Exhibit 10.10
EXECUTION COPY
THIRD AMENDMENT TO
TERM LOAN AGREEMENT
     THIS THIRD AMENDMENT TO TERM LOAN AGREEMENT (this “Agreement”), dated as of
September 10, 2008, is entered into between SPARTECH CORPORATION, a Delaware
corporation (the “Company”) and CALYON NEW YORK BRANCH (the “Bank”).
BACKGROUND
     A. The Company and the Bank have heretofore entered into that certain Term
Loan Agreement, dated as of February 16, 2005, as amended (the “Loan Agreement”;
the terms defined in the Loan Agreement and not otherwise defined herein shall
be used herein as defined in the Loan Agreement).
     B. The Company and the Bank desire to amend the Loan Agreement.
     NOW, THEREFORE, in consideration of the covenants, conditions and
agreements hereafter set forth, and for other good and valuable consideration,
the receipt and adequacy of which are all hereby acknowledged, the Company and
the Bank covenant and agree as follows:
     1. AMENDMENTS TO THE LOAN AGREEMENT.
     (a) The definition of “Applicable Margin” in Section 1.1 of the Loan
Agreement is hereby amended to read in its entirety as follows:
     “Applicable Margin” means, for any day, 2.25% per annum.
(b) Section 1.1 of the Loan Agreement is further amended by adding the following
terms in proper alphabetical order to read as follows:
     “Fixed Charge Coverage Ratio” has the meaning assigned to such term in the
Third Amendment.
     “Intercreditor Agreement” has the meaning assigned to such term in the
Third Amendment.
     “Security Agreement” has the meaning assigned to such term in the Third
Amendment.
     “Third Amendment” means the Third Amendment dated as of the date hereof to
the Revolving Credit Agreement.

 

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     (b) Section 2.4 of the Loan Agreement is hereby amended by (i) inserting
“(a)” immediately preceding the words “The Term Loan” in the first line thereof
and (ii) adding a new clause (b) to read as follows:
     “(b) The Term Loan shall be subject to mandatory prepayment in accordance
with the terms of Section 2.04 of the Revolving Credit Agreement, as amended by
the Third Amendment.”
     (c) Section 6.10 of the Loan Agreement is hereby amended to read in its
entirety as follows:
     “‘Minimum Net Worth’. The Company shall maintain at all times Consolidated
Net Worth of not less than the sum of (i) $350,000,000 plus (ii) 50% of
Consolidated Net Income for each fiscal quarter beginning with the fiscal
quarter ending on April 30, 2006 (excluding any fiscal quarter in which
Consolidated Net Income is not positive) plus (iii) 85% of the net proceeds of
any equity issued by the Company after January 31, 2006, minus (iv) non-cash
impairment charges for goodwill, intangible and fixed assets at such time of
determination.”
     (d) Section 6.11 of the Loan Agreement is hereby amended by revising the
parenthetical in the first sentence thereof to read as follows: “(excluding
Sections 6.13 and 6.14)”.
     (e) Section 7.6 of the Loan Agreement is hereby amended to read in its
entirety as follows:
          “‘Leverage Ratio’. The Company shall not permit the Leverage Ratio to
exceed (a) 4.35 to 1.00 at any time from and including the Third Amendment
Closing Date (as defined in the Third Amendment) through and including the day
immediately preceding the last day of the fourth fiscal quarter of fiscal year
2008, (b) 4.25 to 1.00 from and including the last day of the fourth fiscal
quarter of fiscal year 2008 through and including the day immediately preceding
the last day of the first fiscal quarter of fiscal year 2009, (c) 4.00 to 1.00
from and including the last day of the first fiscal quarter of fiscal year 2009
through and including the day immediately preceding the last day of the third
fiscal quarter of fiscal year 2009, (d) 3.75 to 1.00 from and including the last
day of the third fiscal quarter of fiscal year 2009 through and including the
day immediately preceding the last day of the first fiscal quarter of fiscal
year 2010, and (e) 3.50 to 1.00 thereafter.”.
     (f) Sections 7.7, 7.8 and 7.9 of the Loan Agreement are hereby renumbered
7.8, 7.9 and 7.10, respectively, and a new Section 7.7 is hereby added to the
Loan Agreement to read as follows:
          “‘Section 7.7. Fixed Charge Coverage Ratio. The Company shall not
permit the Fixed Charge Coverage Ratio to be less than (a) 1.50 to 1.00 at the
end of any fiscal quarter-end occurring during the period from and including the
Third Amendment Closing Date through and including the fourth fiscal quarter of
fiscal year 2009, (b) 1.75 to 1.00 at the end of any fiscal quarter-end
occurring during the period from and including the first day of the first fiscal
quarter

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of fiscal year 2010 through and including the second fiscal quarter of fiscal
year 2010, and (c) 2.25 to 1.00 at the end of any fiscal quarter thereafter.
     (g) The first sentence of Section 7.10 (as renumbered pursuant to the terms
of this Agreement) is hereby amended by inserting the parenthetical “(excluding
Section 7.20)” immediately following the first reference to the words “Revolving
Credit Agreement”.
     (h) Section 8.1 of the Loan Agreement is hereby amended by (i) deleting the
word “or” at the end of clause (l), (ii) deleting the period and inserting a
semicolon and the word “and” at the end of clause (l) and (iii) inserting a new
clause (m) to read as follows:
          “(m) Collateral Documents. Any Collateral Document shall for any
reason (other on account of the Collateral Agent’s election not to take
possession of or make certain filings or registrations in respect of certain
Collateral) fail to create a valid and perfected first priority (subject only to
Permitted Liens) in any Collateral purported to be covered thereby, except as
permitted by the terms of any Collateral Document.”.
     (i) The proviso and the last sentence of Section 9.1(b) of the Loan
Agreement are hereby amended to read in their entirety as follows:
“provided, however, that if the Revolving Credit Agreement is amended to delete
therefrom in substance Section 7.06 (Consolidated Net Worth), Section 7.07
(Fixed Charge Coverage Ratio) or Section 7.08 (Leverage Ratio), the foregoing
shall not apply to, and no such amendment or amendments shall be required with
respect to, Sections 6.10, 7.7 and 7.6 hereof. For the avoidance of doubt,
notwithstanding that the Revolving Credit Agreement may no longer contain
substantive provisions regarding minimum net worth, minimum fixed charge
coverage and maximum leverage, the restrictions contained in Sections 6.10, 7.7
and 7.6 of this Agreement shall continue to apply to the Company.”.
     2. REPRESENTATIONS AND WARRANTIES TRUE; NO EVENT OF DEFAULT. By its
execution and delivery hereof, the Company represents and warrants that, as of
the date hereof and after giving effect to the amendments contemplated by the
foregoing Section 1:
     (a) the representations and warranties contained in the Loan Agreement and
the other Loan Documents are true and correct on and as of the date hereof as if
made on and as of such date, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they are true
and correct as of such earlier date;
     (b) no event has occurred and is continuing which constitutes a Default or
an Event of Default;
     (c) (i) the Company has full corporate power and authority to execute and
deliver this Agreement and the Security Agreement, (ii) each Granting Party has
full legal power and authority to execute, deliver and perform the Security
Agreement, (iii) this Agreement, the Security Agreement and the Loan Agreement,
as amended hereby, constitute the legal, valid and binding respective
obligations of the Company, enforceable against the Company in accordance

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with their respective terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, or similar laws affecting the enforcement of
creditors’ rights generally and by general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law) and except as
rights to indemnity may be limited by federal or state securities laws, (iv) the
Security Agreement constitutes the legal, valid and binding respective
obligations of each Granting Party, enforceable against each Granting Party in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws affecting the enforcement of creditors’
rights generally and by general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law) and except as rights
to indemnity may be limited by federal or state securities laws;
     (d) (i) the execution, delivery and performance by the Company of this
Agreement, the Security Agreement and the Loan Agreement, as amended hereby, do
not and will not conflict with, result in a breach of or constitute a default
under any Organization Document of the Company or any Contractual Obligation to
which the Company is a party or by which its respective properties may be bound
and (ii) the execution, delivery and performance by each Granting Party of the
Security Agreement does not and will not conflict with, result in a breach of or
constitute a default under any Organization Document of any Granting Party or
any Contractual Obligation to which any Granting Party is a party or by which
its respective properties may be bound; and
     (e) (i) no authorization, approval, consent, or other action by, notice to,
or filing with, any governmental authority or other Person (including the
Company’s Board of Directors) not previously obtained is required for the
execution, delivery or performance by the Company of this Agreement and the
Security Agreement and (ii) no authorization, approval, consent or other action
by, notice to, or filing with, any Governmental Authority or other Person
(including any Granting Party’s Board of Directors or similar governing body)
not previously obtained is required for the execution, delivery or performance
by any Granting Party of the Security Agreement.
     3. CONDITIONS TO EFFECTIVENESS. This Agreement shall be effective as of
September ___, 2008, subject to the following:
     (a) the Bank shall have received a counterpart of this Agreement executed
by the Company and acknowledged by each Guarantor;
     (b) the representations and warranties set forth in Section 2 of this
Agreement shall be true and correct;
     (c) the Bank shall have received copies of (i) the Third Amendment,
(ii) the Security Agreement and (iii) the Intercreditor Agreement, in each case,
executed by all the parties thereto;
     (d) the Bank shall have received an opinion of the Company’s counsel, in
form and substance satisfactory to the Bank, with respect to matters set forth
in Sections 2(c), (d) and (e) of this Agreement and with respect to such other
matters as requested by the Bank; and
     (e) the Bank shall have received in form and substance satisfactory to it,
such other documents and certificates as the Bank shall require.

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     4. GUARANTORS ACKNOWLEDGMENT. By signing below, each of the Guarantors
(i) acknowledges, consents and agrees to the execution, delivery and performance
by the Company of this Agreement, (ii) acknowledges and agrees that its
obligations in respect of the Guaranty are not released, diminished, waived,
modified, impaired or affected in any manner by this Agreement or any of the
provisions contemplated herein, (iii) ratifies and confirms its obligations
under the Guaranty, and (iv) acknowledges and agrees that it has no claims or
offsets against, or defenses or counterclaims to, the Guaranty.
     5. REFERENCE TO THE LOAN AGREEMENT.
     (a) Upon the effectiveness of this Agreement, each reference in the Loan
Agreement to “this Agreement”, “hereunder”, or words of like import shall mean
and be a reference to the Loan Agreement, as affected and amended by this
Agreement.
     (b) The Loan Agreement, as amended by this Agreement, and all other Loan
Documents shall remain in full force and effect and are hereby ratified and
confirmed.
     6. EXECUTION IN COUNTERPARTS. This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed to be an original and
all of which when taken together shall constitute but one and the same
instrument. For purposes of this Agreement, a counterpart hereof (or signature
page thereto) signed and transmitted by any Person party hereto to the Bank by
facsimile machine, telecopier or electronic mail is to be treated as an
original. The signature of such Person thereon, for purposes hereof, is to be
considered as an original signature, and the counterpart (or signature page
thereto) so transmitted is to be considered to have the same binding effect as
an original signature on an original document.
     7. GOVERNING LAW; BINDING EFFECT. (a) THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK.
This Agreement shall be binding upon all parties hereto and their respective
successors and assigns.
     (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
EACH OF THE COMPANY AND THE BANK CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE COMPANY
AND THE BANK IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE
COMPANY AND THE BANK EACH WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR
OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.

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     8. HEADINGS. Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose.
     9. WAIVER OF JURY TRIAL. THE COMPANY AND THE BANK EACH WAIVES THEIR
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY
OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO
CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE COMPANY AND THE BANK EACH AGREES
THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A
JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR
RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO
ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART,
TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION
HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THE LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS.
     10. ENTIRE AGREEMENT. The Loan Agreement, as amended by this Agreement,
together with the other Loan Documents, embodies the entire agreement and
understanding between the Company and the Bank, and supersedes all prior or
contemporaneous agreements and understandings of such Persons, verbal or
written, relating to the subject matter hereof and thereof.

REMAINDER OF PAGE LEFT INTENTIONALLY BLANK

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     IN WITNESS WHEREOF, this Agreement is executed as of the date first set
forth above.

                  SPARTECH CORPORATION    
 
           
 
  By:        
 
  Name:  
 
Randy C. Martin    
 
  Title:   Executive Vice President and
Chief Financial Officer    
 
                CALYON NEW YORK BRANCH    
 
           
 
  By:        
 
  Name:  
 
Blake Wright    
 
  Title:   Managing Director    
 
           
 
  By:        
 
  Name:
Title:  
 
Joseph Philbin
Director    

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ACKNOWLEDGED AND AGREED TO:
ATLAS ALCHEM PLASTICS, INC.
ALCHEM PLASTICS CORPORATION
ALCHEM PLASTICS, INC.
SPARTECH PLASTICS, LLC

         
 
  By:   Spartech Corporation, its sole
member

POLYMER EXTRUDED PRODUCTS, INC.
SPARTECH POLYCAST, INC.
SPARTECH TOWNSEND, INC.
SPARTECH INDUSTRIES FLORIDA, INC.
SPARTECH POLYCOM, INC.
FRANKLIN-BURLINGTON PLASTICS, INC.
SPARTECH INDUSTRIES, INC.
ANJAC-DORON PLASTICS, INC.
SPARTECH CMD, LLC

         
 
  By:   Spartech Corporation, its sole
member

SPARTECH FCD, LLC

         
 
  By:   Polymer Extruded Products, Inc.,
its sole member

SPARTECH SPD, LLC

         
 
  By:   Spartech Corporation, its sole
member

SPARTECH MEXICO HOLDING COMPANY
SPARTECH MEXICO HOLDING COMPANY TWO
SPARTECH MEXICO HOLDINGS, LLC

         
 
  By:   Spartech Mexico Holding Company,
its sole member

CREATIVE FORMING, INC.
SPARTECH POLYCOM (TEXAS), INC.
ALSHIN TIRE CORPORATION
X-CORE, LLC

         
 
  By:   Spartech Industries, Inc., its sole member

         
By:
       
 
 
 
Randy C. Martin    
 
  Vice President for all of the above    

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