EXHIBIT 10.4

CONFIDENTIAL TREATMENT

PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO THE REGISTRANT’S APPLICATION OBJECTING
TO DISCLOSURE AND REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2; THE
OMITTED PORTIONS HAVE BEEN MARKED WITH BRACKETS.

May 5, 2006

Michael T. Kennedy

President and CEO

Radnor Holdings Corporation

150 Radnor Chester Road, Suite 300

Radnor, PA 19087

 

Re: (i) First Amendment to Revolving Credit and Security Agreement, by and among
Radnor Holdings Corporation, a Delaware corporation, StyroChem U.S., Ltd., a
Texas limited partnership, WinCup Texas, Ltd., a Texas limited partnership and
Wincup Holdings, Inc., a Delaware corporation (collectively, the “Borrowers”),
the Guarantors party thereto (the “Guarantors”), National City Business Credit,
Inc., an Ohio corporation (“NCBC”), and various other financial institutions
from time to time party thereto (NCBC and such other financial institutions are
each, a “Lender” and collectively, the “Lenders”), NCBC, as agent for the
Lenders and the Issuer (as defined below) (in such capacity, the “Agent”), and
National City Bank, a national banking association, as Issuer (the “Issuer”)
(the “Credit Agreement”), and (ii) Letter Agreement, dated as of March 31, 2006,
by and among the Agent, the Lenders, the Issuer and the Borrowers (the “Original
Letter Agreement”).

Dear Mr. Kennedy:

This letter (i) sets forth certain additional conditions to the effectiveness of
the First Amendment (as defined below) as well as the fees payable by the
Borrowers, in connection with the First Amendment to the Credit, dated the date
hereof, by and among the Borrowers, the Guarantors the Lenders, the Agent and
the Issuer (the “First Amendment”), and (ii) amends and restates the Original
Letter Agreement. Terms defined in the Credit Agreement are used in this letter
as therein defined.

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The Credit Agreement and the Agent’s Letter provide for certain fees payable to
the Agent, the Lenders and the Issuer. The primary purpose of this letter,
however, is to set forth certain other fees which are payable in connection with
the First Amendment. The Borrowers agree to pay, the following fees (in
immediately available funds) which shall be nonrefundable when paid:

 

1.    Amendment Fee:    A fee of [                                        ]
which was paid on or about
April 4, 2006 to the Agent for the ratable benefit of the Lenders. 2.   
Commitment Fee:    A fee of [                                        ] which was
paid on or about
April 4, 2006 to the Agent for the ratable benefit of the Lenders.

In order to induce the Agent, the Lenders and the Issuer to enter into and
execute the First Amendment, and as an express condition to the Agent, the
Lenders and the Issuer continuing to make additional Revolving Advances and
other financial accommodations to Borrowers (in addition to, and not in
limitation of, all of the conditions precedent set forth in Section 8.2 of the
Credit Agreement), the Loan Parties covenant and agree that Thorp Reed &
Armstrong, LLP, in its capacity as counsel for the Agent (“TR&A”), shall, on or
before May 8, 2006 (the “Retention Date”), enter into a retention agreement with
a financial consultant acceptable to the Agent and the Lenders in their sole and
absolute discretion (the “Financial Consultant”), pursuant to which TR&A will at
all times retain the Financial Consultant during the period from the Retention
Date through and including the date on which the Review (as hereinafter defined)
is completed to the satisfaction of the Agent and the Lenders. The scope of work
will be determined by the Agent and the Lenders in their sole and absolute
discretion and it shall include, but not be limited to, reviewing the Loan
Parties’ financial data, including the Loan Parties’ books and records,
forecasting, liquidity schedules, cost structure on inventory and control
procedures (the “Review”). All reports prepared by the Financial Consultant
shall be sent simultaneously to the Agent, the Lenders and the Issuer and each
of the Agent, the Lenders and the Issuer shall have direct access to the
Financial Consultant. All fees, costs and expenses of the Financial Consultant
(including, but not limited to, any indemnification obligations) now or
hereafter incurred by TR&A and/or the Agent shall be the sole responsibility of
Radnor, and in no event shall TR&A, the Agent, the Lenders or the Issuer have
any liability or responsibility for the payment of any such fees or expenses,
nor shall TR&A, the Agent, the Lenders or the Issuer have any obligation or
liability to any Loan Party or any other Person by reason of any acts or
omissions of the Financial Consultant.

All fees shall be paid without set-off, counterclaim or deduction and are
non-refundable obligations of the Borrowers. This fee letter may be signed in
one or more counterparts, shall be governed by the laws of the Commonwealth of
Pennsylvania, and shall not be deemed to be superceded by any other letter or
documentation, including the Credit Agreement and the Other Documents, unless
such other letter or documentation is executed by you and us, expressly makes
reference to this fee letter, and states that this fee letter is superceded
thereby. The fees described above shall be in addition to, and not creditable
against, any other fee, cost or expense payable under the Credit Agreement, the
Agent’s Letter or related loan documentation.

Each Borrower agrees that this letter is for its confidential use only and will
not be disclosed by it (i) to any person other than its accountants, attorneys
and other advisors, and then only in connection with the transactions
contemplated by the Credit Agreement and on a confidential basis or (ii) unless
as it may otherwise be required by law.

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[INTENTIONALLY LEFT BLANK]

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Please evidence your acceptance of this letter by signing and returning to the
undersigned the enclosed copy of this letter.

 

Sincerely, National City Business Credit, Inc., as Lender and as Agent

By:

  /s/ Michael Fine

Name:

 

Michael Fine

Title:

 

Director

Bank of America, N.A., as Lender and as Syndication Agent

By:

  /s/ Richard Levenson

Name:

  Richard Levenson

Title:

  S.V.P. KeyBank National Association, as Lender

By:

  /s/ Nadine M. Eames

Name:

  Nadine M. Eames

Title:

  Vice President National City Bank, as Issuer

By:

  /s/ Joseph Kwasny

Name:

  Joseph Kwasny

Title:

  S.V.P.

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Acknowledged, Agreed and Accepted on this 5th day of May, 2006. Radnor Holdings
Corporation

By:

 

/s/ Michael T. Kennedy

  Michael T. Kennedy, President and CEO StyroChem U.S., Ltd.   By:   StyroChem
GP, L.L.C.   Its:   General Partner     By:   Radnor Chemical Corporation    
Its:   Sole Member

By:

  /s/ R. Radcliffe Hastings   R. Radcliffe Hastings, Executive Vice President
Wincup Holdings, Inc.

By:

  /s/ Michael T. Kennedy   Michael T. Kennedy, President WinCup Texas, Ltd.  
By:   WinCup GP, L.L.C.   Its:   General Partner     By:   Wincup Holdings, Inc.
    Its:   Sole Member

By:

  /s/ Michael T. Kennedy   Michael T. Kennedy, President