WAIVER AND AMENDMENT AGREEMENT TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

Exhibit 10.1

WAIVER AND AMENDMENT AGREEMENT TO
FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

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

BACKGROUND

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

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

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

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

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

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

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

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

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

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

     2.  AMENDMENTS TO THE CREDIT AGREEMENT .

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

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

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

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

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

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

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

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

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

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

ARTICLE VII.
NEGATIVE COVENANTS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     7.08 [INTENTIONALLY OMITTED.]

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

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

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

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

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

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

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

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

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

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

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

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

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

     7.17 [INTENTIONALLY OMITTED.]

     7.18 [INTENTIONALLY OMITTED.]

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

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

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

     7.22 Senior Note Documents. Change or permit any Subsidiary to change or amend (or take any action or fail to take any action the result of which is an effective amendment or change)