EXHIBIT 10.59
THIRD AMENDMENT TO FOURTH AMENDED AND RESTATED
REVOLVING CREDIT, TERM LOAN AND SECURITY AGREEMENT
This third Amendment to Fourth Amended and Restated Revolving Credit,
Term Loan and Security Agreement (the "Amendment") is made this 1/st/ day of
August, 2003, by and among WinCup Holdings, Inc., Radnor Chemical Corporation,
StyroChem U.S., Ltd., Radnor Holdings Corporation, Radnor Delaware II, Inc.,
StyroChem Delaware, Inc., WinCup Texas, Ltd., StyroChem GP, L.L.C., StyroChem
LP, L.L.C., WinCup GP, L.L.C., and WinCup LP, L.L.C. (each individually a
"Borrower" and collectively, "Borrowers"), and PNC Bank, National Association
("PNC"), as Lead Arranger and Administrative Agent, Fleet Capital Corporation
("Fleet"), as Documentation Agent and Lenders (defined below).
BACKGROUND
A. On December 26, 2001, Borrowers, the financial institutions which
are now or which hereafter become a party hereto (individually, a "Lender" and
collectively, the "Lenders"), and PNC, as agent for Lenders (PNC in such
capacity, the "Agent") entered into a certain Fourth Amended and Restated
Revolving Credit and Security Agreement (as amended, modified, renewed,
extended, replaced or substituted from time to time, the "Loan Agreement") to
reflect certain financing arrangements between the parties thereto. The Loan
Agreement and all other documents executed in connection therewith are
collectively referred to as the "Existing Financing Agreements." All capitalized
terms not otherwise defined herein shall have the meaning ascribed thereto in
the Loan Agreement. In the case of a direct conflict between the provisions of
the Loan Agreement and the provisions of this Amendment, the provisions hereof
shall prevail.
B. Borrowers and Agent modified certain definitions, terms and
conditions contained in the Loan Agreement pursuant to that (i) certain First
Amendment to Revolving Credit and Security Agreement dated February 4, 2002 to
facilitate the execution of a Commitment Transfer Supplement by and between
Lenders and Fleet Capital Corporation, (ii) certain Letter Agreement, dated as
of March 21, 2002, among Borrowers, Agent and Lenders, and (iii) certain Second
Amendment to Revolving Credit and Security Agreement dated March 5, 2003.
C. The Borrowers have requested and the Agent has agreed to modify
certain definitions, terms and conditions in the Loan Agreement as provided
herein.
D. The parties have agreed, subject to the terms and conditions of
this Amendment, to modify and amend the Existing Financing Agreements.
NOW THEREFORE, with the foregoing background hereinafter deemed
incorporated by reference herein and made part hereof, the parties hereto,
intending to be legally bound, promise and agree as follows:
1. Section I of the Loan Agreement shall be amended as follows:
(a) There shall be added to Section I of the Loan Agreement the
following definitions:
"Stone Mountain Availability" shall mean seventy percent (70%) of
the fair market value of the Stone Mountain Property as set forth
in the Stone Mountain Appraisal during the period from the date
of this Amendment through January 31, 2004; provided that, the
Stone Mountain Availability shall be (x) reduced by any proceeds
received by Borrowers from the sale outside the ordinary course
of any of Borrowers' business assets and (y) terminated upon the
earlier of a refinancing of the Stone Mountain Property or
January 31, 2004.
"Stone Mountain Mortgage" shall mean the mortgage on the Stone
Mountain Property together with all extensions, renewals
amendments, supplements, modifications, substitutions and
replacements thereto and thereof.
"Stone Mountain Property" shall mean that certain real property
owned by WinCup Holdings, Inc. generally known as 4600, 4616,
4640 and 0000 Xxxxx Xxxx, Xxxxx Xxxxxxxx, XxXxxx Xxxxxx, Xxxxxxx
00000, as more particularly described in the Stone Mountain
Mortgage.
"Stone Mountain Property Appraisal" shall mean that certain
appraisal of the Stone Mountain Property prepared by Xxxxxxx and
Wakefield and dated February 7, 2003 and February 12, 2003.
(a) The following definitions shall be deleted in their entirety and
replaced as follows:
"Applicable Margin" for any period shall be determined by the Fixed
Charge Coverage Ratio of Radnor on a Consolidated Basis calculated for
the most recent fiscal quarter with respect to the four fiscal
quarters then ended (except calculated for the quarters ended
September 30, 2003, December 31, 2003 and March 31, 2004 as set forth
in Section 6.5 hereof) which shall be increased or decreased from time
to time, as the case may be, so long as no Default or Event of Default
shall have occurred and be continuing, as of the first day of each
fiscal quarter following the fiscal quarter reported upon in the
financial statements delivered pursuant to Sections 9.7 and 9.8
hereof. The Applicable Margin with respect to Eurodollar Rate Loans
shall be the percentage set forth below as corresponds to the
applicable ratio set forth below:
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Fixed Charge Coverage Ratio Revolving Term Loan
--------------------------- Advances Eurodollar
Eurodollar Rate Margin
Rate Margin -----------
-----------
Less than 1.15:1 2.75% 3.00%
1.15:1 to 1.49:1 2.50% 2.75%
1.50:1 to 1.74:1 2.25% 2.50%
1.75:1 or greater 2.00% 2.25%
"Collateral" shall mean and include:
(a) all Receivables;
(b) all Equipment (excluding Equipment as set forth in
Schedule 1.1);
(c) all General Intangibles;
(d) all Inventory;
(e) all Investment Property (excluding the stock or other
ownership interests of any Subsidiary of Radnor or any other
Borrower);
(f) all Mortgaged Property and the Stone Mountain Property;
(g) all of each Borrower's right, title and interest in and
to (i) its respective goods and other property including,
but not limited to, all merchandise returned or rejected by
Customers, relating to or securing any of the Receivables;
(ii) all of each Borrower's rights 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
(including promissory notes), documents, chattel paper
(including electronic chattel paper), warehouse receipts,
deposit accounts, letters of credit, and money; (vi) all
commercial tort claims (whether now existing or hereafter
arising); and (vii) 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;
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(h) all of each Borrower's ledger sheets, ledger cards,
files, correspondence, records, books of account, business
papers, computers, computer software (owned by any Borrower
or in which it has an interest), computer programs, tapes,
disks and documents relating to (a), (b), (c), (d), (e), (f)
or (g) of this Paragraph; and
(i) all proceeds and products of (a), (b), (c), (d), (e),
(f), (g) or (h) in whatever form, including, but not limited
to: cash, deposit accounts (whether or not comprised solely
of 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.
2. Section II of the Loan Agreement shall be amended as follows:
(a) Section 2.1(a) shall be deleted in its entirety and replaced as
follows:
2.1 Revolving Advances.
(a) Subject to the terms and conditions set forth in this
Agreement, including, without limitation, Section 2.1(b),
each Lender, severally and not jointly, agrees to make
Revolving Advances to 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 Borrowing Base (as defined
below) minus the undrawn or unreimbursed amount of
outstanding Letters of Credit unless Borrowers have
deposited with Agent cash collateral in such amounts and in
accordance with Section 3.2. For purposes hereof, "Borrowing
Base" shall mean the lesser of (x) the Maximum Revolving
Advance Amount or (y) the sum of:
(i) up to 85%, subject to the provisions of Section 2.1(b)
hereof ("Receivables Advance Rate"), of Eligible
Receivables, plus
(ii) the lesser of (x) $1,000,000 or (y) up to 85%, subject
to the provisions of 2.1(b) hereof ("Canadian Receivables
Advance Rate"), of Eligible Canadian Receivables, plus
(iii) the lesser of (x) $25,000,000 or (y) up to 60%,
subject to the provisions of Section 2.1(b) hereof
("Inventory Advance Rate"), of Eligible Inventory of
Borrowers (the Receivables Advance Rate, the Canadian
Receivables Advance Rate and the Inventory Advance Rate
shall be referred to, collectively, as the "Advance Rates"),
plus,
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(iv) the Stone Mountain Availability, minus,
(v) such reserves as Agent may, in a commercially reasonable
manner, reasonably deem proper and necessary.
The amount derived from the sum of Sections 2.1(a)(y)(i), (ii),
(iii) and (iv) minus (v) at any time and from time to time shall
be referred to as the "Formula Amount". The Revolving Advances
shall be evidenced by one or more secured promissory notes
(collectively, the "Revolving Credit Note") substantially in the
form attached hereto as Exhibit 2.1(a).
3. Section VI of the Loan Agreement shall be amended as follows:
(a) Section 6.5 of the Loan Agreement shall be deleted in its
entirety and replaced as follows:
6.5. Fixed Charge Coverage Ratio for Radnor on a Consolidated
Basis. Cause to be maintained a Fixed Charge Coverage Ratio for
Radnor on a Consolidated Basis to be calculated at the end of
each fiscal quarter based the most recent four quarters for the
quarter ended June 30, 2003, based on a single quarter for the
quarter ended September 30, 2003, based on two quarters for the
quarter ended December 31, 2003, based on three quarters for the
quarter ended March 31, 2004 and thereafter based on the most
recent four fiscal quarters then ended (for purposes of
calculating the Fixed Charge Coverage Ratio for quarters ending
on or before June 30, 2004, the amount of interest expense
attributable to the Senior Notes and the Second Senior Notes
shall be equal to one-quarter of the annual interest expense for
each quarter included in the test period) equal to or greater
than the amounts set forth below for the periods set forth below:
Period Fixed Charge Coverage Ratio
------ ---------------------------
June 30, 2003 0.70 to 1;
September 30, 2003 0.90 to 1;
December 31, 2003 1.10 to 1;
March 31, 2004 1.00 to 1;
June 30, 2004 1.05 to 1; and
September 30, 2004 and thereafter 1.15 to 1.
(b) Section 6.6 shall be deleted in its entirety and replaced as
follows:
6.6. Funded Debt to EBITDA Ratio. Cause to be maintained a Funded
Debt to EBITDA Ratio for Radnor on a Consolidated Basis to be
calculated at the end of each fiscal quarter based on a single
quarter for the quarter ended September 30, 2003, based on two
quarters for the quarter ended December 31, 2003, based on three
quarters for the quarter ended March 31, 2004 and thereafter
based on the most recent four fiscal quarters then ended (using
an annualized calculation of EBITDA for quarters
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ending on or before June 30, 2004) not greater than the amounts
set forth below for the periods set forth below:
Period Funded Debt to
------ --------------
EBITDA Ratio
------------
June 30, 2003 6.60 to 1;
September 30, 2003 6.00 to 1;
December 31, 2003 5.00 to 1;
March 31, 2004 5.50 to 1;
June 30, 2004 5.25 to 1;
September 30, 2004 and
December 31, 2004 4.50 to 1;
March 31, 2005 and each
quarter through September 30, 2005 4.25 to 1; and
December 31, 2005 and each
quarter thereafter 3.75 to 1.
4. Section 7 of the Loan Agreement shall be amended as follows:
5. (a) Section 7.2 shall be deleted in its entirety and replaced as
follows:
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 and except
that notwithstanding Section 7.8 hereof and this Section 7.2,
WinCup shall be permitted to refinance the Stone Mountain
Property and may place a Lien on the Stone Mountain Property to
secure such refinancing indebtedness. The Agent and the Lenders
agree to release the Stone Mountain Mortgage at the time of such
refinancing; provided that, the Stone Mountain Availability is
terminated upon such release and no Event of Default exists.
6. Representations and Warranties. Each Borrower hereby:
(a) reaffirms all representations and warranties made to Agent and
Lenders under the Agreement and all of the other Existing Financing Agreements
and confirms that all are true and correct as of the date hereof;
(b) reaffirms all of the covenants contained in the Agreement and
covenants to abide thereby until all Advances, Obligations and other liabilities
of Borrowers to Agent and Lenders, of whatever nature and whenever incurred, are
satisfied and/or released by Agent and Lenders;
(c) represents and warrants that no Default or Event of Default has
occurred and is continuing under any of the Existing Financing Agreements, other
than financial covenant defaults which have been cured by this Amendment;
(d) represents and warrants that it has the authority and legal right
to execute, deliver and carry out the terms of this Amendment, that such actions
were duly authorized by all
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necessary corporate action and that the officers executing this Amendment on its
behalf were similarly authorized and empowered, and that this Amendment does not
contravene any provisions of its Articles of Incorporation and By-laws or of any
contract or agreement to which it is a party or by which any of its properties
are bound; and
(e) represents and warrants that this Amendment and all assignments,
instruments, documents, and agreements executed and delivered in connection
herewith, are valid, binding and enforceable in accordance with their respective
terms.
7. Effectiveness Conditions. This Amendment shall be effective upon
satisfaction and completion of the following conditions (all documents to be in
form and substance satisfactory to Agent and Agent's counsel):
(a) Agent shall have received an executed original of the Stone
Mountain Mortgage in recordable form;
(b) Agent shall have received not later than 20 days after the date
of this Amendment a fully paid mortgagee title insurance policy (or binding
commitment to issue a title insurance policy, marked to Agent's satisfaction to
evidence the form of such policy to be delivered with respect to the Stone
Mountain Mortgage), in standard ALTA form, issued by a title insurance company
satisfactory to Agent, in an amount equal to not less than the fair market value
of the Stone Mountain Property, insuring that the Stone Mountain Mortgage
creates a valid Lien on the Stone Mountain Property, with no exceptions which
Agent shall not have approved in writing and no survey exceptions, and failure
of Agent of Agent to receive such policy or commitment shall be an Event of
Default; and
(c) Agent shall have received on or before the date of this Amendment
all fees which are payable to Agent or to the Lenders as required by the Loan
Agreement, this Amendment or any fee letter entered into by Borrowers and Agent.
8. Further Assurances and Affirmative Covenant. Each Borrower hereby
agrees to take all such actions and to execute and/or deliver to Agent and
Lenders all such documents, assignments, financing statements and other
documents, as Agent and Lenders may reasonably require from time to time, to
effectuate and implement the purposes of this Amendment.
9. Payment of Expenses. Borrowers shall pay or reimburse Agent and
Lenders for its reasonable attorneys' fees and expenses in connection with the
preparation, negotiation and execution of this Amendment and the documents
provided for herein or related hereto.
10. Reaffirmation of Loan Agreement. Except as modified by the terms
hereof, all of the terms and conditions of the Loan Agreement, as amended, and
all other of the Existing Financing Agreements are hereby reaffirmed and shall
continue in full force and effect as therein written.
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11. Miscellaneous.
(a) Third Party Rights. No rights are intended to be created
hereunder for the benefit of any third party donee, creditor, or incidental
beneficiary.
(b) Headings. The headings of any paragraph of this Amendment are for
convenience only and shall not be used to interpret any provision hereof.
(c) Modifications. No modification hereof or any agreement referred
to herein shall be binding or enforceable unless in writing and signed on behalf
of the party against whom enforcement is sought.
(d) Governing Law. The terms and conditions of this Amendment shall
be governed by the laws of the Commonwealth of Pennsylvania.
(e) Counterparts. This Amendment may be executed in any number of
counterparts and by facsimile, each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute one and the same
agreement.
[SIGNATURES TO FOLLOW ON SEPARATE PAGES]
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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed
and delivered by their duly authorized officers as of the date first above
written.
WINCUP HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------
Xxxxxxx X. Xxxxxxx, Senior Vice President
RADNOR CHEMICAL CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------------------
Xxxxxxx X. Xxxxxxx, President
STYROCHEM U.S., LTD.
By: StyroChem GP, LLC, its General Partner
By: Radnor Chemical Corporation, its Sole Member
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------------------
Xxxxxxx X. Xxxxxxx, President
RADNOR HOLDINGS CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------------------
Xxxxxxx X. Xxxxxxx, Xx. Vice President
RADNOR DELAWARE II, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------------------
Xxxxxxx X. Xxxxxxx, President
STYROCHEM DELAWARE, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------------------
Xxxxxxx X. Xxxxxxx, President
Signature Page to Third Amendment to
Fourth Amended and Restated Revolving Credit, Term Loan and Security Agreement
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WINCUP TEXAS, LTD.
By: WinCup GP, LLC, its General Partner
By: WinCup Holdings, Inc., its Sole Member
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------------------
Xxxxxxx X. Xxxxxxx, Xx. Vice President
STYROCHEM GP, L.L.C.
By: Radnor Chemical Corporation, its Sole Member
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------------------
Xxxxxxx X. Xxxxxxx, President
STYROCHEM LP, L.L.C.
By: Radnor Chemical Corporation, its Sole Member
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------------------
Xxxxxxx X. Xxxxxxx, President
WINCUP GP, L.L.C.
By: WinCup Holdings, Inc. its Sole Member
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------------------
Xxxxxxx X. Xxxxxxx, Xx. Vice President
WINCUP LP, L.L.C.
By: WinCup Holdings, Inc. its Sole Member
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------------------
Xxxxxxx X. Xxxxxxx, Xx. Vice President
Signature Page to Third Amendment to
Fourth Amended and Restated Revolving Credit, Term Loan and Security Agreement
S-2
Agents:
PNC BANK, NATIONAL ASSOCIATION,
as Agent
By: /s/ Xxxxxxx Xxxxxx, VP
------------------------------------------
Xxxxxxx Xxxxxx, Vice President
PNC BANK, NATIONAL ASSOCIATION,
as Lead Arranger and Administrative Agent
By: /s/ Xxxxxxx Xxxxxx, VP
------------------------------------------
Xxxxxxx Xxxxxx, Vice President
FLEET CAPITAL CORPORATION,
as Documentation Agent
By: /s/ Xxxxxx Anehundia
---------------------------------
Lenders:
PNC BANK, NATIONAL ASSOCIATION,
as Lender
By: /s/ Xxxxxxx Xxxxxx, VP
------------------------------------------
Xxxxxxx Xxxxxx, Vice President
Commitment Percentage: 33.3333%
FLEET CAPITAL CORPORATION, as Lender
By: /s/ Xxxxxx Anehundia
---------------------------------
Xxxxxx Anehundia, Vice President
Commitment Percentage: 27.7777%
Signature Page to Third Amendment to
Fourth Amended and Restated Revolving Credit, Term Loan and Security Agreement
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LASALLE BUSINESS CREDIT, LLC,
as Lender
By: /s/ Xxxxx X. Xxxx
----------------------------------
Xxxxx X. Xxxx/ Vice President
Commitment Percentage: 27.7777%
FIFTH THIRD BANK,
as Lender
By: /s/ Xxxxxx X. Xxxx
----------------------------------
Xxxxxx X. Xxxx VP
Commitment Percentage: 11.1111%
Signature Page to Third Amendment to
Fourth Amended and Restated Revolving Credit, Term Loan and Security Agreement
S-4