EXHIBIT 10.2

CPG International I Inc.

801 Corey Street

Scranton, Pennsylvania 18505

 

 

 

January 31, 2007

 

AEA Mezzanine Funding LLC

AEA Mezzanine (Unleveraged) Fund LP

c/o AEA Mezzanine Management LP

200 First Stamford Place

Stamford, CT 06902

 

Dear Sirs:

 

This letter will confirm our agreement that, in connection with your investment
in CPG International I Inc. (the “Company”), AEA Mezzanine Funding LLC
(“Funding”) and AEA Mezzanine (Unleveraged) Fund LP (“Unleveraged Fund”)
(Funding and Unleveraged Fund, each, an “Investor”) will be entitled to the
following contractual management rights relating to the Company (collectively,
the “Management Rights”):

 

 

1.

Each Investor shall be entitled to routinely consult with and advise management
of the Company with respect to operations of the Company and its direct and
indirect subsidiaries, including all the Company’s business and financial
matters and management’s proposed annual operating plans at the Company’s
facilities at mutually agreeable times for such consultation and advice,
including to review progress in achieving said plans. The Company agrees to give
due consideration to the advice given and any proposals made by an Investor;

 

2.

Each Investor may inspect all documents, contracts, books, records, personnel,
offices and other facilities and properties of the Company and its direct and
indirect subsidiaries and, to the extent available to the Company after the
Company uses reasonable efforts to obtain them, the records of its legal
advisors (provided that such inspection shall not constitute a waiver of legal
privilege) and accountants, including the accountants’ work papers, and each
Investor may make such copies and inspections thereof as each Investor may
reasonably request. The Company shall furnish each Investor with such financial
and operating data and other information with respect to the business and
properties of the Company and its direct and indirect subsidiaries as each
Investor may reasonably request;

 

3.

The Company shall, after receiving notice from each Investor as to the identity
of its representative (collectively, the “Representatives”), (i) permit such
Representatives to attend all meetings of the Board of Directors of the Company
(the “Board”) and all committees thereof as observers; (ii) provide the
Representatives advance notice of each such meeting, including such meeting’s
time and place, at the same time and in the same manner as such notice is
provided to the members of the Board (or such committee thereof); (iii) provide
the Representatives with copies of all materials, including notices, minutes and
consents, distributed to the members of the Board (or such committee thereof) at
the same time as such materials are distributed to such Board (or such committee
thereof) and shall permit the Representatives to have the same access to
information concerning the business and operations of the Company and its direct
and indirect subsidiaries as is provided to the members of the Board; and (iv)
permit the Representatives to

 

 

discuss the affairs, finances and accounts of the Company and its direct and
indirect subsidiaries with, and to make proposals and furnish advice with
respect thereto to, the Board, without voting, and the Board and the Company’s
officers shall take such proposals or advice seriously and give due
consideration thereto. Reasonable costs and expenses incurred by the
Representatives for the purposes of attending Board (or committee) meetings and
conducting other Company business will be paid by the Company.

 

4.

The Company shall deliver to each Investor:

 

(a)

as soon as available and in any event within 45 days (plus any grace period
provided by Rule 12b-25 of the SEC rules) after the end of each of the first
three quarters of each fiscal year of the Company, consolidated balance sheets
of the Company and its direct and indirect subsidiaries as of the end of such
period then ended, and consolidated statements of income and cash flows of the
Company and its direct and indirect subsidiaries for the period then ended, in
each case prepared in conformity with generally accepted accounting principles
in the United States applied on a consistent basis, except as otherwise noted
therein and subject to the absence of footnotes and to year-end adjustments;

 

(b)

as soon as available and in any event within 90 days (plus any grace period
provided by Rule 12b-25 of the SEC rules) after the end of each fiscal year of
the Company, a consolidated balance sheet of the Company and its direct and
indirect subsidiaries as of the end of such year, and consolidated statements of
income and cash flows of the Company and its direct and indirect subsidiaries
for the year then ended, in each case prepared in conformity with generally
accepted accounting principles in the United States applied on a consistent
basis, except as otherwise noted therein, together with an auditor’s report
thereon of a firm of established national reputation; and

 

(c)

to the extent the Company or any direct or indirect subsidiary is required by
law or pursuant to the terms of any outstanding indebtedness of the Company or
any direct or indirect subsidiary to prepare such reports, any annual reports,
quarterly reports and other periodic reports pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934 actually prepared by the Company or any
direct or indirect subsidiary as soon as available.

Investors agree, and shall cause each of its Representatives to agree, to hold
in confidence and trust and not use or disclose any confidential information
provided to or learned by it in connection with the exercise of Investor’s
Management Rights under this letter agreement, unless otherwise required by law
or unless such confidential information otherwise becomes publicly available or
available to it other than through this letter agreement.

 

The rights set forth in this letter agreement are intended to satisfy the
requirement of contractual management rights for purposes of qualifying
Investor’s interests in the Company as venture capital investments for purposes
of the Department of Labor’s “plan assets” regulations, and in the event that,
after the date hereof, as a result of any change in applicable law or regulation
or a judicial or administrative interpretation of applicable law or regulation,
it is determined that such rights are not satisfactory for such purpose, each
Investor and the Company shall reasonably cooperate in good faith to agree upon
mutually satisfactory management rights which satisfy such regulations.

The rights obtained by each of the Funding and Unleveraged Fund herein are in
addition to and not in lieu of any rights they have pursuant to the Purchase
Agreement to which they are a party, dated as of the date hereof.

 

 

 

 

 

Very truly yours,

 

 

 

 

 

 

 

CPG INTERNATIONAL I INC.

 

By:

/s/ SCOTT HARRISON

 

 

Name:

Scott Harrison

 

 

Title:

Executive Vice President and

 

 

 

Chief Financial Officer

 

AGREED AND ACCEPTED THIS 31st day of January, 2007

 

 

 

 

AEA MEZZANINE FUNDING LLC

 

 

 

 

 

 

 

 

 

 

By:

/s/ JOSEPH D. CARRABINO, JR.

 

 

Name:

Joseph D. Carrabino, Jr.

 

 

Title:

President

 

 

 

 

 

 

 

 

 

 

 

AEA MEZZANINE (UNLEVERAGED) FUND LP

 

 

By:

AEA Mezzanine Partners LP,

 

 

 

its General Partner

 

 

 

 

 

 

By:

AEA Mezzanine Management GP LLC,

 

 

 

its General Partner

 

 

 

 

 

 

By:

/s/ JOSEPH D. CARRABINO, JR.

 

 

Name:

Joseph D. Carrabino, Jr.

 

 

Title:

President