Document:

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                                                                   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
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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

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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

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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
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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
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          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.

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               (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,

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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

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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

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(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
                                      ______________________________
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[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-

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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

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