Spartech 10Q 2008 Q3 Quarterly report | SEH Filing

Exhibit 10.4

THIRD AMENDMENT TO
FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

THIS THIRD AMENDMENT TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT (this “Third Amendment”), dated as of September 10, 2008, is entered into among SPARTECH CORPORATION, a Delaware corporation (the “Borrower”), the lenders listed on the signature pages hereof (collectively, the “Lenders”), and BANK OF AMERICA, N.A., as Administrative Agent and L/C Issuer.

BACKGROUND

A. The Borrower, the Lenders, the Administrative Agent, and the L/C Issuer heretofore entered into that certain Fourth Amended and Restated Credit Agreement, dated as of June 2, 2006, as amended by that certain First Amendment to Fourth Amended and Restated Credit Agreement, dated as of March 7, 2008, and that certain Waiver and Amendment Agreement to Fourth Amended and Restated Credit Agreement, dated as of July 30, 2008 (the “Waiver and Amendment”) (said Credit Agreement, as so waived or amended, the “Credit Agreement”; the terms defined in the Credit Agreement and not otherwise defined herein shall be used herein as defined in the Credit Agreement).

B. The Borrower, the Lenders, the Administrative Agent, and the L/C Issuer desire to amend the Credit Agreement.

NOW, THEREFORE, in consideration of the covenants, conditions and agreements hereafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are all hereby acknowledged, the Borrower, the Lenders, the Administrative Agent, and the L/C Issuer covenant and agree as follows:

1. AMENDMENTS TO THE CREDIT AGREEMENT.

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

“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 Collateral Documents.

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

“Collateral Documents” means the Security Agreement, any Mortgage Instrument, and any document related thereto.

“Consolidated Total Assets” means, at any date, for the Borrower and its Subsidiaries, the total assets as of such date which would be shown as assets on a

consolidated balance sheet of the Borrower and its Subsidiaries prepared in accordance with GAAP.

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

“Disclosed Transaction” means the asset exchange previously disclosed to the Lenders.

“Excess Cash Flow” means, for any period for the Borrower 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 Borrower or any Subsidiary owing to the Borrower 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 Borrower or any Subsidiary owing to the Borrower or another Subsidiary) actually paid in cash, and (vii) net increases (if any) in working capital.

“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.

“Fixed Charge Coverage Ratio” means, as of any date of determination, for the Borrower 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.

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

“Intercreditor Agreement” means that certain Intercreditor and Collateral Agency Agreement, dated as of September 10, 2008, among the Collateral Agent, the Administrative Agent on behalf of each of the Lenders, Calyon New York Branch, and

the Noteholders and consented to by the Borrower and each Granting Party, as hereafter amended, modified or supplemented from time to time, substantially in the form ofExhibit F.

“Loan Prepayment Basis” has the meaning specified inSection 2.04(c).

“Majority Creditors” has the meaning specified in the Intercreditor Agreement.

“Mortgage Instrument” has the meaning specified inSection 6.15.

“Mortgaged Property” has the meaning specified inSection 6.15.

“Net Cash Proceeds” means:

(a) with respect to any Asset Sale by the Borrower or any of its Subsidiaries, or any Extraordinary Receipt received or paid to the account of the Borrower 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 Loan Documents), (B) the reasonable and customary out-of-pocket expenses incurred by the Borrower 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) with respect to the sale or issuance of any Equity Interest by the Borrower or any of its Subsidiaries, or the incurrence or issuance of any Indebtedness by the Borrower 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 Borrower or such Subsidiary in connection therewith.

“Noteholders” means, collectively, the holders, from time to time, of (a) the Borrower’s 5.54% Senior Notes due 2016 and (b) the Borrower’s 5.78% Senior Notes due 2011.

“Reinvestment Property” has the meaning set forth inSection 2.04(c).

“Senior Secured Obligations” has the meaning specified in the Intercreditor Agreement.

“Security Agreement” means that certain Security Agreement, dated as of September 10, 2008, by the Borrower and each Granting Party in favor of the Collateral Agent for the benefit of the Creditors, substantially in the form ofExhibit G.

“Superpriority Amount” has the meaning specified in the Intercreditor Agreement.

“Third Amendment Closing Date” means September 10, 2008.

(b) Section 1.01 of the Credit Agreement is hereby further amended by deleting the defined terms “Canadian Facility”, “Canadian Facility Documents” and “Interest Coverage Ratio” therefrom.

(c) The definition of “Applicable Rate” set forth inSection 1.01 of the Credit Agreement is hereby amended to read as follows:

“Applicable Rate” means the following percentages per annum, based upon the Leverage Ratio as set forth in the most recent Compliance Certificate received by the Administrative Agent pursuant toSection 6.02(a):


					Eurodollar Rate
Pricing			Commitment		for Loans and		Base Rate
Level		Leverage Ratio	Fee		Letters of Credit		for Loans
	1	Less than 2.75 to 1.00		0.300		1.500		0.500
	2	Greater than or equal to 2.75 to 1.00, but less than 3.25 to 1.00		0.350		1.750		0.750
	3	Greater than or equal to 3.25 to 1.00, but less than 3.75 to 1.00		0.400		2.000		1.000
	4	Greater than or equal to 3.75 to 1.00, but less than 4.00 to 1.00		0.450		2.250		1.250
	5	Greater than or equal to 4.00 to 1.00		0.500		2.500		1.500

Any increase or decrease in the Applicable Rate resulting from a change in the Leverage Ratio shall become effective as of the first Business Day immediately following the date a Compliance Certificate is delivered for any fiscal quarter pursuant toSection 6.02(a);provided,however, that if a Compliance Certificate is not delivered when due in accordance with suchSection 6.02(a), then Pricing Level 5 shall apply as of the first Business Day after the date on which such Compliance Certificate was required to have been delivered and shall remain in effect until the first Business Day immediately following the date such Compliance Certificate is actually delivered to the Administrative Agent. Notwithstanding the foregoing, the Applicable Rate in effect from and after the Third Amendment Closing Date through and including the date the Compliance Certificate is delivered pursuant toSection 6.02(a) for the third fiscal quarter of fiscal year 2008 shall be Pricing Level 4.

In the event that any financial statement delivered pursuant toSection 6.01(a) or6.01(b) or any Compliance Certificate delivered pursuant toSection 6.02(a) is shown to be inaccurate (regardless of whether this Agreement or the Commitments are in effect when such inaccuracy is discovered), and such inaccuracy, if corrected, would have led to a higher Applicable Rate for any period (an “Applicable Period”) than the Applicable

Rate applied for such Applicable Period, then (i) the Borrower shall immediately deliver to the Administrative Agent a correct Compliance Certificate for such Applicable Period, (ii) the Applicable Rate shall be determined using the Pricing Level applicable for such Applicable Period based upon the corrected Compliance Certificate, and (iii) the Borrower shall immediately pay to the Administrative Agent the accrued additional interest and fees owing as a result of such increased Applicable Rate for such Applicable Period, which payment shall be promptly applied by the Administrative Agent in accordance with the terms hereof. This paragraph shall not limit the rights of the Administrative Agent and the Lenders underSection 2.07 andArticle VIII and other provisions of this Agreement. The obligations of the Borrower under this paragraph shall survive termination of the Commitments and the repayment of all other Obligations hereunder.

(d) The definition of “EBITDA” set forth inSection 1.01 of the Credit Agreement is hereby amended to read as follows:

“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.

(e) The definition of “Loan Documents” set forth inSection 1.01 of the Credit Agreement is hereby amended to read as follows:

“Loan Documents” means this Agreement, the Notes, the Agent Fee Letter, each Guaranty, each Request for Credit Extension, each Compliance Certificate, each Collateral Document, and any other agreement executed, delivered or performable by any Loan Party in connection herewith or as security for the Obligations.

(f) The definition of “Restricted Payments” set forth inSection 1.01 of the Credit Agreement is hereby amended to read as follows:

“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 or voluntary or optional redemption of the Borrower’s 5.54% Senior Notes due 2016 or the Borrower’s 5.75% Senior Notes due 2011 and (v) any voluntary or optional prepayment of the Indebtedness under the Calyon Credit Documents.

(g) Section 2.04 of the Credit Agreement is hereby amended to read as follows:

2.04Prepayments.

(a) The Borrower may, upon notice to the Administrative Agent, at any time or from time to time voluntarily prepay Loans in whole or in part without premium or penalty;provided that (i) such notice must be received by the Administrative Agent not later than 10:00 a.m. (A) three Business Days prior to any date of prepayment of Eurodollar Rate Loans and (B) on the date of prepayment of Base Rate Loans; (ii) any prepayment of Eurodollar Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof; and (iii) any prepayment of Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof or, in each case, if less, the entire principal amount thereof then outstanding. Each such notice shall specify the date and amount of such prepayment and the Type(s) of Loans to be prepaid and, if Eurodollar Rate Loans are to be prepaid, the Interest Period(s) of such Loans. The Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of such Lender’s Applicable Percentage of such prepayment. If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein. Any prepayment of a Eurodollar Rate Loan shall be accompanied by all accrued interest on the amount prepaid, together with any additional amounts required pursuant toSection 3.05. Each such prepayment shall be applied to the Loans of the Lenders in accordance with their respective Applicable Percentages.

(b) If for any reason the Total Outstandings at any time exceed the Aggregate Commitments then in effect, the Borrower shall immediately prepay Loans and/or Cash Collateralize the L/C Obligations in an aggregate amount equal to such excess;provided,however, that the Borrower shall not be required to Cash Collateralize the L/C Obligations pursuant to thisSection 2.04(b) unless after the prepayment in full of the Loans the Total Outstandings exceed the Aggregate Commitments then in effect.

(c) If the Borrower or any of its Subsidiaries makes an Asset Sale (other than any Asset Sale permitted bySection 7.02(a),(b) or(c)) which results in the realization by such Person of Net Cash Proceeds, the Borrower shall immediately prepay an aggregate principal amount of Loans equal to (x) such Net Cash Proceeds that exceed $1,000,000 (such amount of Net Cash Proceeds as the “Loan 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 Loan 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 Loan 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 Loan Prepayment Basis, provided that (A) the Required Lenders have approved the release of the Superpriority Amount and such release is effective and (B) the Asset Sale mandatory prepayment provisions (or corresponding provisions) in the Note Purchase Agreements and the Calyon Credit Agreement are similar to thisSection 2.04(c) (such prepayments to be applied as set forth in clause (h) 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 Loan

Prepayment Basis not used to prepay the Loans 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; andprovided,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 Loans as set forth in thisSection 2.04(c)). As used herein, “Reinvestment Property” means property that is useful in the business of the Borrower and its Subsidiaries.

(d) Upon the sale or issuance by the Borrower or any of its Subsidiaries of any of its Equity Interests, the Borrower shall prepay an aggregate principal amount of Loans equal to 85% 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 Borrower or such Subsidiary (such prepayments to be applied as set forth in clause (h) below and to be subject to the Intercreditor Agreement).

(e) Upon the incurrence or issuance by the Borrower or any of its Subsidiaries of any Indebtedness, the Borrower shall prepay an aggregate principal amount of Loans 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 Borrower or such Subsidiary (such prepayments to be applied as set forth in clause (h) below and to be subject to the Intercreditor Agreement).

(f) Upon any Extraordinary Receipt received by or paid to or for the account of the Borrower or any of its Subsidiaries, and not otherwise included in clauses (c), (d) or (e) of thisSection 2.04, the Borrower shall prepay an aggregate principal amount of Loans 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 Borrower or such Subsidiary (such prepayments to be applied as set forth in clause (h) 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 Borrower, and so long as no Default shall have occurred and be continuing, the Borrower 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); andprovidedfurther,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 Loans as set forth in thisSection 2.04(f).

(g) Within 15 days after the date that the Audited Financial Statements are required to be delivered pursuant toSection 6.01(a), commencing with the Audited

Financial Statements for fiscal year 2008, and by each such date for each fiscal year thereafter, the Borrower shall prepay Loans 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% 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 that (A) the Required Lenders have approved the release of the Superpriority Amount and such release is effective and (B) the Excess Cash Flow mandatory prepayment provisions in the Note Purchase Agreements and the Calyon Credit Agreement are similar to thisSection 2.04(g) (such prepayment to be applied as set forth in clause (h) 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.

(h) Any mandatory prepayment required pursuant toSection 2.04(b),(c),(d),(e),(f) or(g) shall (i) in addition to such prepayment amount, include any amounts required pursuant toSection 3.05, (ii) not be subject to any notice and minimum payment provisions, (iii) be applied to the Loans of the Lenders in accordance with their respective Applicable Percentages of such Loans, and (iv) if the Loans have been repaid in full, to Cash Collateralize the L/C Obligations. Notwithstanding anything in thisSection 2.04 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.

(h) Section 2.05 of the Credit Agreement is hereby amended to read as follows:

2.05Termination or Reduction of Commitments.The Borrower may, upon notice to the Administrative Agent, terminate the Aggregate Commitments, or from time to time permanently reduce the Aggregate Commitments;provided that (i) any such notice shall be received by the Administrative Agent not later than 10:00 a.m. five Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate amount of $5,000,000 or any whole multiple of $1,000,000 in excess thereof, (iii) the Borrower shall not terminate or reduce the Aggregate Commitments if, after giving effect thereto and to any concurrent prepayments hereunder, the Total Outstandings would exceed the Aggregate Commitments, and (iv) if, after giving effect to any reduction of the Aggregate Commitments, the Letter of Credit Sublimit exceeds the amount of the Aggregate Commitments, the Letter of Credit Sublimit shall be automatically reduced by the amount of such excess. The Administrative Agent will promptly notify the Lenders of any such notice of termination or reduction of the Aggregate Commitments. Any reduction of the Aggregate Commitments shall be applied to the Commitment of each Lender according to its Applicable Percentage. All Commitment Fees accrued until the effective date of any termination of the Aggregate Commitments shall be paid on the effective date of such

termination. The Aggregate Commitments shall be automatically and permanently reduced by the amount of any mandatory prepayment of any Loan or any amount of Cash Collateral required to be made pursuant toSection 2.04 hereof (other than pursuant toSection 2.04(b)) or Section 2.5 of the Intercreditor Agreement, including any payment that would have otherwise been required to be made but for the fact that no Loans or Letters of Credit were outstanding in such amount.

(i) Section 2.13 of the Credit Agreement is hereby amended to read as follows:

2.13 [Intentionally Omitted.]

(j) Section 5.13 of the Credit Agreement is hereby amended to read as follows:

5.13Subsidiaries.As of the Third Amendment Closing Date, the Borrower has no Subsidiaries other than those specifically disclosed in Part (a) ofSchedule 5.13 and has no equity investments in any other corporation or entity other than those specifically disclosed in Part (b) ofSchedule 5.13.

(k) Section 6.14 of the Credit Agreement is hereby amended to read as follows:

6.14Minimum Borrower and Guarantor Consolidated Total Operating Income and Consolidated Total Assets.The Borrower shall cause either (a) at least 75% of the Consolidated Total Operating Income to be generated by the Borrower and the Guarantors or (ii) at least 75% of the Consolidated Assets to be owned by the Borrower and the Guarantors.

(l) Article VI of the Credit Agreement is hereby amended by adding the followingSection 6.15 thereto to read as follows:

6.15Collateral.The Borrower 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 Lenders and covering only 65% of the equity interests of any Foreign Subsidiary) now or hereafter owned by the Borrower 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 Collateral 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 Third Amendment Closing Date, the Borrower 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, appraisals, 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.

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

ARTICLE VII.
NEGATIVE COVENANTS

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

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

(a) Liens in respect of property of the Borrower or a Subsidiary existing on September 4, 2008 and described inSchedule 7.01, and any renewals or extensions thereof, provided (i) the property covered thereby is not changed and (ii) the amount of Indebtedness secured thereby is not increased;

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

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

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

(c) Liens in respect to property acquired by the Borrower or a Subsidiary after the Closing Date, existing on such property at the time of acquisition thereof (and not created in anticipation thereof), or in the case of any Person that after the Closing Date becomes a Subsidiary or is consolidated with or merged with or into the Borrower or a Subsidiary or sells, leases or otherwise disposes of all or substantially all of its property to the Borrower or a Subsidiary, Liens existing at the time such Person becomes a Subsidiary or is so consolidated or merged or effects such sale, lease or other disposition of property (and not created in anticipation thereof), provided that in any such case no such Lien shall

extend to or cover any other property of the Borrower or such Subsidiary, as the case may be;

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

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

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

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

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

(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 Borrower and its Domestic Subsidiaries to secure the Senior Secured Obligations.

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

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

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

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

(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 Borrower and its Subsidiaries during the immediately preceding twelve months does not exceed 15% of Consolidated Net Worth (as of the last day of the quarterly accounting period ending on or most recently prior to the last day of such twelve month period).

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

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

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

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

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

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

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

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

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

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

7.05Limitation 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) ofSection 7.12, (ii) Indebtedness of a Subsidiary existing on July 30, 2008 and described inSchedule 7.05 but no increase of any such Indebtedness, (iii) Indebtedness of a Subsidiary that is a Guarantor owed to the Borrower or any Guarantor or Indebtedness of a Subsidiary that is not a Guarantor owed to the Borrower or any other Subsidiary, (iv) Indebtedness under the Loan Documents, and (v) Indebtedness of a Subsidiary secured by Liens permitted pursuant to clause (h) ofSection 7.01), exceed $5,000,000 in aggregate amount.

7.06Consolidated Net Worth.Permit Consolidated Net Worth at any time to be less than the sum of (i) $350,000,000 plus (ii) 50% of Consolidated Net Income for each fiscal quarter beginning with the fiscal quarter ending on April 30, 2006 (excluding any fiscal quarter in which Consolidated Net Income is not positive) plus (iii) 85% of the net proceeds of any equity issued by the Borrower after January 31, 2006, minus (iv) non-cash impairment charges for goodwill, intangible and fixed assets at such time of determination.

7.07Fixed 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 Third Amendment Closing Date through and including the fourth fiscal quarter of fiscal year 2009, (b) 1.75 to 1.00 at the end of any fiscal quarter-end occurring during the period from and including the first day of the first fiscal quarter 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.

7.08Leverage Ratio.Permit the Leverage Ratio to exceed (a) 4.35 to 1.00 at any time from and including the Third Amendment Closing 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.

7.09Sale/Leasebacks.Sell, lease, transfer or otherwise dispose of (collectively, a “transfer”) any asset on terms whereby the asset or a substantially similar asset is or may be leased or reacquired by the Borrower or any Subsidiary over a period in excess of three years, 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 Borrower and its Subsidiaries entered into after the Third Amendment Closing Date in accordance with the provisions of thisSection 7.09, does not exceed $10,000,000.

7.10Transactions with Affiliates.Enter into any transaction with any Affiliate of the Borrower (other than a Subsidiary), except upon fair and reasonable terms no less favorable to the Borrower or such Subsidiary than would obtain in an comparable arm’s-length transaction with a Person not an Affiliate of the Borrower.

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

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

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

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

(d) Guarantees of the Borrower or any Subsidiary in respect of the obligations (which do not constitute Indebtedness) of (i) in the case of the

Borrower, any Subsidiary, and (ii) in the case of any Subsidiary, the Borrower or any Subsidiary of such Subsidiary or any other Subsidiary.

7.13Restricted Payments.Declare or make any Restricted Payment except that (i) any Subsidiary may declare and pay Dividends to (x) the Borrower, (y) a Guarantor, and (z) the parent of such Subsidiary; and (ii) provided no Default exists or would result therefrom, the Borrower may pay Dividends not to exceed $1,650,000 in aggregate amount during any fiscal quarter commencing with the Borrower’s fourth fiscal quarter of fiscal year 2008.

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

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

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

7.17Amendment and Waivers of Subordinated Debt.Change or permit any Subsidiary to change or amend (or take any action or fail to take any action the result of which is an effective amendment or change) or accept any waiver or consent with respect to, any document, instrument or agreement relating to any Subordinated Debt that would result in (a) an increase in the principal, interest, overdue interest, fees or other amounts payable under any Subordinated Debt, (b) an acceleration of any date fixed for payment or prepayment of principal, interest, fees or other amounts payable under any Subordinated Debt (including, without limitation, as a result of any redemption), (c) a change in any of the subordination provisions of any Subordinated Debt, or (d) any other change in any term or provision of any Subordinated Debt that could reasonably be expected to have an adverse effect on the interest of the Lenders.

7.18Capital Expenditures.Permit Capital Expenditures of the Borrower 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.

7.19Senior Note 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 Senior Note Document that would result in (a) an increase in the principal, interest, overdue interest, fees or other amounts payable under any Senior Note Document, (b) an acceleration of any date fix for

payment or prepayment of principal, interest, overdue interest, fees or other amounts payable under any Senior Note Document, (c) the terms and provisions of the Senior Note Documents, including without limitation the negative covenants and the events of default, being more restrictive to the Borrower and its Subsidiaries than the terms and provisions of this Agreement, or (d) the Borrower or any Subsidiary being subject to any prohibition or limitation on making any payment or prepayment under the Loan Documents.

7.20Calyon Credit 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 Calyon Credit Document that would result in (a) an increase in the principal, interest, overdue interest, fees or other amounts payable under any Calyon Credit Document, (b) an acceleration of any date fix for payment or prepayment of principal, interest, overdue interest, fees or other amounts payable under any Calyon Credit Document, (c) the terms and provisions of the Calyon Credit Documents, including without limitation the negative covenants and the events of default, being more restrictive to the Borrower and its Subsidiaries than the terms and provisions of this Agreement, or (d) the Borrower or any Subsidiary being subject to any prohibition or limitation on making any payment or prepayment under the Loan Documents.

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

(b)Specific Covenants. The Borrower or any Subsidiary fails to perform or observe any term, covenant or agreement contained in any ofSection 6.03,6.05,6.11,6.15,7.01,7.02,7.03,7.05,7.06,7.07,7.08,7.09,7.13,7.17,7.18,7.19 and7.20required to be performed or observed by it; or

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

(l)Collateral Documents. Any Collateral Document shall for any reason (other than on account of the Collateral Agent’s election not to take possession of or make certain filings or registrations in respect of certain Collateral) fail to create a valid and perfected first priority (subject only to Permitted Liens) in any Collateral purported to be covered thereby, except as permitted by the terms of any Collateral Document; or

(p) Notwithstanding the amount of Aggregate Commitments, after September 9, 2008 the Total Outstandings shall not exceed $145,000,000 (as reduced by any amount that the Aggregate Commitments are reduced pursuant toSection 2.05 as a result of mandatory prepayments of the Loans required to be made pursuant toSections 2.04(c),(d),(e),(f) and(g)), and the Borrower shall have no right to request any Credit Extension if, after giving effect thereto and the application of the proceeds thereof, the Total Outstandings would exceed $145,000,000 (as reduced as provided in the immediately preceding parenthetical);provided,however, if the Required Lenders have released the Superpriority Amount and such release is

effective and the Leverage Ratio for the most recently ended fiscal quarter is less than 2.50 to 1.00, the Total Outstandings may be in an aggregate amount up to the Aggregate Commitments, without the need for any action or consent by the Administrative Agent or any Lender.

(q) The Compliance Certificate is hereby amended to be in the form ofExhibit C attached to this Third Amendment.

(r) Schedule 5.13 to the Credit Agreement is hereby amended to be in the form ofSchedule 5.13 attached to this Third Amendment.

(s) Schedule 7.01 to the Credit Agreement is hereby amended to be in the form ofSchedule 7.01 attached to this Third Amendment.

2. REPRESENTATIONS AND WARRANTIES TRUE; NO EVENT OF DEFAULT. By its execution and delivery hereof, the Borrower represents and warrants that, as of the date hereof and after giving effect to the amendments contemplated by the foregoing Section 1:

(a) the representations and warranties contained in the Credit Agreement and the other Loan Documents are true and correct on and as of the date hereof as if made on and as of such date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date;

(b) no event has occurred and is continuing which constitutes a Default or an Event of Default;

(c) (i) the Borrower has full corporate power and authority to execute, deliver and perform this Third Amendment and the Security Agreement, (ii) each Granting Party has full legal power and authority to execute, deliver and perform the Security Agreement, (iii) this Third Amendment, the Security Agreement and the Credit Agreement, as amended hereby, constitute the legal, valid and binding respective obligations of the Borrower, enforceable against the Borrower, in accordance with their respective terms, except as enforceability may be limited by applicable Debtor Relief Laws and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law) and except as rights to indemnity may be limited by federal or state securities laws, and (iv) the Security Agreement constitutes the legal, valid and binding respective obligations of each Granting Party, enforceable against each Granting Party, in accordance with their respective terms, except as enforceability may be limited by applicable Debtor Relief Laws and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law) and except as rights to indemnity may be limited by federal or state securities laws;

(d) (i) the execution, delivery and performance by the Borrower of this Third Amendment, the Security Agreement and the Credit Agreement, as amended hereby, do not and will not conflict with, result in a breach of or constitute a default under, any Organization Document of the Borrower or any Contractual Obligation to which the Borrower is a party or by which its respective properties may be bound and (ii) the execution, delivery and performance by each Granting Party of the Security Agreement does not and will not conflict with, result in a breach of or constitute a default under any Organization Document of any Granting Party or any

Contractual Obligation to which any Granting Party is a party or by which its respective properties may be bound; and

(e) (i) no authorization, approval, consent, or other action by, notice to, or filing with, any Governmental Authority or other Person (including the Borrower’s Board of Directors) not previously obtained is required for the execution, delivery or performance by the Borrower of this Third Amendment and the Security Agreement and (ii) no authorization, approval, consent or other action by, notice to, or filing with, any Governmental Authority or other Person (including any Granting Party’s Board of Directors or similar governing body) not previously obtained is required for the execution, delivery or performance by any Granting Party of the Security Agreement.

3. CONDITIONS TO EFFECTIVENESS. This Third Amendment shall be effective as of September 10, 2008, subject to the following:

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

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

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

(e) the Administrative Agent shall have received counterparts of the Security Agreement executed by the Borrower and each Granting Party, together with related UCC-1 financing statements, intellectual property filings, stock or other appropriate certificates, if applicable, for 100% of the equity interest of each Domestic Subsidiary;

(f) the Administrative Agent shall have received certificates showing the existence of all insurance policies required by the Collateral Documents, together with certificates and endorsements naming the Collateral Agent as loss payee and additional insured;

(g) the Calyon Credit Agreement, and the Note Purchase Agreements shall have been amended in form and substance satisfactory to the Administrative Agent;

(h) the Administrative Agent shall have received certificates of resolutions or other similar action, incumbency certificates and/or certificates of Responsible Officers of the Borrower and each Granting Party as the Administrative Agent may require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Third Amendment;

(i) the Administrative Agent shall have received an opinion of the Borrower’s counsel, in form and substance satisfactory to the Administrative Agent, with respect to matters set forth in Sections 2(c), (d) and (e) of this Third Amendment and with respect to such other matters as requested by the Administrative Agent or its counsel;

(j) the Administrative Agent shall have received counterparts of the Intercreditor Agreement executed by all parties thereto (including the Administrative Agent on behalf of the Lenders);

(k) the Administrative Agent shall have received all fees payable to the Administrative Agent and Arranger as agreed to by the Borrower;

(l) the Borrower shall have paid all Attorney Costs of the Administrative Agent incurred in connection with this Third Amendment to the extent invoiced; and

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

4. GUARANTORS ACKNOWLEDGMENT. By signing below, each of the Guarantors (i) acknowledges, consents and agrees to the execution, delivery and performance by the Borrower of this Third Amendment, (ii) acknowledges and agrees that its obligations in respect of the Guaranty are not released, diminished, waived, modified, impaired or affected in any manner by this Third Amendment or any of the provisions contemplated herein, (iii) ratifies and confirms its obligations under the Guaranty, and (iv) acknowledges and agrees that it has no claims or offsets against, or defenses or counterclaims to, the Guaranty.

5. DIRECTION TO EXECUTE INTERCREDITOR AGREEMENT. By signing below, each of the Lenders hereby directs and requests that the Administrative Agent execute the Intercreditor Agreement on behalf of the Lenders.

6. REFERENCE TO THE CREDIT AGREEMENT.

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

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

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

8. EXECUTION IN COUNTERPARTS. This Third Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which when taken together shall constitute but one and the same instrument. For purposes of this Third Amendment, a counterpart hereof (or signature page thereto) signed and transmitted by any Person party hereto to the Administrative Agent (or its counsel) by facsimile machine, telecopier or electronic mail is to be treated as an original. The signature of such Person thereon, for purposes hereof, is to be considered as an original signature, and the counterpart (or signature page thereto) so transmitted is to be considered to have the same binding effect as an original signature on an original document.

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

10. HEADINGS. Section headings in this Third Amendment are included herein for convenience of reference only and shall not constitute a part of this Third Amendment for any other purpose.

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

LOAN DOCUMENT EXECUTED IN CONNECTION THEREWITH, INCLUDING, WITHOUT LIMITATION, ANY CONTRACTING FOR, CHARGING, TAKING, RESERVING, COLLECTING OR RECEIVING INTEREST IN EXCESS OF THE HIGHEST LAWFUL RATE APPLICABLE, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE CREDIT AGREEMENT OR ANY OTHER LOAN DOCUMENT EXECUTED IN CONNECTION THEREWITH, AND NEGOTIATION FOR AND EXECUTION OF THIS THIRD AMENDMENT (BUT EXCLUDING IN ALL CASES ANY OF THE FOREGOING ARISING FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE RELEASED PARTIES).

12. ENTIRE AGREEMENT. THE CREDIT AGREEMENT, AS AMENDED BY THIS THIRD AMENDMENT, AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AS TO THE SUBJECT MATTER THEREIN AND HEREIN AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES.

REMAINDER OF PAGE LEFT INTENTIONALLY BLANK

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


	SPARTECH CORPORATION
	By:
		Randy C. Martin
		Executive Vice President and Chief Financial Officer