Document:

exv10w23

Exhibit 10.23

SECOND AMENDMENT TO AMENDED

AND RESTATED CREDIT AGREEMENT

     THIS SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (the “Amendment”) is dated as
of January 12, 2011, and is made by and among SPARTECH CORPORATION, a Delaware corporation (the
“Borrower”), each of the GUARANTORS (as hereinafter defined), the LENDERS (as hereinafter defined),
and PNC BANK, NATIONAL ASSOCIATION, in its capacity as administrative agent for the Lenders
(hereinafter referred to in such capacity as the “Administrative Agent”).

WITNESSETH:

     WHEREAS, reference is made to that certain Amended and Restated Credit Agreement dated as of
June 9, 2010, as amended by a First Amendment thereto dated as of July 2, 2010 (collectively, the
“Credit Agreement”), by and among the Borrower, the Guarantors from time to time party thereto (the
“Guarantors”), the Lenders from time to time party thereto (the “Lenders”), and the Administrative
Agent; and

     WHEREAS, the Borrower and the Guarantors have requested the Lenders to amend the financial
covenants applicable to the Loan Parties and modify certain definitions used in the calculation of
the Fixed Charge Coverage Ratio applicable to the Loan Parties, and the Lenders have agreed to such
amendments and modifications, subject to the terms hereof.

     NOW, THEREFORE, the parties hereto, in consideration of their mutual covenants and agreements
hereinafter set forth and intending to be legally bound hereby, covenant and agree as follows:

     1. Definitions. Capitalized terms used in this Amendment unless otherwise defined
herein shall have the meanings ascribed to them in the Credit Agreement.

     2. Amendments to Credit Agreement.

     (a) The following definition in Section 1.1 of the Credit Agreement is hereby amended and
restated as follows:

          “Permitted Acquisition means an Acquisition (a) which is non-hostile, (b) which occurs
when no Potential Default or Event of Default exists or will result therefrom, (c) after giving
effect to which, (i) the Leverage Ratio determined on a Pro Forma Basis as of the date of such
Acquisition is not greater than the lesser of (x) 3.00 to 1.00, or (y) the Leverage Ratio
requirement at the time of such Acquisition (as set forth in Section 8.2.8), and (ii) no Potential
Default or Event of Default will exist, including as a result of any breach of any financial
covenant set forth in this Agreement (in each case determined as of the date of such Acquisition on
a Pro Forma Basis, and (d) after giving effect to all consideration paid and costs and

 

 

expenses incurred in connection with such Acquisition, the Borrower has the ability to borrow
at least an additional $25,000,000 of Revolving Credit Loans.”

     (b) The following new definition is hereby inserted in Section 1.1 of the Credit Agreement in
alphabetical order:

          “Testing Date has the meaning specified in Section 8.2.18(b).”

     (c) Subsections (e) and (f) Section 8.2.4 [Loans and Investments] of the Credit Agreement are
hereby amended and restated as follows:

          “(e) advances, loans, extensions of credit or investments in the ordinary course of business
which either existed on January 3, 2011 or are entered into after the end of the 2011 fiscal year
of the Borrower; provided that the aggregate amount of all such investments shall not
exceed $15,000,000;

          (f) investments incurred in order to consummate Permitted Acquisitions which were either
effected prior to January 3, 2011 or are entered into after the end of the 2011 fiscal year of the
Borrower;”

     (d) Section 8.2.8 of the Credit Agreement is hereby amended and restated as follows:

“8.2.8 Leverage Ratio. Permit the Leverage Ratio to exceed the following amounts
during the following periods, which Leverage Ratio shall be calculated in the Compliance
Certificates delivered pursuant to Section 8.3.3:

	 	 	 
	Fiscal Quarter(s)	 	Maximum Leverage Ratio
	January 12, 2011 through end of the first fiscal
quarter of the Borrower’s 2011 fiscal year

	 	4.25 to 1.00
	 
	 	 
	second fiscal quarter of the Borrower’s 2011 fiscal
year

	 	4.50 to 1.00
	 
	 	 
	third fiscal quarter of the Borrower’s 2011 fiscal
year

	 	3.75 to 1.00
	 
	 	 
	fourth fiscal quarter of the Borrower’s 2011 fiscal
year

	 	3.50 to 1.00
	 
	 	 
	first fiscal quarter of the Borrower’s 2012 fiscal
year through the third fiscal quarter of the
Borrower’s 2012 fiscal year

	 	3.25 to 1.00
	 
	 	 
	fourth fiscal quarter of the Borrower’s 2012 fiscal
year through the third fiscal quarter of the
Borrower’s 2013 fiscal year

	 	3.00 to 1.00
	 
	 	 
	fourth fiscal quarter of the Borrower’s 2013 fiscal
year and thereafter

	 	2.75 to 1.00”

     (e) Section 8.2.13 of the Credit Agreement is hereby amended and restated as follows:

-2-

 

“8.2.13 Restricted Payments. Declare or make any Restricted Payment except that (a)
any Subsidiary may declare and pay Dividends to (i) the Borrower, (ii) a Guarantor, and
(iii) the parent of such Guarantor; and (b) the Borrower may declare and pay Dividends and
Stock Redemptions made after the end of the Borrower’s 2011 fiscal year, provided
that (i) no Potential Default or Event of Default exists or would result therefrom, (ii)
the Fixed Charge Coverage Ratio determined on a Pro Forma Basis as of the date of such
Restricted Payment is not less than (x) 2.25 to 1.00 from the first fiscal quarter of the
Borrower’s fiscal year 2012 through the third fiscal quarter of the Borrower’s fiscal year
2012, and (y) 1.40 to 1.00 if such date is after the third fiscal quarter of the Borrower’s
fiscal year 2012, and (iii) the Leverage Ratio determined on a Pro Forma Basis as of the
date of such Restricted Payment is not greater than the lesser of (x) 3.00 to 1.00, or (y)
the Leverage Ratio requirement at the time of such Restricted Payment (as set forth in
Section 8.2.8).”

     (f) Section 8.2.18 of the Credit Agreement is hereby amended and restated as follows:

“8.2.18 Capital Expenditures.

     (a) Permit Capital Expenditures of the Borrower and its Subsidiaries unless the Fixed
Charge Coverage Ratio, determined on a Pro Forma Basis as of the date of such Capital
Expenditure, is not less than (i) 2.25 to 1.00 if such date is before the last day of the
fourth fiscal quarter of fiscal year 2012, or (ii) 1.40 to 1.00 if such date is on or after
the last day of the fourth fiscal quarter of fiscal year 2012.

     (b) Notwithstanding the provisions of Section 8.2.18(a), as of the end of any fiscal
quarter (as used in this Section 8.2.18, each, a “Testing Date”), the Loan Parties shall not
allow the aggregate amount of Capital Expenditures for the preceding period of three (3)
consecutive fiscal quarters, plus the amount of Capital Expenditures for the immediately
following fiscal quarter, to exceed $30,000,000 unless the Leverage Ratio as of such Testing
Date shall be less than 3.00 to 1.00. Solely for purposes of this Section 8.2.18(b), the
aggregate amount of Capital Expenditures for each fiscal quarter of the Borrower in fiscal
year 2010 shall be deemed to be $5,400,000.”

     (g) The following new Section 8.3.5 is hereby inserted in the Credit Agreement immediately
following Section 8.3.4:

“8.3.5 Capital Expenditure Reporting. Within thirty (30) days after the end of each
fiscal quarter of the Borrower, a detailed report on the Capital Expenditures of the
Borrower and its Subsidiaries made during such prior fiscal quarter, together with a budget
for Capital Expenditures projected for the current fiscal quarter, together with
management’s commentary and analysis of each project undertaken during such prior fiscal
quarter.”

     3. Conditions to Effectiveness. This Amendment shall become effective as of the date
hereof on the first date when the Loan Parties have satisfied all of the following conditions to
the satisfaction of the Administrative Agent (the “Effective Date”):

-3-

 

     (a) Legal Details; Counterparts. All legal details and proceedings in connection with
the transactions contemplated by this Amendment shall be in form and substance satisfactory to the
Administrative Agent, and the Administrative Agent shall have received (i) from the Borrower, the
Guarantors and the Required Lenders an executed counterpart original of this Amendment; and (ii)
all such other counterpart originals or certified or other copies of such documents and proceedings
in connection with such transactions as may be reasonably requested by the Administrative Agent, in
form and substance reasonably satisfactory to the Administrative Agent.

     (b) Each Loan Party shall have delivered to the Administrative Agent for the benefit of each
Lender a certificate dated the Effective Date and signed by the Secretary or an Assistant Secretary
of each of the Loan Parties, certifying as appropriate as to:

     (i) all action taken by each Loan Party in connection with this Amendment and the other
Loan Documents;

     (ii) the names of the officer or officers authorized to sign this Amendment and the
other Loan Documents and the true signatures of such officer or officers and specifying the
Authorized Officers permitted to act on behalf of each Loan Party for purposes of this
Amendment and the true signatures of such officers, on which the Administrative Agent and
each Lender may conclusively rely; and

     (iii) copies of its organizational documents, including its certificate of
incorporation, bylaws, certificate of limited partnership, partnership agreement,
certificate of formation, and limited liability company agreement as in effect on the date
of this Amendment certified by the appropriate state official where such documents are filed
in a state office (or, in the event that no change has been made to such organizational
documents previously delivered to the Administrative Agent since June 9, 2010, so certified
by the Secretary or Assistant Secretary of such Loan Party).

     (c) The Noteholders under the Note Purchase Agreement for the Borrower’s 6.58% Senior Notes
due 2016 shall have executed and delivered an amendment to the Note Purchase Agreement between such
Noteholders and the Borrower pursuant to which the financial covenants and related definitions in
such Note Purchase Agreement are amended to be consistent with the corresponding definitions and
financial covenant ratios and levels set forth in this Amendment. In the event that the fees paid
to such Noteholders at closing in connection with the Third Amendment to the Note Purchase
Agreement of even date herewith as a percentage of the principal amount outstanding by the Borrower
to such Noteholders is greater than the fees paid the Lenders in connection with this Amendment as
a percentage of the Lenders’ Revolving Credit Commitments, then the fees to be paid to the Lenders
shall be increased such that the percentage amount of fees paid to the Lenders is equal to the
percentage amount of fees paid to the Noteholders. The Lenders hereby consent to the payment of
such fees to the Noteholders and agree that the payment of such fees shall not constitute a
violation of Section 8.2.19(a) of the Credit Agreement. To the extent that the Noteholders and the
Loan Parties modify the Note Purchase Agreement to incorporate the restrictions on permitted
investments, Permitted Acquisitions, Dividends and Stock Redemptions as set forth in this
Amendment, the Lenders consent to such modifications notwithstanding Section 2.8(e) of the
Intercreditor Agreement,

-4-

 

subject to the agreement of the Noteholders to consent to the corresponding modifications set
forth in this Amendment.

     (d) Officer’s Certifications. By execution and delivery of this Amendment to the
Administrative Agent, each of the Loan Parties certifies that, as of the date hereof, after giving
effect to this Amendment: (i) the representations and warranties of each of the Loan Parties
contained in Section 6 of the Credit Agreement and in each of the other Loan Documents are true and
correct in all material respects on and as of the Effective Date and as of the date hereof with the
same effect as though such representations and warranties had been made on and as of such dates
(except representations and warranties which relate solely to an earlier date or time, which
representations and warranties were true and correct on and as of the specific dates or times
referred to therein), and (ii) no Event of Default or Potential Default has occurred and is
continuing or exists.

     (e) Compliance. Each Loan Party represents and warrants that no default or event of
default shall have occurred or will occur under the terms of any other agreement involving borrowed
money or the extension of credit or any other Indebtedness under which any Loan Party or Subsidiary
of any Loan Party may be obligated as a borrower or guarantor as a result of and after giving
effect to the transactions contemplated by this Amendment.

     (f) Payment of Fees. The Borrower shall have paid or caused to be paid to the
Administrative Agent for itself and for the account of the Lenders all fees accrued through the
Effective Date and the date hereof to the extent not previously paid, and the Borrower
unconditionally agrees to pay and reimburse the Administrative Agent and hold the Administrative
Agent harmless against liability for the payment of all reasonable out-of-pocket costs, expenses
and disbursements, including, without limitation, reasonable expenses of counsel, incurred by the
Administrative Agent in connection with the development, preparation, execution, administration,
interpretation or performance of this Amendment and all other documents or instruments to be
delivered in connection herewith.

     4. Miscellaneous.

     (a) Force and Effect. The Credit Agreement and each of the other Loan Documents are
hereby ratified and confirmed and are in full force and effect. No novation to any Loan Document
is intended or shall occur by or as a result of this Amendment.

     (b) Governing Law. This Amendment shall be deemed to be a contract under the Laws of
the State of New York.

     (c) Counterparts. This Amendment may be executed in any number of counterparts, each
of which when so executed and delivered shall be deemed an original, and all such counterparts
shall together constitute one and the same instrument. Delivery by telecopy or electronic portable
document format (i.e., “pdf”) transmission of executed signature pages hereof from one
party hereto to another party hereto shall be deemed to constitute due execution and delivery by
such party; provided, however that any Person making delivery by telecopy or electronic portable
document format shall promptly deliver an executed original of the same to the Administrative
Agent.

-5-

 

     (d) Construction. From and after the Effective Date, each reference to “hereof”,
“hereunder”, “herein” and “hereby” and each other similar reference, and each reference to “this
Agreement” and each other similar reference contained in the Credit Agreement shall refer to the
Credit Agreement as amended hereby.

[SIGNATURES BEGIN ON NEXT PAGE]

-6-

 

[SIGNATURE PAGE TO SECOND AMENDMENT TO

AMENDED AND RESTATED CREDIT AGREEMENT]

     IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly authorized, have
executed this Amendment as of the day and year first above written.

	 	 	 	 	 
	 	SPARTECH CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

	 	 	 	 	 

[SIGNATURE PAGE TO SECOND AMENDMENT TO

AMENDED AND RESTATED CREDIT AGREEMENT]

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 POLYCOM, INC.

FRANKLIN-BURLINGTON PLASTICS, INC.

SPARTECH CMD, LLC

By: Spartech Plastics LLC, its managing member

SPARTECH FCD, LLC

By: Polymer Extruded Products, Inc., its managing

member

SPARTECH SPD, LLC

By: Spartech Plastics, LLC, its managing 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.

PEPAC HOLDINGS, INC.

SPARTECH RESEARCH AND DEVELOPMENT, LLC

By: Spartech Corporation, its sole member

SPARTECH FRANCE HOLDINGS, L.P.

By: Spartech Polycom, Inc., its General Partner

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

 

 

	 	 	 	 	 

[SIGNATURE PAGE TO SECOND AMENDMENT TO

AMENDED AND RESTATED CREDIT AGREEMENT]

	 	 	 	 	 
	 	PNC BANK, NATIONAL ASSOCIATION,

Individually and as Administrative Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

	 	 	 	 	 

[SIGNATURE PAGE TO SECOND AMENDMENT TO

AMENDED AND RESTATED CREDIT AGREEMENT]

	 	 	 	 	 
	 	BANK OF AMERICA, N.A.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

	 	 	 	 	 

[SIGNATURE PAGE TO SECOND AMENDMENT TO

AMENDED AND RESTATED CREDIT AGREEMENT]

	 	 	 	 	 
	 	WELLS FARGO BANK, NATIONAL ASSOCIATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

	 	 	 	 	 

[SIGNATURE PAGE TO SECOND AMENDMENT TO

AMENDED AND RESTATED CREDIT AGREEMENT]

	 	 	 	 	 
	 	THE HUNTINGTON NATIONAL BANK

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

	 	 	 	 	 

[SIGNATURE PAGE TO SECOND AMENDMENT TO

AMENDED AND RESTATED CREDIT AGREEMENT]

	 	 	 	 	 
	 	COMERICA BANK

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

	 	 	 	 	 

[SIGNATURE PAGE TO SECOND AMENDMENT TO

AMENDED AND RESTATED CREDIT AGREEMENT]

	 	 	 	 	 
	 	COMPASS BANK

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

	 	 	 	 	 

[SIGNATURE PAGE TO SECOND AMENDMENT TO

AMENDED AND RESTATED CREDIT AGREEMENT]

	 	 	 	 	 
	 	FIRSTMERIT BANK, N.A.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:exv10w24

Exhibit 10.24

EXECUTION COPY

SPARTECH CORPORATION

THIRD AMENDMENT TO AMENDED AND

RESTATED NOTE PURCHASE AGREEMENT

As of January 12, 2011

To the Holders of Notes

Named in Annex 1 Hereto

Ladies and Gentlemen:

     Spartech Corporation, a Delaware corporation (the “Company”), agrees with you as follows:

1. PRELIMINARY STATEMENTS.

     Pursuant to that certain Amended and Restated Note Purchase Agreement dated as of September
10, 2008 (initially dated as of September 15, 2004) (as amended by that certain Amendment No. 1 to
Amended and Restated Note Purchase Agreement dated as of July 10, 2009, and that certain Second
Amendment to Amended and Restated Note Purchase Agreement dated as of June 9, 2010, and as in
effect immediately prior to giving effect to the Amendments (as defined below) provided for hereby,
the “Existing Note Purchase Agreement”, and as amended by this Third Amendment Agreement (as
defined below) and as may be further amended, restated or otherwise modified from time to time, the
“Note Purchase Agreement”), the Company issued and sold One-Hundred Fifty Million Dollars
($150,000,000) in aggregate initial principal amount of its 5.54% Senior Notes due 2016
(collectively, as amended, restated or otherwise modified from time to time as of the date hereof,
and currently bearing interest at a rate of 6.58% per annum, the “Notes”). The register for the
registration and transfer of the Notes indicates that the parties named in Annex 1 (the
“Noteholders”) to this Third Amendment to Amended and Restated Note Purchase Agreement (this “Third
Amendment Agreement”) are currently the holders of the majority in outstanding principal amount of
the Notes and constitute the “Required Holders” as set forth in the Existing Note Purchase
Agreement.

2. DEFINED TERMS.

     Capitalized terms used herein and not otherwise defined herein have the meanings ascribed to
them in the Existing Note Purchase Agreement.

3. AMENDMENTS TO THE EXISTING NOTE PURCHASE AGREEMENT.

     Subject to Section 6 of this Third Amendment Agreement, each of the undersigned Noteholders
and the Company hereby agree to each of the amendments to the Existing Note

 

 

Purchase Agreement as provided for by this Third Amendment Agreement and specified in
Exhibit A. Such amendments are referred to herein, collectively, as the “Amendments”.

4. SUBSIDIARY GUARANTORS

     4.1 Joinder of Spartech France Holdings, L.P.

     Spartech France Holdings, L.P., a newly formed subsidiary, shall concurrently herewith execute
and deliver a Subsidiary Guarantee pursuant to Section 7.6 of the Note Purchase Agreement.

5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

     To induce you to enter into this Third Amendment Agreement and to consent to the Amendments,
the Company represents and warrants as follows:

     5.1. Reaffirmation of Representations and Warranties.

     All of the representations and warranties contained in Section 4 of the Existing Note Purchase
Agreement are correct with the same force and effect as if made by the Company on the date hereof
(or, if any representation or warranty is expressly stated to have been made as of a specific date,
as of such date).

     5.2. Organization, Power and Authority, etc.

     The Company has all requisite corporate power and authority to execute and deliver and perform
its obligations under this Third Amendment Agreement.

     5.3. Legal Validity.

     The execution and delivery of this Third Amendment Agreement by the Company and compliance by
the Company with its obligations hereunder and under the Note Purchase Agreement: (a) are within
the corporate powers of the Company; and (b) do not violate or result in any breach of, constitute
a default under, or result in the creation of any Lien upon any property of the Company under the
provisions of: (i) its organizational and governing documents; (ii) any order, judgment, decree or
ruling of any court, arbitrator or Governmental Authority applicable to either the Company or its
property; or (iii) any agreement or instrument to which the Company is a party or by which the
Company or any of its property may be bound or any statute or other rule or regulation of any
Governmental Authority applicable to the Company or its property.

     This Third Amendment Agreement has been duly authorized by all necessary action on the part of
the Company, has been executed and delivered by a duly authorized officer of the Company, and
constitutes 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 applicable
bankruptcy, reorganization, arrangement, insolvency, moratorium, or other similar laws affecting
the enforceability of creditors’ rights generally and subject to general principles of

2

 

equity (regardless of whether such enforceability is considered in a proceeding in equity or
at law).

     5.4. No Defaults.

     As of the date hereof and after giving effect to this Third Amendment Agreement, no event has
occurred and no condition exists that constitutes or would constitute a Default or an Event of
Default.

     5.5. Disclosure.

     This Third Amendment Agreement and the documents, certificates or other writings delivered to
the Noteholders by or on behalf of the Company in connection therewith, 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. 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 other documents, certificates and other
writings delivered to the Noteholders by or on behalf of the Company specifically for use in
connection with the transactions contemplated by this Third Amendment Agreement. Except as
expressly set forth in this Third Amendment Agreement, pursuant to the Second Amendment to Amended
and Restated Credit Agreement of even date herewith (the “Second Amendment to Credit Agreement”) or
otherwise disclosed in writing to the Noteholders, none of the Company, the Company’s Subsidiaries
or the Company’s Affiliates has paid or will pay, directly or indirectly, any fee, charge,
increased interest or other consideration to, or given any additional security or collateral to, or
shortened the maturity or average life of any Indebtedness or permanently reduced any borrowing
capacity in favor of or for the benefit of, any creditor of the Company or any creditor of any of
the Company’s Subsidiaries or Affiliates as a condition to, or otherwise in connection with, the
execution or delivery of this Third Amendment Agreement or similar agreement with the holders of
such Indebtedness.

6. EFFECTIVENESS OF AMENDMENTS.

     The Amendments shall become effective only upon the date of the satisfaction in full of the
following conditions precedent (the “Effective Date”):

     6.1. Execution and Delivery of this Agreement.

     The Company and the Required Holders shall have executed and delivered this Third Amendment
Agreement.

     6.2. Amendment to Credit Agreement.

     The Company, the guarantors party thereto (together with the Company, the “Loan Parties”), the
lenders party thereto (the “Lenders”) and PNC Bank, National Association, as administrative agent
(together with the Lenders, the “Bank Group”) shall have executed and delivered the Second
Amendment to Credit Agreement pursuant to which the financial covenants and related definitions in
that certain Amended and Restated Credit Agreement dated as of June

3

 

9, 2010, as amended, are amended to be consistent with the corresponding definitions and
financial covenant ratios and levels set forth in this Third Amendment Agreement. In the event
that the fees paid to the Bank Group in connection with such amendment, on an aggregate basis, as a
percentage of the aggregate Revolving Credit Commitments (as defined in the Credit Agreement) by
the Company is greater than the fees paid to the holders of the Notes in connection with this Third
Amendment Agreement, on an aggregate basis, as a percentage of the outstanding principal amount of
the Notes, then the fees to be paid to the holders of the Notes shall be increased such that the
percentage amount of fees paid to the holders of the Notes is equal to the percentage amount of
fees paid to the Bank Group. The Noteholders hereby consent to the payment of such fees to the
Bank Group and agree that the payment of such fees shall not constitute a violation of Section
8.19(a) of the Note Purchase Agreement. To the extent that the Bank Group and the Loan Parties
modify the Credit Agreement to incorporate the restrictions on permitted investments, Permitted
Acquisitions, Dividends and Stock Redemptions as set forth in this Third Amendment Agreement, the
Noteholders consent to such modifications notwithstanding Section 2.8(e) of the Intercreditor
Agreement, subject to the agreement of the Bank Group to consent to the corresponding modifications
set forth in this Third Amendment Agreement.

     6.3. Representations and Warranties True.

     The representations and warranties set forth in Section 5 shall be true and correct on such
date in all respects.

     6.4. Authorization.

     The Company shall have authorized, by all necessary action, the execution, delivery and
performance of all documents, agreements and certificates in connection with this Third Amendment
Agreement.

     6.5. Opinion of Company Counsel.

     Each of the Noteholders shall have received an opinion, dated the date hereof, from Armstrong
Teasdale LLP, special counsel for the Company, in form and substance satisfactory to such
Noteholder and its counsel (and the Company hereby instructs its counsel to deliver such opinion to
the Noteholders).

     6.6. Secretary’s Certificate.

     Each of the Noteholders shall have received a certificate of the Secretary or an Assistant
Secretary of the Company, dated the date hereof, certifying as to the resolutions attached thereto
and other corporate proceedings relating to the authorization, execution and delivery of this
Agreement, in form and substance satisfactory to the Required Holders and their counsel.

     6.7. Amendment Fee.

     The Company shall have paid to each holder of Notes on the Effective Date an amendment fee in
the amount of 50 basis points (0.50%) times the outstanding principal amount of Notes held by such
holder on such date.

4

 

     6.8. Special Counsel Fees.

     The Company shall have paid the reasonable fees and disbursements of Noteholders’ special
counsel in accordance with Section 7 below.

     6.9. Joinder of Spartech France.

     Spartech France Holdings, L.P. shall have executed and delivered to each of the holders of the
Notes a Subsidiary Guarantee in accordance with section 4.2 hereof, in form and substance
satisfactory to the Required Holders.

     6.10. Proceedings Satisfactory.

     All proceedings taken in connection with this Third Amendment Agreement and all documents and
papers relating thereto shall be satisfactory to the Noteholders signatory hereto and their special
counsel, and such Noteholders and their special counsel shall have received copies of such
documents and papers as they or their special counsel may reasonably request in connection
herewith.

7. EXPENSES.

     Whether or not the Amendments become effective, the Company will promptly (and in any event
within thirty (30) days of receiving any statement or invoice therefor) pay all fees, expenses and
costs relating to this Third Amendment Agreement and any prior amendment or amendment and
restatement of, or waiver under, the Existing Note Purchase Agreement, including, but not limited
to, the reasonable fees of the Noteholders’ special counsel, Bingham McCutchen LLP, incurred in
connection with the preparation, negotiation and delivery of this Third Amendment Agreement, any
other such amendment, amendment and restatement or waiver, and any other documents related to any
thereof. In addition, the Company will pay all such fees, expenses and costs set forth in any
subsequent statement within thirty (30) days of its receipt thereof. Nothing in this Section shall
limit the Company’s obligations pursuant to Section 13.1 of the Existing Note Purchase Agreement.

8. MISCELLANEOUS.

     8.1. Part of Note Purchase Agreement; Future References, etc.

     This Third Amendment Agreement shall be construed in connection with and as a part of the Note
Purchase Agreement and, except as expressly amended by this Third Amendment Agreement, all terms,
conditions and covenants contained in the Existing Note Purchase Agreement are hereby ratified and
shall be and remain in full force and effect. Any and all notices, requests, certificates and
other instruments executed and delivered after the execution and delivery of this Third Amendment
Agreement may refer to the Note Purchase Agreement without making specific reference to this Third
Amendment Agreement, but nevertheless all such references shall include this Agreement unless the
context otherwise requires.

     8.2. Counterparts, Facsimiles.

5

 

     This Third Amendment 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. Delivery of an executed signature page by facsimile or e-mail transmission
shall be effective as delivery of a manually signed counterpart of this Agreement.

     8.3. Governing Law.

     THIS THIRD AMENDMENT AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE
RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW 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.

     [Remainder of page intentionally left blank. Next page is signature page.]

6

 

     If you are in agreement with the foregoing, please so indicate by signing the acceptance below
on the accompanying counterpart of this Third Amendment Agreement and returning it to the Company,
whereupon it will become a binding agreement among you and the Company.

	 	 	 	 	 
	 	SPARTECH CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Signature Page to Spartech Third Amendment to

Amended and Restated Note Purchase Agreement

	 	 	 	 	 

 

 

\

	 	 	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 

     The foregoing Third Amendment Agreement is hereby accepted as of the date first above written.
By its execution below, each of the undersigned represents that it is the owner of one or more of
the Notes and is authorized to enter into this Third Amendment Agreement in respect thereof.

[Noteholder Signature Pages]

Signature Page to Spartech Third Amendment to

Amended and Restated Note Purchase Agreement

 

 

GUARANTOR ACKNOWLEDGEMENT

     Each undersigned Subsidiary Guarantor hereby acknowledges and agrees to the terms of the Third
Amendment to Amended and Restated Note Purchase Agreement dated as of January 12, 2011 (the “Third
Amendment”), amending that certain Amended and Restated Note Purchase Agreement dated as of
September 10, 2008 (initially dated as of September 15, 2004) (as amended by that certain Amendment
No. 1 to Amended and Restated Note Purchase Agreement dated as of July 10, 2009, by that certain
Second Amendment to Amended and Restated Note Purchase Agreement dated as of June 9, 2010 and as
may be further amended, the “Note Purchase Agreement”), among Spartech Corporation, a Delaware
corporation, and the holders of Notes party thereto. Each undersigned Subsidiary Guarantor hereby
confirms that the Subsidiary Guarantee to which it is a party remains in full force and effect
after giving effect to the Third Amendment and continues to be the valid and binding obligation of
such Subsidiary Guarantor, enforceable against such Subsidiary Guarantor in accordance with its
terms, subject to any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditor’s rights generally or by equitable principles including
principles of commercial reasonableness, good faith and fair dealing (whether enforceability is
sought by proceedings in equity or at law).

          Capitalized terms used herein but not defined are used as defined in the Note Purchase
Agreement.

          Dated as of January 12, 2011

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 POLYCOM, INC.

FRANKLIN-BURLINGTON PLASTICS, INC.

SPARTECH CMD, LLC

By:   Spartech Plastics LLC, its managing member

SPARTECH FCD, LLC

By:   Polymer Extruded Products, Inc.,

          its managing member

SPARTECH SPD, LLC

By:   Spartech Plastics, LLC, its managing member

SPARTECH MEXICO HOLDING COMPANY

SPARTECH MEXICO HOLDING COMPANY TWO

SPARTECH MEXICO HOLDINGS, LLC

By:   Spartech Mexico Holding Company,

Guarantor Acknowledgement to Spartech Third Amendment to

Amended and Restated Note Purchase Agreement

 

 

          its sole member

CREATIVE FORMING, INC.

PEPAC HOLDINGS, INC.

SPARTECH RESEARCH AND

          DEVELOPMENT, LLC

By:   Spartech Corporation, its sole member

SPARTECH FRANCE HOLDINGS, L.P.

By:   Spartech Polycom, Inc., its General Partner

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Guarantor Acknowledgement to Spartech Third Amendment to

Amended and Restated Note Purchase Agreement

 

 

Annex 1

Noteholders

Metropolitan Life Insurance Company

Metlife Insurance Company of Connecticut

Teachers Insurance and Annuity Association of America

AXA Equitable Life Insurance Company

MONY Life Insurance Company

The Variable Annuity Life Insurance Company

The Guardian Life Insurance Company of America

Massachusetts Mutual Life Insurance Company

C.M. Life Insurance Company

Primerica Life Insurance Company

Annex 1-1

 

EXHIBIT A

AMENDMENTS

     (a) Section 5.1 — Financial and Business Information. Section 5.1 of the Existing Note
Purchase Agreement is hereby amended by (i) renumbering subsections (g) and (h) as subsections (h)
and (i), respectively, and (ii) adding a new subsection (g) in its proper order to read as follows:

     “(g) Capital Expenditures Reporting — within 30 days after the end of each
fiscal quarter of the Company, a detailed report on its Capital Expenditures made during
such prior fiscal quarter, together with a budget for Capital Expenditures projected for the
current fiscal quarter, and including management’s commentary and analysis of each project
undertaken during such prior fiscal quarter;”

     (b) New Section 7.10 — Letter from Company. Section 7 of the Existing Note Purchase
Agreement is hereby amended by adding the following new Section 7.10 thereto, which shall read in
its entirety as follows:

     “7.10 Letter.

     The Company shall pay the fees set forth in that certain letter dated January 12, 2011
addressed to the holders of the Notes, as and when provided therein.”

     (c) Section 8.4 — Loans and Investments. Subsections (e) and (f) of Section 8.4 of the
Existing Note Purchase Agreement are hereby amended and restated in their entirety to read as
follows:

     “(e) advances, loans, extensions of credit or investments in the ordinary course of
business which either existed on January 3, 2011 or are entered into after the end of the
2011 fiscal year of the Company; provided that the aggregate amount of all such
investments shall not exceed $15,000,000;

     (f) Investments incurred in order to consummate Permitted Acquisitions which were
either effected prior to January 3, 2011 or are entered into after the end of the 2011
fiscal year of the Company;”

     (d) Section 8.8 — Leverage Ratio. Section 8.8 of the Existing Note Purchase Agreement is
hereby amended and restated in its entirety to read as follows:

     “8.8. Leverage Ratio.

     Permit the Leverage Ratio to exceed (a) 4.25 to 1.00 at any time from and including the
effective date of the Third Amendment to Amended and Restated Note Purchase Agreement, dated
January 12, 2011, among the Company and certain holders of the Notes, through and including
the last day of the first fiscal quarter of fiscal year 2011, (b) 4.50 to 1.00 at any time
after the last day of the first fiscal quarter of fiscal year 2011 through and including the
last day of the second fiscal quarter of fiscal year 2011, (c)

Exhibit A-1

 

3.75 to 1.00 at any time after the last day of the second fiscal quarter of fiscal year
2011 through and including the last day of the third fiscal quarter of fiscal year 2011, (d)
3.50 to 1.00 at any time after the last day of the third fiscal quarter of fiscal year 2011
through and including the last day of the fourth fiscal quarter of fiscal year 2011, (e)
3.25 to 1.00 at any time after the last day of the fourth fiscal quarter of fiscal year 2011
through and including the last day of the third fiscal quarter of fiscal year 2012, (f) 3.00
to 1.00 at any time after the last day of the third fiscal quarter of fiscal year 2012
through and including the last day of the third fiscal quarter of fiscal year 2013, and (g)
(e) 2.75 to 1.00 at any time thereafter.”

     (e) Section 8.13 — Restricted Payments. Section 8.13 of the Existing Note Purchase Agreement
is hereby amended and restated in its entirety to read as follows:

     “8.13 Restricted Payments.

     Declare or make any Restricted Payment except that (a) any Subsidiary may declare and
pay Dividends to (i) the Company, (ii) a Subsidiary Guarantor, and (iii) the parent of such
Subsidiary Guarantor; and (b) the Company may declare and pay Dividends and Stock
Redemptions made after the end of the Company’s 2011 fiscal year, provided that (i)
no Default or Event of Default exists or would result therefrom, (ii) the Fixed Charge
Coverage Ratio determined on a Pro Forma Basis as of the date of such Restricted Payment is
not less than (x) 2.25 to 1.00 from the first fiscal quarter of the Company’s fiscal year
2012 through the third fiscal quarter of the Company’s fiscal year 2012, and (y) 1.40 to
1.00 if such date is after the third fiscal quarter of the Company’s fiscal year 2012, and
(iii) the Leverage Ratio determined on a Pro Forma Basis as of the date of such Restricted
Payment is not greater than the lesser of (x) 3.00 to 1.00, or (y) the Leverage Ratio
requirement at the time of such Restricted Payment (as set forth in Section 8.8).”

     (f) Section 8.18 — Capital Expenditures. Section 8.18 of the Existing Note Purchase
Agreement is hereby amended and restated in its entirety to read as follows:

     “8.18 Capital Expenditures.

     (a) Permit Capital Expenditures of the Company and its Subsidiaries unless the Fixed
Charge Coverage Ratio, determined on a Pro Forma Basis as of the date of such Capital
Expenditure, is not less than (i) 2.25 to 1.00 if such date is before the last day of the
fourth fiscal quarter of fiscal year 2012, or (ii) 1.40 to 1.00 if such date is on or after
the last day of the fourth fiscal quarter of fiscal year 2012.

     (b) Notwithstanding the provisions of Section 8.18(a), as of the end of any fiscal
quarter (as used in this Section 8.18, each, a “Testing Date”), the Company shall not allow
the aggregate amount of Capital Expenditures for the preceding period of 3 consecutive
fiscal quarters, plus the amount of Capital Expenditures for the immediately following
fiscal quarter, to exceed $30,000,000 unless the Leverage Ratio as of such Testing Date
shall be less than 3.00 to 1.00. Solely for purposes of this Section 8.18(b),

Exhibit A-2

 

the aggregate amount of Capital Expenditures for each fiscal quarter of the Company in
fiscal year 2010 shall be deemed to be $5,400,000.”

     (g) Schedule B — Amendment. Schedule B of the Existing Note Purchase Agreement is hereby
amended by amending and restating the definition of “Permitted Acquisition” therein to read as
follows:

     ““Permitted Acquisition” means an Acquisition (a) which is non-hostile, (b) which
occurs when no Default or Event of Default exists or will result therefrom, (c) after giving
effect to which, (i) the Leverage Ratio determined on a Pro Forma Basis as of the date of
such Acquisition is not greater than the lesser of (x) 3.00 to 1.00, or (y) the Leverage
Ratio requirement at the time of such Acquisition (as set forth in Section 8.8), and (ii) no
Default or Event of Default will exist, including as a result of any breach of any financial
covenant set forth in this Agreement (in each case determined as of the date of such
Acquisition on a Pro Forma Basis, and (d) after giving effect to all consideration paid and
costs and expenses incurred in connection with such Acquisition, the Company has the ability
to borrow at least an additional $25,000,000 of Revolving Credit Loans (as defined in the
Credit Agreement in effect on the date hereof).”

     (h) Schedule B — Additional definitions. Schedule B of the Existing Note Purchase Agreement
is hereby amended by adding the following definition of “Testing Date” in proper alphabetical order
within Scheduled B, to read in its entirety as follows:

     ““Testing Date” has the meaning ascribed to it in Section 8.18.”

Exhibit A-3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00183-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00183-of-00352.parquet"}]]