Document:

exv10w5

Exhibit 10.5

EXECUTION COPY

 

SPARTECH CORPORATION

 

5.78% Senior Notes due 2011

 

NOTE PURCHASE AGREEMENT

Dated as of June 5, 2006

 

 

 

Table of Contents

	 	 	 	 	 
	 	 	Page	 
	1. AUTHORIZATION OF NOTES, ETC.
	 	 	1	 
	1.1. The Notes
	 	 	1	 
	1.2. The Subsidiary Guarantees
	 	 	1	 
	 
	 	 	 	 
	2. SALE AND PURCHASE OF NOTES
	 	 	1	 
	 
	 	 	 	 
	3. CLOSING
	 	 	2	 
	 
	 	 	 	 
	4. CONDITIONS TO CLOSING
	 	 	2	 
	4.1. Representations and Warranties
	 	 	2	 
	4.2. Performance; No Default
	 	 	2	 
	4.3. Compliance Certificates
	 	 	3	 
	4.4. Opinions of Counsel
	 	 	3	 
	4.5. Subsidiary Guarantees
	 	 	3	 
	4.6. Purchase Permitted by Applicable Law, etc.
	 	 	3	 
	4.7. Sale of Notes to Other Purchasers
	 	 	4	 
	4.8. Payment of Special Counsel Fees
	 	 	4	 
	4.9. Private Placement Number
	 	 	4	 
	4.10. Funding Instructions
	 	 	4	 
	4.11. Changes in Corporate Structure
	 	 	4	 
	4.12. Rating
	 	 	4	 
	4.13. Proceedings and Documents
	 	 	4	 
	 
	 	 	 	 
	5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
	 	 	5	 
	5.1. Organization; Power and Authority
	 	 	5	 
	5.2. Authorization, etc.
	 	 	5	 
	5.3. Disclosure
	 	 	5	 
	5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates
	 	 	6	 
	5.5. Financial Statements
	 	 	6	 
	5.6. Compliance with Laws, Other Instruments, etc.
	 	 	7	 
	5.7. Governmental Authorizations, etc.
	 	 	7	 
	5.8. Litigation; Observance of Agreements, Statutes and Orders
	 	 	7	 
	5.9. Taxes
	 	 	7	 
	5.10. Title to Property; Leases
	 	 	8	 
	5.11. Licenses, Permits, etc.
	 	 	8	 
	5.12. Compliance with ERISA
	 	 	8	 
	5.13. Private Offering by the Company
	 	 	9	 
	5.14. Use of Proceeds; Margin Regulations
	 	 	9	 
	5.15. Existing Indebtedness; Future Liens
	 	 	10	 
	5.16. Foreign Assets Control Regulations, etc.
	 	 	10	 
	5.17. Status Under Certain Statutes
	 	 	11	 
	5.18. Environmental Matters
	 	 	11	 

 

 

	 	 	 	 	 
	 	 	Page	 
	5.19. Solvency
	 	 	11	 
	 
	 	 	 	 
	6. REPRESENTATIONS OF THE PURCHASER
	 	 	11	 
	6.1. Purchase of Notes
	 	 	11	 
	6.2. Source of Funds
	 	 	12	 
	 
	 	 	 	 
	7. INFORMATION AS TO COMPANY
	 	 	13	 
	7.1. Financial and Business Information
	 	 	13	 
	7.2. Officer’s Certificate
	 	 	16	 
	7.3. Inspection
	 	 	16	 
	 
	 	 	 	 
	8. PAYMENT AND PREPAYMENT OF THE NOTES
	 	 	17	 
	8.1. Payment at Maturity
	 	 	17	 
	8.2. Optional Prepayments
	 	 	17	 
	8.3. Allocation of Partial Prepayments
	 	 	18	 
	8.4. Maturity; Surrender, etc.
	 	 	18	 
	8.5. Purchase of Notes
	 	 	18	 
	 
	9. AFFIRMATIVE COVENANTS
	 	 	18	 
	9.1. Compliance with Law
	 	 	19	 
	9.2. Insurance
	 	 	19	 
	9.3. Maintenance of Properties
	 	 	19	 
	9.4. Payment of Taxes and Claims
	 	 	19	 
	9.5. Corporate Existence, etc.
	 	 	20	 
	9.6. Additional Subsidiary Guarantees; Release of Subsidiary Guarantees, etc.
	 	 	20	 
	 
	 	 	 	 
	10. NEGATIVE COVENANTS
	 	 	21	 
	10.1. Total Indebtedness; Subsidiary Indebtedness
	 	 	21	 
	10.2. Liens
	 	 	22	 
	10.3. Limitation on Sale and Leaseback Transactions
	 	 	23	 
	10.4. Maintenance of Net Worth
	 	 	24	 
	10.5. Asset Sales
	 	 	24	 
	10.6. Merger, Consolidation, etc.
	 	 	25	 
	10.7. Transactions with Affiliates
	 	 	25	 
	 
	 	 	 	 
	11. EVENTS OF DEFAULT
	 	 	26	 
	 
	 	 	 	 
	12. REMEDIES ON DEFAULT, ETC.
	 	 	28	 
	12.1. Acceleration
	 	 	28	 
	12.2. Other Remedies
	 	 	28	 
	12.3. Rescission
	 	 	29	 
	12.4. No Waivers or Election of Remedies, Expenses, etc.
	 	 	29	 
	 
	 	 	 	 
	13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES
	 	 	29	 
	13.1. Registration of Notes
	 	 	29	 
	13.2. Transfer and Exchange of Notes
	 	 	30	 
	13.3. Replacement of Notes
	 	 	30	 

(ii)

 

	 	 	 	 	 
	 	 	Page	 
	14. PAYMENTS ON NOTES
	 	 	31	 
	14.1. Place of Payment
	 	 	31	 
	14.2. Home Office Payment
	 	 	31	 
	 
	 	 	 	 
	15. EXPENSES, ETC.
	 	 	31	 
	15.1. Transaction Expenses
	 	 	31	 
	15.2. Survival
	 	 	32	 
	 
	 	 	 	 
	16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT
	 	 	32	 
	 
	 	 	 	 
	17. AMENDMENT AND WAIVER
	 	 	32	 
	17.1. Requirements
	 	 	32	 
	17.2. Solicitation of Holders of Notes
	 	 	33	 
	17.3. Binding Effect, etc.
	 	 	33	 
	17.4. Notes held by Company, etc.
	 	 	33	 
	 
	 	 	 	 
	18. NOTICES
	 	 	34	 
	 
	 	 	 	 
	19. REPRODUCTION OF DOCUMENTS
	 	 	34	 
	 
	 	 	 	 
	20. CONFIDENTIAL INFORMATION
	 	 	34	 
	 
	 	 	 	 
	21. SUBSTITUTION OF PURCHASER
	 	 	35	 
	 
	 	 	 	 
	22. MISCELLANEOUS
	 	 	36	 
	22.1. Successors and Assigns
	 	 	36	 
	22.2. Construction
	 	 	36	 
	22.3. Jurisdiction and Process; Waiver of Jury Trial
	 	 	36	 
	22.4. Payments Due on Non-Business Days
	 	 	37	 
	22.5. Severability
	 	 	37	 
	22.6. Accounting Terms; Pro Forma Calculations
	 	 	37	 
	22.7. Counterparts
	 	 	37	 
	22.8. Governing Law
	 	 	38	 

	 	 	 	 	 
	Schedule A

	 	—
	 	Names and Addresses of Purchasers
	Schedule B

	 	—
	 	Defined Terms
	 
	Exhibit 1.1

	 	—
	 	Form of 5.78% Senior Note due 2011
	Exhibit 1.2

	 	—
	 	Form of Subsidiary Guarantee
	Exhibit 4.4(a)

	 	—
	 	Form of Opinion of Special Counsel for the Company
	Exhibit 4.4(b)

	 	—
	 	Form of Opinion of Special Counsel for the Purchasers
	Schedule 5.3

	 	—
	 	Disclosure Documents
	Schedule 5.4

	 	—
	 	Subsidiaries
	Schedule 5.5

	 	—
	 	Financial Statements
	Schedule 5.15

	 	—
	 	Existing Indebtedness

(iii)

 

SPARTECH CORPORATION

120 South Central

Suite 1700

Clayton, MO 63105

5.78% Senior Notes due 2011

As of June 5, 2006

TO EACH OF THE PURCHASERS LISTED

IN THE ATTACHED SCHEDULE A:

Ladies and Gentlemen:

          SPARTECH CORPORATION, a Delaware corporation (the “Company”), agrees with each of the
purchasers whose names appear at the end hereof (each, a “Purchaser” and, collectively, the
“Purchasers”) as follows:

1. AUTHORIZATION OF NOTES, ETC.

1.1. The Notes.

          The Company has duly authorized the issue and sale of $50,000,000 aggregate principal amount
of its 5.78% Senior Notes due 2011(the “Notes”), such notes to be substantially in the form set out
in Exhibit 1.1. As used herein, the term “Notes” shall mean all notes delivered pursuant to this
Agreement and all notes delivered in substitution or exchange for any such note and, where
applicable, shall include the singular number as well as the plural. Certain capitalized and other
terms used in this Agreement are defined in Schedule B; and references to a “Schedule” or an
“Exhibit” are, unless otherwise specified, to a Schedule or an Exhibit attached to this Agreement.

     1.2. The Subsidiary Guarantees.

          The Notes will be unconditionally guaranteed by each of the Company’s existing Domestic
Subsidiaries (except Subsidiaries that are inactive, have no assets other than ownership interests
in other Domestic Subsidiaries or relate solely to Preferred Securities Agreements), pursuant to
subsidiary guarantees substantially in the form of Exhibit 1.2 (individually a “Subsidiary
Guarantee” and collectively the “Subsidiary Guarantees”, which terms shall include after the date
of the Closing all additional Subsidiary Guarantees from time to time executed and delivered
pursuant to Section 9.6).

2. SALE AND PURCHASE OF NOTES.

          Subject to the terms and conditions of this Agreement, the Company will issue and sell to each
Purchaser and each Purchaser will purchase from the Company, at the Closing provided for in Section
3, Notes in the principal amount specified opposite its name in Schedule

 

 

A at the purchase price of 100% of the principal amount thereof. The obligations of the
Purchasers under this Agreement are several and not joint obligations and no Purchaser shall have
any liability to any Person for the performance or non-performance by any other Purchaser
hereunder.

3. CLOSING.

          The sale and purchase of the Notes to be purchased by each Purchaser shall occur at the
offices of Willkie Farr & Gallagher LLP, 787 Seventh Avenue, New York, NY 10019 at 10:00 a.m., New
York time, at a closing (the “Closing”) on June 5, 2006 or on such other Business Day thereafter as
may be agreed upon by the Company and the Purchasers. At the Closing the Company will deliver to
each Purchaser the Notes to be purchased by such Purchaser in the form of a single Note (or such
greater number of Notes in denominations of at least $100,000 as such Purchaser may request) dated
the date of the Closing and registered in such Purchaser’s name (or in the name of its nominee),
against delivery by such Purchaser to the Company or its order of immediately available funds in
the amount of the purchase price therefor by wire transfer of immediately available funds for the
account of the Company, account number 86669-02794 at Bank of America Illinois, 

ABA # 026-009-593.

          If at the Closing the Company shall fail to tender such Notes to any Purchaser as provided
above in this Section 3, or any of the conditions specified in Section 4 shall not have been
fulfilled to such Purchaser’s satisfaction, such Purchaser shall, at its election, be relieved of
all further obligations under this Agreement, without thereby waiving any rights such Purchaser may
have by reason of such failure or such nonfulfillment.

4. CONDITIONS TO CLOSING.

          The obligation of each Purchaser to purchase and pay for the Notes to be sold to it at the
Closing is subject to the fulfillment to such Purchaser’s satisfaction, prior to or at the Closing,
of the following conditions:

4.1. Representations and Warranties.

          The representations and warranties of the Company in this Agreement shall be correct when made
and at the time of the Closing.

4.2. Performance; No Default.

          The Company shall have performed and complied with all agreements and conditions contained in
this Agreement required to be performed or complied with by it prior to or at the Closing and after
giving effect to the issue and sale of the Notes (and the application of the proceeds thereof as
contemplated by Section 5.14) no Default or Event of Default shall have occurred and be continuing.

2

 

4.3. Compliance Certificates.

          (a) Officer’s Certificate. The Company shall have delivered to such Purchaser an
Officer’s Certificate, dated the date of the Closing, certifying that the conditions specified in
Sections 4.1, 4.2 and 4.10 have been fulfilled.

          (b) Secretary’s Certificate. The Company shall have delivered to such Purchaser a
certificate of its Secretary or Assistant Secretary, dated the date of the Closing, certifying as
to the resolutions attached thereto and other corporate proceedings relating to the authorization,
execution and delivery of the Notes and this Agreement.

4.4. Opinions of Counsel.

          Such Purchaser shall have received opinions in form and substance satisfactory to it, dated
the date of the Closing (a) from Armstrong Teasdale LLP, special counsel for the Company,
substantially in the form set forth in Exhibit 4.4(a) and covering such other matters incident to
the transactions contemplated hereby as such Purchaser or its counsel may reasonably request (and
the Company hereby instructs its counsel to deliver such opinion to each Purchaser) and (b) from
Willkie Farr & Gallagher LLP, the Purchasers’ special counsel in connection with such transactions,
substantially in the form set forth in Exhibit 4.4(b) and covering such other matters incident to
such transactions as such Purchaser may reasonably request.

4.5. Subsidiary Guarantees.

          A Subsidiary Guarantee, dated as of a date on or before the date of the Closing, shall have
been executed and delivered by each Domestic Subsidiary identified as a Subsidiary Guarantor on
Schedule 5.4 (sometimes individually called a “Subsidiary Guarantor” and collectively the
“Subsidiary Guarantors”, which terms shall include after the date of the Closing all other
Significant Subsidiaries that from time to time execute and deliver additional Subsidiary
Guarantees pursuant to Section 9.6) in the form hereinabove recited and shall be in full force and
effect.

4.6. Purchase Permitted by Applicable Law, etc.

          On the date of the Closing such Purchaser’s purchase of Notes shall (a) be permitted by the
laws and regulations of each jurisdiction to which such Purchaser is subject, without recourse to
provisions (such as section 1405(a)(8) of the New York Insurance Law) permitting limited
investments by insurance companies without restriction as to the character of the particular
investment, (b) not violate any applicable law or regulation (including, without limitation,
Regulation T, U or X of the Board of Governors of the Federal Reserve System) and (c) not subject
such Purchaser to any tax, penalty or liability under or pursuant to any applicable law or
regulation, which law or regulation was not in effect on the date hereof. If requested by such
Purchaser, such Purchaser shall have received an Officer’s Certificate certifying as to such
matters of fact as such Purchaser may reasonably specify to enable such Purchaser to determine
whether such purchase is so permitted.

3

 

4.7. Sale of Notes to Other Purchasers.

          The Company shall sell to the other Purchasers and the other Purchasers shall purchase the
Notes to be purchased by them at the Closing as specified in Schedule A.

4.8. Payment of Special Counsel Fees.

          Without limiting the provisions of Section 15.1, the Company shall have paid on or before the
Closing the reasonable fees, charges and disbursements of the Purchasers’ special counsel referred
to in Section 4.4 to the extent reflected in a statement of such counsel rendered to the Company at
least one Business Day prior to the Closing.

4.9. Private Placement Number.

          A Private Placement Number issued by Standard & Poor’s CUSIP Service Bureau (in cooperation
with the Securities Valuation Office of the National Association of Insurance Commissioners) shall
have been obtained for the Notes.

4.10. Funding Instructions.

          At least three Business Days prior to the date of the Closing, each Purchaser shall have
received written instructions signed by a Responsible Officer on letterhead of the Company
confirming the information specified in Section 3 including (a) the name and address of the
transferee bank, (b) such transferee bank’s ABA number and (c) the account name and number into
which the purchase price for the Notes is to be deposited.

4.11. Changes in Corporate Structure.

          The Company shall not have changed its jurisdiction of incorporation or been a party to any
merger or consolidation or succeeded to all or any substantial part of the liabilities of any other
entity at any time following the date of the most recent financial statements referred to in
Schedule 5.5.

4.12. Rating.

          At the Closing, such Purchaser shall have received evidence satisfactory to it that the
Company itself has, or securities evidencing unsecured and unsubordinated Indebtedness of the
Company having an initial maturity of five years or more have, a rating by a nationally recognized
statistical rating organization of at least investment grade; and for such purpose “investment
grade” means, if such rating organization is Standard & Poor’s Ratings Group, a rating of at least
“BBB-”, or if such rating organization is Moody’s Investor Service Inc., a rating of at least
“Baa3”, and in the case of any other such rating organization, the equivalent of either of the
ratings so described.

4.13. Proceedings and Documents.

          All corporate and other proceedings in connection with the transactions contemplated by this
Agreement and all documents and instruments incident to such transactions

4

 

shall be satisfactory to such Purchaser and its special counsel, and such Purchaser and its
special counsel shall have received all such counterpart originals or certified or other copies of
such documents as such Purchaser or such special counsel may reasonably request.

5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

          The Company represents and warrants to each Purchaser that:

5.1. Organization; Power and Authority.

          The Company is a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation, and is duly qualified as a foreign corporation and is in
good standing in each jurisdiction in which such qualification is required by law, other than those
jurisdictions as to which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The
Company has the corporate power and authority to own or hold under lease the properties it purports
to own or hold under lease, to transact the business it transacts and proposes to transact, to
execute and deliver this Agreement and the Notes and to perform the provisions hereof and thereof.

5.2. Authorization, etc.

          This Agreement and the Notes have been duly authorized by all necessary corporate action on
the part of the Company, and this Agreement constitutes, and upon execution and delivery thereof
each Note will constitute, a legal, valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except as such enforceability may be limited by (a)
applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors’ rights generally and (b) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

5.3. Disclosure.

          This Agreement and the documents, certificates or other writings delivered to the Purchasers
by or on behalf of the Company in connection with the transactions contemplated hereby and
described in Schedule 5.3 (the “Disclosure Documents”), and the financial statements listed in
Schedule 5.5, taken as a whole, do not contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein not misleading in light of the
circumstances under which they were made. Since October 29, 2005, there has been no change in the
financial condition, operations, business, properties or prospects of the Company or any Subsidiary
except as disclosed in the Disclosure Documents or in the financial statements listed in
Schedule 5.5 and other changes that individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect. There is no fact known to the Company that could
reasonably be expected to have a Material Adverse Effect that has not been set forth herein or in
the Disclosure Documents.

5

 

5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates.

          (a) Schedule 5.4 contains (except as noted therein) complete and correct lists of the
Company’s (i) Subsidiaries, showing, as to each Subsidiary, the correct name thereof, the
jurisdiction of its organization, and the percentage of shares of each class of its capital stock
or similar equity interests outstanding owned by the Company and each other Subsidiary, (ii)
Affiliates, other than Subsidiaries, and (iii) directors and senior officers. Schedule 5.4 also
identifies each Significant Subsidiary and each Domestic Subsidiary required to become a Subsidiary
Guarantor pursuant to Section 4.5.

          (b) All of the outstanding shares of capital stock or similar equity interests of each
Subsidiary shown in Schedule 5.4 as being owned by the Company and its Subsidiaries have been
validly issued, are fully paid and nonassessable and are owned by the Company or another Subsidiary
free and clear of any Lien (except as otherwise disclosed in Schedule 5.4).

          (c) Each Subsidiary identified in Schedule 5.4 is a corporation or other legal entity duly
organized, validly existing and in good standing under the laws of its jurisdiction of
organization, and is duly qualified as a foreign corporation or other entity and is in good
standing in each jurisdiction in which such qualification is required by law, other than those
jurisdictions as to which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each
such Subsidiary has the corporate or partnership power and authority to own or hold under lease the
properties it purports to own or hold under lease and to transact the business it transacts and
proposes to transact and, in the case of each such Domestic Subsidiary that is required to become a
Subsidiary Guarantor pursuant to Section 4.5, to execute and deliver and perform its obligations
under its respective Subsidiary Guarantee.

          (d) No Subsidiary is a party to, or otherwise subject to any legal restriction or any
agreement (other than this Agreement, the agreements listed in Schedule 5.4 and customary
limitations imposed by corporate law statutes) restricting the ability of such Subsidiary to pay
dividends out of profits or make any other similar distributions of profits to the Company or any
of its Subsidiaries that owns outstanding shares of capital stock or similar equity interests of
such Subsidiary.

5.5. Financial Statements.

          The Company has delivered to each Purchaser copies of the financial statements of the Company
and its Subsidiaries listed on Schedule 5.5. All of said financial statements (including in each
case the related schedules and notes) fairly present in all material respects the consolidated
financial position of the Company and its Subsidiaries as of the respective dates specified in such
Schedule and the consolidated results of their operations and cash flows for the respective periods
so specified and have been prepared in accordance with GAAP consistently applied throughout the
periods involved except as set forth in the notes thereto (subject, in the case of any interim
financial statements, to normal year-end adjustments). The Company and its Subsidiaries do not
have any Material liabilities that are not disclosed on such financial statements or otherwise
disclosed in the Disclosure Documents.

6

 

5.6. Compliance with Laws, Other Instruments, etc.

          The execution, delivery and performance by the Company of this Agreement and the Notes and by
the Subsidiary Guarantors of their respective Subsidiary Guarantees will not (i) contravene, result
in any breach of, or constitute a default under, or result in the creation of any Lien in respect
of any property of the Company or any Subsidiary under, any indenture, mortgage, deed of trust,
loan, purchase or credit agreement, lease, corporate charter, by-laws or other organization
document, or any other agreement or instrument to which the Company or any Subsidiary is bound or
by which the Company or any Subsidiary or any of their respective properties may be bound or
affected, (ii) conflict with or result in a breach of any of the terms, conditions or provisions of
any order, judgment, decree, or ruling of any court, arbitrator or Governmental Authority
applicable to the Company or any Subsidiary or (iii) violate any provision of any statute or other
rule or regulation of any Governmental Authority applicable to the Company or any Subsidiary.

5.7. Governmental Authorizations, etc.

          No consent, approval or authorization of, or registration, filing or declaration with, any
Governmental Authority is required for the validity of the execution, delivery or performance by
the Company of this Agreement or the Notes or by the Subsidiary Guarantors of their respective
Subsidiary Guarantees.

5.8. Litigation; Observance of Agreements, Statutes and Orders.

          (a) There are no actions, suits or proceedings pending or, to the knowledge of the Company,
threatened against or affecting the Company or any Subsidiary or any property of the Company or any
Subsidiary in any court or before any arbitrator of any kind or before or by any Governmental
Authority that, individually or in the aggregate, could reasonably be expected to have a Material
Adverse Effect.

          (b) Neither the Company nor any Subsidiary is in default under any term of any agreement or
instrument to which it is a party or by which it is bound, or any order, judgment, decree or ruling
of any court, arbitrator or Governmental Authority or is in violation of any applicable law,
ordinance, rule or regulation (including without limitation Environmental Laws) of any Governmental
Authority, which default or violation, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.

5.9. Taxes.

          The Company and its Subsidiaries have filed all tax returns that are required to have been
filed in any jurisdiction, and have paid all taxes shown to be due and payable on such returns and
all other taxes and assessments levied upon them or their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before they have become
delinquent, except for any taxes and assessments (a) currently payable without penalty or interest,
(b) the amount of which is not individually or in the aggregate Material or (c) the amount,
applicability or validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which the Company or a Subsidiary, as the case may be, has
established adequate reserves in accordance with GAAP. The Company knows 

of no

7

 

basis for any other tax or assessment that could reasonably be expected to have a Material
Adverse Effect. The charges, accruals and reserves on the books of the Company and its
Subsidiaries in respect of Federal, state or other taxes for all fiscal periods are adequate. The
Federal income tax liabilities of the Company and its Subsidiaries have been determined by the
Internal Revenue Service and paid for all fiscal years up to and including the fiscal year ended
November 2, 2002.

5.10. Title to Property; Leases.

          The Company and its Subsidiaries have good and marketable title to their respective real
properties and good and sufficient title to their respective other properties that individually or
in the aggregate are Material, including all such properties reflected in the most recent audited
balance sheet listed on Schedule 5.5 or purported to have been acquired by the Company or any
Subsidiary after said date (except as sold or otherwise disposed of in the ordinary course of
business), in each case free and clear of Liens prohibited by this Agreement. All leases that
individually or in the aggregate are Material are valid and subsisting and are in full force and
effect in all material respects.

5.11. Licenses, Permits, etc.

          (a) The Company and its Subsidiaries own or possess all licenses, permits, franchises,
authorizations, patents, copyrights, proprietary software, service marks, trademarks and trade
names, or rights thereto, that individually or in the aggregate are Material, without known
conflict with the rights of others.

          (b) To the best knowledge of the Company, no product of the Company infringes in any material
respect any license, permit, franchise, authorization, patent, copyright, proprietary software,
service mark, trademark, trade name or other right owned by any other Person.

          (c) To the best knowledge of the Company, there is no Material violation by any Person of any
right of the Company or any of its Subsidiaries with respect to any patent, copyright, proprietary
software, service mark, trademark, trade name or other right owned or used by the Company or any of
its Subsidiaries.

5.12. Compliance with ERISA.

          (a) The Company and each ERISA Affiliate have operated and administered each Plan in
compliance with all applicable laws except for such instances of noncompliance as have not resulted
in and could not reasonably be expected to result in a Material Adverse Effect. Neither the
Company nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or
the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in
section 3 of ERISA), and no event, transaction or condition has occurred or exists that could
reasonably be expected to result in the incurrence of any such liability by the Company or any
ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of the
Company or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to such
penalty or excise tax provisions or to section 401(a)(29) or 412 of the

8

 

Code or section 4068 of ERISA, other than such liabilities or Liens as would not be
individually or in the aggregate Material.

          (b) The present value of the aggregate benefit liabilities under each of the Plans (other than
Multiemployer Plans), determined as of the end of such Plan’s most recently ended plan year on the
basis of the actuarial assumptions specified for funding purposes in such Plan’s most recent
actuarial valuation report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities by more than $10,000,000 in the aggregate for all Plans. The
term “benefit liabilities” has the meaning specified in section 4001 of ERISA and the terms
“current value” and “present value” have the meaning specified in section 3 of ERISA.

          (c) The Company and its ERISA Affiliates have not incurred withdrawal liabilities (and are not
subject to contingent withdrawal liabilities) under section 4201 or 4204 of ERISA in respect of
Multiemployer Plans that individually or in the aggregate are Material.

          (d) The expected postretirement benefit obligation (determined as of the last day of the
Company’s most recently ended fiscal year in accordance with Financial Accounting Standards Board
Statement No. 106, without regard to liabilities attributable to continuation coverage mandated by
section 4980B of the Code) of the Company and its Subsidiaries is not Material.

          (e) The execution and delivery of this Agreement and the issuance and sale of the Notes
hereunder will not involve any transaction that is subject to the prohibitions of section 406 of
ERISA or in connection with which a tax could be imposed pursuant to section 4975(c)(1)(A)-(D) of
the Code. The representation by the Company to each Purchaser in the first sentence of this
Section 5.12(e) is made in reliance upon and subject to the accuracy of such Purchaser’s
representation in Section 6.2 as to the sources of the funds used to pay the purchase price of the
Notes to be purchased by such Purchaser.

5.13. Private Offering by the Company.

          Neither the Company nor anyone acting on its behalf has offered the Notes, the Subsidiary
Guarantees or any similar securities for sale to, or solicited any offer to buy any of the same
from, or otherwise approached or negotiated in respect thereof with, any person other than the
Purchasers, each of which has been offered the Notes at a private sale for investment. Neither the
Company nor anyone acting on its behalf has taken, or will take, any action that would subject the
issuance or sale of the Notes or the issuance of the Subsidiary Guarantees to the registration
requirements of Section 5 of the Securities Act.

5.14. Use of Proceeds; Margin Regulations.

          The Company will apply the net proceeds of the sale of the Notes to make partial redemption of
securities issued under outstanding Preferred Securities Agreements or to repay bank indebtedness
incurred to redeem securities issued under outstanding Preferred Securities Agreements. No part of
the proceeds from the sale of the Notes hereunder will be used, and no part of the proceeds of such
securities being redeemed was used, directly or indirectly, for the purpose of buying or carrying
any margin stock within the meaning of Regulation U of the Board

9

 

of Governors of the Federal Reserve System (12 CFR 221), or for the purpose of buying or
carrying or trading in any securities under such circumstances as to involve the Company in a
violation of Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a
violation of Regulation T of said Board (12 CFR 220). Margin stock does not constitute more than
5% of the value of the consolidated assets of the Company and its Subsidiaries and the Company does
not have any present intention that margin stock will constitute more than 5% of the value of such
assets. As used in this Section, the terms “margin stock” and “purpose of buying or carrying”
shall have the meanings assigned to them in said Regulation U.

5.15. Existing Indebtedness; Future Liens.

          (a) Schedule 5.15 sets forth a complete and correct list of all outstanding Indebtedness of
the Company and its Subsidiaries in an unpaid principal amount exceeding $1,000,000 as of April 29,
2006, since which date there has been no Material change in the amounts, interest rates, sinking
funds, installment payments or maturities of the Indebtedness of the Company or its Subsidiaries.
Neither the Company nor any Subsidiary is in default, and no waiver of default is currently in
effect, in the payment of any principal or interest on any Indebtedness of the Company or such
Subsidiary in an unpaid principal amount exceeding $1,000,000, and no event or condition exists
with respect to any such Indebtedness of the Company or any Subsidiary that would permit (or that
with the giving of notice or the lapse of time, or both, would permit) one or more Persons to cause
such Indebtedness to become due and payable before its stated maturity or before its regularly
scheduled dates of payment.

          (b) Except as disclosed in Schedule 5.15, neither the Company nor any Subsidiary has agreed or
consented to cause or permit in the future (upon the happening of a contingency or otherwise) any
of its property, whether now owned or hereafter acquired, to be subject to a Lien not permitted by
Section 10.2.

5.16. Foreign Assets Control Regulations, etc.

          (a) Neither the sale of the Notes by the Company hereunder nor its use of the proceeds thereof
will violate the Trading with the Enemy Act, as amended, or any of the foreign assets control
regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or
any enabling legislation or executive order relating thereto.

          (b) Neither the Company nor any Subsidiary (i) is a Person described or designated in the
Specially Designated Nationals and Blocked Persons List of the Office of Foreign Assets Control or
in Section 1 of the Anti-Terrorism Order or (ii) knowingly engages in any dealings or transactions
with any such Person. The Company and its Subsidiaries are in compliance, in all material
respects, with the USA Patriot Act.

          (c) No part of the proceeds from the sale of the Notes hereunder will be used, directly or
indirectly, for any payments to any governmental official or employee, political party, official of
a political party, candidate for political office, or anyone else acting in an official capacity,
in order to obtain, retain or direct business or obtain any improper advantage, in violation of the
United States Foreign Corrupt Practices Act of 1977, as amended, assuming in all cases that such
Act applies to the Company.

10

 

5.17. Status Under Certain Statutes.

          Neither the Company nor any Subsidiary is subject to regulation under the Investment Company
Act of 1940, as amended, the Public Utility Holding Company Act of 1935, as amended, the ICC
Termination Act of 1995, as amended, or the Federal Power Act, as amended.

5.18. Environmental Matters.

          Neither the Company nor any Subsidiary has knowledge of any claim or has received any notice
of any claim, and no proceeding has been instituted raising any claim against the Company or any of
its Subsidiaries or any of their respective real properties now or formerly owned, leased or
operated by any of them or other assets, alleging any damage to the environment or violation of any
Environmental Laws, except, in each case, such as could not reasonably be expected to result in a
Material Adverse Effect. Except as otherwise disclosed to you in writing prior to your execution
and delivery of this Agreement,

     (a) neither the Company nor any Subsidiary has knowledge of any facts which would give
rise to any claim, public or private, of violation of Environmental Laws or damage to the
environment emanating from, occurring on or in any way related to real properties now or
formerly owned, leased or operated by any of them or to other assets or their use, except,
in each case, such as could not reasonably be expected to result in a Material Adverse
Effect;

     (b) neither the Company nor any of its Subsidiaries has stored any Hazardous Materials
on real properties now or formerly owned, leased or operated by any of them and has not
disposed of any Hazardous Materials in a manner contrary to any Environmental Laws in each
case in any manner that could reasonably be expected to result in a Material Adverse Effect;
and

     (c) all buildings on all real properties now owned, leased or operated by the Company
or any of its Subsidiaries are in compliance with applicable Environmental Laws, except
where failure to comply could not reasonably be expected to result in a Material Adverse
Effect.

5.19. Solvency.

          The Company is, and after giving effect to the issuance of the Notes on the date of the
Closing will be, a “solvent institution”, as said term is used in Section 1405(c) of the New York
Insurance Law, whose “obligations . . . are not in default as to principal or interest”, as said
terms are used in said Section 1405(c).

6. REPRESENTATIONS OF THE PURCHASER.

6.1. Purchase of Notes.

          Each Purchaser severally represents that it is purchasing the Notes for its own account or for
one or more separate accounts maintained by such Purchaser or for the account of

11

 

one or more pension or trust funds and not with a view to the distribution thereof, provided
that the disposition of such Purchaser’s or their property shall at all times be within such
Purchaser’s or their control. Each Purchaser understands that the Notes have not been registered
under the Securities Act and may be resold only if registered pursuant to the provisions of the
Securities Act or if an exemption from registration is available, except under circumstances where
neither such registration nor such an exemption is required by law, and that the Company is not
required to register the Notes.

6.2. Source of Funds.

          Each Purchaser severally represents that at least one of the following statements is an
accurate representation as to each source of funds (a “Source”) to be used by such Purchaser to pay
the purchase price of the Notes to be purchased by such Purchaser hereunder:

     (a) the Source is an “insurance company general account” (as the term is defined in the
United States Department of Labor’s Prohibited Transaction Exemption (“PTE”) 95-60) in
respect of which the reserves and liabilities (as defined by the annual statement for life
insurance companies approved by the National Association of Insurance Commissioners (the
“NAIC Annual Statement”)) for the general account contract(s) held by or on behalf of any
employee benefit plan together with the amount of the reserves and liabilities for the
general account contract(s) held by or on behalf of any other employee benefit plans
maintained by the same employer (or affiliate thereof as defined in PTE 95-60) or by the
same employee organization in the general account do not exceed 10% of the total reserves
and liabilities of the general account (exclusive of separate account liabilities) plus
surplus as set forth in the NAIC Annual Statement filed with such Purchaser’s state of
domicile; or

     (b) the Source is a separate account that is maintained solely in connection with such
Purchaser’s fixed contractual obligations under which the amounts payable, or credited, to
any employee benefit plan (or its related trust) that has any interest in such separate
account (or to any participant or beneficiary of such plan (including any annuitant)) are
not affected in any manner by the investment performance of the separate account; or

     (c) the Source is either (i) an insurance company pooled separate account, within the
meaning of PTE 90-1 or (ii) a bank collective investment fund, within the meaning of PTE
91-38 and, except as disclosed by such Purchaser to the Company in writing pursuant to this
clause (c), no employee benefit plan or group of plans maintained by the same employer or
employee organization beneficially owns more than 10% of all assets allocated to such pooled
separate account or collective investment fund; or

     (d) the Source constitutes assets of an “investment fund” (within the meaning of Part V
of PTE 84-14 (the “QPAM Exemption”)) managed by a “qualified professional asset manager” or
“QPAM” (within the meaning of Part V of the QPAM Exemption), no employee benefit plan’s
assets that are included in such investment fund, when combined with the assets of all other
employee benefit plans established or maintained by the same employer or by an affiliate
(within the meaning of Section

12

 

V(c)(1) of the QPAM Exemption) of such employer or by the same employee organization
and managed by such QPAM, exceed 20% of the total client assets managed by such QPAM, the
conditions of Part I(c) and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a
person controlling or controlled by the QPAM (applying the definition of “control” in
Section V(e) of the QPAM Exemption) owns a 5% or more interest in the Company and (i) the
identity of such QPAM and (ii) the names of all employee benefit plans whose assets are
included in such investment fund have been disclosed to the Company in writing pursuant to
this clause (d); or

     (e) the Source constitutes assets of a “plan(s)” (within the meaning of Section IV of
PTE 96-23 (the “INHAM Exemption”)) managed by an “in-house asset manager” or “INHAM” (within
the meaning of Part IV of the INHAM exemption), the conditions of Part I(a), (g) and (h) of
the INHAM Exemption are satisfied, neither the INHAM nor a person controlling or controlled
by the INHAM (applying the definition of “control” in Section IV(d) of the INHAM Exemption)
owns a 5% or more interest in the Company and (i) the identity of such INHAM and (ii) the
name(s) of the employee benefit plan(s) whose assets constitute the Source have been
disclosed to the Company in writing pursuant to this clause (e); or

     (f) Source is a governmental plan; or

     (g) the Source is one or more employee benefit plans, or a separate account or trust
fund comprised of one or more employee benefit plans, each of which has been identified to
the Company in writing pursuant to this clause (g); or

     (h) the Source does not include assets of any employee benefit plan, other than a plan
exempt from the coverage of ERISA.

     As used in this Section 6.2, the terms “employee benefit plan,” “governmental plan,” and “separate
account” shall have the respective meanings assigned to such terms in section 3 of ERISA.

7. INFORMATION AS TO COMPANY.

7.1. Financial and Business Information.

          The Company shall deliver to each holder of Notes that is an Institutional Investor:

     (a) Quarterly Statements — within 60 days after the end of each quarterly
fiscal period in each fiscal year of the Company (other than the last quarterly fiscal
period of each such fiscal year), duplicate copies of,

     (i) a consolidated balance sheet of the Company and its Subsidiaries as at the
end of such quarter, and

     (ii) consolidated statements of income, changes in shareholders’ equity and
cash flows of the Company and its Subsidiaries, for such quarter and (in the

13

 

case of the second and third quarters) for the portion of the fiscal year
ending with such quarter,

setting forth in each case in comparative form the figures for the corresponding periods in
the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP
applicable to quarterly financial statements generally, and certified by a Senior Financial
Officer as fairly presenting, in all material respects, the financial position of the
companies being reported on and their results of operations and cash flows, subject to
changes resulting from year-end adjustments, provided that delivery within the time period
specified above of copies of the Company’s Quarterly Report on Form 10-Q prepared in
compliance with the requirements therefor and filed with the Securities and Exchange
Commission shall be deemed to satisfy the requirements of this Section 7.1(a);

     (b) Annual Statements — within 105 days after the end of each fiscal year of
the Company, duplicate copies of,

     (i) a consolidated balance sheet of the Company and its Subsidiaries as at the
end of such year, and

     (ii) consolidated statements of income, changes in shareholders’ equity and
cash flows of the Company and its Subsidiaries for such year,

setting forth in each case in comparative form the figures for the previous fiscal year, all
in reasonable detail, prepared in accordance with GAAP, and accompanied by

     (A) an opinion thereon of independent public accountants of recognized
national standing, which opinion shall state that such financial statements present
fairly, in all material respects, the financial position of the companies being
reported upon and their results of operations and cash flows and have been prepared
in conformity with GAAP, and that the examination of such accountants in connection
with such financial statements has been made in accordance with generally accepted
auditing standards, and that such audit provides a reasonable basis for such
opinion in the circumstances, and

     (B) a certificate of such accountants stating that they have reviewed this
Agreement and stating further whether, in making their audit, they have become
aware of any condition or event that then constitutes a Default or an Event of
Default, and, if they are aware that any such condition or event then exists,
specifying the nature and period of the existence thereof (it being understood that
such accountants shall not be liable, directly or indirectly, for any failure to
obtain knowledge of any Default or Event of Default unless such accountants should
have obtained knowledge thereof in making an audit in accordance with generally
accepted auditing standards or did not make such an audit),

provided that the delivery within the time period specified above of the Company’s Annual
Report on Form 10-K for such fiscal year (together with the Company’s annual report to
shareholders, if any, prepared pursuant to Rule 14a-3 under the Exchange Act)

14

 

prepared in accordance with the requirements therefor and filed with the SEC, together with
the accountant’s certificate described in clause (B) above, shall be deemed to satisfy the
requirements of this Section 7.1(b);

     (c) SEC and Other Reports — promptly upon their becoming available, one copy of
(i) each financial statement, report, notice or proxy statement sent by the Company or any
Subsidiary generally to its shareholders or its creditors (other than the Company or another
Subsidiary) or to its public securities holders generally, and (ii) each regular or periodic
report, each registration statement (without exhibits except as expressly requested by such
holder), and each prospectus and all amendments thereto filed by the Company or any
Subsidiary with the SEC and of each press release and other statement made available
generally by the Company or any Subsidiary to the public concerning developments that are
Material;

     (d) Notice of Default or Event of Default — promptly, and in any event within
five days after a Responsible Officer becoming aware of the existence of any Default or
Event of Default or that any Person has given any notice or taken any action with respect to
a claimed default hereunder or that any Person has given any notice or taken any action with
respect to a claimed default of the type referred to in Section 11(f), a written notice
specifying the nature and period of existence thereof and what action the Company is taking
or proposes to take with respect thereto;

     (e) ERISA Matters — promptly, and in any event within five days after a
Responsible Officer becoming aware of any of the following, a written notice setting forth
the nature thereof and the action, if any, that the Company or an ERISA Affiliate proposes
to take with respect thereto:

     (i) with respect to any Plan, any reportable event, as defined in
section 4043(b) of ERISA and the regulations thereunder, for which notice thereof
has not been waived pursuant to such regulations as in effect on the date hereof; or

     (ii) the taking by the PBGC of steps to institute, or the threatening by the
PBGC of the institution of, proceedings under section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan, or the
receipt by the Company or any ERISA Affiliate of a notice from a Multiemployer Plan
that such action has been taken by the PBGC with respect to such Multiemployer Plan;
or

     (iii) any event, transaction or condition that could result in the incurrence
of any liability by the Company or any ERISA Affiliate pursuant to Title I or IV of
ERISA or the penalty or excise tax provisions of the Code relating to employee
benefit plans, or in the imposition of any Lien on any of the rights, properties or
assets of the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA or
such penalty or excise tax provisions, if such liability or Lien, taken together
with any other such liabilities or Liens then existing, could reasonably be expected
to have a Material Adverse Effect;

15

 

     (f) Notices from Governmental Authority — promptly, and in any event within 30
days of receipt thereof, copies of any notice to the Company or any Subsidiary from any
Federal or state Governmental Authority relating to any order, ruling, statute or other law
or regulation that could reasonably be expected to have a Material Adverse Effect; and

     (g) Requested Information — with reasonable promptness, such other data and
information relating to the business, operations, affairs, financial condition, assets or
properties of the Company or any of its Subsidiaries or relating to the ability of the
Company to perform its obligations hereunder and under the Notes or relating to the ability
of a Subsidiary Guarantor to perform its obligations under its respective Subsidiary
Guarantee, in each case as from time to time may be reasonably requested by any such holder
of Notes.

7.2. Officer’s Certificate.

          Each set of financial statements delivered to a holder of Notes pursuant to Section 7.1(a) or
Section 7.1(b) shall be accompanied by a certificate of a Senior Financial Officer setting forth:

     (a) Covenant Compliance — the information (including detailed calculations)
required in order to establish whether the Company was in compliance with the requirements
of Sections 10.1 through 10.5, inclusive, during the quarterly or annual period covered by
the statements then being furnished (including with respect to each such Section, where
applicable, the calculations of the maximum or minimum amount, ratio or percentage, as the
case may be, permissible under the terms of such Sections, and the calculation of the
amount, ratio or percentage then in existence); and

     (b) Default — a statement that such Senior Financial Officer has reviewed the
relevant terms hereof and has made, or caused to be made, under his or her supervision, a
review of the transactions and conditions of the Company and its Subsidiaries from the
beginning of the quarterly or annual period covered by the statements then being furnished
to the date of the certificate and that such review shall not have disclosed the existence
during such period of any condition or event that constitutes a Default or an Event of
Default or, if any such condition or event existed or exists (including, without limitation,
any such event or condition resulting from the failure of the Company or any Subsidiary to
comply with any Environmental Law), specifying the nature and period of existence thereof
and what action the Company shall have taken or proposes to take with respect thereto.

7.3. Inspection.

          The Company shall permit the representatives of each holder of Notes that is an Institutional
Investor:

     (a) No Default — if no Default or Event of Default then exists, at the expense
of such holder and upon reasonable prior notice to the Company, to visit the principal
executive office of the Company, to discuss the affairs, finances and accounts of the

16

 

Company and its Subsidiaries with the Company’s officers, and (with the consent of the
Company, which consent will not be unreasonably withheld) its independent public
accountants, and (with the consent of the Company, which consent will not be unreasonably
withheld) to visit the other offices and properties of the Company and each Subsidiary, all
at such reasonable times and as often as may be reasonably requested in writing; and

     (b) Default — if a Default or Event of Default then exists, at the expense of
the Company, to visit and inspect any of the offices or properties of the Company or any
Subsidiary, to examine all their respective books of account, records, reports and other
papers, to make copies and extracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers, employees and independent public
accountants (and by this provision the Company authorizes said accountants to discuss the
affairs, finances and accounts of the Company and its Subsidiaries), all at such times and
as often as may be requested.

8. PAYMENT AND PREPAYMENT OF THE NOTES.

8.1. Payment at Maturity.

          As provided therein, the entire unpaid principal balance of the Notes shall be due and payable
on the stated maturity date thereof.

8.2. Optional Prepayments.

          The Company may, at its option and upon notice as provided below, prepay at any time after
June 5, 2009 all, or from time to time any part of, the Notes (in a minimum amount of $5,000,000
and otherwise in multiples of $1,000,000) at the principal amount so prepaid, together with
interest accrued thereon to the date of such prepayment, without any premium, provided that the
Company may not effect any such prepayment directly or indirectly from, or in anticipation of the
receipt of, the proceeds (or any part thereof) of any refinancing operation involving

     (a) the issuance or sale of Preferred Stock of the Company or any Affiliate of the
Company, if such Stock has a dividend rate lower than 5.78% per annum or is redeemable
(other than in liquidation) at the option of the Company or such Affiliate or any holder of
such Stock prior to the maturity date of the Notes, or

     (b) the incurring by the Company or any Affiliate of the Company of any Indebtedness
having a fixed rate of interest that is lower than 5.78% per annum or a Remaining Average
Life less than the Remaining Average Life of the Notes.

Each notice of prepayment of any of the Notes pursuant to this Section 8.2 shall state that such
prepayment is not being effected in contravention of the provisions of this Section.

          The Company will give each holder of Notes written notice of each optional prepayment under
this Section 8.2 not less than 30 days and not more than 60 days prior to the date fixed for such
prepayment. Each such notice shall specify the date fixed for such

17

 

prepayment (which shall be a Business Day), the aggregate principal amount of the Notes to be
prepaid on such date, the principal amount of Notes (if any) held by such holder to be prepaid
(determined in accordance with Section 8.3) and the interest to be paid on the prepayment date with
respect to such principal amount being prepaid.

8.3. Allocation of Partial Prepayments.

          In the case of a partial prepayment of the Notes pursuant to this Section 8, the principal
amount of the Notes to be prepaid shall be allocated among all the Notes at the time outstanding in
proportion, as nearly as practicable, to the respective unpaid principal amounts thereof.

8.4. Maturity; Surrender, etc.

          In the case of each prepayment of Notes pursuant to this Section 8, the principal amount of
each Note to be prepaid shall mature and become due and payable on the date fixed for such
prepayment, together with interest on such principal amount accrued to such date. From and after
such date, unless the Company shall fail to pay such principal amount when so due and payable,
together with the interest as aforesaid, interest on such principal amount shall cease to accrue.
Any Note paid or prepaid in full shall be surrendered to the Company and canceled and shall not be
reissued, and no Note shall be issued in lieu of any prepaid principal amount of any Note.

8.5. Purchase of Notes.

          The Company will not and will not permit any Affiliate to purchase, redeem, prepay or
otherwise acquire, directly or indirectly, any of the outstanding Notes except (a) upon the payment
or prepayment of the Notes in accordance with the terms of this Agreement and the Notes or (b)
pursuant to an offer made by the Company or any such Affiliate to all holders of the Notes to
purchase Notes on the same terms and conditions, pro rata among all Notes tendered, which offer
shall remain outstanding for a reasonable period of time (not to be less than 30 days).

          Any Notes so repurchased shall immediately upon acquisition thereof be canceled and no Notes
shall be issued in substitution or exchange therefor.

          Promptly and in any event within five Business Days after each such purchase of Notes, the
Company will furnish each holder of the Notes with a certificate of a Senior Financial Officer
describing such purchase (including the aggregate principal amount of Notes so purchased and the
purchase price therefor) and certifying that such purchase was made in compliance with the
requirements of this Section.

9. AFFIRMATIVE COVENANTS.

          The Company covenants that so long as any of the Notes are outstanding:

18

 

9.1. Compliance with Law.

          The Company will and will cause each of its Subsidiaries to comply with all laws, ordinances
or governmental rules or regulations to which each of them is subject, including without
limitation, ERISA, the USA Patriot Act and Environmental Laws, and will obtain and maintain in
effect all licenses, certificates, permits, franchises and other governmental authorizations
necessary to the ownership of their respective properties or to the conduct of their respective
businesses, in each case to the extent necessary to ensure that non-compliance with such laws,
ordinances or governmental rules or regulations or failures to obtain or maintain in effect such
licenses, certificates, permits, franchises and other governmental authorizations could not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

9.2. Insurance.

          The Company will and will cause each of its Subsidiaries to maintain, with financially sound
and reputable insurers, insurance with respect to their respective properties and businesses
against such casualties and contingencies, of such types, on such terms and in such amounts
(including deductibles, co-insurance and self-insurance, if adequate reserves are maintained with
respect thereto) as is customary in the case of entities of established reputations engaged in the
same or a similar business and similarly situated.

9.3. Maintenance of Properties.

          The Company will and will cause each of its Subsidiaries to maintain and keep, or cause to be
maintained and kept, their respective properties in good repair, working order and condition (other
than ordinary wear and tear), so that the business carried on in connection therewith may be
properly conducted at all times, provided that this Section shall not prevent the Company or any
Subsidiary from discontinuing the operation and the maintenance of any of its properties if such
discontinuance is desirable in the conduct of its business and the Company has concluded that such
discontinuance could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

9.4. Payment of Taxes and Claims.

          The Company will and will cause each of its Subsidiaries to file all tax returns required to
be filed in any jurisdiction and to pay and discharge all taxes shown to be due and payable on such
returns and all other taxes, assessments, governmental charges, or levies imposed on them or any of
their properties, assets, income or franchises, to the extent such taxes and assessments have
become due and payable and before they have become delinquent and all claims for which sums have
become due and payable that have or might become a Lien on properties or assets of the Company or
any Subsidiary, provided that neither the Company nor any Subsidiary need pay any such tax or
assessment or claim if (i) the amount, applicability or validity thereof is contested by the
Company or such Subsidiary on a timely basis in good faith and in appropriate proceedings, and the
Company or a Subsidiary has established adequate reserves therefor in accordance with GAAP on the
books of the Company or such Subsidiary or (ii) the nonpayment of all such taxes and assessments in
the aggregate could not reasonably be expected to have a Material Adverse Effect.

19

 

9.5. Corporate Existence, etc.

          The Company will at all times preserve and keep in full force and effect its corporate
existence. Subject to Sections 10.5 and 10.6, the Company will at all times preserve and keep in
full force and effect the corporate existence of each of its Subsidiaries (unless merged into the
Company or a Subsidiary) and all rights and franchises (as franchisee) of the Company and its
Subsidiaries unless, in the good faith judgment of the Company, the termination of or failure to
preserve and keep in full force and effect such corporate existence, right or franchise could not,
individually or in the aggregate, have a Material Adverse Effect.

9.6. Additional Subsidiary Guarantees; Release of Subsidiary Guarantees, etc.

          (a) Forthwith after any Person becomes a Domestic Subsidiary after the date of the Closing,
the Company will cause such Person to execute and deliver a Subsidiary Guarantee, unless such
Domestic Subsidiary (i) is substantially concurrently merged with or into the Company or any other
Subsidiary Guarantor (with the Company or such Subsidiary Guarantor being the surviving Person) or
(ii) inactive or has no assets other than the capital stock or other ownership interests of another
Domestic Subsidiary. Promptly and in any event within ten Business Days after the execution and
delivery of each such Subsidiary Guarantee, the Company will furnish each holder of the Notes with
a counterpart of such executed Subsidiary Guarantee, together with an opinion of Armstrong Teasdale
LLP or other counsel reasonably satisfactory to the Required Holders (which opinion shall be
reasonably satisfactory to the Required Holders and may be subject to customary exceptions,
qualifications and limitations under the circumstances) to the effect that such Subsidiary
Guarantee has been duly authorized, executed and delivered by such Subsidiary and is valid, binding
and enforceable in accordance with its terms. The Company will cause each Subsidiary Guarantee to
remain in full force and effect at all times after the execution and delivery thereof.

          (b) Any Subsidiary the Voting Stock of which is being disposed of in an Asset Sale in
accordance with the provisions of Section 10.5 shall, at the Company’s request, be discharged from
all of its obligations and liabilities under its Subsidiary Guarantee by the Required Holders
entering into a release in form and substance reasonably satisfactory to the Required Holders, and
you and each other holder of a Note, by acceptance of such Note, agree to enter into such a
satisfactory release promptly upon request, except that this sentence shall not apply (i) if a
Default or Event of Default has occurred and is continuing, (ii) to a Subsidiary if any amount is
then due and payable under its Subsidiary Guarantee or (iii) to a Subsidiary which at the time is a
guarantor of any other Indebtedness of the Company or another Subsidiary party to a Subsidiary
Guarantee that is not also concurrently being released.

          (c) In furtherance of the preceding paragraph (a): if Spartech Canada shall at any time
guarantee any Indebtedness of the Company (whether or not it is a Significant Subsidiary), the
Company will cause Spartech Canada to execute and deliver a Subsidiary Guarantee and otherwise
comply with the requirements of this Section 9.6, prior to or concurrently with the delivery by
Spartech Canada of any Guaranty in respect of such Indebtedness of the Company.

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10. NEGATIVE COVENANTS.

          The Company covenants that so long as any of the Notes are outstanding:

10.1. Total Indebtedness; Subsidiary Indebtedness.

          (a) The Company will not and will not permit any Subsidiary to create, assume, incur,
guarantee or otherwise be or become liable in respect of any Indebtedness except as follows (and
subject in the case of any Subsidiary to the further limitations of paragraph (b) below):

     (i) Indebtedness in respect of Preferred Securities Agreements;

     (ii) Borrowing Facility Indebtedness, provided that at the time such Borrowing Facility
Indebtedness is incurred the aggregate unpaid principal amount of Borrowing Facility
Indebtedness does not exceed the Maximum Amount as then in effect; and

     (iii) other Indebtedness (including Borrowing Facility Indebtedness in excess of the
Maximum Amount as then in effect), provided that immediately after giving effect thereto and
to the application of the proceeds of such other Indebtedness, the pro forma Total
Indebtedness to EBITDA Ratio does not exceed 3.50 to 1.

          (b) The Company will not permit any Subsidiary (other than a Subsidiary Guarantor) to create,
assume, incur, guarantee or otherwise be or become liable in respect of any Indebtedness except

     (i) Indebtedness secured by Liens permitted by Section 10.2(b) or (c),

     (ii) not more than (x) Can. $25,000,000 aggregate principal amount of Indebtedness
under the Spartech Canada Bank Credit Facility and (y) $20,000,000 (or the equivalent in the
currency of payment) under a line or term of credit obtained from banks to finance European
operations,

     (iii) Indebtedness (A) evidenced by the Subsidiary Guarantees and other guarantees in
respect of the 1997 Senior Notes, the 2004 Senior Notes and in respect of unsecured
Indebtedness of the Company and Spartech Canada outstanding under the Existing Bank Credit
Facilities and (B) in respect of Preferred Securities Agreements,

     (iv) Indebtedness owing to the Company or a Wholly-Owned Subsidiary Guarantor, and

     (v) other Indebtedness provided that immediately after giving effect to such other
Indebtedness the sum (without duplication) of (A) the aggregate unpaid principal amount of
Indebtedness (including Capitalized Lease Obligations) of the Company and its Subsidiaries
secured by Liens permitted by Section 10.2(e) plus (B) the aggregate unpaid principal amount
of Indebtedness of all Subsidiaries (other than Indebtedness of Subsidiary Guarantors and
Indebtedness permitted by clause (ii), (iii) or (iv) above) plus

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(C) the aggregate Attributable Debt in connection with all sale and leaseback
transactions of the Company and its Subsidiaries entered into after the date of the Closing
in accordance with the provisions of Section 10.3, does not exceed 15% of Consolidated
Capitalization.

          For purposes of this Section 10.1(b), a Subsidiary shall be deemed to have incurred
Indebtedness in respect of any obligation previously owed to the Company or to a Wholly-Owned
Subsidiary Guarantor on the date the obligee ceases for any reason to be the Company or a
Wholly-Owned Subsidiary Guarantor, a Subsidiary Guarantor shall be deemed to incur all of its
outstanding Indebtedness on the date such Subsidiary ceases for any reason to be a Subsidiary
Guarantor, and a Person that hereafter becomes a Subsidiary shall be deemed at that time to have
incurred all of its outstanding Indebtedness.

10.2. Liens.

          The Company will not and will not permit any Subsidiary to create, assume, incur or suffer to
exist any Lien upon or with respect to any property or assets, whether now owned or hereafter
acquired, securing any Indebtedness without making effective provision (pursuant to documentation
in form and substance reasonably satisfactory to the Required Holders) whereby the Notes shall be
secured by such Lien equally and ratably with or prior to any and all Indebtedness and other
obligations to be secured thereby, provided that nothing in this Section 10.2 shall prohibit

     (a) Liens in respect of property of the Company or a Subsidiary existing on the date of
the Closing and described in Schedule 5.15, but no extension, renewal or replacement of any
such Lien except as permitted by Section 10.2(e);

     (b) Liens in respect of property acquired or constructed by the Company or a Subsidiary
after the date of the Closing, which are created at the time of or within 180 days after
acquisition 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 Company 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 of property acquired by the Company or a Subsidiary after the date
of the Closing, 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 date of the
Closing becomes a Subsidiary or is consolidated with or merged with or into the Company or a
Subsidiary or sells, leases or otherwise disposes of all or substantially all of its
property to the Company 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 created in anticipation thereof), provided that in any such

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case no such Lien shall extend to or cover any other property of the Company or such
Subsidiary, as the case may be;

     (d) Liens securing Indebtedness owed by a Subsidiary to the Company or to a
Wholly-Owned Subsidiary Guarantor; and

     (e) Liens which would otherwise not be permitted by Section 10.2(a), (b), (c) or (d),
securing additional Indebtedness of the Company or a Subsidiary, provided that after giving
effect thereto the sum (without duplication) of (i) the aggregate unpaid principal amount of
Indebtedness (including Capitalized Lease Obligations) of the Company and its Subsidiaries
secured by such Liens permitted by this Section 10.2(e) plus (ii) the aggregate unpaid
principal amount of Indebtedness of Subsidiaries (other than Indebtedness of Subsidiary
Guarantors and Indebtedness permitted by clause (ii), (iii) or (iv) of Section 10.1(b)) plus
(iii) the aggregate Attributable Debt in connection with all sale and leaseback transactions
of the Company and its Subsidiaries entered into after the date of the Closing in accordance
with the provisions of Section 10.3, does not exceed 15% of Consolidated Capitalization.

          For purposes of this Section 10.2 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 Company or a Subsidiary shall be deemed to have been
created at that time.

10.3. Limitation on Sale and Leaseback Transactions.

          The Company will not, and will not permit any Subsidiary to 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 Company or any Subsidiary over a period in
excess of three years, unless either

     (a) after giving effect to such transaction and the incurrence of Attributable Debt in
respect thereof, the sum (without duplication) of (i) the aggregate unpaid principal amount
of Indebtedness (including Capitalized Lease Obligations) of the Company and its
Subsidiaries secured by such Liens permitted by Section 10.2(e) plus (ii) the aggregate
unpaid principal amount of Indebtedness of Subsidiaries (other than Indebtedness of
Subsidiary Guarantors and Indebtedness permitted by clause (ii), (iii) or (iv) of Section
10.1(b)) plus (iii) the aggregate Attributable Debt in connection with all sale and
leaseback transactions of the Company and its Subsidiaries entered into after the date of
the Closing in accordance with the provisions of this Section 10.3, does not exceed 15% of
Consolidated Capitalization, or

     (b) the net proceeds realized from the transfer are applied within 60 days after the
receipt thereof to the repayment of Indebtedness (and in that connection the Company shall
have made an offer to purchase, at not less than par and otherwise in accordance with
Section 8.5, Notes in an unpaid principal amount at least equal to a pro rata portion of all
such Indebtedness to be repaid, allocated among all Notes tendered).

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10.4. Maintenance of Net Worth.

          The Company will not at any time permit Consolidated Net Worth to be less than the sum of
(a) $300,000,000 plus (b) 25% of Consolidated Net Income for each fiscal year (beginning with the
fiscal year ending on October 28, 2006) for which Consolidated Net Income is positive.

10.5. Asset Sales.

          The Company will not and will not permit any Subsidiary to, directly or indirectly, make any
sale, transfer, lease (as lessor), loan or other disposition of any property or assets (an “Asset
Sale”) other than

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

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

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

     (i) immediately before and after giving effect thereto, (A) no Default or Event
of Default shall have occurred and be continuing and (B) the Company would be
permitted to incur at least $1 of additional Indebtedness under Section 10.1(a), and

     (ii) the aggregate net book value of property or assets disposed of in such
Asset Sale and all other Asset Sales by the Company and its Subsidiaries during the
immediately preceding twelve months does not exceed 15% of Consolidated
Capitalization (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),

and provided further that for purposes of clause (ii) above there shall be excluded the net book
value of property or assets disposed of in an Asset Sale if and to the extent such Asset Sale is
made for cash, payable in full upon the completion of such Asset Sale, and an amount equal to the
net proceeds realized upon such Asset Sale is applied by the Company or such Subsidiary, as the
case may be, within one year after the effective date of such Asset Sale (x) to reinvest in similar
categories of property or assets for use in the business of the Company and its Subsidiaries or (y)
to repay Indebtedness (and in that connection the Company shall have made an offer to purchase, at
not less than par and otherwise in accordance with Section 8.5, Notes in an unpaid principal amount
at least equal to a pro rata portion of all such Indebtedness to be repaid, allocated among all
Notes tendered).

          For purposes of this Section 10.5 any shares of Voting Stock of a Subsidiary that are the
subject of an Asset Sale shall be valued at the greater of (1) the fair market value of such shares
as determined in good faith by the Board of Directors of the Company and (2) the aggregate net book
value of the assets of such Subsidiary multiplied by a fraction of which the numerator is the
aggregate number of shares of Voting Stock of such Subsidiary disposed of in

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such Asset Sale and the denominator is the aggregate number of shares of Voting Stock of such
Subsidiary outstanding immediately prior to such Asset Sale.

10.6. Merger, Consolidation, etc.

          The Company will not and will not permit any Subsidiary to 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) a Subsidiary may consolidate with or merge with any other corporation or convey or
transfer all or substantially all of its assets to

     (i) the Company (provided that the Company shall be the continuing or surviving
corporation) or a then existing Wholly-Owned Subsidiary Guarantor, or

     (ii) 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
limitations of Section 10.5; and

     (b) the Company may consolidate with or merge with any other corporation or convey or
transfer all or substantially all of its assets to a corporation organized and existing
under the laws of the United States or any State thereof, provided that

     (i) if the Company is not the continuing, surviving or acquiring corporation
(the “surviving corporation”), the surviving corporation shall have (A) executed and
delivered to each holder of a Note its assumption of the due and punctual
performance and observance of all obligations of the Company under this Agreement,
the Other Agreements and the Notes and (B) caused to be delivered to each holder of
a Note an opinion of counsel reasonably satisfactory to the Required Holders to the
effect that all agreements or instruments effecting such assumption are enforceable
in accordance with their terms and comply with the terms hereof, and

     (ii) immediately after giving effect to such transaction, (A) no Default or
Event of Default shall have occurred and be continuing and (B) the Company would be
permitted to incur at least $1 of additional Indebtedness under Section 10.1(a).

No such conveyance, transfer or lease of substantially all of the assets of the Company shall have
the effect of releasing the Company or any successor corporation that shall theretofore have become
such in the manner prescribed in this Section 10.6 from its liability under this Agreement or the
Notes.

10.7. Transactions with Affiliates.

          The Company will not and will not permit any Subsidiary to enter into directly or indirectly
any transaction or group of related transactions (including without limitation the

25

 

purchase, lease, sale or exchange of properties of any kind or the rendering of any service)
with any Affiliate (other than the Company or another Subsidiary), except in the ordinary course
and pursuant to the reasonable requirements of the Company’s or such Subsidiary’s business and upon
fair and reasonable terms no less favorable to the Company or such Subsidiary than would be
obtainable in a comparable arm’s-length transaction with a Person not an Affiliate.

11. EVENTS OF DEFAULT.

          An “Event of Default” shall exist if any of the following conditions or events shall occur and
be continuing:

     (a) the Company defaults in the payment of any principal or premium, if any, on any
Note when the same becomes due and payable, whether at maturity or at a date fixed for
prepayment or by declaration or otherwise; or

     (b) the Company defaults in the payment of any interest on any Note for more than five
Business Days after the same becomes due and payable; or

     (c) the Company defaults in the performance of or compliance with any term contained in
Section 7.1(d) or Sections 10.1 to 10.6, inclusive (and, in the case of any such default
under Section 10.4, such default shall have continued for a period of 30 days after a
Responsible Officer obtains knowledge thereof if and so long as the Company is proceeding
diligently and in good faith, by issuing equity securities or otherwise, to remedy such
default during such 30-day period); or

     (d) the Company defaults in the performance of or compliance with any term contained
herein (other than those referred to in paragraphs (a), (b) and (c) of this Section 11) and
such default is not remedied within 30 days after a Responsible Officer obtains knowledge of
such default; or

     (e) any representation or warranty made in writing by or on behalf of the Company or by
any officer of the Company in this Agreement or in any writing furnished in connection with
the transactions contemplated hereby proves to have been false or incorrect in any material
respect on the date as of which made; or

     (f) (i) the Company or any Subsidiary is in default (as principal or as guarantor or
other surety) in the payment of any principal of or premium or make-whole amount or interest
on any Indebtedness (other than the Notes) that is outstanding in an aggregate principal
amount of at least $1,000,000 beyond any period of grace provided with respect thereto, or
(ii) the Company or any Subsidiary is in default in the performance of or compliance with
any term of any evidence of any Indebtedness or of any mortgage, indenture or other
agreement relating thereto or any other condition exists, and as a consequence of such
default or condition such Indebtedness has become, or has been declared, due and payable
before its stated maturity or before its regularly scheduled dates of payment, or (iii) as a
consequence of the occurrence or continuation of any event or condition (other than the
passage of time or the right of the holder of Indebtedness to convert such Indebtedness into
equity interests or a sale of assets or other transaction that is permitted if made in
connection with a repayment of Indebtedness), the Company or

26

 

any Subsidiary has become obligated to purchase or repay any Indebtedness before its
regular maturity or before its regularly scheduled dates of payment; or

     (g) the Company or any Significant Subsidiary (i) is generally not paying, or admits in
writing its inability to pay, its debts as they become due, (ii) files, or consents by
answer or otherwise to the filing against it of, a petition for relief or reorganization or
arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any
bankruptcy, insolvency, reorganization, moratorium or other similar law of any jurisdiction,
(iii) makes an assignment for the benefit of its creditors, (iv) consents to the appointment
of a custodian, receiver, trustee or other officer with similar powers with respect to it or
with respect to any substantial part of its property, (v) is adjudicated as insolvent or to
be liquidated, or (vi) takes corporate action for the purpose of any of the foregoing; or

     (h) a court or Governmental Authority of competent jurisdiction enters an order
appointing, without consent by the Company or any Significant Subsidiary, a custodian,
receiver, trustee or other officer with similar powers with respect to it or with respect to
any substantial part of its property, or constituting an order for relief or approving a
petition for relief or reorganization or any other petition in bankruptcy or for liquidation
or to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering
the dissolution, winding-up or liquidation of the Company or any such Subsidiary, or any
such petition shall be filed against the Company or any such Subsidiary and such petition
shall not be dismissed within 60 days; or

     (i) a final judgment or judgments for the payment of money aggregating in excess of
$500,000 are rendered against one or more of the Company and its Subsidiaries which
judgments are not, within 60 days after entry thereof, bonded, paid, discharged or stayed
pending appeal, or are not discharged within 60 days after the expiration of such stay; or

     (j) any Subsidiary Guarantee shall cease to be in full force and effect as an
enforceable instrument or any Subsidiary (or any Person at its authorized direction or on
its behalf) shall assert in writing that the Subsidiary Guarantee of such Subsidiary is
unenforceable in any material respect; or

     (k) if (i) any Plan shall fail to satisfy the minimum funding standards of ERISA or the
Code for any plan year or part thereof or a waiver of such standards or extension of any
amortization period is sought or granted under section 412 of the Code, (ii) a notice of
intent to terminate any Plan shall have been or is reasonably expected to be filed with the
PBGC or the PBGC shall have instituted proceedings under ERISA section 4042 to terminate or
appoint a trustee to administer any Plan or the PBGC shall have notified the Company or any
ERISA Affiliate that a Plan may become a subject of any such proceedings, (iii) the
aggregate “amount of unfunded benefit liabilities” (within the meaning of section
4001(a)(18) of ERISA) under all Plans, determined in accordance with Title IV of ERISA,
shall exceed $1,000,000, (iv) the Company or any ERISA Affiliate shall have incurred or is
reasonably expected to incur any liability pursuant to Title I or IV of ERISA or the penalty
or excise tax provisions of the Code relating to

27

 

employee benefit plans, (v) the Company or any ERISA Affiliate withdraws from any
Multiemployer Plan, or (vi) the Company or any Subsidiary establishes or amends any employee
welfare benefit plan that provides post-employment welfare benefits in a manner that would
increase the liability of the Company or any Subsidiary thereunder; and any such event or
events described in clauses (i) through (vi) above, either individually or together with any
other such event or events, could reasonably be expected to have a Material Adverse Effect.

          As used in Section 11(k), the terms “employee benefit plan” and “employee welfare benefit
plan” shall have the respective meanings assigned to such terms in section 3 of ERISA.

12. REMEDIES ON DEFAULT, ETC.

12.1. Acceleration.

          (a) If an Event of Default with respect to the Company described in paragraph (g) or (h) of
Section 11 has occurred, all the Notes then outstanding shall automatically become immediately due
and payable.

          (b) If any other Event of Default has occurred and is continuing, the Required Holders may at
any time at its or their option, by notice or notices to the Company, declare all the Notes at the
time outstanding to be immediately due and payable.

          (c) If any Event of Default described in paragraph (a) or (b) of Section 11 has occurred and
is continuing, any holder or holders of Notes at the time outstanding affected by such Event of
Default may at any time, at its or their option, by notice or notices to the Company, declare all
the Notes held by it or them to be immediately due and payable.

          Upon any Note becoming due and payable under this Section 12.1, whether automatically or by
declaration, such Note will forthwith mature and the entire unpaid principal amount of such Note,
plus (x) all accrued and unpaid interest thereon and (y) in the event that such Note shall become
due and payable prior to June 5, 2009, the Make-Whole Amount determined in respect of such
principal amount (to the full extent permitted by applicable law), shall all be immediately due and
payable, in each and every case without presentment, demand, protest or further notice, all of
which are hereby waived. The Company acknowledges, and the parties hereto agree, that each holder
of a Note has the right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided) and that the provision for payment of a Make-Whole Amount
by the Company in the event that the Notes are accelerated as a result of an Event of Default, is
intended to provide compensation for the deprivation of such right under such circumstances.

12.2. Other Remedies.

          If any Default or Event of Default has occurred and is continuing, and irrespective of whether
any Notes have become or have been declared immediately due and payable under Section 12.1, the
holder of any Note at the time outstanding may proceed to protect and enforce the rights of such
holder by an action at law, suit in equity or other appropriate proceeding,

28

 

whether for the specific performance of any agreement contained herein or in any Note, or for
an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise
of any power granted hereby or thereby or by law or otherwise.

12.3. Rescission.

          At any time after any Notes have been declared due and payable pursuant to paragraph (b) or
(c) of Section 12.1, the Required Holders, by written notice to the Company, may rescind and annul
any such declaration and its consequences if (a) the Company has paid all overdue interest on the
Notes, all principal of and premium, if any, on any Notes that are due and payable and are unpaid
other than by reason of such declaration, and all interest on such overdue principal and premium,
if any, and (to the extent permitted by applicable law) any overdue interest in respect of the
Notes, at the Default Rate, (b) all Events of Default and Defaults, other than the non-payment of
amounts that have become due solely by reason of such declaration, have been cured or have been
waived pursuant to Section 17, and (c) no judgment or decree has been entered for the payment of
any monies due pursuant hereto or to the Notes. No rescission and annulment under this Section
12.3 will extend to or affect any subsequent Event of Default or Default or impair any right
consequent thereon.

12.4. No Waivers or Election of Remedies, Expenses, etc.

          No course of dealing and no delay on the part of any holder of any Note in exercising any
right, power or remedy shall operate as a waiver thereof or otherwise prejudice such holder’s
rights, powers or remedies. No right, power or remedy conferred by this Agreement or by any Note
upon any holder thereof shall be exclusive of any other right, power or remedy referred to herein
or therein or now or hereafter available at law, in equity, by statute or otherwise. Without
limiting the obligations of the Company under Section 15, the Company will pay to the holder of
each Note on demand such further amount as shall be sufficient to cover all costs and expenses of
such holder incurred in any enforcement or collection under this Section 12, including without
limitation reasonable attorneys’ fees, expenses and disbursements.

13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.

13.1. Registration of Notes.

          The Company shall keep at its principal executive office a register for the registration and
registration of transfers of Notes. The name and address of each holder of one or more Notes, each
transfer thereof and the name and address of each transferee of one or more Notes shall be
registered in such register. Prior to due presentment for registration of transfer, the Person in
whose name any Note shall be registered shall be deemed and treated as the owner and holder thereof
for all purposes hereof, and the Company shall not be affected by any notice or knowledge to the
contrary. The Company shall give to any holder of a Note that is an Institutional Investor
promptly upon request therefor, a complete and correct copy of the names and addresses of all
registered holders of Notes.

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13.2. Transfer and Exchange of Notes.

          Upon surrender of any Note at the principal executive office of the Company for registration
of transfer or exchange (and in the case of a surrender for registration of transfer, accompanied
by a written instrument of transfer duly executed by the registered holder of such Note or such
holder’s attorney duly authorized in writing and accompanied by the address for notices of each
transferee of such Note or part thereof), within five Business Days thereafter the Company shall
execute and deliver, at the Company’s expense (except as provided below), one or more new Notes (as
requested by the holder thereof) in exchange therefor, in an aggregate principal amount equal to
the unpaid principal amount of the surrendered Note. Each such new Note shall be payable to such
Person as such holder may request. Each such new Note shall be dated and bear interest from the
date to which interest shall have been paid on the surrendered Note or dated the date of the
surrendered Note if no interest shall have been paid thereon. The Company may require payment of a
sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such
transfer of Notes. Notes shall not be transferred in denominations of less than $100,000, provided
that if necessary to enable the registration of transfer by a holder of its entire holding of
Notes, one Note may be in a denomination of less than $100,000.

          You agree that the Company shall not be required to register the transfer of any Note to any
Person (other than your nominee) or to any separate account maintained by you unless the Company
receives from the transferee a representation to the Company (and appropriate information as to any
separate accounts or other matters) to the same or similar effect with respect to the transferee as
is contained in Section 6.2 or other assurances reasonably satisfactory to the Company that such
transfer does not involve a prohibited transaction (as such term is used in Section 5.12(e). You
shall not be liable for any damages in connection with any such representations or assurances
provided to the Company by any transferee.

13.3. Replacement of Notes.

          Upon receipt by the Company of evidence reasonably satisfactory to it of the ownership of and
the loss, theft, destruction or mutilation of any Note (which evidence shall be, in the case of an
Institutional Investor, notice from such Institutional Investor of such ownership and such loss,
theft, destruction or mutilation), and

     (a) in the case of loss, theft or destruction, of indemnity reasonably satisfactory to
it (provided that if the holder of such Note is, or is a nominee for, an original Purchaser
or any other Institutional Investor, such Person’s own unsecured agreement of indemnity
shall be deemed to be satisfactory), or

     (b) in the case of mutilation, upon surrender and cancellation thereof,

within five Business Days thereafter the Company at its own expense shall execute and deliver, in
lieu thereof, a new Note, dated and bearing interest from the date to which interest shall have
been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen,
destroyed or mutilated Note if no interest shall have been paid thereon.

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14. PAYMENTS ON NOTES.

14.1. Place of Payment.

          Subject to Section 14.2, payments of principal, premium, if any, and interest becoming due and
payable on the Notes shall be made at the principal office of Citibank, N.A. in New York City. The
Company may at any time, by notice to each holder of a Note, change the place of payment of the
Notes so long as such place of payment shall be either the principal office of the Company in New
York City or the principal office of a bank or trust company in New York City.

14.2. Home Office Payment.

          So long as any Purchaser or nominee shall be the holder of any Note, and notwithstanding
anything contained in Section 14.1 or in such Note to the contrary, the Company will pay all sums
becoming due on such Note for principal, premium, if any, and interest by the method and at the
address specified for such purpose below such Purchaser’s name in Schedule A, or by such other
method or at such other address as such Purchaser shall have from time to time specified to the
Company in writing for such purpose, without the presentation or surrender of such Note or the
making of any notation thereon, except that upon written request of the Company made concurrently
with or reasonably promptly after payment or prepayment in full of any Note, such Purchaser shall
surrender such Note for cancellation, reasonably promptly after any such request, to the Company at
its principal executive office or at the place of payment most recently designated by the Company
pursuant to Section 14.1. Prior to any sale or other disposition of any Note held by a Purchaser
or its nominee, such Purchaser will, at its election, either endorse thereon the amount of
principal paid thereon and the last date to which interest has been paid thereon or surrender such
Note to the Company in exchange for a new Note or Notes pursuant to Section 13.2. The Company will
afford the benefits of this Section 14.2 to any Institutional Investor that is the direct or
indirect transferee of any Note purchased by a Purchaser under this Agreement and that has made the
same agreement relating to such Note as the Purchasers have made in this Section 14.2.

15. EXPENSES, ETC.

15.1. Transaction Expenses.

          Whether or not the transactions contemplated hereby are consummated, the Company will pay all
costs and expenses (including reasonable attorneys’ fees of a special counsel and, if reasonably
required by the Required Holders, local or other counsel) incurred by the Purchasers and each other
holder of a Note in connection with such transactions and in connection with any amendments,
waivers or consents under or in respect of this Agreement or the Notes (whether or not such
amendment, waiver or consent becomes effective), including without limitation: (a) the costs and
expenses incurred in enforcing or defending (or determining whether or how to enforce or defend)
any rights under this Agreement or the Notes or in responding to any subpoena or other legal
process or informal investigative demand issued in connection with this Agreement or the Notes, or
by reason of being a holder of any Note, (b) the costs and expenses, including financial advisors’
fees, incurred in connection with the insolvency

31

 

or bankruptcy of the Company or any Subsidiary or in connection with any work-out or
restructuring of the transactions contemplated hereby and by the Notes and (c) the costs and
expenses incurred in connection with the initial filing of this Agreement and all related documents
and financial information with the Securities Valuation Office of the National Association of
Insurance Commissioners. The Company will pay, and will save each Purchaser and each other holder
of a Note harmless from, all claims in respect of any fees, costs or expenses, if any, of brokers
and finders (other than those, if any, retained by a Purchaser or other holder in connection with
its purchase of the Notes).

          In furtherance of the foregoing, on the date of the Closing the Company will pay or cause to
be paid the reasonable fees and disbursements and other charges (including estimated unposted
disbursements and other charges as of the date of the Closing) of special counsel for the
Purchasers which are reflected in the statement of such special counsel submitted to the Company on
or prior to the date of the Closing. The Company will also pay, promptly upon receipt of
supplemental statements therefor, reasonable additional fees, if any, and disbursements and charges
of such special counsel in connection with the transactions hereby contemplated (including
disbursements and other charges unposted as of the date of the Closing to the extent such
disbursements exceed estimated amounts paid as aforesaid).

15.2. Survival.

          The obligations of the Company under this Section 15 will survive the payment or transfer of
any Note, the enforcement, amendment or waiver of any provision of this Agreement or the Notes, and
the termination of this Agreement.

16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.

          All representations and warranties contained herein shall survive the execution and delivery
of this Agreement and the Notes, the purchase or transfer by any Purchaser of any Note or portion
thereof or interest therein and the payment of any Note, and may be relied upon by any subsequent
holder of a Note, regardless of any investigation made at any time by or on behalf of such
Purchaser or any other holder of a Note. All statements contained in any certificate or other
instrument delivered by or on behalf of the Company pursuant to this Agreement shall be deemed
representations and warranties of the Company under this Agreement. Subject to the preceding
sentence, this Agreement and the Notes embody the entire agreement and understanding between each
Purchaser and the Company and supersede all prior agreements and understandings relating to the
subject matter hereof.

17. AMENDMENT AND WAIVER.

17.1. Requirements.

          This Agreement and the Notes may be amended, and the observance of any term hereof or of the
Notes may be waived (either retroactively or prospectively), with (and only with) the written
consent of the Company and the Required Holders, except that (a) no amendment or waiver of any of
the provisions of Section 1, 2, 3, 4, 5, 6 or 21, or any defined term (as it is used therein), will
be effective as to any Purchaser unless consented to by such Purchaser in writing,

32

 

and (b) no such amendment or waiver may, without the written consent of the holder of each
Note at the time outstanding affected thereby, (i) subject to the provisions of Section 12 relating
to acceleration or rescission, change the amount or time of any prepayment or payment of principal
of, or change the rate or the time of payment or method of computation of interest or of the
Make-Whole Amount on, the Notes, (ii) change the percentage of the principal amount of the Notes
the holders of which are required to consent to any such amendment or waiver, or (iii) amend any of
Sections 8, 11(a), 11(b), 12, 17 or 20.

17.2. Solicitation of Holders of Notes.

          (a) Solicitation. The Company will provide each holder of the Notes (irrespective of
the amount of Notes then owned by it) with sufficient information, sufficiently far in advance of
the date a decision is required, to enable such holder to make an informed and considered decision
with respect to any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes. The Company will deliver executed or true and correct copies of each
amendment, waiver or consent effected pursuant to the provisions of this Section 17 to each holder
of outstanding Notes promptly following the date on which it is executed and delivered by, or
receives the consent or approval of, the requisite holders of Notes.

          (b) Payment. The Company will not directly or indirectly pay or cause to be paid any
remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any
security, to any holder of Notes as consideration for or as an inducement to the entering into by
any holder of Notes of any waiver or amendment of any of the terms and provisions hereof unless
such remuneration is concurrently paid, or security is concurrently granted, on the same terms,
ratably to each holder of Notes then outstanding even if such holder did not consent to such waiver
or amendment.

17.3. Binding Effect, etc.

          Any amendment or waiver consented to as provided in this Section 17 applies equally to all
holders of Notes and is binding upon them and upon each future holder of any Note and upon the
Company without regard to whether such Note has been marked to indicate such amendment or waiver.
No such amendment or waiver will extend to or affect any obligation, covenant, agreement, Default
or Event of Default not expressly amended or waived or impair any right consequent thereon. No
course of dealing between the Company and the holder of any Note nor any delay in exercising any
rights hereunder or under any Note shall operate as a waiver of any rights of any holder of such
Note. As used herein, the term “this Agreement” and references thereto shall mean this Agreement
as it may from time to time be amended or supplemented.

17.4. Notes held by Company, etc.

          Solely for the purpose of determining whether the holders of the requisite percentage of the
aggregate principal amount of Notes then outstanding approved or consented to any amendment, waiver
or consent to be given under this Agreement or the Notes, or have directed the taking of any action
provided herein or in the Notes to be taken upon the direction of the holders of a specified
percentage of the aggregate principal amount of Notes then

33

 

outstanding, Notes directly or indirectly owned by the Company or any of its Affiliates shall
be deemed not to be outstanding.

18. NOTICES.

          All notices and communications provided for hereunder shall be in writing and sent (a) by
telecopy if the sender on the same day sends a confirming copy of such notice by a recognized
overnight delivery service (charges prepaid), or (b) by registered or certified mail with return
receipt requested (postage prepaid), or (c) by a recognized overnight delivery service (with
charges prepaid). Any such notice must be sent:

     (i) if to you or your nominee, to you or it at the address specified for such
communications in Schedule A, or at such other address as you or it shall have specified to
the Company in writing,

     (ii) if to any other holder of any Note, to such holder at such address as such other
holder shall have specified to the Company in writing, or

     (iii) if to the Company, to the Company at its address set forth at the beginning
hereof to the attention of the Chief Financial Officer, or at such other address as the
Company shall have specified to the holder of each Note in writing.

Notices under this Section 18 will be deemed given only when actually received.

19. REPRODUCTION OF DOCUMENTS.

          This Agreement and all documents relating thereto, including, without limitation, (a)
consents, waivers and modifications that may hereafter be executed, (b) documents received by any
Purchaser at the Closing (except the Notes themselves), and (c) financial statements, certificates
and other information previously or hereafter furnished to any Purchaser, may be reproduced by such
Purchaser by any photographic, photostatic, electronic, digital, or other similar process and such
Purchaser may destroy any original document so reproduced. The Company agrees and stipulates that,
to the extent permitted by applicable law, any such reproduction shall be admissible in evidence as
the original itself in any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by such Purchaser in the regular course of
business) and any enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence. This Section 19 shall not prohibit the Company or any other
holder of Notes from contesting any such reproduction to the same extent that it could contest the
original, or from introducing evidence to demonstrate the inaccuracy of any such reproduction.

20. CONFIDENTIAL INFORMATION.

          For the purposes of this Section 20, “Confidential Information” means information delivered to
any Purchaser by or on behalf of the Company or any Subsidiary in connection with the transactions
contemplated by or otherwise pursuant to this Agreement that is proprietary in nature and that was
clearly marked or labeled or otherwise adequately identified when received by such Purchaser as
being confidential information of the Company or such

34

 

Subsidiary, provided that such term does not include information that (a) was publicly known
or otherwise known to such Purchaser prior to the time of such disclosure, (b) subsequently becomes
publicly known through no act or omission by such Purchaser or any person acting on such
Purchaser’s behalf, (c) otherwise becomes known to such Purchaser other than through disclosure by
the Company or any Subsidiary or (d) constitutes financial statements delivered to such Purchaser
under Section 7.1 that are otherwise publicly available. Each Purchaser will maintain the
confidentiality of such Confidential Information in accordance with procedures adopted by such
Purchaser in good faith to protect confidential information of third parties delivered to such
Purchaser, provided that such Purchaser may deliver or disclose Confidential Information to (i) its
directors, officers, employees, agents, attorneys and affiliates (to the extent such disclosure
reasonably relates to the administration of the investment represented by its Notes), (ii) its
financial advisors and other professional advisors whose duties require them to hold confidential
the Confidential Information substantially in accordance with the terms of this Section 20, (iii)
any other holder of any Note, (iv) any Institutional Investor to which it sells or offers to sell
such Note or any part thereof or any participation therein (if such Person has agreed in writing
prior to its receipt of such Confidential Information to be bound by the provisions of this Section
20), (v) any Person from which it offers to purchase any security of the Company (if such Person
has agreed in writing prior to its receipt of such Confidential Information to be bound by the
provisions of this Section 20), (vi) any federal or state regulatory authority having jurisdiction
over such Purchaser, (vii) the National Association of Insurance Commissioners or any similar
organization, or any nationally recognized rating agency that requires access to information about
such Purchaser’s investment portfolio, or (viii) any other Person to which such delivery or
disclosure may be necessary or appropriate (w) to effect compliance with any law, rule, regulation
or order applicable to such Purchaser, (x) in response to any subpoena or other legal process, (y)
in connection with any litigation to which such Purchaser is a party or (z) if an Event of Default
has occurred and is continuing, to the extent such Purchaser may reasonably determine such delivery
and disclosure to be necessary or appropriate in the enforcement or for the protection of the
rights and remedies under such Purchaser’s Notes and this Agreement. Each holder of a Note, by its
acceptance of a Note, will be deemed to have agreed to be bound by and to be entitled to the
benefits of this Section 20 as though it were a party to this Agreement. On reasonable request by
the Company in connection with the delivery to any holder of a Note of information required to be
delivered to such holder under this Agreement or requested by such holder (other than a holder that
is a party to this Agreement or its nominee), such holder will enter into an agreement with the
Company embodying the provisions of this Section 20.

21. SUBSTITUTION OF PURCHASER.

          Each Purchaser shall have the right to substitute any one of its Affiliates as the purchaser
of the Notes that it has agreed to purchase hereunder, by written notice to the Company, which
notice shall be signed by both such Purchaser and such Affiliate, shall contain such Affiliate’s
agreement to be bound by this Agreement and shall contain a confirmation by such Affiliate of the
accuracy with respect to it of the representations set forth in Section 6. Upon receipt of such
notice, any reference to such Purchaser in this Agreement (other than in this Section 21), shall be
deemed to refer to such Affiliate in lieu of such original Purchaser. In the event that such
Affiliate is so substituted as a Purchaser hereunder and such Affiliate thereafter transfers to
such original Purchaser all of the Notes then held by such Affiliate, upon receipt by the Company
of notice of such transfer, any reference to such Affiliate as a

35

 

“Purchaser” in this Agreement (other than in this Section 21), shall no longer be deemed to
refer to such Affiliate, but shall refer to such original Purchaser, and such original Purchaser
shall again have all the rights of an original holder of the Notes under this Agreement.

22. MISCELLANEOUS.

22.1. Successors and Assigns.

          All covenants and other agreements contained in this Agreement by or on behalf of any of the
parties hereto bind and inure to the benefit of their respective successors and assigns (including
without limitation any subsequent holder of a Note) whether so expressed or not.

22.2. Construction.

          Each covenant contained herein shall be construed (absent express provision to the contrary)
as being independent of each other covenant contained herein, so that compliance with any one
covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with
any other covenant. Where any provision herein refers to action to be taken by any Person, or
which such Person is prohibited from taking, such provision shall be applicable whether such action
is taken directly or indirectly by such Person.

22.3. Jurisdiction and Process; Waiver of Jury Trial.

          (a) The Company irrevocably submits to the non-exclusive in personam
jurisdiction of any New York State or federal court sitting in the Borough of Manhattan, The City
of New York, over any suit, action or proceeding arising out of or relating to this Agreement or
the Notes. To the fullest extent permitted by applicable law, the Company irrevocably waives and
agrees not to assert, by way of motion, as a defense or otherwise, any claim that it is not subject
to the in personam jurisdiction of any such court, any objection that it may now or
hereafter have to the laying of the venue of any such suit, action or proceeding brought in any
such court and any claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum.

          (b) The Company consents to process being served in any suit, action or proceeding of the
nature referred to in Section 22.3(a) by mailing a copy thereof by registered or certified mail,
postage prepaid, return receipt requested, to the Company at its address specified in Section 18 or
at such other address of which the holders of Notes shall then have been notified pursuant to said
Section. The Company agrees that such service upon receipt (i) shall be deemed in every respect
effective service of process upon it in any such suit, action or proceeding and (ii) shall, to the
fullest extent permitted by applicable law, be taken and held to be valid personal service upon and
personal delivery to the Company. Notices hereunder shall be conclusively presumed received as
evidenced by a delivery receipt furnished by the United States Postal Service or any reputable
commercial delivery service.

          (c) Nothing in this Section 22.3 shall affect the right of any holder of a Note to serve
process in any manner permitted by law, or limit any right that the holders of any of the Notes may
have to bring proceedings against the Company in the courts of any appropriate

36

 

jurisdiction or to enforce in any lawful manner a judgment obtained in one jurisdiction in any
other jurisdiction.

          (d) THE COMPANY WAIVES TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT TO THIS
AGREEMENT, THE OTHER AGREEMENTS, THE NOTES OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH OR
THEREWITH.

22.4. Payments Due on Non-Business Days.

          Anything in this Agreement or the Notes to the contrary notwithstanding (but without limiting
the requirement in Section 8.2 that notice of any optional prepayment specify a Business Day as the
date fixed for such prepayment), any payment of principal of or interest on any Note that is due on
a date other than a Business Day shall be made on the next succeeding Business Day without
including the additional days elapsed in the computation of the interest payable on such next
succeeding Business Day.

22.5. Severability.

          Any provision of this Agreement that 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 (to the fullest extent permitted by applicable law) not invalidate or
render unenforceable such provision in any other jurisdiction.

22.6. Accounting Terms; Pro Forma Calculations.

          All accounting terms used herein which are not expressly defined in this Agreement have the
meanings respectively given to them in accordance with GAAP. Except as otherwise specifically
provided herein, all computations made pursuant to this Agreement shall be made in accordance with
GAAP and all balance sheets and other financial statements with respect thereto shall be prepared
in accordance with GAAP. Except as otherwise specifically provided herein, any consolidated
financial statement or financial computation shall be done in accordance with GAAP; and, if at the
time that any such statement or computation is required to be made the Company shall not have any
Subsidiary, such terms shall mean a financial statement or a financial computation, as the case may
be, with respect to the Company only.

          Any pro forma computation required to be made hereby shall include adjustments (without
limitation as to other appropriate pro forma adjustments in accordance with generally accepted
financial practice) giving effect to all acquisitions and dispositions made during the period with
respect to which such computation is being made as if such acquisitions and dispositions were made
on the first day of such period.

22.7. Counterparts.

          This Agreement may be executed in any number of counterparts, each of which shall be an
original but all of which together shall constitute one instrument. Each counterpart

37

 

may consist of a number of copies hereof, each signed by less than all, but together signed by
all, of the parties hereto.

22.8. Governing Law.

          This Agreement and the Notes shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the laws of the State of New York excluding
choice-of-law principles of the law of such State that would require the application of the laws of
a jurisdiction other than such State.

38

 

          If you are in agreement with the foregoing, please sign the form of agreement in the space
below provided on a counterpart of this Agreement and return it to the Company, whereupon the
foregoing shall become a binding agreement between you and the Company.

	 	 	 	 	 
	 	Very truly yours,

SPARTECH CORPORATION

 	 
	 	By       /s/ Randy C. Martin
 	 
	 	Name:  	Randy C. Martin 	 
	 	Title:  	Executive VP & CFO 	 
	 

	 	 	 	 	 	 	 	 	 
	The foregoing is hereby agreed to as of the date thereof.	 	 
	 
	 	 	 	 	 	 	 	 
	CUNA MUTUAL LIFE INSURANCE COMPANY	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	MEMBERS Capital Advisors, Inc.,	 	 
	 	 	 	 	acting as Investment Advisor:	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By
	 	/s/ John Petchler	 	 
	 

	 	 	 	 	 	 

Name: John Petchler
	 	 
	 

	 	 	 	 	 	Title: Sr. Vice President,	 	 
	 

	 	 	 	 	 	          Managing Director — Investments	 	 
	 
	 	 	 	 	 	 	 	 
	CUNA MUTUAL INSURANCE SOCIETY	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	MEMBERS Capital Advisors, Inc.,	 	 
	 	 	 	 	acting as Investment Advisor:	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By
	 	/s/ John Petchler	 	 
	 

	 	 	 	 	 	 

Name: John Petchler
	 	 
	 

	 	 	 	 	 	Title: Sr. Vice President,	 	 
	 

	 	 	 	 	 	          Managing Director — Investments	 	 

39

 

	 	 	 	 	 	 	 	 
	CUMIS INSURANCE SOCIETY, INC.	 
	 
	 	 	 	 	 	 	 
	 	 	By:	 	MEMBERS Capital Advisors, Inc.,	 
	 	 	 	 	acting as Investment Advisor:	 
	 
	 

	 	 	 	By
	 	/s/ John Petchler	 
	 

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: John Petchler

Title: Sr. Vice President,

          Managing Director — Investments	 
	 
	 	 	 	 	 	 	 
	MEMBERS LIFE INSURANCE COMPANY	 
	 
	 	 	 	 	 	 	 
	 	 	By:	 	MEMBERS Capital Advisors, Inc.,	 
	 	 	 	 	acting as Investment Advisor:	 
	 
	 	 	 	 	 	 	 
	 

	 	 	 	By
	 	/s/ John Petchler	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: John Petchler	 
	 

	 	 	 	 	 	Title: Sr. Vice President,	 
	 

	 	 	 	 	 	          Managing Director — Investments	 

THE NORTHWESTERN MUTUAL LIFE

INSURANCE COMPANY

	 	 	 	 	 
	By

	 	/s/ Mark E. Kishler
 

Name: Mark E. Kishler

Title: Its Authorized Representative
	 	 

40

 

SCHEDULE A

          This Schedule A shows the names and addresses of the Purchasers under the foregoing Note
Purchase Agreement and the respective principal amounts of Notes to be purchased by each.

	 	 	 	 	 
	 	 	Principal Amount of
	Name and Address of Purchaser	 	Notes to be Purchased
	 
	CUNA MUTUAL INSURANCE SOCIETY
	 	$	10,500,000	 

(Securities to be registered in the name of
TURNKEYS & CO.)

	(1)	 	All payments by wire transfer of immediately
available funds to:State Street Bank
	 
	 	 	DTC/New York Window

55 Water Street

Plaza Level, 3rd floor

New York, NY 10041

Account Name: CUNA Mutual Insurance Company

Account Number: ZT1E

ABA/Routing: 011000028

with sufficient information to identify
the issue to which the payment relates and
to identify the amount of

 interest,

principal or premium.
	 
	(2)	 	All notices of payment and written
confirmations of such wire transfers:
	 
	 	 	State Street Bank

Attn: Brian Kershner

801 Pennsylvania

Kansas City, MO 64105

Fax: (816) 691-5545

E-mail: bdkersh@statestreetkc.com
	 
	 	 	With copy to:
	 
	 	 	CUNA Mutual Life Insurance Society

Attn: Rosie Pope

5910 Mineral Point Road

Madison, WI 53705-4456

Fax: (608) 231-8591

E-mail: rosie.pope@cunamutual.com

 

 

	 	 	 	 	 
	 	 	Principal Amount of
	Name and Address of Purchaser	 	Notes to be Purchased

	(3)	 	Address for all other communications:
	 
	 	 	CUNA Mutual Insurance Society

Attn: Managing Director - Investments

5910 Mineral Point Road

Madison, WI 53705-4456

Telephone: (608) 231-8255

Fax: (608) 236-6224

E-mail: john.petchler@cunamutual.com
	 
	 	 	With copy to:
	 
	 	 	CUNA Mutual Insurance Society

Attn: Associate General Counsel

5910 Mineral Point Road

Madison, WI 53705-4456

Telephone: (608) 231-7653

Fax: (608) 236-7653

E-mail: steve.suleski@cunamutual.com
	 
	(4)	 	Tax Identification No.: 39-0230590

A-2

 

	 	 	 	 	 
	 	 	Principal Amount of
	Name and Address of Purchaser	 	Notes to be Purchased
	 
	CUMIS INSURANCE SOCIETY
	 	$	5,250,000	 

(Securities to be registered in the name of
TURNJETTY & CO.)

	(1)	 	All payments by wire transfer of
immediately available funds to:State Street Bank
	 
	 	 	DTC/New York Window

55 Water Street

Plaza Level, 3rd floor

New York, NY 10041

Account Name: CUMIS Insurance Society

Account Number: ZT1I

ABA/Routing: 011000028

with sufficient information to identify
the issue to which the payment relates and
to identify the amount of

 interest,

principal or premium.
	 
	(2)	 	All notices of payment and written
confirmations of such wire transfers:
	 
	 	 	State Street Bank

Attn: Brian Kershner

801 Pennsylvania

Kansas City, MO 64105

Fax: (816) 691-5545

E-mail: bdkersh@statestreetkc.com
	 
	 	 	With copy to:
	 
	 	 	CUNA Mutual Life Insurance Society

Attn: Rosie Pope

5910 Mineral Point Road

Madison, WI 53705-4456

Fax: (608) 231-8591

E-mail: rosie.pope@cunamutual.com

 

 

	 	 	 	 	 
	 	 	Principal Amount of
	Name and Address of Purchaser	 	Notes to be Purchased

	(3)	 	Address for all other communications:
	 
	 	 	CUNA Mutual Insurance Society

Attn: Managing Director - Investments

5910 Mineral Point Road

Madison, WI 53705-4456

Telephone: (608) 231-8255

Fax: (608) 236-6224

E-mail: john.petchler@cunamutual.com
	 
	 	 	With copy to:
	 
	 	 	CUNA Mutual Insurance Society

Attn: Associate General Counsel

5910 Mineral Point Road

Madison, WI 53705-4456

Telephone: (608) 231-7653

Fax: (608) 236-7653

E-mail: steve.suleski@cunamutual.com
	 
	(4)	 	Tax Identification No.: 39-0972608

A-2

 

	 	 	 	 	 
	 	 	Principal Amount of
	Name and Address of Purchaser	 	Notes to be Purchased
	 
	MEMBERS LIFE INSURANCE COMPANY
	 	$	3,500,000	 

(Securities to be registered in the name of
TURNLAUNCH & CO.)

	(1)	 	All payments by wire transfer of
immediately available funds to:
	 
	 	 	State Street Bank

DTC/New York Window

55 Water Street

Plaza Level, 3rd floor

New York, NY 10041

Account Name: MEMBERS Life Insurance Company

Account Number: ZT1J

ABA/Routing: 011000028

	 
	 	 	with sufficient information to identify
the issue to which the payment relates and
to identify the amount of

 interest,

principal or premium.
	 
	(2)	 	All notices of payment and written
confirmations of such wire transfers:
	 
	 	 	State Street Bank

Attn: Brian Kershner

801 Pennsylvania

Kansas City, MO 64105

Fax: (816) 691-5545

E-mail: bdkersh@statestreetkc.com
	 
	 	 	With copy to:
	 
	 	 	CUNA Mutual Life Insurance Society

Attn: Rosie Pope

5910 Mineral Point Road

Madison, WI 53705-4456

Fax: (608) 231-8591

E-mail: rosie.pope@cunamutual.com

 

 

	 	 	 	 	 
	 	 	Principal Amount of
	Name and Address of Purchaser	 	Notes to be Purchased

	(3)	 	Address for all other communications:
	 
	 	 	CUNA Mutual Insurance Society

Attn: Managing Director - Investments

5910 Mineral Point Road

Madison, WI 53705-4456

Telephone: (608) 231-8255

Fax: (608) 236-6224

E-mail: john.petchler@cunamutual.com
	 
	 	 	With copy to:
	 
	 	 	CUNA Mutual Insurance Society

Attn: Associate General Counsel

5910 Mineral Point Road

Madison, WI 53705-4456

Telephone: (608) 231-7653

Fax: (608) 236-7653

E-mail: steve.suleski@cunamutual.com
	 
	(4)	 	Tax Identification No.: 39-1236386

A-2

 

	 	 	 	 	 
	 	 	Principal Amount of
	Name and Address of Purchaser	 	Notes to be Purchased
	 
	CUNA MUTUAL LIFE INSURANCE COMPANY
	 	$	15,750,000	 

(Securities to be registered in the name of
TURNSPEED & CO.)

	(1)	 	All payments by wire transfer of immediately
available funds to:State Street Bank

	 
	 	 	DTC/New York Window

55 Water Street

Plaza Level, 3rd floor

New York, NY 10041

Account Name: CUNA Mutual Life Insurance
Company

Account Number: ZT2A

ABA/Routing: 011000028

	 
	 	 	with sufficient information to identify
the issue to which the payment relates and
to identify the amount of

 interest,

principal or premium.
	 
	(2)	 	All notices of payment and written
confirmations of such wire transfers:
	 
	 	 	State Street Bank

Attn: Brian Kershner

801 Pennsylvania

Kansas City, MO 64105

Fax: (816) 691-5545

E-mail: bdkersh@statestreetkc.com
	 
	 	 	With copy to:
	 
	 	 	CUNA Mutual Life Insurance Society

Attn: Rosie Pope

5910 Mineral Point Road

Madison, WI 53705-4456

Fax: (608) 231-8591

E-mail: rosie.pope@cunamutual.com

 

 

	 	 	 	 	 
	 	 	Principal Amount of
	Name and Address of Purchaser	 	Notes to be Purchased

	(3)	 	Address for all other communications:
	 
	 	 	CUNA Mutual Insurance Society

Attn: Managing Director - Investments

5910 Mineral Point Road

Madison, WI 53705-4456

Telephone: (608) 231-8255

Fax: (608) 236-6224

E-mail: john.petchler@cunamutual.com
	 
	 	 	With copy to:
	 
	 	 	CUNA Mutual Insurance Society

Attn: Associate General Counsel

5910 Mineral Point Road

Madison, WI 53705-4456

Telephone: (608) 231-7653

Fax: (608) 236-7653

E-mail: steve.suleski@cunamutual.com
	 
	(4)	 	Tax Identification No.: 42-0388260

A-2

 

	 	 	 	 	 
	 	 	Principal Amount of
	Name and Address of Purchaser	 	Notes to be Purchased
	 
	THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY
	 	$	15,000,000	 

(1) All payments by wire transfer of immediately
available funds to:

US Bank

777 East Wisconsin Avenue

Milwaukee, WI 53202

ABA #075000022

	 	 	For the account of:

	 	 	Northwestern Mutual Life

Account No. 182380324521

	 
	 	 	with sufficient information to identify
the source of the transfer, the amount
of interest,
 principal or premium,

 the

series of Notes and the PPN
	 
	(2)	 	All notices of payment and written
confirmations of such wire transfers:
	 
	 	 	720 East Wisconsin Avenue

Milwaukee, WI 53202

Attention: Investment Operations

Fax: (414) 625-6998
	 
	(3)	 	Address for all other communications:
	 
	 	 	720 East Wisconsin Avenue

Milwaukee, WI 53202

Attention: Securities Department

Fax: (414) 665-7124
	 
	(4)	 	Tax Identification No.: 39-0509570

 

 

SCHEDULE B

DEFINED TERMS

          As used herein, the following terms have the respective meanings set forth below or set forth
in the Section hereof following such term:

          “Affiliate” means, at any time, (a) with respect to any Person (including without limitation
the Company), any other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with, such first Person,
and (b) with respect to the Company, any Person beneficially owning or holding, directly or
indirectly, 10% or more of any class of voting or equity interests of the Company or any Subsidiary
or any corporation of which the Company and its Subsidiaries beneficially own or hold, in the
aggregate, directly or indirectly, 10% or more of any class of voting or equity interests. As used
in this definition, “Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether through the ownership of
voting securities, by contract or otherwise. Unless the context otherwise clearly requires, any
reference to an “Affiliate” is a reference to an Affiliate of the Company.

          “Anti-Terrorism Order” means Executive Order No. 13,244 of September 24, 2001, Blocking
Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit or Support
Terrorism, 66 U.S. Fed. Reg. 49, 079 (2001), as amended.

          “Attributable Debt” means, as to any particular lease relating to a sale and leaseback
transaction, the total amount of rent (discounted semiannually from the respective due dates
thereof at the interest rate implicit in such lease) required to be paid by the lessee under such
lease during the remaining term thereof. The amount of rent required to be paid under any such
lease for any such period shall be (a) the total amount of the rent payable by the lessee with
respect to such period after excluding amounts required to be paid on account of maintenance and
repairs, insurance, taxes, assessments, utilities, operating and labor costs and similar charges
plus (b) without duplication, any guaranteed residual value in respect of such lease to the extent
such guarantee would be included in indebtedness in accordance with GAAP.

          “Borrowing Facility Indebtedness” means, at any date, Indebtedness of the Company or any
Subsidiary which either (a) has a final maturity of less than 12 months from the date of
determination but which by its terms is renewable or extendible beyond 12 months from such date at
the option of the obligor or (b) is issued under a credit facility having a final termination or
maturity date of more than 12 months from the date of determination but which permits amounts to be
repaid and reborrowed thereunder at the option of the obligor prior to such final termination or
maturity date.

          “Business Day” means any day other than a Saturday, a Sunday or a day on which commercial
banks in New York City or St. Louis, Missouri are required or authorized to be closed.

 

 

          “Capital Lease” means, at any time, a lease with respect to which the lessee is required
concurrently to recognize the acquisition of an asset and the incurrence of a liability in
accordance with GAAP.

          “Capitalized Lease Obligations” means with respect to any Person, all outstanding obligations
of such Person in respect of Capital Leases, taken at the capitalized amount thereof accounted for
as indebtedness in accordance with GAAP.

          “Closing” is defined in Section 3.

          “Code” means the Internal Revenue Code of 1986, as amended from time to time, and the rules
and regulations promulgated thereunder from time to time.

          “Company” means Spartech Corporation, a Delaware corporation.

          “Confidential Information” is defined in Section 20.

          “Consolidated Capitalization” means, at any date, the sum (without duplication) of (a)
Consolidated Indebtedness plus (b) Consolidated Net Worth plus (c) all Indebtedness in respect of
Preferred Securities Agreements plus (d) deferred tax liabilities (if any), all as determined on a
consolidated basis for the Company and its Subsidiaries in accordance with GAAP.

          “Consolidated Indebtedness” means, at any date, all Indebtedness of the Company and its
Subsidiaries determined on a consolidated basis in accordance with GAAP.

          “Consolidated Interest Expense” for any period means the sum for the Company and its
Subsidiaries, determined on a consolidated basis in accordance with GAAP, of all amounts which
would be deducted in computing Consolidated Net Income on account of interest on Indebtedness
(including imputed interest in respect of Capitalized Lease Obligations and amortization of debt
discount and expense) and amounts (without duplication) paid or accrued on account of distributions
or interest in respect of Preferred Securities Agreements.

          “Consolidated Net Income” for any period means the net income of the Company and its
Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP, excluding

     (a) the proceeds of any life insurance policy,

     (b) any gains arising from (i) the sale or other disposition of any assets (other than
current assets) to the extent that the aggregate amount of the gains during such period
exceeds the aggregate amount of the losses during such period from the sale, abandonment or
other disposition of assets (other than current assets), (ii) any write-up of assets or
(iii) the acquisition of outstanding securities of the Company or any Subsidiary,

     (c) any amount representing any interest in the undistributed earnings of any other
Person (other than a Subsidiary),

B-2

 

     (d) any earnings, prior to the date of acquisition, of any Person acquired in any
manner, and any earnings of any Subsidiary prior to its becoming a Subsidiary,

     (e) any earnings of a successor to or transferee of the assets of the Company prior to
its becoming such successor or transferee,

     (f) any deferred credit (or amortization of a deferred credit) arising from the
acquisition of any Person, and

     (g) any extraordinary gains not covered by clause (b) above.

          “Consolidated Net Worth” means, at any date, on a consolidated basis for the Company and its
Subsidiaries, (a) the sum of (i) capital stock taken at par or stated value plus (ii) capital in
excess of par or stated value relating to capital stock plus (iii) retained earnings (or minus any
retained earning deficit) minus (b) the sum of treasury stock, capital stock subscribed for and
unissued and other contra-equity accounts, all determined in accordance with GAAP.

          “Default” means an event or condition the occurrence or existence of which would, with the
giving of notice or the lapse of time, or both, become an Event of Default.

          “Default Rate” means that rate of interest that is the greater of (i) 7.78% per annum and
(ii) 2% above the rate of interest publicly announced by Citibank, N.A. from time to time at its
principal office in New York City as its prime rate.

          “Domestic Subsidiary” means any Subsidiary which is organized under the laws of the United
States or any state thereof or which at the time is conducting a majority of its business within
the United States.

          “EBITDA” for any period means Consolidated Net Income plus all amounts deducted in the
computation thereof on account of (a) Consolidated Interest Expense, (b) depreciation and
amortization expenses and other non-cash charges and (c) income and profits taxes.

          “Environmental Laws” means any and all Federal, state, local, and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or governmental restrictions relating to pollution and the
protection of the environment or the release of any materials into the environment, including but
not limited to those related to Hazardous Materials.

          “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.

          “ERISA Affiliate” means any trade or business (whether or not incorporated) that is treated as
a single employer together with the Company under section 414 of the Code.

          “Event of Default” is defined in Section 11.

B-3

 

          “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.

          “Existing Bank Credit Facilities” means the Existing Bank Credit Facility and the Spartech
Canada Bank Credit Facility.

          “Existing Bank Credit Facility” means the Third Amended and Restated Credit Agreement dated as
of March 3, 2004 by and among the Company, certain banks and Bank of America, N.A., as
administrative agent for such banks, as supplemented, amended, restated or refinanced from time to
time.

          “GAAP” means generally accepted accounting principles as in effect from time to time in the
United States of America.

          “Governmental Authority” means

          (a) the government of

     (i) the United States of America or any State or other political subdivision
thereof, or

     (ii) any jurisdiction in which the Company or any Subsidiary conducts all or
any part of its business, or which asserts jurisdiction over any properties of the
Company or any Subsidiary, or

     (b) any entity exercising executive, legislative, judicial, regulatory or
administrative functions of, or pertaining to, any such government.

          “Guaranty” means, with respect to any Person, any obligation (except the endorsement in the
ordinary course of business of negotiable instruments for deposit or collection) of such Person
guaranteeing or in effect guaranteeing any indebtedness, dividend or other obligation of any other
Person in any manner, whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such Person:

     (a) to purchase such indebtedness or obligation or any property constituting security
therefor;

     (b) to advance or supply funds (i) for the purchase or payment of such indebtedness or
obligation, or (ii) to maintain any working capital or other balance sheet condition or any
income statement condition of any other Person or otherwise to advance or make available
funds for the purchase or payment of such indebtedness or obligation;

     (c) to lease properties or to purchase properties or services primarily for the purpose
of assuring the owner of such indebtedness or obligation of the ability of any other Person
to make payment of the indebtedness or obligation; or

B-4

 

     (d) otherwise to assure the owner of such indebtedness or obligation against loss in
respect thereof.

          In any computation of the indebtedness or other liabilities of the obligor under any Guaranty,
the indebtedness or other obligations that are the subject of such Guaranty shall be assumed to be
direct obligations of such obligor.

          “Hazardous Material” means any and all pollutants, toxic or hazardous wastes or any other
substances that might pose a hazard to health or safety, the removal of which may be required or
the generation, manufacture, refining, production, processing, treatment, storage, handling,
transportation, transfer, use, disposal, release, discharge, spillage, seepage, or filtration of
which is or shall be restricted, prohibited or penalized by any applicable law (including without
limitation asbestos, urea formaldehyde foam insulation and polychlorinated biphenyls).

          “holder” means, with respect to any Note, the Person in whose name such Note is registered in
the register maintained by the Company pursuant to Section 13.1.

          “Indebtedness” with respect to any Person means, at any time, without duplication,

     (a) its liabilities for borrowed money or its mandatory purchase, redemption or other
retirement obligations in respect of mandatorily redeemable Preferred Stock,

     (b) its liabilities for the deferred purchase price of property acquired by such Person
(excluding accounts payable arising in the ordinary course of business and not overdue but
including all liabilities created or arising under any conditional sale or other title
retention agreement with respect to any such property),

     (c) its Capitalized Lease Obligations,

     (d) all liabilities for borrowed money secured by any Lien with respect to any property
owned by such Person (whether or not it has assumed or otherwise become liable for such
liabilities),

     (e) all its liabilities in respect of letters of credit or instruments serving a
similar function issued or accepted for its account by banks and other financial
institutions (whether or not representing obligations for borrowed money),

     (f) the aggregate Swap Termination Value of all Swap Contracts, and

     (g) any Guaranty of such Person with respect to liabilities of a type described in any
of clauses (a) through (f) above.

          Indebtedness of any Person shall include all obligations of such Person of the character described
in clauses (a) through (g) above to the extent such Person remains legally liable in respect
thereof notwithstanding that any such obligation is deemed to be extinguished under GAAP. Except
to the extent otherwise specifically provided in this Agreement, the obligations of the Company and

B-5

 

any trustee in respect of Preferred Securities Agreements shall constitute Indebtedness of the
Company (including without limitation for purposes of Section 11(f)).

          “Institutional Investor” means (a) any original purchaser of a Note, (b) any holder of a Note
holding (together with one or more of its Affiliates) more than 2% of the aggregate principal
amount of the Notes then outstanding, and (c) any bank, trust company, savings and loan association
or other financial institution, any pension plan, any investment company, any insurance company,
any broker or dealer, or any other similar financial institution or entity, regardless of legal
form.

          “Lien” means, with respect to any Person, any mortgage, lien, pledge, charge, security
interest or other encumbrance, or any interest or title of any vendor, lessor, lender or other
secured party to or of such Person under any conditional sale or other title retention agreement or
Capital Lease, upon or with respect to any property or asset of such Person (including in the case
of stock, stockholder agreements, voting trust agreements and all similar arrangements).

          “Make-Whole Amount” means, with respect to any Note, an amount equal to the excess, if any, of
the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of
such Note over the amount of such Called Principal, provided that the Make-Whole Amount may in no
event be less than zero. For the purposes of determining the Make-Whole Amount, the following
terms have the following meanings:

     “Called Principal” means, with respect to any Note, the principal of such Note that has
become or is declared to be immediately due and payable pursuant to Section 12.1.

     “Discounted Value” means, with respect to the Called Principal of any Note, the amount
obtained by discounting all Remaining Scheduled Payments with respect to such Called
Principal from their respective scheduled due dates to the Settlement Date with respect to
such Called Principal, in accordance with accepted financial practice and at a discount
factor (applied on the same periodic basis as that on which interest on the Notes is
payable) equal to the Reinvestment Yield with respect to such Called Principal.

     “Reinvestment Yield” means, with respect to the Called Principal of any Note, 0.50%
over the yield to maturity implied by (i) the yields reported, as of 10:00 A.M. (New York
City time) on the second Business Day preceding the Settlement Date with respect to such
Called Principal, on (x) the Bloomberg Financial Markets News screen PX1 or the equivalent
screen provided by Bloomberg Financial Markets News, or (y) if such on-line market data is
not at the time provided by Bloomberg Financial Markets News, on the display designated as
“Page 500” on the Telerate service (or such other display as may replace Page 500 on the
Telerate service), in any case for actively traded U.S. Treasury securities having a
maturity equal to the Remaining Average Life of such Called Principal as of such Settlement
Date, or (ii) if such yields are not reported as of such time or the yields reported as of
such time are not ascertainable (including by way of interpolation), the Treasury Constant
Maturity Series Yields reported, for the latest day for which such yields have been so
reported as of the second Business Day preceding the

B-6

 

Settlement Date with respect to such Called Principal, in Federal Reserve Statistical
Release H.15 (519) (or any comparable successor publication) for actively traded U.S.
Treasury securities having a constant maturity equal to the Remaining Average Life of such
Called Principal as of such Settlement Date. Such implied yield will be determined, if
necessary, by (a) converting U.S. Treasury bill quotations to bond-equivalent yields in
accordance with accepted financial practice and (b) interpolating linearly between (1) the
actively traded U.S. Treasury security with a maturity closest to and greater than the
Remaining Average Life and (2) the actively traded U.S. Treasury security with a maturity
closest to and less than the Remaining Average Life.

     “Remaining Average Life” means, with respect to any Called Principal, the number of
years (calculated to the nearest one-twelfth year) obtained by dividing (i) such Called
Principal into (ii) the sum of the products obtained by multiplying (a) the principal
component of each Remaining Scheduled Payment with respect to such Called Principal by (b)
the number of years (calculated to the nearest one-twelfth year) that will elapse between
the Settlement Date with respect to such Called Principal and the scheduled due date of such
Remaining Scheduled Payment.

     “Remaining Scheduled Payments” means, with respect to the Called Principal of any Note,
all payments of such Called Principal and interest thereon that would be due after the
Settlement Date with respect to such Called Principal if no payment of such Called Principal
were made prior to its scheduled due date, provided that if such Settlement Date is not a
date on which interest payments are due to be made under the terms of the Notes, then the
amount of the next succeeding scheduled interest payment will be reduced by the amount of
interest accrued to such Settlement Date and required to be paid on such Settlement Date
pursuant to Section 12.1.

     “Settlement Date” means, with respect to the Called Principal of any Note, the date on
which such Called Principal has become or is declared to be immediately due and payable
pursuant to Section 12.1.

          “Material” means material in relation to the business, operations, affairs, financial
condition, assets, properties, or prospects of the Company and its Subsidiaries taken as a whole.

          “Material Adverse Effect” means a material adverse effect on (a) the business, operations,
affairs, financial condition, assets or properties of the Company and its Subsidiaries taken as a
whole, (b) the ability of the Company to perform its obligations under this Agreement and the Notes
or (c) the validity or enforceability of this Agreement, the Notes or any Subsidiary Guarantee.

          “Maximum Amount” means on any date an amount equal to 10% of pro forma consolidated net
revenues of the Company and its Subsidiaries for the four consecutive fiscal quarters then most
recently ended, determined on a consolidated basis in accordance with GAAP.

B-7

 

          “Multiemployer Plan” means any Plan that is a “multiemployer plan” (as such term is defined in
section 4001(a)(3) of ERISA).

          “1997 Senior Notes” means the Company’s 7.00% Senior Notes, Series A, due 2004 and 7.00%
Senior Notes, Series B, due 2014, issued in an aggregate original principal amount of $60,000,000.

          “Notes” is defined in Section 1.1.

          “Officer’s Certificate” means a certificate of a Senior Financial Officer or of any other
officer of the Company whose responsibilities extend to the subject matter of such certificate.

          “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA or any
successor thereto.

          “Person” means an individual, partnership, corporation, limited liability company,
association, trust, unincorporated organization, or a government or agency or political subdivision
thereof.

          “Plan” means an “employee benefit plan” (as defined in section 3(3) of ERISA) that is or,
within the preceding five years, has been established or maintained, or to which contributions are
or, within the preceding five years, have been made or required to be made, by the Company or any
ERISA Affiliate or with respect to which the Company or any ERISA Affiliate may have any liability.

          “Preferred Securities Agreements” means collectively all securities purchase agreements,
declarations of trust, Spartech trust common securities, Spartech trust preferred securities,
preferred securities guarantees, common securities guarantees, indentures and convertible junior
subordinated debentures from time to time delivered and in effect in respect of preferred
securities issued by one or more trusts and effectively convertible into shares of the common stock
of the Company (including without limitation Spartech Trust Preferred Securities, Spartech Trust II
Preferred Securities and any future similar issuances).

          “Preferred Stock”, as applied to any Person, means shares or other equity interests of such
person that shall be entitled to preference or priority over any other shares of such Person in
respect of either the payment of dividends or the distribution of assets upon liquidation, or both.
Without limiting the generality of the foregoing, the Spartech Trust Preferred Securities and
Spartech Trust II Preferred Securities shall be deemed to constitute mandatorily redeemable
Preferred Stock of Spartech Trust and Spartech Trust II, respectively.

          “property” or “properties” means, unless otherwise specifically limited, real or personal
property of any kind, tangible or intangible, inchoate or otherwise.

          “PTE” means a Prohibited Transaction Exemption issued by the Department of Labor.

          “Purchaser” is defined in the first paragraph of this Agreement.

B-8

 

          “Required Holders” means, at any time, the holders of at least a majority in unpaid principal
amount of the Notes at the time outstanding (exclusive of Notes then owned by the Company or any of
its Affiliates).

          “Responsible Officer” means any Senior Financial Officer and any other officer of the Company
with responsibility for the administration of the relevant portion of this Agreement.

          “SEC” shall mean the Securities and Exchange Commission of the United States, or any successor
thereto.

          “Securities Act” means the Securities Act of 1933, as amended from time to time.

          “Senior Financial Officer” means the chief financial officer, principal accounting officer,
treasurer or comptroller of the Company.

          “Significant Subsidiary” means, at any date, a Subsidiary (a) which, together with its
Subsidiaries, produced more than 5% of Consolidated Net Income for the fiscal year then most
recently ended (calculated on a pro forma basis in the case of any Person which became a Subsidiary
during or after the end of such fiscal year) or (b) the assets of which, together with the assets
of its Subsidiaries, exceeded 5% of the consolidated total assets (fixed and current) of the
Company and its Subsidiaries as of the last day of such fiscal year (calculated on a pro forma
basis as of the last day of such fiscal year in the case of any Person which became a Subsidiary
thereafter).

          “Spartech Canada” means Spartech Canada, Inc., a New Brunswick corporation, and a Subsidiary
of the Company.

          “Spartech Canada Bank Credit Facility” means the Amended and Restated Credit Agreement dated
as of April 27, 2004 between Spartech Canada and Bank of America, N.A. (Canadian Branch), as
supplemented, amended, restated or refinanced from time to time.

          “Subsidiary” means, as to any Person, any corporation or other business entity a majority of
the combined voting power of all Voting Stock of which is owned by such Person or one or more of
its Subsidiaries or such Person and one or more of its Subsidiaries. Unless the context otherwise
clearly requires, any reference to a “Subsidiary” is a reference to a Subsidiary of the Company.

          “Subsidiary Guarantee” is defined in Section 1.2.

          “Subsidiary Guarantor” is defined in Section 4.5.

          “Swaps” means, with respect to any Person, payment obligations with respect to interest rate
swaps, currency swaps and similar obligations obligating such Person to make payments, whether
periodically or upon the happening of a contingency. For the purposes of this Agreement, the
amount of the obligation under any Swap shall be the amount determined in respect thereof as of the
end of the then most recently ended fiscal quarter of such Person, based

B-9

 

on the assumption that such Swap had terminated at the end of such fiscal quarter, and in
making such determination, if any agreement relating to such Swap provides for the netting of
amounts payable by and to such Person thereunder or if any such agreement provides for the
simultaneous payment of amounts by and to such Person, then in each such case, the amount of such
obligation shall be the net amount so determined.

          “Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking
into account the effect of any legally enforceable netting agreement relating to such Swap
Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and
termination value(s) determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amounts(s) determined as the mark-to-market
values(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily
available quotations provided by any recognized dealer in such Swap Contracts.

          “Total Indebtedness to EBITDA Ratio” means, at any date, the ratio of (a) Consolidated
Indebtedness as at such date to (b) EBITDA for the four consecutive fiscal quarters then most
recently ended, except that for purposes of this definition there shall be excluded from
Consolidated Indebtedness (i) all Indebtedness of the Company and its Subsidiaries (without
duplication) in respect of Preferred Securities Agreements and (ii) the lesser of (x) the aggregate
outstanding amount of Borrowing Facility Indebtedness on such date and (y) the then Maximum Amount.

          “2004 Senior Notes” means the Company’s 5.54% Senior Notes due 2016, issued in an aggregate
original principal amount of $150,000,000.

          “USA Patriot Act” means United States Public Law 107-56, Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of
2001, as amended from time to time, and the rules and regulations promulgated thereunder from time
to time in effect.

          “Voting Stock” means, with respect to any Person, any shares of stock or other equity
interests of any class or classes of such Person whose holders are entitled under ordinary
circumstances (irrespective of whether at the time stock or other equity interests of any other
class or classes shall have or might have voting power by reason of the happening of any
contingency) to vote for the election of a majority of the directors, managers, trustees or other
governing body of such Person.

          “Wholly-Owned Subsidiary” means, at any time, any Subsidiary all of the equity interests
(except directors’ qualifying shares) and voting interests of which are owned by any one or more of
the Company and the Company’s other Wholly-Owned Subsidiaries at such time.

B-10

 

EXHIBIT 1.1

[FORM OF NOTE]

SPARTECH CORPORATION

5.78% Senior Note due 2011

			
	No. R-[                    ]
	 	New York, New York
	$[                    ]
	 	[Date]
	PPN: 847220 C@ 7	 	 

          FOR VALUE RECEIVED, the undersigned, SPARTECH CORPORATION (the “Company”), a Delaware
corporation, hereby promises to pay to [                    ], or registered assigns, the
principal sum of [                    ] DOLLARS on June 5, 2011, with interest
(computed on the basis of a 360-day year of twelve 30-day months) (a) from the date hereof on the
unpaid balance thereof at the rate of 5.78% per annum, payable semiannually on June 5 and December
5 in each year, until the principal hereof shall have become due and payable, and (b) on any
overdue payment of principal, any overdue payment of interest (to the extent permitted by
applicable law) and any overdue payment of any premium, payable semiannually as aforesaid (or, at
the option of the registered holder hereof, on demand) at a rate per annum from time to time equal
to the greater of (i) 7.78% and (ii) 2% above the rate of interest publicly announced by Citibank,
N.A. from time to time at its principal office in New York City as its prime rate.

          Payments of principal of, interest on and any premium with respect to this Note are to be made
in lawful money of the United States of America at said principal office of Citibank, N.A. in New
York City or at such other place as the Company shall have designated by written notice to the
holder of this Note as provided in the Note Purchase Agreement referred to below.

          This Note is one of a series of Senior Notes issued pursuant to the Note Purchase Agreement
dated as of June 5, 2006 (as from time to time amended, the “Note Purchase Agreement”) between the
Company and the several Purchasers named therein and is entitled to the benefits thereof. This
Note is also entitled to the benefits of certain Subsidiary Guarantees that were executed and
delivered pursuant to the Note Purchase Agreement. Each holder of this Note will be deemed, by its
acceptance hereof, to have agreed to the confidentiality provisions set forth in Section 20 of the
Note Purchase Agreement.

          This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender
of this Note for registration of transfer, accompanied by a written instrument of transfer duly
executed by the registered holder hereof or such holder’s attorney duly authorized in writing, a
new Note for a like principal amount will be issued to, and registered in the name of, the
transferee. Prior to due presentment for registration of transfer, the Company may treat the
person in whose name this Note is registered as the owner hereof for the purpose of receiving

 

 

payment and for all other purposes, and the Company will not be affected by any notice to the
contrary.

          This Note is subject to optional prepayment, in whole or from time to time in part, at the
times and on the terms specified in the Note Purchase Agreement, but not otherwise.

          If an Event of Default, as defined in the Note Purchase Agreement, occurs and is continuing,
the principal of this Note may be declared or otherwise become due and payable in the manner, at
the price (including any applicable premium) and with the effect provided in the Note Purchase
Agreement.

          This Note shall be construed and enforced in accordance with, and the rights of the Company
and the holder hereof shall be governed by, the laws of the State of New York, excluding
choice-of-law principles of the law of such State that would require the application of the laws of
a jurisdiction other than such State.

	 	 	 	 	 
	 	SPARTECH CORPORATION

 	 
	 	By  	 	 
	 	 	Title: 	 
	 	 	 	 

 

 

	 	 	 	 	 

Exhibit 1.2

GUARANTEE AGREEMENT

          GUARANTEE AGREEMENT dated as of [            ] [             ], 20[             ], made by
[                    ], a [                    ] [corporation] (the “Guarantor”), in favor of the
holders from time to time of the Notes referred to below (collectively the “Obligees”).

          WHEREAS, Spartech Corporation, a Delaware corporation (the “Company”), has entered into a Note
Purchase Agreement dated as of June 5, 2006 (as amended or otherwise modified from time to time,
collectively the “Note Agreement” and terms defined therein and not otherwise defined herein are
being used herein as so defined) with the institutional purchasers listed in Schedule A thereto,
pursuant to which the Company proposes to issue and sell to such purchasers $50,000,000 aggregate
principal amount of its 5.78% Senior Notes due 2011 (collectively, the “Notes”); and

          WHEREAS, it is a [condition precedent to the purchase of the Notes by such purchasers
under][requirement of] the Note Agreement that the Guarantor shall execute and deliver this
Guarantee Agreement;

          NOW, THEREFORE, in consideration of the premises the Guarantor hereby agrees as follows:

          SECTION 1. Guarantee. The Guarantor unconditionally and irrevocably guarantees, as
primary obligor and not merely as surety,

     A. the punctual payment when due, whether at stated maturity, by acceleration or
otherwise, of all obligations of the Company arising under the Notes and the Note Agreement,
including all extensions, modifications, substitutions, amendments and renewals thereof,
whether for principal, interest (including without limitation interest on any overdue
principal, premium and interest at the rate specified in the Notes and interest accruing or
becoming owing both prior to and subsequent to the commencement of any proceeding against or
with respect to the Company under any chapter of the Bankruptcy Code of 1978, 11 U.S.C. §101
et seq.), Make-Whole Amount, fees, expenses, indemnification or otherwise,
and

     B. the due and punctual performance and observance by the Company of all covenants,
agreements and conditions on its part to be performed and observed under the Notes and the
Note Agreement;

(all such obligations are called the “Guaranteed Obligations”); provided that the aggregate
liability of the Guarantor hereunder in respect of the Guaranteed Obligations shall not exceed at
any time the lesser of (1) the amount of the Guaranteed Obligations and (2) the maximum amount for
which the Guarantor is liable under this Guarantee Agreement without such liability being deemed a
fraudulent transfer under applicable Debtor Relief Laws (as hereinafter defined), as determined by
a court of competent jurisdiction. As used herein, the term “Debtor Relief Laws” means any
applicable liquidation, conservatorship, bankruptcy, moratorium,

 

 

rearrangement, insolvency, reorganization or similar debtor relief laws affecting the rights of
creditors generally from time to time in effect.

          The Guarantor also agrees to pay, in addition to the amount stated above, any and all
reasonable expenses (including reasonable counsel fees and expenses) incurred by any Obligee in
enforcing any rights under this Guarantee Agreement or in connection with any amendment of this
Guarantee Agreement.

          Without limiting the generality of the foregoing, this Guarantee Agreement guarantees, to the
extent provided herein, the payment of all amounts which constitute part of the Guaranteed
Obligations and would be owed by any other Person to any Obligee but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving such Person.

          SECTION 2. Guarantee Absolute. The obligations of the Guarantor under Section 1 of
this Guarantee Agreement constitute a present and continuing guaranty of payment and not of
collectability and the Guarantor guarantees that the Guaranteed Obligations will be paid strictly
in accordance with the terms of the Notes and the Note Agreement, regardless of any law, regulation
or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights
of any Obligee with respect thereto. The obligations of the Guarantor under this Guarantee
Agreement are independent of the Guaranteed Obligations, and a separate action or actions may be
brought and prosecuted against the Guarantor to enforce this Guarantee Agreement, irrespective of
whether any action is brought against the Company or any other Person liable for the Guaranteed
Obligations or whether the Company or any other such Person is joined in any such action or
actions. The liability of the Guarantor under this Guarantee Agreement shall be primary, absolute,
irrevocable, and unconditional irrespective of:

     A. any lack of validity or enforceability of any Guaranteed Obligation, any Note, the
Note Agreement or any agreement or instrument relating thereto;

     B. any change in the time, manner or place of payment of, or in any other term of, all
or any of the Guaranteed Obligations, or any other amendment or waiver of or any consent to
departure from any Note, the Note Agreement or this Guarantee Agreement;

     C. any taking, exchange, release or non-perfection of any collateral, or any taking,
release or amendment or waiver of or consent to departure by the Guarantor or other Person
liable, or any other guarantee, for all or any of the Guaranteed Obligations;

     D. any manner of application of collateral, or proceeds thereof, to all or any of the
Guaranteed Obligations, or any manner of sale or other disposition of any collateral or any
other assets of the Company or any other Subsidiary;

     E. any change, restructuring or termination of the corporate structure or existence of
the Company or any other Subsidiary; or

2

 

     F. any other circumstance (including without limitation any statute of limitations)
that might otherwise constitute a defense, offset or counterclaim available to, or a
discharge of, the Company or the Guarantor.

          This Guarantee Agreement shall continue to be effective or be reinstated, as the case may be,
if at any time any payment of any of the Guaranteed Obligations is rescinded or must otherwise be
returned by any Obligee, or any other Person upon the insolvency, bankruptcy or reorganization of
the Company or otherwise, all as though such payment had not been made.

          SECTION 3. Waivers. The Guarantor hereby irrevocably waives, to the extent permitted
by applicable law:

     A. promptness, diligence, presentment, notice of acceptance and any other notice with
respect to any of the Guaranteed Obligations and this Guarantee Agreement;

     B. any requirement that any Obligee or any other Person protect, secure, perfect or
insure any Lien or any property subject thereto or exhaust any right or take any action
against the Company or any other Person or any collateral;

     C. any defense, offset or counterclaim arising by reason of any claim or defense based
upon any action by any Obligee;

     D. any duty on the part of any Obligee to disclose to the Guarantor any matter, fact or
thing relating to the business, operation or condition of any Person and its assets now
known or hereafter known by such Obligee; and

     E. any rights by which it might be entitled to require suit on an accrued right of
action in respect of any of the Guaranteed Obligations or require suit against the Company
or the Guarantor or any other Person.

          SECTION 4. Waiver of Subrogation and Contribution. The Guarantor shall not assert,
enforce, or otherwise exercise (A) any right of subrogation to any of the rights, remedies, powers,
privileges or liens of any Obligee or any other beneficiary against the Company or any other
obligor on the Guaranteed Obligations or any collateral or other security, or (B) any right of
recourse, reimbursement, contribution, indemnification, or similar right against the Company, and
the Guarantor hereby waives any and all of the foregoing rights, remedies, powers, privileges and
the benefit of, and any right to participate in, any collateral or other security given to any
Obligee or any other beneficiary to secure payment of the Guaranteed Obligations, until such time
as the Guaranteed Obligations have been paid in full.

          SECTION 5. Representations and Warranties. The Guarantor hereby represents and
warrants as follows:

     A. The Guarantor is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation. The execution, delivery and
performance of this Guarantee Agreement have been duly authorized by all necessary action on
the part of the Guarantor.

3

 

     B. The execution, delivery and performance by the Guarantor of this Guarantee Agreement
will not (i) contravene, result in any breach of, or constitute a default under, or result
in the creation of any Lien in respect of any property of the Guarantor or any Subsidiary of
the Guarantor under, any indenture, mortgage, deed of trust, loan, purchase or credit
agreement, lease, corporate charter or by-laws, or any other material agreement or
instrument to which the Guarantor or any Subsidiary of the Guarantor is bound or by which
the Guarantor or any Subsidiary of the Guarantor or any of their respective properties may
be bound or affected, (ii) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any court, arbitrator
or Governmental Authority applicable to the Guarantor or any Subsidiary of the Guarantor or
(iii) violate any provision of any statute or other rule or regulation of any Governmental
Authority applicable to the Guarantor or any Subsidiary of the Guarantor.

     C. The Guarantor and the Company are members of the same consolidated group of
companies and are engaged in related businesses and the Guarantor will derive substantial
direct and indirect benefit from the execution and delivery of this Guarantee Agreement.

          SECTION 6. Amendments, Etc. No amendment or waiver of any provision of this
Guarantee Agreement and no consent to any departure by the Guarantor therefrom shall in any event
be effective unless the same shall be in writing and signed by the Required Holders, and then such
waiver or consent shall be effective only in the specific instance and for the specific purpose for
which given; provided that no amendment, waiver or consent shall, unless in writing and signed by
all Obligees, (i) limit the liability of or release the Guarantor hereunder, (ii) postpone any date
fixed for, or change the amount of, any payment hereunder or (iii) change the percentage of Notes
the holders of which are, or the number of Obligees, required to take any action hereunder.

          SECTION 7. Addresses for Notices. All notices and other communications provided for
hereunder shall be in writing and (A) by telecopy if the sender on the same day sends a confirming
copy of such notice by a recognized overnight delivery service (charges prepaid), or (B) by
registered or certified mail with return receipt requested (postage prepaid), or (C) by a
recognized overnight delivery service (with charges prepaid). Such notice if sent to the Guarantor
shall be addressed to it at the address of the Guarantor provided below its name on the signature
page of this Guarantee Agreement or at such other address as the Guarantor may hereafter designate
by notice to each holder of Notes, or if sent to any holder of Notes, shall be addressed to it as
set forth in the Note Agreement. Any notice or other communication herein provided to be given to
the holders of all outstanding Notes shall be deemed to have been duly given if sent as aforesaid
to each of the registered holders of the Notes at the time outstanding at the address for such
purpose of such holder as it appears on the Note register maintained by the Company in accordance
with the provisions of Section 13.1 of the Note Agreement. Notices under this Section 7 will be
deemed given only when actually received.

          SECTION 8. No Waiver; Remedies. No failure on the part of any Obligee to exercise,
and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any other or further exercise

4

 

thereof or the exercise of any other right. The remedies herein provided are cumulative and
not exclusive of any remedies provided by law.

          SECTION 9. Continuing Guarantee. This Guarantee Agreement is a continuing guarantee
of payment and performance and shall (A) remain in full force and effect until payment in full of
the Guaranteed Obligations and all other amounts payable under this Guarantee Agreement, (B) be
binding upon the Guarantor, its successors and assigns and (C) inure to the benefit of and be
enforceable by the Obligees and their successors, transferees and assigns.

          SECTION 10. Jurisdiction and Process; Waiver of Jury Trial. The Guarantor
irrevocably submits to the non-exclusive in personam jurisdiction of any New York
State or federal court sitting in the Borough of Manhattan, The City of New York, over any suit,
action or proceeding arising out of or relating to this Guarantee Agreement. To the fullest extent
permitted by applicable law, the Guarantor irrevocably waives and agrees not to assert, by way of
motion, as a defense or otherwise, any claim that it is not subject to the in
personam jurisdiction of any such court, any objection that it may now or hereafter have to
the laying of the venue of any such suit, action or proceeding brought in any such court and any
claim that any such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum.

          The Guarantor agrees, to the fullest extent permitted by applicable law, that a final judgment
in any suit, action or proceeding of the nature referred to in this Section 10 brought in any such
court shall be conclusive and binding upon the Guarantor subject to rights of appeal, as the case
may be, and may be enforced in the courts of the United States of America or the State of New York
(or any other courts to the jurisdiction of which the Guarantor is or may be subject) by a suit
upon such judgment.

          The Guarantor consents to process being served in any suit, action or proceeding of the nature
referred to in this Section 10 by mailing a copy thereof by registered or certified mail, postage
prepaid, return receipt requested, to the Guarantor at its address specified in Section 7 or at
such other address of which you shall then have been notified pursuant to said Section. The
Guarantor agrees that such service upon receipt (i) shall be deemed in every respect effective
service of process upon it in any such suit, action or proceeding and (ii) shall, to the fullest
extent permitted by applicable law, be taken and held to be valid personal service upon and
personal delivery to the Guarantor. Notices hereunder shall be conclusively presumed received as
evidenced by a delivery receipt furnished by the United States Postal Service or any recognized
courier or overnight delivery service.

          Nothing in this Section 10 shall affect the right of any holder of a Note to serve process in
any manner permitted by law, or limit any right that the holders of any of the Notes may have to
bring proceedings against the Guarantor in the courts of any appropriate jurisdiction or to enforce
in any lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.

5

 

          THE GUARANTOR WAIVES TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT TO THIS GUARANTEE
AGREEMENT OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH.

          SECTION 11. Governing Law. This Guarantee Agreement shall be construed and enforced
in accordance with, and the rights of the Guarantor and the Obligees shall be governed by, the laws
of the State of New York excluding choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than such State.

6

 

          IN WITNESS WHEREOF, the Guarantor has caused this Guarantee Agreement to be duly executed and
delivered as of the date first above written.

	 	 	 	 	 
	 	[GUARANTOR]

 	 
	 	By  	 	 
	 	Title:
 	 
	 	Address: 	 
	 
	 	     Attention:	 

  Telephone:

  Telecopy:

7

 

Exhibit 4.4(a)

[Form of Opinion of Special Counsel for the Company]

June 5, 2006

To each of the purchasers that are signatories

to the several Note Purchase Agreements

referred to below

     Re: Spartech Corporation

            Sale of 5.78% Senior Notes due 2011

Ladies and Gentlemen:

     We have acted as legal counsel to Spartech Corporation, a Delaware corporation (the
“Company”), in connection with the issuance and sale by the Company to the purchasers of an
aggregate of $50 million principal amount of the Company’s 5.78% Senior Notes due 2011 (the
“Notes”) pursuant to the several Note Purchase Agreements dated as of June 5, 2006 (the
“Agreements”) between the Company and each of the purchasers that are signatories to the Agreements
(the “Purchasers”). This opinion is delivered to each of the Purchasers pursuant to Section 4.4 of
the Agreements. Capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to them in the Agreements.

     For the purpose of rendering this opinion, we have made such documentary, factual, and legal
examinations as we deemed necessary under the circumstances. As to factual matters, we have relied
upon statements, certificates, and other assurances of public officials and of officers and other
representatives of the Company and upon the representations and warranties of the Company contained
in the Agreements, which factual matters have not been independently established or verified by us.
We have assumed with each Purchaser’s permission that the signatures on all documents examined by
us are genuine, all individuals executing such documents (other than those individuals executing
documents on behalf of the Company and its Subsidiaries) were duly authorized, the documents
submitted to us as originals are authentic and the documents submitted to us as certified or
reproduction copies conform to the originals.

     On the basis of the foregoing examination, and in reliance thereon, and subject to the
assumptions, qualifications, limitations, and exceptions set forth herein, we are of that opinion
that:

     1. The Company is a corporation duly organized and validly existing under the laws of the
State of Delaware and has all requisite corporate power and authority to own or hold under lease
the property it purports to own or hold under lease, to carry on its business as now being

 

 

conducted and to execute and deliver the Agreements and the Notes and to perform its
obligations thereunder. The Company is duly qualified as a foreign corporation and is authorized
to do business in each jurisdiction where such qualification and authorization is necessary, except
where the failure to be so qualified or authorized would not reasonably be expected to have a
Material Adverse Effect.

     2. Each Subsidiary is a corporation, limited liability company or limited partnership duly
organized, validly existing and in good standing under the laws of the jurisdiction of its
incorporation or organization and each is duly qualified and is in good standing in each
jurisdiction in which such qualification is required by law, except where the failure to be so
qualified or in good standing would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect. Each Subsidiary has all requisite power and authority to own or
hold under lease the property it purports to own or hold under lease and to transact the business
it transacts and, in the case of Subsidiary Guarantors, to execute and deliver its respective
Subsidiary Guarantee and perform the provisions thereof.

     3. The Agreements have been duly authorized, executed and delivered by the Company and
constitute the legal, valid and binding Agreements of the Company, enforceable against the Company
in accordance with their terms.

     4. The Notes being purchased by the Purchasers on the date hereof have been duly authorized
and executed, and when issued and delivered in accordance with the Agreements and after the
Company’s receipt of payment therefor, the Notes will constitute the legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with their terms.

     5. The Subsidiary Guarantees delivered pursuant to Section 4.5 of the Agreements have been
duly authorized, executed and delivered by the respective Subsidiary Guarantors party thereto and
constitute the legal, valid and binding obligations of such respective Subsidiary Guarantors,
enforceable against such respective Subsidiary Guarantors in accordance with their respective
terms.

     6. No consent, approval or authorization of, or declaration, registration or filing with, any
Governmental Authority is required on the part of the Company or the Subsidiary Guarantors to be
obtained or made as a condition to the validity of the execution, delivery and performance by the
Company of the Agreements or the Notes, or by the Subsidiary Guarantors of the Subsidiary
Guarantees, other than (i) such authorizations, approvals, consents, exemptions, registrations, or
filings which have been made or obtained prior to the date hereof; and (ii) filings with the
Securities and Exchange Commission and certain state securities law administrators which are
permitted by applicable laws, rules, or regulations to be filed subsequent to the date hereof or
which are not required by applicable state securities laws, rules, or regulations to be filed as a
condition to the reliance by the Company upon certain exemptions from the registration or
qualification requirements under such state securities laws.

     7. Subject to the accuracy of each Purchaser’s representations contained in the Agreements,
and in reliance thereon without any independent investigation by us, the offer and sale of the
Notes in accordance with the terms of the Agreements constitutes a transaction

2

 

exempt from (i) the registration requirements of Section 5 of the Securities Act of 1933, as
amended, and (ii) the qualification requirements of the Trust Indenture Act of 1939, as amended.

     8. The execution and delivery of, and performance by the Company of its obligations under, the
Agreements and the Notes and by the Subsidiary Guarantors of their respective Subsidiary Guarantees
will not (i) contravene, result in any breach of, or constitute a default under, or result in the
creation of any Lien in respect of any property of the Company or any Subsidiary under their
respective corporate charter or organizational documents or by-laws, operating agreements or
partnership agreements or to our knowledge, any material contractual obligation of the Company or
any Subsidiary, (ii) conflict with or result in a breach of any of the terms, conditions or
provisions of any order, judgment, decree, or ruling known to us of any court, arbitrator or
Governmental Authority applicable to the Company or any Subsidiary or (iii) violate any provision
of any statute or other rule or regulation of any Governmental Authority applicable to the Company
or any Subsidiary.

     9. Neither the Company nor any Subsidiary is subject to regulation under the Investment
Company Act of 1940, as amended, or the Federal Power Act, as amended. None of the transactions
contemplated by the Agreements will violate or result in a violation of Section 7 of the Securities
Exchange Act of 1934, as amended, or any regulation issued pursuant thereto, including without
limitation Regulations U, T and X of the Board of Governors of the Federal Reserve System (12 CFR,
Part 221, Part 220 and Part 224, respectively).

     10. To the best of our knowledge, there are no actions, suits or proceedings of any kind
pending or threatened against or affecting the Company or any Subsidiary or any property of the
Company or any Subsidiary in any court or before any arbitrator or before or by any Governmental
Authority, except actions, suits or proceedings which (a) individually do not in any manner draw
into question the validity of the Agreements, the Subsidiary Guarantees or the Notes and (b) in the
aggregate would not reasonably be expected to have a Material Adverse Effect.

     The opinions set forth above are subject to the following assumptions, qualifications,
limitations, and exceptions:

     A. The opinions expressed in paragraphs 3, 4 and 5 above as to the enforceability of
the Agreements, the Notes and the Subsidiary Guarantees are qualified to the extent that (i)
such enforceability may be limited by the effect of applicable bankruptcy, reorganization,
insolvency, moratorium, or other laws of general application to or affecting the enforcement
of creditors’ rights from time to time in effect; (ii) the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to equitable defenses and
to the discretion of the court before which any proceedings therefor may be brought
(regardless of whether such enforceability is considered in a proceeding in equity or at
law); and (iii) we express no opinion as to the legality, validity, binding effect, or
enforceability of any provision of the Agreements, the Notes or the Subsidiary Guarantees
regarding the remedies available to any party (1) to take discretionary action which is
arbitrary, unreasonable or capricious, or is not taken in good faith or in a commercially
reasonable manner, whether or not such action is permitted under the relevant instrument, or
(2) for violations or breaches which are

3

 

non-material or without substantial adverse effect upon the ability of the obligor to
perform its material obligations thereunder.

     B. Without limiting the generality of paragraph A.(i) above, we advise each Purchaser
that it could be contended that the obligations of any Subsidiary have not been given for a
fair and reasonable equivalent consideration, that any Subsidiary is, or by executing any
Subsidiary Guarantee, may become, insolvent (or that any such Subsidiary has unreasonably
small capital or intended to incur or believed or reasonably should have believed that it
would incur debts beyond its ability to pay as such debts mature), and that such Subsidiary
Guarantee may be voidable in whole or in part by creditors of such Subsidiary or by a
trustee, receiver or debtor-in-possession in bankruptcy or similar proceedings pursuant to
applicable bankruptcy, fraudulent transfer or similar laws.

     C. With respect to statements in this opinion based upon our knowledge or upon facts
which have come to our attention, we have advised each Purchaser only as to actual knowledge
obtained by us in connection with matters to which we have given substantive attention as
special legal counsel for the Company in the form of legal representation, and which
knowledge we have recognized as pertinent to the matters set forth in this opinion, it being
understood that in determining the extent of such knowledge we have limited our procedures
to an endeavor to determine the knowledge of lawyers presently in our firm who have
performed services for the Company during the past twelve months. Except to the extent
expressly set forth herein, we have not undertaken any independent investigation to
determine the existence or absence of such facts, and no inference as to our knowledge of
the existence or absence of such facts should be drawn from our representation of the
Company.

     D. We have assumed for purposes of this opinion that the Agreements have been duly
authorized, executed, and delivered by each of the Purchasers and constitutes a valid and
binding obligation of each of the Purchasers, and that each Purchaser has the requisite
power, authority, and capacity to perform such Purchaser’s obligations under the Agreements.

     E. We render no opinion herein as to matters involving the laws of any jurisdiction
other than the States of New York, Missouri and Delaware and the United States of America.
We are not admitted to practice in the State of Delaware; however, we are generally familiar
with the Delaware General Corporation Law and have made such inquiries as we considered
necessary to render the opinions contained above. The opinions set forth in this letter are
limited to the present laws of the States of New York, Missouri, the present federal laws of
the United States of America, and to the limited extent set forth above, the present laws of
the State of Delaware and the facts as they presently exist. No opinion is expressed by us
as to matters of conflict or choice of law. The opinions set forth herein are as of the
date hereof and we disavow any undertaking or obligation to advise the Purchasers of any
facts or circumstances that may hereafter be brought to our attention or any change in any
laws that may hereafter occur.

4

 

          This opinion is given solely for the benefit of the Purchasers, and for the benefit of the
institutional investor holders from time to time of the Notes purchased by the Purchasers on the
date hereof, in connection with the closing held today of the transactions contemplated by the
Agreements, and may not be relied upon by any other person for any purpose without our prior
written consent.

Very truly yours,

Armstrong Teasdale LLP

5

 

Exhibit 4.4(b)

[Form of Opinion of Special Counsel for the Purchasers]

June 5, 2006

Re: Spartech Corporation

      5.78% Senior Notes due 2011

To the several Purchasers listed in

    Schedule A to the within-mentioned

    Note Purchase Agreement

Ladies and Gentlemen:

          We have acted as your special counsel in connection with the issuance by Spartech Corporation
(the “Company”) of its 5.78% Senior Notes due 2011 in an aggregate principal amount of $50,000,000
(the “Notes”) and the purchases by you pursuant to the Note Purchase Agreement made by you with the
Company under date of June 5, 2006 (the “Note Purchase Agreement”) of Notes in the respective
aggregate principal amounts specified in Schedule A to the Note Purchase Agreement. All
capitalized terms used herein without definition shall have the meanings ascribed thereto in the
Note Purchase Agreement.

          We have examined such corporate records of the Company, agreements and other instruments,
certificates of officers and representatives of the Company, certificates of public officials, and
such other documents, as we have deemed necessary in connection with the opinions hereinafter
expressed. In such examination we have assumed the genuineness of all signatures, the authenticity
of documents submitted to us as originals and the conformity with the authentic originals of all
documents submitted to us as copies. As to questions of fact material to such opinions we have,
when relevant facts were not independently established, relied upon the representations set forth
in the Note Purchase Agreement and upon certifications by officers or other representatives of the
Company.

          In addition, we attended the closing held today at our office at which you purchased and made
payment for Notes in the respective aggregate principal amounts to be purchased by you, all in
accordance with the Note Purchase Agreement.

          Based upon the foregoing and having regard for legal considerations that we deem relevant, we
render our opinion to you pursuant to Section 4.4(b) of the Note Purchase Agreement as follows:

 

 

          1. The Company is a validly existing corporation in good standing under the laws of the State
of Delaware and has the corporate power to execute and deliver the Note Purchase Agreement and the
Notes and to perform its obligations thereunder.

          2. The Note Purchase Agreement has been duly authorized, executed and delivered by the Company
and constitutes a legal, valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms.

          3. The Notes being purchased by you today have been duly authorized, executed and delivered by
the Company and constitute legal, valid and binding obligations of the Company, enforceable against
the Company in accordance with their terms.

          4. No consent, approval or authorization of, or declaration, registration or filing with, any
New York or Federal Governmental Authority is required to be obtained or made as a condition to the
validity of the execution and delivery by the Company of the Note Purchase Agreement or said Notes,
by the Subsidiary Guarantors of the Guarantee Agreements delivered today pursuant to Section 4.5 of
the Note Purchase Agreement or for the performance by the Company or said Subsidiaries of their
respective obligations thereunder.

          5. It was not necessary in connection with the offering, sale and delivery of said Notes or
said Guarantee Agreements, under the circumstances contemplated by the Note Purchase Agreement, to
register said Notes or said Guarantee Agreements under the Securities Act of 1933, as amended, or
to qualify an indenture in respect of the Notes under the Trust Indenture Act of 1939, as amended.

          6. The opinion of even date herewith of Armstrong Teasdale LLP, special counsel for the
Company, delivered to you pursuant to Section 4.4(a) of the Note Purchase Agreement, is
satisfactory to us in form and scope with respect to the matters specified therein and we believe
that you are justified in relying thereon.

          The opinions expressed above as to the enforceability of any agreement or instrument in
accordance with its terms are subject to the exception that such enforceability may be limited by
(i) applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the
enforcement of creditors’ rights generally and (ii) general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

          We express no opinion as to Section 22.3 of the Note Purchase Agreement insofar as said
Section relates to (a) the subject matter jurisdiction of the United States District Court for the
Southern District of New York to adjudicate any controversy relating to the Note Purchase
Agreement, the Notes or any other document related thereto, (b) the waiver of inconvenient forum
with respect to proceedings in such United States District Court or (c) the waiver of the right to
jury trial.

          We are members of the bar of the State of New York and do not herein intend to express any
opinion as to any matters governed by any laws other than Federal laws, the laws of the State of
New York and the General Corporation Law of the State of Delaware.

2

 

          This opinion is given solely for your benefit and for the benefit of institutional investor
holders from time to time of the Notes purchased by you today, in connection with the closing held
today of the transactions contemplated by the Note Purchase Agreement, and may not be relied upon
by any other person for any purpose without our prior written consent.

Very truly yours,

3

 

Schedule 5.3

Disclosure Documents

	1.	 	Form 8-K dated January 12, 2006, filed with the Securities and Exchange Commission January
12, 2006.
	 
	2.	 	Form 8-K dated March 7, 2006, filed with the Securities and Exchange Commission March 7,
2006.
	 
	3.	 	Form 8-K dated March 7, 2006, filed with the Securities and Exchange Commission March 9,
2006.
	 
	4.	 	Proxy Statement dated February 3, 2006, for the 2006 Annual Meeting held March 8, 2006.
	 
	5.	 	Form 10-Q for the quarter ended January 28, 2006.

 

 

Schedule 5.4

Subsidiaries

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Jurisdiction of	 	“Significant	 	“Subsidiary	 	Direct	 	Directors/	 	 
	Name	 	Organization 	 	Subsidiary”	 	Guarantor”	 	Ownership	 	Managers	 	Officers
	Active Subsidiaries — Domestic
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Atlas Alchem Plastics, Inc.
	 	Delaware	 	 	X	 	 	 	X	 	 	 	(a	)	 	 	(I)		 	 	(1	)
	Alchem Plastics Corporation
	 	Georgia	 	 	X	 	 	 	X	 	 	 	(b	)	 	 	(I)		 	 	(1	)
	TKM Holdings, L.L.C.
	 	Missouri	 	 	X	*	 	 	 	 	 	 	(b	)	 	 	N/A		 	 	(1	)
	TKM Management, Inc.
	 	Missouri	 	 	 	 	 	 	 	 	 	 	(b	)	 	 	(I)		 	 	(1	)
	TKM Plastics, L.P.
	 	Missouri	 	 	X	 	 	 	X	 	 	 	(c	)	 	 	N/A	 	 	 	(1	)
	Alchem Plastics, Inc.
	 	Delaware	 	 	X	 	 	 	X	 	 	 	(a	)	 	 	(I)		 	 	(1	)
	Spartech Plastics, LLC
	 	Delaware	 	 	X	 	 	 	X	 	 	 	(a	)	 	 	N/A	 	 	 	(1	)
	Spartech SPD, LLC
	 	Delaware	 	 	 	 	 	 	X	 	 	 	(d	)	 	 	(I)		 	 	(1	)
	PEPAC Holdings, Inc.
	 	Delaware	 	 	 	 	 	 	 	 	 	 	(a	)	 	(II)	 	 	(3	)
	Polymer Extruded Products, Inc.
	 	New Jersey	 	 	 	 	 	 	X	 	 	 	(e	)	 	(II)	 	 	(3	)
	Spartech Mexico Holding Company
	 	Missouri	 	 	 	 	 	 	X	 	 	 	(a	)	 	 	(I)		 	 	(4	)
	Spartech Mexico Holding Company Two
	 	Missouri	 	 	 	 	 	 	X	 	 	 	(f	)	 	 	(I)		 	 	(4	)
	Spartech Mexico Holdings, LLC
	 	Missouri	 	 	 	 	 	 	X	 	 	 	(f	)	 	 	N/A	 	 	 	(4	)
	Spartech Polycast, Inc.
	 	Delaware	 	 	 	 	 	 	X	 	 	 	(a	)	 	 	(I)		 	 	(2	)
	Spartech Townsend, Inc.
	 	Delaware	 	 	 	 	 	 	X	 	 	 	(g	)	 	 	(I)		 	 	(2	)
	Spartech Industries Florida, Inc.
	 	Delaware	 	 	 	 	 	 	X	 	 	 	(g	)	 	 	(I)		 	 	(4	)
	Spartech Polycom, Inc.
	 	Pennsylvania	 	 	X	 	 	 	X	 	 	 	(a	)	 	(II)	 	 	(3	)
	Spartech CMD, LLC
	 	Delaware	 	 	 	 	 	 	X	 	 	 	(d	)	 	(II)	 	 	(3	)
	Spartech FCD, LLC
	 	Delaware	 	 	 	 	 	 	X	 	 	 	(h	)	 	(II)	 	 	(3	)
	GWB Plastics Holding Co.
	 	Delaware	 	 	 	 	 	 	 	 	 	 	(i	)	 	(II)	 	 	(3	)
	UVTEC Holdings, Inc.
	 	Delaware	 	 	 	 	 	 	 	 	 	 	(j	)	 	(II)	 	 	(3	)
	UVTEC General, LLC
	 	Delaware	 	 	 	 	 	 	 	 	 	 	(k	)	 	(II)	 	 	(3	)
	UVTEC, L.P.
	 	Texas	 	 	 	 	 	 	X	 	 	 	(l	)	 	 	N/A	 	 	 	(3	)
	Franklin-Burlington Plastics, Inc.
	 	Delaware	 	 	 	 	 	 	X	 	 	 	(a	)	 	(II)	 	 	(3	)
	Spartech Industries, Inc.
	 	Delaware	 	 	 	 	 	 	X	 	 	 	(a	)	 	 	(I)		 	 	(4	)
	Anjac-Doron Plastics, Inc.
	 	Delaware	 	 	 	 	 	 	X	 	 	 	(a	)	 	 	(I)		 	 	(4	)
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Active Subsidiaries — Foreign
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Spartech Canada, Inc.
	 	New Brunswick	 	 	X	 	 	 	 	 	 	 	(a	)	 	 	(I)		 	 	(4	)
	Spartech de México Holding Company,
S. de R.L. de C.V.
	 	Mexico	 	 	 	 	 	 	 	 	 	 	(m	)	 	(III)	 	 	(5	)
	Spartech de México, S.A. de C.V.
	 	Mexico	 	 	 	 	 	 	 	 	 	 	(n	)	 	(III)	 	 	(5	)
	Industrias Spartech de México,

S. de R.L. de C.V.
	 	Mexico	 	 	 	 	 	 	 	 	 	 	(o	)	 	(III)	 	 	(5	)
	Prestadora de Servicios Industriales
de Personal, S.A. de C.V.
	 	Mexico	 	 	 	 	 	 	 	 	 	 	(p	)	 	(III)	 	 	(5	)
	Prestadora de Servicios Industriales
del Noreste, S.A. de C.V.
	 	Mexico	 	 	 	 	 	 	 	 	 	 	(p	)	 	(III)	 	 	(5	)
	Spartech Polycom, S.A.S.
	 	France	 	 	 	 	 	 	 	 	 	 	(i	)	 	(III)	 	 	(6	)
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Inactive Subsidiaries
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Adams Plastics Co.
	 	Delaware	 	 	 	 	 	 	 	 	 	 	(a	)	 	None	 	None
	Koenig Plastics, Inc.
	 	Texas	 	 	 	 	 	 	 	 	 	 	(a	)	 	(II)	 	 	(7	)
	Nestoc Corporation
	 	Delaware	 	 	 	 	 	 	 	 	 	 	(b	)	 	(II)	 	 	(7	)
	Spartan Equipment Co.
	 	Delaware	 	 	 	 	 	 	 	 	 	 	(i	)	 	(II)	 	 	(7	)
	Alshin Tire Corporation
	 	California	 	 	 	 	 	 	 	 	 	 	(q	)	 	 	(I)		 	 	(4	)
	X-Core, LLC
	 	California	 	 	 	 	 	 	 	 	 	 	(q	)	 	 	N/A	 	 	 	(4	)

 

 

 

Note to Significant Subsidiary Column

	*	 	Solely by virtue of sales/assets of subsidiary entity

Notes to Direct Ownership Column

	(a)	 	100% owned by Spartech Corporation

	(b)	 	100% owned by Atlas Alchem Plastics, Inc.

	(c)	 	99% owned by TKM Holdings, L.L.C. (limited partner), 1% owned by TKM Management, Inc.
(general partner)

	(d)	 	100% owned by Spartech Plastics, LLC

	(e)	 	100% owned by PEPAC Holdings, Inc.

	(f)	 	100% owned by Spartech Mexico Holding Company

	(g)	 	100% owned by Spartech Polycast, Inc.

	(h)	 	100% owned by Polymer Extruded Products, Inc.

	(i)	 	100% owned by Spartech Polycom, Inc.

	(j)	 	100% owned by GWB Plastics Holding Co.

	(k)	 	100% owned by UVTEC Holdings, Inc.

	(l)	 	99% owned by UVTEC Holdings, Inc. (limited partner), 1% owned by UVTEC General, LLC
(general partner)

	(m)	 	99% owned by Spartech Mexico Holding Company, 1% owned by Spartech Mexico Holdings,
LLC

	(n)	 	99% owned by Spartech Mexico Holding Company, 1% owned by Spartech Mexico Holding
Company Two

	(o)	 	99.98% owned by Spartech de México, S.A. de C.V., 0.02% owned by Spartech Mexico
Holding Company

	(p)	 	99% owned by Spartech de México Holding Company, S. de R.L. de C.V., 1% owned by
Spartech Mexico Holding Company Two

	(q)	 	100% owned by Spartech Industries, Inc.

Notes to Directors/Managers Column

          Abbreviations: GAA=George A. Abd; SJP=Steven J. Ploeger; RCM=Randy C. Martin

	(I)	 	GAA, SJP

	(II)	 	GAA, RCM

	(III)	 	GAA, SJP, RCM

Notes to Officers Column

                    Abbreviations: GAA=George A. Abd; SJP=Steven J. Ploeger; RCM=Randy C. Martin; DG=David Gorenc; GN=Greg Nagel; 

SM=Scott Morford; JDF=Jeffrey D. Fisher

	(1)	 	President/CEO: GAA; VP/CFO: RCM; Exec.VP: SJP; VP’s: GN, DG; Secretary: JDF

	(2)	 	President/CEO: GAA; VP/CFO: RCM; Exec.VP: SJP; VP: GN; Secretary: JDF

	(3)	 	President/CEO: GAA; VP/CFO: RCM; VP: SM; Secretary: JDF

	(4)	 	President/CEO: GAA; VP/CFO: RCM; Exec.VP: SJP; Secretary: JDF

	(5)	 	Chairman: GAA; Treasurer: RCM

	(6)	 	President: SM

	(7)	 	President/CEO: GAA; VP/CFO: RCM; Secretary: JDF

2

 

Schedule 5.5

List of Financial Statements

          1. Unaudited Consolidated Condensed Balance Sheet, Statement of Operations and Statement of
Cash Flows (“Condensed Financial Statements”) for the quarter ended January 28, 2006.

          2. Consolidated Balance Sheet, Statement of Operations and Statement of Cash Flows (“Financial
Statements”) for the year ended October 29, 2005, audited by Ernst & Young, LLP.

 

 

Schedule 5.11

Licenses, etc.

None

 

 

Schedule 5.15

List of Existing Indebtedness in Excess of $1 Million

	 	 	 	 	 
	Indebtedness	 	Amount
	Fourth Amended and Restated Credit Agreement dated June 2,
2006 among Spartech Corporation as the Borrower, Bank of
America, N.A., as Administrative Agent and LC Issuer and
the other lenders party hereto
	 	$	350,000,000	 
	 
	 	 	 	 
	Amended and Restated Credit Agreement dated as of April 27,
2004 between Spartech Canada, Inc. and Bank of America, NA.
(Canada Branch)
	 	$	10,000,000 CAD	 
	 
	 	 	 	 
	5.54% Senior Unsecured Notes, Due September 15, 2016
	 	$	150,000,000	 
	 
	 	 	 	 
	7% Senior Unsecured Notes, Due August 22, 2007
	 	$	12,857,000	 
	 
	 	 	 	 
	6.5% Convertible Subordinated Debentures, Due March 31, 2014
	 	$	51,546,400	 
	 
	 	 	 	 
	7% Convertible Subordinated Debentures, Due March 31, 2015
	 	$	103,092,800	 
	 
	 	 	 	 
	Lake Charles Harbor and Terminal District Revenue Bonds
	 	$	8,000,000	 
	 
	 	 	 	 
	Spartech Corporation guarantee to the Chamber of Commerce
and Industry of Les Ardennes for Spartech Polycom S.A.S.
repayment of the financing by the Chamber of Commerce.
	 	$	4,528,000	 
	 
	 	 	 	 
	Spartech Corporation guarantee to the Societe Generale for
the guarantee of the Societe Generale to the Chamber of
Commerce and Industry of Les Ardennes on behalf of Spartech
Polycom S.A.S.
	 	$	1,132,000	 
	 
	 	 	 	 
	Spartech Corporation Euro Facility with Calyon
	 	 	20,000,000exv10w6

Exhibit 10.6

 

SPARTECH CORPORATION

 

6.82% Senior Notes due 2011

 

AMENDED AND RESTATED

NOTE PURCHASE AGREEMENT

(Initially Dated as of June 5, 2006)

 

Dated as of September 10, 2008

 

- 1 -

 

Table of Contents

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	1.	 	AMENDMENT AND RESTATEMENT	 	 	1	 
	 
	 	1.1.	 	Prior Issuances	 	 	1	 
	 
	 	1.2.	 	Authorization of Amendment and Restatement of Existing Note Agreement	 	 	1	 
	 
	 	1.3.	 	Authorization of Amendment and
Restatement of Existing Notes and Exchange of Existing Notes	 	 	2	 
	 
	 	1.4.	 	Security for the Notes and Other Obligations	 	 	2	 
	 
	 	1.5.	 	The Subsidiary Guarantees	 	 	2	 
	 
	 	 	 	 	 	 	 	 
	2.	 	INTEREST RATE	 	 	3	 
	 
	 	 	 	 	 	 	 	 
	3.	 	CONDITIONS TO CLOSING	 	 	3	 
	 
	 	3.1.	 	Representations and Warranties	 	 	3	 
	 
	 	3.2.	 	Performance; No Default	 	 	3	 
	 
	 	3.3.	 	Compliance Certificates	 	 	3	 
	 
	 	3.4.	 	Opinion of Company Counsel	 	 	4	 
	 
	 	3.5.	 	Other Agreements	 	 	4	 
	 
	 	3.6.	 	Security Documents	 	 	5	 
	 
	 	3.7.	 	Payment of Special Counsel Fees	 	 	5	 
	 
	 	3.8.	 	Payment of Fees to Noteholders	 	 	5	 
	 
	 	3.9.	 	Proceedings and Documents	 	 	5	 
	 
	 	 	 	 	 	 	 	 
	4.	 	REPRESENTATIONS AND WARRANTIES OF THE COMPANY	 	 	5	 
	 
	 	4.1.	 	Organization; Power and Authority	 	 	6	 
	 
	 	4.2.	 	Authorization, etc.	 	 	6	 
	 
	 	4.3.	 	Disclosure	 	 	6	 
	 
	 	4.4.	 	Organization and Ownership of Shares of Subsidiaries; Affiliates	 	 	6	 
	 
	 	4.5.	 	Financial Statements	 	 	7	 
	 
	 	4.6.	 	Compliance with Laws, Other Instruments, etc.	 	 	7	 
	 
	 	4.7.	 	Governmental Authorizations, etc.	 	 	8	 
	 
	 	4.8.	 	Litigation; Observance of Agreements, Statutes and Orders	 	 	8	 
	 
	 	4.9.	 	Taxes	 	 	8	 
	 
	 	4.10.	 	Title to Property; Leases	 	 	9	 
	 
	 	4.11.	 	Licenses, Permits, etc.	 	 	9	 
	 
	 	4.12.	 	Compliance with ERISA	 	 	9	 
	 
	 	4.13.	 	Existing Indebtedness	 	 	10	 
	 
	 	4.14.	 	Foreign Assets Control Regulations, etc.	 	 	10	 
	 
	 	4.15.	 	Status Under Certain Statutes	 	 	11	 
	 
	 	4.16.	 	Environmental Matters	 	 	11	 
	 
	 	4.17.	 	Solvency	 	 	12	 
	 
	 	 	 	 	 	 	 	 
	5.	 	INFORMATION AS TO COMPANY	 	 	12	 
	 
	 	5.1.	 	Financial and Business Information	 	 	12	 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 
	 	5.2.	 	Officer’s Certificate	 	 	14	 
	 
	 	5.3.	 	Inspection	 	 	15	 
	 
	 	 	 	 	 	 	 	 
	6.	 	PAYMENT AND PREPAYMENT OF THE NOTES	 	 	16	 
	 
	 	6.1.	 	Certain Prepayments	 	 	16	 
	 
	 	6.2.	 	Optional Prepayments	 	 	18	 
	 
	 	6.3.	 	Allocation of Partial Prepayments	 	 	19	 
	 
	 	6.4.	 	Maturity; Surrender, etc.	 	 	19	 
	 
	 	6.5.	 	Purchase of Notes	 	 	19	 
	 
	 	 	 	 	 	 	 	 
	7.	 	AFFIRMATIVE COVENANTS	 	 	20	 
	 
	 	7.1.	 	Compliance with Law	 	 	20	 
	 
	 	7.2.	 	Insurance	 	 	20	 
	 
	 	7.3.	 	Maintenance of Properties	 	 	20	 
	 
	 	7.4.	 	Payment of Taxes and Claims	 	 	21	 
	 
	 	7.5.	 	Corporate Existence, etc.	 	 	21	 
	 
	 	7.6.	 	Additional Subsidiary Guarantees; Release of Subsidiary Guarantees	 	 	21	 
	 
	 	7.7.	 	Minimum Company and Subsidiary
Guarantor Consolidated Total Operating Income or Consolidated Total Assets	 	 	22	 
	 
	 	7.8.	 	Collateral	 	 	22	 
	 
	 	7.9.	 	Total Outstandings under Credit Facility Documents	 	 	23	 
	 
	 	 	 	 	 	 	 	 
	8.	 	NEGATIVE COVENANTS	 	 	23	 
	 
	 	8.1.	 	Liens	 	 	23	 
	 
	 	8.2.	 	Disposition of Assets	 	 	25	 
	 
	 	8.3.	 	Consolidations and Mergers	 	 	25	 
	 
	 	8.4.	 	Loans and Investments	 	 	26	 
	 
	 	8.5.	 	Limitation on Indebtedness	 	 	26	 
	 
	 	8.6.	 	Consolidated Net Worth	 	 	27	 
	 
	 	8.7.	 	Fixed Charge Coverage Ratio	 	 	27	 
	 
	 	8.8.	 	Leverage Ratio	 	 	27	 
	 
	 	8.9.	 	Sale/Leasebacks	 	 	27	 
	 
	 	8.10.	 	Transactions with Affiliates	 	 	28	 
	 
	 	8.11.	 	[Reserved]	 	 	28	 
	 
	 	8.12.	 	Guarantees	 	 	28	 
	 
	 	8.13.	 	Restricted Payments	 	 	28	 
	 
	 	8.14.	 	ERISA	 	 	28	 
	 
	 	8.15.	 	Change in Business	 	 	28	 
	 
	 	8.16.	 	Accounting Changes	 	 	29	 
	 
	 	8.17.	 	Amendment and Waivers of Subordinated Debt	 	 	29	 
	 
	 	8.18.	 	Capital Expenditures	 	 	29	 
	 
	 	8.19.	 	Credit Facility Documents	 	 	29	 
	 
	 	8.20.	 	Term Loan Documents	 	 	29	 
	 
	 	8.21.	 	Amended and Restated 2004 NPA	 	 	30	 
	 
	 	 	 	 	 	 	 	 
	9.	 	EVENTS OF DEFAULT	 	 	30	 

(ii)

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	10.	 	REMEDIES ON DEFAULT, ETC.	 	 	32	 
	 
	 	10.1.	 	Acceleration	 	 	32	 
	 
	 	10.2.	 	Other Remedies	 	 	33	 
	 
	 	10.3.	 	Rescission	 	 	33	 
	 
	 	10.4.	 	No Waivers or Election of Remedies, Expenses, etc.	 	 	33	 
	 
	 	 	 	 	 	 	 	 
	11.	 	REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES	 	 	34	 
	 
	 	11.1.	 	Registration of Notes	 	 	34	 
	 
	 	11.2.	 	Transfer and Exchange of Notes	 	 	34	 
	 
	 	11.3.	 	Replacement of Notes	 	 	35	 
	 
	 	 	 	 	 	 	 	 
	12.	 	PAYMENTS ON NOTES	 	 	35	 
	 
	 	12.1.	 	Place of Payment	 	 	35	 
	 
	 	12.2.	 	Home Office Payment	 	 	35	 
	 
	 	 	 	 	 	 	 	 
	13.	 	EXPENSES, ETC.	 	 	36	 
	 
	 	13.1.	 	Transaction Expenses	 	 	36	 
	 
	 	13.2.	 	Survival	 	 	37	 
	 
	 	 	 	 	 	 	 	 
	14.	 	SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT	 	 	37	 
	 
	 	 	 	 	 	 	 	 
	15.	 	AMENDMENT AND WAIVER	 	 	37	 
	 
	 	15.1.	 	Requirements	 	 	37	 
	 
	 	15.2.	 	Solicitation of Holders of Notes	 	 	37	 
	 
	 	15.3.	 	Binding Effect, etc.	 	 	38	 
	 
	 	15.4.	 	Notes held by Company, etc.	 	 	38	 
	 
	 	 	 	 	 	 	 	 
	16.	 	NOTICES	 	 	38	 
	 
	 	 	 	 	 	 	 	 
	17.	 	REPRODUCTION OF DOCUMENTS	 	 	39	 
	 
	 	 	 	 	 	 	 	 
	18.	 	CONFIDENTIAL INFORMATION	 	 	39	 
	 
	 	 	 	 	 	 	 	 
	19.	 	MISCELLANEOUS	 	 	40	 
	 
	 	19.1.	 	Successors and Assigns	 	 	40	 
	 
	 	19.2.	 	Construction	 	 	40	 
	 
	 	19.3.	 	Jurisdiction and Process; Waiver of Jury Trial	 	 	40	 
	 
	 	19.4.	 	Payments Due on Non-Business Days	 	 	41	 
	 
	 	19.5.	 	Severability	 	 	41	 
	 
	 	19.6.	 	Accounting Terms; Pro Forma Calculations	 	 	42	 
	 
	 	19.7.	 	Counterparts	 	 	42	 
	 
	 	19.8.	 	Governing Law	 	 	42	 
	 
	 	19.9.	 	Subsidiary Guarantors’ Acknowledgment	 	 	42	 

(iii)

 

	 	 	 	 	 
	Schedule A

	 	—
	 	Names and Addresses of Noteholders
	Schedule B

	 	—
	 	Defined Terms
	 
	 	 	 	 
	Exhibit 1.3

	 	—
	 	Form of 6.82% Senior Note due 2011
	Exhibit 1.5

	 	—
	 	Form of Subsidiary Guarantee
	Exhibit 3.4

	 	—
	 	Form of Opinion of Special Counsel for the Company
	Exhibit 3.5

	 	—
	 	Form of Intercreditor Agreement
	 
	 	 	 	 
	Schedule 4.4

	 	—
	 	Subsidiaries
	Schedule 4.8

	 	 	 	Litigation
	Schedule 4.10(c)

	 	—
	 	Real Property
	Schedule 4.10(d)

	 	—
	 	Leases
	Schedule 4.11

	 	—
	 	Licenses, Etc.
	Schedule 4.13

	 	—
	 	Existing Indebtedness
	Schedule 8.1

	 	—
	 	Liens

(iv)

 

SPARTECH CORPORATION

120 South Central

Suite 1700

Clayton, MO 63105

6.82% Senior Notes due 2011

As of September 10, 2008

TO EACH OF THE NOTEHOLDERS LISTED

   IN THE ATTACHED SCHEDULE A:

Ladies and Gentlemen:

          SPARTECH CORPORATION, a Delaware corporation (the “Company”), agrees with each Noteholder as
set forth below. Certain capitalized terms used in this Agreement are defined in Schedule B;
references to a “Schedule” or an “Exhibit” are, unless otherwise specified, to a Schedule or an
Exhibit attached to this Agreement; references to Sections are, unless otherwise specified, to
Sections of this Agreement.

1. AMENDMENT AND RESTATEMENT.

1.1. Prior Issuances.

          Pursuant to those certain Note Purchase Agreements, each dated as of June 5, 2006, between the
Company and each of the parties listed on Schedule A thereto as purchasers of the Notes (as amended
from time to time and as in effect immediately prior to the Effective Date, collectively, the
“Existing Note Agreement”), the Company issued $50,000,000 aggregate principal amount of its 5.78%
Senior Notes due 2011 (as amended from time to time and as in effect immediately prior to the
Effective Date, the “Existing Notes”). The Existing Notes are currently outstanding and held
(beneficially or of record) by the Noteholders as set forth on Schedule A hereto. The Company has
requested that the Noteholders agree to amend various provisions of the Existing Note Agreement and
the Existing Notes. The Noteholders have, subject to the satisfaction of the conditions set forth
in Section 3 of this Agreement, consented to such request. The mutual agreement of the parties as
to such matters is set forth in the amendment and restatement of the Existing Note Agreement and
the Existing Notes provided for in this Agreement.

1.2. Authorization of Amendment and Restatement of Existing Note Agreement.

          Subject to the satisfaction of the conditions precedent set forth in Section 3 of this
Agreement, the Company and each Noteholder, each by its execution of this Agreement, hereby agrees
and consents to the amendment and restatement in its entirety of the Existing Note Agreement by
this Agreement, and the Existing Note Agreement shall be deemed so amended and restated.

 

 

          Notwithstanding the foregoing, (a) the representations and warranties set forth in section 5
and section 6 of the Existing Note Agreement shall be deemed to survive the amendment and
restatement of the Existing Note Agreement and (b) the representations and warranties set forth in
Section 4 of this Agreement shall be deemed to be additional representations and warranties made as
of the date of this Agreement. The provisions of Sections 1 through 3 (inclusive) of the Existing
Note Agreement, insofar as they apply to the original issuance of the Existing Notes on the
original date of issuance, shall be deemed to survive the amendment and restatement of the Existing
Note Agreement.

1.3. Authorization of Amendment and Restatement of Existing Notes and Exchange of Existing Notes.

          Subject to the satisfaction of the conditions set forth in Section 3 of this Agreement, the
Company and each Noteholder, each by its execution of this Agreement, hereby agrees and consents to
the amendment and restatement in their entirety of the Existing Notes, on the terms set forth in
this Section 1.3. The Existing Notes, as amended and restated hereby and in the form of Exhibit
1.3 to this Agreement, and as further amended or amended and restated from time to time, shall be
hereinafter referred to, individually, as a “Note” and, collectively, as the “Notes.” Any Note
issued on or after the Effective Date shall be in the form of Exhibit 1.3 to this Agreement.

          On or before the Effective Date, the Company will deliver to the holders’ special counsel,
Bingham McCutchen LLP, at One State Street, Hartford, CT 06103, one or more Notes, in the
denominations specified below such Noteholder’s name on Schedule A hereto, dated as of the most
recent interest payment in respect thereof, and payable to such Noteholder or as otherwise
indicated on Schedule A hereto, against delivery by such Noteholder of the Existing Notes
identified as held by such Noteholder on Schedule A hereto (or notice of lost note in accordance
with Section 11.3). Bingham McCutchen LLP will forward each of the Notes to the Noteholders as
directed in Schedule A hereto and the Existing Notes (or the notice of lost note) to the Company
for cancellation. All amounts owing under, and evidenced by, the Existing Notes as of the
Effective Date shall continue to be outstanding under, and shall, after the Effective Date be
evidenced by, the Notes, and shall be repayable in accordance with this Agreement and the Notes.

1.4. Security for the Notes and Other Obligations.

          The Notes and the other obligations of the Company in respect of this Agreement are secured by
the Collateral on the terms set forth in the Security Documents.

1.5. The Subsidiary Guarantees.

          The Notes and the other obligations of the Company in respect of this Agreement are
unconditionally guaranteed by each of the Company’s existing Domestic Subsidiaries (except
Subsidiaries that are inactive or have no assets other than ownership interests in other Domestic
Subsidiaries), pursuant to subsidiary guarantees substantially in the form of Exhibit 1.5
(individually a “Subsidiary Guarantee” and collectively the “Subsidiary Guarantees”, which terms
shall include after the Effective Date all additional Subsidiary Guarantees from time to

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time executed and delivered pursuant to Section 7.6). Each Person that executes and delivers
a Subsidiary Guarantee is referred to herein as a “Subsidiary Guarantor.”

2. INTEREST RATE

          The interest rate applicable to the Existing Notes on the date of original issuance was 5.78%
per annum. The interest rate on the Notes, on and after the Effective Date, shall be 6.82% per
annum, payable as provided herein and in the Notes.

3. CONDITIONS TO CLOSING.

          The amendment and restatement of the Existing Note Agreement shall be subject to the
fulfillment to the satisfaction of all Noteholders and their special counsel of the following
conditions on September 10, 2008 (the date of such satisfaction, the “Effective Date”):

3.1. Representations and Warranties.

          The representations and warranties of the Company and the Subsidiaries contained in this
Agreement, the other Financing Documents and the Security Documents shall be correct in all
material respects on the Effective Date.

3.2. Performance; No Default.

          The Company shall have performed and complied with all agreements and conditions contained in
this Agreement, the other Financing Documents and the Security Documents required to be performed
or complied with by it on or prior to the Effective Date, and, after giving effect to the amendment
and restatement evidenced by this Agreement, no Default or Event of Default shall have occurred and
be continuing.

3.3. Compliance Certificates.

          (a) Officer’s Certificate. The Company shall have delivered to each Noteholder or its
special counsel an Officer’s Certificate, dated the date of the date hereof, certifying that the
conditions specified in Sections 3.1 and 3.2 have been fulfilled.

          (b) Secretary’s Certificate. The Company shall have delivered to each Noteholder or
its special counsel a certificate of the Secretary or an Assistant Secretary of the Company
attaching (i) a certified copy of the Company’s Organization Documents, (ii) resolutions
authorizing this Agreement and each of the other Financing Documents and Security Documents to
which it is a party, each, in form and substance satisfactory to the Noteholders, and (iii)
incumbency certificates and/or other certificates of Responsible Officers of the Company as the
Noteholders may require evidencing the identity, authority and capacity of each Responsible Officer
thereof authorized to act as a Responsible Officer in connection with this Agreement and the other
Financing Documents and Security Documents to which the Company is a party or is to be a party.

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3.4. Opinion of Company Counsel.

          Each Noteholder or its special counsel shall have received an opinion in form and substance
satisfactory to such Noteholder, dated the Effective Date, from Armstrong Teasdale LLP, special
counsel for the Company, substantially in the form set forth in Exhibit 3.4 and covering such other
matters incident to the transactions contemplated hereby as such Noteholder or its counsel may
reasonably request (and the Company hereby instructs its counsel to deliver such opinion to each
Noteholder or its special counsel).

3.5. Other Agreements.

          (a) Amended and Restated Note Purchase Agreement (Initially Dated as of September 15,
2004). The Company shall have entered into that certain Amended and Restated Note Purchase
Agreement (Initially Dated as of September 15, 2004), dated as of the Effective Date, with the
noteholders listed in schedule A attached thereto (the “Amended and Restated 2004 NPA”), in form
and substance satisfactory to each Noteholder, and the Company shall have satisfied the conditions
precedent to the Amended and Restated 2004 NPA other than the effectiveness of the Financing
Documents. Each Noteholder shall have received true and complete copies of the Amended and
Restated 2004 NPA, and each certificate, opinion or other writing then or theretofore delivered to
any party to the Amended and Restated 2004NPA in respect of the satisfaction of such conditions
precedent (without duplication as to conditions specifically set forth in this Section 3).

          (b) Credit Agreement. The Company shall have entered into that certain Third
Amendment to Fourth Amended and Restated Credit Agreement, dated as of the Effective Date, with the
Bank of America, N.A., as Administrative Agent and L/C Issuer, The Bank of Tokyo-Mitsubishi UFJ,
LTD., and Keybank, National Association as Syndication Agents, Calyon New York Branch and National
City Bank of Pennsylvania as Documentation Agents and the other Lenders party thereto (the
“Amendment to Credit Agreement” and such credit agreement, as further amended from time to time,
the “Credit Agreement”), in form and substance satisfactory to each Noteholder, and the Company
shall have satisfied the conditions precedent to the Amendment to Credit Agreement other than the
effectiveness of the Financing Documents. Each Noteholder shall have received true and complete
copies of the Amendment to Credit Agreement, and each certificate, opinion or other writing then or
theretofore delivered to any party to the Amendment to Credit Agreement in respect of the
satisfaction of such conditions precedent (without duplication as to conditions specifically set
forth in this Section 3).

          (c) Term Loan. The Company shall have entered into that certain Third Amendment to
Term Loan Agreement, dated as of the Effective Date, with Calyon New York Branch (the “Amendment to
Term Loan Agreement” and such term loan agreement, as further amended from time to time, the “Term
Loan Agreement”), in form and substance satisfactory to each Noteholder, and the Company shall have
satisfied the conditions precedent to the Amendment to Term Loan Agreement other than the
effectiveness of the Financing Documents. Each Noteholder shall have received true and complete
copies of the Amendment to Term Loan Agreement, and each certificate, opinion or other writing then
or theretofore delivered to any

4

 

party to the Amendment to Term Loan Agreement in respect of the satisfaction of such
conditions precedent (without duplication as to conditions specifically set forth in this Section
3).

          (d) Intercreditor and Collateral Agency Agreement. Each of the Noteholders or its
counsel and the Collateral Agent shall have received the Intercreditor Agreement, dated as of the
Effective Date, duly executed and delivered by the Company and each other party thereto, in the
form attached hereto as Exhibit 3.5.

3.6. Security Documents.

          The Collateral Agent shall have received a security agreement, dated as of the Effective Date,
duly executed and delivered by the Company and each Debtor (as defined therein) in form and
substance satisfactory to each Noteholder (as amended from time to time, the “Security Agreement”),
together with evidence of the taking of all other actions, recordings and filings of or with
respect to the Security Agreement that the Collateral Agent may deem necessary or desirable within
three days of the Effective Date (or as soon as practicable in the case of actions, recordings and
filings related to intellectual property), or as otherwise agreed by the Collateral Agent in
consultation with the parties to the Credit Agreement, in order to perfect the Lien created
thereby, and each of the Noteholders or its counsel shall have received true and correct copies of
the same.

3.7. Payment of Special Counsel Fees.

          Without limiting the provisions of Section 13.1, the Company shall have paid on or before the
Effective Date the reasonable fees, charges and disbursements of the Noteholders’ special counsel
to the extent reflected in a statement of such counsel rendered to the Company at the closing.

3.8. Payment of Fees to Noteholders.

          The Company shall have paid to the Noteholders for their ratable benefit an amendment fee in
the amount of 15 basis points against the outstanding principal amount of the Notes, and a fee in
respect of certain other matters in the amount of 25 basis points against the outstanding principal
amount of the Notes.

3.9. Proceedings and Documents.

          All corporate and other proceedings in connection with the transactions contemplated by this
Agreement and all documents and instruments incident to such transactions shall be satisfactory to
each Noteholder and its special counsel, and such Noteholder and its special counsel shall have
received all such counterpart originals or certified or other copies of such documents as such
Noteholder or its counsel may reasonably request.

4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

          As of the Effective Date, the Company represents and warrants to each Noteholder that:

5

 

4.1. Organization; Power and Authority.

          The Company and each of its Subsidiaries is a corporation, limited liability company or
limited partnership, as applicable, duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation, organization or formation, as applicable, and is duly
qualified as a foreign corporation, limited liability company or limited partnership, as
applicable, and is in good standing in each jurisdiction in which such qualification is required by
law, other than those jurisdictions as to which the failure to be so qualified or in good standing
could not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect. The Company and each of its Subsidiaries has the power and authority to own or hold under
lease the properties it purports to own or hold under lease, to transact the business it transacts
and proposes to transact, and (a) in the case of the Company, to execute and deliver this
Agreement, the Notes, the other Financing Documents and the Security Documents and to perform the
provisions hereof and thereof, and (b) in the case of each Subsidiary party thereto, to execute and
deliver its respective Subsidiary Guarantee and the Security Documents and to perform the
provisions thereof.

4.2. Authorization, etc.

          The execution, delivery and performance by the Company of this Agreement, and by the Company
and each of its Subsidiaries of any other Financing Document and Security Document to which such
Person is a party, has been duly authorized by all necessary action and this Agreement constitutes,
and upon the execution and delivery thereof each Financing Document and Security Document will
constitute, a legal, valid and binding obligation of the Company and each of its Subsidiaries, as
applicable, enforceable against the Company and each of its Subsidiaries, as applicable, in
accordance with its terms, except as such enforceability may be limited by (a) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement
of creditors’ rights generally and (b) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

4.3. Disclosure.

          None of the information (financial or otherwise) furnished by or on behalf of the Company or
any of its Subsidiaries to the Noteholders in connection with the consummation of the transactions
contemplated by the Financing Documents or Security Documents, taken as a whole, contains any
untrue statement of a material fact or omits to state a material fact necessary to make the
statements contained herein or therein, taken as a whole, not misleading in light of the
circumstances under which they were made.

4.4. Organization and Ownership of Shares of Subsidiaries; Affiliates.

          (a) Schedule 4.4 contains (except as noted therein) complete and correct lists of the
Company’s (i) Subsidiaries, showing, as to each Subsidiary, the correct name thereof, the
jurisdiction of its organization, and the percentage of shares of each class of its capital stock
or similar equity interests outstanding owned by the Company and each other Subsidiary, (ii)
Affiliates, other than Subsidiaries, and (iii) directors and senior officers. Schedule 4.4 also

6

 

identifies each Significant Subsidiary and each Domestic Subsidiary required to be a
Subsidiary Guarantor pursuant hereto.

          (b) All of the outstanding shares of capital stock or similar equity interests of each
Subsidiary shown in Schedule 4.4 as being owned by the Company and its Subsidiaries have been
validly issued, are fully paid and nonassessable and are owned by the Company or another Subsidiary
free and clear of any Lien (except as otherwise disclosed in Schedule 4.4).

          (c) No Subsidiary is a party to, or otherwise subject to any legal restriction or any
agreement (other than customary limitations imposed by corporate law statutes) restricting the
ability of such Subsidiary to pay dividends out of profits or make any other similar distributions
of profits to the Company or any of its Subsidiaries that owns outstanding shares of capital stock
or similar equity interests of such Subsidiary.

          (d) As of the Effective Date, the Company has no Subsidiaries other than those specifically
disclosed in Schedule 4.4 and has no equity investments in any other corporation or entity other
than those specifically disclosed in Schedule 4.4.

4.5. Financial Statements.

          All of the financial statements of the Company and its Subsidiaries delivered to the
Noteholders on or prior to the Effective Date (including in each case the related schedules and
notes) fairly present in all material respects the consolidated financial position of the Company
and its Subsidiaries as of the respective dates of such financial statements and the consolidated
results of their operations and cash flows for the respective periods so specified and have been
prepared in accordance with GAAP consistently applied throughout the periods involved except as set
forth in the notes thereto (subject, in the case of any interim financial statements, to normal
year-end adjustments).

4.6. Compliance with Laws, Other Instruments, etc.

          The execution, delivery and performance by the Company and each of its Subsidiaries of the
Financing Documents and Security Documents to which it is a party will not (i) contravene, result
in any breach of, or constitute a default under, or result in the creation of any Lien in respect
of any property of the Company or any Subsidiary under, any indenture, mortgage, deed of trust,
loan, purchase or credit agreement, lease, corporate charter, by-laws or other Organization
Document, or any other agreement or instrument to which the Company or any Subsidiary is bound or
by which the Company or any Subsidiary or any of their respective properties may be bound or
affected, (ii) conflict with or result in a breach of any of the terms, conditions or provisions of
any order, judgment, decree, or ruling of any court, arbitrator or Governmental Authority
applicable to the Company or any Subsidiary or (iii) violate any provision of any statute or other
rule or regulation of any Governmental Authority applicable to the Company or any Subsidiary.

7

 

4.7. Governmental Authorizations, etc.

          No consent, approval or authorization of, or registration, filing or declaration with, any
Governmental Authority or any other Person is necessary or required in connection with (a) the
execution, delivery or performance by the Company, or any of its Subsidiaries, of this Agreement or
any other Financing Document to which it is a party, (b) the grant by the Company and each Domestic
Subsidiary of the Liens granted by it pursuant to the Security Documents, (c) the perfection or
maintenance of the Liens created under the Security Documents (other than customary filings), or
(d) the priority of such Liens required under the Financing Documents.

4.8. Litigation; Observance of Agreements, Statutes and Orders.

          Other than as set forth on Schedule 4.8 hereto:

          (a) There are no actions, suits or proceedings pending or, to the knowledge of the Company,
threatened against or affecting the Company or any Subsidiary or any property of the Company or any
Subsidiary in any court or before any arbitrator of any kind or before or by any Governmental
Authority that, individually or in the aggregate, could reasonably be expected to have a Material
Adverse Effect.

          (b) Neither the Company nor any Subsidiary is in default under any term of any agreement or
instrument to which it is a party or by which it is bound, or any order, judgment, decree or ruling
of any court, arbitrator or Governmental Authority or is in violation of any applicable law,
ordinance, rule or regulation (including without limitation Environmental Laws) of any Governmental
Authority, which default or violation, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.

4.9. Taxes.

          The Company and each of its Subsidiaries have filed all tax returns that are required to have
been filed in any jurisdiction, and have paid all taxes shown to be due and payable on such returns
and all other taxes and assessments levied upon them or their properties, assets, income or
franchises, to the extent such taxes and assessments have become due and payable and before they
have become delinquent, except for any taxes and assessments (a) currently payable without penalty
or interest, (b) the amount of which is not individually or in the aggregate Material or (c) the
amount, applicability or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which the Company or a Subsidiary, as the case may be,
has established adequate reserves in accordance with GAAP. The Company knows of no basis for any
other tax or assessment that could reasonably be expected to have a Material Adverse Effect. The
charges, accruals and reserves on the books of the Company and its Subsidiaries in respect of
federal, state or other taxes for all fiscal periods are adequate.

8

 

4.10. Title to Property; Leases.

     (a) The Company and each of its Subsidiaries has good record and marketable title
in fee simple to, or valid leasehold interests in, all real property necessary or used
in the ordinary conduct of its business, except for Liens in favor of the Collateral
Agent and Permitted Liens, and except for such defects in title as could not
individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect.

     (b) The property of the Company and each of its Subsidiaries is free and clear of
all Liens except for Permitted Liens.

4.11. Licenses, Permits, etc.

          Except as disclosed in Schedule 4.11,

     (a) the Company and its Subsidiaries own or possess all licenses, permits,
franchises, authorizations, patents, copyrights, proprietary software, service marks,
trademarks and trade names, or rights thereto, that individually or in the aggregate are
Material, without known conflict with the rights of others;

     (b) to the best knowledge of the Company, no product of the Company infringes in
any material respect any license, permit, franchise, authorization, patent, copyright,
proprietary software, service mark, trademark, trade name or other right owned by any
other Person; and

     (c) to the best knowledge of the Company, there is no Material violation by any
Person of any right of the Company or any of its Subsidiaries with respect to any
patent, copyright, proprietary software, service mark, trademark, trade name or other
right owned or used by the Company or any of its Subsidiaries.

4.12. Compliance with ERISA.

          (a) The Company and each ERISA Affiliate have operated and administered each Plan in
compliance with all applicable laws except for such instances of noncompliance as have not resulted
in and could not reasonably be expected to result in a Material Adverse Effect. Neither the
Company nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or
the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in
section 3 of ERISA), and no event, transaction or condition has occurred or exists that could
reasonably be expected to result in the incurrence of any such liability by the Company or any
ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of the
Company or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to such
penalty or excise tax provisions or to section 401(a)(29) or 412 of the Code, other than such
liabilities or Liens as would not be individually or in the aggregate Material.

9

 

          (b) The present value of the aggregate benefit liabilities under each of the Plans (other than
Multiemployer Plans), determined as of the end of such Plan’s most recently ended plan year on the
basis of the actuarial assumptions specified for funding purposes in such Plan’s most recent
actuarial valuation report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities. The term “benefit liabilities” has the meaning specified in
section 4001 of ERISA and the terms “current value” and “present value” have the meaning specified
in section 3 of ERISA.

          (c) The Company and its ERISA Affiliates have not incurred withdrawal liabilities (and are not
subject to contingent withdrawal liabilities) under section 4201 or 4204 of ERISA in respect of
Multiemployer Plans that individually or in the aggregate are Material.

          (d) The expected post retirement benefit obligation (determined as of the last day of the
Company’s most recently ended fiscal year in accordance with Financial Accounting Standards Board
Statement No. 106, without regard to liabilities attributable to continuation coverage mandated by
section 4980B of the Code) of the Company and its Subsidiaries is not Material.

          (e) The execution and delivery of this Agreement will not involve any prohibited transaction
(as such term is defined in section 406(a) of ERISA and section 4975(c)(1)(A)-(D) of the Code),
that could subject the Company or any holder of a Note to any tax or penalty on prohibited
transactions imposed under said section 4975 of the Code or by section 502(i) of ERISA. The
representation by the Company in the first sentence of this Section 4.12(e) is made in reliance
upon and subject to the accuracy of each Noteholder’s representation in section 6.2 of the Existing
Note Agreement as to the source of the funds used to pay the purchase price of the Existing Notes.

4.13. Existing Indebtedness.

          Schedule 4.13 sets forth a complete and correct list of all outstanding Indebtedness of the
Company and its Subsidiaries in an unpaid principal amount exceeding $1,000,000 as of the date set
forth thereon (except as otherwise indicated), in each case setting forth the identity of the
obligor and obligee in respect thereof, whether such Indebtedness is secured by Liens, and whether
such Indebtedness constitutes, or is supported by, a Guaranty. Neither the Company nor any
Subsidiary is in default, and no waiver of default is currently in effect except as otherwise
indicated on Schedule 4.13, in the payment of any principal or interest on any Indebtedness of the
Company or such Subsidiary in an unpaid principal amount exceeding $1,000,000, and no event or
condition exists with respect to any such Indebtedness of the Company or any Subsidiary that would
permit (or that with the giving of notice or the lapse of time, or both, would permit) one or more
Persons to cause such Indebtedness to become due and payable before its stated maturity or before
its regularly scheduled dates of payment.

4.14. Foreign Assets Control Regulations, etc.

          (a) The amendment and restatement of the Existing Note Agreement by the Company represented
hereby will not violate the Trading with the Enemy Act, as amended, or any of the foreign assets
control regulations of the United States Treasury Department (31 CFR,

10

 

Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating
thereto.

          (b) Neither the Company nor any Subsidiary (i) is a Person described or designated in the
Specially Designated Nationals and Blocked Persons List of the Office of Foreign Assets Control or
in Section 1 of the Anti-Terrorism Order or (ii) knowingly engages in any dealings or transactions,
or is otherwise associated, with any such Person. The Company and its Subsidiaries are in
substantial compliance with the USA Patriot Act.

4.15. Status Under Certain Statutes.

          Neither the Company nor any Subsidiary is subject to regulation under the Investment Company
Act of 1940, as amended, the Public Utility Holding Company Act of 2005, as amended, the ICC
Termination Act of 1995, as amended, or the Federal Power Act, as amended.

4.16. Environmental Matters.

          Other than as set forth in Schedule 4.8, neither the Company nor any Subsidiary has knowledge
of any claim or has received any notice of any claim, and no proceeding has been instituted raising
any claim against the Company or any of its Subsidiaries or any of their respective real properties
now or formerly owned, leased or operated by any of them or other assets, alleging any damage to
the environment or violation of any Environmental Laws, except, in each case, such as could not
reasonably be expected to result in a Material Adverse Effect. Except as otherwise disclosed to
each Noteholder in writing prior to its execution and delivery of this Agreement,

     (a) neither the Company nor any Subsidiary has knowledge of any facts which would
give rise to any claim, public or private, of violation of Environmental Laws or damage
to the environment emanating from, occurring on or in any way related to real properties
now or formerly owned, leased or operated by any of them or to other assets or their
use, except, in each case, such as could not reasonably be expected to result in a
Material Adverse Effect;

     (b) neither the Company nor any of its Subsidiaries has stored any Hazardous
Materials on real properties now or formerly owned, leased or operated by any of them
and has not disposed of any Hazardous Materials in a manner contrary to any
Environmental Laws in each case in any manner that could reasonably be expected to
result in a Material Adverse Effect; and

     (c) all buildings on all real properties now owned, leased or operated by the
Company or any of its Subsidiaries are in compliance with applicable Environmental Laws,
except where failure to comply could not reasonably be expected to result in a Material
Adverse Effect.

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4.17. Solvency.

          The Company is, and after giving effect to the transactions contemplated by the Financing
Documents will be, a “solvent institution”, as said term is used in Section 1405(c) of the New York
Insurance Law, whose “obligations . . . are not in default as to principal or interest”, as said
terms are used in said Section 1405(c).

5. INFORMATION AS TO COMPANY.

5.1. Financial and Business Information.

          The Company shall deliver to each holder of Notes that is an Institutional Investor:

        (a) Quarterly Statements — within 45 days after the end of each quarterly
fiscal period in each fiscal year of the Company (other than the last quarterly fiscal
period of each such fiscal year), duplicate copies of,

      (i) a consolidated balance sheet of the Company and its Subsidiaries as at the
end of such quarter, and

      (ii) consolidated statements of income, changes in shareholders’ equity and
cash flows of the Company and its Subsidiaries, for such quarter and (in the case of
the second and third quarters) for the portion of the fiscal year ending with such
quarter,

setting forth in each case in comparative form the figures for the corresponding periods in
the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP
applicable to quarterly financial statements generally, and certified by a Senior Financial
Officer as fairly presenting, in all material respects, the financial position of the
companies being reported on and their results of operations and cash flows, subject to
changes resulting from year-end adjustments, provided that delivery within the time period
specified above of copies of the Company’s Quarterly Report on Form 10-Q prepared in
compliance with the requirements therefor and filed with the Securities and Exchange
Commission shall be deemed to satisfy the requirements of this Section 5.1(a);

        (b) Annual Statements — within 90 days after the end of each fiscal year
of the Company, duplicate copies of,

      (i) a consolidated balance sheet of the Company and its Subsidiaries as at the
end of such year, and

      (ii) consolidated statements of income, changes in shareholders’ equity and
cash flows of the Company and its Subsidiaries for such year,

setting forth in each case in comparative form the figures for the previous fiscal year, all
in reasonable detail, prepared in accordance with GAAP, and accompanied by

12

 

          (A) an opinion thereon of independent public accountants of recognized
national standing, which opinion shall state that such financial statements present
fairly, in all material respects, the financial position of the companies being
reported upon and their results of operations and cash flows and have been prepared
in conformity with GAAP, and that the examination of such accountants in connection
with such financial statements has been made in accordance with generally accepted
auditing standards, and that such audit provides a reasonable basis for such
opinion in the circumstances, and

          (B) a certificate of such accountants stating that they have reviewed this
Agreement and stating further whether, in making their audit, they have become
aware of any condition or event that then constitutes a Default or an Event of
Default, and, if they are aware that any such condition or event then exists,
specifying the nature and period of the existence thereof (it being understood that
such accountants shall not be liable, directly or indirectly, for any failure to
obtain knowledge of any Default or Event of Default unless such accountants should
have obtained knowledge thereof in making an audit in accordance with generally
accepted auditing standards or did not make such an audit),

provided that the delivery within the time period specified above of the Company’s Annual
Report on Form 10-K for such fiscal year (together with the Company’s annual report to
shareholders, if any, prepared pursuant to Rule 14a-3 under the Exchange Act) prepared in
accordance with the requirements therefor and filed with the Securities and Exchange
Commission, together with the accountant’s certificate described in clause (B) above, shall
be deemed to satisfy the requirements of this Section 5.1(b);

        (c) SEC and Other Reports — promptly upon their becoming available, one
copy of (i) each financial statement, report, notice or proxy statement sent by the
Company or any Subsidiary generally to its shareholders or to its creditors (other than
the Company or another Subsidiary), and (ii) each regular or periodic report, each
registration statement (without exhibits except as expressly requested by such holder),
and each prospectus and all amendments thereto filed by the Company or any Subsidiary
with the Securities and Exchange Commission and of each press release and other
statement made available generally by the Company or any Subsidiary to the public
concerning developments that are Material;

        (d) Notice of Default or Event of Default — promptly, and in any event
within five days after a Responsible Officer becoming aware of the existence of any
Default or Event of Default or that any Person has given any notice or taken any action
with respect to a claimed default hereunder or that any Person has given any notice or
taken any action with respect to a claimed default of the type referred to in Section
9(f), a written notice specifying the nature and period of existence thereof and what
action the Company is taking or proposes to take with respect thereto;

13

 

        (e) ERISA Matters — promptly, and in any event within five days after a
Responsible Officer becoming aware of any of the following, a written notice setting
forth the nature thereof and the action, if any, that the Company or an ERISA Affiliate
proposes to take with respect thereto:

      (i) with respect to any Plan, any reportable event, as defined in
section 4043(c) of ERISA and the regulations thereunder, for which notice thereof
has not been waived pursuant to such regulations as in effect on the date hereof; or

      (ii) the taking by the PBGC of steps to institute, or the threatening by the
PBGC of the institution of, proceedings under section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan, or the
receipt by the Company or any ERISA Affiliate of a notice from a Multiemployer Plan
that such action has been taken by the PBGC with respect to such Multiemployer Plan;
or

      (iii) any event, transaction or condition that could result in the incurrence
of any liability by the Company or any ERISA Affiliate pursuant to Title I or IV of
ERISA or the penalty or excise tax provisions of the Code relating to employee
benefit plans, or in the imposition of any Lien on any of the rights, properties or
assets of the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA or
such penalty or excise tax provisions, if such liability or Lien, taken together
with any other such liabilities or Liens then existing, could reasonably be expected
to have a Material Adverse Effect;

        (f) Notices from Governmental Authority — promptly, and in any event
within 30 days of receipt thereof, copies of any notice to the Company or any Subsidiary
from any federal or state Governmental Authority relating to any order, ruling, statute
or other law or regulation that could reasonably be expected to have a Material Adverse
Effect; and

        (g) Requested Information — with reasonable promptness, such other data
and information relating to the business, operations, affairs, financial condition,
assets or properties of the Company or any of its Subsidiaries or relating to the
ability of the Company to perform its obligations hereunder and under the Notes or
relating to the ability of a Subsidiary Guarantor to perform its obligations under its
respective Subsidiary Guarantee, in each case as from time to time may be reasonably
requested by any holder of Notes.

5.2. Officer’s Certificate.

          Each set of financial statements delivered to a holder of Notes pursuant to Section 5.1(a) or
Section 5.1(b) shall be accompanied by a certificate of a Senior Financial Officer setting forth:

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     (a) Covenant Compliance — the information (including detailed
calculations) required in order to establish (i) whether the Company was in compliance
with the requirements of each of Sections 7.7, 8.2, 8.6, 8.7, 8.8, and 8.9 during the
quarterly or annual period covered by the statements then being furnished (including
with respect to each such Section, where applicable, the calculations of the maximum or
minimum amount, ratio or percentage, as the case may be, permissible under the terms of
such Sections, and the calculation of the amount, ratio or percentage then in
existence); and

     (b) Default — a statement that such Senior Financial Officer has reviewed
the relevant terms hereof and has made, or caused to be made, under his or her
supervision, a review of the transactions and conditions of the Company and its
Subsidiaries from the beginning of the quarterly or annual period covered by the
statements then being furnished to the date of the certificate and that such review
shall not have disclosed the existence during such period of any condition or event that
constitutes a Default or an Event of Default or, if any such condition or event existed
or exists (including, without limitation, any such event or condition resulting from the
failure of the Company or any Subsidiary to comply with any Environmental Law),
specifying the nature and period of existence thereof and what action the Company shall
have taken or proposes to take with respect thereto.

5.3. Inspection.

          The Company shall permit the representatives of each holder of Notes that is an Institutional
Investor:

     (a) No Default — if no Default or Event of Default then exists, at the
expense of such holder and upon reasonable prior notice to the Company, to visit the
principal executive office of the Company, to discuss the affairs, finances and accounts
of the Company and its Subsidiaries with the Company’s officers, and (with the consent
of the Company, which consent will not be unreasonably withheld) its independent public
accountants, and (with the consent of the Company, which consent will not be
unreasonably withheld) to visit the other offices and properties of the Company and each
Subsidiary, all at such reasonable times and as often as may be reasonably requested in
writing; and

     (b) Default — if a Default or Event of Default then exists, at the expense
of the Company, to visit and inspect any of the offices or properties of the Company or
any Subsidiary, to examine all their respective books of account, records, reports and
other papers, to make copies and extracts therefrom, and to discuss their respective
affairs, finances and accounts with their respective officers, employees and independent
public accountants (and by this provision the Company authorizes said accountants to
discuss the affairs, finances and accounts of the Company and its Subsidiaries), all at
such times and as often as may be requested.

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6. PAYMENT AND PREPAYMENT OF THE NOTES.

          In addition to the payment of the entire unpaid principal amount of the Notes at the final
maturity thereof, the Company will make required offers of prepayment and may make optional
prepayments in respect of the Notes as hereinafter provided.

6.1. Certain Prepayments.

     (a) Reserved.

     (b) Other Required Offers of Prepayment.

     (i) If the Company or any of its Subsidiaries makes an Asset Sale (other than
any Asset Sale permitted by Section 8.2(a), (b) or (c)) which results in the
realization by such Person of Net Cash Proceeds, the Company shall immediately offer
to prepay, at par and without premium, an aggregate principal amount of Notes equal
to (x) such Net Cash Proceeds that exceed $1,000,000 (such amount of Net Cash
Proceeds as the “Note Prepayment Basis”) times (y) (i) if the Leverage Ratio as of
the last fiscal quarter preceding such Asset Sale is greater than or equal to 3.50
to 1.00, 75% of such Note Prepayment Basis, (ii) if the Leverage Ratio as of the
last fiscal quarter preceding such Asset Sale is less than 3.50 to 1.00 but greater
than or equal to 2.50 to 1.00, 50% of such Note Prepayment Basis, and (iii) if the
Leverage Ratio as of the last fiscal quarter preceding such Asset Sale is less than
2.50 to 1.00, 0% of such Note Prepayment Basis, provided however, in the case of
clause (y)(iii) that (A) the Required Lenders have approved the release of the
Superpriority Amount and such release is effective under the Intercreditor Agreement
and (B) the Asset Sale mandatory prepayment provisions (or corresponding provisions)
in the Amended and Restated 2006 NPA, the Credit Agreement and the Term Loan
Agreement are similar to this Section 6.1(b)(i). Any such offer shall be made and
any such prepayment shall be applied as set forth in clause (vi) below and to be
subject to the Intercreditor Agreement and to be reduced by any amounts required to
be paid to other Creditors pursuant to the Intercreditor Agreement. Any portion of
the Note Prepayment Basis not used to prepay the Notes shall be reinvested in
Reinvestment Property so long as within 180 days after the receipt of such Net Cash
Proceeds, such purchase shall have been consummated or contractually committed to be
consummated pursuant to a definitive agreement (and, if so contractually committed,
actually reinvested within 270 days of the date of receipt of such Net Cash
Proceeds); and provided, however, that any such Net Cash Proceeds not subject to
such definitive agreement or so reinvested as required above shall be immediately
applied to the prepayment of the Notes as set forth in this Section 6.1(b)(i). As
used herein, “Reinvestment Property” means property that is useful in the business
of the Company and its Subsidiaries.

     (ii) Upon the sale or issuance by the Company or any of its Subsidiaries of any
of its Equity Interests, the Company shall offer to prepay, at par and without premium, an aggregate principal amount of Notes equal to 85%

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of all Net Cash Proceeds received therefrom (reduced by any amounts required to be paid
to the other Creditors pursuant to the Intercreditor Agreement), immediately upon
receipt thereof by the Company or such Subsidiary (such offer to be made and such
prepayments to be applied as set forth in clause (vi) below and to be subject to the
Intercreditor Agreement).

     (iii) Upon the incurrence or issuance by the Company or any of its Subsidiaries
of any Indebtedness, the Company shall offer to prepay, at par and without premium,
an aggregate principal amount of Notes equal to 100% of all Net Cash Proceeds
received therefrom (reduced by any amounts required to be paid to the other
Creditors pursuant to the Intercreditor Agreement), immediately upon receipt thereof
by the Company or such Subsidiary (such offer to be made and such prepayments to be
applied as set forth in clause (vi) below and to be subject to the Intercreditor
Agreement).

     (iv) Upon any Extraordinary Receipt received by or paid to or for the account
of the Company or any of its Subsidiaries, and not otherwise included in
clauses (i), (ii) or (iii) of this Section 6.1(b), the Company shall offer to
prepay, at par and without premium, an aggregate principal amount of Notes equal to
100% of all Net Cash Proceeds received therefrom (reduced by any amounts required to
be paid to the other Creditors pursuant to the Intercreditor Agreement), immediately
upon receipt thereof by the Company or such Subsidiary (such offer to be made and
such prepayments to be applied as set forth in clause (vi) below and to be subject
to the Intercreditor Agreement); provided, however, that with
respect to any proceeds of insurance, condemnation awards (or payments in lieu
thereof) or indemnity payments, at the election of the Company, and so long as no
Default shall have occurred and be continuing, the Company or such Subsidiary may
apply such cash proceeds within 180 days after the receipt thereof to replace or
repair the equipment, fixed assets or real property in respect of which such cash
proceeds were received or contractually agree to such replacement or repair within
such 180 day period pursuant to definitive agreement (and, if so contractually
committed, actually utilized within 270 days of the date of receipt of such cash
proceeds); and provided further, however, that any Net Cash
Proceeds not subject to such definitive agreement or so applied as required above
shall be immediately applied to the prepayment of the Notes as set forth in this
Section 6.1(b)(iv).

     (v) Within 15 days after the date that the audited financial statements of the
Company are required to be delivered pursuant to Section 5.1(b), commencing with the
audited financial statements for fiscal year 2008, and by each such date for each
fiscal year thereafter, the Company shall offer to prepay, at par and without
premium, Notes in an aggregate principal amount equal to (i) if the Leverage Ratio
as of the last fiscal quarter of such fiscal year is greater than or equal to 3.50
to 1.00, 75% of the Excess Cash Flow, if any, for the immediately preceding fiscal
year, (ii) if the Leverage Ratio as of the last fiscal quarter of such fiscal year is less than 3.50 to 1.00 but greater than or equal to 2.50 to
1.00, 50%

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of the Excess Cash Flow, if any, for the immediately preceding fiscal
year, and (iii) if the Leverage Ratio as of the last fiscal quarter of such fiscal
year is less than 2.50 to 1.00, 0% of the Excess Cash Flow for the immediately
preceding fiscal year, provided in the case of clause (iii) that (A) the Required
Lenders have approved the release of the Superpriority Amount and such release is
effective under the Intercreditor Agreement and (B) the Excess Cash Flow mandatory
prepayment provisions in the Amended and Restated 2006 NPA, the Credit Agreement and
the Term Loan Agreement are similar to this Section 6.1(b)(v) (such offer to be made
and such prepayment to be applied as set forth in clause (vi) below and to be
subject to the Intercreditor Agreement and in each case to be reduced by any amounts
to be paid to the other Creditors pursuant to the Intercreditor Agreement);
provided, however, the Excess Cash Flow, if any, to be paid for the
fiscal year ending 2008 shall be calculated on Excess Cash Flow, if any, for the
last fiscal quarter of fiscal year 2008.

     (vi) Any offer to prepay, at par, required pursuant to Section 6.1(b)(i), (ii),
(iii), (iv) or (v) shall (A) be an offer to prepay, at par, each outstanding Note in
principal amount ratably, together with interest accrued thereon as of the date of
payment, (B) be in writing and shall offer to prepay the Notes ratably on a date
which is not less than 30 days and not more than 60 days after the date of the
notice of offer, (C) if any Noteholder shall fail to accept in writing such offer of
prepayment within 15 Business Days of receipt of the notice of offer, then the
amount of such Noteholder’s ratable portion shall be offered, at par and in
accordance with this section 6.1(b)(vi), to such other Noteholders as may have
accepted such offer, (D) if every Noteholder shall fail to accept in writing such
offer of prepayment within 15 Business Days of receipt of the notice of offer, then,
the aggregate amount of the Noteholders’ ratable portions shall be offered, at par
and in accordance with similar provisions of the Amended and Restated 2004 NPA, to
the 2004 Noteholders, and (E) if every Noteholder and every 2004 Noteholder shall
fail to accept in writing such offer of prepayment within 15 Business Days of
receipt of the notice of offer, then the Company may retain and use in the operation
of its business the aggregate amount of the Noteholders’ ratable portions as shall
not have been accepted for prepayment of the Notes or the 2004 Notes.
Notwithstanding anything in this Section 6.1(b) to the contrary, the application of
Net Cash Proceeds required to be made hereunder shall be applied as provided in the
Intercreditor Agreement until such time, if any, that the Intercreditor Agreement is
no longer in effect.

6.2. Optional Prepayments.

          The Company may, at its option and upon notice as provided below, prepay at any time after
June 5, 2009 all, or from time to time any part of, the Notes (in a minimum amount of $5,000,000
and otherwise in multiples of $1,000,000) at the principal amount so prepaid, together with
interest accrued thereon to the date of such prepayment, without any premium, provided that the
Company may not effect any such prepayment directly or indirectly from, or in

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anticipation of the receipt of, the proceeds (or any part thereof) of any refinancing
operation involving

     (a) the issuance or sale of Preferred Stock of the Company or any Affiliate of the
Company, if such Stock has a dividend rate lower than 5.78% per annum or is redeemable
(other than in liquidation) at the option of the Company or such Affiliate or any holder
of such Stock prior to the maturity date of the Notes, or

     (b) the incurring by the Company or any Affiliate of the Company of any
Indebtedness having a fixed rate of interest that is lower than 5.78% per annum or a
Remaining Average Life less than the Remaining Average Life of the Notes.

          Each notice of prepayment of any of the Notes pursuant to this Section 6.2 shall state that
such prepayment is not being effected in contravention of the provisions of this Section.

          The Company will give each holder of Notes written notice of each optional prepayment under
this Section 6.2 not less than 30 days and not more than 60 days prior to the date fixed for such
prepayment. Each such notice shall specify the date fixed for such prepayment (which shall be a
Business Day), the aggregate principal amount of the Notes to be prepaid on such date, the
principal amount of Notes (if any) held by such holder to be prepaid (determined in accordance with
Section 6.3) and the interest to be paid on the prepayment date with respect to such principal
amount being prepaid.

6.3. Allocation of Partial Prepayments.

          In the case of a partial prepayment of the Notes pursuant to Section 6.1(a) or Section 6.2,
the principal amount of the Notes to be prepaid shall be allocated among all the Notes at the time
outstanding in proportion, as nearly as practicable, to the respective unpaid principal amounts
thereof.

6.4. Maturity; Surrender, etc.

          In the case of each prepayment of Notes pursuant to this Section 6, the principal amount of
each Note to be prepaid shall mature and become due and payable on the date fixed for such
prepayment, together with interest on such principal amount accrued to such date. From and after
such date, unless the Company shall fail to pay such principal amount when so due and payable,
together with the interest, as aforesaid, interest on such principal amount shall cease to accrue.
Any Note paid or prepaid in full shall be surrendered to the Company and canceled and shall not be
reissued, and no Note shall be issued in lieu of any prepaid principal amount of any Note.

6.5. Purchase of Notes.

          The Company will not and will not permit any Affiliate to purchase, redeem, prepay or
otherwise acquire, directly or indirectly, any of the outstanding Notes except (a) upon the payment
or prepayment of the Notes in accordance with the terms of this Agreement and the

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Notes or (b) pursuant to an offer made by the Company or any such Affiliate to all holders of
the Notes to purchase Notes on the same terms and conditions, pro rata among all Notes tendered,
which offer shall remain outstanding for a reasonable period of time (not to be less than 30 days).

          Any Notes so repurchased shall immediately upon acquisition thereof be canceled and no Notes
shall be issued in substitution or exchange therefor.

          Promptly and in any event within five Business Days after each such purchase of Notes, the
Company will furnish each holder of the Notes with a certificate of a Senior Financial Officer
describing such purchase (including the aggregate principal amount of Notes so purchased and the
purchase price therefor) and certifying that such purchase was made in compliance with the
requirements of this Section.

7. AFFIRMATIVE COVENANTS.

          The Company covenants that so long as any of the Notes are outstanding:

7.1. Compliance with Law.

          The Company will and will cause each of its Subsidiaries to comply with all laws, ordinances
or governmental rules or regulations to which each of them is subject, including without limitation
Environmental Laws, and will obtain and maintain in effect all licenses, certificates, permits,
franchises and other governmental authorizations necessary to the ownership of their respective
properties or to the conduct of their respective businesses, in each case to the extent necessary
to ensure that non-compliance with such laws, ordinances or governmental rules or regulations or
failures to obtain or maintain in effect such licenses, certificates, permits, franchises and other
governmental authorizations could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.

7.2. Insurance.

          The Company will and will cause each of its Subsidiaries to maintain, with financially sound
and reputable insurers, insurance with respect to their respective properties and businesses
against such casualties and contingencies, of such types, on such terms and in such amounts
(including deductibles, co-insurance and self-insurance, if adequate reserves are maintained with
respect thereto) as is customary in the case of entities of established reputations engaged in the
same or a similar business and similarly situated.

7.3. Maintenance of Properties.

          The Company will and will cause each of its Subsidiaries to maintain and keep, or cause to be
maintained and kept, their respective properties in good repair, working order and condition (other
than ordinary wear and tear), so that the business carried on in connection therewith may be
properly conducted at all times, provided that this Section shall not prevent the Company or any
Subsidiary from discontinuing the operation and the maintenance of any of its properties if such
discontinuance is desirable in the conduct of its business and the Company has

20

 

concluded that such discontinuance could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

7.4. Payment of Taxes and Claims.

          The Company will and will cause each of its Subsidiaries to file all tax returns required to
be filed in any jurisdiction and to pay and discharge all taxes shown to be due and payable on such
returns and all other taxes, assessments, governmental charges, or levies imposed on them or any of
their properties, assets, income or franchises, to the extent such taxes and assessments have
become due and payable and before they have become delinquent and all claims for which sums have
become due and payable that have or might become a Lien on properties or assets of the Company or
any Subsidiary, provided that neither the Company nor any Subsidiary need pay any such tax or
assessment or claim if (i) the amount, applicability or validity thereof is contested by the
Company or such Subsidiary on a timely basis in good faith and in appropriate proceedings, and the
Company or a Subsidiary has established adequate reserves therefor in accordance with GAAP on the
books of the Company or such Subsidiary or (ii) the nonpayment of all such taxes and assessments in
the aggregate could not reasonably be expected to have a Material Adverse Effect.

7.5. Corporate Existence, etc.

          The Company will at all times preserve and keep in full force and effect its corporate
existence. Subject to Sections 8.2 and 8.3, the Company will at all times preserve and keep in
full force and effect the corporate existence of each of its Subsidiaries (unless merged into the
Company or a Subsidiary) and all rights and franchises (as franchisee) of the Company and its
Subsidiaries unless, in the good faith judgment of the Company, the termination of or failure to
preserve and keep in full force and effect such corporate existence, right or franchise could not,
individually or in the aggregate, have a Material Adverse Effect.

7.6. Additional Subsidiary Guarantees; Release of Subsidiary Guarantees.

          If any Subsidiary is or becomes a Domestic Subsidiary, or any Subsidiary provides or has
outstanding a Guaranty of Indebtedness outstanding in respect of the Credit Facility Documents or
the Term Loan Documents, then the Company will cause such Subsidiary to execute and deliver a
Subsidiary Guarantee, unless such Domestic Subsidiary (i) is substantially concurrently merged with
or into the Company or any other Subsidiary Guarantor (with the Company or such Subsidiary
Guarantor being the surviving Person), or (ii) inactive or has no assets other than the capital
stock or other ownership interests of another Domestic Subsidiary. Promptly and in any event
within ten Business Days after the execution and delivery of each such Subsidiary Guarantee, the
Company will furnish each holder of the Notes with a counterpart of such executed Subsidiary
Guarantee, together with an opinion of Armstrong Teasdale LLP or other counsel reasonably
satisfactory to the Required Holders (which opinion shall be reasonably satisfactory to the
Required Holders and may be subject to customary exceptions, qualifications and limitations under
the circumstances) to the effect that such Subsidiary Guarantee has been duly authorized, executed
and delivered by such Subsidiary and is valid, binding and enforceable in accordance with its
terms. The Company will cause each Subsidiary Guarantee to remain in full force and effect at all times after the execution and

21

 

delivery thereof. Any Subsidiary, the Voting Equity Interests of which is being disposed of in an
Asset Sale in accordance with the provisions of Section 8.2 shall, at the Company’s request, be
discharged from all of its obligations and liabilities under its Subsidiary Guarantee by the
Required Holders entering into a release in form and substance reasonably satisfactory to the
Required Holders, and each Noteholder and each other holder of a Note, by acceptance of such Note,
agrees to enter into such a satisfactory release promptly upon request, except that this sentence
shall not apply (a) if a Default or Event of Default has occurred and is continuing, (b) to a
Subsidiary if any amount is then due and payable under its Subsidiary Guarantee or (c) to a
Subsidiary which at the time is a guarantor of any other Indebtedness of the Company or another
Subsidiary party to a Subsidiary Guarantee that is not also concurrently being released.

          In furtherance of the preceding paragraph, if Spartech Canada, Inc. shall at any time
guarantee any Indebtedness of the Company (whether or not it is a Significant Subsidiary), the
Company will cause Spartech Canada, Inc. to execute and deliver a Subsidiary Guarantee and
otherwise comply with the requirements of this Section 7.6, prior to or concurrently with the
delivery by Spartech Canada, Inc. of any Guaranty in respect of such Indebtedness of the Company.

	7.7.	 	Minimum Company and Subsidiary Guarantor Consolidated Total Operating Income or Consolidated
Total Assets.

          The Company shall cause either (a) at least 75% of Consolidated Total Operating Income to be
generated by the Company and the Subsidiary Guarantors or (b) 75% of Consolidated Total Assets to
be owned by the Company and the Subsidiary Guarantors.

7.8. Collateral.

          The Company shall, and shall cause each Granting Party to, (a) execute the Security Agreement
(or a joinder agreement thereto) in order to grant a Lien in all personal property (excluding
certain intellectual property agreed to by the Required Holders and covering only 65% of the equity
interests of any Foreign Subsidiary) now or hereafter owned by the Company and such Granting
Parties, subject only to Permitted Liens, in favor of the Collateral Agent, for the ratable benefit
of the Creditors, to secure the Senior Secured Obligations pursuant to the terms and conditions of
the Security Documents and (b) deliver such other documentation as the Collateral Agent may request
in connection with the foregoing, including without limitation, landlord’s waivers, certified
resolutions and other Organization Documents and authorizing documents of such Person, favorable
opinions of counsel to such Person (which shall cover, among other things, the legality, validity,
binding effect and enforceability of the documentation referred to above and the perfection of the
Collateral Agent’s Liens thereunder), all in form, content and scope satisfactory to the Collateral
Agent. If requested by the Majority Creditors at any time after the Effective Date, the Company
and each Granting Party shall enter into and deliver to the Collateral Agent a mortgage, deed of
trust or other security document, in form and substance acceptable to the Collateral Agent (a
“Mortgage Instrument”), with respect to each owned real property that has an aggregate fair market
value of at least $3,000,000 (the “Mortgaged Property”) to secure the Senior Secured Obligations,
together with such title insurance policies, evidence of insurance, insurance certificates and endorsements, surveys,

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appraisals, environmental assessments, consents, estoppels, waivers, subordination agreements, bond
resolutions, officers certificates, corporate documents, opinions of counsel, and other documents
and instruments as the Collateral Agent shall reasonably request.

7.9. Total Outstandings under Credit Facility Documents.

          Following September 9, 2008, notwithstanding the amount of Aggregate Commitments (as such term
is defined in the Credit Facility Documents as in effect on the Effective Date), the Company shall
not allow the amount of “Total Outstandings” (as such term is defined in the Credit Facility
Documents as in effect on the Effective Date) to exceed $145,000,000 at any time, provided that, at
and from such time as (a) the Leverage Ratio determined as of the date of the most recently ended
fiscal quarter of the Company is less than 2.50 to 1.00 and (b) the Required Lenders have approved
the release of the Superpriority Amount and such release is effective under the Intercreditor
Agreement, then the amount of such Total Outstandings shall not exceed $175,000,000 at any time.
Notwithstanding the other provisions of this Agreement, so long as “Total Outstandings” are less
than or equal to $145,000,000 at such time, the Company shall be permitted to reduce “Aggregate
Commitments” (as such term is defined in the Credit Facility Documents) from $175,000,000 to
$145,000,000 at such time.

8. NEGATIVE COVENANTS.

          The Company covenants that so long as any of the Notes are outstanding, the Company shall not,
nor shall it permit any Subsidiary to, directly or indirectly:

8.1. 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 Company or a Subsidiary existing on the
September 4, 2008 and described in Schedule 8.1, 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 Company or a
Subsidiary after the Effective 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 Company or
such Subsidiary, as the case may be, and

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     (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 Company or a Subsidiary after the
Effective 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 Effective
Date becomes a Subsidiary or is consolidated with or merged with or into the Company or
a Subsidiary or sells, leases or otherwise disposes of all or substantially all of its
property to the Company 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 created in anticipation thereof), provided that in any
such case no such Lien shall extend to or cover any other property of the Company or
such Subsidiary, as the case may be;

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

     (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;
and

     (j) Liens in respect of property of the Company and its Domestic Subsidiaries to
secure the Senior Secured Obligations.

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          For purposes of this Section 8.1 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 Company or a Subsidiary shall be deemed to have been
created at that time.

8.2. 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 Company or a
Wholly-Owned Subsidiary that is a Subsidiary Guarantor;

          (c) the Asset Sale as a result of the asset exchange in connection with the
Acquisition of assets of a division of an unaffiliated company previously disclosed to
the Noteholders; or

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

     (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 Company 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 8.2, 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 Company 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.

8.3. 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 Company (provided that the Company shall be the
continuing or surviving corporation) or a then-existing Wholly-Owned Subsidiary that is a
Subsidiary Guarantor and (b) any Person in an Asset Sale involving all of the outstanding stock

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or all or substantially all of the assets of such Subsidiary, in either case subject to the
limitation of Section 8.2.

8.4. 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 Company
(collectively, “Investments”), except for:

          (a) Investments held by the Company 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 Company to any of its Wholly-Owned Subsidiaries or
by any of its Wholly-Owned Subsidiaries to another of its Wholly-Owned Subsidiaries;

          (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 Company of stock of the Company to the
extent permitted by Section 8.13.

8.5. 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 8.12,
(ii) Indebtedness of a Subsidiary existing on July 30, 2008 and described in Schedule 4.13 but no
increase of any such Indebtedness, (iii) Indebtedness of a Subsidiary that is a Subsidiary
Guarantor owed to the Company or any Subsidiary Guarantor or Indebtedness of a Subsidiary that is
not a Subsidiary Guarantor owed to the Company or any other Subsidiary, (iv) Indebtedness under the
Financing Documents, and (v) Indebtedness of a Subsidiary secured

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by Liens permitted pursuant to clause (h) of Section 8.1), exceed in aggregate amount
$5,000,000.

8.6. 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 Company after January 31,
2006, minus (iv) non-cash impairment charges for goodwill, intangible and fixed assets at such time
of determination.

8.7. Fixed Charge Coverage Ratio.

          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 Effective 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 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.

8.8. Leverage Ratio.

          Permit the Leverage Ratio to exceed (a) 4.35 to 1.00 at any time from and including the
Effective Date 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.

8.9. 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 Company
or any Subsidiary over a period in excess of three years, unless after giving effect to such
transaction and the incurrence of Attributable Debt in respect thereof, the aggregate Attributable
Debt in connection with all sale and leaseback transactions of the Company and its Subsidiaries
entered into after the Effective Date in accordance with the provisions of this Section 8.9, does
not exceed $10,000,000.

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8.10. Transactions with Affiliates.

          Enter into any transaction with any Affiliate of the Company (other than a Subsidiary), except
upon fair and reasonable terms no less favorable to the Company or such Subsidiary than would
obtain in a comparable arm’s-length transaction with a Person not an Affiliate of the Company.

8.11. [Reserved].

8.12. 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 the Notes and Indebtedness of the Company 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 Company and its Subsidiaries existing as of the Effective
Date and listed in Schedule 4.13; and

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

8.13. Restricted Payments.

          Declare or make any Restricted Payment except that (i) any Subsidiary may declare and pay
Dividends to (x) the Company, (y) a Subsidiary Guarantor, and (z) the parent of such Subsidiary;
and (ii) provided no Default exists or would result therefrom, the Company may pay Dividends not to
exceed $1,650,000 in aggregate amount during any fiscal quarter commencing with the Company’s
fourth fiscal quarter of fiscal year 2008.

8.14. ERISA.

          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 Company 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.

8.15. Change in Business.

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

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8.16. Accounting Changes.

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

8.17. 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 Noteholders.

8.18. Capital Expenditures.

          Permit Capital Expenditures of the Company and its Subsidiaries during (a) fiscal year 2008 to
exceed $20,000,000, (b) fiscal year 2009 to exceed $26,000,000, (c) fiscal year 2010 to exceed
$28,000,000, and (d) fiscal year 2011 to exceed $32,000,000.

8.19. Credit Facility Documents.

          Except as otherwise provided in the Intercreditor 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 change) or accept any waiver or consent with respect to, any Credit Facility
Document that would result in (a) an increase in the principal (other than as specifically provided
by Section 7.9), interest, overdue interest, fees or other amounts payable under any Credit
Facility Document, (b) an acceleration of any date fixed for payment or prepayment of principal,
interest, overdue interest, fees or other amounts payable under any Credit Facility Document,
(c) the terms and provisions of the Credit Facility Documents, including without limitation the
negative covenants and the events of default, being more restrictive to the Company and its
Subsidiaries than the terms and provisions of this Agreement, or (d) the Company or any Subsidiary
being subject to any prohibition or limitation on making any payment or prepayment under the
Financing Documents.

8.20. Term Loan Documents.

          Except as otherwise provided in the Intercreditor 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 change) or accept any waiver or consent with respect to, any Term Loan
Document that would result in (a) an increase in the principal, interest, overdue interest, fees or
other amounts payable under any Term Loan Document, (b) an acceleration of any date fixed for
payment or prepayment of principal, interest, overdue interest, fees or other

29

 

amounts payable under any Term Loan Document, (c) the terms and provisions of the Term Loan
Documents, including without limitation the negative covenants and the events of default, being
more restrictive to the Company and its Subsidiaries than the terms and provisions of this
Agreement, or (d) the Company or any Subsidiary being subject to any prohibition or limitation on
making any payment or prepayment under the Financing Documents.

8.21. Amended and Restated 2004 NPA.

               Except as otherwise provided in the Intercreditor 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 change) or accept any waiver or consent with respect to, the Amended and
Restated 2004 NPA that would result in (a) an increase in the principal, interest, overdue
interest, fees or other amounts payable under the Amended and Restated 2004 NPA, (b) an
acceleration of any date fixed for payment or prepayment of principal, interest, overdue interest,
fees or other amounts payable under the Amended and Restated 2004 NPA, (c) the terms and provisions
of the Amended and Restated 2004 NPA, including without limitation the negative covenants and the
events of default, being more restrictive to the Company and its Subsidiaries than the terms and
provisions of this Agreement, or (d) the Company or any Subsidiary being subject to any prohibition
or limitation on making any payment or prepayment under the Financing Documents.

9. EVENTS OF DEFAULT.

          An “Event of Default” shall exist if any of the following conditions or events shall occur and
be continuing:

         (a) the Company defaults in the payment of any principal or premium, if any, on any
Note when the same becomes due and payable, whether at maturity or at a date fixed for
prepayment or by declaration or otherwise; or

         (b) the Company defaults in the payment of any interest on any Note for more than
five Business Days after the same becomes due and payable; or

         (c) the Company defaults in the performance of or compliance with any term
contained in Sections 5.1(d), 5.1(e), 7.5, 7.8, 8.1, 8.2, 8.3, 8.5, 8.6, 8.7, 8.8, 8.9,
8.13, 8.17, 8.18, 8.19, 8.20 or 8.21; or

         (d) the Company defaults in the performance of or compliance with any term
contained herein (other than those specifically referred to in the other paragraphs of
this Section 9) and such default is not remedied within 30 days after a Responsible
Officer obtains knowledge of such default; or

         (e) any representation or warranty made in writing by or on behalf of the Company
or by any officer of the Company in this Agreement or in any writing furnished in
connection with the transactions contemplated hereby proves to have been false or
incorrect in any material respect on the date as of which made; or

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     (f) (i) the Company or any Subsidiary is in default (as principal or as guarantor
or other surety) in the payment of any principal of or premium or make-whole amount or
interest on any Indebtedness (other than the Notes) that is outstanding in an aggregate
principal amount of at least $7,500,000 beyond any period of grace provided with respect
thereto, or (ii) the Company or any Subsidiary is in default in the performance of or
compliance with any term of any evidence of any Indebtedness or of any mortgage,
indenture or other agreement relating thereto or any other condition exists, and as a
consequence of such default or condition such Indebtedness has become, or has been or
may be declared (with the giving of notice or otherwise) by the holder or holders
thereof to be, due and payable before its stated maturity or before its regularly
scheduled dates of payment, or (iii) as a consequence of the occurrence or continuation
of any event or condition (other than the passage of time or the right of the holder of
Indebtedness to convert such Indebtedness into equity interests or a sale of assets or
other transaction that is permitted if made in connection with a repayment of
Indebtedness), the Company or any Subsidiary has become, or (by the giving of notice or
otherwise) the holder or holders thereof may cause the Company or any Subsidiary to
become, obligated to purchase or repay any Indebtedness before its regular maturity or
before its regularly scheduled dates of payment; or

     (g) the Company or any Significant Subsidiary (i) is generally not paying, or
admits in writing its inability to pay, its debts as they become due, (ii) files, or
consents by answer or otherwise to the filing against it of, a petition for relief or
reorganization or arrangement or any other petition in bankruptcy, for liquidation or to
take advantage of any bankruptcy, insolvency, reorganization, moratorium or other
similar law of any jurisdiction, (iii) makes an assignment for the benefit of its
creditors, (iv) consents to the appointment of a custodian, receiver, trustee or other
officer with similar powers with respect to it or with respect to any substantial part
of its property, (v) is adjudicated as insolvent or to be liquidated, or (vi) takes
corporate action for the purpose of any of the foregoing; or

     (h) a court or governmental authority of competent jurisdiction enters an order
appointing, without consent by the Company or any Significant Subsidiary, a custodian,
receiver, trustee or other officer with similar powers with respect to it or with
respect to any substantial part of its property, or constituting an order for relief or
approving a petition for relief or reorganization or any other petition in bankruptcy or
for liquidation or to take advantage of any bankruptcy or insolvency law of any
jurisdiction, or ordering the dissolution, winding-up or liquidation of the Company or
any such Subsidiary, or any such petition shall be filed against the Company or any such
Subsidiary and such petition shall not be dismissed within 60 days; or

     (i) a final judgment or judgments for the payment of money aggregating in excess of
$500,000 are rendered against one or more of the Company and its Subsidiaries which
judgments are not, within 60 days after entry thereof, bonded, paid, discharged or
stayed pending appeal, or are not discharged within 60 days after the expiration of such
stay; or

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     (j) any Subsidiary Guarantee shall cease to be in full force and effect as an
enforceable instrument or any Subsidiary (or any Person at its authorized direction or
on its behalf) shall assert in writing that the Subsidiary Guarantee of such Subsidiary
is unenforceable in any material respect; or

     (k) if (i) any Plan shall fail to satisfy the minimum funding standards of ERISA or
the Code for any plan year or part thereof or a waiver of such standards or extension of
any amortization period is sought or granted under section 412 of the Code, (ii) a
notice of intent to terminate any Plan shall have been or is reasonably expected to be
filed with the PBGC or the PBGC shall have instituted proceedings under ERISA section
4042 to terminate or appoint a trustee to administer any Plan or the PBGC shall have
notified the Company or any ERISA Affiliate that a Plan may become a subject of any such
proceedings, (iii) the aggregate “amount of unfunded benefit liabilities” (within the
meaning of section 4001(a)(18) of ERISA) under all Plans, determined in accordance with
Title IV of ERISA, shall exceed $1,000,000, (iv) the Company or any ERISA Affiliate
shall have incurred or is reasonably expected to incur any liability pursuant to Title I
or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee
benefit plans, (v) the Company or any ERISA Affiliate withdraws from any Multiemployer
Plan, or (vi) the Company or any Subsidiary establishes or amends any employee welfare
benefit plan that provides post-employment welfare benefits in a manner that would
increase the liability of the Company or any Subsidiary thereunder; and any such event
or events described in clauses (i) through (vi) above, either individually or together
with any other such event or events, could reasonably be expected to have a Material
Adverse Effect (as used in this clause (k), the terms “employee benefit plan” and
“employee welfare benefit plan” shall have the respective meanings assigned to such
terms in Section 3 of ERISA); or

     (l) any Security Document after delivery thereof pursuant to the Intercreditor
Agreement shall for any reason (other than pursuant to the terms thereof or on account
of the Collateral Agent’s election to not take possession of or make certain filings or
registrations in respect of certain Collateral) cease or fail to create a valid and
perfected first priority Lien (subject only to Permitted Liens) on the property
purported to be covered thereby.

10. REMEDIES ON DEFAULT, ETC.

10.1. Acceleration.

          (a) If an Event of Default with respect to the Company described in paragraph (g) or (h) of
Section 9 has occurred, all the Notes then outstanding shall automatically become immediately due
and payable.

          (b) If any other Event of Default has occurred and is continuing, the Required Holders may at
any time at its or their option, by notice or notices to the Company, declare all the Notes at the
time outstanding to be immediately due and payable.

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          (c) If any Event of Default described in paragraph (a) or (b) of Section 9 has occurred and is
continuing, any holder or holders of Notes at the time outstanding affected by such Event of
Default may at any time, at its or their option, by notice or notices to the Company, declare all
the Notes held by it or them to be immediately due and payable.

          Upon any Note becoming due and payable under this Section 10.1, whether automatically or by
declaration, such Note will forthwith mature and the entire unpaid principal amount of such Note,
plus (x) all accrued and unpaid interest thereon and (y) in the event that such Note shall become
due and payable prior to June 5, 2009, the Make-Whole Amount determined in respect of such
principal amount (to the full extent permitted by applicable law), shall all be immediately due and
payable, in each and every case without presentment, demand, protest or further notice, all of
which are hereby waived. The Company acknowledges, and the parties hereto agree, that each holder
of a Note has the right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided) and that the provision for payment of a Make-Whole Amount
by the Company in the event that the Notes are accelerated as a result of an Event of Default, is
intended to provide compensation for the deprivation of such right under such circumstances.

10.2. Other Remedies.

          If any Default or Event of Default has occurred and is continuing, and irrespective of whether
any Notes have become or have been declared immediately due and payable under Section 10.1, the
holder of any Note at the time outstanding may proceed to protect and enforce the rights of such
holder by an action at law, suit in equity or other appropriate proceeding, whether for the
specific performance of any agreement contained herein or in any Note, or for an injunction against
a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted
hereby or thereby or by law or otherwise.

10.3. Rescission.

          At any time after any Notes have been declared due and payable pursuant to paragraph (b) or
(c) of Section 10.1, the Required Holders, by written notice to the Company, may rescind and annul
any such declaration and its consequences if (a) the Company has paid all overdue interest on the
Notes, all principal of and premium, if any, on any Notes that are due and payable and are unpaid
other than by reason of such declaration, and all interest on such overdue principal and premium,
if any, and (to the extent permitted by applicable law) any overdue interest in respect of the
Notes, at the Default Rate, (b) all Events of Default and Defaults, other than the non-payment of
amounts that have become due solely by reason of such declaration, have been cured or have been
waived pursuant to Section 15, and (c) no judgment or decree has been entered for the payment of
any monies due pursuant hereto or to the Notes. No rescission and annulment under this Section
10.3 will extend to or affect any subsequent Event of Default or Default or impair any right
consequent thereon.

10.4. No Waivers or Election of Remedies, Expenses, etc.

          No course of dealing and no delay on the part of any holder of any Note in exercising any
right, power or remedy shall operate as a waiver thereof or otherwise prejudice

33

 

such holder’s rights, powers or remedies. No right, power or remedy conferred by this
Agreement or by any Note upon any holder thereof shall be exclusive of any other right, power or
remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or
otherwise. Without limiting the obligations of the Company under Section 13, the Company will pay
to the holder of each Note on demand such further amount as shall be sufficient to cover all costs
and expenses of such holder incurred in any enforcement or collection under this Section 10,
including without limitation reasonable attorneys’ fees, expenses and disbursements.

11. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.

11.1. Registration of Notes.

          The Company shall keep at its principal executive office a register for the registration and
registration of transfers of Notes. The name and address of each holder of one or more Notes, each
transfer thereof and the name and address of each transferee of one or more Notes shall be
registered in such register. Prior to due presentment for registration of transfer, the Person in
whose name any Note shall be registered shall be deemed and treated as the owner and holder thereof
for all purposes hereof, and the Company shall not be affected by any notice or knowledge to the
contrary. The Company shall give to any holder of a Note that is an Institutional Investor
promptly upon request therefor, a complete and correct copy of the names and addresses of all
registered holders of Notes.

11.2. Transfer and Exchange of Notes.

          Upon surrender of any Note at the principal executive office of the Company for registration
of transfer or exchange (and in the case of a surrender for registration of transfer, duly endorsed
or accompanied by a written instrument of transfer duly executed by the registered holder of such
Note or his attorney duly authorized in writing and accompanied by the address for notices of each
transferee of such Note or part thereof), within five Business Days thereafter the Company shall
execute and deliver, at the Company’s expense (except as provided below), one or more new Notes (as
requested by the holder thereof) in exchange therefor, in an aggregate principal amount equal to
the unpaid principal amount of the surrendered Note. Each such new Note shall be payable to such
Person as such holder may request and shall be substantially in the form of Note as set forth in
Exhibit 1.3. Each such new Note shall be dated and bear interest from the date to which interest
shall have been paid on the surrendered Note or dated the date of the surrendered Note if no
interest shall have been paid thereon. The Company may require payment of a sum sufficient to
cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes. Notes
shall not be transferred in denominations of less than $100,000, provided that if necessary to
enable the registration of transfer by a holder of its entire holding of Notes, one Note may be in
a denomination of less than $100,000.

          Each Noteholder agrees that the Company shall not be required to register the transfer of any
Note to any Person (other than any transferring Noteholder’s nominee) or to any separate account
maintained by any transferring Noteholder unless the Company receives from the transferee a
representation to the Company (and appropriate information as to any separate accounts or other
matters) to the same or similar effect with respect to the transferee as is contained in section
6.2 of the Existing Note Agreement or other assurances reasonably

34

 

satisfactory to the Company that such transfer does not involve a prohibited transaction (as
such term is used in Section 4.12(e). No Noteholder shall be liable for any damages in connection
with any such representations or assurances provided to the Company by any transferee.

11.3. Replacement of Notes.

          Upon receipt by the Company of evidence reasonably satisfactory to it of the ownership of and
the loss, theft, destruction or mutilation of any Note (which evidence shall be, in the case of an
Institutional Investor, notice from such Institutional Investor of such ownership and such loss,
theft, destruction or mutilation), and

         (a) in the case of loss, theft or destruction, of indemnity reasonably satisfactory
to it (provided that if the holder of such Note is, or is a nominee for, an original
Noteholder or any other Institutional Investor, such Person’s own unsecured agreement of
indemnity shall be deemed to be satisfactory), or

         (b) in the case of mutilation, upon surrender and cancellation thereof,

within five Business Days thereafter the Company at its own expense shall execute and deliver, in
lieu thereof, a new Note, dated and bearing interest from the date to which interest shall have
been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen,
destroyed or mutilated Note if no interest shall have been paid thereon.

12. PAYMENTS ON NOTES.

12.1. Place of Payment.

          Subject to Section 12.2, payments of principal, premium, if any, and interest becoming due and
payable on the Notes shall be made at the principal office of Citibank, N.A. in New York City. The
Company may at any time, by notice to each holder of a Note, change the place of payment of the
Notes so long as such place of payment shall be either the principal office of the Company in New
York City or the principal office of a bank or trust company in New York City.

12.2. Home Office Payment.

          So long as a Noteholder or its nominee shall be the holder of any Note, and notwithstanding
anything contained in Section 12.1 or in such Note to the contrary, the Company will pay all sums
becoming due on such Note for principal, Make-Whole Amount, if any, and interest by the method and
at the address specified for such purpose below such Noteholder’s name in Schedule A, or by such
other method or at such other address as such Noteholder shall have from time to time specified to
the Company in writing for such purpose, without the presentation or surrender of such Note or the
making of any notation thereon, except that upon written request of the Company made concurrently
with or reasonably promptly after payment or prepayment in full of any Note, such Noteholder shall
surrender such Note for cancellation, reasonably promptly after any such request, to the Company at
its principal executive office or at the place of payment most recently designated by the Company
pursuant to Section 12.1. Prior

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to any sale or other disposition of any Note held by such Noteholder or its nominee such
Noteholder will, at its election, either endorse thereon the amount of principal paid thereon and
the last date to which interest has been paid thereon or surrender such Note to the Company in
exchange for a new Note or Notes pursuant to Section 11.2. The Company will afford the benefits of
this Section 12.2 to any Institutional Investor that is the direct or indirect transferee of any
Note that has made the same agreement relating to such Note as such Noteholder has made in this
Section 12.2.

13. EXPENSES, ETC.

13.1. Transaction Expenses.

          Whether or not the transactions contemplated hereby are consummated, the Company will pay all
costs and expenses (including reasonable attorneys’ fees of the Noteholders’ special counsel and,
if reasonably required, local or other counsel) incurred by the Noteholders or holder of a Note in
connection with such transactions and in connection with any amendments, waivers or consents under
or in respect of this Agreement, the Notes, the other Financing Documents or the Security Documents
(whether or not such amendment, waiver or consent becomes effective), including without limitation:
(a) the costs and expenses incurred in enforcing or defending (or determining whether or how to
enforce or defend) any rights under this Agreement, the Notes, the other Financing Documents or the
Security Documents or in responding to any subpoena or other legal process or informal
investigative demand issued in connection with any thereof, or by reason of being a holder of any
Note, (b) the costs and expenses, including financial advisors’ fees, incurred in connection with
the insolvency or bankruptcy of the Company or any Subsidiary or in connection with any work-out or
restructuring of the transactions contemplated hereby or by the Notes, the other Financing
Documents or the Security Documents and (c) the costs and expenses incurred in connection with the
initial filing of this Agreement and all related documents and financial information with the
Securities Valuation Office of the National Association of Insurance Commissioners. The Company
will pay, and will save each Noteholder and each other holder of a Note harmless from, all claims
in respect of any fees, costs or expenses if any, of brokers and finders (other than those retained
by such Noteholder).

          In furtherance of the foregoing, on the Effective Date the Company will pay or cause to be
paid the reasonable fees and disbursements and other charges (including estimated unposted
disbursements and other charges as of the Effective Date) of the Noteholders’ special counsel which
are reflected in the statement of such special counsel submitted to the Company on or prior to the
Effective Date. The Company will also pay, promptly upon receipt of supplemental statements
therefor, reasonable additional fees, if any, and disbursements and charges of such special counsel
in connection with the transactions hereby contemplated (including disbursements and other charges
unposted as of the Effective Date to the extent such disbursements exceed estimated amounts paid as
aforesaid).

36

 

13.2. Survival.

          The obligations of the Company under this Section 13 will survive the payment or transfer of
any Note, the enforcement, amendment or waiver of any provision of this Agreement or the Notes, and
the termination of this Agreement.

14. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.

          All representations and warranties contained herein shall survive the execution and delivery
of this Agreement and the Notes, the purchase or transfer by a Noteholder of any Note or portion
thereof or interest therein and the payment of any Note, and may be relied upon by any subsequent
holder of a Note, regardless of any investigation made at any time by or on behalf of a Noteholder
or any other holder of a Note. All statements contained in any certificate or other instrument
delivered by or on behalf of the Company pursuant to this Agreement shall be deemed representations
and warranties of the Company under this Agreement. Subject to the preceding sentence, this
Agreement, the Notes, the other Financing Documents and the Security Documents embody the entire
agreement and understanding between each Noteholder and the Company and supersede all prior
agreements and understandings relating to the subject matter hereof.

15. AMENDMENT AND WAIVER.

15.1. Requirements.

          This Agreement and the Notes may be amended, and the observance of any term hereof or of the
Notes may be waived (either retroactively or prospectively), with (and only with) the written
consent of the Company and the Required Holders, except that (a) no amendment or waiver of any of
the provisions of Section 1, 2, or 3 hereof, or any defined term (as it is used therein), will be
effective as to such holder of Notes unless consented to by such holder in writing, and (b) no such
amendment or waiver may, without the written consent of the holder of each Note at the time
outstanding affected thereby, (i) subject to the provisions of Section 10 relating to acceleration
or rescission, change the amount or time of any prepayment or payment of principal of, or change
the rate or the time of payment or method of computation of interest or of the Make-Whole Amount
on, the Notes, (ii) change the percentage of the principal amount of the Notes the holders of which
are required to consent to any such amendment or waiver, or (iii) amend any of Sections 6, 9(a),
9(b), 10, 15 or 18.

15.2. Solicitation of Holders of Notes.

          (a) Solicitation. The Company will provide each holder of the Notes (irrespective of
the amount of Notes then owned by it) with sufficient information, sufficiently far in advance of
the date a decision is required, to enable such holder to make an informed and considered decision
with respect to any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes. The Company will deliver executed or true and correct copies of each
amendment, waiver or consent effected pursuant to the provisions of this

37

 

Section 15 to each holder of outstanding Notes promptly following the date on which it is
executed and delivered by, or receives the consent or approval of, the requisite holders of Notes.

          (b) Payment. The Company will not directly or indirectly pay or cause to be paid any
remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any
security, to any holder of Notes as consideration for or as an inducement to the entering into by
any holder of Notes of any waiver or amendment of any of the terms and provisions hereof unless
such remuneration is concurrently paid, or security is concurrently granted, on the same terms,
ratably to each holder of Notes then outstanding even if such holder did not consent to such waiver
or amendment.

15.3. Binding Effect, etc.

          Any amendment or waiver consented to as provided in this Section 15 applies equally to all
holders of Notes and is binding upon them and upon each future holder of any Note and upon the
Company without regard to whether such Note has been marked to indicate such amendment or waiver.
No such amendment or waiver will extend to or affect any obligation, covenant, agreement, Default
or Event of Default not expressly amended or waived or impair any right consequent thereon. No
course of dealing between the Company and the holder of any Note nor any delay in exercising any
rights hereunder or under any Note shall operate as a waiver of any rights of any holder of such
Note. As used herein, the term “this Agreement” and references thereto shall mean this Agreement
as it may from time to time be amended or supplemented.

15.4. Notes held by Company, etc.

          Solely for the purpose of determining whether the holders of the requisite percentage of the
aggregate principal amount of Notes then outstanding approved or consented to any amendment, waiver
or consent to be given under this Agreement or the Notes, or have directed the taking of any action
provided herein or in the Notes to be taken upon the direction of the holders of a specified
percentage of the aggregate principal amount of Notes then outstanding, Notes directly or
indirectly owned by the Company or any of its Affiliates shall be deemed not to be outstanding.

16. NOTICES.

          All notices and communications provided for hereunder shall be in writing and sent (a) by
telecopy if the sender on the same day sends a confirming copy of such notice by a recognized
overnight delivery service (charges prepaid), or (b) by registered or certified mail with return
receipt requested (postage prepaid), or (c) by a recognized overnight delivery service (with
charges prepaid). Any such notice must be sent:

     (i) if to a Noteholder or its nominee, to such Noteholder or its nominee at the address
specified for such communications in Schedule A, or at such other address as such Noteholder
or its nominee shall have specified to the Company in writing,

38

 

     (ii) if to any other holder of any Note, to such holder at such address as such other
holder shall have specified to the Company in writing, or

     (iii) if to the Company, to the Company at its address set forth at the beginning
hereof to the attention of the Chief Financial Officer, or at such other address as the
Company shall have specified to the holder of each Note in writing.

Notices under this Section 16 will be deemed given only when actually received.

17. REPRODUCTION OF DOCUMENTS.

          This Agreement and all documents relating thereto, including, without limitation,
(a) consents, waivers and modifications that may hereafter be executed, (b) documents received by
each Noteholder on the Effective Date (except the Notes themselves), and (c) financial statements,
certificates and other information previously or hereafter furnished to the Noteholder, may be
reproduced by a Noteholder by any photographic, photostatic, microfilm, microcard, miniature
photographic or other similar process and such Noteholder may destroy any original document so
reproduced. The Company agrees and stipulates that, to the extent permitted by applicable law, any
such reproduction shall be admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence and whether or not such
reproduction was made by such Noteholder in the regular course of business) and any enlargement,
facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.
This Section 17 shall not prohibit the Company or any other holder of Notes from contesting any
such reproduction to the same extent that it could contest the original, or from introducing
evidence to demonstrate the inaccuracy of any such reproduction.

18. CONFIDENTIAL INFORMATION.

          For the purposes of this Section 18, “Confidential Information” means information delivered to
a Noteholder by or on behalf of the Company or any Subsidiary in connection with the transactions
contemplated by or otherwise pursuant to this Agreement that is proprietary in nature and that was
clearly marked or labeled or otherwise adequately identified when received by such Noteholder as
being confidential information of the Company or such Subsidiary, provided that such term does not
include information that (a) was publicly known or otherwise known to such Noteholder prior to the
time of such disclosure, (b) subsequently becomes publicly known through no act or omission by such
Noteholder or any person acting on its behalf, (c) otherwise becomes known to such Noteholder other
than through disclosure by the Company or any Subsidiary or (d) constitutes financial statements
delivered to such Noteholder under Section 5.1 that are otherwise publicly available. Each
Noteholder will maintain the confidentiality of such Confidential Information in accordance with
procedures adopted by such Noteholder in good faith to protect confidential information of third
parties delivered to such Noteholder, provided that such Noteholder may deliver or disclose
Confidential Information to (i) its directors, officers, trustees, employees, agents, attorneys and
affiliates (to the extent such disclosure reasonably relates to the administration of the
investment represented by such Noteholder’s Notes), (ii) its financial advisors and other
professional advisors whose duties require them to hold confidential the Confidential Information
substantially in accordance with the terms of this Section 18, (iii) any other holder of any Note,
(iv) any Institutional Investor to

39

 

which such Noteholder sells or offers to sell such Note or any part thereof or any
participation therein (if such Person has agreed in writing prior to its receipt of such
Confidential Information to be bound by the provisions of this Section 18), (v) any Person from
which such Noteholder offers to purchase any security of the Company (if such Person has agreed in
writing prior to its receipt of such Confidential Information to be bound by the provisions of this
Section 18), (vi) any federal or state regulatory authority having jurisdiction over such
Noteholder, (vii) the National Association of Insurance Commissioners or any similar organization,
or any nationally recognized rating agency that requires access to information about such
Noteholder’s investment portfolio or (viii) any other Person to which such delivery or disclosure
may be necessary or appropriate (w) to effect compliance with any law, rule, regulation or order
applicable to such Noteholder, (x) in response to any subpoena or other legal process, (y) in
connection with any litigation to which such Noteholder is a party or (z) if an Event of Default
has occurred and is continuing, to the extent such Noteholder may reasonably determine such
delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of
the rights and remedies under such Noteholder’s Notes, this Agreement, the other Financing
Documents and the Security Documents. Each holder of a Note, by its acceptance of a Note, will be
deemed to have agreed to be bound by and to be entitled to the benefits of this Section 18 as
though it were a party to this Agreement. On reasonable request by the Company in connection with
the delivery to any holder of a Note of information required to be delivered to such holder under
this Agreement or requested by such holder (other than a holder that is a party to this Agreement
or its nominee), such holder will enter into an agreement with the Company embodying the provisions
of this Section 18.

19. MISCELLANEOUS.

19.1. Successors and Assigns.

          All covenants and other agreements contained in this Agreement by or on behalf of any of the
parties hereto bind and inure to the benefit of their respective successors and assigns (including
without limitation any subsequent holder of a Note) whether so expressed or not.

19.2. Construction.

          Each covenant contained herein shall be construed (absent express provision to the contrary)
as being independent of each other covenant contained herein, so that compliance with any one
covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with
any other covenant. Where any provision herein refers to action to be taken by any Person, or
which such Person is prohibited from taking, such provision shall be applicable whether such action
is taken directly or indirectly by such Person.

19.3. Jurisdiction and Process; Waiver of Jury Trial.

          (a) The Company irrevocably submits to the non-exclusive in personam
jurisdiction of any New York State or federal court sitting in the Borough of Manhattan, The City
of New York, over any suit, action or proceeding arising out of or relating to this Agreement, the
Notes, the other Financing Documents and the Security Documents. To the

40

 

fullest extent permitted by applicable law, the Company irrevocably waives and agrees not to
assert, by way of motion, as a defense or otherwise, any claim that it is not subject to the
in personam jurisdiction of any such court, any objection that it may now or
hereafter have to the laying of the venue of any such suit, action or proceeding brought in any
such court and any claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum.

          (b) The Company consents to process being served in any suit, action or proceeding of the
nature referred to in Section 19.3(a) by mailing a copy thereof by registered or certified mail,
postage prepaid, return receipt requested, to the Company at its address specified in Section 16 or
at such other address of which each Noteholder shall then have been notified pursuant to said
Section. The Company agrees that such service upon receipt (i) shall be deemed in every respect
effective service of process upon it in any such suit, action or proceeding and (ii) shall, to the
fullest extent permitted by applicable law, be taken and held to be valid personal service upon and
personal delivery to the Company. Notices hereunder shall be conclusively presumed received as
evidenced by a delivery receipt furnished by the United States Postal Service or any reputable
commercial delivery service.

          (c) Nothing in this Section 19 shall affect the right of any holder of a Note to serve process
in any manner permitted by law, or limit any right that the holders of any of the Notes may have to
bring proceedings against the Company in the courts of any appropriate jurisdiction or to enforce
in any lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.

          (d) THE COMPANY WAIVES TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT TO THIS
AGREEMENT, THE OTHER AGREEMENTS, THE NOTES, THE OTHER FINANCING DOCUMENTS, THE SECURITY DOCUMENTS
OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH OR THEREWITH.

19.4. Payments Due on Non-Business Days.

          Anything in this Agreement or the Notes to the contrary notwithstanding (but without limiting
the requirement in Section 6.2 that notice of any optional prepayment specify a Business Day as
the date fixed for such prepayment), any payment of principal of or interest on any Note that is
due on a date other than a Business Day shall be made on the next succeeding Business Day without
including the additional days elapsed in the computation of the interest payable on such next
succeeding Business Day.

19.5. Severability.

          Any provision of this Agreement that 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 (to the fullest extent permitted by applicable law) not invalidate or
render unenforceable such provision in any other jurisdiction.

41

 

19.6. Accounting Terms; Pro Forma Calculations.

          All accounting terms used herein which are not expressly defined in this Agreement have the
meanings respectively given to them in accordance with GAAP. Except as otherwise specifically
provided herein, all computations made pursuant to this Agreement shall be made in accordance with
GAAP and all balance sheets and other financial statements with respect thereto shall be prepared
in accordance with GAAP. Except as otherwise specifically provided herein, any consolidated
financial statement or financial computation shall be done in accordance with GAAP; and, if at the
time that any such statement or computation is required to be made the Company shall not have any
Subsidiary, such terms shall mean a financial statement or a financial computation, as the case may
be, with respect to the Company only.

          Any pro forma computation required to be made hereby shall include adjustments (without
limitation as to other appropriate pro forma adjustments in accordance with generally accepted
financial practice) giving effect to all acquisitions and dispositions made during the period with
respect to which such computation is being made as if such acquisitions and dispositions were made
on the first day of such period.

19.7. Counterparts.

          This Agreement may be executed in any number of counterparts, each of which shall be an
original but all of which together shall constitute one instrument. Each counterpart may consist
of a number of copies hereof, each signed by less than all, but together signed by all, of the
parties hereto.

19.8. Governing Law.

          This Agreement and the Notes shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the laws of the State of New York excluding
choice-of-law principles of the law of such State that would require the application of the laws of
a jurisdiction other than such State.

19.9. Subsidiary Guarantors’ Acknowledgment.

          By signing below, each of the Subsidiary Guarantors (i) acknowledges, consents and agrees to
the execution, delivery and performance by the Company of this Agreement and the Notes, (ii)
acknowledges and agrees that its obligations in respect of the Subsidiary Guarantee 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
Subsidiary Guarantee, and (iv) acknowledges and agrees that it has no claims or offsets against, or
defenses or counterclaims to, the Subsidiary Guarantee.

42

 

          If you are in agreement with the foregoing, please sign the form of agreement in the space
below provided on a counterpart of this Agreement and return it to the Company, whereupon the
foregoing shall become a binding agreement between you and the Company.

	 	 	 	 	 	 	 
	 

	 	Very truly yours,
	 	 
	 
	 	 	 	 	 	 
	 	 	SPARTECH CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name;
	 	 

	 	 
	 

	 	Title:	 	 	 	 

43

 

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

PEPAC HOLDINGS, INC.

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Randy C. Martin
	 	 
	 

	 	Vice President for all of the above	 	 

44

 

The foregoing is hereby agreed to as of the date thereof:

[NOTEHOLDER SIGNATURE PAGES]

45

 

Schedule A

46

 

SCHEDULE B

DEFINED TERMS

          As used herein, the following terms have the respective meanings set forth below or set forth
in the Section hereof following such term:

          “2004 Noteholders” means the noteholders listed in Schedule A attached to the Amended and
Restated 2004 NPA.

          “2004 Notes” means the notes issued pursuant to the Amended and Restated 2004 NPA.

          “2006 Noteholders” means the Noteholders listed in Schedule A attached hereto.

          “Acquisition” means any transaction or series of related transactions for the purpose of or
resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets
of a Person, or of any business or division of a Person, (b) the acquisition of assets of a Person
that is accompanied by a long term supply agreement, (c) the acquisition of in excess of 50% of the
Equity Interests of any Person, or otherwise causing any Person to become a Subsidiary, or (d) a
merger or consolidation or any other combination with another Person (other than a Person that is a
Subsidiary) provided that the Company or the Subsidiary is the surviving entity.

          “Affiliate” means, at any time, (a) with respect to any Person (including without limitation
the Company), any other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with, such first Person,
and (b) with respect to the Company, any Person beneficially owning or holding, directly or
indirectly, 10% or more of any class of voting or equity interests of the Company or any Subsidiary
or any Person of which the Company and its Subsidiaries beneficially own or hold, in the aggregate,
directly or indirectly, 10% or more of any class of voting or equity interests. As used in this
definition, “Control” means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise. Unless the context otherwise clearly requires, any reference
to an “Affiliate” is a reference to an Affiliate of the Company.

          “Amended and Restated 2004 NPA” has the meaning specified in Section 3.5(a) hereof.

          “Anti-Terrorism Order” means Executive Order No. 13,244 of September 24, 2001, Blocking
Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit or Support
Terrorism, 66 U.S. Fed. Reg. 49, 079 (2001), as amended.

          “Asset Sale” has the meaning specified in Section 8.2 hereof.

 

 

          “Attributable Debt” means, as to any particular lease relating to a sale and leaseback
transaction, the total amount of rent (discounted semiannually from the respective due dates
thereof at the interest rate implicit in such lease) required to be paid by the lessee under such
lease during the remaining term thereof. The amount of rent required to be paid under any such
lease for any such period shall be (a) the total amount of the rent payable by the lessee with
respect to such period after excluding amounts required to be paid on account of maintenance and
repairs, insurance, taxes, assessments, utilities, operating and labor costs and similar charges
plus (b) without duplication, any guaranteed residual value in respect of such lease to the extent
such guarantee would be included in indebtedness in accordance with GAAP.

          “Bank Administrative Agent” means Bank of America, N.A., in its capacity as administrative
agent under the Credit Agreement, or any successor thereto under the Credit Agreement.

          “Business Day” means (a) for the purposes of Section 6.6 only, any day other than a Saturday,
a Sunday or a day on which commercial banks in New York City are required or authorized to be
closed, and (b) for the purposes of any other provision of this Agreement, any day other than a
Saturday, a Sunday or a day on which commercial banks in New York City or St. Louis, Missouri are
required or authorized to be closed.

          “Capital Expenditures” means with respect to any Person for any period, the aggregate amount
of all expenditures by such Person and its Subsidiaries for the acquisition or leasing (pursuant to
a Capital Lease) of fixed or capital assets that are required to be capitalized under GAAP on a
balance sheet of such Person.

          “Capital Lease” means, at any time, a lease with respect to which the lessee is required
concurrently to recognize the acquisition of an asset and the incurrence of a liability in
accordance with GAAP.

          “Capitalized Lease Obligations” means with respect to any Person, all outstanding obligations
of such Person in respect of Capital Leases, taken at the capitalized amount thereof accounted for
as indebtedness in accordance with GAAP.

          “Code” means the Internal Revenue Code of 1986, as amended from time to time, and the rules
and regulations promulgated thereunder from time to time.

          “Collateral” means any collateral in which a Lien is granted by any Person to the Collateral
Agent to secure the Senior Secured Obligations pursuant to the Security Documents.

          “Collateral Agent” means Bank of America in its capacity as collateral agent for the
Creditors, or any successor thereto under the Intercreditor Agreement.

          “Company” means Spartech Corporation, a Delaware corporation.

          “Confidential Information” is defined in Section 18.

B-2

 

          “Consolidated Indebtedness” means, at any date, all Indebtedness of the Company and its
Subsidiaries determined on a consolidated basis in accordance with GAAP.

          “Consolidated Interest Expense” for any period means the sum for the Company and its
Subsidiaries, determined on a consolidated basis in accordance with GAAP, of all amounts which
would be deducted in computing Consolidated Net Income on account of interest on Indebtedness
(including imputed interest in respect of Capitalized Lease Obligations and amortization of debt
discount and expense).

          “Consolidated Net Income” for any period means the net income of the Company and its
Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP, excluding

         (a) the proceeds of any life insurance policy,

         (b) any gains arising from (i) the sale or other disposition of any assets (other
than current assets) to the extent that the aggregate amount of the gains during such
period exceeds the aggregate amount of the losses during such period from the sale,
abandonment or other disposition of assets (other than current assets), (ii) any
write-up of assets or (iii) the acquisition of outstanding securities of the Company or
any Subsidiary,

         (c) any amount representing any interest in the undistributed earnings of any other
Person (other than a Subsidiary),

         (d) any earnings, prior to the date of acquisition, of any Person acquired in any
manner, and any earnings of any Subsidiary prior to its becoming a Subsidiary,

         (e) any earnings of a successor to or transferee of the assets of the Company prior
to its becoming such successor or transferee,

         (f) any deferred credit (or amortization of a deferred credit) arising from the
acquisition of any Person, and

         (g) any extraordinary gains not covered by clause (b) above.

          “Consolidated Net Worth” means, at any date, on a consolidated basis for the Company and its
Subsidiaries, (a) the sum of (i) capital stock taken at par or stated value plus (ii) capital in
excess of par or stated value relating to capital stock plus (iii) retained earnings (or minus any
retained earning deficit) minus (b) the sum of treasury stock, capital stock subscribed for and
unissued and other contra-equity accounts, all determined in accordance with GAAP.

          “Consolidated Total Assets” means, at any date, for the Company and its Subsidiaries, the
total assets as of such date which would be shown as assets on a consolidated balance sheet of the
Company and its Subsidiaries prepared in accordance with GAAP.

B-3

 

          “Consolidated Total Operating Income” means, for any period, on a consolidated basis in
accordance with GAAP for the Company and its Subsidiaries, earnings before Consolidated Interest
Expense and income taxes for such period, plus all amounts deducted for other non-cash charges
(including but not limited to expensing of stock options, fixed asset write-offs and impairments of
goodwill) for such period.

          “Credit Agreement” has the meaning specified in Section 3.5(b) hereof.

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

          “Creditor” has the meaning specified in the Intercreditor Agreement.

          “Default” means an event or condition the occurrence or existence of which would, with the
giving of notice or the lapse of time, or both, become an Event of Default.

          “Default Rate” means that rate of interest that is the greater of (i) 8.82% per annum and
(ii) 2% above the rate of interest publicly announced by Citibank, N.A. from time to time at its
principal office in New York City as its prime rate.

          “Dividends” means, with respect to any Person, dividends or other distributions of assets,
properties, cash, rights, obligations or securities on account of any shares of any class of its
capital stock.

          “Domestic Subsidiary” means any Subsidiary which is organized under the laws of the United
States or any state thereof or which at the time is conducting a majority of its business within
the United States.

          “EBITDA” for any period means Consolidated Net Income for such period plus all amounts
deducted in the computation thereof on account of (a) Consolidated Interest Expense,
(b) depreciation and amortization expenses and other non-cash charges (included but not limited to
expensing of stock options, fixed asset write-offs and impairments of goodwill), (c) income and
profits taxes, and (d) cash restructuring expenses; provided, however, the aggregate amount of cash
restructuring expenses which may be added to determine EBITDA shall not exceed $5,000,000 for any
period of four consecutive fiscal quarters.

          “Effective Date” has the meaning specified in Section 3 hereof.

          “Environmental Laws” means any and all Federal, state, local, and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or governmental restrictions relating to pollution and the
protection of the environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.

B-4

 

          “Equity Interest” means shares of capital stock (whether denominated as common stock or
preferred stock), beneficial, partnership or membership interests, participations or other
equivalents (regardless of how designated) of or in a corporation, partnership, limited liability
company or equivalent entity, whether voting or non-voting.

          “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.

          “ERISA Affiliate” means any trade or business (whether or not incorporated) that is treated as
a single employer together with the Company under section 414 of the Code.

          “Event of Default” is defined in Section 9.

          “Excess Cash Flow” means, for any period for the Company and its Subsidiaries on a
consolidated basis, an amount equal to the sum of, without duplication, in each case for such
period (a) the sum of (i) EBITDA (excluding for purposes of the determination of Excess Cash Flow
only, the addition of any cash restructuring expenses), (ii) interest income received in cash, and
(iii) net decrease (if any) in working capital minus (b) the sum of (i) Restricted Payments,
(ii) aggregate amount of federal, state, local and foreign income taxes paid in cash,
(iii) unfinanced cash portion of Capital Expenditures, (iv) amounts expended for Permitted
Acquisitions, (v) scheduled principal repayments of Indebtedness (other than Indebtedness of the
Company or any Subsidiary owing to the Company or another Subsidiary) and, without duplication,
payments of such Indebtedness which result in a permanent reduction of any commitment related
thereto, (vi) interest and fees in respect of any Indebtedness (other than Indebtedness of the
Company or any Subsidiary owing to the Company or another Subsidiary) actually paid in cash, and
(vii) net increases (if any) in working capital.

          “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.

          “Extraordinary Receipt” means any cash received by or paid to or for the account of any Person
in excess of $1,000,000 not in the ordinary course of business, including tax refunds, pension plan
reversions, proceeds of insurance (other than proceeds of business interruption insurance to the
extent such proceeds constitute compensation for lost earnings), condemnation awards (and payments
in lieu thereof), indemnity payments and any purchase price adjustments; provided, however, that an
Extraordinary Receipt shall not include cash receipts from proceeds of insurance, condemnation
awards (or payments in lieu thereof) or indemnity payments to the extent that such proceeds, awards
or payments are received by any Person in respect of any third party claim against such Person and
applied to pay (or to reimburse such Person for its prior payment of) such claim and the costs and
expenses of such Person with respect thereto.

          “Financing Documents” means this Agreement, the Notes and the Subsidiary Guarantees.

B-5

 

          “Fixed Charge Coverage Ratio” means, as of any date of determination, for the Company and its
Subsidiaries on a consolidated basis, the ratio of (a) the sum of (i) EBITDA minus (ii) Capital
Expenditures, minus (iii) income tax expense to (b) the sum of (i) cash Consolidated Interest
Expense, plus (ii) Dividends and (iii) scheduled installment payments of principal of Consolidated
Indebtedness, in each case for the four consecutive fiscal quarters most recently ended.

          “Foreign Subsidiary” means each Subsidiary of the Company which is organized under the laws of
any jurisdiction other than, and which is conducting the majority of its business outside of, the
United States or any state thereof.

          “GAAP” means generally accepted accounting principles as in effect from time to time in the
United States of America.

          “Governmental Authority” means

          (a) the government of

     (i) the United States of America or any State or other political subdivision
thereof, or

     (ii) any jurisdiction in which the Company or any Subsidiary conducts all or
any part of its business, or which asserts jurisdiction over any properties of the
Company or any Subsidiary, or

          (b) any entity exercising executive, legislative, judicial, regulatory or
administrative functions of, or pertaining to, any such government.

          “Granting Party” means each Domestic Subsidiary of the Company.

          “Guaranty” means, with respect to any Person, any obligation (except the endorsement in the
ordinary course of business of negotiable instruments for deposit or collection) of such Person
guaranteeing or in effect guaranteeing any Indebtedness, dividend or other obligation of any other
Person in any manner, whether directly or indirectly, including without limitation obligations
incurred through an agreement, contingent or otherwise, by such Person:

     (a) to purchase such Indebtedness or obligation or any property constituting security
therefor;

     (b) to advance or supply funds (i) for the purchase or payment of such Indebtedness or
obligation, or (ii) to maintain any working capital or other balance sheet condition or any
income statement condition of any other Person or otherwise to advance or make available
funds for the purchase or payment of such Indebtedness or obligation;

B-6

 

     (c) to lease properties or to purchase properties or services primarily for the purpose
of assuring the owner of such Indebtedness or obligation of the ability of any other Person
to make payment of the Indebtedness or obligation; or

     (d) otherwise to assure the owner of such Indebtedness or obligation against loss in
respect thereof.

          In any computation of the Indebtedness or other liabilities of the obligor under any Guaranty,
the Indebtedness or other obligations that are the subject of such Guaranty shall be assumed to be
direct obligations of such obligor.

          “Hazardous Material” means any and all pollutants, toxic or hazardous wastes or any other
substances that might pose a hazard to health or safety, the removal of which may be required or
the generation, manufacture, refining, production, processing, treatment, storage, handling,
transportation, transfer, use, disposal, release, discharge, spillage, seepage, or filtration of
which is or shall be restricted, prohibited or penalized by any applicable law (including without
limitation asbestos, urea formaldehyde foam insulation and polychlorinated biphenyls).

          “holder” means, with respect to any Note, the Person in whose name such Note is registered in
the register maintained by the Company pursuant to Section 11.1.

          “Indebtedness” with respect to any Person means, at any time, without duplication,

     (a) its liabilities for borrowed money or its mandatory purchase, redemption or other
retirement obligations in respect of mandatorily redeemable Preferred Stock,

     (b) its liabilities for the deferred purchase price of property acquired by such Person
(excluding accounts payable arising in the ordinary course of business and not overdue but
including all liabilities created or arising under any conditional sale or other title
retention agreement with respect to any such property),

     (c) its Capitalized Lease Obligations,

     (d) all liabilities for borrowed money secured by any Lien with respect to any property
owned by such Person (whether or not it has assumed or otherwise become liable for such
liabilities),

     (e) all its liabilities in respect of letters of credit or instruments serving a
similar function issued or accepted for its account by banks and other financial
institutions (whether or not representing obligations for borrowed money),

     (f) Swap Contracts of such Person, and

     (g) any Guaranty of such Person with respect to liabilities of a type described in any
of clauses (a) through (f) above.

B-7

 

Indebtedness of any Person shall include all obligations of such Person of the character described
in clauses (a) through (g) above to the extent such Person remains legally liable in respect
thereof notwithstanding that any such obligation is deemed to be extinguished under GAAP.

          “Institutional Investor” means (a) any original purchaser of a Note, (b) any holder of a Note
holding (together with one or more of its Affiliates) more than 2% of the aggregate principal
amount of the Notes then outstanding, and (c) any bank, trust company, savings and loan association
or other financial institution, any pension plan, any investment company, any insurance company,
any broker or dealer, or any other similar financial institution or entity, regardless of legal
form.

          “Intercreditor Agreement” means that certain Intercreditor and Collateral Agency Agreement,
dated as of September 10, 2008, among the Collateral Agent, the Bank Administrative Agent, Calyon
New York Branch, the 2004 Noteholders and the 2006 Noteholders and consented to by the Company and
each Granting Party, as hereafter amended, modified or supplemented from time to time,
substantially in the form of Exhibit 3.5.

          “Investments” has the meaning specified in Section 8.4 hereof.

          “Lenders” means, collectively, the lenders from time to time party to the Credit Agreement.

          “Leverage Ratio” means, as of any date of determination, for the Company and its Subsidiaries
on a consolidated basis, the ratio of (a) Consolidated Indebtedness as of such date to (b) EBITDA
for the four consecutive fiscal quarters most recently ended. For purposes of calculating the
Leverage Ratio as at any date, EBITDA shall be calculated on a pro forma basis (as certified by the
Company to the each Noteholder) assuming that all Acquisitions made, and all divestitures
completed, during the four consecutive fiscal quarters then most recently ended had been made on
the first day of such period (but without adjustment for expected cost savings or other synergies).

          “Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge, or preference, priority or other security interest
or preferential arrangement in the nature of a security interest of any kind or nature whatsoever
(including any conditional sale or other title retention agreement or other encumbrance on title to
real property, and any financing lease having substantially the same economic effect as any of the
foregoing).

          “Majority Creditors” has the meaning specified in the Intercreditor Agreement.

          “Make-Whole Amount” means, with respect to any Note, an amount equal to the excess, if any, of
the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of
such Note over the amount of such Called Principal, provided that the Make-Whole Amount may in no
event be less than zero. For the purposes of determining the Make-Whole Amount, the following
terms have the following meanings:

B-8

 

     “Called Principal” means, with respect to any Note, the principal of such Note that is
to be prepaid pursuant to Section 6.2 or has become or is declared to be immediately due and
payable pursuant to Section 10.1, as the context requires.

     “Discounted Value” means, with respect to the Called Principal of any Note, the amount
obtained by discounting all Remaining Scheduled Payments with respect to such Called
Principal from their respective scheduled due dates to the Settlement Date with respect to
such Called Principal, in accordance with accepted financial practice and at a discount
factor (applied on the same periodic basis as that on which interest on the Notes is
payable) equal to the Reinvestment Yield with respect to such Called Principal.

     “Reinvestment Yield” means, with respect to the Called Principal of any Note, 0.50%
over the yield to maturity implied by (i) the yields reported, as of 10:00 A.M. (New York
City time) on the second Business Day preceding the Settlement Date with respect to such
Called Principal, on (x) the Bloomberg Financial Markets News screen PX1 or the equivalent
screen provided by Bloomberg Financial Markets News, or (y) if such on-line market data is
not at the time provided by Bloomberg Financial Markets News, on the display designated as
“Page 500” on the Telerate service (or such other display as may replace Page 500 on the
Telerate service), in any case for actively traded U.S. Treasury securities having a
maturity equal to the Remaining Average Life of such Called Principal as of such Settlement
Date, or (ii) if such yields are not reported as of such time or the yields reported as of
such time are not ascertainable (including by way of interpolation), the Treasury Constant
Maturity Series Yields reported, for the latest day for which such yields have been so
reported as of the second Business Day preceding the Settlement Date with respect to such
Called Principal, in Federal Reserve Statistical Release H.15 (519) (or any comparable
successor publication) for actively traded U.S. Treasury securities having a constant
maturity equal to the Remaining Average Life of such Called Principal as of such Settlement
Date. Such implied yield will be determined, if necessary, by (a) converting U.S. Treasury
bill quotations to bond-equivalent yields in accordance with accepted financial practice and
(b) interpolating linearly between (1) the actively traded U.S. Treasury security with a
maturity closest to and greater than the Remaining Average Life and (2) the actively traded
U.S. Treasury security with a maturity closest to and less than the Remaining Average Life.

     “Remaining Average Life” means, with respect to any Called Principal, the number of
years (calculated to the nearest one-twelfth year) obtained by dividing (i) such Called
Principal into (ii) the sum of the products obtained by multiplying (a) the principal
component of each Remaining Scheduled Payment with respect to such Called Principal by (b)
the number of years (calculated to the nearest one-twelfth year) that will elapse between
the Settlement Date with respect to such Called Principal and the scheduled due date of such
Remaining Scheduled Payment.

     “Remaining Scheduled Payments” means, with respect to the Called Principal of any Note,
all payments of such Called Principal and interest thereon that would be due after the
Settlement Date with respect to such Called Principal if no payment of such Called Principal
were made prior to its scheduled due date, provided that if such

B-9

 

Settlement Date is not a date on which interest payments are due to be made under the
terms of the Notes, then the amount of the next succeeding scheduled interest payment will
be reduced by the amount of interest accrued to such Settlement Date and required to be paid
on such Settlement Date pursuant to Section 6.2 or 10.1.

     “Settlement Date” means, with respect to the Called Principal of any Note, the date on
which such Called Principal is to be prepaid pursuant to Section 6.2 or has become or is
declared to be immediately due and payable pursuant to Section 10.1, as the context
requires.

               “Material” means material in relation to the business, operations, affairs, financial
condition, assets, properties, or prospects of the Company and its Subsidiaries taken as a whole.

               “Material Adverse Effect” means a material adverse effect on (a) the business, operations,
affairs, financial condition, assets or properties of the Company and its Subsidiaries taken as a
whole, (b) the ability of the Company to perform its obligations under this Agreement and the Notes
or (c) the validity or enforceability of this Agreement, the Notes or any Subsidiary Guarantee.

               “Maximum Amount” means on any date an amount equal to 10% of pro forma consolidated net
revenues of the Company and its Subsidiaries for the four consecutive fiscal quarters then most
recently ended, determined on a consolidated basis in accordance with GAAP.

               “Mortgage Instrument” has the meaning specified in Section 7.8 hereof.

               “Mortgaged Property” has the meaning specified in Section 7.8 hereof.

               “Multiemployer Plan” means any Plan that is a “multiemployer plan” (as such term is defined in
section 4001(a)(3) of ERISA).

               “Net Cash Proceeds” means:

               (a) with respect to any Asset Sale by the Company or any of its Subsidiaries, or any
Extraordinary Receipt received or paid to the account of the Company or any of its Subsidiaries,
the excess, if any, of (i) the sum of cash and cash equivalents received in connection with such
transaction (including any cash or cash equivalents received by way of deferred payment pursuant
to, or by monetization of, a note receivable or otherwise, but only as and when so received) over
(ii) the sum of (A) the principal amount of any Indebtedness that is secured by the applicable
asset and that is required to be repaid in connection with such transaction (other than
Indebtedness under the Financing Documents), (B) the reasonable and customary out-of-pocket
expenses incurred by the Company or such Subsidiary in connection with such transaction and
(C) taxes reasonably estimated to be actually payable as a result of the relevant transaction;
provided that, if the amount of any estimated taxes pursuant to subclause (C) exceeds the amount of
taxes actually required to be paid in cash in respect of such Asset Sale, the aggregate amount of
such excess shall constitute Net Cash Proceeds; and

B-10

 

          (b) with respect to the sale or issuance of any Equity Interest by the Company or any of its
Subsidiaries, or the incurrence or issuance of any Indebtedness by the Company or any of its
Subsidiaries, the excess of (i) the sum of the cash and cash equivalents received in connection
with such transaction over (ii) the underwriting discounts and commissions, and other reasonable
and customary out-of-pocket expenses, incurred by the Company or such Subsidiary in connection
therewith.

          “Note Prepayment Basis” has the meaning specified in Section 6.1(b)(i) hereof.

          “Notes” has the meaning specified in Section 1.3 hereof.

          “Officer’s Certificate” means a certificate of a Senior Financial Officer or of any other
officer of the Company whose responsibilities extend to the subject matter of such certificate.

          “Organization Documents” means, (a) with respect to any corporation, the certificate or
articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with
respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the
certificate or articles of formation or organization and operating agreement; and (c) with respect
to any partnership, joint venture, trust or other form of business entity, the partnership, joint
venture or other applicable agreement of formation or organization and any agreement, instrument,
filing or notice with respect thereto filed in connection with its formation or organization with
the applicable Governmental Authority in the jurisdiction of its formation or organization and, if
applicable, any certificate or articles of formation or organization of such entity.

          “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA or any
successor thereto.

          “Permitted Acquisitions” means an Acquisition (a) which is non-hostile, (b) which occurs when
no Default or Event of Default exists or will result therefrom, (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 the Required
Holders have given their prior written consent. “Permitted Acquisition” shall include the
acquisition by the Company of the assets of a division of an unaffiliated company previously
disclosed immediately prior to the Effective Date to the Noteholders.

          “Permitted Liens” has the meaning specified in Section 8.1 hereof.

          “Person” means an individual, partnership, corporation, limited liability company,
association, trust, unincorporated organization, or a government or agency or political subdivision
thereof.

          “Plan” means an “employee benefit plan” (as defined in section 3(3) of ERISA) that is or,
within the preceding five years, has been established or maintained, or to which contributions are
or, within the preceding five years, have been made or required to be made, by

B-11

 

the Company or any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate
may have any liability.

          “Preferred Stock", as applied to any Person, means shares or other equity interests of such
person that shall be entitled to preference or priority over any other shares of such Person in
respect of either the payment of dividends or the distribution of assets upon liquidation, or both.

          “property” or “properties” means, unless otherwise specifically limited, real or personal
property of any kind, tangible or intangible, inchoate or otherwise.

          “Reinvestment Property” has the meaning set forth in Section 6.1(b)(i) hereof.

          “Required Holders” means, at any time, the holders of at least a majority in unpaid principal
amount of the Notes at the time outstanding.

          “Required Lenders” has the meaning specified in the Credit Agreement.

          “Responsible Officer” means any Senior Financial Officer and any other officer of the Company
with responsibility for the administration of the relevant portion of this Agreement.

          “Restricted Payments” means (i) the authorization, declaration or payment of any Dividend,
(ii) the payment, purchase or redemption of principal of or interest on any Subordinated Debt,
(iii) Stock Redemptions, (iv) any voluntary or optional prepayment of the Indebtedness under the
Credit Facility Documents that permanently reduces the Aggregate Commitments (as defined therein)
and (v) any voluntary or optional prepayment of the Indebtedness under the Term Loan Documents.

          “Securities Act” means the Securities Act of 1933, as amended from time to time.

          “Security Agreement” has the meaning specified in Section 3.6 hereof.

          “Security Documents” means the Security Agreement, any Mortgage Instrument, the Intercreditor
Agreement and any document related thereto.

          “Senior Financial Officer” means the chief financial officer, principal accounting officer,
treasurer or comptroller of the Company.

          “Senior Secured Obligations” has the meaning specified in the Intercreditor Agreement.

          “Significant Subsidiary” means, at any date, a Subsidiary (a) which, together with its
Subsidiaries, produced more than 5% of Consolidated Net Income for the fiscal year then most
recently ended (calculated on a pro forma basis in the case of any Person which became a Subsidiary
during or after the end of such fiscal year) or (b) the assets of which, together with the

B-12

 

assets of its Subsidiaries, exceeded 5% of the consolidated total assets (fixed and current)
of the Company and its Subsidiaries as of the last day of such fiscal year (calculated on a pro
forma basis as of the last day of such fiscal year in the case of any Person which became a
Subsidiary thereafter).

          “Stock Redemptions” means with respect to any Person any and all funds, cash or other payments
made in respect of the redemption, repurchase or acquisition of such capital stock (specifically
including, without limitation, a Treasury Stock Purchase), unless such capital stock shall be
redeemed or acquired through the exchange of such capital stock with capital stock of the same
class or options or warrants to purchase such capital stock.

          “Subordinated Debt” means any Indebtedness of the Company or any Subsidiary which is expressly
subordinated to the Notes, at all times pursuant to terms satisfactory to the Required Holders.

          “Subsidiary” means, as to any Person, any corporation or other business entity a majority of
the combined voting power of all Voting Equity Interests of which is owned by such Person or one or
more of its Subsidiaries or such Person and one or more of its Subsidiaries. Unless the context
otherwise clearly requires, any reference to a “Subsidiary” is a reference to a Subsidiary of the
Company.

          “Subsidiary Guarantee” is defined in Section 1.5.

          “Subsidiary Guarantors” is defined in Section 1.5.

          “Superpriority Amount” has the meaning specified in the Intercreditor Agreement.

          “Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative
transactions, forward rate transactions, commodity swaps, commodity options, forward commodity
contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or
options or forward bond or forward bond price or forward bond index transactions, interest rate
options, forward foreign exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap transactions, currency options,
spot contracts, or any other similar transactions or any combination of any of the foregoing
(including any options to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions of any kind, and
the related confirmations, which are subject to the terms and conditions of, or governed by, any
form of master agreement published by the International Swaps and Derivatives Association, Inc.,
any International Foreign Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including any such
obligations or liabilities under any Master Agreement.

          “Term Loan Agreement” has the meaning specified in Section 3.5(c) hereof.

B-13

 

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

          “Treasury Stock Purchase” means any purchase, redemption, retirement, defeasance or other
acquisition (including any sinking fund or similar deposit for such purpose) by the Company or any
Subsidiary of the Company of its capital stock or any warrants, rights or options to acquire such
capital stock.

          “USA Patriot Act” means United States Public Law 107-56, Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of
2001, as amended from time to time, and the rules and regulations promulgated thereunder from time
to time in effect.

          “Voting Equity Interests” of any Person means any Equity Interests of any class or classes
having ordinary voting power for the election of at least a majority of the members of the board of
directors, managing general partners or the equivalent governing body of such Person, irrespective
of whether, at the time, any Equity Interests of any other class or classes or such entity shall
have or might have voting power by reason of the happening of any contingency.

          “Wholly-Owned Subsidiary” means any corporation in which (other than directors’ qualifying
shares required by law) 100% of the capital stock of each class having ordinary voting power, and
100% of the capital stock of every other class, in each case, at the time as of which any
determination is being made, is owned, beneficially and of record, by the Company, or by one or
more of the other Wholly-Owned Subsidiaries, or both.

B-14

 

Exhibit 1.3

FORM OF NOTE

 

 

Exhibit 1.5

FORM OF SUBSIDIARY GUARANTEE

          GUARANTEE AGREEMENT dated as of                     , 20___, made by                           
             , a
               
               
           corporation (the “Guarantor”), in favor of the holders from time to time of the
Notes referred to below (collectively the “Obligees”).

          WHEREAS, Spartech Corporation, a Delaware corporation (the “Company”), has entered into
several Note Purchase Agreements dated as of June 5, 2006 (as amended pursuant to the Amended and
Restated Note Purchase Agreement (Initially Dated as of June 5, 2006) dated as of September 10,
2008, and as otherwise modified from time to time, collectively the “Note Agreements” and terms
defined therein and not otherwise defined herein are being used herein as so defined) with the
institutional purchasers listed in Schedule A thereto, pursuant to which the Company sold and such
purchasers purchased $50,000,000 aggregate principal amount of its 5.54% Senior Notes due 2016 (as
amended and restated, and as otherwise modified from time to time, collectively, the “Notes”); and

          WHEREAS, it is a requirement of the Note Agreements that the Guarantor shall execute and
deliver this Guarantee Agreement;

          NOW, THEREFORE, in consideration of the premises the Guarantor hereby agrees as follows:

          SECTION 1. Guarantee. The Guarantor unconditionally and irrevocably guarantees, as
primary obligor and not merely as surety,

     A. the punctual payment when due, whether at stated maturity, by acceleration or
otherwise, of all obligations of the Company arising under the Notes and the Note
Agreements, including all extensions, modifications, substitutions, amendments and renewals
thereof, whether for principal, interest (including without limitation interest on any
overdue principal, premium and interest at the rate specified in the Notes and interest
accruing or becoming owing both prior to and subsequent to the commencement of any
proceeding against or with respect to the Company under any chapter of the Bankruptcy Code
of 1978, 11 U.S.C. §101 et seq.), Make-Whole Amount, Additional Amounts,
fees, expenses, indemnification or otherwise, and

     B. the due and punctual performance and observance by the Company of all covenants,
agreements and conditions on its part to be performed and observed under the Notes and the
Note Agreements;

(all such obligations are called the “Guaranteed Obligations”); provided that the aggregate
liability of the Guarantor hereunder in respect of the Guaranteed Obligations shall not exceed at
any time the lesser of (1) the amount of the Guaranteed Obligations and (2) the maximum amount for
which the Guarantor is liable under this Guarantee Agreement without such liability being deemed a
fraudulent transfer under applicable Debtor Relief Laws (as hereinafter defined), as determined by
a court of competent jurisdiction. As used herein, the term “Debtor Relief Laws” means any
applicable liquidation, conservatorship, bankruptcy, moratorium,

 

 

rearrangement, insolvency, reorganization or similar debtor relief laws affecting the rights of
creditors generally from time to time in effect.

          The Guarantor also agrees to pay, in addition to the amount stated above, any and all
reasonable expenses (including reasonable counsel fees and expenses) incurred by any Obligee in
enforcing any rights under this Guarantee Agreement or in connection with any amendment of this
Guarantee Agreement.

          Without limiting the generality of the foregoing, this Guarantee Agreement guarantees, to the
extent provided herein, the payment of all amounts which constitute part of the Guaranteed
Obligations and would be owed by any other Person to any Obligee but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving such Person.

          SECTION 2. Guarantee Absolute. The obligations of the Guarantor under Section 1 of
this Guarantee Agreement constitute a present and continuing guaranty of payment and not of
collectability and the Guarantor guarantees that the Guaranteed Obligations will be paid strictly
in accordance with the terms of the Notes and the Note Agreements, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or
the rights of any Obligee with respect thereto. The obligations of the Guarantor under this
Guarantee Agreement are independent of the Guaranteed Obligations, and a separate action or actions
may be brought and prosecuted against the Guarantor to enforce this Guarantee Agreement,
irrespective of whether any action is brought against the Company or any other Person liable for
the Guaranteed Obligations or whether the Company or any other such Person is joined in any such
action or actions. The liability of the Guarantor under this Guarantee Agreement shall be primary,
absolute, irrevocable, and unconditional irrespective of:

     A. any lack of validity or enforceability of any Guaranteed Obligation, any Note, the
Note Agreements or any agreement or instrument relating thereto;

     B. any change in the time, manner or place of payment of, or in any other term of, all
or any of the Guaranteed Obligations, or any other amendment or waiver of or any consent to
departure from any Note, the Note Agreements or this Guarantee Agreement;

     C. any taking, exchange, release or non-perfection of any collateral, or any taking,
release or amendment or waiver of or consent to departure by the Guarantor or other Person
liable, or any other guarantee, for all or any of the Guaranteed Obligations;

     D. any manner of application of collateral, or proceeds thereof, to all or any of the
Guaranteed Obligations, or any manner of sale or other disposition of any collateral or any
other assets of the Company or any other Subsidiary;

     E. any change, restructuring or termination of the corporate structure or existence of
the Company or any other Subsidiary; or

 

 

     F. any other circumstance (including without limitation any statute of limitations)
that might otherwise constitute a defense, offset or counterclaim available to, or a
discharge of, the Company or the Guarantor.

          This Guarantee Agreement shall continue to be effective or be reinstated, as the case may be,
if at any time any payment of any of the Guaranteed Obligations is rescinded or must otherwise be
returned by any Obligee, or any other Person upon the insolvency, bankruptcy or reorganization of
the Company or otherwise, all as though such payment had not been made.

          SECTION 3. Waivers. The Guarantor hereby irrevocably waives, to the extent permitted
by applicable law:

     A. promptness, diligence, presentment, notice of acceptance and any other notice with
respect to any of the Guaranteed Obligations and this Guarantee Agreement;

     B. any requirement that any Obligee or any other Person protect, secure, perfect or
insure any Lien or any property subject thereto or exhaust any right or take any action
against the Company or any other Person or any collateral;

     C. any defense, offset or counterclaim arising by reason of any claim or defense based
upon any action by any Obligee;

     D. any duty on the part of any Obligee to disclose to the Guarantor any matter, fact or
thing relating to the business, operation or condition of any Person and its assets now
known or hereafter known by such Obligee; and

     E. any rights by which it might be entitled to require suit on an accrued right of
action in respect of any of the Guaranteed Obligations or require suit against the Company
or the Guarantor or any other Person.

          SECTION 4. Waiver of Subrogation and Contribution. The Guarantor shall not assert,
enforce, or otherwise exercise (A) any right of subrogation to any of the rights, remedies, powers,
privileges or liens of any Obligee or any other beneficiary against the Company or any other
obligor on the Guaranteed Obligations or any collateral or other security, or (B) any right of
recourse, reimbursement, contribution, indemnification, or similar right against the Company, and
the Guarantor hereby waives any and all of the foregoing rights, remedies, powers, privileges and
the benefit of, and any right to participate in, any collateral or other security given to any
Obligee or any other beneficiary to secure payment of the Guaranteed Obligations, until such time
as the Guaranteed Obligations have been paid in full.

          SECTION 5. Representations and Warranties. The Guarantor hereby represents and
warrants as follows:

     A. The Guarantor is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation. The execution, delivery and
performance of this Guarantee Agreement have been duly authorized by all necessary action on
the part of the Guarantor.

 

 

     B. The execution, delivery and performance by the Guarantor of this Guarantee Agreement
will not (i) contravene, result in any breach of, or constitute a default under, or result
in the creation of any Lien in respect of any property of the Guarantor or any Subsidiary of
the Guarantor under, any indenture, mortgage, deed of trust, loan, purchase or credit
agreement, lease, corporate charter or by-laws, or any other material agreement or
instrument to which the Guarantor or any Subsidiary of the Guarantor is bound or by which
the Guarantor or any Subsidiary of the Guarantor or any of their respective properties may
be bound or affected, (ii) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any court, arbitrator
or Governmental Authority applicable to the Guarantor or any Subsidiary of the Guarantor or
(iii) violate any provision of any statute or other rule or regulation of any Governmental
Authority applicable to the Guarantor or any Subsidiary of the Guarantor.

     C. The Guarantor and the Company are members of the same consolidated group of
companies and are engaged in related businesses and the Guarantor will derive substantial
direct and indirect benefit from the execution and delivery of this Guarantee Agreement.

          SECTION 6. Amendments, Etc. No amendment or waiver of any provision of this
Guarantee Agreement and no consent to any departure by the Guarantor therefrom shall in any event
be effective unless the same shall be in writing and signed by the Required Holders, and then such
waiver or consent shall be effective only in the specific instance and for the specific purpose for
which given; provided that no amendment, waiver or consent shall, unless in writing and signed by
all Obligees, (i) limit the liability of or release the Guarantor hereunder, (ii) postpone any date
fixed for, or change the amount of, any payment hereunder or (iii) change the percentage of Notes
the holders of which are, or the number of Obligees, required to take any action hereunder.

          SECTION 7. Addresses for Notices. All notices and other communications provided for
hereunder shall be in writing and (A) by telecopy if the sender on the same day sends a confirming
copy of such notice by a recognized overnight delivery service (charges prepaid), or (B) by
registered or certified mail with return receipt requested (postage prepaid), or (C) by a
recognized overnight delivery service (with charges prepaid). Such notice if sent to the Guarantor
shall be addressed to it at the address of the Guarantor provided below its name on the signature
page of this Guarantee Agreement or at such other address as the Guarantor may hereafter designate
by notice to each holder of Notes, or if sent to any holder of Notes, shall be addressed to it as
set forth in the Note Agreements. Any notice or other communication herein provided to be given to
the holders of all outstanding Notes shall be deemed to have been duly given if sent as aforesaid
to each of the registered holders of the Notes at the time outstanding at the address for such
purpose of such holder as it appears on the Note register maintained by the Company in accordance
with the provisions of Section 11.1 of the Note Agreements. Notices under this Section 7 will be
deemed given only when actually received.

          SECTION 8. No Waiver; Remedies. No failure on the part of any Obligee to exercise,
and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any other or further exercise

 

 

thereof or the exercise of any other right. The remedies herein provided are cumulative and
not exclusive of any remedies provided by law.

          SECTION 9. Continuing Guarantee. This Guarantee Agreement is a continuing guarantee
of payment and performance and shall (A) remain in full force and effect until payment in full of
the Guaranteed Obligations and all other amounts payable under this Guarantee Agreement, (B) be
binding upon the Guarantor, its successors and assigns and (C) inure to the benefit of and be
enforceable by the Obligees and their successors, transferees and assigns.

          SECTION 10. Jurisdiction and Process; Waiver of Jury Trial. The Guarantor
irrevocably submits to the non-exclusive in personam jurisdiction of any New York
State or federal court sitting in the Borough of Manhattan, The City of New York, over any suit,
action or proceeding arising out of or relating to this Guarantee Agreement. To the fullest extent
permitted by applicable law, the Guarantor irrevocably waives and agrees not to assert, by way of
motion, as a defense or otherwise, any claim that it is not subject to the in
personam jurisdiction of any such court, any objection that it may now or hereafter have to
the laying of the venue of any such suit, action or proceeding brought in any such court and any
claim that any such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum.

          The Guarantor agrees, to the fullest extent permitted by applicable law, that a final judgment
in any suit, action or proceeding of the nature referred to in this Section 10 brought in any such
court shall be conclusive and binding upon the Guarantor subject to rights of appeal, as the case
may be, and may be enforced in the courts of the United States of America or the State of New York
(or any other courts to the jurisdiction of which the Guarantor is or may be subject) by a suit
upon such judgment.

          The Guarantor consents to process being served in any suit, action or proceeding of the nature
referred to in this Section 10 by mailing a copy thereof by registered or certified mail, postage
prepaid, return receipt requested, to the Guarantor at its address specified in Section 7 or at
such other address of which you shall then have been notified pursuant to said Section. The
Guarantor agrees that such service upon receipt (i) shall be deemed in every respect effective
service of process upon it in any such suit, action or proceeding and (ii) shall, to the fullest
extent permitted by applicable law, be taken and held to be valid personal service upon and
personal delivery to the Guarantor. Notices hereunder shall be conclusively presumed received as
evidenced by a delivery receipt furnished by the United States Postal Service or any recognized
courier or overnight delivery service.

          Nothing in this Section 10 shall affect the right of any holder of a Note to serve process in
any manner permitted by law, or limit any right that the holders of any of the Notes may have to
bring proceedings against the Guarantor in the courts of any appropriate jurisdiction or to enforce
in any lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.

 

 

          THE GUARANTOR WAIVES TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT TO THIS GUARANTEE
AGREEMENT OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH.

          SECTION 11. [Tax Indemnification.

          11.1. Payments Without Tax Withholding. All payments whatsoever by the Guarantor
under this Guarantee Agreement shall be made in the lawful currency of the United States free and
clear of, and without reduction or liability for or on account of, any present or future taxes
(whether income, documentary, sales, stamp, registration, issue, capital, property, excise or
otherwise), levies, imposts, duties, fees, charges, deductions, withholding, restrictions or
conditions or any penalties, interest or additions thereto of any nature whatsoever (herein called
“Tax") unless any withholding or deduction for or on account of any Tax is required by law.

          11.2. Gross-Up for Required Tax Withholding. If the Guarantor shall be obligated by
law to make any such withholding or deduction for any Tax imposed, levied, collected, assessed or
withheld by or within the jurisdiction in which the Guarantor is organized or resident for tax
purposes (other than the United States) or any political subdivision or taxing authority thereof or
therein or by any other jurisdiction (or any taxing authority thereof or therein) other than the
United States from or through which payments under the Guaranteed Obligations by the Guarantor are
actually made (hereinafter a “Taxing Jurisdiction”), then the Guarantor will promptly (i) notify
the affected holders of Guaranteed Obligations of such requirement, (ii) pay such additional
amounts of interest (“Guarantee Additional Amounts”) as may be necessary so that the net amount
received by each holder of Guaranteed Obligations (including Guarantee Additional Amounts) after
such withholding or deduction will not be less than the amount such holder would have received if
such Taxes had not been withheld or deducted, (iii) make such withholding or deduction and remit
the full amount deducted or withheld to the relevant authority in accordance with applicable law
and (iv) furnish such holder with the original receipt of such payment from such government or
taxing authority (or such other evidence sufficient under United States Treasury Regulations
1.905-2(a)(2) under the Code (or any successor or subsequent provisions) so as to allow such holder
to verify that such Tax has been paid to such government or taxing authority). Notwithstanding the
provisions of this Section 11, no such Guarantee Additional Amounts shall be payable for or on
account of:

     (a) any Tax which would not have been imposed but for (1) the connection of a holder
with the Taxing Jurisdiction (other than the mere holding of a Note) including the existence
of a permanent establishment or other fixed place of business of such holder in such Taxing
Jurisdiction or (2) the appointment by a holder of a collecting agent in such Taxing
Jurisdiction;

     (b) any Tax that is imposed or withheld by reason of the failure by the holder of any
Note, notwithstanding its legal and practical ability, promptly after becoming a holder of a
Note to provide information concerning the nationality, residence or identity of such holder
or to make such declaration or other similar claim or report (provided such declaration or
claim does not require the holder to reveal any confidential or proprietary tax return or
other information and does not require the holder to incur any undue

 

 

expense) as may be required by a statute, treaty or regulation of the Taxing
Jurisdiction as a precondition to exemption from all or part of such Tax; and

     (c) any combination of clauses (A) and (B) above;

provided further, however, that no Guarantee Additional Amounts shall be payable (x) in respect of
any Guaranteed Obligation held by a holder who is a fiduciary or a partnership or a beneficial
owner who is other than the sole beneficial owner of such Guaranteed Obligation to the extent a
beneficiary or settlor with respect to such fiduciary or a member of such partnership or a
beneficial owner would not have been entitled to such Guarantee Additional Amounts had it been the
holder of such Guaranteed Obligation or (y) in respect of any Guaranteed Obligation in excess of
the amount which the Guarantor would have been obligated to pay if such Guaranteed Obligation had
been beneficially owned at all relevant times by Persons who were resident in the United States for
purposes of the income tax treaty in effect between the United States and such Taxing Jurisdiction.

          If the Guarantor fails to pay any withheld or deducted Taxes pursuant to clause (iii) of
Section 11.2 in accordance with applicable law, then the Guarantor shall indemnify and hold
harmless the affected holder and reimburse such holder for the amount of Taxes imposed on and paid
by such holder so that the net amount received by such holder after such reimbursement will not be
less than the net amount such holder would have received if Taxes on such reimbursement had not
been imposed, but excluding any Taxes on such holder’s net income generally or based on such
holder’s capital generally.

          11.3. Taxes Imposed by Means Other Than Withholding. If any Taxes are imposed on a
holder of a Guaranteed Obligation (other than Taxes imposed by the United States, any State thereof
or other political subdivision thereof) with respect to any payment made by the Guarantor hereunder
by means other than deduction or withholding and the Guarantor would be obligated to pay Guarantee
Additional Amounts to such holder hereunder if such Taxes had been withheld or deducted, the
Guarantor shall indemnify and hold harmless each such holder and will upon notice by such holder
and provided that reasonable supporting documentation is provided, reimburse each such holder for
the amount of (i) any Taxes so levied or imposed and paid to such holder as a result of payments
made under or with respect to the Guaranteed Obligation and (ii) any Taxes so levied or imposed
with respect to any reimbursement under the foregoing clause (i) so that the net amount received by
such holder after such reimbursement will not be less than the net amount the holder would have
received if Taxes on such reimbursement had not been imposed, but excluding any Taxes on such
holder’s net income generally or based on such holder’s capital generally.

          11.4. Tax Information Disclosure. For the avoidance of doubt, nothing herein shall
require any Person to disclose any information regarding its tax affairs or computations to the
Guarantor other than as shall be necessary to permit the Guarantor to determine whether any
Guarantee Additional Amounts would be required to be paid pursuant to the provisions of this
Section; provided, however, that no Person shall be obligated to disclose any of its tax returns to
the Guarantor or any agent of the Guarantor.

 

 

          11.5. Reimbursement of Guarantee Additional Amounts by Holder. If any Taxes imposed
on any holder are paid or indemnified against by the Guarantor under this Section 11, and such
holder receives a refund of any amount of Taxes paid or reimbursed by such Guarantor and such
holder is able, in good faith, to identify the tax refund as being attributable to such payment or
reimbursement, such holder shall pay to such Guarantor an amount equal to such refund.

          Section 12. Judgment Currency. Any payment on account of an amount that is payable
hereunder by the Guarantor in U.S. Dollars which is made to or for the account of any Obligee in
any other currency, whether as a result of any judgment or order or the enforcement thereof or the
realization of any security or the liquidation of such Guarantor, shall constitute a discharge of
such Guarantor’s obligation under this Guarantee Agreement only to the extent of the amount of U.S.
Dollars which such Obligee could purchase in the foreign exchange markets in London, England, with
the amount of such other currency in accordance with normal banking procedures at the rate of
exchange prevailing on the London Banking Day following receipt of the payment first referred to
above. If the amount of U.S. Dollars that could be so purchased is less than the amount of U.S.
Dollars originally due to such Obligee, the Guarantor agrees, to the fullest extent permitted by
law, to indemnify and save harmless such Obligee from and against all loss or damage arising out of
or as a result of such deficiency. This indemnity shall, to the fullest extent permitted by law,
constitute an obligation separate and independent from the other obligations contained in this
Guarantee Agreement, shall give rise to a separate and independent cause of action, shall apply
irrespective of any indulgence granted by such Obligee from time to time and shall continue in full
force and effect notwithstanding any judgment or order for a liquidated sum in respect of an amount
due hereunder or under any judgment or order. As used herein the term “London Banking Day” shall
mean any day other than Saturday or Sunday or a day on which commercial banks are required or
authorized by law to be closed in London, England.

          SECTION 13.]* Governing Law. This Guarantee Agreement shall be construed
and enforced in accordance with, and the rights of the Guarantor and the Obligees shall be governed
by, the laws of the State of New York excluding choice-of-law principles of the law of such State
that would require the application of the laws of a jurisdiction other than such State.

 

			
	*	 	Bracketed Sections 11 and 12 to be inserted if the
Guarantor is a Subsidiary with a jurisdiction of incorporation outside the
United States.

 

 

          IN WITNESS WHEREOF, the Guarantor has caused this Guarantee Agreement to be duly executed and
delivered as of the date first above written.

	 	 	 	 	 	 	 
	 	 	[GUARANTOR]	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 

	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 
	 
	 	 	 	 	 	 
	 	 	     Attention:	 	 
	 	 	Telephone:

Telecopy:	 	 

 

 

Exhibit 3.4

FORM OF OPINION OF SPECIAL COUNSEL FOR COMPANY

 

 

Exhibit 3.5

FORM OF INTERCREDITOR AGREEMENT

 

 

Schedule 4.4

SUBSIDIARIES

 

 

Schedule 4.10(c)

REAL PROPERTY

 

 

Schedule 4.10(d)

LEASES

 

 

Schedule 4.11

LICENSES, ETC.

 

 

Schedule 4.13

EXISTING INDEBTEDNESS

 

 

Schedule 8.1

LIENS

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