EXHIBIT 10.6

 

GUARANTY AND SURETYSHIP AGREEMENT

 

April 26, 2004

 

FOR VALUE RECEIVED, and in consideration of loans made or to be made or credit
otherwise extended or to be extended by PNC Bank, National Association (“PNC”),
each of the financial institutions (collectively, “Lenders”) named in or which
hereafter become a party to the Credit Agreement (as hereinafter defined) and
PNC as lead arranger and administrative agent for Lenders (in such capacity
“PNC”) and Fleet Capital Corporation as documentation agent for Lenders (in such
capacity “Fleet” and collectively with PNC, the “Agent”) to or for the account
of WinCup Holdings, Inc., Radnor Chemical Corporation, Radnor Holdings
Corporation, Radnor Delaware II, Inc., StyroChem U.S., Ltd., 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, a “Borrower” and jointly and severally, 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 Fourth Amended and Restated Revolving Credit, Term Loan and
Security Agreement by and among Borrowers, Lenders and Agent dated as of
December 26, 2001 (as amended, supplemented, modified or restated from time to
time, the “Credit Agreement”) or any documents, instruments or agreements
relating to or executed in connection with the Credit Agreement or any
documents, instruments or agreements referred to therein (together with the
Credit 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 therefore 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 Credit Agreement shall 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.

 

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2. Guaranty Absolute. The undersigned guarantees that the Obligations will be
paid strictly in accordance with the terms of the Credit Agreement and/or any
other document, instrument or agreement creating or evidencing the Obligations,
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 Credit 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 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

 

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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 Credit 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 undersigned
hereunder, until all amounts owing to Agent and each Lender by Borrowers on
account of the Obligations are paid in full and the Credit 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

 

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Credit 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 Credit 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 Credit Agreement), that:

 

(a) Corporate Status. The undersigned is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware 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 corporate and 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.

 

(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

 

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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 Credit 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 Credit
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, 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.

 

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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 Credit 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 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.

 

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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 COMMONWEALTH OF PENNSYLVANIA. THE UNDERSIGNED EXPRESSLY CONSENTS TO THE
JURISDICTION AND VENUE OF THE COMMONWEALTH COURTS OF THE COMMONWEALTH OF
PENNSYLVANIA LOCATED IN COUNTY OF MONTGOMERY OR PHILADELPHIA, PENNSYLVANIA, AND
OF THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA 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 COMMONWEALTH COURTS OF THE COMMONWEALTH OF PENNSYLVANIA
LOCATED IN COUNTY OF MONTGOMERY OR PHILADELPHIA, PENNSYLVANIA, AND OF THE UNITED
STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA. 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 COMMONWEALTH OF PENNSYLVANIA OR THE EASTERN DISTRICT OF PENNSYLVANIA 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 (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.

 

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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.

 

IN WITNESS WHEREOF, this Guaranty has been executed by the undersigned this 26th
day of April, 2004.

 

STYROCHEM EUROPE DELAWARE, INC. By:   /s/    MICHAEL V. VALENZA            
Michael V. Valenza, President

 

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COMMONWEALTH OF PENNSYLVANIA

   )               )   : ss     

COUNTY OF PHILADELPHIA

   )         

 

On the 26th day of April, 2004, before me personally came MICHAEL V. VALENZA, to
me known, who being by me duly sworn, did depose and say that he is the
President of StyroChem Europe Delaware, Inc., the corporation described in and
which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by order of the board of directors of said corporation,
and that he signed his name thereto by order of said corporation.

 

/s/    SHARON B. ROMAN        

Notary Public

 

My commission expires:

Notarial Seal

Sharon B. Roman, Notary Public

City Of Philadelphia, Philadelphia County

My Commission Expires Nov. 29, 2006

Member, Pennsylvania Association of Notaries