exv10w1






Exhibit 10.1




WAIVER AND AMENDMENT AGREEMENT TO

FOURTH AMENDED AND RESTATED CREDIT AGREEMENT




     THIS WAIVER AND AMENDMENT AGREEMENT TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT (this
“Agreement”), dated as of July 30, 2008, is entered into among SPARTECH CORPORATION, a
Delaware corporation (the “Borrower”), the lenders listed on the signature pages hereof
(collectively, the “Lenders”), and BANK OF AMERICA, N.A., as Administrative Agent and L/C
Issuer.



BACKGROUND




     A. The Borrower, the Lenders, the Administrative Agent, and the L/C Issuer heretofore entered
into that certain Fourth Amended and Restated Credit Agreement, dated as of June 2, 2006, as
amended by that certain First Amendment to Fourth Amended and Restated Credit Agreement, dated as
of March 7, 2008 (said Credit Agreement, as so amended, the “Credit Agreement”; the terms
defined in the Credit Agreement and not otherwise defined herein shall be used herein as defined in
the Credit Agreement).



     B. The Borrower has informed the Lenders that the Borrower will fail to comply with
Section 7.21 of the Credit Agreement and may fail to comply with Section 7.08 of
the Credit Agreement, in each case, for the fiscal quarter ending August 2, 2008. The foregoing
will constitute Events of Default (such Events of Default are hereby referred to herein
collectively as the “Financial Covenant Defaults”).



     C. As a result of the Financial Covenant Defaults, the Administrative Agent, the Lenders and
the L/C Issuer, will be entitled to, among other things, enforce their rights and remedies under
the Credit Agreement and the other Loan Documents, and otherwise at law or equity, including,
without limitation, the right to terminate the Commitments and accelerate the Obligations.



     D. The Borrower and the other Loan Parties have requested that the Administrative Agent and
Lenders waive the Financial Covenant Defaults for a period of time, and the Administrative Agent,
the Lenders and the L/C Issuer are willing to provide a limited waiver as provided herein, and
subject to the terms and conditions herein.



     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 Borrower, the Lenders, the Administrative Agent, and the L/C Issuer
covenant and agree as follows:



     1. DEFINITIONS. The following terms shall have the following meanings as provided
herein:




     “Waiver Default” means (a) the occurrence of any Default or Event of Default
under the Credit Agreement that is not a Financial Covenant Default (but which may, for



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avoidance of doubt, include a default under Section 7.21 of the Credit
Agreement, as amended by this Agreement), or (b) any breach by the Borrower or any other
Loan Party of any representation, warranty or covenant provided in this Agreement.




     “Waiver Expiration Date” means the earlier of (a) September 15, 2008 and
(b) the date of occurrence of any Waiver Default.




     “Waiver Period” means the period of time commencing on the date hereof and
ending on the Waiver Expiration Date.



     2. AMENDMENTS TO THE CREDIT AGREEMENT.



     (a) Section 1.01 of the Credit Agreement is hereby amended by adding the following
defined terms thereto in proper alphabetical order to read as follows:




     “Calyon Credit Agreement” means that certain Term Loan Agreement, dated as of
February 16, 2005, between the Borrower and Calyon New York Branch, as heretofore and
hereafter amended, modified or supplemented from time to time.




     “Calyon Credit Documents” means the Calyon Credit Agreement and any and all
promissory notes and other documents and agreements executed and delivered in connection
therewith.




     “Canadian Facility Documents” means the Canadian Facility and any and all
promissory notes and other documents and agreements executed and delivered in connection
therewith




     “Note Purchase Agreements” means, collectively, that certain (a) Note Purchase
Agreement, dated as of September 15, 2004, among the Borrower and the purchasers named
therein in respect of the Borrower’s 5.54% Senior Notes due 2016 and (b) Note Purchase
Agreement, dated as of June 5, 2006, among the Borrower and the purchasers named therein in
respect of the Borrower’s 5.78% Senior Notes, due 2011, as amended, modified or supplemented
from time to time, except as otherwise noted herein.




     “Senior Note Documents” mean the Note Purchase Agreements, the Borrower’s 5.54%
Senior Notes due 2016, the Borrower’s 5.78’% Senior Notes due 2011 and all other documents
and instruments executed and delivered pursuant thereto.



     (b) The definition of “Permitted Acquisitions” set forth in Section 1.01 of
the Credit Agreement is hereby amended to read as follows:




     “Permitted Acquisition” means an Acquisition (a) which is non-hostile,
(b) which occurs when no Default or Event of Default exists or will result therefrom, and
(c) which after giving effect to which, on a pro forma basis (assuming that such Acquisition
had occurred on the last day of the fiscal quarter most recently ended from the date which
is one year prior to the date of such Acquisition) no Default or Event of Default will
exist, and (d) with respect to which (other than, with the Administrative Agent’s prior
review and approval, which approval shall not be unreasonably withheld or delayed, provided



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that the terms thereof are substantially similar to those previously disclosed to the
Administrative Agent, the Acquisition of assets of a division of Arkema Inc. for an
aggregate consideration (excluding assets exchanged for assets of at least equal value) not
to exceed $5,000,000, plus or minus net working capital adjustments) the Required Lenders
have given their prior written consent.



     (c) Article VII of the Credit Agreement is hereby amended to read as follows:



ARTICLE VII.

NEGATIVE COVENANTS





     So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation
hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall remain
outstanding, the Borrower shall not, nor shall it permit any Subsidiary to, directly or
indirectly:




     7.01 Liens. Create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired, other than the
following (collectively, “Permitted Liens”):




     (a) Liens in respect of property of the Borrower or a Subsidiary existing on
the Closing Date and described in Schedule 7.01 and Liens existing on
July 3, 2008, and any renewals or extensions thereof, provided (i) the property
covered thereby is not changed and (ii) the amount of Indebtedness secured thereby
is not increased;




     (b) Liens in respect of property acquired or constructed by the Borrower or a
Subsidiary after the Closing Date, which are created at the time of or within 180
days after acquisitions or completion of construction of such property to secure
Indebtedness assumed or incurred to finance all or any part of the purchase price or
cost of construction of such property, provided that in any such case;




     (i) no such Lien shall extend to or cover any other property of the
Borrower or such Subsidiary, as the case may be, and




     (ii) the aggregate principal amount of Indebtedness secured by all such
Liens in respect of any such property shall not exceed the cost of such
property and any improvements then being financed;




     (c) Liens in respect to property acquired by the Borrower or a Subsidiary after
the Closing Date, existing on such property at the time of acquisition thereof (and
not created in anticipation thereof), or in the case of any Person that after the
Closing Date becomes a Subsidiary or is consolidated with or merged with or into the
Borrower or a Subsidiary or sells, leases or otherwise disposes of all or
substantially all of its property to the Borrower or a Subsidiary, Liens existing at
the time such Person becomes a Subsidiary or is so consolidated or merged or effects
such sale, lease or other disposition of property (and not



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created in anticipation thereof), provided that in any such case no such Lien
shall extend to or cover any other property of the Borrower or such Subsidiary, as
the case may be;




     (d) Liens securing Indebtedness owed by a Subsidiary to the Borrower or to a
Wholly-Owned Subsidiary which is a Guarantor;




     (e) Liens for taxes not yet due or which are being contested in good faith and
by appropriate proceedings diligently conducted, if adequate reserves with respect
thereto are maintained on the books of the applicable Person in accordance with
GAAP;




     (f) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other
like Liens arising in the ordinary course of business which are not overdue for a
period of more than 30 days or which are being contested in good faith and by
appropriate proceedings diligently conducted, if adequate reserves with respect
thereto are maintained on the books of the applicable Person;




     (g) pledges or deposits in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other social security legislation,
other than any Lien imposed by ERISA;




     (h) deposits to secure the performance of bids, trade contracts and leases
(other than Indebtedness), statutory obligations, surety bonds (other than bonds
related to judgments or litigation), performance bonds and other obligations of a
like nature incurred in the ordinary course of business; and




     (i) easements, rights-of-way, restrictions and other similar encumbrances
affecting real property which, in the aggregate, are not substantial in amount, and
which do not in any case materially detract from the value of the property subject
thereto or materially interfere with the ordinary conduct of the business of the
applicable Person.




For purposes of this Section 7.01 any Lien existing in respect of property at the
time such property is acquired or in respect of property of a Person at the time such Person
is acquired, consolidated or merged with or into the Borrower or a Subsidiary shall be
deemed to have been created at that time.




     7.02 Disposition of Assets. Make any sale, transfer, lease (as lessor), loan or other
disposition of any property or assets (an “Asset Sale”), other than the following:




     (a) Asset Sales in the ordinary course of business;




     (b) Asset Sales of property or assets by a Subsidiary to the Borrower or a
Wholly-Owned Subsidiary; or




     (c) other Asset Sales, provided that in each case



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     (i) immediately before and after giving effect thereto, no Default
shall have occurred and be continuing, and




     (ii) the aggregate net book value of the property or assets disposed of
in such Asset Sale and all other Asset Sales by the Borrower and its
Subsidiaries during the immediately preceding twelve months does not exceed
15% of Consolidated Net Worth (as of the last day of the quarterly
accounting period ending on or most recently prior to the last day of such
twelve month period).




     For purposes of this Section 7.02, any Voting Equity Interests of a Subsidiary
that are the subject of an Asset Sale shall be valued at the greater of (x) the fair market
value of such shares as determined in good faith by the Board of Directors of the Borrower
and (y) the aggregate net book value of the assets of such Subsidiary multiplied by a
fraction of which the numerator is the aggregate number of Voting Equity Interests of such
Subsidiary disposed of in such Asset Sale and the denominator is the aggregate number of
Voting Equity Interests of such Subsidiary outstanding immediately prior to such Asset Sale.




     7.03 Consolidations and Mergers. Consolidate with or merge with any other corporation
or convey, transfer or lease all or substantially all of its assets in a single transaction
or series of transactions to any Person except a Subsidiary may consolidate with or merge
with any other corporation or convey or transfer all or substantially all of its assets to
(a) the Borrower (provided that the Borrower shall be the continuing or surviving
corporation) or a then-existing Wholly-Owned Subsidiary and (b) any Person in an Asset Sale
involving all of the outstanding stock or all or substantially all of the assets of such
Subsidiary, in either case subject to the limitation of Section 7.02.




     7.04 Loans and Investments. Purchase or acquire, or make any commitment therefor, any
capital stock, equity interest, or any obligations or other securities of, or any interest
in, any Person, or make or commit to make any Acquisitions, or make or commit to make any
advance, loan, extension of credit or capital contribution to or any other investment in,
any Person including any Affiliate of the Borrower (collectively, “Investments”),
except for:




     (a) Investments held by the Borrower or any Subsidiary in the form of cash
equivalents or short term marketable securities;




     (b) extensions of credit in the nature of accounts receivable or notes
receivable arising from the sale or lease of goods or services in the ordinary
course of business;




     (c) extensions of credit by the Borrower to any of its Wholly-Owned
Subsidiaries or by any of its Wholly-Owned Subsidiaries to another of its
Wholly-Owned Subsidiaries;



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     (d) pledges or deposits as required in the ordinary course of business in
connection with workmen’s compensation, unemployment insurance and other social
security legislation;




     (e) advances, loans, extensions of credit or investments in the ordinary course
of business; provided that the aggregate amount thereof shall not exceed
$15,000,000;




     (f) Investments incurred in order to consummate Permitted Acquisitions; and




     (g) purchases and other acquisitions by the Borrower of stock of the Borrower
to the extent permitted by Section 7.13.




     7.05 Limitation on Indebtedness. Create, assume, incur, guarantee, permit to exist or
otherwise become liable in respect of any Indebtedness unless immediately before and after
giving effect thereto no Default exists or would result therefrom; provided,
however, notwithstanding anything herein to the contrary, in no event shall the
aggregate amount of Indebtedness outstanding at any time of all Subsidiaries (excluding
(i) Guarantees permitted pursuant to clauses (a), (b), (c) and (d) of Section 7.12,
(ii) Indebtedness of a Subsidiary existing on July 30, 2008 and described in
Schedule 7.05 but no increase of any such Indebtedness, (iii) Indebtedness of a
Subsidiary that is a Guarantor owed to the Borrower or any Guarantor or Indebtedness of a
Subsidiary that is not a Guarantor owed to the Borrower or any other Subsidiary,
(iv) Indebtedness under the Loan Documents, and (v) Indebtedness of a Subsidiary secured by
Liens permitted pursuant to clause (h) of Section 7.01), exceed in aggregate amount
the sum of (x) 3,000,000 Canadian Dollars under the Canadian Facility, and (y) $2,000,000.




     7.06 Consolidated Net Worth. Permit Consolidated Net Worth at any time to be 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 Borrower after January 31, 2006.




     7.07 Interest Coverage Ratio. Permit the Interest Coverage Ratio to be less than 2.50
to 1.00.




     7.08 [INTENTIONALLY OMITTED.]




     7.09 Sale/Leasebacks. Sell, lease, transfer or otherwise dispose of (collectively, a
“transfer”) any asset on terms whereby the asset or a substantially similar asset is or may
be leased or reacquired by the Borrower or any Subsidiary over a period in excess of three
years.




     7.10 Transactions with Affiliates. Enter into any transaction with any Affiliate of
the Borrower (other than a Subsidiary), except upon fair and reasonable terms



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no less favorable to the Borrower or such Subsidiary than would obtain in an comparable
arm’s-length transaction with a Person not an Affiliate of the Borrower.




     7.11 Use of Proceeds. Use any portion of any Loan proceeds or any Letter of Credit,
directly or indirectly, (i) to purchase or carry Margin Stock, (ii) to repay or otherwise
refinance indebtedness of the Borrower or others incurred to purchase or carry Margin Stock
or (iii) to extend credit for the purpose of purchasing or carrying any Margin Stock.




     7.12 Guarantees. Create, incur, assume or suffer to exist any Guarantees except:




     (a) endorsements for collection or deposit in the ordinary course of business;




     (b) Guarantees of Indebtedness of the Borrower and its Subsidiaries to the
extent such Indebtedness is permitted hereunder, provided that all
Guarantees in respect of Swap Contracts shall arise under contracts entered into in
the ordinary course of business as bona fide hedging transactions;




     (c) Guarantees of the Borrower and its Subsidiaries existing as of the Closing
Date and listed in Schedule 7.12; and




     (d) Guarantees of the Borrower or any Subsidiary in respect of the obligations
(which do not constitute Indebtedness) of (i) in the case of the Borrower, any
Subsidiary, and (ii) in the case of any Subsidiary, the Borrower or any Subsidiary
of such Subsidiary or any other Subsidiary.




     7.13 Restricted Payments. Declare or make any Restricted Payment except that (i) any
Subsidiary may declare and pay Dividends to (x) the Borrower, (y) a Guarantor, and (z) the
parent of such Subsidiary; and (ii) provided no Default exists or would result therefrom,
the Borrower may pay Dividends not to exceed $1,650,000 in aggregate amount during any
fiscal quarter.




     7.14 ERISA. (a) Engage in a prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan which has resulted or could reasonably be
expected to result in liability of the Borrower in an aggregate amount in excess of
$2,000,000; or (b) engage in a transaction that could be subject to Section 4069 or 4212(c)
of ERISA.




     7.15 Change in Business. Engage in any material line of business substantially
different from those lines of business carried on by the Borrower and its Subsidiaries on
the date hereof.




     7.16 Accounting Changes. Make any significant change in accounting treatment or
reporting practices, except as required by GAAP, or change the fiscal year of the Borrower
or of any Subsidiary.



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     7.17 [INTENTIONALLY OMITTED.]




     7.18 [INTENTIONALLY OMITTED.]




     7.19 Amendment and Waivers of Subordinated Debt. Change or permit any Subsidiary to
change or amend (or take any action or fail to take any action the result of which is an
effective amendment or change) or accept any waiver or consent with respect to, any
document, instrument or agreement relating to any Subordinated Debt that would result in
(a) an increase in the principal, interest, overdue interest, fees or other amounts payable
under any Subordinated Debt, (b) an acceleration of any date fixed for payment or prepayment
of principal, interest, fees or other amounts payable under any Subordinated Debt
(including, without limitation, as a result of any redemption), (c) a change in any of the
subordination provisions of any Subordinated Debt, or (d) any other change in any term or
provision of any Subordinated Debt that could reasonably be expected to have an adverse
effect on the interest of the Lenders.




     7.20 Capital Expenditures. Permit Capital Expenditures of the Borrower and its
Subsidiaries during the (a) fiscal quarter ending May 3, 2008 to exceed $8,000,000 in
aggregate amount, (b) the fiscal quarter ending August 2, 2008 to exceed $6,000,000 in
aggregate amount; provided, however, so long as no Default has occurred and
is continuing, 50% of the amount of Capital Expenditures permitted but not expended during
the fiscal quarter ending May 3, 2008 may be carried over to the fiscal quarter ending
August 2, 2008; or (c) the fiscal quarter commencing August 3, 2008 to not be consistent
with projections previously delivered to the Lenders for such fiscal quarter.




     7.21 Minimum EBITDA. Permit EBITDA for the fiscal quarter ending August 2, 2008 to be
less than $17,000,000.




     7.22 Senior Note Documents. Change or permit any Subsidiary to change or amend (or
take any action or fail to take any action the result of which is an effective amendment or
change) or accept any waiver or consent with respect to, any Senior Note Document that would
result in (a) an increase in the principal, interest, overdue interest, fees or other
amounts payable under any Senior Note Document, (b) an acceleration of any date fix for
payment or prepayment of principal, interest, overdue interest fees or other amounts payable
under any Senior Note Document, (c) the terms and provisions of the Senior Note Documents,
including without limitation the negative covenants and the events of default, being more
restrictive to the Borrower and its Subsidiaries than the terms and provisions of this
Agreement, (d) the Borrower or any Subsidiary being subject to any prohibition or limitation
on making any payment or prepayment under the Loan Documents, or (e) further restrict or
limit the amount of debt that may be secured pursuant to Section 10.2(e) of the Note
Purchase Agreements or otherwise on a non-equal and non-ratable basis with the debt under
the Senior Note Documents.




     7.23 Calyon Credit Documents. Except as otherwise provided or contemplated in the
Calyon Credit Documents in order to make the terms thereof similar to the terms of this
Agreement, change or permit any Subsidiary to change or amend (or take any action or fail to
take any action the result of which is an effective amendment or



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change) or accept any waiver or consent with respect to, any Calyon Credit Document
that would result in (a) an increase in the principal, interest, overdue interest, fees or
other amounts payable under any Calyon Credit Document, (b) an acceleration of any date fix
for payment or prepayment of principal, interest, overdue interest, fees or other amounts
payable under any Calyon Credit Document, (c) the terms and provisions of the Calyon Credit
Documents, including without limitation the negative covenants and the events of default,
being more restrictive to the Borrower and its Subsidiaries than the terms and provisions of
this Agreement, or (d) the Borrower or any Subsidiary being subject to any prohibition or
limitation on making any payment or prepayment under the Loan Documents.




     7.24 Canadian Facility Documents. Change or permit any Subsidiary to change or amend
(or take any action or fail to take any action the result of which is an effective amendment
or change) or accept any waiver or consent with respect to, any Canadian Facility Document
that would result in (a) an increase in the principal, interest, overdue interest, fees or
other amounts payable under any Canadian Facility Document, (b) an acceleration of any date
fix for payment or prepayment of principal, interest, overdue interest, fees or other
amounts payable under any Canadian Facility Document, (c) the terms and provisions of the
Canadian Facility Documents, including without limitation the negative covenants and the
events of default, being more restrictive to the Borrower and its Subsidiaries than the
terms and provisions of this Agreement, or (d) the Borrower or any Subsidiary being subject
to any prohibition or limitation on making any payment or prepayment under the Loan
Documents.



     (d) Section 8.01(b) of the Credit Agreement is hereby amended to read as follows:




     (b) Specific Covenants. The Borrower or any Subsidiary fails to perform or
observe any term, covenant or agreement contained in any of Section 6.03,
6.05, 6.11, 7.01, 7.02, 7.03, 7.05,
7.06, 7.07, 7.08, 7.09, 7.13, 7.20,
7.21, 7.22, 7.23, and 7.24 required to be performed or observed by
it; or



     (e) Section 8.01 is hereby amended by (i) deleting “or” after subsection (j) thereof,
(ii) deleting “.” after subsection (k) thereof and inserting “;” in lieu thereof and (iii) adding
the following new subsection (l) thereto to read as follows:




     (l) Amendment. The Borrower, the Administrative Agent and the Required Lenders
shall fail to execute an amendment to this Agreement satisfactory to the parties thereto by
September 15, 2008.



     (f) The Aggregate Commitments are hereby reduced to $175,000,000 and the Commitment of each
Lender is hereby reduced to be the amount set forth opposite each Lender’s name on
Schedule 2.01, which is hereby amended to be in the form of Schedule 2.01 attached
to this Agreement. Notwithstanding the amount of the Aggregate Commitments or anything else in the
Credit Agreement to the contrary, after July 30, 2008 the Total Outstandings shall not exceed
$150,000,000, and the Borrower shall have no right to request any Credit Extension if, after giving
effect thereto and the application of the proceeds thereof, the Total Outstandings would exceed
$150,000,000.



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     (g) Schedule 7.05 to the Credit Agreement is hereby amended to be in the form of
Schedule 7.05 attached to this Agreement.



     (h) The Compliance Certificate is hereby amended to be in the form of Exhibit C
attached to this Agreement.



     (i) Notwithstanding the waiver of the Financial Covenant Defaults as provided herein, the
Default Rate shall be in effect from and including the date of this Agreement until such time, if
ever, that the Financial Covenant Defaults are permanently waived through an amendment to the
Credit Agreement.



     (j) For avoidance of doubt, the amendments of the Credit Agreement provided for in this
Section 2 shall not be construed to eliminate the Financial Covenant Defaults, which Financial
Covenant Defaults are waived pursuant to the terms of Section 3 hereof.



     3. WAIVER. Subject to the terms and conditions of this Agreement, the Lenders hereby
waive, during and only during the Waiver Period, the Financial Covenant Defaults. During the
Waiver Period, provided no Waiver Default occurs, (a) the Administrative Agent and the Lenders
shall not exercise or enforce any remedy against any Loan Party arising as a result of the
Financial Covenant Defaults; and (b) the Borrower’s right to request Credit Extensions and to
receive Borrowings and Letters of Credit, subject to the limitation set forth in the last sentence
of Section 2(f) of this Agreement shall not be terminated as a result of the Financial Covenant
Defaults. Upon the Waiver Expiration Date, the Waiver Period shall terminate and, in the event
that the Financial Covenant Defaults have not been permanently waived by, or amended with the
consent of, the Required Lenders, the Administrative Agent and the Lenders shall be entitled to
exercise all of their rights and remedies under the Credit Agreement and the other Loan Documents.
Nothing herein constitutes a waiver of (a) any Default or Event of Default other than the temporary
waiver of the Financial Covenant Defaults as set forth in the first sentence of this Section 3, or
(b) any other terms, covenants or provisions of the Credit Agreement or any other Loan Document, or
any obligations of the Borrower or any other Loan Party. The Borrower and each other Loan Party
acknowledge and agree that neither the Administrative Agent nor the Lenders shall be obligated to
forbear from exercising any rights or remedies with respect to the Financial Covenant Defaults
following the Waiver Expiration Date, or any other Defaults or Events of Default at any time.



     4. REPRESENTATIONS AND WARRANTIES TRUE; NO EVENT OF DEFAULT. By its execution and
delivery hereof, the Borrower represents and warrants that, as of the date hereof and after giving
effect to the waiver and amendments contemplated by the foregoing Sections 2 and 3:



     (a) the representations and warranties contained in the Credit 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;



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     (c) (i) the Borrower has full corporate power and authority to execute, deliver and perform
this Agreement, and (ii) this Agreement and the Credit Agreement, as amended hereby, constitute the
legal, valid and binding respective obligations of the Borrower, enforceable against the Borrower,
in accordance with their respective terms, except as enforceability may be limited by applicable
Debtor Relief Laws 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) the execution, delivery and performance by the Borrower of this Agreement and the Credit
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 Borrower or any Contractual Obligation
to which the Borrower is a party or by which its respective properties may be bound;



     (e) no authorization, approval, consent, or other action by, notice to, or filing with, any
Governmental Authority or other Person (including the Borrower’s Board of Directors) not previously
obtained is required for the execution, delivery or performance by the Borrower of this Agreement;



     (f) the Subsidiaries appearing as Guarantors on the signature pages of this Agreement
constitute all Subsidiaries of the Borrower who are required to be Guarantors pursuant to the
Credit Agreement..



     5. CONDITIONS TO EFFECTIVENESS. This Agreement shall be effective as of July 30,
2008, subject to the following:



     (a) the Administrative Agent shall have received counterparts of this Agreement executed by
the Required Lenders;



     (b) the Administrative Agent shall have received counterparts of this Agreement executed by
the Borrower and acknowledged by each Guarantor;



     (c) the representations and warranties set forth in Section 4 of this Agreement shall be true
and correct;



     (d) the Administrative Agent shall have received from the Borrower for the benefit of each
Lender executing and delivering this Agreement to the Administrative Agent or its counsel by the
date and time communicated to the Lenders by the Administrative Agent an amendment fee in
immediately available funds in an amount equal to the product of (i) 0.15% and (ii) the amount of
each Lender’s Commitment, as reduced by this Agreement;



     (e) the Canadian Facility and the Calyon Credit Agreement shall have been amended or otherwise
modified in form and substance satisfactory to the Administrative Agent;



     (f) payment of (i) all reasonable out-of-pocket expenses and fees of counsel to the
Administrative Agent incurred in connection with the negotiation, execution and delivery of this
Agreement to the extent invoiced prior to the date hereof and (ii) all other fees agreed to be paid
by the Borrower;



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     (g) the Administrative Agent shall have received an opinion of the Borrower’s counsel, in form
and substance satisfactory to the Administrative Agent, with respect to matters set forth in
Sections 4(c), (d) and (e) of this Agreement and with respect to such other matters as requested by
the Administrative Agent or its counsel;



     (h) the Administrative Agent shall have received a Guaranty executed by Spartech Polycom
(Texas), Inc., X-Core, LLC and Alshin Tire Corporation, together with such related documents as
required by Section 6.13 of the Credit Agreement; and



     (i) the Administrative Agent and the Lenders shall have received in form and substance
satisfactory to the Administrative Agent and the Lenders, such other documents and certificates as
the Lenders shall require.



     6. GUARANTORS ACKNOWLEDGMENT. By signing below, each of the Guarantors
(i) acknowledges, consents and agrees to the execution, delivery and performance by the Borrower 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.



     7. REFERENCE TO THE CREDIT AGREEMENT.



     (a) Upon the effectiveness of this Agreement, each reference in the Credit Agreement to “this
Agreement”, “hereunder”, or words of like import shall mean and be a reference to the Credit
Agreement, as affected and amended by this Agreement.



     (b) The Credit Agreement, as amended by this Agreement, and all other Loan Documents shall
remain in full force and effect and are hereby ratified and confirmed.



     8. COSTS, EXPENSES AND TAXES. The Borrower agrees to pay on demand all costs and
expenses of the Administrative Agent in connection with the preparation, reproduction, execution
and delivery of this Agreement and the other instruments and documents to be delivered hereunder
(including the reasonable fees and out-of-pocket expenses of counsel for the Administrative Agent
with respect thereto and with respect to advising the Administrative Agent as to its rights and
responsibilities under the Credit Agreement, as amended by this Agreement).



     9. 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 Administrative
Agent (or its counsel) 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.



12









 





     10. GOVERNING LAW; BINDING EFFECT. This Agreement shall be governed by and construed
in accordance with the laws of the State of Texas applicable to agreements made and to be performed
entirely in such state; provided that the Administrative Agent and each Lender shall retain
all rights arising under federal law. This Agreement shall be binding upon all parties hereto and
their respective successors and assigns.



     11. 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.



     12. RELEASE. THE BORROWER AND EACH GUARANTOR HEREBY ACKNOWLEDGE THAT THE OBLIGATIONS
UNDER THE CREDIT AGREEMENT AND EACH OTHER LOAN DOCUMENT EXECUTED IN CONNECTION THEREWITH ARE
ABSOLUTE AND UNCONDITIONAL WITHOUT ANY RIGHT OF RESCISSION, SETOFF, COUNTERCLAIM, DEFENSE, OFFSET,
CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR
ELIMINATE ALL OR ANY PART OF ITS LIABILITY TO REPAY THE OBLIGATIONS UNDER THE CREDIT AGREEMENT AND
EACH OTHER LOAN DOCUMENT EXECUTED IN CONNECTION THEREWITH OR TO SEEK AFFIRMATIVE RELIEF OR DAMAGES
OF ANY KIND OR NATURE FROM ANY RELEASED PARTY (AS DEFINED BELOW). THE BORROWER AND EACH GUARANTOR
HEREBY VOLUNTARILY AND KNOWINGLY RELEASE AND FOREVER DISCHARGE THE ARRANGER, THE ADMINISTRATIVE
AGENT, THE L/C ISSUER, EACH LENDER AND ITS PREDECESSORS, EACH RELATED PARTY TO ANY OF THE ABOVE,
AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, COUNSEL, AGENTS, ATTORNEYS-IN-FACT, SUCCESSORS, AND
ASSIGNS (COLLECTIVELY, THE “RELEASED PARTIES”), FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS,
CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN,
ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT LAW
OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS AGREEMENT IS EXECUTED,
WHICH THE BORROWER OR ANY GUARANTOR MAY NOW OR HEREAFTER HAVE AGAINST THE RELEASED PARTIES, IF
ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR
REGULATIONS, OR OTHERWISE, AND ARISING OUT OF OR IN CONNECTION WITH OR BY REASON OF THE CREDIT
AGREEMENT OR ANY OTHER LOAN DOCUMENT EXECUTED IN CONNECTION THEREWITH, INCLUDING, WITHOUT
LIMITATION, ANY CONTRACTING FOR, CHARGING, TAKING, RESERVING, COLLECTING OR RECEIVING INTEREST IN
EXCESS OF THE HIGHEST LAWFUL RATE APPLICABLE, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE
CREDIT AGREEMENT OR ANY OTHER LOAN DOCUMENT EXECUTED IN CONNECTION THEREWITH, AND NEGOTIATION FOR
AND EXECUTION OF THIS AGREEMENT (BUT EXCLUDING IN ALL CASES ANY OF THE FOREGOING ARISING FROM THE
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE RELEASED PARTIES).



     13. ENTIRE AGREEMENT. THE CREDIT AGREEMENT, AS AMENDED BY THIS AGREEMENT, AND THE
OTHER LOAN DOCUMENTS REPRESENT THE



13









 







FINAL AGREEMENT BETWEEN THE PARTIES AS TO THE SUBJECT MATTER THEREIN AND HEREIN AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE
PARTIES.








REMAINDER OF PAGE LEFT INTENTIONALLY BLANK










14









 





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



	 	 	 	 	 
	 	SPARTECH CORPORATION

 	 
	 	By:  	/s/ Myles S. Odaniell
 	 
	 	 	Myles S. Odaniell 	 
	 	 	President and CEO 	 
	 



Signature Page to Waiver and Amendment Agreement





 









 





	 	 	 	 	 
	 	BANK OF AMERICA, N.A., as

Administrative Agent

 	 
	 	By:  	/s/ William M. Bulger Jr.
 	 
	 	 	Name:  	William M. Bulger Jr. 	 
	 	 	Title:  	Vice President 	 
	 



Signature Page to Waiver and Amendment Agreement




	 	 	 	 	 



 









 






	 	 	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 



	 	 	 	 	 
	 	BANK OF AMERICA, N.A., as a Lender and L/C

Issuer

 	 
	 	By:  	/s/ William M. Bulger Jr.
 	 
	 	 	Name:  	William M. Bulger Jr. 	 
	 	 	Title:  	Vice President 	 
	 



Signature Page to Waiver and Amendment Agreement





 









 





	 	 	 	 	 
	 	THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., as a

Lender and Syndication Agent

 	 
	 	By:  	/s/ Victor Pierzchalski
 	 
	 	 	Name:  	Victor Pierzchalski 	 
	 	 	Title:  	Authorized Signatory 	 
	 



Signature Page to Waiver and Amendment Agreement









 









 











	 	 	 	 	 
	 	KEYBANK, NATIONAL ASSOCIATION, as a Lender

 and
Syndication Agent

 	 
	 	By:  	/s/ Brian P. Fox
 	 
	 	 	Name:  	Brian P. Fox 	 
	 	 	Title:  	Assistant Vice President 	 
	 



Signature Page to Waiver and Amendment Agreement




	 	 	 	 	 



 









 






	 	 	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 



	 	 	 	 	 
	 	NATIONAL CITY BANK OF PENNSYLVANIA, as a

Lender and Documentation Agent

 	 
	 	By:  	/s/ Thomas S. Sherman
 	 
	 	 	Name:  	Thomas S. Sherman 	 
	 	 	Title:  	SVP 	 
	 



Signature Page to Waiver and Amendment Agreement





 












 





	 	 	 	 	 
	 	CALYON NEW YORK BRANCH, as a Lender and

Documentation Agent

 	 
	 	By:  	/s/ David Cagle
 	 
	 	 	Name:  	David Cagle 	 
	 	 	Title:  	Managing Director 	 
	 
	 	 	 
	 	By:  	                    /s/ Robert Smith
 	 
	 	 	Name:  	Robert Smith 	 
	 	 	Title:  	Managing Director 	 
	 



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	 	SUNTRUST BANK, as a Lender

 	 
	 	By:  	/s/ Kip Hurd
 	 
	 	 	Name:  	Kip Hurd 	 
	 	 	Title:  	Director 	 
	 



Signature Page to Waiver and Amendment Agreement














 








	 	 	 	 	 
	 	FIFTH THIRD BANK, as a Lender

 	 
	 	By:  	/s/ Robert M. Sander
 	 
	 	 	Name:  	Robert M. Sander 	 
	 	 	Title:  	Vice President 	 
	 



Signature Page to Waiver and Amendment Agreement















 








	 	 	 	 	 	 	 	 	 
	 	 	U. S. BANK NATIONAL ASSOCIATION, as a Lender	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 





Signature Page to Waiver and Amendment Agreement














 








	 	 	 	 	 
	 	COMERICA BANK, as a Lender

 	 
	 	By:  	/s/ Mark J. Leveille
 	 
	 	 	Name:  	Mark J. Leveille 	 
	 	 	Title:  	Vice President 	 
	 



Signature Page to Waiver and Amendment Agreement














 








	 	 	 	 	 
	 	DEUTSCHE BANK TRUST COMPANY 

AMERICAS, as a Lender

 	 
	 	By:  	/s/ Erin Morrissey
 	 
	 	 	Name:  	Erin Morrissey 	 
	 	 	Title:  	Vice President 	 
	 
	 	 	 
	 	By:  	                                                        /s/ Susan LeFevre
 	 
	 	 	Name:  	Susan LeFevre 	 
	 	 	Title:  	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:

	 	/s/ Myles S. Odaniell
	 	 
	 

	 	 	 	 
	 

	 	Myles S. Odaniell

President and CEO	 	 






Signature Page to Waiver and Amendment Agreement














 










SCHEDULE 2.01




COMMITMENTS

AND APPLICABLE PERCENTAGES




	 	 	 	 	 	 	 	 	 
	Lender	 	Commitment	 	 	Applicable Percentage	 
	 
	Bank of America, N.A.
	 	$	21,875,000.00	 	 	 	12.500000000	%
	The Bank of Tokyo-Mitsubishi UFJ, Ltd.
	 	$	20,416,666.67	 	 	 	11.666666667	%
	KeyBank, National Association
	 	$	20,416,666.67	 	 	 	11.666666667	%
	National City Bank of Pennsylvania
	 	$	20,416,666.67	 	 	 	11.666666667	%
	Calyon New York Branch
	 	$	20,416,666.67	 	 	 	11.666666667	%
	SunTrust Bank
	 	$	18,958,333.33	 	 	 	10.833333333	%
	Fifth Third Bank
	 	$	14,583,333.33	 	 	 	8.333333333	%
	U. S. Bank National Association
	 	$	14,583,333.33	 	 	 	8.333333333	%
	Comerica Bank
	 	$	14,583,333.33	 	 	 	8.333333333	%
	Deutsche Bank Trust Company Americas
	 	$	8,750,000.00	 	 	 	5.000000000	%
	 
	 	 	 	 	 	 
	Total
	 	$	175,000,000.00	 	 	 	100.000000000	%






Schedule 2.01














 









SCHEDULE 7.05




EXISTING INDEBTEDNESS




	 	 	 	 	 
	Indebtedness	 	Amount	 
	Lake Charles Harbor and Terminal District Revenue Bonds
	 	$	8,000,000	 
	Middle Monongahela Association, Inc. / Pennsylvania Industrial Development Authority – Loan Number 03401902
	 	$	50,656	 
	Middle Monongahela Association, Inc. / Pennsylvania Industrial Development Authority – Loan Number 03402603
	 	$	433,096	 
	Richard R. Guske and Second Generation of Sheboygan, LLC as Landlord, Pertaining to Premises Located at 430 Forest
Avenue, Sheboygan, WI
	 	$	257,267	 
	Alliant Energy
	 	$	242,369	 
	Chamber of Commerce and Industry of Les Ardennes as Landlord, Pertaining to Premises Located at 2.1. Donchery,
Donchery France
	 	 	3,412,055 	Euros







Schedule 7.05

















 





EXHIBIT C




FORM OF COMPLIANCE CERTIFICATE




Financial Statement Date:                     




To:     Bank of America, N.A., as Administrative Agent




Ladies and Gentlemen:




     Reference is made to that certain Credit Agreement, dated as of June 2, 2006 (as amended,
restated, extended, supplemented or otherwise modified in writing from time to time, the
“Agreement;” the terms defined therein being used herein as therein defined), among
Spartech Corporation, a Delaware corporation (the “Borrower”), the Lenders from time to
party thereto and Bank of America, N.A. as Administrative Agent and L/C Issuer.



     The undersigned hereby certifies as of the date hereof that he/she is the                                       
                
       of the Borrower and
that, as such, he/she is authorized to execute and deliver this certificate to the Administrative
Agent on the behalf of the Borrower and that:


[Use following for fiscal year-end financial statements]



Attached hereto as Schedule 1 are the year-end audited financial statements required by
Section 6.01(a) of the Agreement for the fiscal year of the Borrower ended as of the above
date, together with the report and opinion of an independent certified public accountant required
by such section.



[Use following for fiscal quarter-end financial statements]




     1. Attached hereto as Schedule 1 are the unaudited financial statements required by
Section 6.01(b) of the Agreement for the fiscal quarter of the Borrower ended as of the
date set forth above as the Financial Statement Date. Such financial statements fairly present in
all material respects the financial condition, results of operations and cash flows of the Borrower
and its Subsidiaries in accordance with GAAP as at such date and for such period, subject only to
normal year-end audit adjustments and the absence of footnotes.



     2. The undersigned has reviewed and is familiar with the terms of the Agreement and has made,
or has caused to be made under his/her supervision, a detailed review of the transactions and
condition (financial or otherwise) of the Borrower during the accounting period covered by the
attached financial statements.



     3. A review of the activities of the Borrower during such fiscal period has been made under
the supervision of the undersigned with a view to determining whether during such fiscal period the
Borrower performed and observed all its Obligations under the Loan Documents and



Exhibit C — 1

Form of Compliance Certificate




 









 





[select one:]




     [to the best knowledge of the undersigned during such fiscal period, the Borrower performed
and observed each covenant and condition of the Loan Documents applicable to it and no Default has
occurred and is continuing.]



—or—




     [the following covenants or conditions have not been performed or observed and the following
is a list of each such Default and its nature and status:]



     4. The representations and warranties of the Borrower contained in Article V of the Agreement,
and any representations and warranties of any Loan Party that are contained in any document
furnished at any time under or in connection with the Loan Documents, are true and correct on and
as of the date hereof, 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, and
except that for purposes of this Compliance Certificate, the representations and warranties
contained in subsections (a) and (b) of Section 5.05 of the Agreement shall be deemed to
refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of
Section 6.01 of the Agreement, including the statements in connection with which this
Compliance Certificate is delivered. The financial covenant analyses and information set forth on
Schedule 2 attached hereto are true and accurate on and as of the date set forth above as
the Financial Statement Date.



     IN WITNESS WHEREOF, the undersigned has executed this Certificate as of                          ,                     .



	 	 	 	 	 	 	 
	 	 	SPARTECH CORPORATION, a
 Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 






Exhibit C — 2

Form of Compliance Certificate




 









 





For the Quarter/Year ended                           (“Statement Date”)




SCHEDULE 2

to the Compliance Certificate

($ in 000’s)




	 	 	 	 	 
	I. Section 7.02(c) – Limitation on Asset Dispositions.
	 	 	 	 
	 
	 	 	 	 
	A. Aggregate net book value of the property or assets disposed of in asset sales
(other than asset sales pursuant to 7.02(a) and 7.02(b)):
	 	$	 	 
	 
	 	 	 
	 
	 	 	 	 
	B. All other asset sales by Borrower and its Subsidiaries during the immediately
preceding twelve months:
	 	$	 	 
	 
	 	 	 
	 
	 	 	 	 
	C. Total (Line I.A. + I.B.):
	 	$	 	 
	 
	 	 	 
	 
	 	 	 	 
	D. Maximum (15% x IV.A.(5):
	 	$	 	 
	 
	 	 	 
	 
	 	 	 	 
	II. Section 7.04(e) – Limitations on Loans and Investment.
	 	 	 	 
	 
	 	 	 	 
	A. Aggregate outstanding advances, loans, extensions of credit or investments in the
ordinary course of business:
	 	$	 	 
	 
	 	 	 
	 
	 	 	 	 
	B. Maximum in aggregate amount at any one time outstanding:
	 	$	15,000,000	 
	 
	 	 	 	 
	III. Section 7.05 – Limitation on Indebtedness.
	 	 	 	 
	 
	 	 	 	 
	A. Aggregate outstanding amount of Indebtedness of all Subsidiaries (excluding
(i) Guarantees permitted pursuant to clauses (a), (b), (c) and (d) of Section
7.12, (ii) Indebtedness of a Subsidiary existing on July 30, 2008 and described in
Schedule 7.05 but no increase of any such Indebtedness, (iii) Indebtedness of a
Subsidiary owed to the Borrower or any Guarantor, (iv) Indebtedness under the Loan
Documents, and (v) Indebtedness of a Subsidiary secured by Liens permitted
pursuant to clause (h) of Section 7.01):
	 	$	 	 
	 
	 	 	 
	 
	 	 	 	 
	B. Maximum permitted amount of Subsidiary Indebtedness:
	 	3,000,000
 Canadian Dollars
 plus $2,000,000	 
	 
	 	 	 	 
	IV. Section 7.06 – Consolidated Net Worth.
	 	 	 	 
	 
	 	 	 	 
	A. Consolidated Net Worth:
	 	 	 	 
	 
	 	 	 	 
	(1) Capital stock taken at par or stated value:
	 	$	 	 
	 
	 	 	 





Exhibit C — 3

Form of Compliance Certificate





 











 





	 	 	 	 	 
	(2) Capital in excess of par or stated value
relating to capital stock:
	 	$	 	 
	 
	 	 	 
	 
	 	 	 	 
	(3) Retained earnings (or minus any retained
earnings deficit):
	 	$	 	 
	 
	 	 	 
	 
	 	 	 	 
	(4) Sum of treasury stock, capital stock
subscribed for and unissued and other
contra-equity accounts, all as determined in
accordance with GAAP:
	 	$	 	 
	 
	 	 	 
	 
	 	 	 	 
	(5) Total (Line IV.A.(1) + (2) + (3) — (4)):
	 	$	 	 
	 
	 	 	 
	 
	 	 	 	 
	B. Minimum Consolidated Net Worth.
	 	 	 	 
	 
	 	 	 	 
	(1) $350,000,000:
	 	$	 	 
	 
	 	 	 
	 
	 	 	 	 
	(2) 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):
	 	$	 	 
	 
	 	 	 
	 
	 	 	 	 
	(3) 85% of the net proceeds of any equity issued
by the Borrower after January 31, 2006:
	 	$	 	 
	 
	 	 	 
	 
	 	 	 	 
	(4) Minimum Consolidated Net Worth (Lines IV.B.(1)
+ (2) + (3)):
	 	$	 	 
	 
	 	 	 
	 
	 	 	 	 
	V. Section 7.07 - Minimum Interest Coverage Ratio.
	 	 	 	 
	 
	 	 	 	 
	A. EBITDA for the Borrower and its Subsidiaries on a consolidated basis for the
period of the four fiscal quarters most recently ended (the “Subject Period”):
	 	 	 	 
	 
	 	 	 	 
	1. Consolidated Net Income for the Subject Period:
	 	$	 	 
	 
	 	 	 
	 
	 	 	 	 
	2. Without duplication and to the extent deducted
in determining Net Income, Consolidated
Interest Expense:
	 	$	 	 
	 
	 	 	 
	 
	 	 	 	 
	3. Without duplication and to the extent deducted
in determining Net Income, depreciation and
amortization expenses and other non-cash
charges (including but not limited to
expensing of stock options, fixed asset
write-offs and impairment of goodwill):
	 	$	 	 
	 
	 	 	 





Exhibit C — 4

Form of Compliance Certificate



 









 






	 	 	 	 	 
	4. Without duplication and to the extent deducted
in determining Net Income, income and profits
taxes:
	 	$	 	 
	 
	 	 	 
	 
	 	 	 	 
	5. EBITDA (Lines VI.A.1. + 2. + 3. + 4.):
	 	$	 	 
	 
	 	 	 
	 
	 	 	 	 
	B. Consolidated Interest Expense for the Subject Period:
	 	$	 	 
	 
	 	 	 
	 
	 	 	 	 
	C. Interest Coverage Ratio (Line V.A.5.)  ̧ (Line VI.B.):
	 	_____ to 1.00
	 
	 	 	 	 
	H. Minimum Interest Coverage Ratio:
	 	 	2.50 to 1.00	 
	 
	 	 	 	 
	VI. Section 7.13 - Limitation on Restricted Payments
	 	 	 	 
	 
	 	 	 	 
	A. Aggregate amount of Dividends paid during fiscal quarter
	 	$	 	 
	 
	 	 	 
	 
	 	 	 	 
	B. Aggregate amount of Dividends permitted during fiscal quarter
	 	$	1,650,000	 
	 
	 	 	 	 
	VII. Section 7.20 - Limitation on Capital Expenditures
	 	 	 	 
	 
	 	 	 	 
	A. Aggregate amount of Capital Expenditures made during fiscal quarter ending May 3,
2008:
	 	$	 	 
	 
	 	 	 
	 
	 	 	 	 
	B. Aggregate amount of Capital Expenditures permitted to be made during fiscal quarter ending May 3, 2008:
	 	$	8,000,000	 
	 
	 	 	 	 
	C. Aggregate amount of Capital Expenditures made during fiscal quarter ending
August 2, 2008:
	 	$	 	 
	 
	 	 	 
	 
	 	 	 	 
	D. Aggregate amount of Capital Expenditures permitted to be made during fiscal
quarter ending August 2, 2008 ($6,000,000 plus 50% of the remainder, if any, of
$8,000,000 minus Line VII.A.):
	 	$	 	 
	 
	 	 	 
	 
	 	 	 	 
	VIII  Section 7.21 - Minimum EBITDA
	 	 	 	 
	 
	 	 	 	 
	A. EBITDA for fiscal quarter ending August 2, 2008:
	 	$	 	 
	 
	 	 	 
	 
	 	 	 	 
	B. Minimum EBITDA for fiscal quarter ending August 2, 2008:
	 	$	17,000,000	 






Exhibit C — 5

Form of Compliance Certificate