into a loan of another type in the same
aggregate principal amount provided that any conversion of a Eurodollar Rate
Loan shall be made only on the last Business Day of the then current Interest
Period applicable to such Eurodollar Rate Loan. If Borrower desires to convert
a loan, Borrowing Agent shall give the Agent not less than three (3) Business
Days' prior written notice, specifying the date of such conversion, the loans to
be converted and if the conversion is from a Domestic Rate Loan to any other
type of loan, the duration of the first Interest Period therefor.
(e) Borrowers may prepay the Revolving Advances in accordance with the
provisions of Section 13.1 with accrued interest on the principal being prepaid
to the date of such repayment. In the event that any prepayment of a Eurodollar
Rate Loan is required or permitted on a date other than the last Business Day of
the then current Interest Period with respect thereto Borrowers shall indemnify
Agent and Lenders therefor in accordance with Section 2.2(f) hereof.
(f) Subject to the limitations of the Cross-Guaranty set forth in Section
17.1 hereof, each Borrower shall indemnify Agent and Lenders and hold Agent and
Lenders harmless from and against any and all losses or expenses that Agent and
any Lender may sustain or incur as a consequence of any prepayment or any
default by any Borrower in the payment of the principal of or interest on any
Eurodollar Rate Loan or failure by any Borrower to complete a borrowing of, a
prepayment of or conversion of or to a Eurodollar Rate Loan after notice thereof
has been given, including but not limited to, any interest payable by Agent or
any Lender to lenders of funds obtained by it in order to make or maintain its
Eurodollar Rate Loans hereunder.
(g) Notwithstanding any other provision hereof, if any applicable law,
treaty, regulation or directive, or any change therein or in the interpretation
or application thereof, shall make it unlawful for any Lender (for purposes of
this subsection (g), the term "Lender" shall include any Lender and the office
or branch where any Lender or any corporation or bank controlling such Lender
makes or maintains any Eurodollar Rate Loans) to make or maintain its Eurodollar
Rate Loans, the obligation of any Lender to make Eurodollar Rate Loans hereunder
shall forthwith be cancelled and Borrower shall, if any affected Eurodollar Rate
Loans are then outstanding, promptly upon request from Agent, either pay all
such affected Eurodollar Rate Loans or convert such affected Eurodollar Rate
Loans into loans of another type. If any such payment or conversion of any
Eurodollar Rate Loan is made on a day that is not applicable to such Eurodollar
Rate Loan, Borrowers shall pay such Lender, upon such Lender's request, such
amount or amounts as may be necessary to compensate such Lender for any loss or
expense
24
<PAGE>
sustained or incurred by such Lender in respect of such Eurodollar Rate Loan as
a result of such payment or conversion, including (but not limited to) any
interest or other amounts payable by such Lender to lenders of funds obtained by
such Lender in order to make or maintain such Eurodollar Rate Loan. A
certificate as to any additional amounts payable pursuant to the foregoing
sentence submitted by Agent to Borrower shall be conclusive absent manifest
error; provided, each Lender shall use its best efforts to minimize or avoid any
such additional payment.
(h) Anything in Section 2.2(b) to the contrary notwithstanding, any
Borrower may obtain a Eurodollar Rate Loan upon at least three (3) Business
Days' prior written notice for an Interest Period of one month with interest on
such Eurodollar Rate Loans to be charged at the Average Monthly Eurodollar Rate.
Borrowing Agent shall specifically provide in the prior written notice that
interest is to be charged at the Average Monthly Eurodollar Rate; otherwise,
interest shall be charged at the Eurodollar Rate for Eurodollar Rate Loans
having an Interest Period of one month.
2.3. Disbursement of Advance Proceeds.
--------------------------------
All Revolving Advances shall be disbursed from whichever office or other
place Agent may designate from time to time and, together with any and all other
Obligations of Borrowers to Agent or any of the Lenders, shall be charged to the
applicable Borrower's account on Agent's books. During the Term, Borrowers may
use the Revolving Advances by borrowing, prepaying and reborrowing, all in
accordance with the terms and conditions hereof. The proceeds of each Revolving
Advance requested on behalf of any Borrower or deemed to have been requested by
such Borrower under Section 2.2(a) hereof shall, with respect to requested
Revolving Advances to the extent the Lenders make such Revolving Advances, be
made available to such Borrower on the day so requested by way of credit to such
Borrower's operating account at the Bank, or such other bank as Borrowing Agent
may designate following notification to Agent, in federal funds or other
immediately available funds or, with respect to Revolving Advances deemed to
have been requested, be disbursed to Agent to be applied to the outstanding
Obligations giving rise to such deemed request.
2.4. Optional Currencies.
-------------------
(a) Selection. A Borrower shall, through the Borrowing Agent, select
---------
the currency of a Revolving Advance in the relevant notice for borrowing, which
currency must be Dollars or an Optional Currency. No Borrower may choose a
currency if as a result the Revolving Advances would be denominated at any one
time in more than four currencies. The Agent shall notify each Lender of the
currency and the Original Dollar Amount of each Revolving Advance and the
applicable Agent's Spot Rate of Exchange promptly after they are ascertained.
(b) Revocation of currency. If before 9:30 a.m. on any day falling
----------------------
two Business Days prior to the commencement of an Interest Period relating to a
Revolving Advance, the Agent receives notice from a Lender that: (i) it is
impracticable for the Lender to fund its Commitment Percentage of the relevant
Revolving Advance in the relevant Optional
25
<PAGE>
Currency during its Interest Period in the ordinary course of business in the
London interbank market; and/or (ii) the use of the proposed Optional Currency
might contravene any law or regulation, the Agent shall give notice to the
relevant Borrower and to the Lenders to that effect before 11:00 a.m. on that
day. In this event, (i) the relevant Borrower and the Lender may agree that the
drawdown will not be made; or (ii) (1) that Lender's Commitment Percentage of
the Revolving Advance (or, if more than one Lender is similarly affected, those
Lender's participation in the Revolving Advance) shall be treated as a separate
Advance denominated in Dollars during the relevant Interest Period; (2) in the
definition of "LIBOR" (insofar as it applies to that Revolving Advance) in
Section 1.1 (Definitions) there shall be substituted for the time "11.00 a.m."
the time "1.00 p.m.".
(c) Amount of Optional Currencies
(i) Drawdowns. If a Revolving Advance is to be drawn in an Optional
---------
Currency, the amount of each Lender's participation in that Revolving
Advance will be determined by converting into that Optional Currency the
Lender's participation in the Original Dollar Amount of that Revolving
Advance on the basis of the Agent's Spot Rate of Exchange two Business Days
before its date of borrowing.
(ii) Notification. The Agent shall notify the Lenders and the
------------
Borrower of Optional Currency amounts (and the applicable Agent's Spot Rate
of Exchange) promptly after they are ascertained.
(d) Change of Currency
------------------
(i) If more than one currency or currency unit are at the same time
recognized by the central bank of any country as the lawful currency
of that country, then:
(1) any reference in this Agreement or any other Agreement to, and
any obligations arising under this Agreement or any other
Agreement in, the currency of that county shall be translated
into, or paid in, the currency or currency unit of that country
designated by the Agent; and
(2) any translation from one currency or currency unit to another
shall be at the official rate of exchange recognized by the
central bank for the conversion of that currency or currency unit
into the other, rounded up or down by the Agent acting
reasonably.
(ii) If a change in any currency of a country occurs, this Agreement will
and each other Agreement shall be deemed to be amended to the extent
the Agent (having consulted with the Lenders) specifies it to be
necessary to reflect the change in currency and to put the Lenders in
the same position, so far as possible, that they would have been in if
no change in currency had occurred.
26
<PAGE>
2.5. Maximum Advances.
----------------
The (i) aggregate balance of U.S. Advances outstanding at any time to U.S.
Borrowers shall not exceed the U.S. Borrowing Base and (ii) the aggregate
balance of European Advances outstanding at any time to European Borrowers shall
not exceed the European Borrowing Base.
2.6. Repayment of Advances.
---------------------
(a) The Advances shall be due and payable in full on the last day of the
Term subject to earlier prepayment as herein provided.
(b) Borrowers recognize that the amounts evidenced by checks, notes,
drafts or any other items of payment relating to and/or proceeds of Collateral
may not be collectible by Agent on the date received. In consideration of
Agent's agreement to conditionally credit a Borrower's account as of the
Business Day on which Agent receives those items of payment, each Borrower
agrees that, in computing the charges under this Agreement, all items of payment
shall be deemed applied by Agent on account of such Borrower's Obligations one
(1) Business Day after receipt by Agent of good funds with respect to such items
of payment. Agent is not, however, required to credit any Borrower's account for
the amount of any item of payment which is unsatisfactory to Agent and Agent may
charge such Borrower's account for the amount of any item of payment which is
returned to Agent unpaid.
(c) Except as set forth in Section 2.7, all payments of principal,
interest and other amounts payable hereunder, or under any of the related
agreements shall be made to Agent at the Payment Office not later than 1:00 P.M.
New York Time) on the due date therefor in lawful money of the United States of
America in federal funds or other funds immediately available to Agent. Agent
shall have the right to effectuate payment on any and all Obligations due and
owing hereunder by charging the applicable Borrower's account or by making
Advances as provided in Section 2.2 hereof.
(d) Borrowers shall pay principal, interest, and all other amounts payable
hereunder, or under any related agreement, without any deduction whatsoever,
including, but not limited to, any deduction for any setoff or counterclaim.
2.7. Currency.
--------
(i) A repayment or prepayment of an Advance or any part of an
Advance is payable in the currency in which such Advance is
denominated on its due date.
(ii) Interest is payable in the currency in which the relevant amount
in respect of which it is payable is denominated.
(iii) Amounts payable in respect of costs, expenses and taxes and the
like are payable in the currency in which they are incurred.
27
<PAGE>
(iv) Any other amount payable under this Agreement is, except as
otherwise provided in this Agreement, payable in Dollars.
2.8. Statement of Account.
--------------------
Agent shall maintain, in accordance with its customary procedures, a loan
account in the name of each Borrower in which shall be recorded the date and
amount of each Advance made by Lenders and the date and amount of each payment
in respect thereof; provided, however, the failure by Agent to record the date
-------- -------
and amount of any Advance shall not adversely affect Agent or any Lender. Each
month, Agent shall send to Borrowing Agent a statement showing the accounting
for the Advances made, payments made or credited in respect thereof, and other
transactions between Lenders and each Borrower, during such month. The monthly
statements shall be deemed correct and binding upon Borrowers in the absence of
manifest error and shall constitute an account stated between Lenders and
Borrowers unless Agent receives a written statement of a Borrower's specific
exceptions thereto within thirty (30) days after such statement is received by
Borrowing Agent. The records of Agent with respect to the loan account shall be
prima facie evidence of the amounts of Advances and other charges thereto and of
- ----- -----
payments applicable thereto, absent manifest error.
2.9. Letters of Credit.
-----------------
(a) Subject to the terms and conditions hereof, (i) Agent shall issue or
cause the issuance of standby and documentary letters of credit for the U.S.
Borrowers ("U.S. Letters of Credit") provided, however, that Agent will not be
-------- -------
required to issue or cause to be issued U.S. Letters of Credit to the extent
that the face amount of such U.S. Letters of Credit plus Swingline Loans
----
outstanding plus the U.S. Revolving Advances outstanding (with the requested
----
U.S. Letter of Credit being deemed to be outstanding for purposes of this
calculation) would exceed the U.S. Borrowing Base and (ii) Agent shall issue or
cause the issuance of standby and documentary letters of credit for the European
Borrowers ("European Letters of Credit" and, together with the U.S. Letters of
Credit, "Letters of Credit") provided, however, that Agent will not be required
-------- -------
to issue or cause to be issued European Letters of Credit to the extent that the
face amount of such European Letters of Credit plus the European Revolving
----
Advances outstanding (with the requested European Letter of Credit being deemed
to be outstanding for purposes of this calculation) would exceed the European
Borrowing Base.
(b) The maximum amount of outstanding (i) U.S. Letters of Credit that are
standby letters of credit hereunder shall not exceed $5,000,000 in the aggregate
at any time, (ii) U.S. Letters of Credit that are documentary letters of credit
hereunder shall not exceed $2,000,000 in the aggregate at any time, (iii)
European Letters of Credit that are standby letters of credit hereunder shall
not exceed $5,000,000 in the aggregate at any time, and (iv) European Letters of
Credit that are documentary letters of credit hereunder shall not exceed
$2,000,000 in the aggregate at any time. Letters of Credit issued hereunder
shall not have an original expiry date more than one year from the date of
issuance or extension, nor an expiry date, whether as originally issued or by
extension, extending beyond the end of the Term.
28
<PAGE>
(c) (i) All disbursements or payments related to U.S. Letters of Credit
shall be deemed to be U.S. Revolving Advances and shall bear interest at
the Revolving Interest Rate for Domestic Rate Loans (unless and until
converted to a Eurodollar Rate Loan); and to the extent not drawn upon,
Letters of Credit that have not been drawn upon shall not bear interest.
U.S. Letters of Credit shall be subject to the terms and conditions set
forth in the Application and Agreement for Letter of Credit attached hereto
as Exhibit 2.9.
-----------
(ii) All disbursements or payments related to European Letters of
Credit shall be deemed to be European Revolving Advances and shall bear
interest at the Revolving Interest Rate for Domestic Rate Loans (unless and
until converted to a Eurodollar Rate Loan); and to the extent not drawn
upon, Letters of Credit that have not been drawn upon shall not bear
interest. European Letters of Credit shall be subject to the terms and
conditions set forth in the Application and Agreement for Letter of Credit
attached hereto as Exhibit 2.9.
-----------
2.10. Issuance of Letters of Credit.
-----------------------------
(a) Borrowing Agent on behalf of any Borrower may request Agent to issue
or cause the issuance of a Letter of Credit by delivering to Agent at the
Payment Office, Agent's standard form of Letter of Credit and Security Agreement
together with Bank's standard form of Letter of Credit Application
(collectively, the "Letter of Credit Application") completed to the satisfaction
of Agent; and, such other certificates, documents and other papers and
information as Agent may reasonably request.
(b) Each Letter of Credit shall, among other things, (i) provide for the
payment of sight drafts when presented for honor thereunder in accordance with
the terms thereof and when accompanied by the documents described therein and
(ii) have an expiry date not later than twelve (12) months after such Letter of
Credit's date of issuance and in no event later than the last day of the Term.
Each Letter of Credit Application and each Letter of Credit shall be subject to
the Uniform Customs and Practice for Documentary Credits (1993 Revision),
International Chamber of Commerce Publication No. 500) and any amendments or
revision thereof and, to the extent not inconsistent therewith, the laws of the
State of New York.
2.11. Requirements For Issuance of Letters of Credit.
----------------------------------------------
(a) In connection with the issuance of any Letter of Credit, (subject to
the limitations of the Cross-Guaranty set forth in Section 17.1 hereof)
Borrowers shall indemnify, save and hold Agent and each Lender harmless from any
loss, cost, expense or liability, including, without limitation, payments made
by Agent and any Lender, and expenses and reasonable attorneys' fees incurred by
Agent or any Lender arising out of, or in connection with, any Letter of Credit
to be issued or created for a Borrower. Borrowers shall be bound by Agent's or
any issuing or accepting bank's regulations and good faith interpretations of
any Letter of Credit issued or created for its account, although this
interpretation may be different from its own, and, neither Agent nor any Lender,
the bank which opened the Letter of Credit, nor any of its correspondents shall
be liable for any error, negligence, or mistakes, whether of omission or
commission, in
29
<PAGE>
following Borrowing Agent's or any Borrower's instructions or those contained in
any Letter of Credit or of any modifications, amendments or supplements thereto
or in issuing or paying any Letter of Credit, except for Agent's or any Lender's
or such correspondents' willful misconduct or gross (not mere) negligence.
(b) Borrowing Agent shall authorize and direct any bank which issues a
Letter of Credit to name the applicable Borrower as the "Account Party" therein
and to deliver to Agent all instruments, documents, and other writings and
property received by the bank pursuant to the Letter of Credit and to accept and
rely upon Agent's instructions and agreements with respect to all matters
arising in connection with the Letter of Credit, the application therefor or any
acceptance therefor.
(c) In connection with all Letters of Credit issued or caused to be issued
by Agent under this Agreement, each Borrower hereby appoints Agent, or its
designee, as its attorney, with full power and authority, (i) to sign and/or
endorse such Borrower's name upon any warehouse or other receipts, letter of
credit applications and acceptances; (ii) to sign such Borrower's name on bills
of lading; (iii) to clear Inventory through the United States of America Customs
Department ("Customs") in the name of such Borrower or Agent or Agent's
designee, and to sign and deliver to Customs officials powers of attorney in the
name of such Borrower for such purpose; and (iv) to complete in such Borrower's
name or Agent's, or in the name of Agent's designee, any order, sale or
transaction, obtain the necessary documents in connection therewith, and collect
the proceeds thereof. Neither Agent nor its attorneys will be liable for any
acts or omissions nor for any error of judgment or mistakes of fact or law,
except for Agent's or its attorney's willful misconduct or gross (not mere)
negligence. This power, being coupled with an interest, is irrevocable as long
as any Letters of Credit remain outstanding.
(d) Each Lender shall to the extent of the percentage amount equal to the
product of such Lender's Commitment Percentage times the aggregate amount of all
disbursements made with respect to the Letters of Credit be deemed to have
irrevocably purchased an undivided participation in each U.S. Revolving Advance,
in the case of U.S. Letters of Credit, and European Revolving Advance, in the
case of European Letters of Credit, made as a consequence of such disbursement.
In the event that at the time a disbursement is made the (i) unpaid balance of
U.S. Revolving Advances exceeds or would exceed, with the making of such
disbursement, the U.S. Borrowing Base minus (1) the undrawn or unreimbursed
-----
amount of outstanding U.S. Letters of Credit issued on behalf of the U.S.
Borrowers and (2) Swingline Loans outstanding, and such disbursement is not
reimbursed by U.S. Borrowers within two (2) Business Days or (ii) the unpaid
balance of European Revolving Advances exceeds or would exceed, with the making
of such disbursement, the European Borrowing Base minus the undrawn or
-----
unreimbursed amount of outstanding European Letters of Credit issued on behalf
of the European Borrowers, and such disbursement is not reimbursed by European
Borrowers within two (2) Business Days, Agent shall promptly notify each Lender
and upon Agent's demand each Lender shall pay to Agent such Lender's
proportionate share of such unreimbursed disbursement together with such
Lender's proportionate share of Agent's unreimbursed costs and expenses relating
to such unreimbursed disbursement. Upon receipt by Agent of a repayment from
Borrowers of any amount disbursed by Agent for which Agent had already been
reimbursed by the Lenders, Agent shall deliver to each of the Lenders that
Lender's pro rata share of such repayment. Each
30
<PAGE>
Lender's participation commitment shall continue until the last to occur of any
of the following events: (A) Agent ceases to be obligated to issue Letters of
Credit hereunder; (B) no Letter of Credit issued hereunder remains outstanding
and uncancelled or (C) all Persons (other than Borrowers) have been fully
reimbursed for all payments made under or relating to Letters of Credit.
2.12. Additional Payments.
-------------------
Any sums expended by Agent or any Lender due to any Borrower's failure to
perform or comply with its obligations under this Agreement or any Other
Document including, without limitation, any Borrower's obligations under
Sections 4.2, 4.4, 4.12, 4.13, 4.14 and 6.1 hereof, may be charged to such
Borrower's account as a Revolving Advance and added to the Obligations, provided
Agent shall promptly thereafter provide to Borrowing Agent a copy of
documentation supporting such charges.
2.13. Manner of Borrowing and Payment.
-------------------------------
(a) Each borrowing of Revolving Advances shall be advanced according to
the Commitment Percentages of the Lenders.
(b) Each payment (including each prepayment) by Borrowers on account of
the principal of and interest on the Revolving Advances, shall be applied to the
Revolving Advances pro rata according to the applicable Commitment Percentages
of the Lenders. Except as expressly provided herein, all payments (including
prepayments) to be made by Borrowers on account of principal, interest and fees
shall be made without set-off or counterclaim and shall be made to Agent on
behalf of the Lenders to the Payment Office, in each case on or prior to
1:00P.M., New York time, in Dollars and in immediately available funds.
(c) (i) Notwithstanding anything to the contrary contained in Sections
2.13(a) and (b) hereof, commencing with the first Business Day following the
Effective Date, each borrowing of Revolving Advances shall be advanced by Agent
and each payment by Borrowers on account of Revolving Advances shall be applied
first to those Revolving Advances made by Agent. On or before 1:00 P.M., New
York time, on each Settlement Date commencing with the first Settlement Date
following the Effective Date, Agent and the Lenders shall make certain payments
as follows: (I) if the aggregate amount of new Revolving Advances made by Agent
during the preceding Week exceeds the aggregate amount of repayments applied to
outstanding Revolving Advances during such preceding Week (if any), then each
Lender shall provide Agent with funds in an amount equal to its Commitment
Percentage of the difference between (w) such Revolving Advances and (x) such
repayments and (II) if the aggregate amount of repayments applied to outstanding
Revolving Advances during such Week exceeds the aggregate amount of new
Revolving Advances made during such Week, then Agent shall provide each Lender
with funds in an amount equal to its Commitment Percentage of the difference
between (y) such repayments and (z) such Revolving Advances.
(ii) Each Lender shall be entitled to earn interest at the applicable
Contract Rate on outstanding Advances which it has funded.
31
<PAGE>
(iii) Promptly following each Settlement Date, Agent shall submit to
each Lender a certificate with respect to payments received and Advances
made during the Week immediately preceding such Settlement Date. Such
certificate of Agent shall be conclusive in the absence of manifest error.
(d) If any Lender or any Transferee (a "benefitted Lender") shall at any
time receive any payment of all or part of its Advances, or interest thereon, or
receive any Collateral in respect thereof (whether voluntarily or involuntarily
or by set-off) in a greater proportion than any such payment to and Collateral
received by any other Lender, if any, in respect of such other Lender's
Advances, or interest thereon, and such greater proportionate payment or receipt
of Collateral is not expressly permitted hereunder, such benefitted Lender shall
purchase for cash from the other Lenders such portion of each such other
Lender's Advances, or shall provide such other Lender with the benefits of any
such Collateral, or the proceeds thereof as shall be necessary to cause such
benefitted Lender to share the excess payment or benefits of such Collateral or
proceeds ratably with each of the Lenders; provided, however, that if all or any
-------- -------
portion of such excess payment or benefits is thereafter recovered from such
benefitted Lender, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest Each
Lender so purchasing a portion of another Lender's Advances may exercise all
rights of payment (including, without limitation, rights of set-off) with
respect to such portion as fully as if such Lender were the direct holder of
such portion.
(e) Unless Agent shall have been notified by telephone, confirmed in
writing, by any Lender that such Lender will not make the amount which would
constitute its applicable Commitment Percentage of the Advances available to
Agent, Agent may (but shall not be obligated to) assume that such Lender shall
make such amount available to Agent and, in reliance upon such assumption, make
available to Borrowers a corresponding amount. Agent will promptly notify
Borrowing Agent of its receipt of any such notice from a Lender. If such amount
is made available to Agent on a date after a Settlement Date, such Lender shall
pay to Agent on demand an amount equal to the product of (i) the daily average
Federal Funds Rate (computed on the basis of a year of 360 days) during such
period as quoted by Agent, times (ii) such amount, times (iii) the number of
days from and including such Settlement Date to the date on which such amount
becomes immediately available to Agent. A certificate of Agent submitted to any
Lender with respect to any amounts owing under this paragraph (e) shall be
conclusive, in the absence of manifest error. If such amount is not in fact
made available to Agent by such Lender within three (3) Business Days after such
Settlement Date, Agent shall be entitled to recover such an amount, with
interest thereon at the domestic rate per annum then applicable to Revolving
Advances hereunder, on demand from Borrowers; provided, however, that Agent's
-------- -------
right to such recovery shall not prejudice or otherwise adversely affect any
Borrower's rights (if any) against such Lender.
(f) Notwithstanding anything to the contrary contained herein, in the
event any Lender (x) has refused (which refusal constitutes a breach by such
Lender of its obligations under this Agreement) to make available its Commitment
Percentage of any Advance or (y) notifies either Agent or Borrowers that it does
not intend to make available its Commitment Percentage of any Advance (if the
actual refusal would constitute a breach by such Lender of its
32
<PAGE>
obligations under this Agreement) (each, a "Lender Default"), all rights and
obligations hereunder of such Lender (a "Defaulting Lender") as to which a
Lender Default is in effect and of the other parties hereto shall be modified to
the extent of the express provisions of this Section 2.13(f) while such Lender
Default remains in effect.
(i) Revolving Advances shall be allocated pro rata among Lenders
--- ----
(the "Non-Defaulting Lenders") which are not Defaulting Lenders in
accordance with their respective Commitment Percentages, and no Commitment
Percentage of any Lender or any pro rata share of any Revolving Advances
--- ----
required to be advanced by any Lender shall be increased as a result of
such Lender Default. Amounts received in respect of principal of Advances
shall be applied to reduce Advances of each Lender pro rata based on the
--- ----
aggregate of the outstanding Advances of all Lenders at the time of such
application; provided that, such amount shall not be applied to any
Advances of a Defaulting Lender at any time when, and to the extent that,
the aggregate amount of Advances of any Lender that is not a Defaulting
Lender exceeds such Lender's Commitment Percentage of all Advances then
outstanding.
(ii) Lenders shall participate in Letters of Credit on the basis of
their respective pro rata shares, and no participation or reimbursement
--- ----
obligation of any Lender shall be increased as a result of a failure of any
Defaulting Lender to reimburse Agent with respect to any amounts drawn on
or otherwise payable with respect to any Letters of Credit (the amount that
any such Defaulting Lender has failed to reimburse is hereinafter referred
to as such Defaulting Lender's "Unreimbursed Amount"). Until such
Defaulting Lender has reimbursed Agent for any Unreimbursed Amount owed by
it, all payments and other amounts received from any source with respect to
the Obligations or otherwise under or in connection with this Agreement
(including any letter of credit fees) which would otherwise be payable to
such Defaulting Lender will instead be paid to Agent for application to
such Unreimbursed Amount until such Unreimbursed Amount has been paid in
full. A Defaulting Lender shall not be entitled to receive any portion of
the letter of credit fees or any other fees payable in connection with this
Agreement, or any indemnity arising from its agreement to make Revolving
Advances and/or participate in Letters of Credit hereunder.
(iii) A Defaulting Lender shall not be entitled to give instructions
to Agent or to approve, disapprove, consent to or vote on any matters
relating to this Agreement or the Other Documents. All amendments, waivers
and other modifications of this Agreement and the Other Documents may be
made without regard to a Defaulting Lender and, solely for purposes of the
definition of "Required Lenders", a Defaulting Lender shall be deemed not
to be a Lender and not to have Advances outstanding.
(iv) Other than as expressly set forth in this Section 2.13(f), the
rights and obligations of a Defaulting Lender (including the obligation to
indemnify Agent) and the other parties hereto shall remain unchanged.
Nothing in this Section 2.13(f) shall be deemed to release any Defaulting
Lender from its obligations under this Agreement or the Other Documents,
shall alter such obligations, shall operate as a waiver of any default by
such Defaulting Lender hereunder, or shall prejudice any rights which any
Borrower,
33
<PAGE>
Agent or any Lender may have against any Defaulting Lender as a result of
any default by such Defaulting Lender hereunder.
(v) In the event a Defaulting Lender retroactively cures, to the
satisfaction of Agent, the breach which caused such Lender to become a
Defaulting Lender, such Defaulting Lender shall no longer be a Defaulting
Lender and shall be treated as a Lender under this Agreement.
2.14. Swingline Loans.
---------------
(a) Swingline Commitment. Subject to the terms and conditions hereof and
--------------------
in reliance upon the representations and warranties herein set forth, the
Swingline Lender, in its individual capacity, agrees to make certain revolving
credit loans to the U.S. Borrowers (each a "Swingline Loan" and, collectively,
--------------
the "Swingline Loans") from time to time during the Term for the purposes
---------------
hereinafter set forth; provided, however, (i) the aggregate principal amount of
-------- -------
Swingline Loans outstanding at any time shall not exceed FIVE MILLION DOLLARS
("$5,000,000) (the "Swingline Committed Amount"), and (ii) the aggregate
--------------------------
principal amount of all U.S. Revolving Advances outstanding at any time plus
----
U.S. Letters of Credit plus the requested Swingline Loan shall not exceed the
----
U.S. Borrowing Base. Swingline Loans hereunder shall be made as Domestic Rate
Loans as the U.S. Borrowers may request in accordance with the provisions of
this Section 2.14, and may be repaid and reborrowed in accordance with the
provisions hereof.
(b) Swingline Loan Advances.
-----------------------
(i) Notices; Disbursement. By no later than 1:00 p.m. (New York
---------------------
time) on the Business Day of the requested Swingline Loan advance, one or
more of the U.S. Borrowers shall submit a written Swingline Loan Request in
the form of Exhibit 2.14(b)(i) to the Agent setting forth (A) that a
-----------------
Swingline Loan advance is requested, (B) the date of the requested
Swingline Loan advance (which shall be a Business Day) and (C) the
principal amount of the Swingline Loan advance requested. Each such notice
shall be irrevocable. Each Swingline Loan shall be made as a Domestic Rate
Loan and shall have such maturity date as the Swingline Lender and the
applicable Borrower shall agree upon receipt by the Swingline Lender of any
such Swingline Loan Request. The Swingline Lender shall initiate the
transfer of funds representing the Swingline Loan advance to the applicable
U.S. Borrower by 12:00 noon (New York time) on the Business Day of the
requested borrowing.
(ii) Minimum Amount. Each Swingline Loan shall be in a minimum
--------------
principal amount of $100,000 and in integral multiples of $100,000 in
excess thereof (or the remaining amount of the Swingline Committed Amount,
if less).
(iii) Repayment of Swingline Loans. The principal amount of all
----------------------------
Swingline Loans shall be due and payable on the earlier of (A) the maturity
date agreed to by the Swingline Lender and the applicable U.S. Borrower
with respect to such Loan or (B) the last day of the Term. The Swingline
Lender may, upon the occurrence of any Default or Event of Default, in its
sole discretion, by written notice to the Borrowing Agent and the Lenders,
demand repayment of its Swingline Loans by way of a U.S. Revolving Advance,
in which case the U.S. Borrowers shall be deemed to have requested an
advance comprised solely of
34
<PAGE>
Domestic Rate Loans in the amount of such Swingline Loans; provided,
--------
however, that any such demand shall be deemed to have been given one
-------
Business Day prior to the expiration of the Term and on the date of the
occurrence of any Event of Default described in Section 10.1 and upon
acceleration of the indebtedness hereunder and the exercise of remedies in
accordance with the provisions of Section 11.1 provided, further that the
--------
Lenders shall have no obligation to make a U.S. Revolving Advance to repay
an outstanding Swingline Loan, if such Swingline Loan was made to a
Borrower during the occurrence or continuance of a Default or Event of
Default. Upon notice from the Agent each Lender hereby
irrevocably agrees to make its pro rata share of each such U.S. Revolving
Advance in the amount, in the manner and on the date specified in the
preceding sentence notwithstanding (I) the amount of such borrowing may not
---------------
comply with the minimum amount for U.S. Revolving Advances otherwise
required hereunder, (II) whether any conditions specified in Section 8.2
are then satisfied, (III) whether a Default or Event of Default then
exists, (IV) failure of any such request or deemed request for U.S.
Revolving Advances to be made by the time otherwise required hereunder, (V)
whether the date of such borrowing is a date on which U.S. Revolving
Advances are otherwise permitted to be made hereunder of (VI) any
termination of the commitments relating thereto immediately prior to or
contemporaneously with such borrowing. In the event that any U.S.
Revolving Advance cannot for any reason be made on the date otherwise
required above (including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code with respect to any
one of the Borrowers), then each Lender hereby agrees that it shall
forthwith purchase (as of the date such borrowing would otherwise have
occurred, but adjusted for any payments received from the U.S. Borrowers on
or after such date and prior to such purchase) from the Swingline Lender
such participations in the outstanding Swingline Loans as shall be
necessary to cause each such Lender to share in such Swingline Loans
ratably based upon its Commitment Percentage (determined before giving
effect to any termination of the commitments hereunder pursuant to Section
11.1), provided that (A) all interest payable on the Swingline Loans shall
--------
be for the account of the Swingline Lender until the date as of which the
respective participation is purchased and (B) at the time any purchase of
participations pursuant to this sentence is actually made, the purchasing
Lender shall be required to pay to the Swingline Lender, interest on the
principal amount of participation purchased for each day from and including
the day upon which such borrowing would otherwise have occurred to but
excluding the date of payment for such participation, at the rate equal to
the Federal Funds Rate.
(c) Interest on Swingline Loans.
---------------------------
(i) Subject to the provisions of Section 3.1, each Swingline Loan
shall bear interest at a per annum rate equal to the Alternate Base
Rate plus the Applicable Percentage.
----
(ii) Interest on Swingline Loans shall be payable in arrears in
accordance with Section 3.1 hereof (or at such other times as may be
specified herein).
(d) Swingline Note. The Swingline Loans shall be evidenced by a duly
--------------
executed promissory note of the U.S. Borrowers to the Swingline Lender in
substantially the form of Exhibit 2.14(d).
---------------
35
<PAGE>
2.15. Utilization of Advances in Optional Currencies.
----------------------------------------------
The Agent will determine the Original Dollar Amount with respect to any (i)
Advance that is requested in an Optional Currency as of the requested borrowing
date and as of any requested continuation date and (ii) outstanding Advances
denominated in Optional Currencies as of the last Business Day of each month,
and, during the occurrence and continuation of an Event of Default, such other
dates as may be requested by the Required Lenders (but in no event more
frequently than once a week) (each such date under clause (i) and (ii), a
"Determination Date").
- -------------------
III INTEREST AND FEES.
-----------------
3.1. Interest.
--------
Interest on Advances shall be payable in arrears on the last day of each
month with respect to Domestic Rate Loans and, with respect to Eurodollar Rate
Loans, at the end of each Interest Period or, for Eurodollar Rate Loans with an
Interest Period in excess of three months, at the earlier of (a) the last day of
each three month period from the date of the commencement of such Eurodollar
Rate Loan or (b) the end of the Interest Period. Interest charges shall be
computed on the actual principal of Advances outstanding during the month (the
"Monthly Advances") at a rate per annum equal to the applicable Contract Rate.
Whenever, subsequent to the date of this Agreement, the Alternate Base Rate is
increased or decreased, the applicable Contract Rate with respect to Domestic
Rate Loans shall be similarly changed without notice or demand of any kind by an
amount equal to the amount of such change in the Alternate Base Rate during the
time such change or changes remain in effect. Upon and after the occurrence of
an Event of Default, and during the continuation thereof, the Obligations shall
bear interest at the applicable Revolving Interest Rate plus two (2%) percent
per annum (the "Default Rate"). So long as no Default or Event of Default shall
have occurred and be continuing, the Applicable Margin shall be increased or
decreased, as the case may be, as of the first day of each month following the
fiscal quarter reported upon in the financial statements delivered pursuant to
Sections 9.8 and 9.9 hereof, commencing with fiscal quarter ending September 24,
1999, based upon the ratio of Funded Indebtedness to EBITDA with respect to the
four (4) fiscal quarters then ended as reported upon in the applicable financial
statements.
3.2. Letter of Credit Fees.
---------------------
Borrowers shall pay Agent (i) for the ratable benefit of the Lenders for
issuing or causing the issuance of a Standby Letter of Credit, a fee computed at
a rate per annum of one and three quarters percent (1.75%) on the outstanding
amount thereof from time to time, (ii) for the ratable benefit of the Lenders
for issuing or causing the issuance of a Documentary Letter of Credit, a fee
computed at a rate per annum of one and one half percent (1.50%) of the original
and each increase in the face amount thereof, (iii) for its own account, a
letter of credit fronting and negotiation fee of .125% per annum on the maximum
amount available to be drawn under each Letter of Credit, payable upon the
issuance of each such Letter of Credit, and (iv) Bank's other customary charges
payable in connection with Letters of Credit as in effect from time to time
36
<PAGE>
(which charges shall be furnished to Borrowers by Agent upon request). Such fees
and charges shall be payable in the case of any Letter of Credit, on its opening
monthly thereafter in advance and upon each increase in the outstanding amount
thereof. Any such charge in effect at the time of a particular transaction shall
be the charge for that transaction, notwithstanding any subsequent change in
Bank's prevailing charges for that type of transaction. All Letter of Credit
Fees payable hereunder shall be deemed earned in full on the date when the same
are due and payable hereunder and shall not be subject to rebate or proration
upon the termination of this Agreement for any reason.
3.3. Fees.
----
(a) Intentionally Omitted.
(b) Facility Fee.
If, for any month during the Term, the average daily unpaid balance of
the Revolving Advances for each day of such month plus outstanding Letters
----
of Credit does not equal the Maximum Loan Amount (any outstanding Swingline
Loans being considered unused for this purpose) then Borrowers shall pay to
Agent for the ratable benefit of the Lenders a fee at a rate equal to the
Applicable Margin for Facility Fee per annum on the amount by which the
Maximum Loan Amount exceeds such average daily unpaid balance plus
outstanding Letters of Credit. Such fee shall be payable to Agent in
arrears on the last day of each month and on the last day of the Term. So
long as no Default or Event of Default shall have occurred and be
continuing, the Applicable Margin with respect to the facility fee shall be
increased or decreased, as the case may be, as of the first day of each
month following the fiscal quarter reported upon in the financial
statements delivered pursuant to Sections 9.8 and 9.9 hereof, commencing
with fiscal quarter ending September 24, 1999, based upon the ratio of
Funded Indebtedness to EBITDA with respect to the four (4) fiscal quarters
then ended as reported upon in the applicable financial statements.
(c) Agency Fee.
Borrower shall pay to Agent (for the sole benefit of Agent) an agency fee
of $40,000 per annum payable to Agent on the Effective Date and on each
anniversary date thereafter during the Term. The agency fee shall be deemed
earned in full on the date when same is due and payable hereunder and shall not
be subject to rebate or proration upon termination of this Agreement for any
reason.
37
<PAGE>
3.4. Collateral Monitoring Fee.
-------------------------
Borrower shall pay to Agent (for the sole benefit of Agent) on the first
day of each month following any month in which Agent performs any collateral
monitoring - namely any field examination, collateral analysis or other business
analysis, the need for which is to be determined by Agent and which monitoring
is undertaken by Agent or for Agent's benefit - a collateral monitoring fee in
an amount equal to $750 per day for each person performing such monitoring, plus
all costs and disbursements incurred by Agent in the performance of such
examination or analysis.
3.5. Computation of Interest and Fees.
--------------------------------
Interest and fees hereunder shall be computed on the basis of a year of 360
days and for the actual number of days elapsed. If any payment to be made
hereunder becomes due and payable on a day other than a Business Day, the due
date thereof shall be extended to the next succeeding Business Day and interest
thereon shall be payable at the applicable Contract Rate during such extension.
3.6. Maximum Charges.
---------------
In no event whatsoever shall interest and other charges charged hereunder
exceed the highest rate permissible under law which a court of competent
jurisdiction shall, in a final determination, deem applicable hereto. In the
event that a court determines that Agent or any Lender has received interest and
other charges hereunder in excess of the highest rate permissible hereto, such
excess amount shall be first applied to any unpaid principal balance owed by
Borrowers, and if the then remaining excess amount is greater than the
previously unpaid principal balance, the Lenders shall promptly refund such
excess amount to Borrowers and the provisions hereof shall be deemed amended to
provide for such permissible rate.
3.7. Increased Costs.
---------------
In the event that any applicable law, treaty or governmental regulation, or
any change therein or in the interpretation or application thereof or compliance
by any Lender (for purposes of this Section 3.7, the term "Lender" shall include
Agent or any Lender and any corporation or bank controlling Agent or any Lender)
and the office or branch where Agent or any Lender (as so defined) makes or
maintains any Eurodollar Rate Loans with any request or directive (whether or
not having the force of law) from any central bank or other financial, monetary
or other authority, shall:
(a) subject Agent or any Lender to any tax of any kind whatsoever with
respect to this Agreement or any Eurodollar Rate Loan or change the basis of
taxation of payments to Agent or any Lender of principal, fees, interest or any
other amount payable hereunder or under any Other Documents (except for changes
in the rate of tax on the overall net income of Agent or any Lender by the
jurisdiction in which it maintains its principal office);
38
<PAGE>
(b) change the currency of a country, impose, modify or hold applicable any
reserve, special deposit, assessment or similar requirement against assets held
by, or deposits in or for the account of, advances or loans by, or other credit
extended by, any office of Agent or any Lender, including (without limitation)
pursuant to Regulation D of the Board of Governors of the Federal Reserve
System; or
(c) impose on Agent or any Lender or the London interbank Eurodollar market
any other condition with respect to this Agreement, any Other Documents or any
Eurodollar Rate Loan;
and the result of any of the foregoing is to increase the cost to Agent or
Lender of making, renewing or maintaining its Advances hereunder by an amount
that Agent or such Lender deems to be material or to reduce the amount of any
payment (whether of principal, interest or otherwise) in respect of any of the
Advances by an amount that Agent or such Lender deems to be material, then, in
any case Borrowers shall promptly pay Agent or such Lender, upon its demand,
such additional amount as will compensate Agent or such Lender for such
additional cost or such reduction, as the case may be, provided that the
foregoing shall not apply to increased costs which are reflected in the
Alternate Base Rate or the Eurodollar Rate, as the case may be. Agent or such
Lender shall certify the amount of such additional cost or reduced amount to
Borrowing Agent, and such certification shall be conclusive absent manifest
error.
3.8. Basis For Determining Interest Rate Inadequate or Unfair.
--------------------------------------------------------
In the event that Agent or any Lender shall have determined that:
(a) reasonable means do not exist for ascertaining the Eurodollar Rate for
any Interest Period; or
(b) Dollar deposits in the relevant amount and for the relevant maturity
are not available in the London interbank Eurodollar market, with respect to an
outstanding Eurodollar Rate Loan, a proposed Eurodollar Rate Loan, or a proposed
conversion of a Domestic Rate Loan into a Eurodollar Rate Loan;
Agent shall give Borrowing Agent prompt written, telephonic or telegraphic
notice of such determination. If such notice is given, (i) any such requested
Eurodollar Rate Loan shall be made as a Domestic Rate Loan, unless Borrowing
Agent shall notify Agent no later than 10:00 a.m. (New York City time) two (2)
Business Days prior to the date of such proposed borrowing, that its request for
such borrowing shall be cancelled or made as an unaffected type of Eurodollar
Rate Loan, (ii) any Domestic Rate Loan or Eurodollar Rate Loan which was to have
been converted to an affected type of Eurodollar Rate Loan shall be continued as
or converted into a Domestic Rate Loan, or, if Borrowing Agent shall notify
Agent, no later than 10:00 a.m. New York City time) two (2) Business Days prior
to the proposed conversion, shall be maintained as an unaffected type of
Eurodollar Rate Loan, and (iii) any outstanding affected Eurodollar Rate Loans
shall be converted into a Domestic Rate Loan, or, if Borrowing Agent shall
notify Agent, no later than 10:00 a.m. New York City time) two (2) Business Days
prior to the last Business Day of the then current Interest Period applicable to
such affected Eurodollar Rate Loan, shall be
39
<PAGE>
converted into an unaffected type of Eurodollar Rate Loan, on the last Business
Day of the then current Interest Period for such affected Eurodollar Rate Loans.
Until such notice has been withdrawn, the Lenders shall have no obligation to
make an affected type of Eurodollar Rate Loan or maintain outstanding affected
Eurodollar Rate Loans and no Borrower shall have the right to convert a Domestic
Rate Loan or an unaffected type of Eurodollar Rate Loan into an affected type of
Eurodollar Rate Loan.
3.9. Capital Adequacy.
----------------
(a) In the event that Agent or any Lender shall have determined that any
applicable law, rule, regulation or guideline regarding capital adequacy, or any
change therein, or any change in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by Agent or any Lender
(for purposes of this Section 3.9, the term "Lender" shall include Agent or any
Lender and any corporation or bank controlling Agent or any Lender) and the
office or branch where Agent or any Lender (as so defined) makes or maintains
any Eurodollar Rate Loans with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on Agent or any Lender's capital as a consequence of its obligations
hereunder to a level below that which Agent or such Lender could have achieved
but for such adoption, change or compliance (taking into consideration Agent's
and each Lender's policies with respect to capital adequacy) by an amount deemed
by Agent or any Lender to be material, then, from time to time, Borrowers shall
pay upon demand to Agent or such Lender such additional amount or amounts as
will compensate Agent or such Lender for such reduction. In determining such
amount or amounts, Agent or such Lender may use any reasonable averaging or
attribution methods. The protection of this Section 3.9 shall be available to
Agent and each Lender regardless of any possible contention of invalidity or
inapplicability with respect to the applicable law, regulation or condition.
(b) A certificate of Agent or such Lender setting forth such amount or
amounts as shall be necessary to compensate Agent or such Lender with respect to
Section 3.9(a) hereof when delivered to Borrowers shall be conclusive absent
manifest error.
IV. COLLATERAL; GENERAL TERMS.
-------------------------
For the purpose of this Article IV, references herein to the "Agent" shall
be deemed to mean "the Agent, for the ratable benefit of the Lenders".
4.1. Acknowledgement and Grant of Security Interests.
-----------------------------------------------
(a) Each Borrower hereby acknowledges, confirms and agrees that Agent for
the ratable benefit of Lenders has and shall continue to have a lien upon and
security interest in all Collateral heretofore granted to Agent pursuant to the
Existing Loan Agreement and the European Security Documents to secure the U.S.
Obligations, in the case of the U.S. Borrowers and the European Obligations, in
the case of the European Borrowers and, to the extent not otherwise granted
thereunder or under the Other Documents or otherwise granted to or held by
40
<PAGE>
Agent. Each Borrower hereby pledges and assigns to Agent for the ratable
benefit of Lenders and grants to Agent for the ratable benefit of Lenders a
continuing security interest to secure the U.S. Obligations, in the case of the
U.S. Borrowers and the European Obligations, in the case of the European
Borrowers in all of such Borrower's Collateral, wherever located, whether in any
Borrower's possession or in the possession and control of a third party for any
Borrower's or Agent's or any Lender's account. All of each Borrower's ledger
sheets, files, records, books of account, business papers and documents relating
to the Collateral shall, until delivered to or removed by Agent, be kept by such
Borrower in trust for Agent for the ratable benefit of Lenders.
(b) The liens and security interests of Agent for the ratable benefit of
Lenders in the Collateral shall be deemed to be continuously perfected from the
earliest date of the granting of such liens and security interests, whether
hereunder, under the Other Documents, or under the Existing Loan Agreement.
(c) Anything else herein to the contrary notwithstanding the Lenders and
the Agent acknowledge that the U.S. Collateral is granted as security only for
the U.S. Obligations and the European Collateral is granted as security only for
the European Obligations.
4.2. Perfection of Security Interest.
-------------------------------
Each Borrower shall take all action that may be necessary or desirable, or
that Agent may request, so as at all times to maintain the validity, perfection,
enforceability and priority of Agent's security interest for the ratable benefit
of the Lenders in the Collateral or to enable Agent to protect, exercise or
enforce its rights hereunder and in the Collateral, including, but not limited
to (i) immediately discharging all Liens other than Permitted Encumbrances, (ii)
obtaining landlords' or mortgagees' lien waivers, (iii) delivering to Agent,
endorsed or accompanied by such instruments of assignment as Agent may specify,
and stamping or marking, in such manner as Agent may specify, any and all
chattel paper, instruments, letters of credits and advices thereof and documents
evidencing or forming a part of the Collateral, (iv) entering into warehousing,
lockbox and other custodial arrangements satisfactory to Agent, and (v)
executing and delivering financing statements, instruments of pledge, mortgages,
notices and assignments, in each case in form and substance satisfactory to the
Required Lenders, relating to the creation, validity, perfection, maintenance or
continuation of Agent's security interest for the ratable benefit of the Lenders
under the Uniform Commercial Code or other applicable law. Agent is hereby
authorized to file financing statements covering the Collateral signed by Agent
instead of Borrower in accordance with Section 9-402(2) of the Uniform
Commercial Code as adopted in the State of New York. All charges, expenses and
fees Agent may incur in doing any of the foregoing, and any local taxes relating
thereto, shall be charged to Borrower's account as a Revolving Advance and added
to (i) the U.S. Obligations, with respect to charges, expenses and fees related
to the U.S. Borrowers, or (ii) the European Obligations with respect to charges,
expenses and fees related to the European Borrowers or, at the Agent's option,
shall be paid to Agent for the ratable benefit of the Lenders immediately upon
demand.
41
<PAGE>
4.3. Disposition of Collateral.
-------------------------
Each Borrower will safeguard and protect all Collateral granted by such
Borrower for Agent's general account and make no disposition thereof whether by
sale, lease or otherwise except the sale of Inventory in the ordinary course of
business.
4.4 Preservation of Collateral.
--------------------------
Following the occurrence and during the continuance of an Event of Default,
in addition to the rights and remedies set forth in Section 11.1 hereof, Agent:
(a) may at any time take such steps as Agent deems necessary to protect Agent's
and Lenders' interest in and to preserve the Collateral,\\ including the hiring
of such security guards or the placing of other security protection measures as
Agent may deem appropriate; (b) may employ and maintain at any Borrower's
premises a custodian who shall have full authority to do all acts necessary to
protect Agent's and Lenders' interests in the Collateral; (c) may lease
warehouse facilities to which Agent may move all or part of the Collateral; (d)
may use any Borrower's owned or leased lifts, hoists, trucks and other
facilities or equipment for handling or removing the Collateral; and (e) shall
have, and is hereby granted, a right of ingress and egress to the places where
the Collateral is located, and may proceed over and through any Borrower's owned
or leased property. Each Borrower shall cooperate fully with all of Agent's
efforts to preserve the Collateral and will take such actions to preserve the
Collateral as Agent may direct. All of Agent's expenses of preserving the
Collateral, including any expenses relating to the bonding of a custodian, shall
be charged (i) to the European Borrowers' accounts as a European Revolving
Advance, in the case of Collateral of a European Borrower and (ii) to the U.S.
Borrowers' accounts as a U.S. Revolving Advance in the case of Collateral of a
U.S. Borrower; each in such manner as Agent deems appropriate and added to the
U.S. Obligations, in the case of the U.S. Borrowers or the European Obligations,
in the case of the European Borrowers.
4.5. Ownership of Collateral.
-----------------------
With respect to the Collateral, at the time the Collateral becomes subject
to Agent's security interest for its benefit and for the ratable benefit of the
Lenders: (a) each Borrower shall be the sole owner of and fully authorized and
able to sell, transfer, pledge and/or grant a first security interest in each
and every item of the Collateral to Agent for its benefit and for the ratable
benefit of the Lenders; and, except for Permitted Encumbrances the Collateral
shall be free and clear of all Liens and encumbrances whatsoever; (b) each
document and agreement executed by each Borrower or delivered to Agent or any
Lender in connection with this Agreement shall be true and correct in all
respects; (c) all signatures and endorsements of each Borrower that appear on
such documents and agreements shall be genuine and each Borrower shall have full
capacity to execute same; and (d) each Borrower's Inventory shall be located as
set forth on Schedule 4.5 and shall not be removed from such location(s) without
------------
the prior written consent of Agent except with respect to the sale of Inventory
in the ordinary course of business.
42
<PAGE>
4.6. Defense of Agent's and Lender's Interests.
-----------------------------------------
Until (a) payment and performance in full of all of the U.S. Obligations,
in the case of the U.S. Borrowers or the European Obligations, in the case of
the European Borrowers and (b) termination of this Agreement, Agent's and
Lenders' interests in the Collateral shall continue in full force and effect.
During such period no Borrower shall, without Required Lenders' prior written
consent, pledge, sell (except Inventory in the ordinary course of business),
assign, transfer, create or suffer to exist a Lien upon or encumber or allow or
suffer to be encumbered in any way except for Permitted Encumbrances, any part
of such Borrower's Collateral. Each Borrower shall defend Agent and Lenders'
interests in such Borrower's Collateral against any and all persons whatsoever.
At any time following the occurrence and during the continuance of an Event of
Default and a demand by Agent for payment of all Obligations, Agent shall have
the right to take possession of the indicia of the Collateral and the Collateral
in whatever physical form contained, including without limitation: labels,
stationery, documents, instruments and advertising materials. If Agent exercises
this right to take possession of the Collateral, each Borrower shall, upon
demand, assemble the Collateral provided by it in the best manner possible and
make it available to Agent at a place reasonably convenient to Agent. In
addition, with respect to all Collateral, Agent and the Lenders shall be
entitled to all of the rights and remedies set forth herein and further provided
by the Uniform Commercial Code or other applicable law. Each Borrower shall, and
Agent may, at its option, instruct all suppliers, carriers, forwarders,
warehouses or others receiving or holding cash, checks, Inventory, documents or
instruments in which Agent holds a security interest for its benefit and for the
ratable benefit of the Lenders to deliver same to Agent and/or subject to
Agent's order and if they shall come into any Borrower's possession, they, and
each of them, shall be held by Borrower in trust as Agent's trustee, and such
Borrower, as the case may be, will immediately deliver them to Agent in their
original form together with any necessary endorsement.
4.7. Books and Records.
-----------------
Each Borrower (a) shall keep proper books of record and account in which
full, true and correct entries will be made of all dealings or transactions of
or in relation to its business and affairs; (b) set up on its books accruals
with respect to all taxes, assessments, charges, levies and claims; and (c) on a
reasonably current basis set up on its books, from its earnings, allowances
against doubtful Receivables as the case may be, advances and investments and
all other proper accruals (including without limitation by reason of
enumeration, accruals for premiums, if any, due on required payments and
accruals for depreciation, obsolescence, or amortization of properties), which
should be set aside from such earnings in connection with its business. All
determinations pursuant to this subsection shall be made in accordance with, or
as required by, GAAP consistently applied in the opinion of such independent
public accountant as shall then be regularly engaged by Borrowers.
4.8. Financial Disclosure.
--------------------
Each Borrower hereby irrevocably authorizes and directs all accountants and
auditors employed by Borrowers at any time during the Term to exhibit and
deliver to Agent and each Lender copies of any Borrower's financial statements,
trial balances or other accounting records
43
<PAGE>
of any sort in the accountant's or auditor's possession, and to disclose to
Agent and each Lender any information such accountants may have concerning any
Borrower's financial status and business operations. Each Borrower hereby
authorizes all federal, state and municipal authorities to furnish to Agent and
each Lender copies of reports or examinations relating to Borrowers, whether
made by a Borrower or otherwise; however, Agent and each Lender will attempt to
obtain such information or materials directly from Borrowers, as the case may
be, prior to obtaining such information or materials from such accountants or
such authorities.
4.9. Compliance with Laws.
--------------------
Each Borrower shall comply in all material respects with all acts, rules,
regulations and orders of any legislative, administrative or judicial body or
official applicable to the Collateral or any part thereof or to the operation of
such Borrower's business the noncompliance with which could have a Material
Adverse Effect on such Borrower. Each Borrower may, however, contest or dispute
any acts, rules, regulations, orders and directions of those bodies or officials
in any reasonable manner, provided that any related lien is inchoate or stayed
and sufficient reserves are established to the reasonable satisfaction of the
Lenders to protect Agent's Lien on or security interest in the Collateral. The
Collateral at all times shall be maintained in accordance with the requirements
of all insurance carriers which provide insurance with respect to the Collateral
so that such insurance shall remain in full force and effect.
4.10. Inspection of Premises.
----------------------
At all reasonable times Agent and each Lender shall have full access to and
the right to audit, check, inspect and make abstracts and copies from any
Borrower's books, records, audits, correspondence and all other papers relating
to the Collateral and the operation of their respective businesses. Agent, any
Lender and their agents may enter upon any Borrower's premises at any time
during business hours and at any other reasonable time, and from time to time
without prior notice, for the purpose of inspecting the Collateral and any and
all records pertaining thereto and the operation of their respective businesses.
4.11. Insurance.
---------
Each Borrower shall bear the full risk of any loss of any nature whatsoever
with respect to the Collateral. At Borrowers' own cost and expense in amounts
and with carriers acceptable to Agent, each Borrower shall (a) keep all
insurable properties and properties in which it has an interest insured against
the hazards of fire, flood, sprinkler leakage, those hazards covered by extended
coverage insurance and such other hazards, and for such amounts, as is customary
in the case of companies engaged in similar businesses including, without
limitation, business interruption insurance; (b) maintain a bond in such amounts
as is customary in the case of companies engaged in similar businesses insuring
against larceny, embezzlement or other criminal misappropriation of insured's
officers and employees who may either singly or jointly with others at any time
have access to the assets or funds of Borrowers either directly or through
authority to draw upon such funds or to direct generally the disposition of such
assets; (c) maintain public and product liability insurance against claims for
personal injury, death or property damage suffered by others; (d) maintain all
such worker's compensation or similar
44
<PAGE>
insurance as may be required under the laws of any state or jurisdiction in
which it is engaged in business; (e) furnish Agent with (i) copies of all
policies and evidence of the maintenance of such policies by the renewal thereof
at least thirty (30) days before any expiration date, and (ii) appropriate loss
payable endorsements in form and substance satisfactory to Agent, naming Agent
as a co-insured and loss payee as its interests may appear with respect to all
insurance coverage referred to in clauses (a) and (b) above, and providing (A)
that all proceeds thereunder in excess of $100,000 shall be payable to Agent for
the ratable benefit of the Lenders, (B) no such insurance shall be affected by
any act or neglect of the insured or owner of the property described in such
policy, and (C) that such policy and loss payable clauses may not be cancelled,
amended or terminated unless at least thirty (30) days' prior written notice is
given to Agent. In the event of any loss thereunder, the carriers named therein
hereby are directed by Agent or any Borrower to make payment for such loss in
excess of $100,000 to Agent and not to a Borrower and Agent jointly. If any
insurance losses are paid by check, draft or other instrument payable to a
Borrower and Agent jointly, Agent may endorse such Borrower's name thereon and
do such other things as Agent may deem advisable to reduce the same to cash.
Agent is hereby authorized to adjust and compromise claims under insurance
coverage referred to in clauses (a) and (b) above. All loss recoveries received
by Agent upon any such insurance related to U.S. Collateral may be applied to
the U.S. Obligations and all loss recoveries received by Agent upon any such
insurance related to the European Collateral may be applied to the European
Obligations, in such order as Agent in its sole discretion shall determine;
provided, upon any Borrower's request such proceeds shall be disbursed to such
- --------
Borrower for the restoration of damaged property if such proceeds together with
other amounts provided by such Borrower are sufficient to fully restore such
property to its condition prior to the casualty loss. Any surplus shall be paid
by Agent to Borrowers or applied as may be otherwise required by law. Any
deficiency thereon shall be paid by Borrowers, to Agent, on demand.
4.12. Failure to Pay Insurance.
------------------------
If any Borrower shall fail to obtain insurance as hereinabove provided, or
to keep the same in force, Agent, if Agent so elects, may obtain such insurance
and pay the premium therefor for such Borrower's account, and charge such
Borrower's account therefor and such expenses so paid shall be part of the U.S.
Obligations, in the case of a U.S. Borrower and the European Obligations, in the
case of a European Borrower, provided Agent shall promptly thereafter provide to
such Borrower documentation supporting such charges.
4.13. Payment of Taxes.
----------------
Each Borrower will pay, when due, all taxes, assessments and other Charges
lawfully levied or assessed upon any Borrower or any of the Collateral
including, without limitation, real and personal property taxes, assessments and
charges and all franchise, income, employment, social security benefits,
withholding, and sales taxes. If any tax by any governmental authority is or
may be imposed on or as a result of any transaction between any Borrower and
Agent or any Lender which Agent or any Lender may be required to withhold or pay
or if any taxes, assessments, or other Charges remain unpaid after the date
fixed for their payment, or if any claim shall be made which, in Agent's or
Lender's opinion, may possibly create a valid Lien on the Collateral, Agent may
without notice to such Borrower pay the taxes, assessments or other
45
<PAGE>
Charges and Borrowers hereby indemnify and hold Agent and each Lender harmless
in respect thereof. The amount of any payment by Agent under this Section 4.13
shall be charged to the applicable Borrower's accounts as a Revolving Advance
and added to the U.S. Obligations in the case of a U.S. Borrower or the European
Obligations, in the case of a European Borrower and, until a Borrower shall
furnish Agent with an indemnity therefor (or supply Agent with evidence
satisfactory to Agent that due provision for the payment thereof has been made),
Agent may hold without interest any balance standing to any Borrower's credit
and Agent shall retain its security interest in any and all Collateral held by
Agent.
4.14. Payment of Leasehold Obligations.
--------------------------------
Each Borrower shall at all times pay, when and as due, its rental
obligations under all leases under which it is a tenant, and shall otherwise
comply, in all material respects, with all other terms of such leases and keep
them in full force and effect and, at Agent's request, will provide evidence of
having done so.
4.15. Receivables.
-----------
(a) Nature of Receivables. Each of the Receivables shall be a bona
---------------------
fide and valid account representing a bona fide indebtedness incurred by the
Customer therein named, for a fixed sum as set forth in the invoice relating
thereto provided immaterial or unintentional invoice errors shall not be deemed
to be a breach hereof) with respect to an absolute sale or lease and delivery of
goods upon stated terms of such Borrower, or work, labor or services theretofore
rendered by Borrower as of the date each Receivable is created. Same shall be
due and owing in accordance with such Borrower's standard terms of sale without
dispute, setoff or counterclaim except as may be stated on the accounts
receivable schedules delivered by Borrowers to Agent.
(b) Solvency of Customers. Each Customer of each Borrower, to the
---------------------
best of such Borrower's knowledge, as of the date each Receivable is created, is
and will be solvent and able to pay all Receivables on which the Customer is
obligated in full when due or with respect to such Customers of such Borrower
who are not solvent such Borrower has set up on its books and in its financial
records bad debt reserves adequate to cover such Receivables.
(c) Locations of Borrower. Each Borrower's chief executive office
---------------------
and the office at which each maintains its books and records pertaining to
Receivables is the address set forth on Schedule 4.15(c) hereto. Until written
----------------
notice is given to Agent by Borrowing Agent of any other office at which it
keeps its records pertaining to Receivables all such records shall be kept at
such offices.
(d) Collection of Receivables. Until a Borrower's authority to do so
-------------------------
is terminated by Agent (which notice Agent may give at any time following the
occurrence of an Event of Default or a Default), such Borrower will, at its sole
cost and expense, but on Agent's behalf and for Agent's account, collect as
Agent's property and in trust for Agent all amounts received on Receivables of
such Borrower, and shall not commingle such collections with its respective
funds or use the same except to pay Obligations. Each Borrower shall, upon
request, deliver to Agent or the Blocked Account in original form and on the
date of receipt thereof, all
46
<PAGE>
checks, drafts, notes, money orders, acceptances, cash and other evidences of
Indebtedness received by such Borrower.
(e) Notification of Assignment of Receivables. At any time following
-----------------------------------------
the occurrence and during the continuance of an Event of Default or a Default,
Agent shall have the right to send notice of the assignment of, and Agent's
security interest in, the Receivables of the U.S. Borrowers to any and all
Customers or any third party holding or otherwise concerned with any of the
Collateral of the U.S. Borrowers. Thereafter, Agent shall have the sole right
to collect the Receivables of the U.S. Borrowers, take possession of the
Collateral of the U.S. Borrowers, or both, for the ratable benefit of the
Lenders, to be applied, in the case of U.S. Collateral, to the U.S. Obligations.
Agent's actual collection expenses, including, but not limited to, stationery
and postage, telephone and telegraph, secretarial and clerical expenses and the
salaries of any collection personnel used for collection, may be charged to
Borrower's accounts and added to the U.S. Obligations, in the case of the U.S.
Borrowers or the European Obligations, in the case of the European Borrower.
(f) Power of Agent to Act on Borrowers' Behalf. Agent shall have the
------------------------------------------
right to receive, endorse, assign and/or deliver in the name of Agent, or any
Borrower any and all checks, drafts and other instruments for the payment of
money relating to the Receivables of the U.S. Borrowers, and Borrower hereby
waives notice of presentment, protest and non-payment of any instrument so
endorsed. Each Borrower hereby constitutes Agent or Agents designee as its
respective attorney with power (A) at any time following the occurrence and
during the continuance of an Event of Default hereunder (i) to endorse its name
upon any notes, acceptances, checks, drafts, money orders or other evidences of
payment or Collateral of the U.S. Borrowers; (ii) to sign its name on any
invoice or bill of lading relating to any of the Receivables of the U.S.
Borrowers, drafts against Customers or assignments of Receivables of the U.S.
Borrowers; (iii) to demand payment of the Receivables of the U.S. Borrowers;
(iv) to enforce payment of the Receivables of the U.S. Borrowers by legal
proceedings or otherwise; (v) to exercise all of its rights and remedies with
respect to the collection of the Receivables of the U.S. Borrowers and any other
Collateral of the U.S. Borrowers; (vi) to settle, adjust, compromise, extend
or renew the Receivables of the U.S. Borrowers; (vii) to settle, adjust or
compromise any legal proceedings brought to collect Receivables of the U.S.
Borrowers; (viii) to prepare, file and sign its name on a proof of claim in
bankruptcy or similar document against any Customer; (ix) to prepare, file and
sign its name on any notice of Lien, assignment or satisfaction of Lien or
similar document in connection with the Receivables of the U.S. Borrowers; and
(B) at any time (i) to send verifications of Receivables of the U.S. Borrowers
to any Customer; (ii) to sign its name on all financing statements or any other
documents or instruments deemed necessary or appropriate by Agent to preserve,
protect, or perfect Agent's interest in the Collateral and to file same; (iii)
to do all other acts and things necessary to carry out this Agreement. All acts
of said attorney or designee are hereby ratified and approved, and said attorney
or designee shall not be liable for any acts of omission or commission nor for
any error of judgment or mistake of fact or of law, unless done maliciously or
with gross (not mere) negligence; this power being coupled with an interest is
irrevocable while any of the Obligations remain unpaid. Agent shall have the
right at any time following the occurrence and during the continuance of an
Event of Default, to change the address for delivery of mail addressed to any
Borrower to such address as Agent may designate.
47
<PAGE>
(g) No Liability. Neither Agent nor any Lender shall, under any
------------
circumstances or in any event whatsoever, have any liability for any error or
omission or delay of any kind occurring in the settlement, collection or payment
of any of the Receivables of the U.S. Borrowers or any instrument received in
payment thereof, or for any damage resulting therefrom. Following the
occurrence and during the continuance of an Event of Default Agent may, without
notice or consent from any Borrower, sue upon or otherwise collect, extend the
time of payment of, compromise or settle for cash, credit or upon any terms any
of the Receivables of the U.S. Borrowers or any other securities, instruments or
insurance applicable thereto and/or release any obligor thereof. Agent is
authorized and empowered to accept following the occurrence and during the
continuance of an Event of Default the return of the goods represented by any of
the Receivables of the U.S. Borrowers, without notice to or consent by any
Borrower, all without discharging or in any way affecting the Obligations
hereunder.
(h) Establishment of a Lockbox Account, Dominion Account. All
----------------------------------------------------
proceeds of U.S. Collateral shall, at the direction of Agent, be deposited by
U.S. Borrowers into a lockbox account, dominion account or such other "blocked
account" ("Blocked Accounts") as Agent may require pursuant to an arrangement
with such bank(s) as may be selected by U.S. Borrowers and be acceptable to
Agent. U.S. Unless as otherwise may be required at any time by Agent, for the
benefit of the Lenders, Borrowers may transfer any such funds so deposited into
the Blocked Accounts to one or more operating accounts designated by the
Borrowers to be used for general corporate purpose. Agent assumes no
responsibility for such "blocked account" arrangement including, without
limitation, any claim of accord and satisfaction or release with respect to
deposits accepted by any bank thereunder. Alternatively, Agent may establish
depository accounts ("Depository Accounts") in the name of Agent at a bank or
banks for the deposit of such funds and Borrowers shall deposit all proceeds of
Collateral or cause same to be deposited, in kind, in such Depository Accounts
of Agent in lieu of depositing same to the Blocked Accounts.
(i) Adjustments. No Borrower will, without Agent's consent,
-----------
compromise or adjust any Receivables (or extend the time for payment thereof) or
accept any material returns of merchandise or grant any additional discounts,
allowances or credits thereon except for those compromises, adjustments,
returns, discounts, credits and allowances as have been heretofore customary in
the business of such Borrower, as the case may be.
4.16. Inventory.
---------
All Inventory has been, and will be, produced by U.S. Borrowers with the
Federal Fair Labor Standards Act of 1938 (to the extent applicable to such
Borrower), as amended, and all rules, regulations and orders thereunder.
4.17. Intentionally Omitted.
---------------------
48
<PAGE>
4.18. Exculpation of Liability.
------------------------
Nothing herein contained shall be construed to constitute Agent or any
Lender as any Borrower's agent for any purpose whatsoever, nor shall Agent or
any Lender be responsible or liable for any shortage, discrepancy, damage, loss
or destruction of any part of the Collateral wherever the same may be located
and regardless of the cause thereof, unless such shortage, discrepancy, damage,
loss or destruction results from the gross (not mere) negligence or willful
misconduct of Agent or Lenders. Neither Agent nor any Lender, whether by
anything herein or in any assignment or otherwise, assume any Borrower's
obligations under any contract or agreement assigned to Agent or such Lender,
and neither Agent nor any Lender shall be responsible in any way for the
performance by any Borrower of any of the terms and conditions thereof.
4.19. Environmental Matters.
---------------------
(a) Borrowers will ensure that all real property owned or occupied
by Borrowers remains in compliance in all material respects with all
Environmental Laws and they will not place or permit to be placed any Hazardous
Substances on any such property except as not prohibited by applicable law or
appropriate governmental authorities.
(b) Borrowers will establish and maintain a system to assure and
monitor continued compliance with all applicable Environmental Laws which system
shall include periodic reviews of such compliance.
(c) Promptly upon the written request of Agent from time to time,
Borrowers shall provide Agent, at Borrowers' expense, with an environmental site
assessment or environmental audit report prepared by an environmental
engineering firm acceptable in the reasonable opinion of Agent, to assess with a
reasonable degree of certainty the existence of a Hazardous Discharge and the
potential costs in connection with abatement, cleanup and removal of any
Hazardous Substances found on, under, at or within any real property owned or
occupied by a Borrower. Any report or investigation of such Hazardous Discharge
proposed and acceptable to an appropriate Authority that is charged to oversee
the clean-up of such Hazardous Discharge (an "Authority") shall be acceptable to
Agent. If such estimates, individually or in the aggregate, exceed $100,000,
Agent shall have the right to require Borrowers to post a bond, letter of credit
or other security reasonably satisfactory to Agent to secure payment of these
costs and expenses.
(d) Each Borrower shall defend and indemnify Agent and the Lenders
and hold Agent, the Lenders and their respective employees, agents, directors
and officers harmless from and against all loss, liability, damage and expense,
claims, costs, fines and penalties, including attorney's fees, suffered or
incurred by Agent or the Lenders under or on account of any Environmental Laws,
including, without limitation, the assertion of any lien thereunder, with
respect to any Hazardous Discharge, the presence of any Hazardous Substances,
whether or not the same originates or emerges from any real property owned or
occupied by such Borrower or any contiguous real estate, except to the extent
such loss, liability, damage and expense is attributable to any Hazardous
Discharge resulting from actions on the part of Agent or any
49
<PAGE>
Lender. Each Borrower's obligations under this Section 4.19 shall arise upon the
discovery of the presence of any Hazardous Substances at any real property owned
or occupied by such Borrower, whether or not any federal, state, or local
environmental agency has taken or threatened any action in connection with the
presence of any Hazardous Substances. Borrowers obligations and the
indemnifications hereunder shall survive the termination of this Agreement.
(e) For purposes of Sections 4.19 and 5.7, all references to any
real property owned or occupied by a Borrower shall be deemed to include all of
such Borrower's right, title and interest in and to its owned and leased
premises.
4.20. Financing Statements.
--------------------
Except as respects the financing statements filed by Agent and the
financing statements described on Schedule 4.20, no financing statement covering
-------------
any of the Collateral or any proceeds thereof is on file in any public office.
4.21. ThermiSol Sweden.
----------------
(a) Thermisol Sweden shall not, where the distribution restrictions
in the provisions of Chapter 12 Section 2 of the Swedish Companies Act
(Aktiebolagslagen (1975:1385)) apply in relation to the guarantee given by it
hereunder, in each case taking into account the extent to which any commercial
benefit is derived by it in giving such guarantee, assume any liability as a
guarantor in respect of any European Obligations owing by a European Borrower
under or in connection with this Agreement or the Security Documents to the
extent that the obligations and liabilities of Thermisol Sweden in respect
thereof would exceed an amount equal to the lesser of:
(i) the amount of distributable reserves according to its last
audited and adopted balance sheet as at the date hereof; and
(ii) an amount being available for distribution by it under Chapter
12 Section 2 second paragraph of the aforementioned Swedish
Companies Act.
(b) The provision of Section 4.21 also applies to:
(i) any undertaking by Thermisol Sweden that is stated to be joint
and several in nature;
(ii) any indemnity given by Thermisol Sweden for the benefit of any
other Borrower; and
(iii) any undertaking as a primary obligor of obligations not
corresponding to the benefit derived by the company.
50
<PAGE>
V. REPRESENTATIONS AND WARRANTIES.
------------------------------
Each Borrower represents and warrants as follows:
5.1. Authority.
---------
It has full power, authority and legal right to enter into this Agreement
and the Other Documents and perform its respective Obligations hereunder and
thereunder. The execution, delivery and performance hereof and of the Other
Documents (a) are within its respective corporate powers, have been duly
authorized, are not in contravention of law or the terms of any Borrower's by-
laws, certificate of incorporation or other applicable documents relating to the
formation or conduct of its respective business or of any material agreement or
undertaking to which it is a party or by which it is bound, and (b) will not
conflict with nor result in any breach in any of the provisions of or constitute
a default under or result in the creation of any Lien except Permitted
Encumbrances upon any of its respective assets under the provisions of any
agreement, charter document, instrument, by-law, or other instrument to which it
or its property is a party or by which it may be bound.
5.2. Formation and Qualification.
---------------------------
(a) Each is duly formed and in good standing under the laws of its
state or other jurisdiction of incorporation or formation and is qualified to do
business and is in good standing in the states or other jurisdictions listed on
Schedule 5.2(a) which constitute all states in which qualification and good
- ---------------
standing are necessary for each to conduct its business and own its property and
where the failure to so qualify could have a Material Adverse Effect. Each
Borrower has delivered to Agent true and complete copies of its certificate of
incorporation and/or by-laws and each will promptly notify Agent of any
amendment or changes thereto.
(b) The only Subsidiaries of Borrowers are listed on Schedule 5.2(b).
---------------
5.3. Survival of Representations and Warranties.
------------------------------------------
All representations and warranties of each Borrower contained in this
Agreement and the Other Documents shall be true at the time of the execution of
this Agreement and the Other Documents, and shall survive the execution,
delivery and acceptance thereof by the parties thereto and the closing of the
transactions described therein or related thereto.
5.4. Tax Returns.
-----------
Each U.S. Borrower's federal tax identification number is set forth on
Schedule 5.4. Borrowers have each filed all federal, state and local tax
- ------------
returns and other reports it is required by law to file and has paid all taxes,
assessments, fees and other governmental charges that are due and payable. The
provision for taxes on the books of Borrowers are adequate for all years not
closed by applicable statutes, and for its current fiscal year, and no Borrower
has any knowledge of any deficiency or additional assessment in connection
therewith not provided for on its books.
51
<PAGE>
5.5. Financial Statements.
--------------------
(a) The balance sheet of Radnor on a Consolidated Basis as of December
27, 1998 and the related statements of income, changes in stockholder's equity,
and changes in cash flow for the period ended on such date, furnished to Agent
and the Lenders on or prior to the Effective Date, are accurate, complete and
correct and fairly reflect in all material respects the financial condition of
Radnor on a Consolidated Basis as of December 27, 1998, and have been prepared
in accordance with GAAP, consistently applied. Such financial statements have
been certified as accurate, complete and correct in all material respects by the
Chief Financial Officer of Radnor. All financial statements referred to in this
subsection 5.5(a), including the related schedules and notes thereto, have been
prepared, in accordance with GAAP, except as may be disclosed in such financial
statements.
(b) The twelve-month cash flow projections of Radnor on a Consolidated
Basis, copies of which have been previously submitted to Agent and the Lenders
(the "Projections") were prepared by the Chief Financial Officer of each
Borrower, are based on underlying assumptions which provide a reasonable basis
for the projections contained therein and reflect such Borrower's judgment based
on present circumstances of the most likely set of conditions and course of
action for the projected period.
(c) The balance sheets of each Borrower as of September 24, 1999, and
the related statements of income, changes in stockholder's equity, and changes
in cash flow for the period ended on such date, which have been delivered to
Agent, have been prepared in accordance with GAAP, consistently applied and
present fairly in all material respects the financial position of each Borrower
at such date and the results of their operations for such period. Since
September 24, 1999 there has been no change in the condition, financial or
otherwise, of any Borrower as shown on the balance sheets as of such date,
except changes in the ordinary course of business, none of which individually or
in the aggregate has caused a Material Adverse Effect.
5.6. Corporate Name.
--------------
No Borrower has been known by any other corporate name in the past five
years and does not sell Inventory under any other name except as set forth on
Schedule 5.6, nor has any Borrower been the surviving entity of a merger or
- ------------
consolidation or acquired all or substantially all of the assets of any Person
during the preceding five (5) years, except for (i) the dissolution of WinCup
L.P., (ii) the acquisition of certain assets of WinCup L.P. from James River and
WinCup, (iii) the acquisition of stock of Radnor Chemical pursuant to the
Acquisition Agreement, (iv) the acquisition by Radnor of the limited partnership
interest of James River in WinCup L.P., (v) the contribution of El Campo assets
to WinCup Texas, (vi) the transfer of Minton assets to WinCup Texas, (vii) the
acquisition of the assets of Neste Oy's polystyrene business, and (viii) the
purchase of the stock of Epsilevy Oy by ThermiSol Finland.
52
<PAGE>
5.7. O.S.H.A. and Environmental Compliance.
-------------------------------------
Except as disclosed in the Phase I and Phase II environmental reports
prepared by Dames & Moore and Conestoga Rovers & Associates and delivered to
Agent on or before the Effective Date:
(a) Each Borrower has duly complied in all material respects with, and
the facilities, business, assets, property and leaseholds of each are in
compliance in all material respects with, the provisions of the Federal
Occupational Safety and Health Act, the Environmental Protection Act, RCRA and
all other Environmental Laws (to the extent applicable); there have been no
outstanding citations, notices or orders of material non-compliance issued to a
Borrower or relating to its business, assets, property, leaseholds or equipment
under any such laws, rules or regulations.
(b) Each Borrower has been issued all required federal, state and
local licenses, certificates or permits relating to all applicable Environmental
Laws.
(c) Except as set forth on Schedule 5.7, there are no visible signs of
------------
releases, spills, discharges, leaks or disposal (collectively referred to as
"Releases") of Hazardous Substances at, upon, under or within any Borrower's
premises; (i) there are no underground storage tanks or polychlorinated
biphenyls on any Borrower's premises; (ii) none of any Borrower's premises have
ever been used as a treatment, storage or disposal facility of Hazardous Waste;
and (iii) no Hazardous Substances are present on any Borrower's premises,
excepting such quantities as are handled in accordance with all applicable
manufacturer's instructions and governmental regulations and in proper storage
containers and as are necessary for the operation of the commercial business of
any Borrower or its tenants.
5.8. Solvency: No Litigation, Violation, Indebtedness or Default.
-----------------------------------------------------------
(a) Each Borrower is solvent, able to pay its respective debts as they
mature, has capital sufficient to carry on its respective business and all
businesses in which it is about to engage, and (i) as of the Effective Date,
the fair present saleable value of its assets, calculated on a going concern
basis, is in excess of the amount of its liabilities and (ii) subsequent to the
Effective Date, the fair saleable value of its assets (calculated on a going
concern basis) will be in excess of the amount of its liabilities.
(b) Except as disclosed in Schedule 5.8(b) or the Pro Forma Financial
--------------
Statements, no Borrower has (i) any pending or threatened litigation,
arbitration, actions or proceedings which involve the possibility of having a
Material Adverse Effect on such Borrower or on its ability to perform this
Agreement, and (ii) any liabilities nor indebtedness other than the Obligations.
(c) No Borrower is in violation of any applicable statute, regulation
or ordinance in any respect which could have a Material Adverse Effect on such
Borrower and no Borrower is in violation of any order of any court, governmental
authority or arbitration board or tribunal which could have a Material Adverse
Effect on such Borrower.
53
<PAGE>
(d) No U.S. Borrower nor any member of the Controlled Group maintains
or contributes to any Plan other than those listed on Schedule 5.8(d) hereto.
---------------
Except as set forth in Schedule 5.8(d), (i) no Plan has incurred any
---------------
"accumulated funding deficiency," as defined in Section 302(a)(2) of ERISA and
Section 412(a) of the Code, whether or not waived, and each Borrower and each
member of the Controlled Group has met all applicable minimum funding
requirements under Section 302 of ERISA in respect of each Plan, (ii) each Plan
which is intended to be a qualified plan under Section 401(a) of the Code as
currently in effect has been determined by the Internal Revenue Service to be
qualified under Section 401(a) of the Code and the trust related thereto is
exempt from federal income tax under Section 501(a) of the Code, (iii) no
Borrower nor any member of the Controlled Group has incurred any liability to
the PBGC other than for the payment of premiums, and there are no premium
payments which have become due which are unpaid, (iv) no Plan has been
terminated by the plan administrator thereof nor by the PBGC, and there is no
occurrence which would cause the PBGC to institute proceedings under Title IV of
ERISA to terminate any Plan, (v) at this time, the current value of the assets
of each Plan exceeds the present value of the accrued benefits and other
liabilities of such Plan and no Borrower nor any member of the Controlled Group
knows of any facts or circumstances which would materially change the value of
such assets and accrued benefits and other liabilities, (vi) no Borrower nor any
member of the Controlled Group has breached any of the responsibilities,
obligations or duties imposed on it by ERISA with respect to any Plan, (vii) no
Borrower nor any member of a Controlled Group has incurred any liability for any
excise tax arising under Section 4972 or 4980B of the Code, and no fact exists
which could give rise to any such liability, (viii) no Borrower nor any member
of the Controlled Group nor any fiduciary of, nor any trustee to, any Plan, has
engaged in a "prohibited transaction" described in Section 406 of the ERISA or
Section 4975 of the Code nor taken any action which would constitute or result
in a Termination Event with respect to any such Plan which is subject to ERISA,
(ix) Borrower and each member of the Controlled Group has made all contributions
due and payable with respect to each Plan, (x) there exists no event described
in Section 4043(b) of ERISA, for which the thirty (30) day notice period
contained in 29 CFR (S)2615.3 has not been waived, (xi) no Borrower nor any
member of the Controlled Group has any fiduciary responsibility for investments
with respect to any plan existing for the benefit of persons other than
employees or former employees of Borrowers and any member of the Controlled
Group, and (xii) no Borrower nor any member of the Controlled Group has
withdrawn, completely or partially, from any Multiemployer Plan so as to incur
liability under the Multiemployer Pension Plan Amendments Act of 1980.
5.9. Patents, Trademarks, Copyrights and Licenses.
--------------------------------------------
All patents, patent applications, trademarks, trademark applications,
service marks, service mark applications, copyrights, copyright applications,
design rights, tradenames, assumed names, trade secrets and licenses owned or
utilized by any Borrower are set forth on Schedule 5.9, are valid and have been
------------
duly registered or filed with all appropriate governmental authorities and
constitute all of the intellectual property rights which are necessary for the
operation of its business; there is no objection to or pending challenge to the
validity of any such material patent, trademark, copyright, design rights
tradename, trade secret or license and Borrower is not aware of any grounds for
any challenge, except as set forth in Schedule 5.9
------------
54
<PAGE>
hereto. Each patent, patent application, patent license, trademark, trademark
application, trademark license, service mark, service mark application, service
mark license, copyright, copyright application and copyright license owned or
held by any Borrower and all trade secrets used by any Borrower consist of
original material or property developed by such Borrower or was lawfully
acquired by such Borrower from the proper and lawful owner thereof Each of such
items has been maintained so as to preserve the value thereof from the date of
creation or acquisition thereof With respect to all software used by any
Borrower, such Borrower is in possession of all source and object codes related
to each piece of software or is the beneficiary of a source code escrow
agreement, each such source code escrow agreement being listed on Schedule 5.9
------------
hereto.
5.10. Licenses and Permits.
--------------------
Except as set forth in Schedule 5.10, each Borrower (a) is in compliance
-------------
with and (b) has procured and is now in possession of, all material licenses or
permits required by any applicable federal, state or local law or regulation for
the operation of its business in each jurisdiction wherein it is now conducting
or proposes to conduct business and where the failure to procure such licenses
or permits could have a Material Adverse Effect.
5.11. Default of Indebtedness.
-----------------------
No Borrower is in default in the payment of the principal of or interest on
any Indebtedness or under any instrument or agreement under or subject to which
any Indebtedness has been issued and no event has occurred under the provisions
of any such instrument or agreement which with or without the lapse of time or
the giving of notice, or both, constitutes or would constitute an event of
default thereunder.
5.12. No Default.
----------
No Borrower is in default in the payment or performance of any of its
material contractual obligations and no Default has occurred.
5.13. No Burdensome Restrictions.
--------------------------
No Borrower is party to any contract or agreement the performance of which
could have a Material Adverse Effect. No Borrower has agreed or consented to
cause or permit in the future (upon the happening of a contingency or otherwise)
any of its property, whether now owned or hereafter acquired, to be subject to a
Lien which is not a Permitted Encumbrance.
5.14. No Labor Disputes.
-----------------
No Borrower is involved in any labor dispute; there are no strikes or
walkouts or union organization of any Borrower's employees threatened or in
existence and no labor contract is scheduled to expire during the Term other
than as set forth on Schedule 5.14 hereto.
-------------
55
<PAGE>
5.15. Margin Regulations.
------------------
No Borrower is engaged, nor will either of them engage, principally or as
one of its important activities, in the business of extending credit for the
purpose of "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U or Regulation G of the
Board of Governors of the Federal Reserve System as now and from time to time
hereafter in effect. No part of the proceeds of any Advance win be used for
"purchasing" or "carrying" "margin stock" as defined in Regulation U of such
Board of Governors.
5.16. Investment Company Act.
----------------------
No Borrower is an "investment company" registered or required to be
registered under the Investment Company Act of 1940, as amended, nor is either
entity controlled by such a company.
5.17. Disclosure.
----------
No representation or warranty made by any Borrower in this Agreement or in
any financial statement, report, certificate or any other document furnished in
connection herewith or therewith contains any untrue statement of a material
fact or omits to state any material fact necessary to make the statements herein
or therein not misleading.
5.18. Intentionally Omitted.
---------------------
5.19. Swaps.
-----
No Borrower is a party to, nor will it be a party to, any swap agreement
whereby such Borrower has agreed or will agree to swap interest rates or
currencies unless same provides that damages upon termination following an event
of default thereunder are payable on an unlimited "two-way basis" without regard
to fault on the part of either party.
5.20. Conflicting Agreements.
----------------------
No provision of any mortgage, indenture, contract, agreement, judgment,
decree or order binding on any Borrower or affecting the Collateral conflicts
with, or requires any Consent which has not already been obtained to, or would
in any way prevent the execution, delivery or performance of the terms of this
Agreement or the Other Documents.
5.21. Application of Certain Laws and Regulations.
-------------------------------------------
No Borrower nor any Affiliate of any Borrower is subject to any statute,
rule or regulation which regulates the incurrence of any Indebtedness, including
without limitation, statutes or regulations relative to common or interstate
carriers or to the sale of electricity, gas, steam, water, telephone, telegraph
or other public utility services.
56
<PAGE>
5.22. Business and Property of Borrowers.
----------------------------------
Upon and after the Effective Date, Borrowers propose to engage
substantially only in the business of manufacturing and/or distributing
polystyrene beads, disposable products sold to or through the food service
industry and insulation and protective packaging products and activities
necessary to conduct the foregoing. On the Effective Date, each Borrower will
own all the property and possess all of the rights and Consents necessary for
the conduct of its business.
5.23. Acquisition.
-----------
Each Borrower has acquired all of its assets and property in accordance
with all applicable statutes and laws, such property is free and clear of all
Liens other than Permitted Encumbrances.
5.24. Year 2000 Matters.
-----------------
Any reprogramming required to permit the proper functioning, in and
following the year 2000, of (i) any Borrower's computer system and (ii)
equipment containing embedded microchips (including systems and equipment
supplied by others or with which any Borrower's systems interface) and the
testing of all such systems and equipment, as so reprogrammed, will be completed
within such period of time as is required to avoid the occurrence of a Material
Adverse Effect as a result of the failure to complete such reprogramming. The
cost to the Borrower of such reprogramming and testing and of the reasonably
foreseeable consequences of year 2000 to the Borrowers (including, without
limitation, reprogramming errors and the failure of others' systems or
equipment) will not result in a Material Adverse Effect.
VI. AFFIRMATIVE COVENANTS.
----------------------
Each Borrower shall, until payment in full of the Obligations and
termination of this Agreement:
6.1. Payment of Fees.
---------------
Pay to Agent on demand all usual and customary fees and expenses which
Agent incurs in connection with (a) the forwarding of Advance proceeds and (b)
the establishment and maintenance of any Blocked Accounts or Depository Accounts
as provided for in Section 4.15(h). Agent may, without making demand, charge
the accounts of Borrowers for all such fees and expenses, provided Agent shall
promptly thereafter provide Borrowing Agent with copies of supporting
documentation.
6.2. Conduct of Business and Maintenance of Existence and Assets.
-----------------------------------------------------------
(a) Conduct continuously and operate actively its business according to
good business practices and maintain all of its properties useful or necessary
in its business in good working order and condition (reasonable wear and tear
excepted and except as may be disposed of in accordance with the terms of this
Agreement), including, without limitation, all licenses, patents,
57
<PAGE>
copyrights, design rights, tradenames, trade secrets and trademarks and take all
actions necessary to enforce and protect the validity of any intellectual
property right or other right included in the Collateral; (b) keep in full force
and effect its existence and comply in all material respects with the laws and
regulations governing the conduct of its business; and (c) make all such reports
and pay all such franchise and other taxes and license fees and do all such
other acts and things as may be lawfully required to maintain its rights,
licenses, leases, powers and franchises under the laws of the United States or
any political subdivision thereof.
6.3. Violations.
Promptly notify Agent in writing of any violation of any law, statute,
regulation or ordinance of any Governmental Body, or of any agency thereof,
applicable to any Borrower which may have a Material Adverse Effect on any
Borrower.
6.4. Government Receivables.
----------------------
Take all steps necessary to protect Agent's and Lenders' interest in the
Collateral under the Federal Assignment of Claims Act or other applicable state
or local statutes or ordinances and deliver to Agent appropriately endorsed, any
instrument or chattel paper connected with any arising out of contracts between
any Borrower and the United States, any state or any department, agency or
instrumentality of any of them.
6.5. Net Worth.
----------
Cause to be maintained Net Worth in an amount not less than the amounts set
forth below as of the dates set forth below:
Date Amount
---- ------
12-31-99 $ 9,000,000
12-31-00 $10,000,000
12-31-01 $10,000,000
6.6. Current Ratio.
-------------
Cause to be maintained a ratio of Current Assets to Current Liabilities of
not less than 1.00 to 1.00 at the end of each fiscal quarter.
6.7. Fixed Charge Coverage.
---------------------
Cause to be maintained a Fixed Charge Coverage for Radnor on a Consolidated
Basis to be equal to or greater than 1.00 to 1.00 as at the end of each fiscal
quarter for the most recent four fiscal quarters then ended.
58
<PAGE>
6.8. Interest Coverage.
-----------------
Cause to be maintained an Interest Coverage for Radnor on a Consolidated
Basis equal to or greater than 1.25 to 1.00 as at the end of each fiscal quarter
for the most recent four fiscal quarters then ended.
6.9. Net Income.
----------
Achieve Net Income (excluding non-cash extraordinary items and the non-
recurring charge for discontinued operations recognized in fiscal 1999 in
connection with the 1995 disposition of assets) of at least $1 in each fiscal
year for Radnor on a Consolidated Basis.
6.10. Funded Indebtedness to EBITDA Ratio.
-----------------------------------
Cause to be maintained a ratio of Funded Indebtedness to EBITDA for Radnor
on a Consolidated Basis equal to or less than the respective ratios set forth
below as at the end of each fiscal quarter ending during the respective periods
set forth below for the most recent four fiscal quarters then ended:
Maximum Ratio of
Period Funded Indebtedness to EBITDA
------ -----------------------------
3/31/2000 through 9/30/2000 6.00 to 1.0
12/31/2000 through 9/30/2001 5.25 to 1.0
12/31/2001 and thereafter 4.00 to 1.0
6.11. Execution of Supplemental Instruments.
-------------------------------------
Execute and deliver to Agent from time to time, upon demand, such
supplemental agreements, statements, assignments and transfers, or instructions
or documents relating to the Collateral, and such other instruments as Agent may
request, in order that the full intent of this Agreement may be carried into
effect.
6.12. Payment of Indebtedness.
-----------------------
Pay, discharge or otherwise satisfy at or before maturity (subject, where
applicable, to specified grace periods and, in the case of the trade payables,
to normal payment practices) all its material obligations and liabilities of
whatever nature, except when the amount or validity thereof is currently being
contested in good faith by appropriate proceedings and each Borrower shall have
provided for such reserves as Agent may reasonably deem proper and necessary,
subject at all times to any applicable subordination arrangement in favor of
Agent and the Lenders.
6.13. Standards of Financial Statements.
---------------------------------
Cause all financial statements referred to in Sections 9.7, 9.8, 9.9, 9.10,
9.11 and 9.12 as to those to which GAAP is applicable to be complete and correct
in all material respects (subject,
59
<PAGE>
in the case of interim financial statements, to normal year-end audit
adjustments) and to be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein (except as
concurred in by such reporting accountants or officer, as the case may be, and
disclosed therein).
6.14. Exercise of Rights.
------------------
Enforce all of its rights under the Acquisition Agreement and all documents
executed in connection therewith including, but not limited to, all
indemnification rights and pursue all remedies available to it with diligence
and in good faith in connection with the enforcement of any such rights.
6.15. Landlord Waivers; Bailee Letters.
--------------------------------
Not later than sixty (60) days following the Effective Date, Borrowers
shall deliver either (a) acknowledgements from each landlord or bailee that
executed a landlord's waiver or bailee letter, respectively, in favor of Agent
acknowledging the continuing effectiveness of such landlord's waiver or bailee
letter or (b) assignments of such previously executed landlord's waivers and
bailee letters in favor of the Agent, in each case as reasonably required by the
Agent and in form and substance satisfactory to the Agent.
VII. NEGATIVE COVENANTS.
------------------
No Borrower (or in the case of Section 7.16 only, no U.S. Borrower) shall,
until satisfaction in full of the Obligations and termination of this Agreement:
7.1. Merger, Consolidation, Acquisition and Sale of Assets.
-----------------------------------------------------
(a) 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.
(b) Sell, lease, transfer or otherwise dispose of all or any material
part of its properties or assets, except in the ordinary course of its business.
60
<PAGE>
7.2. Creation of Liens.
-----------------
Create or suffer to exist any Lien or transfer upon or against any of its
property or assets now owned or hereafter acquired, except Permitted
Encumbrances.
7.3. Guarantees.
----------
Become liable upon the obligations of any Person by assumption, endorsement
or guaranty thereof or otherwise (other than to Lenders or to any Affiliate of
Lenders) except (a) as disclosed on Schedule 7.3, (b) the endorsement of checks
------------
in the ordinary course of business and (c) guaranties not to exceed a liability
of $5,000,000 in the aggregate at any one time.
7.4. Investments.
-----------
Purchase or acquire obligations or stock of; or any other interest in, any
Person, except (a) obligations issued or guaranteed by the United States of
America or any agency thereof; (b) commercial paper with maturities of not more
than 180 days and a published rating of not less than A-1 or P-1 (or the
equivalent rating); (c) certificates of time deposit and bankers' acceptances
having maturities of not more than 180 days and repurchase agreements backed by
United States government securities of a commercial bank if (i) such bank has a
combined capital and surplus of at least $500,000,000, or (ii) its debt
obligations, or those of a holding company of which it is a Subsidiary, are
rated not less than A (or the equivalent rating) by a nationally recognized
investment rating agency; (d) U.S. money market funds that invest solely in
obligations issued or guaranteed by the United States of America or an agency
thereof; (e) investments in one or more Subsidiaries, joint ventures or other
Affiliates in an aggregate sum not to exceed the sum of (i) 50% of cumulative
Net Income (excluding non-cash extraordinary items and the non-recurring charge
for discontinued operations recognized in fiscal year 1999 in connection with
the 1995 disposition of assets) since October 15, 1997 of Radnor on a
Consolidated Basis plus (ii) $3,000,000; provided, at the time of such
--------
investment no Event of Default has occurred or would occur after giving effect
to such payment; (f) investments by any U.S. Borrower in any other U.S.
Borrower; (g) investments by any European Borrower in any other Borrower; (h)
investments by the U.S. Borrowers in any European Borrower in an aggregate
amount for all such investments not to exceed $5,000,000; and (i) intercompany
investments existing on the Effective Date made in connection with the
acquisition of the polystyrene business of Neste Oy.
7.5. Loans.
-----
Make advances, loans or extensions of credit to any Person, including
without limitation, any Parent, Subsidiary or Affiliate except with respect to
(a) the extension of commercial trade credit in connection with the sale of
Inventory in the ordinary course of its business, (b) loans to its employees in
the ordinary course of business not to exceed the aggregate amount of $100,000
at any time outstanding; provided, the provisions of this subclause (b) shall
--------
not prohibit any loans to an irrevocable life insurance trust established by
Michael T. Kennedy ("Insurance Trust") for the purposes of paying annual
premiums on the life insurance policies owned by the Insurance Trust on the life
of Michael T. Kennedy in an aggregate amount not to exceed
61
<PAGE>
$700,000 outstanding at any one time, (c) loans to a Subsidiary so long as at
the time of such loan no Event of Default has occurred or would occur after
giving effect to such loan or advance, (d) loans to StyroChem International,
Ltd. in an aggregate amount not to exceed $4,000,000 at any time outstanding so
long as at the time of such loan no Event of Default has occurred or would occur
after giving effect to such loan or advance, (e) loans to Affiliates of the
Borrowers not to exceed $5,000,000 in the aggregate, (f) loans made by any U.S.
Borrower to any other U.S. Borrower, (g) loans made by any European Borrower to
any other Borrower (h) loans made by the U.S. Borrowers to any European Borrower
in an aggregate amount for all such loans outstanding at any time not to exceed
$8,000,000 and (i) intercompany loans outstanding on the Effective Date made in
connection with the acquisition of the polystyrene business of Neste Oy.
7.6. Capital Expenditures.
--------------------
Contract for, purchase or make any expenditure or commitments for fixed or
capital assets (including capitalized leases) in an amount in excess of the
amounts set forth below for the fiscal years set forth below with respect to
Radnor on a Consolidated Basis:
<TABLE>
<CAPTION>
Fiscal Year Ended Amount
----------------- ----------
<S> <C>
12-31-99 22,500,000
12-31-00 13,900,000
12-31-01 9,900,000
12-31-02 7,400,000
</TABLE>
Notwithstanding that the amount of permitted capital expenditures for the
fiscal year ended December 31, 1999 is $22,500,000, Borrowers may make
additional capital expenditures in fiscal year ended December 31, 1999 solely to
purchase that certain foam packaging plant in Tolleson, Arizona in an aggregate
amount not to exceed $9,300,000.
7.7. Dividends: Distributions.
------------------------
Declare, pay or make any dividend or distribution to any of its
shareholders or apply any of its funds, property or assets to the purchase,
redemption or other retirement of any of its capital stock except, so long as
(a) notice of termination with regard to this Agreement shall not be
outstanding and (b) if Undrawn Availability is less than $5,000,000 the purpose
for such distribution shall be as set forth in writing to Lenders at least ten
(10) days prior to such distribution and such distribution shall in fact be used
for any of the following purposes: (i) any Borrower shall be permitted to make
distributions to any of its shareholders who are Borrowers hereunder to enable
Radnor to make its regularly scheduled payments of interest on the Senior Notes
and the Second Senior Notes if (x) the aggregate amount of such distributions do
not exceed the interest payments then required to be paid by Radnor on the
Senior Notes or the Second Senior Notes) as the case may be, and (y) at the time
of and after giving effect to any such distribution no Event of Default has
occurred or would occur; and (ii) any Borrower shall be permitted to make
distributions to any of its shareholders for any purpose if (x) at the time of
and after giving effect to such distribution no Event of Default has occurred or
would occur, (y) in the event that Borrowers have Revolving Advances outstanding
hereunder in excess of
62
<PAGE>
$2,000,000 at the time of such distribution, after giving effect to such
distribution Undrawn Availability is more than $2,000,000 and (z) in the event
such distribution is made by Radnor, after giving effect to such distribution,
the aggregate amount of all payments or distributions made by Radnor during such
fiscal year does not exceed 50% of Net Income for the immediately preceding
fiscal year.
7.8. Indebtedness.
------------
Create, incur, assume or suffer to exist any Indebtedness (exclusive of
trade debt) except in respect of (i) Indebtedness to Lenders; (ii) Indebtedness
incurred for capital expenditures permitted under Section 7.6 hereof; (iii)
Indebtedness due under the guaranties issued in respect of the Senior Notes and
the Second Senior Notes; (iv) Indebtedness of any Borrower to any other Borrower
permitted under Section 7.5; and (v) Indebtedness in a maximum aggregate amount
outstanding not greater than $10,000,000 for all Borrowers. Notwithstanding the
foregoing, Borrowers may incur Indebtedness in excess of the foregoing amounts
if, after giving pro forma effect to the incurrence of such Indebtedness,
Interest Coverage for each of the four fiscal quarters most recently ended would
equal or exceed 2.0 to 1.0 if calculated as if such Indebtedness was outstanding
for the entire four quarter period.
7.9. Nature of Business.
------------------
Substantially change the nature of the business in which it is presently
engaged, nor except as specifically permitted hereby purchase or invest,
directly or indirectly, in any assets or property other than in the ordinary
course of business for assets or property which are useful in, necessary for and
are to be used in its business as presently conducted.
7.10. Transactions with Affiliates.
----------------------------
Except for investments permitted under Section 7.4, loans permitted under
Section 7.5, and dividends and distributions permitted under Section 7.7,
directly or indirectly, purchase, acquire or lease any property from, or sell,
transfer or lease any property to, or otherwise deal with, any Affiliate, except
transactions disclosed in the ordinary course of business, on an arm's-length
basis on terms no less favorable than terms which would have been obtainable
from a Person other than an Affiliate provided, the provisions of this Section
7.10 shall not prohibit any payments to Radnor Management, Inc. ("Management")
in accordance with the provisions of the Management Services Agreement dated as
of December 18, 1996 among Management, Borrowers, StyroChem US, Ltd. and
StyroChem FSC, Ltd. ("Management Agreement") in an aggregate amount not to
exceed the actual Expenses under and as defined in the Management Agreement.
7.11. Leases.
------
Enter as lessee into any lease arrangement for real or personal property
(unless capitalized and permitted under Section 7.6 hereof) if after giving
effect thereto, aggregate annual rental payments for all leased property would
exceed $7,500,000 in any one fiscal year.
63
<PAGE>
7.12. Subsidiaries.
------------
(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.
(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 amounts expended pursuant to Section
7.1(a) hereof shall not exceed $5,000,000 during any fiscal year.
7.13. Fiscal Year and Accounting Changes.
----------------------------------
Change its fiscal year from December 31 or make any change (i) in
accounting treatment and reporting practices except as required by GAAP or (ii)
in tax reporting treatment except as required by law.
7.14. Pledge of Credit.
----------------
Now or hereafter pledge any Lender's credit on any purchases or for any
purpose whatsoever or use any portion of any Advance in or for any business
other than Borrower's business as conducted on the date of this Agreement.
7.15. Amendment of Certificate of Incorporation, Etc.
----------------------------------------------
Amend, modify or waive any material term or material provision of its
Certificate of Incorporation, By-laws the Senior Notes or the Second Senior
Notes.
7.16. Compliance with ERISA.
---------------------
(i) (x) Maintain, or permit any member of the Controlled Group to maintain,
or (y) become obligated to contribute, or permit any member of the Controlled
Group to become obligated to contribute, to any Plan, other than those Plans
disclosed on Schedule 5.8(d); (ii) engage, or permit any member of the
---------------
Controlled Group to engage, in any non-exempt "prohibited transaction", as that
term is defined in section 406 of ERISA and Section 4975 of the Code; (iii)
incur, or permit any member of the Controlled Group to incur, any "accumulated
funding deficiency", as that term is defined in Section 302 of ERISA or Section
412 of the Code; (iv) terminate, or permit any member of the Controlled Group to
terminate, any Plan where such event could result in any liability of any
Borrower or any member of the Controlled Group or the imposition of a lien on
the property of any Borrower or any member of the Controlled Group pursuant to
Section 4068 of ERISA; (v) assume, or permit any member of the Controlled Group
to assume, any obligation to contribute to any Multiemployer Plan not disclosed
on
64
<PAGE>
Schedule 5.8(d); (vi) incur, or permit any member of the Controlled Group to
- ---------------
incur, any withdrawal liability to any Multiemployer Plan; (vii) fail promptly
to notify the Agent of the occurrence of any Termination Event; (viii) fail to
comply, or permit a member of the Controlled Group to fail to comply, with the
requirements of ERISA or the Code or other applicable laws in respect of any
Plan; (ix) fail to meet, or permit any member of the Controlled Group to fail to
meet, all minimum funding requirements under ERISA or the Code or postpone or
delay or allow any member of the Controlled Group to postpone or delay any
funding requirement with respect of any Plan.
7.17. Senior Notes.
------------
At any time, directly or indirectly, pay, prepay, repurchase, redeem,
retire or otherwise acquire, or make any payment on account of any principal of;
interest on or premium payable in connection with the repayment or redemption of
the Senior Notes, except that Radnor may (i) pay all regularly scheduled
payments of interest on the Senior Notes so long as no Event of Default has
occurred or would occur after giving effect to such payment and (ii) repurchase
Senior Notes so long as after giving effect to such repurchase Undrawn
Availability of the Borrowers under this Agreement is not less than $15,000,000.
7.18. Second Senior Notes.
-------------------
At any time, directly or indirectly, pay, prepay, repurchase, redeem,
retire or otherwise acquire, or make any payment on account of any principal of;
interest on or premium payable in connection with the repayment or redemption of
the Second Senior Notes, except that Radnor may (i) pay all regularly scheduled
payments of interest on the Second Senior Notes so long as no Event of Default
has occurred or would occur after giving effect to such payment and (ii)
repurchase Second Senior Notes so long as after giving effect to such repurchase
Undrawn Availability of the Borrowers under this Agreement is not less than
$15,000,000.
7.19. Prepayment of Indebtedness.
--------------------------
At any time, directly or indirectly, prepay any Indebtedness (other than to
Agent and the Lenders and Indebtedness of any Borrower to any other Borrower
permitted hereunder), or repurchase, redeem, retire or otherwise acquire any
Indebtedness of Borrower, except Senior Notes and Second Senior Notes in
accordance with Section 7.17 or 7.18 and Indebtedness incurred for capital
expenditures permitted under Section 7.6 hereof, to the extent that such
prepayment is necessary in connection with the refinancing of such Indebtedness
and such Indebtedness is on similar terms.
VIII. CONDITIONS PRECEDENT.
--------------------
8.1. Conditions to Initial Advances.
------------------------------
The agreement of Lenders to make the initial Advances requested to be made
on the Effective Date is subject to the satisfaction, or waiver by Required
Lenders, immediately prior to or concurrently with the making of such Advances,
of the following conditions precedent:
65
<PAGE>
(a) Ratification Agreement. Agent shall have received a Ratification
----------------------
Agreement duly executed and delivered by Borrowers pursuant to which Borrowers
reaffirm and ratify certain ancillary documents delivered in connection with the
Existing Loan Agreement.
(b) Agreement; Notes. Agent shall have received (i) this Agreement
----------------
duly executed and delivered by an authorized officer of Borrowers and Lenders,
(ii) the Notes duly executed and delivered by an authorized officer of Borrowers
(and a Swingline Note for the Swingline Lender), and (iii) the Assignment of
Financing and Security Agreements.
(c) Filings, Registrations and Recordings. Each document (including,
-------------------------------------
without limitation, any Uniform Commercial Code financing statement or
assignments thereof) required by this Agreement, any related agreement or under
law or reasonably requested by the Agent to be filed, registered or recorded in
order to create, in favor of Agent for its benefit and for the ratable benefit
of the Lenders, a perfected security interest in or lien upon the Collateral, or
in the case of the European Borrowers, a registered floating charge
(yrityskiinnitys in the case of Finland, and foretagshypotek, in the case of
Sweden) shall have been properly filed, registered or recorded in each
jurisdiction in which the filing, registration or recordation thereof is so
required or requested, and Agent shall have received an acknowledgment copy, or
other evidence satisfactory to it, of each such filing, registration or
recordation and satisfactory evidence of the payment of any necessary fee, tax
or expense relating thereto;
(d) Proceedings of Borrowers. Agent shall have received a copy of the
------------------------
resolutions in form and substance reasonably satisfactory to Agent, of the Board
of Directors of Borrowers, authorizing (i) the execution, delivery and
performance of this Agreement, the Notes, any related agreements and all
documents executed in connection therewith (collectively the "Documents") and
(ii) the granting by Borrowers of the security interests in and liens upon the
Collateral in each case certified by the President of each Borrower as of the
Effective Date; and, such certificate shall state that the resolutions thereby
certified have not been amended, modified, revoked or rescinded as of the date
of such certificate;
(e) Incumbency Certificates of Borrowers. Agent shall have received a
------------------------------------
certificate of the Secretary of each Borrower, dated the Effective Date, as to
the incumbency and signature of the officers of each Borrower executing this
Agreement, any certificate or other documents to be delivered by it pursuant
hereto, together with evidence of the incumbency of such officer;
(f) Certificates. Agent shall have received a copy of the Articles or
------------
Certificate of Incorporation, and all amendments to the foregoing, certified by
the Secretary of State together with copies of the by-laws and shareholders
agreements of each Borrower, as applicable, certified as accurate and complete
by the general partner or secretary of each Borrower;
(g) Good Standing Certificates. Agent shall have received good
--------------------------
standing certificates for each U.S. Borrower dated not more than ten (10) days
prior to the Effective Date, issued by the Secretary of State or other
appropriate official of each U.S. Borrower's jurisdiction
66
<PAGE>
of formation and each jurisdiction where the conduct of a U.S. Borrower's
business activities or the ownership of its properties necessitates
qualification;
(h) Legal Opinion. Agent shall have received the executed legal
-------------
opinions of Duane Morris & Heckscher LLP and such other counsel as may be
required by the Lenders in form and substance satisfactory to the Lenders which
shall cover such matters incident to the transactions contemplated by this
Agreement, the Notes, and related agreements as Agent may reasonably require and
Borrowers hereby authorize and direct such counsel to deliver such opinions to
Agent and the Lender;
(i) No Litigation. (i) No litigation, investigation or proceeding
-------------
before or by any arbitrator or Governmental Body shall be continuing or
threatened against any Borrower or against the officers or directors of any
Borrower (A) in connection with the Documents or any of the transactions
contemplated thereby and which, in the reasonable opinion of the Agent, is
deemed material or (B) which if adversely determined, could, in the reasonable
opinion of the Agent, have a Material Adverse Effect on any Borrower; and (ii)
no injunction, writ, restraining order or other order of any nature materially
adverse to any Borrower or the conduct of its business shall have been issued by
any Governmental Body;
(j) Financial Condition Opinions. Agent shall have received an
----------------------------
executed Officers' Certificate in the form of Exhibit 8.1(j);
--------------
(k) Collateral Examination. Agent and Lenders shall have received the
----------------------
Borrowers' most recent field audit (which shall be less than twelve months old),
the results of which shall be satisfactory in form and substance to the Agent
and Lenders;
(l) Fees. Agent shall have received all fees payable to Agent and to
----
the Lenders on or prior to the Effective Date pursuant to Article III hereof;
(m) Intentionally Omitted.
(n) Intentionally Omitted.
(o) Payment Instructions. Agent shall have received written
--------------------
instructions from Borrowers directing the application of proceeds of the initial
Advances made pursuant to this Agreement;
(p) Consents. Agent shall have received any and all Consents
--------
necessary to permit the effectuation of the transactions contemplated by this
Agreement and the Other Documents; and Agent shall have received such Consents
and waivers of such third parties as might assert claims with respect to the
Collateral, as Agent and its counsel shall deem necessary;
(q) No Material Adverse Change. (i) since December 31, 1998 (a) no
--------------------------
material adverse change shall have occurred in the condition, financial or
otherwise, operations, properties or prospects of any Borrower, (b) no material
damage or destruction shall have occurred to any of the Collateral and no
material depreciation in the value thereof, (c) no
67
<PAGE>
material adverse deviation shall have occurred from the forecasts and
projections previously delivered to Agent and (d) no event, condition or state
of facts which could reasonably be expected to have a Material Adverse Effect on
any Borrower shall have occurred and (ii) no representations made or information
supplied to Agent or the Lenders shall have been proven to be inaccurate or
misleading in any material respect;
(r) Contract Review. Agent shall have had the opportunity to review
---------------
all material contracts of each Borrower including, without limitation, leases,
union contracts, labor contracts, vendor supply contracts, license agreements
and distributorship agreements and any such contracts and agreements reviewed
shall be satisfactory in all respects to Agent;
(s) Closing Certificate. Agent shall have received closing
-------------------
certificate signed by the Chief Financial Officer of Radnor dated as of the date
hereof, stating that (i) all representations and warranties made by each
Borrower as set forth in this Agreement and the Other Documents are true and
correct on and as of such date, (ii) Borrowers are on such date in compliance
with all the terms and provisions set forth in this Agreement and the other
Documents and (iii) on such date no Default or Event of Default has occurred or
is continuing;
(t) Borrowing Base. Agent and Lenders shall have received evidence
--------------
from Borrowers that (i) the U.S. Borrowing Base is sufficient in value and
amount to support the U.S. Advances in the amounts requested by the U.S.
Borrowers on the Effective Date, and (ii) the European Borrowing Base is
sufficient in value and amount to support the European Advances in the amounts
requested by the European Borrowers on the Effective Date;
(u) Agreements. Agent and Lenders shall have received copies of all
----------
agreements evidencing the obligations of any Borrower with respect to its
Indebtedness for borrowed money, which agreements shall be in form and substance
satisfactory to Agent and shall set forth the conditions on which (i) such
Borrower may make and the holder(s) of such indebtedness may receive payments
with respect thereto and (ii) the holder(s) of such indebtedness may accelerate
such obligations, commence any action against or otherwise exercise any rights
or enforce any remedies against such Borrower, which conditions shall be
satisfactory in form and substance to Agent in its discretion.
(v) Intentionally Omitted.
(w) Intentionally Omitted.
(x) Other Documents. Agent shall have received the executed Other
---------------
Documents, each in form and substance satisfactory to Lenders;
(y) Insurance. Agent shall have received in form and substance
---------
satisfactory to Agent, certified copies of each Borrower's casualty insurance
policies evidencing coverage on all Collateral in such amounts, with such
carriers and covering such risks as is acceptable to Agent, together with loss
payable endorsements on Agent's standard form of loss payee endorsement naming
Agent as loss payee, and certified copies of each Borrower's liability insurance
policies, together with endorsements naming Agent as an additional or co-
insured;
68
<PAGE>
(z) Leasehold Agreements. Agent shall have received landlord,
--------------------
mortgagee or warehouseman agreements satisfactory to Agent with respect to all
premises leased or owned by any Borrower at which Inventory is located;
(aa) Resignation and Assignment by Prior Agent. The Prior Agent shall
-----------------------------------------
have resigned as administrative agent under the Existing Loan Agreement and
shall have executed all necessary assignment agreements and related documents,
including but not limited to collateral assignment agreements and assignment of
UCC-1 financing statements in favor of Bank of America, as Agent for the
Lenders.
8.2. Conditions to Each Advance.
--------------------------
The agreement of the Lenders to make any Advance requested to be made on
any date (including, without limitation, the initial Advance but excluding any
Revolving Advance deemed requested by Borrowing Agent in connection with a
disbursement relating to a Letter of Credit pursuant to Section 2.9(c) hereof or
a Revolving Advance necessary to fund a Swingline Loan pursuant to Section 2.14
hereof), is subject to the satisfaction of the following conditions precedent as
of the date such Advance is made:
(a) Representations and Warranties. Each of the representations and
------------------------------
warranties made by the Borrowers in or pursuant to this Agreement and any
related agreements to which it is a party, and each of the representations and
warranties contained in any certificate, document or financial or other
statement furnished at any time under or in connection with this Agreement or
any related agreement shall be true and correct in all material respects on and
as of such date as if made on and as of such date except as such representations
and warranties are modified in a manner consistent with this Agreement;
(b) No Default. No Event of Default or Default shall have occurred
----------
and be continuing on such date, or would exist after giving effect to the
Advances requested to be made, on such date; provided, however that Lenders in
--------- -------
their sole discretion, may continue to make Advances notwithstanding the
existence of an Event of Default or Default and that any Advances so made shall
not be deemed a waiver of any such Event of Default or Default; and
(c) Maximum Advances.
----------------
(i) in the case of any U.S. Revolving Advances or Swingline Loans
requested to be made or U.S. Letters of Credit to be issued, after giving
effect thereto, the aggregate of all U.S. Advances outstanding shall not
exceed the U.S. Borrowing Base.
(ii) in the case of any European Revolving Advances requested or
European Letters of Credit requested to be issued, after giving effect
thereto, the aggregate of all European Advances outstanding shall not
exceed the European Borrowing Base.
Each request for an Advance by any Borrower hereunder shall constitute a
representation and warranty by each Borrower as of the date of such Advance that
the conditions contained in this subsection shall have been satisfied.
69
<PAGE>
IX. INFORMATION.
-----------
Each Borrower shall, until satisfaction in full of the Obligations and the
termination of this Agreement:
9.1. Disclosure of Material Matters.
------------------------------
Immediately upon learning thereof, report to Agent all matters materially
affecting the value, enforceability or collectibility of any portion of the
Collateral including, without limitation, any Borrower's reclamation or
repossession of, or the return to any Borrower of, a material amount of goods or
claims or disputes asserted by any Customer or other obligor.
9.2. Schedules.
---------
Deliver to Agent and if requested, the Lenders, on or before the fifteenth
(15th) day of each month as and for the prior month (a) accounts receivable
agings, (b) accounts payable schedules and (c) Inventory reports for each
Borrower. In addition, each Borrower will deliver to Agent at such intervals as
Agent may require: (i) confirmatory assignment schedules, (ii) copies of
Customer's invoices, (iii) evidence of shipment or delivery, and (iv) such
further schedules, documents and/or information regarding the Collateral as
Agent may require including, without limitation, trial balances and test
verifications. Agent shall have the right to confirm and verify all Receivables
by any manner and through any medium it considers advisable and do whatever it
may deem reasonably necessary to protect its interests hereunder. The items to
be provided under this Section are to be in form satisfactory to Agent and
executed by each Borrower and delivered to Agent from time to time solely for
Agent's convenience in maintaining records of the Collateral, and any Borrower's
failure to deliver any of such items to Agent shall not affect, terminate,
modify or otherwise limit Agent's Lien with respect to the Collateral.
9.3. Intentionally Omitted.
---------------------
9.4. Litigation.
----------
Promptly notify Agent and Lenders in writing of any litigation, suit or
administrative proceeding affecting any Borrower, whether or not the claim is
covered by insurance, and of any suit or administrative proceeding, which may
have a Material Adverse Effect on any Borrower.
9.5. Material Occurrences.
--------------------
Promptly notify Agent and Lenders in writing upon the occurrence of (a) any
Event of Default or Default; (b) any event of default or (c) any event which
with the giving of notice or lapse of time, or both, would constitute an event
of default under the Senior Notes; (d) any event, development or circumstance
whereby any financial statements or other reports furnished to Agent or any
Lender fail in any material respect to present fairly, in accordance with GAAP
consistently applied, the financial condition or operating results of any
Borrower as of the date of such statements; (e) any accumulated retirement plan
funding deficiency which, if such
70
<PAGE>
deficiency continued for two plan years and was not corrected as provided in
Section 4971 of the Internal Revenue Code, could subject Borrower to a tax
imposed by Section 4971 of the Internal Revenue Code; (f) each and every default
by any Borrower which might result in the acceleration of the maturity of any
Indebtedness, including the names and addresses of the holders of such
Indebtedness with respect to which there is a default existing or with respect
to which the maturity has been or could be accelerated, and the amount of such
Indebtedness; and (g) any other development in the business or affairs of any
Borrower which might reasonably be expected to be materially adverse; in each
case describing the nature thereof and the action such Borrower proposes to take
with respect thereto.
9.6. Government Receivables.
----------------------
Notify Agent immediately if any of the Receivables arise out of contracts
between any Borrower and the United States, any state, or any department, agency
or instrumentality of any of them.
9.7. Annual Financial Statements.
---------------------------
Furnish Agent and the Lenders within ninety (90) days after the end of each
fiscal year of Borrowers, financial statements of Radnor on a consolidated and
consolidating basis, including, but not limited to, statements of income and
stockholders' equity and cash flow from the beginning of the current fiscal year
to the end of such fiscal year and the balance sheet as at the end of such
fiscal year, all prepared in accordance with GAAP applied on a basis consistent
with prior practices, and in reasonable detail and reported upon without
qualification by an independent certified public accounting firm selected by
Borrower and satisfactory to Agent (the "Accountants"). The report of such
accounting firm shall be accompanied by a statement of such accounting firm
certifying that (i) they have caused this Agreement to be reviewed, (ii) in
making the examination upon which such report was based either no information
came to their attention which to their knowledge constituted an Event of Default
or a Default under this Agreement or any related agreement or, if such
information came to their attention, specifying any such Default or Event of
Default, its nature, when it occurred and whether it is continuing, and such
report shall contain or have appended thereto calculations which set forth
Borrowers' compliance with the requirements or restrictions imposed by Sections
6.5, 6.6, 6.7, 6.8, 6.9, 6.10, 7.6 and 7.11 hereof. In addition, the reports
shall be accompanied by a certificate of each Borrower's Chief Financial Officer
which shall state that, based on an examination sufficient to permit him to make
an informed statement, no Default or Event of Default exists, or, if such is not
the case, specifying such Default or Event of Default, its nature, when it
occurred, whether it is continuing and the steps being taken by such Borrower
with respect to such event and, such certificate shall have appended thereto
calculations which set forth Borrowers' compliance with the requirements or
restrictions imposed by Sections 6.5, 6.6, 6.7, 6.8, 6.9, 6.10, 7.6 and 7.11
hereof.
9.8. Quarterly Financial Statements.
------------------------------
Furnish Agent and Lenders within 45 days after the end of each fiscal
quarter, an unaudited balance sheet of Radnor on a Consolidated Basis and
unaudited statements of income
71
<PAGE>
and stockholders' equity and cash flow reflecting results of operations from the
beginning of the fiscal year to the end of such quarter and for such quarter,
prepared on a basis consistent with prior practices and complete and correct in
all material respects, subject to normal year end adjustments. The reports shall
be accompanied by a certificate of each Borrower's Chief Financial Officer which
shall state that, based on an examination sufficient to permit him to make an
informed statement, no Default or Event of Default exists, or, if such is not
the case, specifying such Default or Event of Default, its nature, when it
occurred, whether it is continuing and the steps being taken by such Borrower
with respect to such event and, such certificate shall have appended thereto
calculations which set forth Borrowers' compliance with the requirements or
restrictions imposed by Sections 6.5, 6.6, 6.7, 6.8, 6.9, 6.10, 7.6 and 7.11
hereof.
9.9. Monthly Financial Statements.
----------------------------
Furnish Agent and Lenders within thirty (30) days after the end of each
month, an unaudited balance sheet of Radnor on a consolidated and consolidating
basis and unaudited statements of income and stockholders' equity and cash flow
reflecting results of operations from the beginning of the fiscal year to the
end of such month and for such month, prepared on a basis consistent with prior
practices and complete and correct in all material respects, subject to normal
year end adjustments. The reports shall be accompanied by a certificate of each
Borrower's Chief Financial Officer which shall state that, based on an
examination sufficient to permit him to make an informed statement, no Default
or Event of Default exists, or, if such is not the case, specifying such Default
or Event of Default, its nature, when it occurred, whether it is continuing and
the steps being taken by such Borrower with respect to such event and, such
certificate shall have appended thereto calculations which set forth Borrowers'
compliance with the requirements or restrictions imposed by Sections 6.5, 6.6,
6.7, 6.8, 6.9, 6.10, 7.6 and 7.11 hereof.
9.10. Other Reports.
-------------
Furnish Agent and Lenders as soon as available, but in any event within ten
(10) days after the issuance thereof, (i) with copies of such financial
statements, reports and returns as Radnor shall send to its stockholders and
(ii) copies of all notices sent pursuant to the Senior Notes.
9.11. Additional Information.
----------------------
Furnish Agent and Lenders with such additional information as Agent and
Lenders shall reasonably request in order to enable Agent and Lenders to
determine whether the terms, covenants, provisions and conditions of this
Agreement and the Notes have been complied with by Borrowers including, without
limitation and without the necessity of any request by Agent or any Lender, (a)
copies of all environmental audits and reviews, (b) at least thirty (30) days
prior thereto, notice of any Borrower's opening of any new office or place of
business or any Borrower's closing of any existing office or place of business,
and (c) promptly upon learning thereof, notice of any labor dispute to which any
Borrower may become a party, any strikes or walkouts relating to any of its
plants or other facilities, and the expiration of any labor contract to which
any Borrower is a party or by which any Borrower is bound.
72
<PAGE>
9.12. Projected Operating Budget.
--------------------------
Furnish Agent and Lenders, no later than (x) ninety (90) days following the
Effective Date and (y) thirty (30) days prior to the beginning of each fiscal
year commencing with fiscal year 2000, a month by month projected operating
budget and cash flow of Radnor on a Consolidated Basis for such fiscal year
(including an income statement for each month and a balance sheet as at the end
of the last month in each fiscal quarter), such projections to be accompanied by
a certificate signed by each Borrower's Chief Financial Officer to the effect
that such projections have been prepared on the basis of sound financial
planning practice consistent with past budgets and financial statements and that
such officer has no reason to question the reasonableness of any material
assumptions on which such projections were prepared.
9.13. Intentionally Omitted.
---------------------
9.14. Notice of Suits, Adverse Events.
-------------------------------
Furnish Agent and Lenders with prompt notice of (i) any lapse or other
termination of any Consent issued to Borrowers by any Governmental Body or any
other Person that is material to the operation of any Borrower's business, (ii)
any refusal by any Governmental Body or any other Person to renew or extend any
such Consent; and (iii) copies of any periodic or special reports filed by any
Borrower with any Governmental Body or Person, if such reports indicate any
material change in the business, operations, affairs or condition of any
Borrower, or if copies thereof are requested by Agent or any Lender, and (iv)
copies of any material notices and other communications from any Governmental
Body or Person which specifically relate to any Borrower.
9.15. ERISA Notices and Requests.
--------------------------
Furnish Agent and Lenders with immediate written notice in the event that
(i) any Borrower or any member of the Controlled Group knows or has reason to
know that a Termination Event has occurred, together with a written statement
describing such Termination Event and the action, if any, which Borrower or
member of the Controlled Group has taken, is taking, or proposes to take with
respect thereto and, when known, any action taken or threatened by the Internal
Revenue Service, Department of Labor or PBGC with respect thereto, (ii)
Borrower, or any member of the Controlled Group knows or has reason to know that
a prohibited transaction (as defined in Sections 406 of ERISA and 4975 of the
Internal Revenue Code) has occurred together with a written statement describing
such transaction and the action which such Borrower or any member of the
Controlled Group has taken, is taking or proposes to take with respect thereto,
(iii) a funding waiver request has been filed with respect to any Plan together
with all communications received by Borrower, or any member of the Controlled
Group with respect to such request, (iv) any increase in the benefits of any
existing Plan or the establishment of any new Plan or the commencement of
contributions to any Plan to which such Borrower or any member of the Controlled
Group was not previously contributing shall occur, (v) any Borrower or any
member of the Controlled Group shall receive from the PBGC a notice of intention
to terminate a Plan or to have a trustee appointed to administer a Plan,
together with copies of each such notice, (vi) any Borrower or any member of the
Controlled Group shall
73
<PAGE>
receive any favorable or unfavorable determination letter from the Internal
Revenue Service regarding the qualification of a Plan under Section 401(a) of
the Internal Revenue Code, together with copies of each such letter; (vii) any
Borrower or any member of the Controlled Group shall receive a notice regarding
the imposition of withdrawal liability, together with copies of each such
notice; (viii) any Borrower or any member of the Controlled Group shall fail to
make a required installment or any other required payment under Section 412 of
the Internal Revenue Code on or before the due date for such installment or
payment; (ix) any Borrower or any member of the Controlled Group knows that (a)
a Multiemployer Plan has been terminated) (b) the administrator or plan sponsor
of a Multiemployer Plan intends to terminate a Multiemployer Plan, or (c) the
PBGC has instituted or will institute proceedings under Section 4042 of ERISA to
terminate a Multiemployer Plan.
9.16. Additional Documents.
--------------------
Execute and deliver to Agent, upon request, such documents and agreements
as Agent may, from time to time, reasonably request to carry out the purposes,
terms or conditions of this Agreement.
X. EVENTS OF DEFAULT.
-----------------
The occurrence of any one or more of the following events shall constitute
an "Event of Default":
10.1. failure by any Borrower to pay any principal or interest on the
Obligations when due, whether at maturity or by reason of acceleration pursuant
to the terms of this Agreement or by notice of intention to prepay, or by
required prepayment or failure to pay any other liabilities or make any other
payment, fee or charge provided for herein or any Other Document when due;
10.2. any representation or warranty made or deemed made by any Borrower
in this Agreement or any related agreement or in any certificate, document or
financial or other statement furnished at any time in connection herewith or
therewith shall prove to have been misleading in any material respect on the
date when made or deemed to have been made;
10.3. failure by any Borrower to (i) furnish financial information when
due or when requested, or (ii) permit the inspection of its books or records;
10.4. issuance of a notice of Lien, levy, assessment, injunction or
attachment against a material portion of any Borrower's property;
10.5. (i) a failure or neglect of any Borrower to perform, keep or observe
any term, provision, condition or covenant, contained in Sections 4.7, 4.8, 4.9,
4.14, 4.17, 4.19, 6.1, 6.2, 6.3, and 6.9 hereof which is not cured within thirty
(30) days from the occurrence of such failure or neglect; or (ii) failure or
neglect of any Borrower to perform, keep or observe any other term, provision,
condition, covenant herein contained, or contained in any other agreement or
74
<PAGE>
arrangement, now or hereafter entered into between any Borrower, Agent and the
Lenders after expiration of all applicable grace periods;
10.6. any judgment in excess of $300,000 is rendered against any Borrower
or judgment liens filed against any Borrower of judgments in excess of
$1,000,000 in the aggregate are rendered against all Borrowers for an amount
which within thirty (30) days of such rendering or filing is not either
satisfied, stayed or discharged of record;
10.7. any Borrower shall (i) apply for, consent to or suffer the
appointment of, or the taking of possession by, a receiver, custodian, trustee,
liquidator or similar fiduciary of itself or of all or a substantial part of its
property, (ii) make a general assignment for the benefit of creditors, (iii)
commence a voluntary case under any state or federal bankruptcy laws (as now or
hereafter in effect), (iv) be adjudicated a bankrupt or insolvent, (v) file a
petition seeking to take advantage of any other law providing for the relief of
debtors, (vi) acquiesce to, or fail to have dismissed, within forty five (45)
days, any petition filed against it in any involuntary case under such
bankruptcy laws, or (vii) take any action for the purpose of effecting any of
the foregoing;
10.8. any Borrower shall admit in writing its inability, or be generally
unable, to pay its debts as they become due or cease operations of its present
business;
10.9. any Subsidiary of any Borrower or any Guarantor, shall (i) apply
for, consent to or suffer the appointment of: or the taking of possession by, a
receiver, custodian, trustee, liquidator or similar fiduciary of itself or of
all or a substantial part of its property, (ii) admit in writing its inability,
or be generally unable, to pay its debts as they become due or cease operations
of its present business, (iii) make a general assignment for the benefit of
creditors, (iv) commence a voluntary case under any state or federal bankruptcy
laws (as now or hereafter in effect), (v) be adjudicated a bankrupt or
insolvent, (vi) file a petition seeking to take advantage of any other law
providing for the relief of debtors, (vii) acquiesce to, or fail to have
dismissed, within forty five (45) days, any petition filed against it in any
involuntary case under such bankruptcy laws, or (viii) take any action for the
purpose of effecting any of the foregoing;
10.10. any change in the condition or affairs (financial or otherwise) of
any Borrower which in Agent's opinion impairs the Collateral or the ability of
any Borrower to perform its Obligations under this Agreement;
10.11. any Lien created hereunder or provided for hereby or under any
related agreement for any reason ceases to be or is not a valid and perfected
Lien having a first priority interest;
10.12. an event of default has occurred and been declared under the Senior
Notes which default shall not have been cured or waived within any applicable
grace period;
10.13. a default of the obligations of any Borrower under any other
agreement to which it is a party shall occur which materially adversely affects
its condition, affairs or prospects (financial or otherwise) which default is
not cured within any applicable grace period;
75
<PAGE>
10.14. termination or breach of any Guaranty or similar agreement executed
and delivered to Agent in connection with the Obligations of any Borrower, or if
any Guarantor attempts to terminate, challenges the validity of, or its
liability under, any such Guaranty or similar agreement;
10.15. any Change of Ownership or Change of Control shall have occurred;
10.16. any material provision of this Agreement shall, for any reason,
cease to be valid and binding on any Borrower, or Borrower shall so claim in
writing to Agent;
10.17. (i) any Governmental Body shall (A) revoke, terminate, suspend or
adversely modify any license, permit, patent, trademark or tradename of any
Borrower, the continuation of which is material to the continuation of any
Borrower's business, or (B) commence proceedings to suspend, revoke, terminate
or adversely modify any such license, permit, trademark, tradename or patent and
such proceedings shall not be dismissed or discharged within sixty (60) days, or
(c) schedule or conduct a hearing on the renewal of any license, permit,
trademark, tradename or patent necessary for the continuation of any Borrower's
business and the staff of such Governmental Body issues a report recommending
the termination, revocation, suspension or material, adverse modification of
such license, permit, trademark, tradename or patent; (ii) any agreement which
is necessary or material to the operation of any Borrower's business shall be
revoked or terminated and not replaced by a substitute acceptable to Agent
within thirty (30) days after the date of such revocation or termination, and
such revocation or termination and non-replacement could reasonably be expected
to have a Material Adverse Effect on any Borrower;
10.18. any portion of the Collateral shall be seized or taken by a
Governmental Body or the title and rights of any Borrower shall have become the
subject matter of litigation which might, in the opinion of Agent, upon final
determination, result in impairment or loss of the security provided by this
Agreement or the Other Documents;
10.19. the operations of any Borrower's manufacturing facilities are
interrupted at any time for more than fourteen (14) consecutive days, or if any
Borrower's manufacturing capacity is reduced by 25% as a result of such an
interruption of operations (other than permanent interruptions resulting from
planned closing of up to three (3) plants) unless such Borrower shall (i) be
entitled to receive for such period of interruption, proceeds of business
interruption insurance sufficient to assure that its per diem cash needs during
such period is at least equal to its average per diem cash needs for the
consecutive twelve (12) month period immediately preceding the initial date of
interruption and (ii) receive such proceeds in the amount described in clause
(i) preceding not later than thirty (30) days following the initial date of any
such interruption; provided, however, that notwithstanding the provisions of
clauses (i) and (ii) of this section, an Event of Default shall be deemed to
have occurred if any Borrower shall be receiving the proceeds of business
interruption insurance for a period of thirty (30) consecutive days;
10.20. an event or condition specified in Sections 7.16 or 9.15 hereof
shall occur or exist with respect to any Plan and, as a result of such event or
condition, together with all other such events or conditions, any Borrower or
any member of the Controlled Group shall incur, or in the
76
<PAGE>
opinion of Lender be reasonably likely to incur, a liability to a Plan or the
PBGC (or both) which, in the reasonable judgment of the Required Lenders, could
have a Material Adverse Effect on any Borrower;
XI. LENDERS' RIGHTS AND REMEDIES AFTER DEFAULT.
------------------------------------------
11.1. Rights and Remedies.
-------------------
Upon the occurrence of (i) an Event of Default pursuant to Section 10.7 all
Obligations shall be immediately due and payable and this Agreement and the
obligation of Lenders to make Advances shall be deemed terminated; and, (ii) any
of the other Events of Default and at any time thereafter (such default not
having previously been cured), at the option of Required Lenders all Obligations
shall be immediately due and payable and the Lenders shall have the right to
terminate this Agreement and to terminate the obligation of Lenders to make
Advances. Upon the occurrence of any Event of Default, Agent may, and at the
direction of the Required Lenders shall, exercise any and all other rights and
remedies provided for herein, under the Uniform Commercial Code and at law or
equity generally, including, without limitation, the right to foreclose the
security interests granted herein and to realize upon any Collateral by any
available judicial procedure and/or to take possession of and sell any or all of
the Collateral with or without judicial process. Agent may enter any Borrower's
premises or other premises without legal process and without incurring liability
to any Borrower therefor, and Agent may thereupon, or at any time thereafter, in
its discretion without notice or demand, take the Collateral and remove the same
to such place as Agent may deem advisable and Agent may require Borrowers to
make the Collateral available to Agent at a convenient place. With or without
having the Collateral at the time or place of sale, Agent may sell the
Collateral, or any part thereof, at public or private sale, at any time or
place, in one or more sales, at such price or prices, and upon such terms)
either for cash, credit or future delivery, as Agent may elect. Except as to
that part of the Collateral which is perishable or threatens to decline speedily
in value or is of a type customarily sold on a recognized market, Agent shall
give Borrowers reasonable notification of such sale or sales, it being agreed
that in all events written notice mailed to Borrowing Agent at least five (5)
days prior to such sale or sales is reasonable notification. At any public sale
Agent or any Lender may bid for and become the purchaser, and Agent, any Lender
or any other purchaser at any such sale thereafter shall hold the Collateral
sold absolutely free from any claim or right of whatsoever kind, including any
equity of redemption and such right and equity are hereby expressly waived and
released by each Borrower. In connection with the exercise of the foregoing
remedies, Agent is granted permission to use (a) all of each Borrower's
trademarks, trade styles, trade names, patents, patent applications, licenses,
franchises and other proprietary rights which are used in connection with
Inventory for the purpose of disposing of such Inventory and (b) Equipment for
the purpose of completing the manufacture of unfinished goods without cost to
Agent. The proceeds realized from the sale of any Collateral shall be applied
as follows: first, to the reasonable costs, expenses and attorneys' fees and
expenses incurred by Agent for collection and for acquisition, completion,
protection, removal, storage, sale and delivery of the Collateral; second, to
interest due upon any of the Obligations; and, third, to the principal of the
Obligations. If any deficiency shall arise, each Borrower shall remain liable
to Agent and the Lenders therefor.
77
<PAGE>
11.2. Agent's Discretion.
------------------
Agent shall have the right in its sole discretion, but with the consent of
the Required Lenders to determine which rights, Liens, security interests or
remedies Agent may at any time pursue, relinquish, subordinate, or modify or to
take any other action with respect thereto and such determination will not in
any way modify or affect any of Agent's or Lenders' rights hereunder.
11.3. Setoff.
------
In addition to any other rights which Agent or any Lender may have under
applicable law, upon the occurrence of an Event of Default hereunder, Agent and
such Lender shall have a right to apply any of Borrowers' property held by Agent
and such Lender or by the Bank to reduce the Obligations.
11.4. Rights and Remedies not Exclusive.
---------------------------------
The enumeration of the foregoing rights and remedies is not intended to be
exhaustive and the exercise of any right or remedy shall not preclude the
exercise of any other right or remedies provided for herein or otherwise
provided by law, all of which shall be cumulative and not alternative.
11.5. Actions in Concert.
------------------
Anything in this Agreement to the contrary notwithstanding, each Lender
hereby agrees with each other Lender that no Lender shall take any action to
protect or enforce its rights arising out of this Agreement or the Notes
(including, without limitation, exercising any right of set-off) without first
obtaining the prior written consent of Agent and Required Lenders, it being the
intent of Lenders that any such action to protect or enforce rights under this
Agreement and the Notes shall be taken in concert and at the direction or with
the consent of the Agent and the Required Lenders.
XII. WAIVERS AND JUDICIAL PROCEEDINGS.
--------------------------------
12.1. Waiver of Notice.
----------------
Each Borrower each hereby waives notice of non-payment of any of the
Receivables, demand, presentment, protest and notice thereof with respect to any
and all instruments, notice of acceptance hereof, notice of loans or advances
made, credit extended, Collateral received or delivered) or any other action
taken in reliance hereon, and all other demands and notices of any description,
except such as are expressly provided for herein.
78
<PAGE>
12.2. Delay.
-----
No delay or omission on Agent's or any Lender's part in exercising any
right, remedy or option shall operate as a waiver of such or any other right,
remedy or option or of any default.
12.3. Jury Waiver.
-----------
EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL
BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING UNDER THIS
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH, OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO
IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE AND EACH PARTY HEREBY CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENTS OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
XIII. EFFECTIVE DATE AND TERMINATION.
------------------------------
13.1. Term.
----
This Agreement, which shall inure to the benefit of and shall be binding
upon the respective successors and permitted assigns of each Borrower, Agent and
each Lender, shall become effective on the date hereof and shall continue in
full force and effect until the last day of the Term unless sooner terminated as
herein provided. Borrower may terminate this Agreement at any time upon five (5)
days' prior written notice upon payment in full of the Obligations (the
"Prepayment Date").
13.2. Termination.
-----------
The termination of the Agreement shall not affect any Borrower's, Agent's
or any Lender's rights, or any of the Obligations having their inception prior
to the effective date of such termination, and the provisions hereof shall
continue to be fully operative until all transactions entered into, rights or
interests created or Obligations have been fully disposed of, concluded or
liquidated. The security interests, Liens and rights granted to Agent and the
Lenders hereunder and the financing statements filed hereunder shall continue in
full force and effect, notwithstanding the termination of this Agreement or the
fact that Borrower's account may from time to time be temporarily in a zero or
credit position, until all of the Obligations of
79
<PAGE>
Borrowers have been paid or performed in full after the termination of this
Agreement or Borrowers have furnished Agent and the Lenders with an
indemnification satisfactory to Agent and the Lenders with respect thereto.
Accordingly, each Borrower waives any rights which it may have under Section 9-
404(1) of the Uniform Commercial Code to demand the filing of termination
statements with respect to the Collateral, and Agent shall not be required to
send such UCC termination statements to Borrowers, or to file them with any
filing office, unless and until this Agreement shall have been terminated in
accordance with its terms and all Obligations paid in full in immediately
available funds.
XIV. REGARDING AGENT.
---------------
14.1. Appointment.
-----------
Each Lender hereby designates Bank of America to act as Agent for such
Lender under this Agreement and the Other Documents. Each Lender hereby
irrevocably authorizes Agent to take such action on its behalf under the
provisions of this Agreement and the Other Documents and to exercise such powers
and to perform such duties hereunder and thereunder as are specifically
delegated to or required of Agent by the terms hereof and thereof and such other
powers as are reasonably incidental thereto and Agent shall hold all Collateral,
payments of principal and interest, fees (except the fees set forth in Sections
3.3(a)(i), 3.3(c), 3.4(a) and 3.4(b) charges and collections (without giving
effect to any collection days) received pursuant to this Agreement, for the
ratable benefit of Lenders. Agent may perform any of its duties hereunder by or
through its agents or employees. As to any matters not expressly provided for
by this Agreement (including without limitation, collection of the Notes) Agent
shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Required Lenders,
and such instructions shall be binding; provided, however, that Agent shall
--------- -------
not be required to take any action which exposes Agent to liability or which is
contrary to this Agreement or the Other Documents or applicable law unless Agent
is furnished with an indemnification reasonably satisfactory to Agent with
respect thereto.
14.2. Nature of Duties.
----------------
Agent shall have no duties or responsibilities except those expressly set
forth in this Agreement and the Other Documents. Neither Agent nor any of its
officers, directors, employees or agents shall be (i) liable for any action
taken or omitted by them as such hereunder or in connection herewith, unless
caused by their gross negligence (but not mere negligence) or willful
misconduct, (ii) liable for any action taken or omitted by the Prior Agent or
any of its officers, directors, employees or agents, or (iii) responsible in any
manner for any recitals, statements, representations or warranties made by any
Borrower or any officer thereof contained in this Agreement, or in any of the
Other Documents or in any certificate, report, statement or other document
referred to or provided for in, or received by Agent under or in connection
with, this Agreement or any of the Other Documents or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement, or
any of the Other Documents or for any failure of any Borrower to perform its
respective obligations hereunder. Agent shall not be under any obligation to
any Lender to ascertain or to inquire as to the observance or
80
<PAGE>
performance of any of the agreements contained in, or conditions of, this
Agreement or any of the Other Documents, or to inspect the properties, books or
records of any Borrower. The duties of Agent as respects the Advances to any
Borrower shall be mechanical and administrative in nature; Agent shall not have
by reason of this Agreement a fiduciary relationship in respect of any Lender;
and nothing in this Agreement, expressed or implied, is intended to or shall be
so construed as to impose upon Agent any obligations in respect of this
Agreement except as expressly set forth herein.
14.3. Lack of Reliance on Agent and Resignation.
-----------------------------------------
Independently and without reliance upon Agent or any other Lender, each
Lender has made and shall continue to make (i) its own independent investigation
of the financial condition and affairs of each Borrower in connection with the
making and the continuance of the Advances hereunder and the taking or not
taking of any action in connection herewith, and (ii) its own appraisal of the
creditworthiness of Borrowers. Agent shall have no duty or responsibility,
either initially or on a continuing basis, to provide any Lender with any credit
or other information with respect thereto, whether coming into its possession
before making of the Advances or at any time or times thereafter except as shall
be provided by Borrower pursuant to the terms hereof. Agent shall not be
responsible to any Lender for any recitals, statements, information,
representations or warranties herein or in any agreement, document, certificate
or a statement delivered in connection with or for the execution, effectiveness,
genuineness, validity, enforceability, collectibility or sufficiency of this
Agreement or any Other Document, or of the financial condition of each Borrower,
or be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this Agreement, the
Notes, the Other Documents or the financial condition of each Borrower, or the
existence of any Event of Default or any Default.
Agent may resign on sixty (60) days' written notice to each of Lenders and
Borrowers and upon such resignation, the Required Lenders will promptly
designate a successor Agent reasonably satisfactory to Borrowers.
Any such successor Agent shall succeed to the rights, powers and duties
of Agent, and the term "Agent" shall mean such successor agent effective upon
its appointment, and the former Agent's rights, powers and duties as Agent shall
be terminated, without any other or further act or deed on the part of such
former Agent. After any Agent's resignation as Agent, the provisions of this
Article XIV shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.
14.4. Certain Rights of Agent.
-----------------------
If Agent shall request instructions from Lenders with respect to any act or
action (including failure to act) in connection with this Agreement or any Other
Document, Agent shall be entitled to refrain from such act or taking such action
unless and until Agent shall have received instructions from the Required
Lenders; and Agent shall not incur liability to any Person by reason of so
refraining. Without limiting the foregoing, Lenders shall not have any
81
<PAGE>
right of action whatsoever against Agent as a result of its acting or refraining
from acting hereunder in accordance with the instructions of the Required
Lenders.
14.5. Reliance.
--------
Agent shall be entitled to rely, and shall be fully protected in relying,
upon any note, writing, resolution, notice, statement, certificate, telex,
teletype or telecopier message, cablegram, order or other document or telephone
message believed by it to be genuine and correct and to have been signed, sent
or made by the proper person or entity, and, with respect to all legal matters
pertaining to this Agreement and the Other Documents and its duties hereunder,
upon advice of counsel selected by it. Agent may employ agents and attorneys-
in-fact and shall not be liable for the default or misconduct of any such agents
or attorneys-in-fact selected by Agent with reasonable care.
14.6. Notice of Default.
-----------------
Agent shall not be deemed to have knowledge or notice of the occurrence of
any Default or Event of Default hereunder or under the Other Documents, unless
Agent has received notice from a Lender or any Borrower referring to this
Agreement or the Other Documents, describing such Default or Event of Default
and stating that such notice is a "notice of default". In the event that Agent
receives such a notice, Agent shall give notice thereof to Lenders. Agent shall
take such action with respect to such Default or Event of Default as shall be
directed by the Required Lenders; provided, that, unless and until Agent shall
-------- ----
have received such directions, Agent may but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of Lenders.
14.7. Indemnification.
---------------
To the extent Agent is not reimbursed and indemnified by Borrowers, each
Lender will reimburse and indemnify Agent in proportion to its respective
portion of the Advances (or, if no Advances are outstanding, according to its
Commitment Percentage), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by or asserted against Agent in performing its duties hereunder, or in any way
relating to or arising out of this Agreement or any Other Document; provided
--------
that, Lenders shall not be liable for any portion of such liabilities,
- ----
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from Agent's willful misconduct or gross
(not mere) negligence.
14.8. Agent in its Individual Capacity.
--------------------------------
With respect to the obligation of Agent to lend under this Agreement, the
Advances made by it shall have the same rights and powers hereunder as any other
Lender and as if it were not performing the duties as Agent specified herein;
and the term "Lender" or any similar term shall, unless the context clearly
otherwise indicates, include Agent in its individual capacity as a Lender.
Agent may engage in business with Borrowers as if it were not performing the
duties
82
<PAGE>
specified herein, and may accept fees and other consideration from any Borrower
for services in connection with this Agreement or otherwise without having to
account for the same to Lenders.
14.9. Delivery of Documents.
---------------------
To the extent Agent receives documents and information from any Borrower
pursuant to the terms of this Agreement, Agent will promptly furnish such
documents and information to Lenders.
14.10. Borrowers' Undertaking to Agent.
-------------------------------
Without prejudice to their respective obligations to the Lenders under the
other provisions of this Agreement, each Borrower hereby undertakes with Agent
to pay to Agent from time to time on demand all amounts from time to time due
and payable by it for the account of Agent or the Lenders or any of them
pursuant to this Agreement to the extent not already paid. Any payment made
pursuant to any such demand shall pro tanto satisfy Borrowers' obligations to
--- -----
make payments for the account of the Lenders or the relevant one or more of them
pursuant to this Agreement.
XV. MISCELLANEOUS.
-------------
15.1. Governing Law.
-------------
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York applied to contracts to be performed wholly within
the State of New York. Any judicial proceeding brought by or against any
Borrower with respect to any of the Obligations, this Agreement or any related
agreement may be brought in any court of competent jurisdiction in the State of
New York, United States of America, and, by execution and delivery of this
Agreement, each Borrower each accepts for itself and in connection with its
properties, generally and unconditionally, the non-exclusive jurisdiction of the
aforesaid courts, and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement. Each Borrower hereby waives personal
service of any and all process upon it and consents that all such service of
process may be made by registered mail (return receipt requested) directed to
Borrowing Agent at its address set forth in Section 15.6. Nothing herein shall
affect the right to serve process in any manner permitted by law or shall limit
the right of the Agent to bring proceedings against any Borrower in the courts
of any other jurisdiction. Each Borrower waives any objection to jurisdiction
and venue of any action instituted hereunder and shall not assert any defense
based on lack of jurisdiction or venue or based upon forum non conveniens. Any
--------------------
judicial proceeding by any Borrower against the Agent or Lenders involving,
directly or indirectly, any matter or claim in any way arising out of: related
to or connected with this Agreement or any related agreement, shall be brought
only in a federal or state court located in the City of New York, State of New
York.
83
<PAGE>
15.2 Entire Understanding.
--------------------
(a) This Agreement and the documents executed concurrently herewith
contain the entire understanding between Borrowers, Agent and each Lender and
supersedes all prior agreements and understandings, if any, relating to the
subject matter hereof. Any promises, representations, warranties or guarantees
not herein contained and hereinafter made shall have no force and effect unless
in writing, signed by each Borrower's, Agent's and each Lender's respective
officers. Neither this Agreement nor any portion or provisions hereof may be
changed, modified, amended, waived, supplemented, discharged, cancelled or
terminated orally or by any course of dealing, or in any manner other than by an
agreement in writing, signed by the party to be charged. Each Borrower
acknowledges that it has been advised by counsel in connection with the
execution of this Agreement and Other Documents and is not relying upon oral
representations or statements inconsistent with the terms and provisions of this
Agreement.
(b) The Required Lenders, Agent with the consent in writing of the
Required Lenders, and each Borrower may, subject to the provisions of this
Section 15.2(b), from time to time enter into written supplemental agreements to
this Agreement, the Notes or the Other Documents executed by Borrowers, for the
purpose of adding or deleting any provisions or otherwise changing, varying or
waiving in any manner the rights of the Lenders, Agent or any Borrower
thereunder or the conditions, provisions or terms thereof or waiving any Event
of Default thereunder, but only to the extent specified in such written
agreements; provided, however, that no such supplemental agreement shall (x)
--------- -------
amend Sections 6.5, 6.6, 6.7, 6.8, 6.9, 6.10 or 7.6 without the consent of 67%
of the Lenders or (y) without the consent of all the Lenders:
(i) increase or decrease the Commitment Percentage of any
Lender or the Maximum Loan Amount or the Advance Rates.
(ii) extend the maturity of any Note or the due date for any
amount payable hereunder, or decrease the rate of interest or reduce any fee
payable by Borrowers to Agent or Lenders pursuant to this Agreement.
(iii) alter the definition of the term Required Lenders or
alter, amend or modify this Section 15.2(b).
(iv) release any Collateral during any calendar year having an
aggregate value in excess of $100,000.
(v) change the rights and duties of Agent.
Any such supplemental agreement shall apply equally to each of the Lenders and
shall be binding upon Borrowers, the Lenders and Agent and all future holders of
the Obligations. In the case of any waiver, Borrowers, Agent and the Lenders
shall be restored to their former positions and rights, and any Event of Default
waived shall be deemed to be cured and not continuing, but no waiver of a
specific Event of Default shall extend to any subsequent Event of Default
84
<PAGE>
(whether or not the subsequent Event of Default is the same as the Event of
Default which was waived), or impair any right consequent thereon.
15.3 Successors and Assigns; Participations; New Lenders.
---------------------------------------------------
(a) This Agreement shall be binding upon and inure to the benefit of
Borrowers, Agent, each Lender, all future holders of the Notes and their
respective successors and assigns, except that no Borrower may assign or
transfer any of its rights or obligations under this Agreement without the
prior written consent of Agent and Lenders holding at least seventy-six
percent (76%) of the Advances or if no Advances are outstanding, seventy-
six percent (76%) of the Commitment Percentages.
(b) Each Borrower acknowledges that in the regular course of
commercial banking business one or more Lenders may at any time and from
time to time sell participating interests in the Advances to other
financial institutions (each such transferee or purchaser of a
participating interest, a "Transferee"). Each Transferee may exercise
all rights of payment (including without limitation rights of set-off) with
respect to the portion of such Advances held by it or other Obligations
payable hereunder as fully as if such Transferee were the direct holder
thereof provided that Borrowers shall not be required to pay to any
Transferee more than the amount which it would have been required to pay to
the Lender which granted an interest in its Advances or other Obligations
payable hereunder to such Transferee had such Lender retained such interest
in the Advances hereunder or other Obligations payable hereunder and in no
event shall Borrowers be required to pay any such amount arising from the
same circumstances and with respect to the same Advances or other
Obligations payable hereunder to both such Lender and such Transferee.
Each Borrower hereby grants to any Transferee a continuing security
interest in any deposits, moneys or other property actually or
constructively held by such Transferee as security for the Transferee's
interest in the Advances.
(c) Any Lender may with the consent of Agent which shall not be
unreasonably withheld or delayed sell, assign or transfer all or any part
of its rights under this Agreement and the Other Documents to one or more
additional banks or financial institutions and one or more additional banks
or financial institutions may commit to make Advances hereunder (each a
"Purchasing Lender"), pursuant to a Commitment Transfer Supplement,
executed by a Purchasing Lender, the transferor Lender, and Agent and
delivered to Agent for recording provided no Purchasing Lender shall be
sold an aggregate commitment of less than $5,000,000. Upon such execution,
delivery, acceptance and recording, from and after the transfer effective
date determined pursuant to such Commitment Transfer Supplement, (i)
Purchasing Lender thereunder shall be a party hereto and, to the extent
provided in such Commitment Transfer Supplement, have the rights and
obligations of a Lender thereunder with a Commitment Percentage as set
forth therein, and (ii) the transferor Lender thereunder shall, to the
extent provided in such Commitment Transfer Supplement, be released from
its obligations under this Agreement, the Commitment Transfer Supplement
creating a novation for that purpose. Such Commitment Transfer Supplement
shall be deemed to amend this Agreement to the
85
<PAGE>
extent, and only to the extent, necessary to reflect the addition of such
Purchasing Lender and the resulting adjustment of the Commitment
Percentages arising from the purchase by such Purchasing Lender of all or a
portion of the rights and obligations of such transferor Lender under this
Agreement and the Other Documents. Each Borrower hereby consent to the
addition of such Purchasing Lender and the resulting adjustment of the
Commitment Percentages arising from the purchase by such Purchasing Lender
of all or a portion of the rights and obligations of such transferor Lender
under this Agreement and the Other Documents. Each Borrower shall execute
and deliver such further documents and do such further acts and things in
order to effectuate the foregoing.
(d) Agent shall maintain at its address a copy of each Commitment
Transfer Supplement delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Advances owing to each Lender
from time to time. The entries in the Register shall be conclusive, in the
absence of manifest error, and each Borrower, Agent and Lenders may treat
each Person whose name is recorded in the Register as the owner of the
Advance recorded therein for the purposes of this Agreement. The Register
shall be available for inspection by Borrowers, or any Lender at any
reasonable time and from time to time upon reasonable prior notice. Agent
shall receive a fee in the amount of $2500 payable by the applicable
Purchasing Lender upon the effective date of each transfer or assignment to
such Purchasing Lender.
(e) Each Borrower authorizes each Lender to disclose to any Transferee
or Purchasing Lender and any prospective Transferee or Purchasing Lender
any and all financial information in such Lender's possession concerning
Borrowers which has been delivered to such Lender by or on behalf of any
Borrower pursuant to this Agreement or in connection with such Lender's
credit evaluation of Borrowers.
15.4. Application of Payments.
-----------------------
Agent shall have the continuing and exclusive right to apply or reverse and
re-apply any payment and any and all proceeds of Collateral to any portion of
the Obligations. To the extent that any Borrower makes a payment or Agent or
any Lender receives any payment or proceeds of the Collateral for any Borrower's
benefit, which are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, debtor in
possession, receiver, custodian or any other party under any bankruptcy law,
common law or equitable cause, then, to such extent, the Obligations or part
thereof intended to be satisfied shall be revived and continue as if such
payment or proceeds had not been received by Agent or such Lender.
15.5. Indemnity.
---------
Each Borrower shall indemnify Agent and each Lender and their officers,
employees and agents from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses and
disbursements of any kind or nature whatsoever (including, without limitation,
fees and disbursements of counsel) which may be imposed on, incurred by, or
asserted against Agent or any Lender in any litigation, proceeding or
investigation instituted or
86
<PAGE>
conducted by any governmental agency or instrumentality or any other Person with
respect to any aspect of, or any transaction contemplated by, or referred to in,
or any matter related to, this Agreement, whether or not Agent or any Lender is
a party thereto, except to the extent that any of the foregoing arises out of
the willful misconduct or gross (not mere) negligence of the party being
indemnified.
15.6. Notice.
------
Any notice or request hereunder may be given to any Borrower or to Agent or
any Lender at their respective addresses set forth below or at such other
address as may hereafter be specified in a notice designated as a notice of
change of address under this Section. Any notice or request hereunder shall be
given by (a) hand delivery, (b) overnight courier, (c) registered or certified
mail, return receipt requested, (d) telex or telegram, subsequently confirmed by
registered or certified mail, or (e) telecopy to the number set out below (or
such other number as may hereafter be specified in a notice designated as a
notice of change of address) with telephone communication to a duly authorized
officer of the recipient confirming its receipt as subsequently confirmed by
registered or certified mail. Any notice or other communication required or
permitted pursuant to this Agreement shall be deemed given (a) when personally
delivered to any officer of the party to whom it is addressed, (b) on the
earlier of actual receipt thereof or three (3) days following posting thereof by
certified or registered mail, postage prepaid, or (c) upon actual receipt
thereof when sent by a recognized overnight delivery service or (d) upon actual
receipt thereof when sent by telecopier to the number set forth below with
telephone communication confirming receipt and subsequently confirmed by
registered, certified or overnight mail to the address set forth below, in each
case addressed to each party at its address set forth below or at such other
address as has been furnished in writing by a party to the other by like notice:
(A) If to Agent or Bank of America at: Bank of America, N.A.
Agency Services
Independence Center, 15th Floor
Charlotte, NC 28255
Attention: Kelly Weaver
Telephone: (704) 388-6483
Telecopier: (704) 409-0014
with a copy to
(other than with respect
to matters relating solely
to fundings and payments): Bank of America, N.A.
335 Madison Ave.
New York, NY 10017
Attention: David Noda
Telephone: (212) 503-7948
Telecopy: (212) 503-7878
87
<PAGE>
(B) If to a Lender other than Agent, as specified on the signature pages
hereof
(C) If to a Borrower: c/o Radnor Holdings Corporation
Three Radnor Corporate Center
Suite 300
100 Matsonford Road
Radnor, Pennsylvania 19087
Attention: Michael T. Kennedy
Telephone: (610) 995-2568
Telecopier: (610) 995-2697
with a copy to: Duane Morris & Heckscher
One Liberty Place
Philadelphia, Pennsylvania 19103
Attention: Stephen Teaford, Esq.
Telephone: (215) 979-1220
Telecopier: (215) 979-1020
15.7. Survival.
--------
The obligations of Borrowers under Sections 2.2(f), 3.7, 3.8, 3.9, 14.7 and
15.5 shall survive termination of this Agreement and the Other Documents and
payment in full of the Obligations.
15.8. Severability.
------------
If any part of this Agreement is contrary to, prohibited by, or deemed
invalid under applicable laws or regulations, such provision shall be
inapplicable and deemed omitted to the extent so contrary, prohibited or
invalid, but the remainder hereof shall not be invalidated thereby and shall be
given effect so far as possible.
15.9. Expenses.
--------
Borrowers shall pay all costs and expenses including, without limitation,
reasonable attorneys' fees and disbursements incurred by Agent, any Lender and
Agent on behalf of the Lenders (a) in all efforts made to enforce payment of any
Obligation or effect collection of any Collateral, or (b) in connection with the
entering into, modification, amendment, administration and enforcement of this
Agreement or any consents or waivers hereunder and all related agreements
documents and instruments, or (c) in instituting, maintaining, preserving,
enforcing and foreclosing on Agent's security interest in or Lien on any of the
Collateral, whether through judicial proceedings or otherwise, or (d) in
defending or prosecuting any actions or proceedings arising out of or relating
to Agent's or any Lender's transactions with any Borrower, or (e) in connection
with any advice given to Agent or any Lender with respect to its rights and
obligations under this Agreement and all related agreements.
88
<PAGE>
15.10. Injunctive Relief.
-----------------
Each Borrower recognizes that, in the event any Borrower fails to perform,
observe or discharge any of its obligations or liabilities under this Agreement,
any remedy at law may prove to be inadequate relief to Agent and the Lenders;
therefore, Agent and each Lender, if Agent or such Lender so requests, shall be
entitled to temporary and permanent injunctive relief in any such case without
the necessity of proving that actual damages are not an adequate remedy.
15.11. Consequential Damages.
---------------------
Neither Agent nor Lenders nor any agent or attorney for any of them shall
be liable to any Borrower for consequential damages arising from any breach of
contract, tort or other wrong relating to the establishment, administration or
collection of the Obligations.
15.12. Captions.
--------
The captions at various places in this Agreement are intended for
convenience only and do not constitute and shall not be interpreted as part of
this Agreement.
15.13. Counterparts: Telecopied Signatures.
------------------------------------
This Agreement 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.
15.14. Construction.
------------
The parties acknowledge that each party and its counsel have reviewed this
Agreement and that the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Agreement or any amendments, schedules or exhibits
thereto.
15.15. Currency Indemnity.
------------------
Except as set forth in Section 2.7,
(a) If: (i) any amount payable by a Borrower hereunder or in
connection herewith is received by the Agent or any Lender in a currency
(the "Payment Currency") other than that agreed to be payable hereunder
(the "Agreed Currency"), whether as a result of any judgment or order or
the enforcement thereof, the liquidation of such Borrower or otherwise
howsoever; and (ii) the amount produced by converting the Payment Currency
so received into the Agreed Currency is less than the relevant amount of
the Agreed Currency; then such Borrower shall indemnify each of the Agent
and the Lenders for the deficiency and any loss sustained as a result.
Such conversion shall be made at such prevailing rate of exchange, on such
date and in such market as is
89
<PAGE>
determined by the Agent, or the relevant Lender as being most appropriate
for such conversion. Such Borrower shall in addition pay the costs of such
conversion.
(b) The above indemnity shall constitute separate and independent
obligations of each Borrower from its other obligations hereunder and shall
apply irrespective of any indulgence granted by the Agent or any Lender.
XVI. BORROWING AGENCY
----------------
16.1. Borrowing Agency Provisions.
---------------------------
(a) Each Borrower hereby irrevocably designates Borrowing Agent to
be its attorney and agent and in such capacity to borrow, sign and endorse
notes, and execute and deliver all instruments, documents, writings and
further assurances now or hereafter required hereunder, on behalf of such
Borrower or Borrowers, and hereby authorizes Agent to pay over or credit
all loan proceeds hereunder in accordance with the request of Borrowing
Agent.
(b) The handling of this credit facility as a co-borrowing facility
with a borrowing agent in the manner set forth in this Agreement is solely
as an accommodation to Borrowers and at their request. Neither Agent nor
any Lender shall incur liability to Borrowers as a result thereof. To
induce Agent and Lenders to do so and in consideration thereof, each
Borrower hereby indemnifies Agent and each Lender and holds Agent and each
Lender harmless from and against any and all liabilities, expenses, losses,
damages and claims of damage or injury asserted against Agent or any Lender
by any Person arising from or incurred by reason of the handling of the
financing arrangements of Borrowers as provided herein, reliance by Agent
or any Lender on any request or instruction from Borrowing Agent or any
other action taken by Agent or any Lender with respect to this Section 15.1
except due to willful misconduct or gross (not mere) negligence by the
indemnified party.
(c) All U.S. Obligations shall be joint and several obligations of
the U.S. Borrowers, and each U.S. Borrower shall make payment upon the
maturity of the U.S. Obligations by acceleration or otherwise, and such
obligation and liability on the part of each U.S. Borrower shall in no way
be affected by any extensions, renewals and forbearance granted by Agent
or any Lender to any other U.S. Borrower, failure of Agent or any Lender to
give any U.S. Borrower notice of borrowing or any other notice, any failure
of Agent or any Lender to pursue or preserve its rights against any U.S.
Borrower, the release by Agent or any Lender of any Collateral now or
thereafter acquired from any U.S. Borrower, and such agreement by each U.S.
Borrower to pay upon any notice issued pursuant thereto is unconditional
and unaffected by prior recourse by Agent or any Lender to the other U.S.
Borrowers or any Collateral for such U.S. Borrower's Obligations or the
lack thereof.
90
<PAGE>
(d) All European Obligations shall be joint and several as among the
European Borrowers, and each European Borrower shall make payment upon
the maturity of the European Obligations by acceleration or otherwise,
and such obligation and liability on the part of each European Borrower
shall in no way be affected by any extensions, renewals and forbearance
granted by Agent or any Lender to any other European Borrower, failure of
Agent or any Lender to give any European Borrower notice of borrowing or
any other notice, any failure of Agent or any Lender to pursue or
preserve its rights against any European Borrower, the release by Agent
or any Lender of any Collateral now or thereafter acquired from any
European Borrower, and such agreement by each European Borrower to pay
upon any notice issued pursuant thereto is unconditional and unaffected
by prior recourse by Agent or any Lender to the other European Borrowers
or any Collateral for such European Borrower's European Obligations or
the lack thereof.
16.2. Waiver of Subrogation.
---------------------
Each Borrower expressly waives any and all rights of subrogation,
reimbursement, indemnity, exoneration, contribution of any other claim which
such Borrower may now or hereafter have against the other Borrowers or other
Person directly or contingently liable for the Obligations hereunder, or against
or with respect to the other Borrowers' property (including, without limitation,
any property which is Collateral for the Obligations), arising from the
existence or performance of this Agreement, until termination of this Agreement
and repayment in full of the Obligations.
XVII. GUARANTY.
--------
17.1. Cross-Guaranty.
--------------
(a) U.S. Cross-Guaranty. Each U.S. Borrower hereby acknowledges
-------------------
and agrees that such U.S. Borrower is jointly and severally liable for,
and hereby absolutely and unconditionally guarantees to each other U.S.
Borrower, Agent and Lenders the full and prompt payment of, all U.S.
Obligations owed or hereafter owing by each other U.S. Borrower. Each
U.S. Borrower further agrees to pay all costs and expenses including,
without limitation, all court costs and reasonable attorneys' and
paralegals' fees and expenses, paid or incurred by Lender in endeavoring
to collect all or any part of the U.S. Obligations from, or in
prosecuting any action against, such U.S. Borrower or any other guarantor
of all or any part of the U.S. Obligations.
(b) European Cross-Guaranty. Each European Borrower hereby
-----------------------
acknowledges and agrees that such European Borrower is jointly and
severally liable for, and hereby absolutely and unconditionally
guarantees to each other European Borrower, Agent and Lenders the full
and prompt payment of, all European Obligations owed or hereafter owing
by each other European Borrower. Each European Borrower further agrees to
pay all costs and expenses including, without limitation, all court costs
and reasonable attorneys' and paralegals' fees and expenses, paid or
incurred by the Lenders
91
<PAGE>
in endeavoring to collect all or any part of the European Obligations from,
or in prosecuting any action against, such European Borrower or any other
guarantor of all or any part of the European Obligations. No guarantee,
indemnity, joint or other obligation, as referred to in this Section
17.1(b), provided by ThermiSol Denmark shall be made or construed or
enforced as serving (directly or indirectly) as security for any
indebtedness to the Lenders with respect to any obligation of a direct or
indirect shareholder of ThermiSol Denmark.
(c) Guaranty by U.S. Borrowers of the European Obligations. Each
------------------------------------------------------
U.S. Borrower hereby acknowledges and agrees that such U.S. Borrower is
jointly and severally liable for, and hereby absolutely and unconditionally
guarantees to each other Borrower, Agent and Lenders the full and prompt
payment of all, European Obligations owed or hereafter owing by each
European Borrower. Each U.S. Borrower further agrees to pay all costs and
expenses including, without limitation, all court costs and reasonable
attorneys' and paralegals' fees and expenses paid or incurred by the
Lenders in endeavoring to collect all or any part of the European
Obligations from, or in prosecuting any action against such U.S. Borrower
or any other guarantor of all or any part of the European Obligations.
17.2. Contribution with Respect to Guaranty Obligations.
-------------------------------------------------
(a) To the extent that any Borrower shall make a payment under this
Section 17 of all or any of the Obligations for which such Borrower is not
primarily liable (a "Guarantor Payment") which, taking into account all
other Guarantor Payments then previously or concurrently made by the other
Borrower, exceeds the amount which such Borrower would otherwise have paid
if each Borrower had paid the aggregate Obligations satisfied by such
Guarantor Payment in the same proportion that such Borrower's "Allocable
Amount" (as defined below) (in effect immediately prior to such Guarantor
Payment) bore to the aggregate Allocable Amounts of all of the Borrowers in
effect immediately prior to the making of such Guarantor Payment, then such
----
Borrower shall be entitled to receive contribution and indemnification
payments from, and be reimbursed by, the other Borrower for the amount of
such excess, pro rata based upon their respective Allocable Amounts in
--- ----
effect immediately prior to such Guarantor Payment.
(b) As of any date of determination, the "Allocable Amount" of any
--------- ------
Borrower shall be equal to the maximum amount of the claim which could then
be recovered from such Borrower under this Section 17 without rendering
such claim voidable or avoidable under Section 548 of chapter 11 of the
Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer
Act, Uniform Fraudulent Conveyance Act or similar statute or common law.
(c) This subsection 17.2 is intended only to define the relative
rights of the Borrowers and nothing set forth in this subsection 17.2 is
intended to or shall impair the obligations of the Borrowers, jointly and
severally, to pay any amounts as and when the same shall become due and
payable in accordance with the terms of this Agreement, and
92
<PAGE>
nothing contained in this subsection 17.2 shall limit the liability of any
Borrower to pay the Obligations for which it is primarily liable.
(d) The parties hereto acknowledge that the rights of contribution
and indemnification hereunder shall constitute assets of any Borrower to
which such contribution and indemnification is owing.
17.3. Obligations Absolute.
--------------------
The liability of each Borrower to Agent and Lenders hereunder shall not be
affected or impaired by any of the following: (a) the validity or
enforceability of the Obligations or any part thereof, or of the Note or other
instrument or document evidencing all or any part of the Obligations, (b) the
absence of any attempt to collect the Obligations from a Borrower or any other
guarantor or other action to enforce the same, (c) any acceptance of collateral
security, guarantors, accommodation parties or sureties for any or all
Obligations; (d) one or more extensions or renewals of Obligations (whether or
not for longer than the original period) or any modification of the interest
rates, fees, maturities or principal amount of, or other contractual terms
applicable to any Obligations; (e) any waiver or indulgence granted to a
Borrower, any delay or lack of diligence in the enforcement of Obligations, or
any failure to institute proceedings, file a claim, give any required notices or
otherwise protect any Obligations; (f) any full or partial release of;
compromise or settlement with, or agreement not to sue a Borrower or any
guarantor or other person liable in respect of any Obligations; (g) any release,
surrender, cancellation or other discharge of any evidence of any of the
Obligations or the acceptance of any instrument in renewal or substitution
therefore; (h) any failure to obtain collateral security (including rights of
setoff) for any of the Obligations, or to obtain or maintain the proper or
sufficient creation and perfection thereof; or to establish the priority
thereof; or to preserve, protect, insure care for, exercise or enforce any
collateral security; (i) any collection, sale, lease or disposition of; or any
other foreclosure or enforcement of or realization on, any collateral security;
(j) any assignment, pledge or other transfer of any of the Obligations or any
evidence thereof; (k) any manner, order or method of application of any payments
or credits upon any of the Obligations; (1) Agent's or any Lender's election, in
any case or proceedings under the Bankruptcy Code of the application of Section
111 (b)(2) thereof; (xiii) any borrowing or grant of a Lien by a Borrower as
debtor in possession under Section 364 of the Bankruptcy Code and (m) the
disallowance under the Bankruptcy Code of all or any portion of Agent's or such
Lender's claim for repayment of the Obligations. Each Borrower hereby waives
any and all legal and equitable defenses and discharges available to a surety
guarantor, or accommodation co-obligor.
Each Borrower hereby assumes responsibility for keeping itself informed of
the financial condition of the other Borrower, and any and all endorsers and
other guarantors of any agreement, instrument or document evidencing or security
all or any part of the Obligations and of all other circumstances bearing upon
the risk of nonpayment of the Obligations or any part thereof that diligent
inquiry would reveal, and each Borrower hereby agrees that neither Agent nor any
Lender shall have any duty to advise such Borrower of information regarding such
condition or any such circumstances. Each Borrower hereby acknowledges
familiarity with the other Borrower's financial condition and has not relied on
any statements by Agent or Lenders in
93
<PAGE>
obtaining such information. In the event Agent or any Lender, in its sole
discretion, undertakes at any time or from time to time to provide any such
information to a Borrower, it shall not be under any obligation (i) to undertake
any investigation with respect thereto, (ii) to disclose any information which,
pursuant to accepted or reasonable credit practices, Agent wishes to maintain
confidential or (iii) to make any other or future disclosures of such
information, or any other information, to such Borrower.
17.4. Waiver.
------
UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, AGENT OR ANY LENDER MAY, AT ITS
SOLE ELECTION, PROCEED DIRECTLY WITHOUT NOTICE, AGAINST A BORROWER TO COLLECT
AND RECOVER ALL OR ANY PART OF THE OBLIGATIONS WITHOUT FIRST PROCEEDING AGAINST
THE OTHER BORROWER, ANY OTHER GUARANTOR, OR ANY COLLATERAL FOR THE
OBLIGATIONS.
EACH BORROWER ALSO WAIVES ALL SETOFFS AND COUNTERCLAIMS AND ALL
PRESENTMENTS, DEMANDS FOR PERFORMANCE, NOTICES OF NONPERFORMANCE, PROTESTS,
NOTICES OF PROTEST, NOTICES OF DISHONOR, AND NOTICES OF ACCEPTANCE OF THIS
GUARANTY. EACH BORROWER FURTHER WAIVES ALL NOTICES OF THE EXISTENCE, CREATION
OR INCURRING OF NEW OR ADDITIONAL INDEBTEDNESS, ARISING EITHER FROM ADDITIONAL
LOANS EXTENDED TO THE OTHER BORROWERS OR OTHERWISE, AND EXCEPT FOR NOTICES
EXPRESSLY REQUIRED HEREUNDER, ALSO WAIVES ALL NOTICES THAT THE PRINCIPAL AMOUNT,
OR ANY PORTION THEREOF, OR ANY INTEREST ON ANY AGREEMENT, INSTRUMENT OR DOCUMENT
EVIDENCING OR SECURING ALL OR ANY PART OF THE OBLIGATIONS IS DUE, NOTICES OF ANY
AND ALL PROCEEDINGS TO COLLECT FROM THE MAKER, ANY ENDORSER OR ANY OTHER
GUARANTOR OF ALL OR ANY PART OF THE OBLIGATIONS, OR FROM ANY OTHER PERSON, AND
TO THE EXTENT PERMITTED BY LAW, NOTICES OF EXCHANGE, SALE, SURRENDER OR OTHER
HANDLING OF ANY COLLATERAL GIVEN TO AGENT AND LENDERS TO SECURE PAYMENT OF THE
OBLIGATIONS.
17.5. Recovery.
--------
Each Borrower agrees that, to the extent that the other Borrower makes a
payment or payments to Agent or any Lender, or receives any proceeds of
Collateral, which payment or payments or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to such other Borrower, its estate, trustee, receiver or any other
party under any bankruptcy law, state or federal law, common law or equitable
cause, then to the extent of such payment or repayment, the Obligations or the
part thereof which has been paid, reduced or satisfied by such amount shall be
reinstated and continued in full force and effect as of the date such initial
payment, reduction or satisfaction occurred, and this cross guaranty shall
continue to be in existence and full force and effect, irrespective of whether
any evidence of the Obligations has been surrendered or canceled.
94
<PAGE>
17.6. Liability Cumulative.
--------------------
The liability of the Borrowers under this Section 17 is in addition to and
shall be cumulative with all liabilities of each Borrower to Agent and Lenders
under this Agreement and the Other Documents to which such Borrower is a party
or in respect of any Obligations or obligation of the other Borrowers, without
any limitation as to amount, unless the instrument or agreement evidencing or
creating such other liability specifically provides to the contrary.
95
<PAGE>
Each of the parties has signed this Agreement as of the day and year first
above written.
U.S. BORROWERS: WINCUP HOLDINGS, INC.
By: /s/ R. Radcliffe Hastings
-------------------------
Its: SVP
------------------------
RADNOR CHEMICAL CORPORATION
By: /s/ R. Radcliffe Hastings
-------------------------
Its: SVP
------------------------
STYROCHEM U.S., LTD.
By: /s/ R. Radcliffe Hastings
-------------------------
Its: SVP
------------------------
RADNOR HOLDINGS CORPORATION
By: /s/ R. Radcliffe Hastings
-------------------------
Its: SVP
------------------------
RADNOR DELAWARE, INC.
By: /s/ R. Radcliffe Hastings
-------------------------
Its: SVP
------------------------
STYROCHEM DELAWARE, INC.
By: /s/ R. Radcliffe Hastings
-------------------------
Its: SVP
------------------------
WINCUP TEXAS, LTD.
By: /s/ R. Radcliffe Hastings
-------------------------
Its: SVP
------------------------
<PAGE>
EUROPEAN BORROWERS: STYROCHEM EUROPE (THE NETHERLANDS) B.V.
By: /s/ R. Radcliffe Hastings
-------------------------
Its: Authorized Representative
-------------------------
STYROCHEM FINLAND OY
By: /s/ R. Radcliffe Hastings
-------------------------
Its: Director
------------------------
THERMISOL DENMARK A/S
By: /s/ R. Radcliffe Hastings
-------------------------
Its: Director
------------------------
THERMISOL SWEDEN AB
By: /s/ R. Radcliffe Hastings
-------------------------
Its: Director
------------------------
THERMISOL FINLAND OY
By: /s/ R. Radcliffe Hastings
-------------------------
Its: Director
------------------------
2
<PAGE>
BANK OF AMERICA, N.A.,
as a Lender and as Agent
By: /s/ David Noda
------------------------
Its: Managing Director
-----------------------
Commitment Percentage: 50%
FIRST UNION NATIONAL BANK,
as a Lender
By: /s/Constantin E. Chepurny
_________________________
Its: Senior Vice President
________________________
Commitment Percentage: 50%
3
<PAGE>
Exhibit 10.20
AMENDED AND RESTATED
U.S. REVOLVING CREDIT NOTE
$16,000,000.00 December 29, 1999
This Amended and Restated U.S. Revolving Credit Note is executed and
delivered under and pursuant to the terms of that certain Third Amended and
Restated Revolving Credit and Security Agreement dated as of the date hereof (as
amended, supplemented or modified from time to time, the "Loan Agreement") by
and among WinCup Holdings, Inc., Radnor Chemical Corporation, Radnor Holdings
Corporation, Radnor Delaware, Inc., StyroChem U.S., Ltd., Styrochem Delaware,
Inc., and Wincup Texas, Ltd. (each, a "U.S. Borrower" and jointly and severally,
the "U.S. Borrowers") and StyroChem Europe (The Netherlands) B.V., StyroChem
Finland OY, ThermiSol Denmark A/S, ThermiSol Finland OY and ThermiSol Sweden AB
(each a "European Borrower" and jointly and severally, the "European Borrowers";
the European Borrowers together with the U.S. Borrowers each, a "Borrower" and
collectively, the "Borrowers"), the financial institutions named therein and the
financial institutions which hereafter become a party thereto (collectively, the
"Lenders") and Bank of America, N.A. as administrative and collateral agent for
the Lenders (in such capacity, the "Agent"). Capitalized terms not otherwise
defined herein shall have the meanings ascribed thereto in the Loan Agreement.
FOR VALUE RECEIVED, the U.S. Borrowers jointly and severally hereby promise
to pay to the order of BANK OF AMERICA, N.A. (the "Bank"), at Agent's offices
located at 101 N. Tryon Street, Charlotte, North Carolina 28255 or at such other
place as the holder may from time to time designate to Borrower in writing:
(i) the principal sum of SIXTEEN MILLION DOLLARS ($16,000,000.00) or, if
different from such amount, the unpaid principal balance of the Bank's
Commitment Percentage of U.S. Revolving Advances as may be due and owing under
the Loan Agreement, payable in accordance with the provisions of the Loan
Agreement, subject to acceleration upon the occurrence of an Event of Default
under the Loan Agreement, termination of the Loan Agreement pursuant to the
terms thereof or repayment as required by the Loan Agreement; and
(ii) interest in the principal amount of this Note from time to time
outstanding until such principal amount is paid in full at such interest rates
and at such times as are specified in the Loan Agreement. In no event, however,
shall interest hereunder exceed the maximum interest rate permitted by law.
Upon and after the occurrence of an Event of Default, and during the
continuation thereof, interest shall be payable at the Default Rate.
This Note is one of the U.S. Revolving Credit Notes referred to in the Loan
Agreement and is secured, inter alia, by the liens granted pursuant to the Loan
----------
Agreement and the Other Documents, is entitled to the benefits of the Loan
Agreement and the Other Documents and is subject to all of the agreements, terms
and conditions therein contained.
<PAGE>
This note may be prepaid, in whole or in part, on the terms and conditions
set forth in the Loan Agreement.
This Note shall be construed and enforced in accordance with the laws of
the State of New York.
Each U.S. Borrower expressly waives any presentment, demand, protest,
notice of protest, or notice of any kind except as expressly provided in the
Loan Agreement.
This Note, together with the other U.S. Revolving Credit Notes executed and
delivered under and pursuant to the terms of the Loan Agreement, amends and
restates in its entirety, and is issued in full substitution and replacement for
(but not satisfaction of), each Revolving Credit Note executed and delivered
under and pursuant to the terms of the Existing Loan Agreement.
IN WITNESS WHEREOF, I have hereunto set my hand this 29th day of December,
1999.
WINCUP HOLDINGS, INC.
RADNOR CHEMICAL CORPORATION
RADNOR HOLDINGS CORPORATION
RADNOR DELAWARE, INC.
STYROCHEM U.S., LTD.
By: StyroChem GP, L.L.C., its general
partner
STYROCHEM DELAWARE, INC.
WINCUP TEXAS, LTD.
By: WinCup GP, L.L.C., its general
partner
By:/s/ R. Radcliffe Hastings
_________________________
Name:R. Radcliffe Hastings
______________________
Title:Senior Vice President of each of the
foregoing (or, if applicable, its general
partner)
2
<PAGE>
Exhibit 10.21
AMENDED AND RESTATED
U.S. REVOLVING CREDIT NOTE
$16,000,000.00 December 29, 1999
This Amended and Restated U.S. Revolving Credit Note is executed and
delivered under and pursuant to the terms of that certain Third Amended and
Restated Revolving Credit and Security Agreement dated as of the date hereof (as
amended, supplemented or modified from time to time, the "Loan Agreement") by
and among WinCup Holdings, Inc., Radnor Chemical Corporation, Radnor Holdings
Corporation, Radnor Delaware, Inc., StyroChem U.S., Ltd., Styrochem Delaware,
Inc., and Wincup Texas, Ltd. (each, a "U.S. Borrower" and jointly and severally,
the "U.S. Borrowers") and StyroChem Europe (The Netherlands) B.V., StyroChem
Finland OY, ThermiSol Denmark A/S, ThermiSol Finland OY and ThermiSol Sweden AB
(each a "European Borrower" and jointly and severally, the "European Borrowers";
the European Borrowers together with the U.S. Borrowers each, a "Borrower" and
collectively, the "Borrowers"), the financial institutions named therein and the
financial institutions which hereafter become a party thereto (collectively, the
"Lenders") and Bank of America, N.A. as administrative and collateral agent for
the Lenders (in such capacity, the "Agent"). Capitalized terms not otherwise
defined herein shall have the meanings ascribed thereto in the Loan Agreement.
FOR VALUE RECEIVED, the U.S. Borrowers jointly and severally hereby promise
to pay to the order of FIRST UNION NATIONAL BANK (the "Bank"), at Agent's
offices located at 101 N. Tryon Street, Charlotte, North Carolina 28255 or at
such other place as the holder may from time to time designate to Borrower in
writing:
(i) the principal sum of SIXTEEN MILLION DOLLARS ($16,000,000.00) or, if
different from such amount, the unpaid principal balance of the Bank's
Commitment Percentage of U.S. Revolving Advances as may be due and owing under
the Loan Agreement, payable in accordance with the provisions of the Loan
Agreement, subject to acceleration upon the occurrence of an Event of Default
under the Loan Agreement, termination of the Loan Agreement pursuant to the
terms thereof or repayment as required by the Loan Agreement; and
(ii) interest in the principal amount of this Note from time to time
outstanding until such principal amount is paid in full at such interest rates
and at such times as are specified in the Loan Agreement. In no event, however,
shall interest hereunder exceed the maximum interest rate permitted by law.
Upon and after the occurrence of an Event of Default, and during the
continuation thereof, interest shall be payable at the Default Rate.
This Note is one of the U.S. Revolving Credit Notes referred to in the Loan
Agreement and is secured, inter alia, by the liens granted pursuant to the Loan
----------
Agreement and the Other Documents, is entitled to the benefits of the Loan
Agreement and the Other Documents and is subject to all of the agreements, terms
and conditions therein contained.
<PAGE>
This note may be prepaid, in whole or in part, on the terms and conditions
set forth in the Loan Agreement.
This Note shall be construed and enforced in accordance with the laws of
the State of New York.
Each U.S. Borrower expressly waives any presentment, demand, protest,
notice of protest, or notice of any kind except as expressly provided in the
Loan Agreement.
This Note, together with the other U.S. Revolving Credit Notes executed and
delivered under and pursuant to the terms of the Loan Agreement, amends and
restates in its entirety, and is issued in full substitution and replacement for
(but not satisfaction of), each Revolving Credit Note executed and delivered
under and pursuant to the terms of the Existing Loan Agreement.
IN WITNESS WHEREOF, I have hereunto set my hand this 29th day of December,
1999.
WINCUP HOLDINGS, INC.
RADNOR CHEMICAL CORPORATION
RADNOR HOLDINGS CORPORATION
RADNOR DELAWARE, INC.
STYROCHEM U.S., LTD.
By: StyroChem GP, L.L.C., its general
partner
STYROCHEM DELAWARE, INC.
WINCUP TEXAS, LTD.
By: WinCup GP, L.L.C., its general
partner
By:/s/ R. Radcliffe Hastings
__________________________
Name:R. Radcliffe Hastings
_____________________
Title:Senior Vice President of each of the
foregoing (or, if applicable, its
general partner)
2
<PAGE>
Exhibit 10.22
SWINGLINE NOTE
$5,000,000.00 December 29, 1999
This Swingline Note is executed and delivered under and pursuant to the
terms of that certain Third Amended and Restated Revolving Credit and Security
Agreement dated as of the date hereof (as amended, supplemented or modified from
time to time, the "Loan Agreement") by and among WinCup Holdings, Inc., Radnor
Chemical Corporation, Radnor Holdings Corporation, Radnor Delaware, Inc.,
StyroChem U.S., Ltd., StyroChem Delaware, Inc., and WinCup Texas, Ltd. (each, a
"U.S. Borrower" and jointly and severally, the "U.S. Borrowers") and StyroChem
Europe (The Netherlands), B.V., StyroChem Finland OY, ThermiSol Denmark A/S,
ThermiSol Finland OY and ThermiSol Sweden AB (each a "European Borrower" and
jointly and severally, the "European Borrowers"; the European Borrowers together
with the U.S. Borrowers, each a "Borrower" and collectively, the "Borrowers").
FOR VALUE RECEIVED, the U.S. Borrowers hereby promise to pay to the order
of BANK OF AMERICA, N.A., its successors and assigns (the "Swingline Lender"),
----------------
at the office of Bank of America, N.A., as Administrative Agent (the "Agent"),
-----
at 101 N. Tryon Street, Independence Center, NC1-001-15-04, Charlotte, North
Carolina 28255 (or at such other place or places as the holder hereof may
designate), at the times set forth in the Third Amended and Restated Credit
Agreement dated as of December 29, 1999 among the U.S. Borrowers, the European
Borrowers, the financial institutions named therein and the financial
institutions which hereafter become a party thereto (collectively, the
"Lenders") and Bank of America, N.A. as administrative and collateral agent for
the Lenders (in such capacity, the "Agent") (as it may be amended, modified,
extended or restated from time to time, the "Credit Agreement"; all capitalized
----------------
terms not otherwise defined herein shall have the meanings set forth in the
Credit Agreement), but in no event later than the Termination Date, in Dollars
and in immediately available funds, the principal amount of FIVE MILLION DOLLARS
($5,000,000.00) or, if less than such principal amount, the aggregate unpaid
principal amount of all Swingline Loans made by the Swingline Lender to the U.S.
Borrowers pursuant to the Credit Agreement, and to pay interest from the date
hereof on the unpaid principal amount hereof, in like money, at said office, on
the dates and at the rate determined in accordance with subsection 2.14 of the
Credit Agreement.
Upon the occurrence and during the continuance of an Event of Default, the
balance outstanding hereunder shall bear interest as provided in subsection
2.14(c) of the Credit Agreement. Further, in the event the payment of all sums
due hereunder is accelerated under the terms of the Credit Agreement, this Note,
and all other indebtedness of the U.S. Borrowers to the Swingline Lender
outstanding under the Credit Agreement shall become immediately due and payable,
without presentment, demand, protest or notice of any kind, all of which are
hereby waived by the U.S. Borrowers.
In the event this Note is not paid when due at any stated or accelerated
maturity, the U.S. Borrowers agree to pay, in addition to the principal and
interest, all costs of collection, including reasonable attorneys' fees.
<PAGE>
All borrowings evidenced by this Note and all payments and prepayments
of the principal hereof and interest hereon and the respective dates thereof
shall be endorsed by the holder hereof on Schedule A attached hereto and
----------
incorporated herein by reference, or on a continuation thereof which shall be
attached hereto and made a part hereof; provided, however, that any failure to
-------- -------
endorse such information on such schedule or continuation thereof shall not in
any manner affect the obligation of the U.S. Borrowers to make payments of
principal and interest in accordance with the terms of this Note.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the U.S. Borrowers have caused this Note to be duly
executed by its duly authorized officer as of the day and year first above
written.
WINCUP HOLDINGS, INC.
RADNOR CHEMICAL CORPORATION
RADNOR HOLDINGS CORPORATION
RADNOR DELAWARE, INC.
STYROCHEM U.S., LTD.
By: StyroChem GP, L.L.C., its general
partner
STYROCHEM DELAWARE, INC.
WINCUP TEXAS, LTD.
By: Wincup GP, L.L.C., its general
partner
By:/s/ R. Radcliffe Hastings
-------------------------
Name:R. Radcliffe Hastings
---------------------
Title:Senior Vice President of each of the foregoing
(or, if applicable, its general partner)
<PAGE>
SCHEDULE A TO THE
SWINGLINE NOTE
OF THE U.S. BORROWERS
DATED DECEMBER 29, 1999
Unpaid Name of
Type Payments Principal Person
of Interest Principal Balance Making
Date Loan Period Interest of Note Notation
- ---- ---- ------ --------- -------- --------
<PAGE>
Exhibit 10.23
ASSIGNMENT AGREEMENT
This Assignment Agreement (the "Assignment") is entered into as of December
29, 1999 by and among GMAC COMMERICAL CREDIT LLC, formerly BNY Factoring LLC,
successor by merger to BNY Financial Corporation (the "U.S. Assignor"), GMAC
COMMERICAL CREDIT DEVELOPMENT LIMITED, formerly BNY Financial Limited (the "U.K.
Assignor" and, together with the U.S. Assignor, the "Assignors") and BANK OF
AMERICA, N.A., in its individual capacity and in its capacity as Lender under
the Loan Agreement described below, formerly NationsBank, N.A. ("Assignee").
RECITALS
--------
WHEREAS, the U.S. Assignor is the Agent under the Second Amended and
Restated Revolving Credit and Security Agreement dated as of October 15, 1997
(as same has been or may be amended, supplemented or otherwise modified in
accordance with the terms thereof, the "Loan Agreement") among (i) Wincup
Holdings, Inc., Radnor Chemical Corporation (formerly known as SP Acquisition
Co.), StyroChem U.S. Ltd. (formerly known as StyroChem International, Inc.),
Radnor Holdings Corporation, Radnor Delaware, Inc., StyroChem Delaware, Inc. and
Wincup Texas, Ltd., as Borrowers (each, a "U.S. Borrower" and jointly and
severally, the "U.S. Borrowers"), (ii) the U.S. Assignor, the Assignee and each
of the other financial institutions named therein or which have become a party
to such agreement, as Lenders (the "U.S. Lenders") and (iii) the U.S. Assignor,
as administrative and collateral agent for the U.S. Lenders (the "U.S. Agent");
WHEREAS, the U.K. Assignor is the Agent under the Supplement Revolving
Multicurrency Credit Agreement dated as of 12th December, 1997 (as same has been
or may be amended, supplemented or otherwise modified in accordance with the
terms thereof, the "European Supplement") among (i) StyroChem Europe (The
Netherlands) B.V., StyroChem Finland Oy, Thermisol Denmark A/S, Thermisol Sweden
AB and Thermisol Finland Oy, as Borrowers (each, a "European Borrower" and
jointly and severally, the "European Borrowers"; collectively, the U.S.
Borrowers and the European Borrowers are referred to herein as the "Borrowers"),
(ii) the U.K. Assignor, the Assignee and each of the other financial
institutions named therein or which have become a party to such agreement, as
Lenders (the "European Lenders") and (iii) the U.K. Assignor, as administrative
agent for the European Lenders (the "European Agent");
WHEREAS, in connection with execution of the Loan Agreement and the
European Supplement, the Borrowers and other Credit Parties executed and
delivered certain documents, instruments and agreements to the Assignors as more
particularly set forth on Exhibit A hereof (collectively, the "Financing
---------
Documents");
WHEREAS, at the Borrowers' request, (i) the U.S. Assignor has agreed to
assign, and the Assignee has agreed to accept U.S. Assignor's rights and
obligations as U.S. Agent under the Loan Agreement, including without limitation
its rights in the Financing Documents, (ii) the U.K. Assignor has agreed to
assign, and the Assignee has agreed to accept, all of the U.K. Assignor's rights
and obligations as European Agent under the European Supplement, including
without limitation its rights in the Financing Documents, and (iii) the parties
hereto have agreed that the Assignee shall become the successor Agent under the
Loan Agreement, the European Supplement and the Other Documents referred to
therein; and
WHEREAS, this Assignment is being executed and delivered in accordance with
Section 15.3 of the Loan Agreement and Section 15.3 of the European Supplement;
NOW, THEREFORE, the parties hereto hereby agree as follows:
AGREEMENT
---------
1. All capitalized terms used herein which are not defined shall have the
meanings given to them in the Loan Agreement and/or the European Supplement, as
applicable.
2. This Assignment shall become effective on the date hereof (the
"Transfer Effective Date"), and from and after the Transfer Effective Date, (a)
the Assignee shall be the Agent under each of the Loan Agreement
<PAGE>
and the European Supplement and for all purposes related thereto and (b) upon
simultaneously transferring their commitments, as Lenders, to First Union
National Bank, the Assignors shall no longer be parties to the Loan Agreement,
the European Supplement or the Other Documents, provided, however, Assignors
shall continue to retain their rights under the Loan Agreement and/or the
European Supplement as to any rights accruing to Assignors while they were
parties to such agreements, including any indemnity rights of Assignors which
survive the termination of the Loan Agreement pursuant to the terms thereof.
3. The Assignors have made arrangements with the Assignee with respect to
(a) the portion, if any, to be paid, and the date or dates for payment, by the
Assignors to the Assignee of any fees heretofore received by the Assignors, in
their capacity as agents, pursuant to the Loan Agreement and the European
Supplement prior to the Transfer Effective Date and (b) the portion, if any, to
be paid, and the date or dates for payment, by the Assignee to the Assignors of
fees or interest received by Assignee, in its capacity as agent, pursuant to the
Loan Agreement or the European Supplement from and after the Transfer Effective
Date. Borrowers acknowledge and agree that to induce Assignors to execute this
Assignment and the Commitment Transfer Supplements, dated as of the date hereof,
with First Union National Bank, Borrowers shall pay to Assignors a fee equal to
$200,000. The parties hereto acknowledge and agree that each Lender under the
Loan Agreement hereby waives its respective rights to any prepayment and/or
termination fee under the Loan Agreement.
4. All principal payments that would otherwise be payable from and after
the Transfer Effective Date to or for the account of an Assignor, in its
capacity as agent, pursuant to the Loan Agreement, the European Supplement
and/or the Notes shall, instead, be payable to or for the account of the
Assignee, as agent.
5. Concurrently with the execution and delivery hereof, the Assignors will
provide to the Assignee conformed copies of the Loan Agreement, the European
Supplement and all related documents delivered to the Assignors to the extent
such documents have not previously been delivered to the Assignee.
6. Each Assignor represents and warrants that it is a holder of the
Financing Documents being assigned by it hereunder and that its interest as
described in the Financing Documents to such Assignor's knowledge are free and
clear of any adverse claim.
7. Further, each Assignor represents and warrants to the Assignee as
follows:
(a) such Assignor has not previously assigned or pledged any of its
rights under any of the Financing Documents to any other person.
(b) to the best of its knowledge, such Assignor is not in default under
any of the Financing Documents.
(c) such Assignor does not know of any default on the part of any other
party to the Financing Documents (other than Bank of America, N.A.).
(d) such Assignor is not prohibited under any agreement with any other
person or under any judgment or decree from the execution and delivery of
this Assignment.
(e) such Assignor does not know of any action that has been brought or
threatened which would in any way prohibit or impair the execution and
delivery of this Assignment.
(f) no consent or other approval is required in connection with the
execution and delivery of this Assignment by such Assignor other than the
consent of the Borrowers hereunder.
(g) to the best of the Assignors' knowledge, Exhibit A sets forth each
---------
of the Financing Documents, together with any changes, extensions,
revisions, modifications or guarantees of performance thereto, and true and
correct copies of each of the Financing Documents have been delivered to
the Assignee.
<PAGE>
(h) such Assignor has full power to exercise any and all of its rights
under any of the Financing Documents.
8. Each of the parties to this Assignment agrees that at any time and
from time to time upon the written request of any other party, it will execute
and deliver such further documents and do such further acts and things as such
other party may reasonably request in order to effect the purposes of this
Assignment at the Borrowers' cost.
9. By executing and delivering this Assignment, the Assignors and the
Assignee confirm to and agree with each other as follows: (a) other than the
representation and warranty that it is the legal and beneficial owner of the
interest being assigned hereby free and clear of any adverse claim and those set
forth in Section 7 hereof, no Assignor makes any representation or warranty or
assumes any responsibility with respect to any statements, warranties or
representations made in or in connection with the Loan Agreement or the European
Supplement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Agreement, the European Supplement the Notes or
any other instrument or document furnished pursuant thereto; (b) no Assignor
makes any representation or warranty or assumes any responsibility with respect
to the financial condition of Borrowers or the performance or observance by
Borrowers of any of their Obligations under the Loan Agreement, the European
Supplement, the Notes or any other instrument or document furnished pursuant
thereto; (c) the Assignee confirms that it has received a copy of the Loan
Agreement and the European Supplement, together with copies of such financial
statements and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Assignment; (d)
the Assignee will, independently and without reliance upon the Assignors and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Agreement, the European Supplement or the Other Documents; (e)
the Assignee agrees that it will perform all of its respective obligations as
set forth in the Loan Agreement and the European Supplement to be performed by
it as a Lender and as Agent; and (f) the Assignee represents and warrants to the
Assignors and the Borrowers that it is either (i) entitled to the benefits of an
income tax treaty with the United States of America that provides for an
exemption from the United States withholding tax on interest and other payments
made by Borrowers under the Loan Agreement, the European Supplement and the
Other Documents or (ii) is engaged in trade or business within the United States
of America.
10. This Assignment shall be governed by, and construed in accordance
with, the laws of the State of New York.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Assignment to be
executed by their respective duly authorized officers on the date set forth
above.
GMAC COMMERCIAL CREDIT LLC, formerly BNY Factoring
LLC, successor by merger to BNY Financial
Corporation, as U.S. Assignor
By:/s/ Anthony Viola
------------------
Name:Anthony Viola
Title:Vice President
GMAC COMMERCIAL CREDIT DEVELOPMENT LIMITED,
formerly BNY Financial Limited, as U.K. Assignor
By:/s/ Peter Brady
----------------
Name:Peter Brady
Title:Senior Vice President
BANK OF AMERICA, N.A.,
as Assignee
By:/s/ David Noda
------------------
Name:David Noda
Title:Managing Director
Consented to:
FIRST UNION NATIONAL BANK
By:/s/ Constantin Chepurny
------------------------
Name:Constantin Chepurny
Title:Senior Vice President
WINCUP HOLDINGS, INC.
By:/s/ R. Radcliffe Hastings
-------------------------
Name:R. Radcliffe Hastings
Title:Senior Vice President
RADNOR CHEMICAL CORPORATION
By:/s/ R. Radcliffe Hastings
-------------------------
Name:R. Radcliffe Hastings
Title:Senior Vice President
STYROCHEM U.S., LTD.
By:/s/ R. Radcliffe Hastings
-------------------------
Name:R. Radcliffe Hastings
Title:Senior Vice President
<PAGE>
RADNOR HOLDINGS CORPORATION
By:/s/ R. Radcliffe Hastings
-------------------------
Name:R. Radcliffe Hastings
Title:Senior Vice President
RADNOR DELAWARE, INC.
By:/s/ R. Radcliffe Hastings
-------------------------
Name:R. Radcliffe Hastings
Title:Senior Vice President
STYROCHEM DELAWARE, INC.
By:/s/ R. Radcliffe Hastings
-------------------------
Name:R. Radcliffe Hastings
Title:Senior Vice President
WINCUP TEXAS, LTD.
By:/s/ R. Radcliffe Hastings
-------------------------
Name:R. Radcliffe Hastings
Title:Senior Vice President
<PAGE>
STYROCHEM EUROPE (THE NETHERLANDS) B.V.
By:/s/ R. Radcliffe Hastings
-------------------------
Name:R. Radcliffe Hastings
Title:Authorized Representative
STYROCHEM FINLAND OY
By:/s/ R. Radcliffe Hastings
-------------------------
Name:R. Radcliffe Hastings
Title:Director
THERMISOL DENMARK A/S
By:/s/ R. Radcliffe Hastings
-------------------------
Name:R. Radcliffe Hastings
Title:Director
THERMISOL SWEDEN AB
By:/s/ R. Radcliffe Hastings
-------------------------
Name:R. Radcliffe Hastings
Title:Director
THERMISOL FINLAND OY
By:/s/ R. Radcliffe Hastings
-------------------------
Name:R. Radcliffe Hastings
Title:Director
<PAGE>
EXHIBIT A
---------
FINANCING DOCUMENTS
LANDLORD WAIVERS
- ----------------
1. Landlord Waiver dated 4/10/98 between Radnor Center Associates and WinCup
Holdings, Inc. for property at Suite 300, Building 3.
2. Landlord Waiver dated 12/12/97 between Stone Mountain Industrial Park, Inc.
and WinCup Holdings, Inc. for property at 1625 Litton Drive, Stone
Mountain, GA
3. Landlord Waiver dated 12/13/97 between Patricia M. Dunnell and WinCup
Holdings, Inc. for property at 5355 Shawland Rd., Jacksonville, FL
4. Landlord Waiver dated 6/22/98 between Hunt Brothers Leasing LLC and WinCup
Holdings, Inc. for property at 205 Tamal Vista, Corte Madera, CA 94925
5. Landlord Waiver dated 6/22/98 between Hunt Brothers Leasing LLC and WinCup
Holdings, Inc. for property at 201 Tamal Vista, Corte Madera, CA, 94925
6. Landlord Waiver dated 6/22/98 between Hunt Brothers Leasing LLC and WinCup
Holdings, Inc. for property at 195 Tamal Vista, Corte Madera, CA, 94925
7. Landlord's Subordination and Waiver (undated) between CK Airpark Associates
and WinCup Holdings, Inc. for property at 2215 East University Drive,
Phoenix, AZ 85034
8. Landlord's Subordination and Waiver (undated) between CK Airpark Associates
and WinCup Holdings, Inc. for property at 2093 East Magnolia Street,
Phoenix, AZ 85034
9. Landlord Waiver dated 12/18/95 between Etzioni Partners and WinCup
Holdings, L.P. for property at 64 Brunswick Avenue, Edison, NJ
10. Landlord Waiver dated 12/5/96 between Bradford Management Company of
Dallas, Inc. and The Bank of New York Commercial Corporation for property
at 4933 Pylon Street, Fort Worth, Texas
LOCKBOX ACCOUNT AGREEMENTS
- --------------------------
1. Direct Deposit Lockbox Service Agreement dated as of 1/18/86 between WinCup
Holdings, L.P. and The Bank of New York
2. Agreement Relating to Lockbox Services dated 1/18/96 between Wincup
Holdings, L.P. and The Bank of New York Commercial Corporation
3. Special Deposit Agreement dated 12/4/96 between Styrochem International,
Inc. and The Bank of New York Commercial Corporation
UCC FINANCING STATEMENTS
- ------------------------
(See Schedule 1 attached hereto)
INTELLECTUAL PROPERTY
- ---------------------
1. Trademark Collateral Security Agreement dated 12/5/96 between StyroChem
International, Inc. and The Bank of New York Commercial Corporation
2. Trademark Collateral Security Agreement dated 12/5/96 between WinCup
Holdings, Inc. and The Bank of New York Commercial Corporation
OTHER
- -----
1. Collateral Assignment of Rights under the Stock Purchase Agreement and
Environmental Escrow Agreement dated 12/5/96 between Radnor Holdings
Corporation and The Bank of New York Commercial Corporation
2. Guaranty dated 3/23/99 by Radnor Management Delaware, Inc. and Wincup
Europe Delaware, Inc.
3. Guaranty dated 1/21/99 by Styrochem GP, L.L.C., Styrochem LP, L.L.C.,
Wincup GP, L.L.C. and Wincup
<PAGE>
LP, L.L.C.
4. Reaffirmation and Ratification Agreement dated 10/15/97 between WinCup
Holdings, Inc., SP Acquisition Co., StyroChem International, Inc., Radnor
Holdings Corporation, NationsBank, N.A. and BNY Financial Corporation
5. StyroChem Finland Oy Security Agreement dated 12/12/97 between Styrochem
Finland Oy and BNY Financial Limited
6. Promissory Notes
(a) No. 1 dated 12/12/97, issued by Stryrochem Finland Oy to BNY Financial
Limited for 6.5 million FIM
(b) No. 2 dated 12/12/97, issued by Stryrochem Finland Oy to BNY Financial
Limited for 6.5 million FIM
(c) No. 3 dated 1/26/98, issued by Stryrochem Finland Oy to BNY Financial
Limited for 5 million FIM
(d) No. 4 dated 2/27/98, issued by Stryrochem Finland Oy to BNY Financial
Limited for 5 million FIM
(e) No. 5 dated 4/16/98, issued by Stryrochem Finland Oy to BNY Financial
Limited for 6 million FIM
7. Thermisol Finland Oy Security Agreement dated as of12/12/97 between
Thermisol Finland Oy and BNY Financial Limited
8. Promissory Notes
(a) No. 1 dated 12/12/97, issued by Thermisol Finland Oy to BNY Financial
Limited for 4 million FIM
(b) No. 2 dated 12/12/97, issued by Thermisol Finland Oy to BNY Financial
Limited for 4 million FIM
(c) No. 3 dated 6/22/99, issued by Thermisol Finland Oy to BNY Financial
Limited for 7 million FIM
9. Agreement executed 8/24/98 regarding priorities among business mortgages in
connection with the merger of Epsilevy Oy into Thermisol Finland Oy
<PAGE>
SCHEDULE 1
----------
UCC Financing Statements to be assigned
DEBTOR: WINCUP HOLDINGS, INC.
- ------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
JURISDICTION SECURED FILE DATE FILE NO.
------------ ------- --------- --------
PARTY
-----
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Arizona SOS BNY Financial Corporation, as Agent 2/21/95 858956
- ---------------------------------------------------------------------------------------------------------------------
California SOS BNY Financial Corporation, as Agent 9/5/97 9725161066
- ---------------------------------------------------------------------------------------------------------------------
Florida SOS BNY Financial Corporation, as Agent 9/5/97 970000200562
- ---------------------------------------------------------------------------------------------------------------------
DeKalb Co., GA BNY Financial Corporation, as Agent 10/6/97 441997-9936
- ---------------------------------------------------------------------------------------------------------------------
Illinois SOS BNY Financial Corporation, as Agent 9/5/97 3736294
- ---------------------------------------------------------------------------------------------------------------------
Caddo Parish, LA BNY Financial Corporation, as Agent 9/9/97 09-953158
- ---------------------------------------------------------------------------------------------------------------------
Mississippi SOS BNY Financial Corporation, as Agent 9/5/97 01138725
- ---------------------------------------------------------------------------------------------------------------------
Lauderdale Co., MS BNY Financial Corporation, as Agent 9/5/97 7784-97
- ---------------------------------------------------------------------------------------------------------------------
Missouri SOS BNY Financial Corporation, as Agent 9/5/97 2827176
- ---------------------------------------------------------------------------------------------------------------------
Lafayette Co., MO BNY Financial Corporation, as Agent 9/5/97 2888
- ---------------------------------------------------------------------------------------------------------------------
New Jersey SOS BNY Financial Corporation, as Agent 9/17/97 1791540
- ---------------------------------------------------------------------------------------------------------------------
Ohio SOS BNY Financial Corporation, as Agent 9/5/97 AN93974
- ---------------------------------------------------------------------------------------------------------------------
Madison Co., OH BNY Financial Corporation, as Agent 9/5/97 9700001705
- ---------------------------------------------------------------------------------------------------------------------
Pennsylvania SOC BNY Financial Corporation, as Agent 12/21/95 25000497
- ---------------------------------------------------------------------------------------------------------------------
Delaware Co., PA BNY Financial Corporation, as Agent 12/21/95 95-203140
Prothonotary
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
DEBTOR: RADNOR HOLDINGS CORPORATION
- ------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
JURISDICTION SECURED FILE DATE FILE NO.
------------ ------- --------- --------
PARTY
-----
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
California SOS BNY Financial Corporation, as Agent 12/9/96 9634560484
- ---------------------------------------------------------------------------------------------------------------------
Illinois SOS BNY Financial Corporation, as Agent 12/11/96 3624613
- ---------------------------------------------------------------------------------------------------------------------
Mississippi SOS BNY Financial Corporation, as Agent 12/9/96 01058141
- ---------------------------------------------------------------------------------------------------------------------
Lauderdale Co., MS BNY Financial Corporation, as Agent 12/10/96 8987-96
- ---------------------------------------------------------------------------------------------------------------------
Pennsylvania SOC BNY Financial Corporation, as Agent 12/9/96 26140944
- ---------------------------------------------------------------------------------------------------------------------
Delaware Co., PA BNY Financial Corporation, as Agent 12/10/96 96-203162
Prothonotary
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
DEBTOR: RADNOR DELAWARE, INC.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
JURISDICTION SECURED FILE DATE FILE NO.
------------ ------- --------- --------
PARTY
-----
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Delaware SOS BNY Financial Corporation, as Agent 4/13/98 9815741
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
DEBTOR: STYROCHEM DELAWARE, INC.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
JURISDICTION SECURED FILE DATE FILE NO.
------------ ------- --------- --------
PARTY
-----
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Delaware SOS BNY Financial Corporation, as Agent 10/5/99 9951592
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Exhibit 10.31
AMENDED AND RESTATED GUARANTY
New York, New York December 29, 1999
FOR VALUE RECEIVED, and in consideration of loans made or to be made
or credit otherwise extended or to be extended by Bank of America, N.A.
("BofA"), each of the financial institutions (collectively, "Lenders") named in
or which hereafter become a party to the Loan Agreement (as hereinafter defined)
and BofA as agent for Lenders (in such capacity "Agent") to or for the account
of Wincup Holdings, Inc., Radnor Chemical Corporation, Radnor Holdings
Corporation, Radnor Delaware, Inc., StyroChem U.S., Ltd., Styrochem Delaware,
Inc., and Wincup Texas, Ltd. (each, a "U.S. Borrower" and jointly and severally,
the "U.S. Borrowers") and StyroChem Europe (The Netherlands) B.V., StyroChem
Finland OY, Thermisol Denmark A/S, ThermiSol Finland OY and ThermiSol Sweden AB
(each a "European Borrower" and jointly and severally, the "European Borrowers";
the European Borrowers together with the U.S. Borrowers each, a "Borrower" and
collectively, the "Borrowers"), from time to time and at any time and for other
good and valuable consideration and to induce Agent and Lenders, in their
discretion, to make such loans or extensions of credit and to make or grant such
renewals, extensions, releases of collateral or relinquishments of legal rights
as Agent and Lenders may deem advisable, the undersigned (and each of them if
more than one, the liability under this Guaranty being joint and several)
unconditionally guaranties to Agent for its own benefit and for the ratable
benefit of Lenders, their successors, endorsees and assigns the prompt payment
when due (whether by acceleration or otherwise) of all present and future
obligations and liabilities of any and all kinds of each Borrower to Agent or
Lenders and of all instruments of any nature evidencing or relating to any such
obligations and liabilities upon which any Borrower is or may become liable to
Agent or Lenders, whether incurred by a Borrower as maker, endorser, drawer,
acceptor, guarantor, accommodation party or otherwise, and whether due or to
become due, secured or unsecured, absolute or contingent, joint or several, and
however or whenever acquired by Agent or Lenders, whether arising under, out of,
or in connection with that certain Third Amended and Restated Revolving Credit
and Security Agreement by and among Borrowers, Lenders and Agent (as amended,
supplemented, modified or restated from time to time, the "Loan Agreement") or
any documents, instruments or agreements relating to or executed in connection
with the Loan Agreement or any documents, instruments or agreements referred to
therein (together with the Loan Agreement, the "Loan Documents"), (all of which
are herein collectively referred to as the "Obligations"), and irrespective of
the genuineness, validity, regularity or enforceability of such Obligations, or
of any instrument evidencing any of the Obligations or of any collateral
therefor or of the existence or extent of such collateral, and irrespective of
the allowability, allowance or disallowance of any or all of the Obligations in
any case commenced by or against Borrowers under Title 11, United States Code,
including, without limitation, obligations or indebtedness of Borrowers for
post-petition interest, fees, costs and charges that would have accrued or been
added to Borrowers' Obligations to Agent and the Lenders but for the
commencement of such case. Terms defined in the Loan Agreement shall
<PAGE>
have the same meanings herein, unless otherwise herein expressly provided. In
furtherance of the foregoing, the undersigned hereby agrees as follows:
1. No Impairment. Agent and Lenders may at any time and from time to
-------------
time, either before or after the maturity thereof, without notice to or further
consent of the undersigned, extend the time of payment of, exchange or surrender
any collateral for, renew or extend any of the Obligations or increase or
decrease the interest rate thereon, and may also make any agreement with
Borrowers or with any other party to or person liable on any of the Obligations,
or interested therein, for the extension, renewal, payment, compromise,
discharge or release thereof, in whole or in part, or for any modification of
the terms thereof or of any agreement between or among Agent, Lenders and
Borrowers or any such other party or person, or make any election of rights
Agent and Lenders may deem desirable under the United States Bankruptcy Code, as
amended, or any other federal or state bankruptcy, reorganization, moratorium or
insolvency law relating to or affecting the enforcement of creditors' rights
generally (any of the foregoing, an "Insolvency Law") without in any way
impairing or affecting this Guaranty. This instrument shall be effective
regardless of the subsequent incorporation, merger or consideration of any
Borrower, or any change in the composition, nature, personnel or location of any
Borrower and shall extend to any successor entity to each Borrower, including a
debtor in possession or the like under any Insolvency Law.
2. Guaranty Absolute. The undersigned guarantees that the
-----------------
Obligations will be paid strictly in accordance with the terms of the Loan
Agreement and/or any other document, instrument or agreement creating or
evidencing the Obligation, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of Borrowers with respect thereto. The undersigned hereby knowingly
accepts the full range of risk encompassed within a contract of "continuing
guaranty" which risk includes the possibility that Borrowers will contract
additional indebtedness for which the undersigned may be liable hereunder after
Borrowers' financial condition or ability to pay their lawful debts when they
fall due has deteriorated, whether or not Borrowers have properly authorized
incurring such additional indebtedness. The undersigned acknowledges that (i)
no oral representations, including any representations to extend credit or
provide other financial accommodations to Borrowers, have been made by Agent or
any Lender to induce the undersigned to enter into this Guaranty and (ii) any
extension of credit to the Borrowers shall be governed solely by the provisions
of the Loan Agreement. The liability of the undersigned under this Guaranty
shall be absolute and unconditional, in accordance with its terms, and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, any circumstance or
occurrence whatsoever, including, without limitation: (a) any waiver,
indulgence, renewal, extension, amendment or modification of or addition,
consent or supplement to or deletion from or any other action or inaction under
or in respect of the Loan Documents or any other instruments or agreements
relating to the Obligations or any assignment or transfer of any thereof; (b)
any lack of validity or enforceability of any Loan Document or other documents,
instruments or agreements relating to the Obligations or any assignment or
transfer of any thereof; (c) any furnishing of any additional security to Agent
for the ratable benefit of the Lenders or its assignees or any acceptance
thereof or any release of any security by Agent or its assignees; (d) any
limitation on any party's liability or obligation under the Loan
2
<PAGE>
Documents or any other documents, instruments or agreements relating to the
Obligations or any assignment or transfer of any thereof or any invalidity or
unenforceability, in whole or in part, of any such document, instrument or
agreement or any term thereof; (e) any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation or other like proceeding
relating to Borrowers, or any action taken with respect to this Guaranty by any
trustee or receiver, or by any court, in any such proceeding, whether or not the
undersigned shall have notice or knowledge of any of the foregoing; (f) any
exchange, release or nonperfection of any collateral, or any release, or
amendment or waiver of or consent to departure from any guaranty or security,
for all or any of the Obligations; or (g) any other circumstance which might
otherwise constitute a defense available to, or a discharge of, the undersigned.
Any amounts due from the undersigned to Agent or any Lender shall bear interest
until such amounts are paid in full at the highest rate then applicable to the
Obligations of Borrowers to Lenders under the Loan Agreement. Obligations
include post-petition interest whether or not allowed or allowable.
3. Waivers. (a) This Guaranty is a guaranty of payment and not of
-------
collection. Neither Agent nor any Lender shall be under any obligation to
institute suit, exercise rights or remedies or take any other action against
Borrowers or any other person liable with respect to any of the Obligations or
resort to any collateral security held by it to secure any of the Obligations as
a condition precedent to the undersigned being obligated to perform as agreed
herein and the undersigned hereby waives any and all rights which it may have by
statute or otherwise which would require Agent or any Lender to do any of the
foregoing. The undersigned further consents and agrees that neither Agent nor
Lenders shall be under any obligation to marshal any assets in favor of the
undersigned, or against or in payment of any or all of the Obligations. The
undersigned hereby waives any rights to interpose any defense, counterclaim or
offset of any nature and description which may have or which may exist between
and among Agent, Lenders, Borrowers and/or the undersigned with respect to the
undersigned's obligations under this Guaranty, or which Borrowers may assert on
the underlying debt, including but not limited to failure of consideration,
breach of warranty, fraud, payment (other than cash payment in full of the
Obligations), statue of frauds, bankruptcy, infancy, statue of limitations,
accord and satisfaction, and usury.
(b) The undersigned further waives (i) notice of the acceptance of
this Guaranty, of the making of any such loans or extensions of credit, and of
all notices and demands of any kind to which the undersigned may be entitled,
including, without limitations, notice of adverse change in Borrowers' financial
condition or of any other fact which might materially increase the risk of the
undersigned; and (ii) presentment to or demand of payment from anyone whomsoever
liable upon any of the Obligations, protest, notices of presentment, non-payment
or protest and notice of any sale of collateral security or any default of any
sort.
(c) Notwithstanding any payment or payments made by the undersigned
hereunder, or any setoff or application of funds of the undersigned by Agent or
any Lender, the undersigned shall not be entitled to be subrogated to any of the
rights of Agent or any Lender against Borrowers or against any collateral or
guarantee or right of offset held by Agent or any Lender for the payment of the
Obligations, nor shall the undersigned seek or be entitled to seek any
contribution or reimbursement from Borrowers in respect of payments made by the
3
<PAGE>
undersigned hereunder, until all amounts owing to Agent and each Lender by
Borrowers on account of the Obligations are paid in full and the Loan Agreement
has been terminated. If, notwithstanding the foregoing, any amount shall be paid
to the undersigned on account of such subrogation rights at any time when all of
the Obligations shall not have been paid in full and the Loan Agreement shall
not have been terminated, such amount shall be held by the undersigned in trust
for Agent and Lenders, segregated from other funds of the undersigned, and shall
forthwith upon, and in any event within two (2) business days of, receipt by the
undersigned, be turned over to Agent for the retable benefit of the Lenders in
the exact form received by the undersigned (duly endorsed by the undersigned to
Agent, if required), to be applied against the Obligations, whether matured or
unmatured, in such order as Agent and Lenders may determine, subject to the
provisions of the Loan Agreement. Repayment of any and all present and future
debts and obligations of Borrowers to any of the undersigned are hereby
subordinated to the full payment and performance of, all present and future
debts and obligations of Borrowers to Agent and Lenders provided however,
payments may be made to and retained by the undersigned in the ordinary course
of business in the absence of an Event of Default.
4. Security. All sums at any time to the credit of the undersigned
--------
and any property of the undersigned in Agent's or any Lender's possession or in
the possession of any bank, financial institution or other entity that directly
or indirectly, through one or more intermediaries, controls or is controlled by,
or is under common control with, Agent or any Lender (each such entity, an
"Affiliate") shall be deemed held by Agent, such Lender or such Affiliate, as
the case may be, as security for any and all of the undersigned's obligations to
Agent and Lenders and to any Affiliate of Agent or any Lender, no matter how or
when arising and whether under this or any other instrument, agreement or
otherwise.
5. Representations and Warranties. The undersigned hereby represents
------------------------------
and warrants (all of which representations and warranties shall survive until
all Obligations are indeafeasibly satisfied in full and there remain no
outstanding commitments under the Loan Agreement), that:
(a) Corporate Status. The undersigned is a corporation or a
----------------
limited liability company duly organized, validly existing and in good
standing under the laws of the state of its organization and has full
power, authority and legal right to own its property and assets and to
transact the business in which it is engaged.
(b) Authority and Execution. The undersigned has full power,
-----------------------
authority and legal right to execute and deliver, and to perform its
obligations under, this Guaranty and has taken all necessary legal
action to authorize the execution, delivery and performance of this
Guaranty.
(c) Legal, Valid and Binding Character. This Guaranty
----------------------------------
constitutes the legal, valid and binding obligation of the undersigned
enforceable in accordance with its terms, except as enforceability may
be limited by applicable Insolvency Law.
4
<PAGE>
(d) Violations. The execution, delivery and performance of this
----------
Guaranty will not violate any requirement of law applicable to the
undersigned or any material contract, agreement or instrument to which
the undersigned is a party or by which the undersigned or its property
is bound or result in the creation or imposition of any mortgage, lien
or other encumbrance other than to Agent for the ratable benefit of
Lenders on any of the property or assets of the undersigned pursuant
to the provisions of any of the foregoing.
(e) Consents or Approvals. No consent of any other Person
---------------------
(including, without limitation, any creditor of the undersigned) and
no consent, license, permit, approval or authorization of, exemption
by, notice or report to, or registration, filing or declaration with,
any governmental authority is required in connection with the
execution, delivery, performance, validity or enforceability of this
Guaranty.
(f) Litigation. No litigation, arbitration, investigation or
----------
administrative proceeding of or before any court, arbitrator or
governmental authority, bureau or agency is currently pending or, to
the best knowledge of the undersigned, threatened (i) with respect to
this Guaranty or any of the transactions contemplated by this Guaranty
or (ii) against or affecting the undersigned, or any of its property
or assets, which, if adversely determined, would have a material
adverse effect on the business, operations, assets or condition,
financial or otherwise, of the undersigned.
(g) Financial Benefit. The undersigned has derived or expects to
-----------------
derive a financial or other advantage from each and every loan,
advance or extension of credit made under the Loan Agreement or other
Obligation incurred by Borrowers to Agent and Lenders.
The foregoing representations and warranties shall be deemed to have
been made by the undersigned on the date of each borrowing by Borrowers under
the Loan Agreement on and as of such date of such borrowing as though made
hereunder on and as of such date.
6. Acceleration. If either Borrowers or the undersigned should at
------------
any time become insolvent, or make a general assignment, or if a proceeding in
or under any Insolvency Law shall be filed or commenced by, or in respect of,
the undersigned, or if a notice of any lien, levy, or assessment is filed of
record with respect to any assets of the undersigned by the United States or any
department, agency, or instrumentality thereof, or if any taxes or debts owing
at any time or times hereafter to any one of them becomes a lien or encumbrance
upon any assets of the undersigned in Agent's or any Lender's possession, or
otherwise, any and all Obligations shall for purposes hereof, at Agent's or any
Lender's option, be deemed due and payable without notice.
7. Payments for Guarantor. Upon the occurrence of and during the
----------------------
continuance of Event of Default, Agent, on behalf of Lenders, in its sole and
absolute discretion,
5
<PAGE>
with or without notice to the undersigned, may apply on account of the
Obligations any payment from the undersigned or any other guarantor, or amounts
realized from any security for the Obligations, or may deposit any and all such
amounts realized in a non-interest bearing cash collateral deposit account to be
maintained as security for the Obligations.
8. Costs. The undersigned shall pay on demand, all fees and expenses
-----
(including reasonable expenses for legal services of every kind) relating or
incidental to the enforcement or protection of the rights of Agent or any Lender
hereunder or under any of the Obligations.
9. No Termination. This is a continuing irrevocable guaranty and
--------------
shall remain in full force and effect and be binding upon the undersigned, and
the undersigned's successors and assigns, until all of the Obligations have been
paid in full and the Loan Agreement has been terminated. If any of the present
or future Obligations are guarantied by persons, partnerships or corporations in
addition to the undersigned, the death, release or discharge in whole or in part
or the bankruptcy, merger, consolidation, incorporation, liquidation or
dissolution of one or more of them shall not discharge or effect the liabilities
of the undersigned under this Guaranty.
10. Recapture. Anything in this Guaranty to the contrary
---------
notwithstanding, if Agent or any Lender receives any payment or payments on
account of the liabilities guarantied hereby, which payment or payments or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver, or
any other party under any Insolvency Law, common law or equitable doctrine, then
to the extent of any sum not finally retained by Agent or any such Lender, the
undersigned's obligations to Agent and Lenders shall be reinstated and this
Guaranty shall remain in full force and effect (or be reinstated) until payment
shall have been made to Lender, which payment shall be due on demand.
11. Books and Records. The books and records of Agent showing the
-----------------
account among Agent, Lenders and Borrowers shall be admissible in evidence in
any action or proceedings, shall be binding upon the undersigned for the purpose
of establishing the items therein set forth and shall constitute prima facie
proof thereof.
12. No Waiver. No failure on the part of Agent to exercise, and no
---------
delay in exercising, any right, remedy or power hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by Agent of any right,
remedy or power hereunder preclude any other or future exercise of any other
legal right, remedy or power. Each and every right, remedy and power hereby
granted to Agent or allowed it by law or other agreement shall be cumulative and
not exclusive of any other, and may be exercised by Agent at any time and from
time to time.
13. Waiver of Jury Trial. THE UNDERSIGNED DOES HEREBY KNOWINGLY,
--------------------
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING BASED ON OR WITH RESPECT TO THIS GUARANTY OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR
6
<PAGE>
RELATING OR INCIDENTAL HERETO. THE UNDERSIGNED DOES HEREBY CERTIFY THAT NO
REPRESENTATIVE OR AGENT OF AGENT OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT AGENT OR ANY LENDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THIS WAIVER OR RIGHT TO JURY TRIAL PROVISION.
14. Governing Law, Jurisdiction; Amendments. THIS INSTRUMENT CANNOT
---------------------------------------
BE CHANGED OR TERMINATED ORALLY, AND SHALL BE GOVERNED, CONSTRUED AND
INTERPRETED AS TO VALIDITY, ENFORCEMENT AND IN ALL OTHER RESPECTS IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK. THE UNDERSIGNED EXPRESSLY CONSENTS TO
THE JURISDICTION AND VENUE OF THE SUPREME COURT OF THE STATE OF NEW YORK, COUNTY
OF NEW YORK, AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT
OF NEW YORK FOR ALL PURPOSES IN CONNECTION HEREWITH. ANY JUDICIAL PROCEEDING BY
THE UNDERSIGNED AGAINST AGENT AND/OR ANY LENDER INVOLVING, DIRECTLY OR
INDIRECTLY ANY MATTER OR CLAIM IN ANY WAY ARISING OUT OF, RELATED TO OR
CONNECTED HEREWITH SHALL BE BROUGHT ONLY IN THE SUPREME COURT OF THE STATE OF
NEW YORK, COUNTY OF NEW YORK OR THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK. THE UNDERSIGNED FURTHER CONSENTS THAT ANY
SUMMONS, SUBPOENA OR OTHER PROCESS OR PAPERS (INCLUDING WITHOUT LIMITATION, ANY
NOTICE OR MOTION OR OTHER APPLICATION TO EITHER OF THE AFOREMENTIONED COURTS OR
A JUDGE THEREOF) OR ANY NOTICE IN CONNECTION WITH ANY PROCEEDINGS HEREUNDER, MAY
BE SERVED INSIDE OR OUTSIDE OF THE STATE OF NEW YORK OR THE SOUTHERN DISTRICT OF
NEW YORK BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED OR BY
PERSONAL SERVICE PROVIDED A REASONABLE TIME OR APPEARANCE IS PERMITTED, OR IN
SUCH OTHER MANNER AS MAY BE PERMISSIBLE UNDER THE RULES OF SAID COURTS. THE
UNDERSIGNED WAIVES ANY OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION
INSTITUTED HEREON AND SHALL NOT ASSERT ANY DEFENSE BASED ON LACK OF JURISDICTION
OR VENUE OR BASED UPON FORUM NON COVENIENS.
----- --- ---------
15. Severability. To the extent permitted by applicable law, any
------------
provision of this Guaranty which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
16. Amendments, Waivers. No amendment or waiver of any provision of
-------------------
this Guaranty nor consent to any departure by the undersigned therefrom shall in
any event be effective unless the same shall be in writing executed by the
undersigned, Agent and Lenders.
17. Notice. All notices, requests and demands to or upon the
------
undersigned, shall be in writing or by telecopy or telex and shall be deemed to
have been duly given or made
7
<PAGE>
(a) when delivered, if by hand, (b) three (3) days after being deposited in the
mail, postage prepaid, if by mail (c) when confirmed, if by telecopy or, (d) in
the case of telex notice, when sent, answer back receiver, in each event, to the
number and address set forth beneath the signature of the undersigned.
18. Successors. Agent or any Lender may, from time to time, without
----------
notice to the undersigned, sell, assign, transfer or otherwise dispose of all or
any part of the Obligations and/or rights under this Guaranty. Without limiting
the generality of the foregoing, Agent or any Lender may assign, or grant
participations to, one or more banks, financial institutions or other entities
all or any part of any of the Obligations. In each such event, Agent, any
Lender, its Affiliates and each and every immediate and successive purchaser,
assignee, transferee or holder of all or any part of the Obligations shall have
the right to enforce this Guaranty, by legal action or otherwise, for its own
benefit as fully as if such purchaser, assignee, transferee or holder were
herein by name specifically given such right. Agent or any Lender shall have an
unimpaired right to enforce this Guaranty for its benefit with respect to that
portion of the Obligations which Agent or any such Lender has not disposed of,
sold, assigned, or otherwise transferred.
19. Release. Nothing except cash payment in full of the Obligations
-------
shall release the undersigned from liability under this Guaranty.
20. Amendment. This Guaranty amends, restates and replaces those
---------
certain guaranties existing prior hereto by the undersigned in favor of the
Lenders and the Agent pursuant to the terms of the Existing Loan Agreement, as
such term is defined in the Loan Agreement.
IN WITNESS WHEREOF, this Guaranty has been executed by the undersigned
this 29th day of December, 1999.
[SEAL] STYROCHEM GP, L.L.C.
By:/s/ R. Radcliffe Hastings
_______________________________
Its:Senior Vice President
______________________________
[SEAL] STYROCHEM LP, L.L.C.
By:/s/ R. Radcliffe Hastings
_______________________________
Its:Senior Vice President
______________________________
8
<PAGE>
[SEAL] WINCUP GP, L.L.C.
By:/s/ R. Radcliffe Hastings
_______________________________
Its:Senior Vice President
______________________________
[SEAL] WINCUP LP, L.L.C.
By:/s/ R. Radcliffe Hastings
_______________________________
Its:Senior Vice President
______________________________
[SEAL] RADNOR MANAGEMENT DELAWARE, INC.
By:/s/ R. Radcliffe Hastings
_______________________________
Its:Senior Vice President
______________________________
[SEAL] WINCUP EUROPE DELAWARE, INC.
By:/s/ R. Radcliffe Hastings
_______________________________
Its:Senior Vice President
______________________________
9
<PAGE>
Exhibit 10.41
THERMISOL FINLAND OY
SECURITY AGREEMENT
Dated as of December 29, 1999
In consideration of credit extended under Third Amended and Restated
Revolving Credit and Security Agreement dated as of December 29, 1999 ("the
Credit Agreement") between WINCUP HOLDINGS, INC., RADNOR CHEMICAL CORPORATION,
STYROCHEM U.S., LTD., RADNOR HOLDINGS CORPORATION, RADNOR DELAWARE, INC.,
STYROCHEM DELAWARE, INC. and WINCUP TEXAS, LTD. and STYROCHEM EUROPE (THE
NETHERLANDS) B.V., STYROCHEM FINLAND OY, THERMISOL DENMARK A/S, THERMISOL SWEDEN
AB and THERMISOL FINLAND OY, BANK OF AMERICA, N.A. and each of other financial
institutions which are and such financial institutions which become a party to
the "Credit Agreement" (Bank of America and such other financial institutions,
collectively, the "Lenders" and individually a "Lender") and Bank of America, as
administrative and collateral agent for the Lenders, the Agent and Thermisol
Finland Oy hereby agree as follows (with certain terms used herein being defined
in Article 1 of the Credit Agreement and in Article 6 of this Agreement):
<PAGE>
ARTICLE 1
SECURITY INTEREST
-----------------
Section 1.01 (a) Security Interest. To secure the payment, observance
-----------------
and performance of the European Obligations, Thermisol Finland Oy hereby agrees
to establish a Business Mortgage (i.e. "yrityskiinnitys", also referred to in
English as a floating charge) in respect of the Collateral in favor of the Agent
for the ratable benefit of the Lenders. The Business Mortgage granted by
Thermisol Finland Oy is evidenced by Promissory Notes registered in the Finnish
Business Mortgage Register. The Promissory Notes are in the form set forth in
Exhibit 1. to this Agreement. By delivering such registered Promissory Notes to
the Agent or to the Agent's designated representative in Finland, the Borrowers
are entitled to draw under the Credit Agreement within the limits and under the
conditions set forth in the Credit Agreement. Thermisol Finland Oy will ensure
that the aggregate Dollar equivalent of the principal amount in Finnish Markka
of the registered Promissory Notes together with any other European Collateral
shall be sufficient to satisfy the requirement for the European Borrowing Base
set out in Section 2.1A in the Credit Agreement. Thermisol Finland Oy will,
forthwith upon demand from the Agent, deliver to the Agent or the Agent's
representative in Finland additional registered Promissory Note or Notes in an
amount which will ensure compliance with this Section 1.01(a).
(b) Assigning, Delivering and Pledging Existing Promissory Notes.
--------------------------------------------------------------
Thermisol Finland Oy hereby agrees to the Prior U.K. Agent assigning and
delivering any and all of the current Promissory Notes registered in the Finnish
Business Mortgage Register and pledged in favor of the Prior U.K. Agent to the
Agent for the purpose of granting to the Agent the Business Mortgage described
in Section 1.01 (a) above.
(c) Continued Priority of Security Interest. The Business Mortgage
---------------------------------------
shall at all times be valid, and enforceable against Thermisol Finland Oy and
all third parties, in accordance with the terms hereof, as security for the
European Obligations, and the Collateral shall not at any time be subject to any
Lien that is prior to, on a parity with or junior to the Busi-
2
<PAGE>
ness Mortgage, except as required by mandatory Finnish law and as to any
Permitted Encumbrance.
(d) Required Action. Thermisol Finland Oy shall take all action that
---------------
may be necessary or desirable, or that the Agent may request, so as at all times
to maintain the validity, enforceability and priority of the Business Mortgage
in the Collateral in conformity with the requirements of Section 1(c), or to
enable the Agent to protect, exercise or enforce the Lenders' rights hereunder
and in the Collateral, including but not limited to (i) executing the Promissory
Note(s) mentioned in Section 1.01 (a) and registering the same in the Finnish
Trade Register (ii) immediately discharging all Liens in respect of the
Collateral other than Permitted Encumbrances, and (iii) obtaining landlords' or
mortgagees' lien waivers (if any).
Section 1.02 Thermisol Finland Oy Remains Obligated; The Lenders Not
--------------------------------------------------------
Obligated. The grant by Thermisol Finland Oy to the Lenders or to the Agent for
- ---------
the ratable benefit of the Lenders of the Business Mortgage in the Collateral
shall not relieve Thermisol Finland Oy from the performance of any term,
covenant, condition or agreement on its part to be performed or observed under
or in respect of any of the Collateral or from any liability to a Person under
or in respect of any of the Collateral or impose any obligation on the Agent to
perform or observe any such term, covenant, condition or agreement on Thermisol
Finland Oy's part to be so performed or observed or impose any liability on the
Agent for any act or omission on the part of Thermisol Finland Oy relative
thereto.
Section 1.03 Disposition of Collateral. Thermisol Finland Oy will make
-------------------------
no disposition of the Collateral except in the ordinary course of business.
Section 1.04 Defense of Agent's and Lenders' Interests. Until (a)
-----------------------------------------
payment and performance in full of all of the European Obligations and (b)
termination of the Credit Agreement as to the European Borrowers, the Business
Mortgage shall continue in full force and effect. During such period Thermisol
Finland Oy shall not, without the Agent's prior written consent, pledge, sell
(except Inventory and other Collateral in the ordinary course of business),
assign, transfer, create or suffer to exist a Lien upon or encumber or allow or
suffer to be encumbered in any way except for Permitted Encumbrances, any part
of the Collateral.
3
<PAGE>
Thermisol Finland Oy shall defend Agent's and Lenders' interests in the
Collateral against any and all Persons whatsoever.
ARTICLE 2
CERTAIN REPRESENTATIONS AND
---------------------------
WARRANTIES OF THERMISOL FINLAND OY
----------------------------------
In order to induce the Lenders to extend credit under the Credit Agreement,
Thermisol Finland Oy represents and warrants as follows:
Section 2.01 Organization; Power. Thermisol Finland Oy is a
-------------------
corporation duly organized and validly existing under the laws of Finland, has
the corporate power and authority to own its property and to carry on its
business as now being conducted.
Section 2.02 Authorization and Compliance of Agreement. Styrochem
-----------------------------------------
Finland Oy has the corporate power, and has taken all necessary corporate action
to authorize it, to execute, deliver and perform this Agreement in accordance
with its terms. This Agreement has been duly executed and delivered by Thermisol
Finland Oy and is the legal, valid and binding obligation of Thermisol Finland
Oy. The execution, delivery and performance of this Agreement in accordance with
its terms does not and will not (i) require (a) any Governmental Approval (other
than the registration of the Business Mortgage by the Finnish National Board of
Patents and Registration), or (b) any consent or approval of the stockholders of
Thermisol Finland Oy, (ii) violate or conflict with, result in a breach of, or
constitute a default under, (a) any Contract to which Thermisol Finland Oy is a
party or by which any of its properties may be bound or (b) any applicable law
or (iii) result in or require the creation of any Lien upon any assets of
Thermisol Finland Oy, other than the Business Mortgage .
4
<PAGE>
ARTICLE 3
COVENANTS
---------
Unless the Lenders shall otherwise consent in writing:
A. General.
-------
Section 3.01 Preservation of Existence, Scope of Business, Compliance
--------------------------------------------
with Law. Thermisol Finland Oy shall (a) preserve and maintain its corporate
existence, (b) engage only in businesses in substantially the same fields as the
businesses conducted on the day of signing this Agreement and (c) comply with
all applicable law.
Section 3.02 (a) Ownership and Defense of Collateral. Thermisol
-----------------------------------
Finland Oy shall at all times (i) be the owner of the Collateral free from any
right, title or interest of any Person except Permitted Encumbrances and (ii)
defend the Collateral against the claims and demands of all Persons.
(b) No Pledging of Securities. Thermisol Finland Oy shall not pledge
-------------------------
any of its securities in favour of any other Person than the Lenders.
Section 3.03 (a) Chief Executive Office. Thermisol Finland Oy shall
----------------------
maintain its chief executive office and, if different from its chief executive
office, each office where the books and records relating to any Receivables are
kept only at, or, in the case of such books and records, in transit to, a
location of which the Agent has received not less than 60 days prior notice.
(b) Change of Name, Identity, etc. Thermisol Finland Oy shall not
-----------------------------
change its name or identity without the Agent's permission in writing.
(c) Invoices. Thermisol Finland Oy shall not use any invoice
--------
identifying the seller of the goods or provider of the services to which such
invoice relates by a name other than Thermisol Finland Oy's corporate name
provided, however, that Thermisol Finland Oy may use any parallel or
supplementary trade name, provided it has been registered in the Trade Register.
Section 3.04 Taxes; Compliance. Thermisol Finland Oy shall (a) pay or
-----------------
cause to be paid all taxes, assessments and governmental charges levied or
assessed or imposed
5
<PAGE>
upon or with respect to any of the Collateral and (b) comply with (i) all laws,
rules and regulations applicable to its business or the Collateral and (ii) the
terms and provisions of all leases, mortgages, and other agreements relating to
premises whereby Collateral is located.
Section 3.05 (a) Property Insurance. (i) Thermisol Finland Oy shall
------------------
insure the Inventory against loss or damage by fire, theft, burglary, pilferage,
loss in transit and such other hazards as the Agent shall from time to time
specify, in amounts and under policies issued by insurers acceptable to the
Agent, and all premiums thereon shall be paid by Thermisol Finland Oy and copies
of the policies delivered to the Agent.(ii) All insurance policies required
under this Section 3.05(a) shall contain loss payable clauses in the form and
substance satisfactory to the Agent, and shall name the Agent for the ratable
benefit of the Lenders as loss payee as its interests may appear, and provide
(A) that all proceeds thereunder in excess of USD 100,000 or the equivalent
amount in Finnish Markka, the lawful currency of Finland, shall be payable to
the Agent for the ratable benefit of the Lenders, (B) no such insurance shall be
affected by any act or neglect of the insurer or owner of the property described
in such policy, and (C) that such policy and loss payable clauses may not be
canceled, amended or terminated unless at least 30 days prior notice is given to
the Agent, (iii) Proceeds of such insurance paid to the Lenders or to the Agent
for the ratable benefit of the Lenders shall, prior to an Event of Default, be
held by the Agent as cash collateral and, after an Event of Default, at the
option of the Agent, be so held or applied to the payments of such of the
Obligations as the Agent may elect to the extent permitted by law. (iv)
Thermisol Finland Oy will not use or permit any part of the Inventory or any
part of the Equipment to be used unlawfully or outside of any insurance
coverage.
Section 3.06 Inspection. The Lenders (by any of its officers or
----------
employees) shall have upon reasonable prior notice the right at any time or
times during the business hours of Thermisol Finland Oy to (a) inspect the
Collateral, all records and files relating thereto and the premises upon which
any of the Collateral is located, (b) discuss with any Person, and each such
Person is hereby authorized to discuss with the Lenders, Styrochem Finland Oy's
business, assets, liabilities, financial condition, results of operation and
business prospects, provided that the Lenders inform Thermisol Finland Oy of
such discussions prior
6
<PAGE>
to or as soon as possible after they have occurred, (c) upon reasonable prior
notice verify the amount, quantity, value and condition of, or any other matter
relating to, any of the Collateral and (d) upon reasonable prior notice review,
audit and make extracts from all records and files related to any of the
Collateral. Thermisol Finland Oy hereby authorizes each of the Lenders and the
Agent, and will deliver to the Lenders and the Agent any instrument necessary
for them, to obtain records from any service bureau maintaining records on
behalf of Thermisol Finland Oy.
Section 3.07 Maintenance. Thermisol Finland Oy shall maintain all
-----------
physical property that constitutes Collateral in good condition, with reasonable
allowance for wear and tear, and shall exercise proper custody over all such
property.
Section 3.08 Notice of Diminution of Value. Thermisol Finland Oy
-----------------------------
shall give prompt notice to the Agent of any matter or event which has resulted
in, or may result in, the actual or potential diminution in value of any of its
Collateral other than diminutions which are insignificant in amount.
Section 3.09 Information. In addition to such other information as
-----------
shall be specifically provided for herein, Thermisol Finland Oy shall furnish to
the Agent such other information with respect to the Collateral as the Agent may
reasonably request from time to time.
B. Receivables.
-----------
Section 3.10 (a) Status of Receivables. Each Receivable (i) shall at
---------------------
all times represent the legal, valid and binding obligation of the Customer and
at the time it arose be enforceable in accordance with its terms, (ii) shall at
no time be subject to (A) any defense, set-off or counter-claim, other than ones
arising in the ordinary course of business for refunds or allowances resulting
from damaged or non-complying merchandise, (B) any agreement prohibiting
assignment or requiring notice of or consent to assignment, or (iii) shall arise
out of a bonafide transaction, (iv) represented by any outstanding invoice shall
require no further act on the part of Thermisol Finland Oy or any other Person
to make it payable by the Customer, and (v) shall comply with all applicable
laws.
7
<PAGE>
(b) Patents, Etc. Thermisol Finland Oy shall maintain, and diligently
------------
pursue all applications for, all patents, copyrights, trademarks, service marks,
trade names and the like belonging to its business.
Section 3.11 No Sales of Receivables. Thermisol Finland Oy shall not
-----------------------
sell any Receivables or any interest therein, or pledge any Receivable in favour
of any other Person than the Lenders, except as permitted under Section 1.04
above.
Section 3.12 Collection. Thermisol Finland Oy shall endeavor to cause
----------
to be collected from the Customer of each Receivable, as and when due
(including, without limitation, Receivables which are delinquent, such
Receivables to be collected in accordance with lawful collection procedures) any
and all amounts owing under or on account of such Receivable, and apply
forthwith upon receipt thereof all such amounts as are so collected to the
outstanding balance of such Receivable.
C. Inventory.
---------
Section 3.13 Nature of Inventory. All Inventory shall at all times
-------------------
(i) be in good condition, (ii) meet all governmental standards applicable
thereto or to its use or sale, and (ii) be currently either usable or salable in
the ordinary course of Thermisol Finland Oy's business.
Section 3.14 Records. Thermisol Finland Oy shall keep correct and
-------
accurate records of Inventory, itemizing and describing the kind, type, and
quantity of Inventory, Thermisol Finland Oy's cost therefor and a current price
list for such Inventory.
Section 3.15 (a) No Sales of Inventory. Thermisol Finland Oy shall
---------------------
without the prior written consent by the Agent not sell any Inventory or any
interest therein except for sales in the ordinary course of its business.
(b) Sales in Compliance With Applicable Law. All sales of Inventory
---------------------------------------
will be made in full compliance with all requirements of applicable law.
8
<PAGE>
ARTICLE 4
REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT
-----------------------------------------------
If any Event of Default shall have occurred and be continuing, then
and in such case:
Section 4.01 (a) No Notice or Compensation. Each of the Lenders and
-------------------------
the Agent may exercise any or all of its rights and remedies hereunder and under
applicable laws and regulations without (A) notice to or demand upon Thermisol
Finland Oy, (B) resistance or interference by Thermisol Finland Oy and (C)
payment of compensation of any kind to Thermisol Finland Oy.
Section 4.02 Application of Proceeds. The Agent on behalf of itself
-----------------------
and all of the Lenders hereby commit themselves and their successors,
transferees and assigns not to collect their claims under the Security Agreement
from proceeds received from the realization of any fixed assets of Thermisol
Finland Oy or other assets not constituting part of the Collateral. If at any
time any of the Lenders or any of their successors, transferees or assigns
receives any proceeds from the realization of any fixed assets of Thermisol
Finland Oy or other assets not constituting part of the Collateral, such
receiving party will immediately pay the full amount of such proceeds received
to Thermisol Finland Oy.
ARTICLE 5
MISCELLANEOUS
Section 5.01 Registration Charges. Thermisol Finland Oy will pay any
--------------------
and all registration and similar taxes, fees or charges, and shall indemnify
each of the Lenders and the Agent against any and all liabilities with respect
to or resulting from any delay in the payment or omission to pay any such taxes,
fees or charges, which may be payable or determined to be payable in connection
with the execution, delivery, performance or enforcement of this Agreement or
any instrument, document or the like executed and delivered (i) in connection
with, or contemplated by, this Agreement, or (ii) in con-
9
<PAGE>
nection with any transaction in connection with or contemplated by this
Agreement.
Section 5.02 (a) Expenses of Thermisol Finland Oy's Agreements and
-------------------------------------------------
Duties. Thermisol Finland Oy's agreements and duties hereunder and under the
- ------
other Collateral Documents shall be performed by it at its sole cost and
expense.
(b) Lenders' Right to Perform on Thermisol Finland Oy's Behalf. If
----------------------------------------------------------
Styro-chem Finland Oy shall fail to do any act or thing which it has agreed to
do hereunder or under the other Collateral Documents, or fails to observe or
perform any agreement or obligation hereunder, or under the other Collateral
Documents, the Agent may (but shall not be obligated to) do the same or cause it
to be done or performed or observed, either in its name or in the name or on
behalf of Thermisol Finland Oy, and Thermisol Finland Oy hereby irrevocably
authorizes the Agent so to do.
(c) Expenses; Indemnification. Thermisol Finland Oy shall pay, or
-------------------------
reimburse the Agent for the ratable benefit of the Lenders for, all of the
Lenders' reasonable costs and expenses (including fees and disbursements of
legal counsel, appraisers, accountants, and other experts, employed or retained
by the Lenders or the Agent) incurred, and indemnify and hold the Lenders and
the Agent harmless from and against all losses suffered by the Lenders and the
Agent in connection with, (i) the negotiation, preparation, execution and
delivery of (A) this Agreement or any of the other Collateral Documents and (B)
whether or not executed, any waiver, amendment or consent thereunder, (ii)
consulting with respect to any matter in any way arising out of, related to, or
connected with, this Agreement or any of the other Collateral Documents,
including but not limited to the enforcement of any of the Obligations or the
enforcement or defense by the Lenders and the Agent of the Security Interest as
a valid first priority Business Mortgage , (iii) protecting, preserving,
exercising or enforcing the rights of the Lenders under this Agreement or any of
the other Collateral Documents, and (iv) any claim (whether asserted by the
Lenders, Thermisol Finland Oy or any other entity), and the prosecution or
defense thereof, in any way arising under, out of, related to, or connected
with, this Agreement or any of the other Collateral Documents. Thermisol Finland
Oy shall also pay (i) to the Agent for the ratable benefit of the Lenders its
charges for all
10
<PAGE>
bank services performed by it for Thermisol Finland Oy at Thermisol Finland Oy's
request and (ii) all transfer, documentary, stamp and similar taxes, and all
recording and filing fees, payable in connection with, arising out of, or in any
way connected with, the execution, delivery or performance of this Agreement or
any of the other Collateral Documents.
Section 5.03 No Waivers of Rights Hereunder; Amendments. No course of
------------------------------------------
dealing or performance by the Agent or the Lenders, including any delay or
forbearance by them in exercising any right hereunder or under any of the
Collateral Documents, shall operate as a waiver by them of such right, or the
amendment, release or novation of any provision hereof or thereof, nor shall any
single or partial exercise of any right preclude other or further exercises
thereof or the exercise of any other right. No waiver of any of their rights
under, nor any amendment of any provision of, this Agreement or any of the
Collateral Documents, shall be enforceable against the Lenders unless in writing
and signed by an authorized officer of the Lenders, and unless it expressly
refers to the right or provision affected; any such waiver shall be limited
solely to the specific event waived.
Section 5.04 Assignment. The Lenders may assign any or all of the
----------
Obligations and may transfer therewith any or all of the Collateral therefor
and the transferee shall have the same rights with respect thereto as had the
Lenders. Upon such transfer, the Lenders shall be released from all
responsibility for the Collateral so transferred.
Section 5.05 (a) Governing Law. This Agreement shall be governed by
-------------
and interpreted and enforced in accordance with the laws of Finland, and the
Lenders shall have the rights and remedies of a secured party under such laws.
(b) Jurisdiction. All actions and proceedings in any way arising out
------------
of, related to, or connected with, this Agreement and any of the Collateral
Documents shall be litigated in the District Court of Helsinki (Helsingin
karajaoikeus) in Finland, and, in the case of any such commenced by the Lenders,
in such other courts as the Lenders may select. Such courts are convenient
forums for Thermisol Finland Oy and Thermisol Finland Oy submits to the personal
jurisdiction of such courts.
11
<PAGE>
(c) Certain Waivers. Thermisol Finland Oy waives the right to assert
---------------
in any action or proceeding between it and the Lenders any offsets or
counterclaims which it may have.
(d) Manner of Payment and Performance. All payments due to the
---------------------------------
Lenders hereunder, and all other terms, conditions, covenants and agreements to
be observed or performed by Thermisol Finland Oy hereunder, shall be made,
observed or performed by Thermisol Finland Oy without any reduction whatsoever,
including but not limited to any reduction for any setoff, recoupment,
counterclaim or tax.
Section 5.06 Notices. Any notice or request hereunder may be given to
-------
Styro-chem Finland Oy or to the Agent as provided for in the Credit Agreement,
Section 15.6. Notice.
Section 5.07 (a) This Agreement and the Collateral Documents shall be
binding upon the heirs, executors, administrators, assigns or successors of
Thermisol Finland Oy and shall inure to the benefit of and be enforceable by the
Lenders, its successors, transferees and assigns.
(b) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof in that jurisdiction or affecting the validity or
enforceability of such provision in any other jurisdiction.
ARTICLE 6
DEFINITIONS
-----------
Section 6.01 (a) Certain Terms Defined by Reference. (i) All terms
----------------------------------
defined in the Credit Agreement are used herein with the meanings therein given.
(b) Other Defined Terms. For purpose of this Agreement:
--------------------
"Agreement" means this Agreement.
12
<PAGE>
"Business Mortgage" (translation of the Finnish word "Yrityskiinnitys") means a
mortgage in certain property, as defined in Article 3 of the Act on Business
Mortgages 24.8.1984/634 (in Finnish "Yrityskiinnityslaki") with amendments, of a
Finnish business enterprise registered in the Finnish Trade Register.
"Collateral" means and includes all of Thermisol Finland Oy's Inventory,
Receivables, General Intangibles (excluding tax refunds) as defined in the
Credit Agreement and which Collateral is covered by a Business Mortgage pursuant
to the Finnish Act on Business Mortgages 24.8.1984/634 with amendments.
"Collateral Documents" means agreements, documents and instruments related to,
arising out of, or in any way connected with (a) this Agreement including but
not limited to (i) each Promissory Note ("Panttivelkakirja") to be registered in
the Finnish Business Mortgage Register and (ii) thereto related application form
("Yrityskiinnityshakemus") and, (b) any other agreement, document or instrument
referred to in this clause (b), in each case whether now or hereafter executed.
"Person" means an individual, corporation, partnership, trust or unincorporated
organization or a government or any agency or subdivision thereof.
"Promissory Note" means a Note granting either the holder of the note or the
named creditor of the note, as the case may be, in accordance with Article 2 of
the Act on Business Mortgages 24.8.1984/634 with amendments evidencing the
consent of Thermisol Finland Oy to grant a registration of a claim for the
capital, interest and collecting costs, in amounts which are determined in each
Promissory Note.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized officers all as of the day and year first
written above.
THERMISOL FINLAND OY BANK OF AMERICA
By:/s/ R. Radcliffe Hastings By:/s/ Donald J. Chin
____________________________ --------------------------
Name:R. Radcliffe Hastings Name:Donald J Chin
Title: Authorized Representative Title:Managing Director
13
<PAGE>
Exhibit 10.42
STYROCHEM FINLAND OY
SECURITY AGREEMENT
Dated as of December 29, 1999
In consideration of credit extended under Third Amended and Restated
Revolving Credit and Security Agreement dated as of December 29, 1999 ("the
Credit Agreement") between WINCUP HOLDINGS, INC., RADNOR CHEMICAL CORPORATION,
STYROCHEM U.S., LTD., RADNOR HOLDINGS CORPORATION, RADNOR DELAWARE, INC.,
STYROCHEM DELAWARE, INC. and WINCUP TEXAS, LTD. and STYROCHEM EUROPE (THE
NETHERLANDS) B.V., STYROCHEM FINLAND OY, THERMISOL DENMARK A/S, THERMISOL SWEDEN
AB and THERMISOL FINLAND OY, BANK OF AMERICA, N.A. and each of other financial
institutions which are and such financial institutions which become a party to
the "Credit Agreement" (Bank of America and such other financial institutions,
collectively, the "Lenders" and individually a "Lender") and Bank of America, as
administrative and collateral agent for the Lenders, the Agent and Styrochem
Finland Oy hereby agree as follows (with certain terms used herein being defined
in Article 1 of the Credit Agreement and in Article 6 of this Agreement):
<PAGE>
ARTICLE 1
SECURITY INTEREST
-----------------
Section 1.01 (a) Security Interest. To secure the payment, observance
-----------------
and performance of the European Obligations, Styrochem Finland Oy hereby agrees
to establish a Business Mortgage (i.e. "yrityskiinnitys", also referred to in
English as a floating charge) in respect of the Collateral in favor of the Agent
for the ratable benefit of the Lenders. The Business Mortgage granted by
Styrochem Finland Oy is evidenced by Promissory Notes registered in the Finnish
Business Mortgage Register. The Promissory Notes are in the form set forth in
Exhibit 1. to this Agreement. By delivering such registered Promissory Notes to
the Agent or to the Agent's designated representative in Finland, the Borrowers
are entitled to draw under the Credit Agreement within the limits and under the
conditions set forth in the Credit Agreement. Styrochem Finland Oy will ensure
that the aggregate Dollar equivalent of the principal amount in Finnish Markka
of the registered Promissory Notes together with any other European Collateral
shall be sufficient to satisfy the requirement for the European Borrowing Base
set out in Section 2.1A in the Credit Agreement. Styrochem Finland Oy will,
forthwith upon demand from the Agent, deliver to the Agent or the Agent's
representative in Finland additional registered Promissory Note or Notes in an
amount which will ensure compliance with this Section 1.01(a).
(b) Assigning, Delivering and Pledging Existing Promissory Notes.
--------------------------------------------------------------
Styrochem Finland Oy hereby agrees to the Prior U.K. Agent assigning and
delivering any and all of the current Promissory Notes registered in the Finnish
Business Mortgage Register and pledged in favor of the Prior U.K. Agent to the
Agent for the purpose of granting to the Agent the Business Mortgage described
in Section 1.01 (a) above.
(c) Continued Priority of Security Interest. The Business Mortgage
---------------------------------------
shall at all times be valid, and enforceable against Styrochem Finland Oy and
all third parties, in accordance with the terms hereof, as security for the
European Obligations, and the Collateral shall not at any time be subject to any
Lien that is prior to, on a parity with or junior to the Busi-
2
<PAGE>
ness Mortgage, except as required by mandatory Finnish law and as to any
Permitted Encumbrance.
(d) Required Action. Styrochem Finland Oy shall take all action that
---------------
may be necessary or desirable, or that the Agent may request, so as at all times
to maintain the validity, enforceability and priority of the Business Mortgage
in the Collateral in conformity with the requirements of Section 1(c), or to
enable the Agent to protect, exercise or enforce the Lenders' rights hereunder
and in the Collateral, including but not limited to (i) executing the Promissory
Note(s) mentioned in Section 1.01 (a) and registering the same in the Finnish
Trade Register (ii) immediately discharging all Liens in respect of the
Collateral other than Permitted Encumbrances, and (iii) obtaining landlords' or
mortgagees' lien waivers (if any) .
Section 1.02 Styrochem Finland Oy Remains Obligated; The Lenders Not
-------------------------------------------------------
Obligated. The grant by Styrochem Finland Oy to the Lenders or to the Agent for
- ---------
the ratable benefit of the Lenders of the Business Mortgage in the Collateral
shall not relieve Styrochem Finland Oy from the performance of any term,
covenant, condition or agreement on its part to be performed or observed under
or in respect of any of the Collateral or from any liability to a Person under
or in respect of any of the Collateral or impose any obligation on the Agent to
perform or observe any such term, covenant, condition or agreement on Styrochem
Finland Oy's part to be so performed or observed or impose any liability on the
Agent for any act or omission on the part of Styrochem Finland Oy relative
thereto.
Section 1.03 Disposition of Collateral. Styrochem Finland Oy will make
-------------------------
no disposition of the Collateral except in the ordinary course of business.
Section 1.04 Defense of Agent's and Lenders' Interests. Until (a)
-----------------------------------------
payment and performance in full of all of the European Obligations and (b)
termination of the Credit Agreement as to the European Borrowers, the Business
Mortgage shall continue in full force and effect. During such period Styrochem
Finland Oy shall not, without the Agent's prior written consent, pledge, sell
(except Inventory and other Collateral in the ordinary course of business),
assign, transfer, create or suffer to exist a Lien upon or encumber or allow or
suffer to be encumbered in any way except for Permitted Encumbrances, any part
of the Collateral.
3
<PAGE>
Styrochem Finland Oy shall defend Agent's and Lenders' interests in the
Collateral against any and all Persons whatsoever.
ARTICLE 2
CERTAIN REPRESENTATIONS AND
---------------------------
WARRANTIES OF STYROCHEM FINLAND OY
----------------------------------
In order to induce the Lenders to extend credit under the Credit
Agreement, Styrochem Finland Oy represents and warrants as follows:
Section 2.01 Organization; Power. Styrochem Finland Oy is a
-------------------
corporation duly organized and validly existing under the laws of Finland, has
the corporate power and authority to own its property and to carry on its
business as now being conducted.
Section 2.02 Authorization and Compliance of Agreement. Styrochem
-----------------------------------------
Finland Oy has the corporate power, and has taken all necessary corporate action
to authorize it, to execute, deliver and perform this Agreement in accordance
with its terms. This Agreement has been duly executed and delivered by Styrochem
Finland Oy and is the legal, valid and binding obligation of Styrochem Finland
Oy. The execution, delivery and performance of this Agreement in accordance with
its terms does not and will not (i) require (a) any Governmental Approval (other
than the registration of the Business Mortgage by the Finnish National Board of
Patents and Registration), or (b) any consent or approval of the stockholders of
Styrochem Finland Oy, (ii) violate or conflict with, result in a breach of, or
constitute a default under, (a) any Contract to which Styrochem Finland Oy is a
party or by which any of its properties may be bound or (b) any applicable law
or (iii) result in or require the creation of any Lien upon any assets of
Styrochem Finland Oy, other than the Business Mortgage.
4
<PAGE>
ARTICLE 3
COVENANTS
---------
Unless the Lenders shall otherwise consent in writing:
A. General.
-------
Section 3.01 Preservation of Existence, Scope of Business,
---------------------------------------------
Compliance with Law. Styrochem Finland Oy shall (a) preserve and maintain its
- -------------------
corporate existence, (b) engage only in businesses in substantially the same
fields as the businesses conducted on the day of signing this Agreement and (c)
comply with all applicable law.
Section 3.02 (a) Ownership and Defense of Collateral. Styrochem
-----------------------------------
Finland Oy shall at all times (i) be the owner of the Collateral free from any
right, title or interest of any Person except Permitted Encumbrances and (ii)
defend the Collateral against the claims and demands of all Persons.
(b) No Pledging of Securities. Styrochem Finland Oy shall not pledge
-------------------------
any of its securities in favour of any other Person than the Lenders.
Section 3.03 (a) Chief Executive Office. Styrochem Finland Oy shall
----------------------
maintain its chief executive office and, if different from its chief executive
office, each office where the books and records relating to any Receivables are
kept only at, or, in the case of such books and records, in transit to, a
location of which the Agent has received not less than 60 days prior notice.
(b) Change of Name, Identity, etc. Styrochem Finland Oy shall not
-----------------------------
change its name or identity without the Agent's permission in writing.
(c) Invoices. Styrochem Finland Oy shall not use any invoice
--------
identifying the seller of the goods or provider of the services to which such
invoice relates by a name other than Styrochem Finland Oy's corporate name
provided, however, that Styrochem Finland Oy may use any parallel or
supplementary trade name, provided it has been registered in the Trade Register.
Section 3.04 Taxes; Compliance. Styrochem Finland Oy shall (a) pay or
-----------------
cause to be paid all taxes, assessments and governmental charges levied or
assessed or imposed
5
<PAGE>
upon or with respect to any of the Collateral and (b) comply with (i) all laws,
rules and regulations applicable to its business or the Collateral and (ii) the
terms and provisions of all leases, mortgages, and other agreements relating to
premises whereby Collateral is located.
Section 3.05 (a) Property Insurance. (i) Styrochem Finland Oy shall
------------------
insure the Inventory against loss or damage by fire, theft, burglary, pilferage,
loss in transit and such other hazards as the Agent shall from time to time
specify, in amounts and under policies issued by insurers acceptable to the
Agent, and all premiums thereon shall be paid by Styrochem Finland Oy and copies
of the policies delivered to the Agent.(ii) All insurance policies required
under this Section 3.05(a) shall contain loss payable clauses in the form and
substance satisfactory to the Agent, and shall name the Agent for the ratable
benefit of the Lenders as loss payee as its interests may appear, and provide
(A) that all proceeds thereunder in excess of USD 100,000 or the equivalent
amount in Finnish Markka, the lawful currency of Finland, shall be payable to
the Agent for the ratable benefit of the Lenders, (B) no such insurance shall be
affected by any act or neglect of the insurer or owner of the property described
in such policy, and (C) that such policy and loss payable clauses may not be
canceled, amended or terminated unless at least 30 days prior notice is given to
the Agent, (iii) Proceeds of such insurance paid to the Lenders or to the Agent
for the ratable benefit of the Lenders shall, prior to an Event of Default, be
held by the Agent as cash collateral and, after an Event of Default, at the
option of the Agent, be so held or applied to the payments of such of the
Obligations as the Agent may elect to the extent permitted by law. (iv)
Styrochem Finland Oy will not use or permit any part of the Inventory or any
part of the Equipment to be used unlawfully or outside of any insurance
coverage.
Section 3.06 Inspection. The Lenders (by any of its officers or
----------
employees) shall have upon reasonable prior notice the right at any time or
times during the business hours of Styrochem Finland Oy to (a) inspect the
Collateral, all records and files relating thereto and the premises upon which
any of the Collateral is located, (b) discuss with any Person, and each such
Person is hereby authorized to discuss with the Lenders, Styrochem Finland Oy's
business, assets, liabilities, financial condition, results of operation and
business prospects, provided that the Lenders inform Styrochem Finland Oy of
such discussions prior
6
<PAGE>
to or as soon as possible after they have occurred, (c) upon reasonable prior
notice verify the amount, quantity, value and condition of, or any other matter
relating to, any of the Collateral and (d) upon reasonable prior notice review,
audit and make extracts from all records and files related to any of the
Collateral. Styrochem Finland Oy hereby authorizes each of the Lenders and the
Agent, and will deliver to the Lenders and the Agent any instrument necessary
for them, to obtain records from any service bureau maintaining records on
behalf of Styrochem Finland Oy.
Section 3.07 Maintenance. Styrochem Finland Oy shall maintain all
-----------
physical property that constitutes Collateral in good condition, with reasonable
allowance for wear and tear, and shall exercise proper custody over all such
property.
Section 3.08 Notice of Diminution of Value. Styrochem Finland Oy
-----------------------------
shall give prompt notice to the Agent of any matter or event which has resulted
in, or may result in, the actual or potential diminution in value of any of its
Collateral other than diminutions which are insignificant in amount.
Section 3.09 Information. In addition to such other information as
-----------
shall be specifically provided for herein, Styrochem Finland Oy shall furnish to
the Agent such other information with respect to the Collateral as the Agent may
reasonably request from time to time.
B. Receivables.
-----------
Section 3.10 (a) Status of Receivables. Each Receivable (i) shall at
---------------------
all times represent the legal, valid and binding obligation of the Customer and
at the time it arose be enforceable in accordance with its terms, (ii) shall at
no time be subject to (A) any defense, set-off or counter-claim, other than ones
arising in the ordinary course of business for refunds or allowances resulting
from damaged or non-complying merchandise, (B) any agreement prohibiting
assignment or requiring notice of or consent to assignment, or (iii) shall arise
out of a bonafide transaction, (iv) represented by any outstanding invoice shall
require no further act on the part of Styrochem Finland Oy or any other Person
to make it payable by the Customer, and (v) shall comply with all applicable
laws.
7
<PAGE>
(b) Patents, Etc. Styrochem Finland Oy shall maintain, and diligently
------------
pursue all applications for, all patents, copyrights, trademarks, service marks,
trade names and the like belonging to its business.
Section 3.11 No Sales of Receivables. Styrochem Finland Oy shall not
-----------------------
sell any Receivables or any interest therein, or pledge any Receivable in favour
of any other Person than the Lenders, except as permitted under Section 1.04
above.
Section 3.12 Collection. Styrochem Finland Oy shall endeavor to cause
----------
to be collected from the Customer of each Receivable, as and when due
(including, without limitation, Receivables which are delinquent, such
Receivables to be collected in accordance with lawful collection procedures) any
and all amounts owing under or on account of such Receivable, and apply
forthwith upon receipt thereof all such amounts as are so collected to the
outstanding balance of such Receivable.
C. Inventory.
---------
Section 3.13 Nature of Inventory. All Inventory shall at all times
-------------------
(i) be in good condition, (ii) meet all governmental standards applicable
thereto or to its use or sale, and (ii) be currently either usable or salable in
the ordinary course of Styrochem Finland Oy's business.
Section 3.14 Records. Styrochem Finland Oy shall keep correct and
-------
accurate records of Inventory, itemizing and describing the kind, type, and
quantity of Inventory, Styrochem Finland Oy's cost therefor and a current price
list for such Inventory.
Section 3.15 (a) No Sales of Inventory. Styrochem Finland Oy shall
---------------------
without the prior written consent by the Agent not sell any Inventory or any
interest therein except for sales in the ordinary course of its business.
(b) Sales in Compliance With Applicable Law. All sales of Inventory
---------------------------------------
will be made in full compliance with all requirements of applicable law.
8
<PAGE>
ARTICLE 4
REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT
-----------------------------------------------
If any Event of Default shall have occurred and be continuing, then
and in such case:
Section 4.01 (a) No Notice or Compensation. Each of the Lenders and
-------------------------
the Agent may exercise any or all of its rights and remedies hereunder and under
applicable laws and regulations without (A) notice to or demand upon Styrochem
Finland Oy, (B) resistance or interference by Styrochem Finland Oy and (C)
payment of compensation of any kind to Styrochem Finland Oy .
Section 4.02 Application of Proceeds. The Agent on behalf of itself
-----------------------
and all of the Lenders hereby commit themselves and their successors,
transferees and assigns not to collect their claims under the Security Agreement
from proceeds received from the realization of any fixed assets of Styrochem
Finland Oy or other assets not constituting part of the Collateral. If at any
time any of the Lenders or any of their successors, transferees or assigns
receives any proceeds from the realization of any fixed assets of Styrochem
Finland Oy or other assets not constituting part of the Collateral, such
receiving party will immediately pay the full amount of such proceeds received
to Styrochem Finland Oy.
ARTICLE 5
MISCELLANEOUS
Section 5.01 Registration Charges. Styrochem Finland Oy will pay any
--------------------
and all registration and similar taxes, fees or charges, and shall indemnify
each of the Lenders and the Agent against any and all liabilities with respect
to or resulting from any delay in the payment or omission to pay any such taxes,
fees or charges, which may be payable or determined to be payable in connection
with the execution, delivery, performance or enforcement of this Agreement or
any instrument, document or the like executed and delivered (i) in con-
9
<PAGE>
nection with, or contemplated by, this Agreement, or (ii) in connection with any
transaction in connection with or contemplated by this Agreement.
Section 5.02 (a) Expenses of Styrochem Finland Oy's Agreements and
-------------------------------------------------
Duties. Styrochem Finland Oy's agreements and duties hereunder and under the
- ------
other Collateral Documents shall be performed by it at its sole cost and
expense.
(b) Lenders' Right to Perform on Styrochem Finland Oy's Behalf. If
----------------------------------------------------------
Styrochem Finland Oy shall fail to do any act or thing which it has agreed to
do hereunder or under the other Collateral Documents, or fails to observe or
perform any agreement or obligation hereunder, or under the other Collateral
Documents, the Agent may (but shall not be obligated to) do the same or cause it
to be done or performed or observed, either in its name or in the name or on
behalf of Styrochem Finland Oy, and Styrochem Finland Oy hereby irrevocably
authorizes the Agent so to do.
(c) Expenses; Indemnification. Styrochem Finland Oy shall pay, or
-------------------------
reimburse the Agent for the ratable benefit of the Lenders for, all of the
Lenders' reasonable costs and expenses (including fees and disbursements of
legal counsel, appraisers, accountants, and other experts, employed or retained
by the Lenders or the Agent) incurred, and indemnify and hold the Lenders and
the Agent harmless from and against all losses suffered by the Lenders and the
Agent in connection with, (i) the negotiation, preparation, execution and
delivery of (A) this Agreement or any of the other Collateral Documents and (B)
whether or not executed, any waiver, amendment or consent thereunder, (ii)
consulting with respect to any matter in any way arising out of, related to, or
connected with, this Agreement or any of the other Collateral Documents,
including but not limited to the enforcement of any of the Obligations or the
enforcement or defense by the Lenders and the Agent of the Security Interest as
a valid first priority Business Mortgage , (iii) protecting, preserving,
exercising or enforcing the rights of the Lenders under this Agreement or any of
the other Collateral Documents, and (iv) any claim (whether asserted by the
Lenders, Styrochem Finland Oy or any other entity), and the prosecution or
defense thereof, in any way arising under, out of, related to, or connected
with, this Agreement or any of the other Collateral Documents. Styrochem Finland
Oy shall also pay (i) to the Agent for the ratable benefit of the Lenders its
charges for all
10
<PAGE>
bank services performed by it for Styrochem Finland Oy at Styrochem Finland Oy's
request and (ii) all transfer, documentary, stamp and similar taxes, and all
recording and filing fees, payable in connection with, arising out of, or in any
way connected with, the execution, delivery or performance of this Agreement or
any of the other Collateral Documents.
Section 5.03 No Waivers of Rights Hereunder; Amendments. No course of
------------------------------------------
dealing or performance by the Agent or the Lenders, including any delay or
forbearance by them in exercising any right hereunder or under any of the
Collateral Documents, shall operate as a waiver by them of such right, or the
amendment, release or novation of any provision hereof or thereof, nor shall any
single or partial exercise of any right preclude other or further exercises
thereof or the exercise of any other right. No waiver of any of their rights
under, nor any amendment of any provision of, this Agreement or any of the
Collateral Documents, shall be enforceable against the Lenders unless in writing
and signed by an authorized officer of the Lenders, and unless it expressly
refers to the right or provision affected; any such waiver shall be limited
solely to the specific event waived.
Section 5.04 Assignment. The Lenders may assign any or all of the
----------
Obligations and may transfer therewith any or all of the Collateral therefor
and the transferee shall have the same rights with respect thereto as had the
Lenders. Upon such transfer, the Lenders shall be released from all
responsibility for the Collateral so transferred.
Section 5.05 (a) Governing Law. This Agreement shall be governed by
-------------
and interpreted and enforced in accordance with the laws of Finland, and the
Lenders shall have the rights and remedies of a secured party under such laws.
(b) Jurisdiction. All actions and proceedings in any way arising out
------------
of, related to, or connected with, this Agreement and any of the Collateral
Documents shall be litigated in the District Court of Helsinki (Helsingin
karajaoikeus) in Finland, and, in the case of any such commenced by the Lenders,
in such other courts as the Lenders may select. Such courts are convenient
forums for Styrochem Finland Oy and Styrochem Finland Oy submits to the personal
jurisdiction of such courts.
11
<PAGE>
(c) Certain Waivers. Styrochem Finland Oy waives the right to assert
---------------
in any action or proceeding between it and the Lenders any offsets or
counterclaims which it may have.
(d) Manner of Payment and Performance. All payments due to the
---------------------------------
Lenders hereunder, and all other terms, conditions, covenants and agreements to
be observed or performed by Styrochem Finland Oy hereunder, shall be made,
observed or performed by Styrochem Finland Oy without any reduction whatsoever,
including but not limited to any reduction for any setoff, recoupment,
counterclaim or tax.
Section 5.06 Notices. Any notice or request hereunder may be given to
-------
Styro-chem Finland Oy or to the Agent as provided for in the Credit Agreement,
Section 15.6. Notice.
Section 5.07 (a) This Agreement and the Collateral Documents shall be
binding upon the heirs, executors, administrators, assigns or successors of
Styrochem Finland Oy and shall inure to the benefit of and be enforceable by the
Lenders, its successors, transferees and assigns.
(b) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof in that jurisdiction or affecting the validity or
enforceability of such provision in any other jurisdiction.
ARTICLE 6
DEFINITIONS
-----------
Section 6.01 (a) Certain Terms Defined by Reference. (i) All terms
----------------------------------
defined in the Credit Agreement are used herein with the meanings therein given.
(b) Other Defined Terms. For purpose of this Agreement:
-------------------
"Agreement" means this Agreement.
12
<PAGE>
"Business Mortgage" (translation of the Finnish word "Yrityskiinnitys") means a
mortgage in certain property, as defined in Article 3 of the Act on Business
Mortgages 24.8.1984/634 (in Finnish "Yrityskiinnityslaki") with amendments, of a
Finnish business enterprise registered in the Finnish Trade Register.
"Collateral" means and includes all of Styrochem Finland Oy's Inventory,
Receivables, General Intangibles (excluding tax refunds) as defined in the
Credit Agreement and which Collateral is covered by a Business Mortgage pursuant
to the Finnish Act on Business Mortgages 24.8.1984/634 with amendments.
"Collateral Documents" means agreements, documents and instruments related to,
arising out of, or in any way connected with (a) this Agreement including but
not limited to (i) each Promissory Note ("Panttivelkakirja") to be registered in
the Finnish Business Mortgage Register and (ii) thereto related application form
("Yrityskiinnityshakemus") and , (b) any other agreement, document or instrument
referred to in this clause (b), in each case whether now or hereafter executed.
"Person" means an individual, corporation, partnership, trust or unincorporated
organization or a government or any agency or subdivision thereof.
"Promissory Note" means a Note granting either the holder of the note or the
named creditor of the note, as the case may be, in accordance with Article 2 of
the Act on Business Mortgages 24.8.1984/634 with amendments evidencing the
consent of Styrochem Finland Oy to grant a registration of a claim for the
capital, interest and collecting costs, in amounts which are determined in each
Promissory Note.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized officers all as of the day and year first
written above.
STYROCHEM FINLAND OY BANK OF AMERICA
By:/s/ R. Radcliffe Hastings By:/s/ Donald J. Chin
____________________________ --------------------------
Name:R. Radcliffe Hastings Name:Donald J Chin
Title: Authorized Representative Title:Managing Director
13
<PAGE>
Exhibit 10.43
EUROPEAN
REVOLVING NOTE
$4,000,000.00 December 29, 1999
This European Revolving Note is executed and delivered under and pursuant
to the terms of that certain Third Amended and Restated Revolving Credit and
Security Agreement dated as of the date hereof (as amended, supplemented or
modified from time to time, the "Loan Agreement") by and among WinCup Holdings,
Inc., Radnor Chemical Corporation, Radnor Holdings Corporation, Radnor Delaware,
Inc., StyroChem U.S., Ltd., StyroChem Delaware, Inc., and WinCup Texas, Ltd.
(each, a "U.S. Borrower" and jointly and severally, the "U.S. Borrowers"), and
StyroChem Europe (The Netherlands) B.V., StyroChem Finland OY, ThermiSol Denmark
A/S, ThermiSol Finland OY and ThermiSol Sweden AB (each a "European Borrower"
and jointly and severally, the "European Borrowers"; the European Borrowers
together with the U.S. Borrowers, each a "Borrower" and collectively, the
"Borrowers"), the financial institutions named therein and the financial
institutions which hereafter become a party thereto (collectively, the
"Lenders") and Bank of America, N.A. as administrative and collateral agent for
the Lenders (in such capacity, the "Agent"). Capitalized terms not otherwise
defined herein shall have the meanings ascribed thereto in the Loan Agreement.
FOR VALUE RECEIVED, the European Borrowers jointly and severally hereby
promise to pay to the order of BANK OF AMERICA, N.A. (the "Bank"), at Agent's
offices located at 101 N. Tryon Street, Charlotte, North Carolina 28255 or at
such other place as the holder may from time to time designate to Borrower in
writing:
(i) the principal sum of FOUR MILLION DOLLARS ($4,000,000.00) or, if
different from such amount, the unpaid principal balance of the Bank's
Commitment Percentage of European Revolving Advances as may be due and owing
under the Loan Agreement, payable in accordance with the provisions of the Loan
Agreement, subject to acceleration upon the occurrence of an Event of Default
under the Loan Agreement, termination of the Loan Agreement pursuant to the
terms thereof or repayment as required by the Loan Agreement; and
(ii) interest in the principal amount of this Note from time to time
outstanding until such principal amount is paid in full at such interest rates
and at such times as are specified in the Loan Agreement. In no event, however,
shall interest hereunder exceed the maximum interest rate permitted by law.
Upon and after the occurrence of an Event of Default, and during the
continuation thereof, interest shall be payable at the Default Rate.
This Note is one of the European Revolving Notes referred to in the Loan
Agreement and is secured, inter alia, by the liens granted pursuant to the Loan
----------
Agreement and the Other Documents, is entitled to the benefits of the Loan
Agreement and the Other Documents and is subject to all of the agreements, terms
and conditions therein contained.
<PAGE>
This note may be prepaid, in whole or in part, on the terms and conditions
set forth in the Loan Agreement.
This Note shall be construed and enforced in accordance with the laws of
the State of New York.
Each Borrower expressly waives any presentment, demand, protest, notice of
protest, or notice of any kind except as expressly provided in the Loan
Agreement.
This Note, together with the other European Revolving Notes executed and
delivered under and pursuant to the terms of the Loan Agreement, amends and
restates in its entirety, and is issued in full substitution and replacement for
(but not satisfaction of), each European Note executed and delivered under and
pursuant to the terms of the Existing Loan Agreement.
IN WITNESS WHEREOF, I have hereunto set my hand this 29th day of December,
1999.
STYROCHEM EUROPE (THE
NETHERLANDS) B.V.
STYROCHEM FINLAND OY
THERMISOL DENMARK A/S
THERMISOL FINLAND OY
THERMISOL SWEDEN AB
By:/s/ R. Radcliffe Hastings
____________________________________
Name: R. Radcliffe Hastings
__________________________________
Title: Director, Authorized Rep. of each of
the foregoing (or, if applicable, its
general partner)
2
<PAGE>
EXHIBIT 10.44
EUROPEAN
REVOLVING NOTE
$4,000,000.00 December 29, 1999
This European Revolving Note is executed and delivered under and pursuant
to the terms of that certain Third Amended and Restated Revolving Credit and
Security Agreement dated as of the date hereof (as amended, supplemented or
modified from time to time, the "Loan Agreement") by and among WinCup Holdings,
Inc., Radnor Chemical Corporation, Radnor Holdings Corporation, Radnor Delaware,
Inc., StyroChem U.S., Ltd., StyroChem Delaware, Inc., and WinCup Texas, Ltd.
(each, a "U.S. Borrower" and jointly and severally, the "U.S. Borrowers"), and
StyroChem Europe (The Netherlands) B.V., StyroChem Finland OY, ThermiSol Denmark
A/S, ThermiSol Finland OY and ThermiSol Sweden AB (each a "European Borrower"
and jointly and severally, the "European Borrowers"; the European Borrowers
together with the U.S. Borrowers, each a "Borrower" and collectively, the
"Borrowers"), the financial institutions named therein and the financial
institutions which hereafter become a party thereto (collectively, the
"Lenders") and Bank of America, N.A. as administrative and collateral agent for
the Lenders (in such capacity, the "Agent"). Capitalized terms not otherwise
defined herein shall have the meanings ascribed thereto in the Loan Agreement.
FOR VALUE RECEIVED, the European Borrowers jointly and severally hereby
promise to pay to the order of FIRST UNION NATIONAL BANK (the "Bank"), at
Agent's offices located at 101 N. Tryon Street, Charlotte, North Carolina 28255
or at such other place as the holder may from time to time designate to Borrower
in writing:
(i) the principal sum of FOUR MILLION DOLLARS ($4,000,000.00) or, if
different from such amount, the unpaid principal balance of the Bank's
Commitment Percentage of European Revolving Advances as may be due and owing
under the Loan Agreement, payable in accordance with the provisions of the Loan
Agreement, subject to acceleration upon the occurrence of an Event of Default
under the Loan Agreement, termination of the Loan Agreement pursuant to the
terms thereof or repayment as required by the Loan Agreement; and
(ii) interest in the principal amount of this Note from time to time
outstanding until such principal amount is paid in full at such interest rates
and at such times as are specified in the Loan Agreement. In no event, however,
shall interest hereunder exceed the maximum interest rate permitted by law.
Upon and after the occurrence of an Event of Default, and during the
continuation thereof, interest shall be payable at the Default Rate.
This Note is one of the European Revolving Notes referred to in the Loan
Agreement and is secured, inter alia, by the liens granted pursuant to the Loan
----------
Agreement and the Other Documents, is entitled to the benefits of the Loan
Agreement and the Other Documents and is subject to all of the agreements, terms
and conditions therein contained.
<PAGE>
This note may be prepaid, in whole or in part, on the terms and conditions
set forth in the Loan Agreement.
This Note shall be construed and enforced in accordance with the laws of
the State of New York.
Each Borrower expressly waives any presentment, demand, protest, notice of
protest, or notice of any kind except as expressly provided in the Loan
Agreement.
This Note, together with the other European Revolving Notes executed and
delivered under and pursuant to the terms of the Loan Agreement, amends and
restates in its entirety, and is issued in full substitution and replacement for
(but not satisfaction of), each European Note executed and delivered under and
pursuant to the terms of the Existing Loan Agreement.
IN WITNESS WHEREOF, I have hereunto set my hand this 29th day of December,
1999.
STYROCHEM EUROPE (THE
NETHERLANDS), B.V.
STYROCHEM FINLAND OY
THERMISOL DENMARK A/S
THERMISOL FINLAND OY
THERMISOL SWEDEN AB
By:/s/ R. Radcliffe Hastings
____________________________________
Name: R. Radcliffe Hastings
__________________________________
Title: Director, Authorized Rep. of each of the
foregoing (or, if applicable, its general
partner)
2
<PAGE>
Exhibit 10.55
RADNOR HOLDINGS CORPORATION
SENIOR EXECUTIVE RETIREMENT PLAN
--------------------------------
(Amended as of September 1, 1999)
Part I - Supplemental Retirement Benefits-
------------------------------------------
ARTICLE I. PURPOSE
- --------------------
The primary purpose of this Plan is to provide for the payment of
supplemental retirement benefits to certain designated senior executives of
Radnor Holdings Corporation and its affiliates as part of an integrated
executive compensation program intended to assist in attracting, motivating and
retaining senior executives of superior ability, industry and loyalty.
Secondarily, this Plan provides a mechanism for the voluntary deferral of a
senior executive's bonus for a period selected by the senior executive.
ARTICLE II. DEFINITIONS
- -------------------------
The following terms used in this Plan shall have the following meanings
unless a different meaning is clearly required by the context:
2.1 "Active Participant" means a Participant who is also an active
------------------
employee of the Employer.
2.2 "Administrator" means the Plan Sponsor or any individual or
-------------
individuals appointed by the Plan Sponsor to be responsible for the
administration and operation of the Plan in accordance with Article XI hereof.
2.3 "Application" means a written form by which a Participant agrees to
-----------
participate in the Plan, by which the Participant elects to defer a fixed dollar
amount from his annual cash compensation, by which the Participant elects to
make a voluntary year-end bonus deferral pursuant to Section 9.1 hereof, and on
which the Participant makes certain other designations and elections as required
thereon.
2.4 "Benefit Commencement Date" means the first day of the month next
-------------------------
following the Normal Retirement Date on which a Participant retires or any
earlier date authorized by the Administrator for the commencement of benefit
payments.
2.5 "Chairman of the Board" means the Chairman of the Board of Directors
---------------------
of the Plan Sponsor, as it shall be constituted from time to time.
2.6 "Code" means the Internal Revenue Code of 1986, as amended, any
----
successor statute of similar purpose and any regulations issued thereunder.
2.7 "Cost of Insurance" means the annual term insurance cost of
-----------------
maintaining the death benefit coverage of each Insurance Policy in force, as
determined by the Insurer.
<PAGE>
2
2.8 "Deferred Benefit Account" means the book account to which a
------------------------
Participant's Deferral Contributions and Matching Contributions shall be
credited and to which the other adjustments provided for in Article IV hereof
shall be credited or debited, as the case may be.
2.9 "Deferral Contribution" means the amount credited to a Participant's
---------------------
Deferred Benefit Account pursuant to Section 3.3 hereof.
2.10 "Effective Date" means January 1, 1998.
--------------
2.11 "Employer" means the Plan Sponsor and each Participating Company.
--------
Except as used in Article VIII hereof, each reference to the singular shall be
deemed a reference to each Employer individually. In Article VIII "Employer" is
intended to refer to the Plan Sponsor and each Participating Company together.
2.12 "Enrollment Period" means the initial period of forty-five days
-----------------
commencing on the date an individual becomes a Senior Executive, provided that
if there is less than forty-five days until the Senior Executive's initial Entry
Date, the initial Enrollment Period shall be shortened to the period preceding
such Entry Date. Apart from this initial Enrollment Period, Enrollment Period
means for each Plan Year the period from November 1 to December 15 immediately
preceding the first day of such Plan Year.
2.13 "Entry Date" means the first day of January, April, July and October.
----------
2.14 "Insurance Policy" or "Policy" means each Pacific Life Custom COLI
---------------- ------
Flexible Premium Variable Life Insurance Policy, including any rider thereto,
("Pacific Life Policy") owned by the Rabbi Trust, insuring the life of a
Participant and naming the Rabbi Trust as the beneficiary or any similar policy
which may be obtained hereafter either as a substitute for, or as an addition
to, a Pacific Life Policy.
2.15 "Insurer" means the life insurance company that has issued an
-------
Insurance Policy on the life of a Participant pursuant to this Plan.
1.16 "Investment Option" means any investment vehicle deemed to be made
-----------------
available under the Plan for purposes of determining the balance in a
Participant's Deferred Benefit Account. With respect to amounts deemed
to be invested in a Policy on the life of a Participant, such
Investment Options may include, but are not limited to, each of the
separate mutual fund variable accounts available under such Policy.
With respect to the amounts credited to the Deferred Benefit Accounts
which are not deemed to be invested in a Policy, Investment Options
may include, but are not limited to, each of the mutual funds or other
investment vehicles selected by the Administrator and deemed available
for investment of the assets held by the Rabbi Trust.
2.17 "Marginal Tax Rate" means the sum of (a) the highest marginal tax
-----------------
rate, including
<PAGE>
3
any surcharge, that could be applicable to the Plan Sponsor for federal income
tax purposes for the taxable year for which the determination is being made and
(b) the tax-effected composite of the highest marginal tax rates, including any
surcharges, for state income tax purposes, e.g., the product of (i) the
composite of the highest marginal state tax rates imposed on the members of the
Plan Sponsor's consolidated group and (ii) one minus the federal marginal
highest tax rate, that apply to the Plan Sponsor and its affiliates for the same
taxable year being used for purposes of part (a), above. For example, the 1998
Marginal Tax Rate (assuming the composite of the highest marginal state tax
rates is ten percent (10%)) is the sum of 35% (the highest marginal federal tax
rate) and 6.5% (the tax-effected composite marginal state tax rate).
2.18 "Matching Contribution" means the amount credited to a Participant's
---------------------
Deferred Benefit Account pursuant to Section 3.4 hereof.
2.19 "Memorandum" means the Offering Memorandum, dated May 1, 1997 and
----------
supplemented as of September 1, 1997, for the Pacific Life Policy, as it may be
further supplemented or amended from time to time, and any other similar
offering memorandum for any other Insurance Policy. The terms and conditions of
each such Memorandum shall be deemed incorporated herein by this reference.
2.20 "Normal Retirement Date" means the date on which a Participant who
----------------------
has both attained age 65 and completed at least five Years of Active
Participation retires from his Employer.
2.21 "Participant" means a current or former Senior Executive who elected
-----------
to participate by completing an Application, who is receiving, or who may become
eligible to receive, a benefit under the Plan and for whom a Deferred Benefit
Account is being maintained.
2.22 "Participating Company" means WinCup Holdings, Inc., StyroChem U.S.,
---------------------
Inc., Radnor Management, Inc. and any other eligible employer that in accordance
with Section 12.7 hereof has agreed to adopt and to become a party to the Plan
and the Trust Agreement with the approval of the Chairman of the Board.
2.23 "Plan" means the Radnor Holdings Corporation Senior Executive
----
Retirement Plan, as set forth herein and as it may be amended from time to time.
2.24 "Plan Sponsor" means Radnor Holdings Corporation, a Delaware
------------
corporation and any successor to its business.
2.25 "Plan Year" means January 1, 1998 to December 31, 1998 and each
---------
calendar year thereafter during which this Plan remains in effect.
2.26 "Rabbi Trust" means the grantor trust and trust fund, of which the
-----------
Plan Sponsor is the grantor, within the meaning of subpart E, part I, subchapter
J, chapter 1, subtitle A of the Code, and which is established and maintained
pursuant to the terms of the Trust Agreement.
<PAGE>
4
2.27 "Senior Executive" means an officer, general manager, salesman or
----------------
other senior executive who is a member of a select group of management or
highly-compensated employees employed by an Employer and who the Chairman of the
Board has designated as eligible to participate in this Plan.
2.28 "Trust Agreement" means the agreement and declaration of trust
---------------
executed pursuant to Section 12.5 hereof.
2.29 "Trustee" means the corporate trustee or one or more individuals,
-------
collectively, appointed and acting as trustee under the Trust Agreement and such
successor and additional trustees as shall be named pursuant to the terms of the
Trust Agreement.
2.30 "Valuation Date" means the last day of each calendar quarter ending
--------------
after the Effective Date, and for each Participant whose employment has
terminated or who has died, the date of such termination or death.
2.31 "Voluntary Deferral Account" means the book account to which a
--------------------------
Participant's voluntary year-end bonus deferral shall be credited and to which
the adjustments provided for in Article IX hereof shall be credited or debited,
as the case may be.
2.32 "Years of Active Participation" means the quotient (rounded to the
-----------------------------
next lower whole number) obtained by dividing (i) the number of months of
participation by an Active Participant, completed during the period from the
effective date of an Active Participant's initial deferral election to the
earlier of the date on which an Active Participant no longer has a balance in
his Deferred Benefit Account or the date on which he is no longer an employee of
the Employer, by (ii) twelve (12). Participation, active or otherwise, shall
also cease following the termination of the Plan. Separate periods for which a
Participant is credited with Years of Active Participation, but which are
separated by one or more periods which do not qualify as participation by an
Active Participant, shall be aggregated for purposes of determining the
Participant's total Years of Active Participation.
ARTICLE III. PARTICIPATION; CONTRIBUTIONS
- -----------------------------------------
3.1 Commencement of Participation. Each individual when first designated
-----------------------------
a Senior Executive shall be initially eligible to commence participation on the
immediately following Entry Date. In order to commence his participation a
Senior Executive must file an Application with the Administrator during the
initial Enrollment Period. If the Senior Executive fails to commence
participation in this Plan on the initial Entry Date, the Senior Executive shall
thereafter commence participation on the January 1st next following the
Enrollment Period during which his initial Application is filed with the
Administrator. Participation in the Plan is voluntary. Prior to a Senior
Executive's commencement of participation in the Plan, the Administrator shall
provide each Senior Executive with a copy of the most recent prospectus
associated with each Investment Option and shall make available a copy of the
Memorandum to each Senior Executive who requests a copy to review. Each Senior
Executive shall be considered to be familiar with the terms and conditions of
the Memorandum regardless of
<PAGE>
5
whether the Senior Executive has requested a copy to review. By applying to
become an Active Participant, a Senior Executive shall be deemed conclusively to
have assented to the provisions of this Plan and all amendments hereto.
3.2 Re-Employment. If a Participant whose employment with the Employer
-------------
has been terminated is subsequently re-employed, he shall not become an Active
Participant until he is again designated as a Senior Executive and he applies to
commence participation in accordance with the provisions of Section 3.1 hereof.
3.3 Participant Deferral Election.
-----------------------------
3.3.1 In a Participant's initial Application the Participant shall
direct his Employer to reduce his annual cash compensation by a fixed dollar
amount which in turn shall be credited by the Administrator to the Participant's
Deferred Benefit Account within no more than thirty days after the date on which
the Participant would have otherwise received such deferred amount as current
compensation. A Participant's compensation deferrals shall be made through
periodic payroll reductions.
3.3.2 As a condition of becoming a Participant, a Senior Executive
must agree that his initial deferral election shall be irrevocable for a period
of five consecutive years ending on the day before the fifth anniversary of the
effective date of such deferral election. In the event that this condition is
not satisfied, the Employer shall pay to the Participant within 90 days of the
revocation of the Participant's initial deferral election an amount equal to the
lesser of (i) the product of the cash surrender value of the Policy insuring the
Participant's life and a fraction, the numerator of which shall be an amount
equal to the aggregate Deferral Contributions credited to the Participant's
Deferred Benefit Account and the denominator of which shall be the sum of the
aggregate Deferral Contributions and Matching Contributions credited to the
Participant's Deferred Benefit Account or (ii) the Participant's aggregate
Deferral Contributions. The Participant's participation in this Plan shall cease
upon receipt of this payment and the unpaid balance in the Participant's
Deferred Benefit Account shall be forfeited. If such Senior Executive again
chooses to become a Participant, each subsequent deferral election shall be
treated as an initial deferral election until the five year requirement set
forth in this Section 3.3.2 has been satisfied.
3.3.3 Once a Participant has maintained a single deferral election in
effect for at least five years, the Participant may from time to time thereafter
change his deferral election by a notice provided to the Administrator or its
designee in writing or in any other form acceptable to the Administrator during
any Enrollment Period. In the absence of any such change, the Participant's
deferral election shall continue in force indefinitely.
3.4 Matching Contribution. By no later than the last day of each Plan
---------------------
Year, the Employer shall credit a Matching Contribution to each Active
Participant's Deferred Benefit Account in an amount equal to 100% of such
Participant's Deferral Contributions made during such Plan Year, provided that
in no event shall a Matching Contribution greater than $10,000 be credited to
any Active Participant's Deferred Benefit Account for any Plan Year.
<PAGE>
6
ARTICLE IV. INVESTMENTS AND ALLOCATIONS
- -----------------------------------------
4.1 Deferred Benefit Accounts. A Deferred Benefit Account shall be
-------------------------
established and maintained in the name of each Participant which shall become
vested in the Participant as specified in Article VI hereof and to which shall
be credited or debited, as the case may be: (i) amounts equal to the
Participant's Deferral Contributions; (ii) amounts equal to the Employer's
Matching Contributions; (iii) any deemed earnings and losses allocated to the
Deferred Benefit Account; (iv) any taxes due with respect to earnings credited
to the Deferred Benefit Account; and (v) the fees, taxes, Cost of Insurance and
other charges or expenses which must be debited from the Deferred Benefit
Account in accordance with the terms of any Investment Option in which all or
any portion of the balance in a Deferred Benefit Account is deemed invested.
4.2 Allocation of Investment Results. Pursuant to Section 4.5 hereof,
--------------------------------
each Participant shall have the right to direct the Administrator as to how
amounts credited to his Deferred Benefit Account shall be deemed to be invested
among the Investment Options made available under the Plan. As of each
Valuation Date the Administrator shall determine the increase or decrease in the
deemed value of each Investment Option since the last Valuation Date and shall
allocate that deemed investment experience plus any earnings, gains and losses
deemed realized by the Trust among the Participants' Deferred Benefit Accounts
based on the amount from each Deferred Benefit Account deemed invested in each
Investment Option. Such investment experience shall be net of any Cost of
Insurance, fees, taxes or other charges or expenses incurred with respect to any
Investment Option either at the time a deemed investment is made or thereafter.
For this purpose, the deemed value of an Insurance Policy on any Valuation Date
shall be its then cash surrender value, as determined by the Insurer.
4.3 Accounting for Distributions. As of the date of any distribution
----------------------------
hereunder, the distribution to a Participant or his beneficiary shall be debited
from such Participant's Deferred Benefit Account. Such amount shall be charged
on a pro rata basis against the Investment Options in which the Participant's
account balance is deemed to be invested.
4.4 Allocation Not Equivalent of Vesting. The fact that an allocation has
------------------------------------
been made pursuant to this Article IV will not operate to vest in a Participant
any right, title or interest in or to any benefit under the Plan. Vesting of
such benefits shall occur only in accordance with the provisions of Article VI
hereof.
4.5 Investment Directions of Participants. Subject to such limitations as
-------------------------------------
may from time to time be required by law or by this Plan or as may be imposed by
the Administrator or the Trustee and further subject to the operating rules and
procedures set forth in this Section 4.5 or such rules and procedures as may be
imposed from time to time by the Administrator or the Trustee, each Participant
may communicate to the Administrator or its designee in such manner and
frequency as shall be designated by the Administrator a direction as to how the
amounts credited to his Deferred Benefit Account should be deemed to be invested
(in any whole percentage) among the Investment Options. Such election shall
separately designate a deemed investment (i) for that portion of the
Participant's Deferred Benefit Account attributable to amounts that have been
credited to that account prior to the date on which such direction shall
<PAGE>
7
become effective, and (ii) for that portion of the Participant's Deferred
Benefit Account credited thereto after the date on which such direction shall
become effective. Such directions shall become effective subject to the
following rules and procedures:
4.5.1 Any initial or subsequent investment direction shall be made
during an Enrollment Period on the Application or on any other form or in any
other manner authorized by the Administrator or its designee and shall be
effective as of the date which is no more than thirty (30) days (or such shorter
period as the Administrator may determine) after the filing of the appropriate
form or after the receipt of any other authorized form of communication by the
Administrator or its designee.
4.5.2 All amounts credited to a Participant's Deferred Benefit
Account shall be deemed to be invested in accordance with the Participant's then
effective investment direction. As of the effective date of any new investment
direction, all or a portion of the Participant's Deferred Benefit Account on
that date shall be reallocated among the designated Investment Options according
to the new investment direction and in the percentages specified in that
investment direction unless and until a subsequent investment direction shall be
filed and become effective.
4.5.3 If the Administrator receives an investment direction which it
finds is incomplete, unclear or improper, the Participant's investment direction
then in effect shall remain in effect (or, in the case of a deficiency in an
initial investment direction, the Participant shall be deemed to have filed no
investment direction) until an effective direction is received, unless the
Administrator permits corrective action prior thereto.
4.5.4 If the Administrator possesses at any time a direction as to
the deemed investment of less than all of the balance in a Participant's
Deferred Benefit Account, the Participant shall be considered to have directed
that the undesignated portion of the Deferred Benefit Account be deemed to be
invested in the fixed income account of any Investment Option.
4.6 Payment of Fees and Expenses. As of each Valuation Date,
----------------------------
recordkeeping fees and Trustee fees, if any, of the Plan and the Rabbi Trust and
any other professional fees or expenses incurred in connection with the
operation of the Plan and the Rabbi Trust since the last Valuation Date shall be
paid by the Trustee out of the Rabbi Trust, unless the Administrator, in its
sole discretion, determines to provide for the payment of such fees and
expenses. If payment is made from the Rabbi Trust, a Participant's allocable
share of such payment shall be ratably debited from the balance in the
Participant's Deferred Benefit Account.
4.7 No Actual Investment Obligation. Notwithstanding the existence of the
-------------------------------
Rabbi Trust, each Deferred Benefit Account shall be a bookkeeping entry only.
Neither the Employer nor the Trustee shall be obligated to purchase or maintain
any asset in connection with the establishment and maintenance of the Deferred
Benefit Accounts, and any reference to investments or Investment Options is
solely for the purpose of computing the value of benefits under this Plan. To
the extent a Participant, beneficiary or any other person acquires a right to
receive payments under this Plan, that right shall be no greater than the right
of any unsecured
<PAGE>
8
general creditor of the Employer. Neither this Plan nor any action taken
pursuant to the terms of this Plan shall be considered to create a fiduciary
relationship between the Employer and any Participant or any other person or to
establish a trust in which the assets are protected against the claims of any
unsecured general creditor of the Employer.
ARTICLE V. BENEFITS
- ---------------------
5.1 Normal Pension Benefit. Except as otherwise provided in Sections 5.5
----------------------
and 6.3 hereof, if a Participant retires on a Normal Retirement Date his
Employer shall pay to him an annual pension, as defined in Section 5.1.1 hereof,
for each year ending before the fifteenth anniversary of his Benefit
Commencement Date. This annual pension shall be paid in monthly installments,
commencing on the Participant's Benefit Commencement Date and continuing to be
paid on the first day of each subsequent month during the fifteen year payment
period.
5.1.1 The amount of a Participant's annual pension shall be the
product of the annual benefit fraction and the total pension amount, where:
5.1.1.1 the annual benefit fraction shall be 1/15 for the
first year, 1/14 for the second year, 1/13 for the third year, and so forth
(i.e., the denominator for each succeeding year being one less than the
denominator in effect during the previous year).
5.1.1.2 the total pension amount for each Plan Year shall be
the amount credited to the Participant's Deferred Benefit Account as of the
Valuation Date immediately preceding the Benefit Commencement Date and each
anniversary thereof.
5.1.2 A Participant who is entitled to a normal pension benefit shall
also be paid a monthly supplemental pension benefit for as long as the normal
pension benefit is being paid equal to the product of his monthly normal pension
benefit and the Marginal Tax Rate, divided by one minus the Marginal Tax Rate.
5.2 Vested Annual Pension. Except as otherwise provided in Sections 5.5
---------------------
and 6.3 hereof, if a Participant who has completed at least 20 Years of Active
Participation terminates employment with the Employer before reaching his
earliest Normal Retirement Date, his Employer shall pay to him a vested annual
pension in an amount equal to the annual pension and the supplemental pension,
determined pursuant to Section 5.1 hereof as of the Valuation Date immediately
preceding the first day of the month that follows what would have been the
Participant's earliest Normal Retirement Date. The payment of the vested annual
pension shall commence on the Benefit Commencement Date following such Normal
Retirement Date and shall continue to be paid for each year ending before the
fifteenth anniversary of his Benefit Commencement Date. This vested annual
pension shall be paid in monthly installments, on the first day of each month
during the fifteen year payment period.
5.3 Limited Annual Pension. Except as otherwise provided in Sections 5.5
----------------------
and 6.3 hereof, if a Participant who has more than five, but less than twenty,
Years of Active Participation terminates employment with the Employer before
reaching his earliest Normal
<PAGE>
9
Retirement Date, his Employer shall pay to him a limited annual pension, as
defined in Section 5.4 hereof, beginning on the Benefit Commencement Date
following what would have been the Participant's earliest Normal Retirement
Date, for each year ending before the fifteenth anniversary of his Benefit
Commencement Date. This benefit shall be paid in monthly installments on the
first day of each month during the fifteen year payment period.
5.4 Amount of Limited Annual Pension. The amount of the limited annual
--------------------------------
pension shall be the product of the annual benefit fraction and the total
limited annual pension amount, where:
5.4.1 the annual benefit fraction shall be as defined in Section
5.1.1.1 hereof; and
5.4.2 the total limited annual pension amount for each Plan Year
shall be the vested portion of the amount credited to the Participant's Deferred
Benefit Account as of the Valuation Date immediately preceding the Participant's
Benefit Commencement Date and each anniversary thereof;
5.4.3 a Participant who is entitled to a limited annual pension shall
also be paid a monthly supplemental pension benefit for as long as the limited
annual pension is paid equal to the product of the monthly limited pension
amount and the Marginal Tax Rate, divided by one minus the Marginal Tax Rate.
5.5 Forfeiture of Benefit Payments and Other Amounts. In addition to (and
------------------------------------------------
not in derogation of) the forfeitures provided for in Section 6.3 hereof, if at
any time while a Senior Executive is a Participant, he breaches any of the
covenants relating to confidential information, nonsolicitation or
noncompetition set forth in Article VIII hereof, the portion of the
Participant's Deferred Benefit Account attributable to Matching Contributions
shall be forfeited and all payments derived from such Matching Contributions
that may be required under this Plan following such breach shall cease and be
forfeited. Thereafter, the Employer shall recalculate such Participant's annual
pension amount as if he had terminated employment with less than twenty Years of
Active Participation, as provided in Section 5.4 hereof. All forfeitures
arising pursuant to this Section 5.5 or any other provision of this Plan shall
be used to reduce the amount of Matching Contributions that the Employer is
required to make with respect to the Plan Year in which the forfeitures arose
and with respect to any Plan Year thereafter.
5.6 Form of Payment. All distributions under the Plan shall be made in
---------------
cash or cash equivalents.
ARTICLE VI. VESTING
- -------------------
6.1 Retirement Date. Except as otherwise provided in Sections 5.5 and 6.3
---------------
hereof, a Participant shall have a 100% vested interest in the balance in his
Deferred Benefit Account if he retires from the Employer on a Normal Retirement
Date.
6.2 Termination Prior to Retirement Date. Except as otherwise provided in
------------------------------------
Sections
<PAGE>
10
5.5 and 6.3 hereof, the vested interest of a Participant whose employment
terminates before his earliest Normal Retirement Date shall be:
6.2.1 100% of that portion of the balance in the Participant's
Deferred Benefit Account that is equal to the product of such balance and a
fraction, the numerator of which is the Participant's aggregate Deferral
Contributions and the denominator of which is the sum of the Participant's
aggregate Deferral and Matching Contributions, if the Participant has completed
less than 20 Years of Active Participation.
6.2.2 100% of the balance credited to his Deferred Benefit Account,
if the Participant has completed at least 20 Years of Active Participation.
6.3 Forfeiture. Except as hereinafter provided, a Participant shall
----------
forfeit his right to an annual pension in the event he dies before receiving
payment of his annual pension for the entire fifteen year payment period or in
the event the Employer terminates the Participant's employment for cause. In
the latter event, the Participant shall only be entitled to the payment of an
amount determined under Section 3.3.2 hereof as if the Participant had not
satisfied the condition described in that section. For purposes of this Section
6.3 "cause" shall have one of the following meanings:
6.3.1 If the Participant has an employment agreement with the
Employer that defines what constitutes a termination for "cause" for purposes of
that agreement, such definition shall also apply to this Plan; and
6.3.2 In all other cases, "cause" shall mean:
6.3.2.1 fraud, theft, misappropriation or embezzlement of the
Employer's funds;
6.3.2.2 conviction of any felony, crime involving fraud or
misrepresentation, or any other crime (whether or not connected with his
employment) the effect of which is likely to adversely affect the Employer;
6.3.2.3 abuse of alcohol, drugs or other controlled substances
which interferes with the performance by the Participant of his employment
duties; or
6.3.2.4 failure to substantially perform the Participant's
employment duties, which failure continues uncured for a period of more than
thirty (30) days and which failure is not principally caused by a physical or
mental disability of the Participant.
6.3.3 Notwithstanding the foregoing provisions of Section 6.3 or any
other provision hereof, a Participant shall not be deemed to have been
terminated for cause unless there shall have been delivered to the Participant a
letter signed by the Chairman of the Board, stating that, in the good faith
opinion of the Chairman of the Board, the Participant was guilty of conduct
described in Section 6.3.2 hereof and specifying the particulars thereof in
reasonable detail.
<PAGE>
11
ARTICLE VII. DEATH BENEFIT
- --------------------------
7.1 Death after Pension Commencement. If a Participant dies after the
--------------------------------
commencement of his pension benefit under Section 5.1, 5.2 or 5.3 hereof, but
before he receives 180 monthly installments, then, except as otherwise provided
in Section 7.5 hereof, the Employer shall pay to the Participant's beneficiary
an amount determined in accordance with Section 7.3 hereof.
7.2 Death before Pension Commencement. If a Participant dies before his
---------------------------------
pension benefit has commenced under Section 5.1, 5.2 or 5.3 hereof, then, except
as otherwise provided in Section 7.5 hereof, the Employer shall pay to the
Participant's beneficiary an amount determined in accordance with Section 7.3
hereof.
7.3 Amount of Death Benefit. The amount of the death benefit provided
-----------------------
under the conditions set forth in Sections 7.1 and 7.2 hereof shall be an amount
equal to the proceeds of the Policy, if any, insuring the Participant's life,
reduced by an amount equal to the sum of (i) the aggregate Matching
Contributions made to the Participant's Deferred Benefit Account and (ii) an
amount equal to the product of the Participant's aggregate Deferral
Contributions and the Marginal Tax Rate (Such reduced amount is hereafter
referred to as the "net proceeds.") and then further supplemented by a portion
of the proceeds equal to the product of the net proceeds and the Marginal Tax
Rate, divided by one minus the Marginal Tax Rate.
7.4 Beneficiary Designation. Any death benefit payable pursuant to this
-----------------------
Article VII shall be paid to the beneficiary designated by the Participant.
Such designation and any subsequent change of designation shall be made in
writing on an appropriate form and shall be filed with the Administrator. If
more than one beneficiary has been designated and survives the Participant, the
Employer shall pay the benefit in equal shares to the designated surviving
beneficiaries, unless a different proportion has been directed. If no
designated beneficiary survives the Participant, the death benefit shall be paid
to the Participant's estate.
7.5 Insurance Policies. It is the Employer's expectation that the death
------------------
benefits provided for in this Article VII shall be provided through the purchase
of an Insurance Policy on each Participant's life. These Insurance Policies
will be owned by the Rabbi Trust and the Rabbi Trust will be designated as the
sole beneficiary thereof. Each Participant shall provide the Administrator with
such information as it may require in order to enable the Trustee to apply for
such insurance and to cooperate fully with the Administrator in respect of such
application, including, without limitation, the taking of a physical
examination, if requested to do so.
7.5.1 Notwithstanding the foregoing provisions of this Section 7.5,
in the event the Insurer to which an application for insurance coverage is made
declines to issue an Insurance Policy at standard premium rates, the
Administrator may determine not to purchase a Policy on such terms and may, in
its sole discretion, determine to make other arrangements for the payment of an
alternative death benefit hereunder. Such alternative arrangements may include,
without limitation, purchasing additional life insurance on the life of a
Participant who is insurable at
<PAGE>
12
standard premium rates.
7.5.2 If a Participant should die while employed and the proceeds of
the Policy on the Participant's life are not paid to the Rabbi Trust because the
information the Participant furnished in connection with the issuance of such
Policy was materially false or the Participant's death was caused by suicide
within two years of the date of issuance of such Policy, the Employer will be
under no obligation to pay the death benefit provided under this Article VII. In
that event the Participant's beneficiary shall be entitled to the amount, if
any, in the Participant's Deferred Benefit Account after the Employer has
recovered its costs (including lost tax deductions), as described in Section
7.3(i) and (ii) hereof.
ARTICLE VIII. PROHIBITED ACTIVITIES
- -------------------------------------
8.1 Noncompetition and Nonsolicitation. As a condition to the receipt of
----------------------------------
benefits hereunder, each Participant shall refrain during his employment and
during the entire period preceding his receipt of all payments due to him
pursuant to this Plan from engaging in all of the following activities:
8.1.1 Entering into or engaging, directly or indirectly, in any
business (either financially or as a shareholder, employee, officer, partner,
independent contractor, or owner) which is competitive with the business of the
Employer, provided that nothing herein shall prevent a Participant from
investing in the securities of any company which are publicly traded so long as
his investment does not give him any voice in the management or conduct of the
affairs of such company;
8.1.2 Soliciting business, accepting any business from or otherwise
doing, or contracting to do, business with any person or entity who at any time
during the Participant's period of employment with the Employer was an active
customer or was actively solicited by the Employer according to the books and
records of the Employer; or
8.1.3 Soliciting, enticing, persuading, inducing, requesting or
otherwise causing any employee, officer or agent of the Employer to refrain from
rendering services to the Employer or to terminate his relationship, contractual
or otherwise, with the Employer.
8.2 Nondisclosure Covenant. Each Participant covenants and agrees that he
----------------------
will not, except in the performance of his duties on behalf of the Employer,
communicate or disclose to any person (other than the Employer and its
employees), or use for his own account, without the prior written consent of an
authorized representative of the Employer, any Confidential Information (as
hereinafter defined) which was obtained or acquired by the Participant during
his employment with the Employer. The Participant (i) shall retain such
Confidential Information in trust for the sole benefit of the Employer and its
successors and assigns, and (ii) shall promptly deliver to the Employer all
tangible evidence of such Confidential Information prior to, or at the
termination of, his employment with the Employer. For purposes of this
Agreement, "Confidential Information" shall mean any and all knowledge and
information relating to the business affairs of the Employer, their products,
processes and/or services and their customers,
<PAGE>
13
creditors, shareholders, suppliers, contractors, agents, consultants and
employees, including (but not limited to) the provisions of this Plan, provided,
however, that Confidential Information shall not include any information which
may be in the public domain or have come into the public domain not as a result
of a breach by the Participant of his covenant hereunder.
8.3 Breach of Covenants. Any breach of the covenants set forth in this
-------------------
Article VIII shall result in the forfeitures provided for in Section 5.5 hereof
and can result in the Employer obtaining injunctive relief pursuant to Section
13.8 hereof in order to prevent any further breach of such covenants.
Part II - Voluntary Deferral of Bonuses
---------------------------------------
ARTICLE IX. ELECTION TO DEFER A BONUS
- ---------------------------------------
9.1 Elections. Each Active Participant and eligible Senior Executive
---------
shall have the right to defer on a voluntary basis all or any portion of the
cash bonuses, if any, which he or she shall receive in the following Plan Year
by filing an Application at the time and in the manner prescribed in this
Article IX. The amount of the bonus deferred by a Participant for a Plan Year
pursuant to an Application shall be withheld from the payment of the
Participant's bonus for the Plan Year (in accordance with the general pay
practices of the Employers), and credited to the Participant's Voluntary
Deferral Account in accordance with Article XI hereof. No Application filed by
a former Senior Executive shall be valid or effective.
9.2 Filing of Applications. Each Participant's voluntary deferral
----------------------
election (the "Election") shall be made on the Application provided by the
Administrator. Except as provided in Section 9.3 hereof, no Election shall be
given effect unless it is filed with the Administrator on or before the close of
business on September 30th of the Plan Year preceding the Plan Year in which the
bonus will be paid. The Participant shall also designate on the Application a
beneficiary to receive payment of the Participant's Voluntary Deferral Account
in the event of his or her death.
9.3 Filing of Elections by New Senior Executives. Notwithstanding
--------------------------------------------
Sections 9.1 and 9.2 hereof, a new Senior Executive may elect to defer all or
any portion of his or her bonus to be earned for the Plan Year in which the new
Senior Executive was hired by making and filing an Application with the
Administrator within 30 days of such new Senior Executive's date of hire.
Elections by such new Senior Executives for succeeding Plan Years shall be made
in accordance with Sections 9.1 and 9.2 hereof.
9.4 Plan Years to which Elections May Apply. A separate Election may be
---------------------------------------
made for each Plan Year as to which a Participant desires to defer all or any
portion of his or her bonus, but the failure of a Participant to make an
Election for any Plan Year shall not affect such Participant's right to make an
Election for any subsequent Plan Year.
9.5 Limited Application of This Article. The Election provided for in
-----------------------------------
this Article IX shall apply solely to bonuses and shall not apply to any other
form of compensation that an
<PAGE>
14
Active Participant may be entitled to receive.
9.6 Vesting. Each Participant shall always have a 100% vested and
-------
nonforfeitable right to the balance in the Participant's Voluntary Deferral
Account.
ARTICLE X. TIMING AND FORM OF DISTRIBUTION
- --------------------------------------------
10.1 Election of Form of Payment. Subject to the restrictions set forth
---------------------------
in this Article X, and prior to receiving any distribution from his or her
Voluntary Deferral Account, each Participant who has a Voluntary Deferral
Account shall elect the form of payment for such distribution from among the
options set forth in Section 10.3 hereof.
10.2 Timing of Distribution.
----------------------
10.2.1 Except as provided in Section 10.2.2 hereof, the distribution
of the balance in a Participant's Voluntary Deferral Account shall take place
following a Participant's termination of employment with the Employer or death,
whichever occurs first. The amount and timing of that distribution shall be
determined in accordance with Section 10.2.3 hereof.
10.2.2 Each Participant may elect at any time to accelerate receipt
of part or all of the balance in his or her Voluntary Deferral Account by filing
an Application with the Administrator at least 18 months before the Valuation
Date as of which the value of the distribution will be determined. Once a
Participant has made an election in accordance with this Section 10.2, it shall
be irrevocable.
10.2.3 During the life of a Participant the distribution of any
amount credited to his or her Voluntary Deferral Account shall be made as of the
Valuation Date coinciding with or immediately following the event, other than
death, which gave rise to the distribution, but in no event earlier than the
60th day following the date on which the Participant designates a form of
payment for the distribution. In the event of a Participant's death while
employed by the Employer or before distribution of the Voluntary Deferral
Account has commenced, apart from distributions made pursuant to Section 10.2.2
hereof, the distribution of the balance in the Participant's Voluntary Deferral
Account shall be made to his or her designated beneficiary in the form of a
single cash payment made within thirty (30) days following the Participant's
date of death in the amount determined as of the immediately preceding Valuation
Date. If a Participant's death occurs when he or she is still receiving payments
from his or her Voluntary Deferral Account, the balance of such payments shall
be paid in a single cash amount to the Participant's designated beneficiary no
later than thirty (30) days following the Participant's date of death.
10.3 Forms of Payment. Except as otherwise provided in the event of
----------------
death, the amounts credited to a Voluntary Deferral Account shall be paid in
cash (or a cash equivalent) in the manner selected by the Participant from
between either of the following forms of payment:
10.3.1 A lump sum payment; or
<PAGE>
15
10.3.2 Substantially equal annual installments over a five (5), ten
(10) or fifteen (15) year period.
ARTICLE XI. VOLUNTARY DEFERRAL ACCOUNTS
- -----------------------------------------
11.1 Voluntary Deferral Account. A Voluntary Deferral Account shall be
--------------------------
established for each Participant who makes an Election pursuant to Article IX
hereof. Amounts deferred pursuant to Article IX hereof shall be credited to a
Participant's Voluntary Deferral Account on the date his or her annual year-end
bonus would otherwise have been paid to the Participant. Earnings on the
balance credited to the Account shall be credited to the Voluntary Deferral
Account as provided in Section 11.3 hereof.
11.2 Investments. Each Participant shall be permitted to designate the
-----------
investment vehicles in which all or a portion of his or her Voluntary Deferral
Account shall be deemed to be invested for purposes of determining the balance
in his or her Voluntary Deferral Account. All designated investments shall be
determined and selected in accordance with the rules and procedures established
by the Administrator.
11.3 Crediting of Earnings on Voluntary Deferral Accounts.
----------------------------------------------------
11.3.1 Any income, gain or loss earned or realized on the balance
reflected in a Participant's Voluntary Deferral Account shall be credited to
that Voluntary Deferral Account. The crediting of such deemed investment
experience to the Voluntary Deferral Account shall be made as of each Valuation
Date.
11.3.2 Effective for the period extending from a Participant's
employment termination date or date of death, whichever is applicable, to the
date the Participant's Voluntary Deferral Account is distributed in full, the
Administrator shall credit such Participant's Voluntary Deferral Account with
earnings based on the investment election in effect on the Participant's date of
termination or death, whichever is applicable.
11.3.3 If a Participant elects to receive annual installments from
his or her Voluntary Deferral Account pursuant to Section 10.3.2 hereof, the
amount of each installment shall be adjusted, if necessary, to take into account
the gains, losses or net income credited to his or her Voluntary Deferral
Account since the last payment.
Part III - Administration and Adoption
--------------------------------------
ARTICLE XII. ADMINISTRATION OF THE PLAN
- -----------------------------------------
12.1 Powers and Duties of the Administrator. The Administrator shall be
--------------------------------------
responsible for the operation and administration of the Plan, and shall have
such powers as may be necessary or appropriate to carry out the provisions of
the Plan and to perform its duties hereunder, including the power:
<PAGE>
16
12.1.1 To engage such persons as it deems necessary or advisable to
assist in the administration of the Plan or to render advice with respect to the
responsibilities of the Administrator under the Plan, including accountants,
actuaries and attorneys.
12.1.2 To make use of the services of employees of the Employer in
administrative matters.
12.1.3 To obtain and act on the basis of all tables, valuations,
certificates, opinions, and reports furnished by the persons described in
Section 12.1.1 or 12.1.2 hereof.
12.1.4 To determine all benefits and resolve all questions pertaining
to the administration and interpretation of the Plan, either by rules of general
applicability or by particular decisions. To the maximum extent permitted by
law, all interpretations of the Plan and other decisions of the Administrator
shall be conclusive and binding on all parties.
12.1.5 To adopt such forms, rules and regulations as it shall deem
necessary or appropriate for the administration of the Plan and the conduct of
its affairs, provided that any such forms, rules and regulations shall not be
inconsistent with the provisions of the Plan.
12.1.6 To remedy any inequity from any incorrect information received
by, or communicated to, the Administrator or from administrative error.
12.1.7 To commence or defend in any legal or administrative
proceeding any litigation arising from the operation of the Plan.
12.1.8 To direct the Trustee as to how to make all elections required
by the Insurance Policies, including, but not limited to, the selection of a
death benefit qualification test, and to direct the Trustee to take whatever
actions the Administrator deems necessary or appropriate in order to avoid
having an Insurance Policy become a "modified endowment contract," as defined in
Code section 7702A.
12.2 Required Information. A Participant and any beneficiary eligible to
--------------------
receive benefits under the Plan shall furnish to the Administrator any
information or proof requested by the Administrator and reasonably required for
the proper administration of the Plan, including, but not limited to, the
information required to obtain an Insurance Policy, as provided for in Section
7.5 hereof. Failure on the part of a Participant or beneficiary to comply with
any such request within a reasonable period of time shall be sufficient grounds
for delay in the payment of benefits under the Plan until such information or
proof is received by the Administrator.
12.3 Nonuniform Determinations. Neither the Administrator's, the Plan
-------------------------
Sponsor's or the Chairman of the Board's determinations or interpretations under
the Plan need be uniform and may be made by the Administrator, the Plan Sponsor
or the Chairman of the Board selectively among Participants (whether or not such
Participants are similarly situated). Without limiting the generality of the
foregoing, the Administrator and the Chairman of the Board shall be entitled,
<PAGE>
17
among other things, (a) to make nonuniform and selective determinations with
respect to the acceleration of vesting, (b) the commencement of benefit
payments, (c) the selection of Investment Options and (d) any other matters
regarding the administration or operation of the Plan as to which either is
responsible. Moreover, the Administrator, the Plan Sponsor or the Chairman of
the Board may elect, in his or its sole discretion, to waive any requirement or
restriction set forth in the Plan without being required to implement the same
or a similar waiver for the same Participant at a future time or for other
similarly situated Participants.
12.4 Claims Procedure and Review.
---------------------------
12.4.1 Claims for benefits under the Plan shall be filed in writing
by a claimant with the Administrator. Within 60 days after receipt of such
claim, the Administrator shall act on the claim and shall notify the claimant in
writing as to whether the claim has been granted in whole or in part; provided,
however, if the claimant has not received written notice of such decision within
such 60-day period, the claimant shall, for the purpose of Section 12.4.3
hereof, regard his claim as having been denied.
12.4.2 Any notice of denial of a claim, in whole or in part, shall
set forth (i) the specific reason or reasons for the denial, (ii) reference to
the Plan provisions on which the denial is based, and (iii) a copy of the Plan's
claims and review provisions.
12.4.3 Any claimant who has had a claim denied, in whole or in part,
under the Plan shall be entitled, upon the filing of a written request for
review with the Administrator within 60 days after receipt by the claimant of
written notice of such denial (or, if the claimant had not received written
notice of the decision within the 60-day period described in Section 12.4.1
hereof, within 120 days of receipt of the claim form by the Administrator), to
appeal the denial of his claim to the Administrator.
12.4.4 The claimant shall be entitled in connection with such appeal
to examine pertinent documents and submit issues and comments in writing to the
Administrator. Any decision on review by the Administrator shall be in writing,
and shall include specific reasons for the decision (including reference to the
Plan provisions on which the decision is based). Such decision shall be made by
the Administrator not later than 60 days after receipt by it of the claimant's
request for review.
12.5 Designation of Trustee. The Chairman of the Board shall name and
----------------------
designate a Trustee and shall enter into a Trust Agreement for the purpose of
establishing the Rabbi Trust. The Chairman of the Board shall have the power,
by a written instrument, to amend the Trust Agreement, remove the Trustee, and
designate a successor Trustee, as provided in the Trust Agreement.
12.6 Litigation. In any action or judicial proceeding affecting the Plan
----------
and the Rabbi Trust, it shall be necessary to join as a party only the Plan
Sponsor. Except as may be otherwise required by law, no Participant or
beneficiary shall be entitled to any notice or service of process, and any final
judgment entered in such action shall be binding on all persons interested in,
or
<PAGE>
18
claiming under, the Plan.
12.7 Adoption by Participating Companies.
-----------------------------------
12.7.1 This Plan may be adopted by any parent, subsidiary, related or
affiliated company which the Chairman of the Board shall designate and declare
as eligible to adopt and participate in the Plan (an "adopting company"),
subject to the following conditions:
12.7.1.1 Each employer who becomes an adopting company after
the Effective Date shall execute and deliver such instruments as the Chairman of
the Board shall deem necessary or desirable, including an instrument evidencing
the joinder of the adopting company in the Plan and Trust Agreement; and
12.7.1.2 Each adopting company shall designate the Chairman
of the Board as its agent to act for it in all transactions regarding the Plan,
including, without limitation, its amendment and termination, as provided by
Article XIII hereof, as well as its administration, as provided by this Article
XII.
12.7.2 In the event of such adoption, the Administrator designated by
the Chairman of the Board shall thereafter also act as the Administrator for the
adopting company.
12.7.3 The Plan shall be effective with respect to each adopting
company and its employees on such date as shall be specified in the resolutions
of such company's board of directors, authorizing the adoption of the Plan.
12.7.4 The Participating Companies on the Effective Date shall be
deemed to have satisfied the conditions set forth in this Section 12.7 by virtue
of their participation in the Plan.
12.8 Withdrawal from Plan. Any Participating Company may withdraw from
--------------------
this Plan at any time by giving ninety (90) days prior written notice to the
Administrator. Such withdrawal shall be treated as a partial termination with
respect to the Participants to whom such withdrawal applies. The withdrawing
Employer shall thereafter cease to participate in this Plan and its Senior
Executives shall cease to be eligible to participate in the Plan.
ARTICLE XIII. GENERAL PROVISIONS
- ----------------------------------
13.1 Funding. This Plan shall be unfunded and credits to the Deferred
-------
Benefit and Voluntary Deferral Accounts of each Participant shall not be set
apart nor otherwise made available so that they may be drawn upon at any time,
except as provided in this Plan. Neither any Participant nor any beneficiary
shall have any rights, title or interest in such credits or any claim against
them. Payments shall only be made at such times and in the manner expressly
provided in the Plan, and the Employer shall only have a contractual obligation
to make the payments when due. No notes or security for the payment of any
Participant's benefit shall be issued or provided by the Employer. Except as
otherwise provided for in the Trust Agreement, payment of benefits hereunder
shall be made from the general assets of the Employer.
<PAGE>
19
13.2 Nonalienation. No Participant or beneficiary shall pledge,
-------------
hypothecate, anticipate, assign or in any way create a lien upon any amounts
provided under this Plan, and no benefit payable hereunder shall be assignable
in anticipation of payment either by voluntary or involuntary acts, or by
operation of law. Moreover, no benefit payable under the Plan shall in any
manner be liable for or subject to the debts, contracts, liabilities,
engagements or torts of the person entitled thereto. Further, (i) withholding
of taxes from Plan benefit payments, (ii) the recovery under the Plan of
overpayments of benefits previously made to a Participant or beneficiary, (iii)
if applicable, the transfer of benefit rights from this Plan to another plan, or
(iv) the direct deposit of benefit payments to an account in a banking
institution shall not be construed as an assignment or alienation. In the event
that any Participant's or beneficiary's benefits hereunder are garnished or
attached by order of any court, the Administrator may bring an action for a
declaratory judgment in a court of competent jurisdiction to determine the
proper recipient of the benefits to be paid under the Plan. During the pendency
of such action, any benefits that become payable shall be held as credits to the
Participant's or beneficiary's Deferred Benefit Account or Voluntary Deferral
Account or, if the Administrator prefers, paid into the court as they become
payable, to be distributed by the court to the recipient who it deems proper at
the close of such judicial preceding.
13.3 No Employment Contract. The establishment of this Plan shall not be
----------------------
construed to confer upon any Senior Executive the legal right to be retained in
the employ of the Employer, or give a Senior Executive or any beneficiary, any
right to any payment whatsoever, except to the extent of the benefits provided
for hereunder.
13.4 Incompetent Recipient. If the Administrator determines that any
---------------------
person to whom a benefit is payable under the Plan is incompetent by reason of
age or physical or mental disability, the Administrator shall have the power to
cause the payments becoming due to such person to be made to another for his
benefit without any responsibility to see to the application of such payments.
Any payment made pursuant to such power shall, as to the amount of such payment,
operate as a complete discharge of the Employer.
13.5 Questions of Identity. If at any time any doubt exists as to the
---------------------
identity of any person entitled to any payment hereunder or the amount or time
of such payment, the Employer shall cause such sum to be held in the Rabbi Trust
until such identity, amount or time is finally determined or until a final order
of a court of competent jurisdiction is obtained. Notwithstanding the
foregoing, the Employer shall also be entitled, in its sole discretion, to cause
such sum to be paid into court in accordance with the appropriate rules of law.
13.6 Effect on Other Benefits. The benefits of each Participant shall be
------------------------
in addition to any benefits paid or payable to or on account of the Participant
under any other pension, disability, equity, annuity or retirement plan or
policy. However, any supplemental retirement income credited under this Plan
shall not be deemed part of the Participant's total compensation for the purpose
of computing benefits to which he may be entitled under any pension plan or
other supplemental compensation arrangement, unless such plan or arrangement
specifically provides to the contrary.
<PAGE>
20
13.7 Waiver of Liability. No liability shall attach to or be incurred by
-------------------
any officer or director of the Employer under or by reason of the terms,
conditions and provisions contained in this Plan, or for the acts or decisions
taken or made thereunder or in connection therewith; and as a condition
precedent to the establishment of the Plan or the receipt of benefits hereunder,
or both, such liability, if any, is expressly waived and released by each
Participant and by any and all persons claiming under or through such
Participant. Such waiver and release shall be conclusively evidenced by any act
of participation in, or the acceptance of benefits under, the Plan.
13.8 Injunctive Relief. Without limiting the right of the Employer to
-----------------
pursue all other available legal and equitable rights for violation of the
covenants set forth in Article VIII hereof, the Participants shall be deemed to
acknowledge that such other remedies cannot fully compensate the Employer for
such violation, and that the Employer shall be entitled to injunctive relief to
prevent violation or continuing violation of such covenants. The Participants
shall also be deemed to intend and to agree that if, in any action before any
court or agency legally empowered to enforce such covenants, any term,
restriction, covenant or promise is found to be unreasonable and for that reason
unenforceable, then such term, restriction, covenant or promise shall be deemed
modified to the extent necessary to make it enforceable by such a court or
agency.
13.9 Conflicts. In the event of any conflict between the terms and
---------
conditions of an Investment Option and the terms and conditions of this Plan,
the terms and conditions of the Investment Option shall control.
13.10 Amendment and Termination. The Chairman of the Board shall have the
-------------------------
sole authority to modify, amend or terminate the Plan, provided that no
amendment or termination shall have an adverse effect upon rights which have
vested or upon amounts which are being paid as of the date of such amendment or
termination. Should this Plan be terminated, each Participant shall receive
written notice of when such termination shall be effective.
13.10.1 Notwithstanding the provisions of this Section 13.9, the
Plan and the Trust Agreement may be amended at any time, retroactively if deemed
necessary in the opinion of the Administrator, in order to ensure that the Plan
is characterized as a non-qualified plan of deferred compensation maintained for
a select group of management or highly compensated employees, as described under
Code section 451 and under sections 201(2), 301(a)(3) and 401(a)(1) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and to
conform the Plan and the Rabbi Trust to the provisions and requirements of any
applicable law (including ERISA and the Code) and to ensure that the Rabbi Trust
is characterized as a grantor trust as described in Code sections 671 through
679. No such required amendment shall be considered prejudicial to any interest
of a Participant or beneficiary hereunder.
13.10.2 This Section 13.9.2 shall become operative on a complete
termination of the Plan. The provisions of this Section 13.9.2 shall also become
operative on a partial termination of the Plan, as determined by the Chairman of
the Board, but only with respect to
<PAGE>
21
that portion of the Plan attributable to the Participants to whom the partial
termination is applicable. Upon the effective date of any such event,
notwithstanding any other provisions of the Plan, no persons who were not
theretofore Participants shall be eligible to become Participants, and all
nonvested interests of Participants not yet fully vested shall be forfeited
unless the Chairman of the Board otherwise provides for full vesting. The value
of the vested interests of all Participants and beneficiaries shall be
determined and, after debiting such Deferred Benefit Account with its allocable
shares of the estimated expenses arising from the liquidation of the Plan, the
vested balance in each Participant's Deferred Benefit Account shall be paid to
them as soon as is practicable after such termination. In the sole discretion of
the Chairman of the Board, this payment may be made through the transfer to a
Participant of the Insurance Policy on his life, as long as the terms of the
Insurance Policy contemplate and authorize such a transfer.
13.11 Suspension of Credits. The Chairman of the Board shall also have
---------------------
the authority to suspend operation of the Plan on a temporary or a permanent
basis. In the event of such suspension, the Employer shall continue all aspects
of the Plan, other than the crediting of Deferral and Matching Contributions,
during the period of the suspension. Benefit payments will also continue to be
made during the period of the suspension in accordance with the provisions of
the Plan.
13.12 Participants' Status as General Creditors. The Deferred Benefit and
-----------------------------------------
Voluntary Deferral Accounts shall at all times represent the general obligation
of the Employer. The Participant shall be a general creditor of the Employer
with respect to this obligation, and shall not have a secured or preferred
position with respect to his or her Deferred Benefit and Voluntary Deferral
Accounts. Nothing contained herein shall be deemed to create a fiduciary
relationship of any kind. Moreover, nothing contained herein shall be construed
to eliminate any priority or preferred position of a Participant in a bankruptcy
matter with respect to any claim for unpaid wages.
13.13 Severability. Should any provision of the Plan or any regulation
------------
adopted thereunder be deemed, or be held, to be unlawful or invalid for any
reason, such fact shall not adversely affect the other Plan provisions or
regulations, unless such invalidity shall render impossible or impractical the
functioning of the Plan, and, in such case, the Chairman of the Board shall
immediately adopt a new provision or regulation to take the place of the one
held illegal or invalid.
13.14 Notices. Any notices required or permitted to be given under this
-------
Plan shall be sufficient if in writing and if sent by certified mail, postage
prepaid or if delivered by a nationally recognized overnight delivery service to
the last known address of the Participant as shown on the Employer's personnel
records or to the principal executive offices of the Plan Sponsor, marked to the
attention of its General Counsel, as the case may be.
13.15 Governing Law. The Plan shall be governed by the internal laws of
-------------
the Commonwealth of Pennsylvania, without regard to conflict of law principles.
<PAGE>
22
13.16 Binding Effect. This Plan shall be binding upon each Senior
--------------
Executive, his personal or legal representatives, executors, administrators,
heirs, successors and assigns. In the event of a merger, consolidation, or
reorganization involving the Employer, this Plan shall continue in force and
become an obligation of the Employer's successor or successors.
13.17 Gender and Number. Whenever used in the Plan, the masculine shall
-----------------
include the feminine and the singular shall include the plural.
13.18 Headings. The article and section headings contained herein are for
--------
convenience of reference only and are not to be considered in the interpretation
of the terms and conditions of the Plan.
ARTICLE XIV. ADOPTION
- -----------------------
To record the adoption of this Plan, as amended and restated as of April 5,
1999, the Chairman of the Board on behalf of the Plan Sponsor and the other
Employers has duly executed this amended and restated plan document on the 14th
day of September, 1999, to be effective as of September 1, 1999.
RADNOR HOLDINGS CORPORATION
By:/s/ Michael T. Kennedy
_________________________________
Chairman
<PAGE>
23
RADNOR HOLDINGS CORPORATION
SENIOR EXECUTIVE RETIREMENT PLAN
(Amended as of September 1, 1999)
<PAGE>
24
RADNOR HOLDINGS CORPORATION
SENIOR EXECUTIVE RETIREMENT PLAN
--------------------------------
(Amended as of September 1, 1999)
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
ARTICLE PAGE
- ------- ----
<S> <C>
Part I - Supplemental Retirement Benefits
I. PURPOSE 1
II. DEFINITIONS 1
III. PARTICIPATION; CONTRIBUTIONS 4
IV. INVESTMENTS AND ALLOCATIONS 6
V. BENEFITS 8
VI. VESTING 10
VII. DEATH BENEFIT 11
VIII. PROHIBITED ACTIVITIES 12
Part II - Voluntary Deferral of Bonuses
IX. ELECTION TO DEFER A BONUS 13
X. TIMING AND FORM OF DISTRIBUTION 14
XI. VOLUNTARY DEFERRAL ACCOUNTS 15
Part III - Administration and Adoption
XII. ADMINISTRATION OF THE PLAN 16
XIII. GENERAL PROVISIONS 19
XIV. ADOPTION 22
</TABLE>
<PAGE>
Exhibit 21.1
------------
SUBSIDIARIES OF THE REGISTRANT
------------------------------
<TABLE>
<CAPTION>
State or
Jurisidiction of
Incorporation Names Under Which
Name of Subsidiary or Organization Subsidiary Does Business
- ---------------------------- ---------------- ----------------------------------
<S> <C> <C>
WinCup Holdings, Inc.(1) Delaware WinCup Holdings, Inc.
WinCup Holdings of Texas, Inc.
WinCup
Radnor Chemical Delaware Radnor Chemical Corporation
Corporation (1)
StyroChem Canada, Ltd.(2) Quebec StyroChem Canada, Ltd.
StyroChem International
StyroChem U.S., Ltd.(3) Texas StyroChem U.S., Ltd.
StyroChem International
WinCup Texas, Ltd.(4) Texas WinCup Texas, Ltd.
WinCup
StyroChem GP, L.L.C.(2) Delaware StyroChem GP, L.L.C.
StyroChem LP, L.L.C.(2) Delaware StyroChem LP, L.L.C
WinCup GP, L.L.C.(5) Delaware WinCup GP, L.L.C.
WinCup LP, L.L.C.(5) Delaware WinCup LP, L.L.C
Radnor Management, Inc.(1) Delaware Radnor Management, Inc.
StyroChem Europe (The The Netherlands StyroChem Europe (The Netherlands)
Netherlands) B.V.(2) B.V.
StyroChem Finland Oy(6) Finland StyroChem Finland Oy
StyroChem International
ThermiSol Denmark ApS(6) Denmark ThermiSol Denmark ApS
ThermiSol Finland Oy(6) Finland ThermiSol Finland Oy
ThermiSol Sweden AB(6) Sweden ThermiSol Sweden AB
Radnor Delaware, Inc.(5) Delaware Radnor Delaware, Inc.
</TABLE>
- ------------------
(1) Owned 100% by Radnor Holdings Corporation.
(2) Owned 100% by Radnor Chemical Corporation.
(3) Owned 99% by StyroChem LP, L.L.C. and 1% by StyroChem GP, L.L.C.
(4) Owned 99% by WinCup LP, L.L.C. and 1% by WinCup GP, L.L.C.
(5) Owned 100% by WinCup Holdings, Inc.
(6) Owned 100% by StyroChem Europe (The Netherlands) B.V.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM RADNOR
HOLDING CORPORATION AND SUBSIDIARIES AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> DEC-26-1998
<PERIOD-END> DEC-31-1999
<CASH> 7,579
<SECURITIES> 0
<RECEIVABLES> 29,135
<ALLOWANCES> 0
<INVENTORY> 34,781
<CURRENT-ASSETS> 79,635
<PP&E> 226,347
<DEPRECIATION> (34,235)
<TOTAL-ASSETS> 293,683
<CURRENT-LIABILITIES> 66,751
<BONDS> 211,599
0
0
<COMMON> 1
<OTHER-SE> 7,573
<TOTAL-LIABILITY-AND-EQUITY> 293,683
<SALES> 318,115
<TOTAL-REVENUES> 318,115
<CGS> 226,509
<TOTAL-COSTS> 226,509
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 21,070
<INCOME-PRETAX> 716
<INCOME-TAX> 241
<INCOME-CONTINUING> 475
<DISCONTINUED> (6,859)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,384)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
