Document:

Exhibit 10.2

 

[FORM]

 

EXECUTIVE CHANGE OF CONTROL AGREEMENT

 

THIS CHANGE OF CONTROL
AGREEMENT (the “Agreement”)
is entered into effective as of
                    ,
20     (the “Effective
Date”), by and between EAGLE ROCK ENERGY G&P, LLC (the “Company”) and
                            
(“Executive”).

 

W I T N E S
S E T H:

 

WHEREAS, the Company is the general partner of Eagle Rock Energy GP, L.P., a
Delaware limited partnership (“ERGP”),
which is, in turn, the general partner of Eagle Rock Energy Partners, L.P., a
Delaware limited partnership (the “Partnership”);

 

WHEREAS, the Executive is currently employed by the Company and is an integral
part of the management of the Company and the Partnership;

 

WHEREAS, the Company desires to attract and retain certain key management
personnel such as the Executive and, accordingly, desires to enter into a
change of control severance agreement with the Executive in order to encourage
his continued service to the Company; and

 

WHEREAS, the Executive is prepared to commit such services in return for
specific arrangements with respect to change of control severance compensation.

 

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the Company and Executive agree as follows:

 

1.                                      Definitions.  For purposes of this Agreement, the terms
listed below will have the meanings specified herein:

 

(a)                                 “Accrued Payments” means (i) any unpaid
Base Salary through the Date of Termination (but calculated at the rate then in
effect), (ii) any performance bonus for the calendar year ended
immediately prior to the Date of Termination, to the extent unpaid, in an
amount equal to (A) the actual bonus earned by the Executive, to the
extent such amount has been communicated to the Executive by written notification
prior to the Date of Termination in accordance with the timing and
determinations provided by historical Company plans, policies and practices or (B) if
no such notification has occurred, 100% of the Target Bonus for such calendar
year, (iii) unreimbursed business expenses that are eligible for
reimbursement in accordance with the applicable Company policies through the
Date of Termination, and (iv) such employee benefits, if any, as to which
the Executive may be entitled pursuant to the terms governing such benefits.

 

(b)                                 “Base Salary” means the amount the Executive
is entitled to receive as wages or salary on an annualized (12-month) basis,
calculated as of the Date of Termination or, if greater, before any reduction
not consented to by the Executive.

 

 

(c)                                  “Board” means the board of directors of the
Company.

 

(d)                                 “Cause” means a determination made in good
faith by two-thirds (2/3) of the Board that the Executive (i) willfully
and continually failed to substantially perform the Executive’s duties with the
Partnership Entities (other than a failure resulting from the Executive’s
incapacity due to physical or mental illness) which failure continued for a
period of at least thirty (30) days after a written notice of demand for
substantial performance has been delivered to the Executive specifying the
manner in which the Executive has failed to substantially perform, or (ii) willfully
engaged in conduct which is demonstrably and materially injurious to the
Partnership Entities, monetarily or otherwise; provided, however, that no
termination of the Executive’s services shall be for Cause as set forth in
clause (ii) above until (A) there shall have been delivered to the
Executive a copy of a written notice setting forth that the Executive was
guilty of the conduct described in clause (ii) above and specifying the
particulars thereof in detail, and (B) the Executive shall have been
provided an opportunity to be heard by the Board (with the assistance of the
Executive’s counsel if the Executive so desires).  No act or failure to act on the part of the
Executive shall be considered “willful” unless the Executive has intentionally
or deliberately acted or failed to act with knowledge that such action or
failure to act was likely to be materially injurious to the Partnership
Entities.  Notwithstanding anything
contained herein to the contrary, no failure to perform by the Executive after
a notice of termination is given shall constitute Cause.

 

(e)                                  “Change of Control” means, the occurrence of
one of the following:

 

(i)                                     the consummation of an agreement to acquire or a tender offer for
beneficial ownership (within the meaning of Rule 13d-3 under the Exchange
Act) by any “person” or “group” (within the meaning of those terms as used in
Sections 13(d) and 14(d)(2) of the Exchange Act) such that afterwards
such person or group has 40% or more of either (A) the then outstanding
common equity securities of the Partnership (the “Outstanding Equity”) or (B) the
combined voting power of the then outstanding voting securities of the
Partnership (the “Outstanding
Voting Securities”); provided, however, that for purposes of
this subclause (i), the following acquisitions shall not constitute a Change of
Control: (1) any acquisition directly from the Partnership, (2) any
acquisition by the Partnership, (3) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Partnership or
any of its Affiliates, (4) any acquisition by any entity pursuant to a
transaction that complies with clauses (A), (B) or (C) of subclause (iv) below,
or (5) any acquisition by any member of the NGP Group unless, prior to
such acquisition but following the Effective Date, the aggregate ownership of
members of the NGP Group has been reduced to less than 20% of both the Outstanding
Equity and the Outstanding Voting Securities; or

 

(ii)                                  the acquisition of beneficial ownership by any person or group of 40% or
more of the combined voting power of the then outstanding voting securities of
ERGP and/or the General Partner (the “GP
Outstanding Voting Securities”); provided, however, that for
purposes of this subclause (ii), the following acquisitions shall not
constitute a Change of Control: (A) any acquisition by the Partnership or
any of its subsidiaries, (B) any transaction that is subject to subclause (iv) below,
or (C) any 

 

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acquisition of beneficial
ownership of GP Outstanding Voting Securities solely by virtue of an
acquisition of Outstanding Equity or Outstanding Voting Securities; or

 

(iii)                               the limited partners of the Partnership approve, in one or a series of
transactions, a plan of complete liquidation of the Partnership; or

 

(iv)                              the consummation of a reorganization, merger or consolidation involving
the Partnership or a sale or other disposition by the Partnership of all or
substantially all of its assets or an acquisition of assets of another entity
(a “Business Combination”),
in each case, unless following such Business Combination: (A) the
Outstanding Equity and Outstanding Voting Securities immediately prior to such
Business Combination represent or are converted into or exchanged for
securities that represent or are convertible into more than 50% of,
respectively, the then outstanding equity securities and the combined voting
power of the then outstanding voting securities, as the case may be, of the
entity resulting from such Business Combination or the resulting public parent
thereof (including, without limitation, any entity that as a result of such
transaction owns the Partnership, or all or substantially all of the assets of
the Partnership either directly or through one or more subsidiaries), as the
case may be, (B) no Person (excluding any employee benefit plan (or
related trust) of the Partnership or the entity resulting from the Business
Combination or the resulting public parent thereof, as the case may be)
beneficially owns, directly or indirectly, 20% or more of, respectively, the
then outstanding equity securities of the entity resulting from such Business
Combination or the resulting public parent thereof, as the case may be, or the
combined voting power of the then outstanding voting securities of such entity,
except to the extent that such ownership existed with respect to the
Partnership prior to the Business Combination, and (C) following the
occurrence of the GP Acquisition, at least a majority of the members of the
board of directors or similar governing entity of the entity resulting from
such Business Combination or the resulting public parent thereof, as the case
may be, were members of the Incumbent Board at the time of the execution of the
initial agreement, or of the action of the Board, providing for such Business
Combination; provided, however, that clauses (A), (B) and (C) of this
subclause (iv) shall not apply if the entity resulting from the Business
Combination or the resulting public parent thereof, as the case may be, is a
limited partnership unless 100% of the combined voting power of the voting
securities of the general partner thereof is owned, directly or indirectly, by
such limited partnership; or

 

(v)                                 following the occurrence of the GP Acquisition, individuals who
constitute the Incumbent Board cease for any reason to constitute at least a
majority of the Board;

 

provided, however, that in no event will the
exercise, if any, by the Partnership of its option to acquire all of the issued
and outstanding limited partner interests in ERGP and membership interests in
the Company, or any change resulting therefrom (the “GP Acquisition”), constitute
a Change of Control for purposes of this Agreement.  [FOR
INDIVIDUALS WHO WORK FOR THE UPSTREAM/MIDSTREAM BUSINESS: ; provided, that, the
term “Change of Control” shall also include the consummation of a
reorganization, merger, consolidation, 

 

3

 

spin off or similar transaction involving the
[upstream][midstream] business unit of the Partnership or a sale of all or
substantially all of the equity interests and/or assets of the
[upstream][midstream] business unit of the Partnership, in either case, unless
following the consummation of such event, the [upstream][midstream] business
unit continues to be controlled by the Company, the Partnership or any
affiliate of the foregoing (“[Midstream][Upstream] Sale”).

 

(f)                                   “COBRA” means the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended.

 

(g)                                  “Code” means the Internal Revenue Code of
1986, as amended, and applicable administrative guidance issued thereunder.

 

(h)                                 “Date of Termination” means the date of
receipt of the Notice of Termination or any later date specified therein, as
the case may be.  For all purposes of
this Agreement, the Executive’s Date of Termination shall not occur prior to
the date the Executive incurs a “separation from service” within the meaning of
Section 409A(a)(2)(A)(i) of the Code.

 

(i)                                     “Disability” means (i) a physical or
mental impairment of sufficient severity that, in the opinion of the Board, the
Executive is unable to continue performing the duties assigned to the Executive
prior to such impairment or the Executive’s condition entitles the Executive to
disability benefits under any insurance or employee benefit plan of any
Partnership Entity in which the Executive participates, and (ii) the
impairment or condition is cited by the employing Partnership Entity as the
reason for the Executive’s termination.

 

(j)                                    “Good Reason” means the occurrence of any of
the following events or conditions: (i) a change in the Executive’s
status, title, position or responsibilities (including reporting
responsibilities) which represents a substantial  reduction of the status, title, position or responsibilities
as in effect immediately prior thereto, the assignment to the Executive of any
duties or responsibilities that are inconsistent with such status, title,
position or responsibilities, or any removal of the Executive from or failure
to reappoint or reelect the Executive to any of such positions, except in
connection with the termination of the Executive’s services for Cause, due to the
Executive’s Disability or death, or by the Executive voluntarily without Good
Reason, (ii) a reduction in the Executive’s annual base salary, (iii) a
change in the geographic location at which the Executive must perform services
(without the consent of the Executive) to a location more than thirty-five (35)
miles from the location at which the Executive normally performs such services
as of the Effective Date, except for reasonably required business travel that
is not materially greater than such travel requirements prior to the Effective
Date, (iv) the failure by the Partnership Entities to continue in effect
any material compensation or benefit plan in which the Executive was
participating as of the Effective Date or to provide the Executive with compensation
and benefits at least equal (in terms of benefit levels and/or reward
opportunities) to those provided for under each compensation or employee
benefit plan, program and practice as in effect immediately prior to the
Effective Date (or as in effect following the Effective Date, if greater), (v) any
material breach by a Partnership Entity of any provision of this Agreement or
of any provision of the Executive’s employment agreement, if any, or (vi) any
purported termination of the Executive’s employment for Cause by a Partnership
Entity that does not 

 

4

 

otherwise
comply with the terms of this Agreement or the Executive’s employment
agreement, if any.  In the case of the
Executive’s allegation of Good Reason, (A) the Executive shall provide
notice to the Board of the event alleged to constitute Good Reason within 90
days of the occurrence of such event, and (B) the Partnership Entities
shall have the opportunity to remedy the alleged Good Reason event within 30
days from receipt of notice of such allegation.

 

[FOR INDIVIDUALS WHO WORK FOR THE UPSTREAM/MIDSTREAM
BUSINESS:  Solely as used in Section 1(s)(i) of
this Agreement, however, “Good
Reason” shall mean only the occurrence of (x) any of the
events or conditions described in clauses (ii) through (vi) of the
immediately preceding paragraph or (y) a demotion in the Executive’s then
current status as an officer, such as would result in a senior vice president
or executive vice president no longer holding such title.]

 

(k)                                 “Incumbent Board” means the portion of the
Board constituted of the individuals who are members of the Board immediately
following the GP Acquisition and any other individual who becomes a director of
the Company after such date and who is either (A) an Appointed Director
(as such term is defined in the Partnership Agreement), (B) a Management
Director (as such term is defined in the Partnership Agreement), or (C) an
Elected Director (as such term is defined in the Partnership Agreement) who was
nominated to serve on the Board by a vote of at least a majority of the Elected
Directors then serving on the Incumbent Board, but excluding, for this purpose,
any such individual whose initial assumption of office occurs as result of an
actual or threatened election contest with respect to the election or removal
of directors or other actual or threatened solicitation of proxies or consents
by or on behalf of a person other than the Incumbent Board.

 

(l)                                     “NGP Group” shall mean Natural Gas Partners
VII, L.P., Natural Gas Partners VIII, L.P., Natural Gas Partners, L.L.C. d/b/a
NGP Energy Capital Management, and their respective Affiliates (other than the
Partnership, the General Partner, ERGP and their respective subsidiaries) and
their Affiliate’s respective directors, officers, shareholders, members,
managers, representatives of management committees and employees (and members
of their respective families and trusts for the primary benefit of such family
members).

 

(m)                             “Notice of Termination” means a written notice
communicated by the Company or the Executive, as applicable, that (i) indicates
the specific reason for termination of the Executive’s employment, (ii) sets
forth in reasonable detail the facts and circumstances claimed to provide a
basis for the termination, and (iii) specifies the Date of Termination.

 

(n)                                 “Partnership Entities” means the Company, the
Partnership and any other entity which is an affiliate of the foregoing
entities and, when applicable in accordance with Section 5(c),
means any successor to the Company, the Partnership or any other entity which
is an affiliate thereof, and also includes any other entity which is an
affiliate of such successor entity(ies).

 

(o)                                 “Pro-Rata Bonus” means a pro-rata portion of
the Target Bonus for the calendar year of termination, such portion to be
determined by multiplying the Target Bonus for the calendar year of termination
by a fraction, the numerator of which is the number of days 

 

5

 

during
which the Executive was employed by the Company in the calendar year of
termination, and the denominator of which is 365.

 

(p)                                 “Protection Period” means (i) the six
month period ending on the date a Change of Control occurs, and (ii) the
two year period beginning on the date a Change of Control occurs.

 

(q)                                 “Severance Conditions” means the Executive’s
execution and delivery to the Company on or prior to the 60th day following the
Date of Termination of a release of claims agreement in the Company’s customary
form, which shall exclude (and not release) claims for indemnification, claims
for coverage under officer and director policies, and claims as a direct or
indirect unitholder of the Partnership and/or the Company and which may be
amended by the Company to reflect changes in applicable laws and regulations
and, where applicable, the Executive’s non-revocation of such release.

 

(r)                                    “Target Bonus” means the Executive’s target
bonus for a given calendar year pursuant to the Company’s cash performance
bonus program as in effect from time to time, assuming 100% achievement of all
performance metrics including, without limitation and by example only,
Enterprise Goals and Individual Goals (within the meaning of the Company’s
annual Short Term Incentive Bonus Plan).

 

(s)                                   “Termination Event” means a termination of the
Executive’s employment by the Partnership Entities for any reason other than
for Cause or by the Executive for Good Reason, in either case during the
Protection Period [FOR INDIVIDUALS WHO WORK
FOR THE UPSTREAM/MIDSTREAM BUSINESS: ; provided, that, for the
avoidance of doubt, in the event of a [Midstream][Upstream] Sale, the Executive
shall be deemed to experience a Termination Event if (i) the Executive
remains employed by the Company, the Partnership or an affiliate thereof
following such sale and is subsequently terminated by the employing entity
other than for Cause or by the Executive for Good Reason, in either case during
the two year period beginning on the date of such [Midstream][Upstream] Sale,
or (ii) following such sale, the Executive is employed by the successor
entity resulting from the [Midstream][Upstream] Sale (or an affiliate thereof)
and is subsequently terminated by the employing entity other than for Cause or
by the Executive for Good Reason, in either case during the two year period
beginning on the date of such [Midstream][Upstream] Sale].

 

2.                                      Term of Agreement.  The term of this Agreement (the “Term”) shall be for a period
that commences on the Effective Date and terminates upon the earlier to occur
of the fifth anniversary of the Effective Date or a Change of Control;
provided, that, if a Change of Control has not occurred by the fifth
anniversary of the Effective Date, the Term will be automatically extended for
an additional one (1) year period as of the fifth anniversary of the
Effective Date and on each anniversary date of the Effective Date occurring
thereafter, unless the Board cancels further extension of this Agreement by
giving notice to the Executive at least sixty (60) days prior to the applicable
extension date.  Upon a Change of Control
during the Term, the Term will be extended through the end of the Protection
Period, immediately following which time this Agreement will terminate, except
to the extent necessary to enable the Executive to enforce his rights under Section 3
of this Agreement.

 

6

 

3.             Benefits.

 

(a)           In the event the Executive experiences a
Termination Event, then the Company shall, contingent upon the Executive
satisfying the Severance Conditions (and, in the case of a termination
occurring during the six (6) month period ending on the Change of Control,
contingent upon a Sufficiency Determination pursuant to Section 3(b) below):

 

(i)            pay the Executive, within the earlier to occur of the date on which
applicable law or Company policy or practice would necessitate payment and 60
days following the Date of Termination (or 60 days following the occurrence of
the Change of Control, in the case of a termination occurring during the six (6) month
period ending on the Change of Control), the Accrued Payments;

 

(ii)           pay the Executive, within 60 days following the Date of Termination (or
within 60 days following the occurrence of the Change of Control, in the case
of a termination occurring during the six (6) month period ending on the
Change of Control), (i) a Pro-Rata Bonus for the calendar year of
termination, and (ii) a lump sum payment equal to
[      ] times the sum of (A) an amount
equivalent to Base Salary, plus (B) the Executive’s Target Bonus for the
calendar year in which the Change of Control occurs (calculated based on the
Executive’s Base Salary);

 

(iii)          provide the Executive (and his or her spouse and eligible dependents)
with continued medical, dental and vision coverage until the earlier of (A) the
end of the [      ] month period beginning on the
Date of Termination, or (B) until the Executive is, or becomes, eligible
for comparable coverage under the group health plans of a subsequent
employer.  The Company may satisfy its
obligations under this Section 3(a)(iii) in one or more of the
following manners, as determined by the Company in its discretion: (1) by
continuing the Executive’s coverage under the Company’s group health plans on
the same terms and conditions as active employees of the Company, with the
balance of any applicable premiums, as determined by the Company, being paid by
the Company with income applicable to such premiums imputed to the Executive,
or (2) during the period of time that the Executive would, but for the
continued coverage provided pursuant to this Section 3(a)(iii), be
entitled to continued group health plan coverage pursuant to the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), if the Executive elected such coverage and paid
the applicable premiums (the “COBRA
Continuation Period”), by reimbursing the Executive on a monthly
basis for the cost of COBRA continuation coverage in excess of the premium
amount paid by active employees of the Company for group health plan coverage,
or (3) following the COBRA Continuation Period, to the extent the
Executive is still entitled to continued coverage pursuant to this Section 3(a)(iii),
the coverage to be continued shall be self-funded by the Company, shall be
provided in the form of an individual insurance policy obtained by the Company
for the Executive, or shall be provided in the form of monthly reimbursement by
the Company to the Executive for the cost of obtaining such coverage (but only
to the extent such cost exceeds the premium amount paid by active employees of
the Company for group health plan coverage), such method under this subclause (3) to
be determined by the Company in its discretion and to be provided in 

 

7

 

accordance
with the provisions of Treas. Reg. § 1.409A-3(i)(1)(iv)(A), including but
not limited to the requirements that (x) the benefits or reimbursements
provided be determined by reference to the objective and nondiscretionary
criteria set forth in the applicable group health plans, (y) the benefits
or reimbursements provided during one taxable year of the Executive not affect
the benefits or reimbursements to be provided in any other taxable year
(provided, that a limit imposed on the amount of benefits or reimbursements
that may be provided over some or all of the continuation period described in
this Section 3(a)(iii) shall not in and of itself cause the
arrangement described herein to fail to satisfy the requirements of Treas. Reg.
§ 1.409A-3(i)(1)(iv)), and (z) the right to receive benefits or
reimbursements not be subject to liquidation or exchange for another
benefit.  If the Executive experiences a
Termination Event during the six (6) month period ending on a Change of
Control and it is ultimately determined that such termination was in
anticipation of such Change of Control such that the Executive is entitled to
benefits under this Agreement, the Company shall reimburse the Executive for
any COBRA premiums incurred by the Executive prior to such determination to the
extent such premiums are in excess of the premium amount paid by active
employees in the Company’s group health plans, such reimbursement to be
provided within 60 days of the Change of Control, with the remainder of any
continued coverage to which the Executive is entitled under this Section 3(a)(iii) to
be provided in accordance with the foregoing provisions of this Section 3(a)(iii).  The health care continuation coverage period
under COBRA or any replacement or successor provision of applicable law, shall
run concurrently with the period during which the Executive continues to
receive benefits pursuant to this Section 3(a)(iii); and

 

(iv)          reimburse the Executive for the cost of reasonable outplacement services
and expenses, not to exceed $30,000, incurred during the one year period
beginning on the Date of Termination; provided, that such reimbursement shall
be made no later than the last day of the calendar year following the calendar
year in which the expense is incurred; provided, further, that the value of any
outplacement services received will constitute taxable income to the Executive.

 

(b)           (i)            In the event the Executive experiences a
Termination Event in connection with a termination occurring during the six (6) month
period ending on the Change of Control for which the Executive believes he is
entitled to benefits in accordance with this Section 3, the
Executive shall deliver to the Company a written notice setting forth a
description of facts and circumstances constituting evidence that the
termination of the Executive’s employment was made in anticipation of the
occurrence of a Change of Control and with the intention of avoiding payments
under this Agreement, no later than 30 days following the occurrence of the
Change of Control.

 

(ii)           Within 15 days following receipt of the notice described in Section 3(b)(i),
the [Compensation Committee of the Company](1),
will make a good faith determination, based on the information contained in
such notice and any other information known to the [Compensation Committee of
the Company](1), whether the Executive’s termination was
made in anticipation of the occurrence of a Change of Control and with the
intention of avoiding payments under this Agreement.  If the [Compensation Committee](1) 

 

(1)  Note:  For Joe Mills’ Change of Control
Agreement, a majority of the Board will make the Sufficiency Determination.

 

8

 

affirmatively
determines that the termination was under such circumstances (a “Sufficiency Determination”),
the Executive will be eligible for and the Company shall provide benefits to
the Executive in accordance with Section 3(a).

 

(iii)          If the [Compensation Committee of the Company](1) instead determines that there is insufficient
evidence to support a Sufficiency Determination, the Company will promptly
inform the Executive of such determination.

 

4.             Excise Taxes.  If the Compensation Committee of the Board
determines, in its sole discretion, that Section 280G of the Code applies
to any compensation payable to the Executive, then the provisions of this Section 4
shall apply.  If any payments or benefits
to which the Executive is entitled from the Company, any affiliate, any
successor to the Company or an affiliate, or any trusts established by any of
the foregoing by reason of, or in connection with, any transaction that occurs
after the Effective Date (collectively, the “Payments,” which shall include, without limitation, the
vesting of any equity awards or other non-cash benefit or property) are, alone
or in the aggregate, more likely than not, if paid or delivered to the
Executive, to be subject to the tax imposed by Section 4999 of the Code or
any successor provisions to that section, then the Payments (beginning with any
Payment to be paid in cash hereunder), shall be either (a) reduced (but
not below zero) so that the present value of such total Payments received by
the Executive will be one dollar ($1.00) less than three times the Executive’s “base
amount” (as defined in Section 280G(b)(3) of the Code) and so that no
portion of such Payments received by the Executive shall be subject to the excise
tax imposed by Section 4999 of the Code, or (b) paid in full,
whichever of (a) or (b) produces the better net after tax position to
the Executive (taking into account any applicable excise tax under Section 4999
of the Code and any other applicable taxes). 
The determination as to whether any Payments are more likely than not to
be subject to taxes under Section 4999 of the Code and as to whether
reduction or payment in full of the amount of the Payments provided hereunder
results in the better net after tax position to the Executive shall be made by
the Board and the Executive in good faith.

 

5.             General Provisions.

 

(a)           Taxes.  The Company is authorized to withhold from
any payments made hereunder amounts of withholding and other taxes due or
potentially payable in connection therewith, and to take such other action as
the Company may deem advisable to enable the Company and the Executive to
satisfy obligations for the payment of withholding taxes and other tax
obligations relating to any payments made under this Agreement.

 

(b)           Offset.  The Company may set off against, and the
Executive authorizes the Company to deduct from, any payments due to the
Executive, or to his estate, heirs, legal representatives, or successors, any
amounts which may be due and owing to the Company or an affiliate by the
Executive, whether arising under this Agreement or otherwise; provided that no
such offset may be made with respect to amounts payable that are subject to the
requirements of Section 409A of the Code unless the offset would not
result in a violation of the requirements of Section 409A of the Code.

 

(1)  Note:  For Joe Mills’ Change of Control
Agreement, a majority of the Board will make the Sufficiency Determination.

 

9

 

(c)           Successors.  This Agreement and all rights hereunder are
personal to the Executive and shall not be assignable by the Executive;
provided, however, that any amounts that shall become payable under this
Agreement prior to the Executive’s death shall inure to the benefit of the
Executive’s heirs and other legal representatives, as the case may be.  This Agreement shall bind, and inure to the
benefit of, the Company and any successor to the Partnership Entities pursuant
to a Change of Control.  The Company
shall require any successor to the Partnership Entities pursuant to a Change of
Control to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform if
no succession had taken place.  Upon such
assumption by the successor, the Company automatically shall be released from
all liability hereunder.  In the event a
successor does not assume this Agreement, the benefits payable pursuant to Section 3
will be paid immediately prior to the Change of Control.

 

(d)           Unfunded Obligation.  All
benefits due to the Executive under this Agreement are unfunded and unsecured
and are payable out of the general funds of the Company.

 

(e)           Limitation on Rights Conferred.  Neither
the Agreement nor any action taken hereunder will be construed as (i) giving
the Executive the right to continue in the employ or service of the Company or
an affiliate; (ii) interfering in any way with the right of the Company or
any affiliate to terminate the Executive’s employment or service at any time;
or (iii) giving the Executive any claim to be treated uniformly with other
employees.

 

(f)            Entire Agreement.  Except as otherwise
specifically provided herein, this Agreement constitutes the entire agreement
between the parties respecting the subject matter hereof and supersedes any
prior agreements respecting severance benefits upon a Change of Control.  No amendment to this Agreement shall be
deemed valid unless in writing and signed by the parties.  A waiver of any term, covenant, agreement or
condition contained in this Agreement shall not be deemed a waiver of any other
term, covenant, agreement or condition, and any waiver of any default in any
such term, covenant, agreement or condition shall not be deemed a waiver of any
later default thereof or of any other term, covenant, agreement or
condition.  Any disagreements over the
payment of amounts under, or otherwise with respect to, this Agreement shall be
resolved in accordance with the claims procedures attached hereto as Exhibit A.

 

(g)           Severability.  If any provision of the Agreement is held to
be illegal or invalid for any reason, the illegality or invalidity will not
affect the remaining provisions of the Agreement, but such provision will be
fully severable and the Agreement will be construed and enforced as if the
illegal or invalid provision had never been included herein.

 

(h)           Notices.  Any notice required or permitted to be given
by this Agreement shall be effective only if in writing, delivered personally
or by courier or by facsimile transmission or sent by express, registered or
certified mail, postage prepaid, (i) to the Executive at the last address
he has filed with the Company, and (ii) to the Company at its principal
executive offices, or at such other places that either party may designate by
notice to the other.

 

10

 

(i)            Application of Section 409A.  The
amounts payable pursuant to Section 3 of this Agreement are intended to
comply with the short-term deferral exception to Section 409A of the
Code.  To the extent that the Executive
is a “specified employee” within the meaning of the Treasury Regulations issued
pursuant to Section 409A of the Code (the “Section 409A Regulations”) as of
the Executive’s Date of Termination, no amount that constitutes a deferral of
compensation which is payable on account of the Executive’s separation from
service shall be paid to the Executive before the date (the “Delayed Payment Date”)
which is first day of the seventh month after the Executive’s Date of
Termination or, if earlier, the date of the Executive’s death following such
Date of Termination.  All such amounts
that would, but for this Section 4(i), become payable prior to the Delayed
Payment Date will be accumulated and paid on the Delayed Payment Date.  No interest will be paid by the Company with
respect to any such delayed payments. 
For purposes of Section 409A of the Code, each payment or amount
due under this Agreement shall be considered a separate payment, and the
Executive’s entitlement to a series of payments under this Agreement is to be
treated as an entitlement to a series of separate payments.

 

(j)            Governing Law.  All questions arising with
respect to the provisions of the Agreement and payments due hereunder will be
determined by application of the laws of the State of Texas, without giving
effect to any conflict of law provisions thereof, except to the extent Texas
law is preempted by federal law.

 

(k)           Word Usage.  Words used in the masculine shall apply to
the feminine, where applicable, and wherever the context of the Agreement
dictates, the plural shall be read as the singular and the singular as the
plural.

 

[Signature Page Follows]

 

11

 

IN WITNESS WHEREOF, the parties hereto have
executed this Agreement effective as of the Effective Date.

 

 

	
   

  	
  EAGLE ROCK ENERGY G&P, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Name]

  

 

12

 

EXHIBIT A

 

CLAIMS PROCEDURES

 

(a)           Any individual who believes that he or she has been
denied a benefit to which he or she is entitled under this Agreement
(hereinafter referred to as a “Claimant”)
may file a written request for such benefit with the Board.  In order to file a claim for benefits under
this Agreement, the Claimant must submit to the Board a written claim for
benefits containing a description of (i) an alleged failure to receive a
benefit payable under this Agreement or (ii) an alleged discrepancy
between the amount of a benefit owed and the amount of a benefit the Claimant
received under this Agreement.  In
connection with the submission of a claim, the Claimant may examine this
Agreement and any other relevant documents relating to his or her claim, and
the Claimant may submit written comments relating to such claim to the
Board.  If the Claimant needs additional
information regarding his or her claim for benefits, the Claimant can submit a
written request to the Board for such information.  Failure to furnish a written claim
description or to otherwise comply with this claim submission procedure shall
invalidate the Claimant’s claim unless the Board determines that it was not
reasonably possible to comply with such procedure.

 

(b)           A Claimant shall be
permitted to examine any relevant document relating to his or her claim and
submit written comments or other information to the Board to supplement his or
her claim.  Within 90 days from the date
the Claimant filed the claim (or such longer period as may be necessary due to
unusual circumstances or to enable the Claimant to submit written comments, but
in any event no longer than the time period described in clause (c) hereof),
the Board shall make a decision as to whether the claim is to be approved,
modified, or denied.  If the Board
approves the claim, then the Company shall process the claim as soon as
administratively practicable.

 

(c)           In the event of an “Adverse Benefit Determination”
(which includes a denial or modification of a Claimant’s claim, or an
invalidation for failing to follow this claim submission procedure), the
Claimant shall be notified in writing not later than 90 days following the date
the Claimant filed his or her claim (or within 180 days under special
circumstances, in which case the Claimant will be informed of the extension and
the circumstances requiring the extension in writing prior to its commencement)
of the following:

 

(i)            The specific
reason or reasons for the Adverse Benefit Determination;

 

(ii)           The provisions
of this Agreement upon which the Adverse Benefit Determination is based;

 

(iii)          Any additional
material or information necessary to perfect the claim and the reasons why such
material or information is necessary;

 

(iv)          The claims
review procedure set forth in this Agreement; and

 

(v)           A description
of the Claimant’s right to bring a civil action under the 

 

1

 

Employee
Retirement Income Security Act of 1974, as amended (“ERISA”),
with respect to the Adverse Benefit Determination.

 

(d)           Within 60 days following
receipt of an Adverse Benefit Determination, the Claimant may submit a written
request to the Board for review of such determination.  During this review process, the Claimant
shall have the opportunity to submit written comments and other information
relating to his or her claim and the Claimant shall have reasonable access to,
and copies of, all documents and other information related to his or her claim
free of charge.  Any items the Claimant
submits to the Board shall be considered without regard to whether such items
were considered in the initial benefit determination.

 

(e)           Within 60 days following the
Claimant’s request for review (or within 120 days under special circumstances,
in which case the Claimant will receive written notice of the extension and the
circumstances requiring the extension prior to its commencement), the Board
must, after providing the Claimant with a full and fair review, render its
final decision in writing (or electronically) to the Claimant.  However, the review process may be delayed if
the Claimant fails to provide information that is requested by the Board.  If the Board approves the claim on review,
then the Company shall process the claim as soon as administratively practicable.  In the event of an Adverse Benefit
Determination on review, the Board’s final decision shall include:

 

(i)            The specific
reason or reasons for the Adverse Benefit Determination;

 

(ii)           The provisions
of this Agreement upon which the Adverse Benefit Determination is based;

 

(iii)          A statement
that the Claimant is entitled to reasonable access to, and copies of, all
documents and other information related to the claim free of charge; and

 

(iv)          A description
of the Claimant’s right to bring a civil action under ERISA with respect to the
Adverse Benefit Determination.

 

(f)            A Claimant may, by
submitting a written statement to the Company, authorize an individual or
entity to pursue his or her claim for benefits under this Agreement and/or the
Claimant’s request for a review of an Adverse Benefit Determination made with
respect to his or her claim.

 

2Exhibit 10.1

 

AMENDMENT NO. 1 TO

TERM LOAN AND SECURITY AGREEMENT

 

THIS
AMENDMENT NO. 1 TO TERM LOAN AND SECURITY AGREEMENT, dated as of July 26,
2010 (this “Amendment No. 1”), is by and among Wells Fargo Bank,
National Association (as successor by merger to Wachovia Bank, National
Association), in its capacity as administrative agent for the Lenders (as
hereinafter defined) pursuant to the Loan Agreement defined below (in such
capacity, “Agent”), the parties to the Loan Agreement as lenders
(individually, each a “Lender” and collectively, “Lenders”), CPG
International I Inc., a Delaware corporation (“CPG I”), Scranton
Products, Inc., a Delaware corporation (“Scranton”), AZEK Building
Products, Inc., a Delaware corporation (“AZEK”), Procell Decking
Inc., a Delaware corporation (“Procell”, and together with CPG I,
Scranton and AZEK, each individually a “Borrower” and collectively, “Borrowers”),
CPG International Inc., a Delaware corporation (“Parent”), Santana
Products Inc., a Delaware corporation (“Santana”), CPG Sub I
Corporation, a Delaware Corporation (“Sub I”), Vycom Corp., a Delaware
corporation (“Vycom”) and Sanatec Sub I Corporation, a Delaware
corporation (“Sanatec”, and together with Parent, Santana, Sub I, Vycom,
each individually a “Guarantor” and collectively “Guarantors”).

 

W  I
T  N  E  S  S  E  T  H :

 

WHEREAS,
Agent, Lenders, Borrowers and Guarantors have entered into financing
arrangements pursuant to which Lenders (or Agents on behalf of Lenders) made
loans to Borrowers as set forth in the Term Loan and Security Agreement, dated February 29,
2008, by and among Agent, Lenders, Borrowers and Guarantors (as the same now
exists or may hereafter be amended, modified, supplemented, extended, renewed,
restated or replaced, the “Loan Agreement”) and other agreements,
documents and instruments referred to therein or at any time executed or
delivered in connection therewith or related thereto, including, without
limitation, this Amendment No. 1 (all of the foregoing, including the Loan
Agreement, as the same now exist or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced, being collectively
referred to herein as the “Financing Agreements”);

 

WHEREAS,
Borrowers have requested that Agent and Lenders agree to make certain amendments
to the Loan Agreement, and Agent and Lenders are willing to make such
amendments, subject to the terms and conditions set forth herein; and

 

WHEREAS,
by this Amendment No. 1, Agent, Lenders, Borrowers and Guarantors intend
to evidence such amendments;

 

NOW,
THEREFORE, in consideration of the foregoing and the mutual agreements and
covenants contained herein, the parties hereto agree as follows:

 

1.        Definitions.

 

(a)      Additional
Definition.  As used herein or in the
Financing Agreements, the term “Amendment No. 1” shall mean Amendment No. 1
to Loan Agreement, dated as of July 26, 2010 by and among Borrowers,
Guarantors, Agent and Lenders, and the Loan Agreement and the other Financing
Agreements shall be deemed and are hereby amended to include, in addition and
not in limitation, such definition.

 

(b)      Interpretation.  For purposes of this Amendment No. 1,
all terms used herein which are not otherwise defined herein, including but not
limited to, those terms used in the recitals hereto, shall have the respective
meanings assigned thereto in the Loan Agreement as amended by this Amendment No. 1.

 

 

2.        Amendments.

 

(a)      Excess
Cash Flow.  The definition of “Excess
Cash Flow” in Section 1.65 of the Loan Agreement is hereby deleted in its
entirety.

 

(b)      Maturity
Date.  The definition of “Maturity
Date” in Section 1.104 of the Loan Agreement is hereby amended by
replacing the date “February 28, 2011” therein with “April 30, 2012”.

 

(c)      Amortization.  The last row of the table in Section 2.1(b) of
the Loan Agreement is hereby deleted in its entirety and substituting the
following therefor:

 

	
  March 31,
  2011

  	
   

  	
  $62,500

  	
   

  
	
  June 30, 2011

  	
   

  	
  $62,500

  	
   

  
	
  September 30, 2011

  	
   

  	
  $62,500

  	
   

  
	
  December 31, 2011

  	
   

  	
  $62,500

  	
   

  
	
  March 31, 2012

  	
   

  	
  $62,500

  	
   

  
	
  Maturity Date

  	
   

  	
  $23,937,500 or the remaining outstanding principal
  amount of the Term Loan

  	
   

  

 

(d)      Mandatory
Prepayments.  Section 2.2(b)(iv) is
hereby deleted in its entirety and substituting the following therefor: “[Reserved.]”.

 

(e)      Perfection
of Security Interest.  Section 5.3(d) is
hereby amended by inserting the following at the end thereof:  “or as to the deposit accounts listed in item
3.(b)(ii) of the Supplemental Information Certificate attached to the
Amendment No. 1.”

 

3.        Representations, Warranties and
Covenants.  Each Borrower and Guarantor,
jointly and severally, represents and warrants to Agents and Lenders as
follows, which representations and warranties are continuing and shall survive
the execution and delivery hereof, the truth and accuracy which are a
continuing condition of the making or providing of any Loans to Borrowers:

 

(a)      this
Amendment No. 1 has been duly authorized, executed and delivered by all
necessary action of each Borrower and Guarantor, and is in full force and
effect, and the agreements and obligations of each Borrower and Guarantor
contained herein constitute legal, valid and binding obligations of Borrowers
and Guarantors enforceable against Borrowers and Guarantors in accordance with
their respective terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar law limiting creditors’
rights generally and by general equitable principles;

 

(b)      no
action of, or filing with, or consent of any Governmental Authority, and no
approval or consent of any other Person, is or will be required to authorize,
or is or will be otherwise required in connection with, the execution, delivery
and performance by any Borrower or Guarantor of this Amendment No. 1;

 

(c)      on
the date hereof and after giving effect hereto, no Default or Event of Default
exists or has occurred and is continuing; and

 

(d)      the
representations and warranties contained in Section 8 of the Loan
Agreement are true and correct in all material respects on and as of the date
hereof (except to the extent stated to relate to an earlier date) and after
giving effect hereto and to the Supplemental Information Certificate attached
as Annex hereto (the “Supplemental Information Certificate”).

 

 

4.        Conditions Precedent.  This Amendment No. 1 and the amendments
contained herein shall only be effective upon the satisfaction of each of the
following conditions precedent in a manner satisfactory to Agent:

 

(a)      Agent
shall have received counterparts of this Amendment No. 1, duly authorized,
executed and delivered by Borrowers, Guarantors, Agent and Lenders;

 

(b)      no
Default or Event of Default shall exist or have occurred and be continuing
after giving effect hereto;

 

(c)      the Lenders, as consideration
for the execution of this Amendment No. 1, shall have received
payment of an amendment fee equal to
0.25% of the respective outstanding principal amounts of Term Loans of such
Lenders; and

 

(d)      the
Agent shall have received a fully executed copy of the Amendment No. 2 to
the Loan and Security Agreement, dated February 13, 2008, by and among
Scranton, AZEK and Procell, as borrowers, Parent, CPG I, Santana, Sub I, Vycom,
and Sanatec, as guarantors, the parties hereto from time to time as lenders,
General Electric Capital Corporation, as syndication agent, and the Agent as
the agent, in form and substance satisfactory to the Agent.

 

5.        General.

 

(a)      Effect
of this Amendment.  Except as
expressly provided herein, no other changes or modifications to the Financing
Agreements are intended or implied, and in all other respects the Financing
Agreements are hereby specifically ratified, restated and confirmed by all
parties hereto as of the date hereof.  To
the extent any conflict exists between the terms of this Amendment No. 1
and the other Financing Agreements, the terms of this Amendment No. 1
shall control.

 

(b)      Waiver.  The disclosures in the Supplemental
Information Certificate shall be deemed to have been provided at such time as
was required under the Financing Agreements and all current and past Defaults
or Events of Default, if any, that would have occurred solely as a
result of any delay by the Borrower or the Guarantors in providing such
disclosures at the time otherwise required under the Financing Agreements,
are hereby waived.  This waiver shall be
effective only to the extent specifically set forth herein and shall not
(a) be construed as a waiver of any breach, Default or Event of Default
other than as specifically waived herein nor as a waiver of any breach, Default
or Event of Default of which the Lenders have not been informed by the
Borrowers or the Guarantors, (b) affect the right of the Lenders to demand
compliance by the Borrowers and the Guarantors with all terms and conditions of
the Financing Agreements, except as specifically modified or waived by this
Amendment No. 1, (c) be deemed a waiver of any transaction or future
action on the part of the Borrowers or the Guarantors requiring the Lenders’ or
the Required Lenders’ consent or approval under the Financing Agreements, or
(d) except as waived hereby, be deemed or construed to be a waiver or
release of, or a limitation upon, the Agent’s or the Lenders’ exercise of any
rights or remedies under the Financing Agreements, whether arising as a
consequence of any Default or Event of Default which may now exist or otherwise,
all such rights and remedies hereby being expressly reserved.

 

(c)      Governing
Law.  The validity, interpretation
and enforcement of this Amendment No. 1 and any dispute arising out of the
relationship between the parties hereto, whether in contract, tort, equity or
otherwise, shall be governed by the internal laws of the State of New York but
excluding any principles of conflicts of law or other rule of law that
would cause the application of the law of any jurisdiction other than the laws
of the State of New York.

 

(d)      Jury
Trial Waiver.  BORROWERS, GUARANTORS,
AGENT AND LENDERS HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION ARISING UNDER THIS AMENDMENT NO. 1 OR ANY OF THE
OTHER 

 

 

FINANCING
AGREEMENTS OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AMENDMENT NO. 1 OR ANY OF THE
OTHER FINANCING AGREEMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO IN
EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT,
TORT, EQUITY OR OTHERWISE.  BORROWERS,
GUARANTORS, AGENT AND LENDERS HEREBY AGREE AND CONSENT THAT ANY SUCH CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A
JURY AND THAT ANY BORROWER, ANY GUARANTOR, THE AGENT OR ANY LENDER MAY FILE
AN ORIGINAL COUNTERPART OF A COPY OF THIS AMENDMENT NO. 1 WITH ANY COURT
AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY.

 

(e)      Binding
Effect.  This Amendment No. 1
shall be binding upon and inure to the benefit of each of the parties hereto
and their respective successors and permitted assigns.

 

(f)       Entire
Agreement.  This Amendment No. 1
represents the entire agreement and understanding concerning the subject matter
hereof among the parties hereto, and supersedes all other prior agreements,
understandings, negotiations and discussions, representations, warranties,
commitments, proposals, offers and contracts concerning the subject matter
hereof, whether oral or written.

 

(g)      Counterparts, etc.  This Amendment No. 1 may be executed in
any number of counterparts, each of which shall be an original, but all of
which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of this
Amendment No. 1 by telefacsimile or other electronic method of
transmission shall have the same force and effect as delivery of an original
executed counterpart of this Amendment No. 1.

 

(h)      Expenses.  The Borrowers agrees to pay all reasonable
costs and expenses of the Agent in connection with the preparation, execution
and delivery of this Amendment No.1, including without limitation the
reasonable fees and expenses of the Agent’s legal counsel.

 

(i) No Actions, Claims, Etc.  As of the date hereof, each of the Borrowers
and the Guarantors hereby acknowledges and confirms that it has no knowledge of
any actions, causes of action, claims, demands, damages and liabilities of
whatever kind or nature, in law or in equity, against the Agent, the Lenders,
or the Agent’s or the Lenders’ respective officers, employees, representatives,
agents, counsel or directors arising from any action by such Persons, or
failure of such Persons to act under the Financing Agreements on or prior to
the date hereof.

 

(j) 
General Release.  In consideration
of the Agent’s and the Lenders’ willingness to enter into this Amendment No.1,
each of the Borrowers and Guarantors hereby releases and discharges the Agent,
the Lenders and the Agent’s and the Lender’s respective predecessors, successors,
assigns, officers, managers, directors, employees, agents, attorneys,
representatives, and affiliates (hereinafter all of the above collectively
referred to as the “Bank Group”), from any and all claims,
counterclaims, demands, damages, debts, suits, liabilities, actions
and causes of action of any nature whatsoever, including, without limitation,
all claims, demands, and causes of action for contribution and indemnity,
whether arising at law or in equity, whether known or unknown, whether liability
be direct or indirect, liquidated or unliquidated, whether absolute or
contingent, foreseen or unforeseen, and whether or not heretofore asserted, excluding, however, any claims,
counterclaims, demands, damages,
debts, suits, liabilities, actions and causes of action of any
nature whatsoever to the extent
resulting from the gross negligence or willful misconduct of such member
of the Bank Group, which any Borrower or Guarantor may have or claim to
have against any of the Bank Group in any
way related to or connected with the Financing Agreements and the transactions
contemplated thereby prior to the date hereof.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1
to be duly executed as of the date first written above.

 

	
   

  	
  Agent:

  
	
   

  	
   

  
	
   

  	
  WELLS
  FARGO BANK, NATIONAL ASSOCIATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Jacob Petkovich

  
	
   

  	
  Name: Jacob Petkovich

  
	
   

  	
  Title: Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Lenders:

  
	
   

  	
   

  	
   

  
	
   

  	
  BLACKROCK
  CORPORATE HIGH YIELD FUND, INC.

  
	
   

  	
  BLACKROCK
  CORPORATE HIGH YIELD FUND III, INC.

  
	
   

  	
  BLACKROCK
  HIGH INCOME SHARES

  
	
   

  	
  BLACKROCK
  CORPORATE HIGH YIELD FUND VI, INC.

  
	
   

  	
  BLACKROCK
  CORPORATE HIGH YIELD FUND V, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ AnnMarie Smith

  
	
   

  	
  Name: AnnMarie Smith

  
	
   

  	
  Title: Authorized Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AEA
  MIDDLE MARKET DEBT FUNDING LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Joseph D Carrabino Jr.

  
	
   

  	
  Name: Joseph D Carrabino Jr.

  
	
   

  	
  Title:  President

  

 

[AMENDMENT NO. 1 TO TERM
LOAN AND SECURITY AGREEMENT]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1
to be duly executed as of the date first written above.

 

	
   

  	
  Borrowers:

  
	
   

  	
   

  
	
   

  	
  CPG INTERNATIONAL I INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Amy C. Bevacqua

  
	
   

  	
  Name: Amy C. Bevacqua

  
	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SCRANTON PRODUCTS INC

  
	
   

  	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Amy C. Bevacqua

  
	
   

  	
  Name: Amy C. Bevacqua

  
	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AZEK BUILDING PRODUCTS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Amy C. Bevacqua

  
	
   

  	
  Name: Amy C. Bevacqua

  
	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PROCELL DECKING INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Amy C. Bevacqua

  
	
   

  	
  Name: Amy C. Bevacqua

  
	
   

  	
  Title: Vice President

  

 

[AMENDMENT NO. 1 TO TERM
LOAN AND SECURITY AGREEMENT]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1
to be duly executed as of the date first written above.

 

	
   

  	
  Guarantors:

  
	
   

  	
   

  
	
   

  	
  CPG INTERNATIONAL INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Amy C. Bevacqua

  
	
   

  	
  Name: Amy C. Bevacqua

  
	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SANTANA PRODUCTS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Amy C. Bevacqua

  
	
   

  	
  Name: Amy C. Bevacqua

  
	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CPG SUB I CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Amy C. Bevacqua

  
	
   

  	
  Name: Amy C. Bevacqua

  
	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  VYCOM CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Amy C. Bevacqua

  
	
   

  	
  Name: Amy C. Bevacqua

  
	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SANATEC SUB I CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Amy C. Bevacqua

  
	
   

  	
  Name: Amy C. Bevacqua

  
	
   

  	
  Title: Vice President

  

 

[AMENDMENT NO. 1 TO TERM
LOAN AND SECURITY AGREEMENT]

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