Exhibit 10.12

INCREMENTAL AMENDMENT NO. 1

INCREMENTAL AMENDMENT NO. 1, dated as of June 18, 2018 (this “Incremental Amendment”), to the Term Loan Credit Agreement, dated as of September 30, 2013 (as amended by the First Amendment, dated as of February 6, 2014, the Second Amendment, dated as of May 5, 2017, and as further amended, supplemented or otherwise modified prior to giving effect to this Incremental Amendment, the “Credit Agreement”; and the Credit Agreement as so amended, the “Amended Credit Agreement”), among CPG NEWCO LLC (“Holdings”), CPG INTERNATIONAL LLC (as successor-in-interest to CPG International Inc., itself a successor-in-interest to CPG Merger Sub LLC, the “Borrower”), the lenders party thereto from time to time (the “Lenders”), JEFFERIES FINANCE LLC (as successor-in-interest to Barclays Bank PLC), as administrative agent (in such capacity, and as further defined in Section 1.01 of the Credit Agreement, the “Administrative Agent”) and as collateral agent (in such capacity, and as further defined in Section 1.01 of the Credit Agreement, the “Collateral Agent”), and the other agents parties thereto.

W I T N E S S E T H:

WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to make, and have made, certain loans to the Borrower;

WHEREAS, Section 2.19 of the Credit Agreement permits the Borrower to borrow Incremental Term Loans under the Credit Agreement;

WHEREAS, the Borrower has requested to borrow an additional $225,000,000 of term loans (the “2018 Incremental Term Loans” and the commitments in respect thereof, the “2018 Incremental Term Commitments”) for the purpose of financing the acquisition (the “Acquisition”) by the Borrower of Versatex Holdings, LLC (the “Target”) and its Subsidiaries pursuant to that certain Membership Interest Purchase Agreement, dated as of May 11, 2018, by and among the Borrower, the Target and the other parties party thereto (the “Acquisition Agreement”);

WHEREAS, Jefferies Finance LLC, Barclays Bank PLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Deutsche Bank Securities Inc. and Citigroup Global Markets Inc. are acting as joint lead arrangers (the “Lead Arrangers”) in connection with this Incremental Amendment and the arrangement of the 2018 Incremental Term Loans;

WHEREAS, each Person signatory hereto as an “Incremental Term Lender” (each, a “2018 Incremental Term Lender”) has agreed to provide 2018 Incremental Term Commitments in the amount set forth opposite such Person’s name in the commitment schedule attached hereto as Annex I (the “Incremental Commitment Schedule”) under the heading “2018 Incremental Term Commitments”, upon the terms and subject to the conditions set forth herein;

WHEREAS, the 2018 Incremental Term Loans shall be fungible with the term loans outstanding under the Credit Agreement immediately prior to giving effect to the Incremental Amendment Effective Date (the “Existing Term Loans”) and the 2018 Incremental Term Loans and the Existing Term Loans shall constitute one tranche of term loans;

WHEREAS, the Borrower desires to amend the Credit Agreement as further set forth herein;

WHEREAS, as permitted by Section 9.08 of the Credit Agreement, the Credit Agreement may be amended pursuant to an agreement entered into by the Borrower and the Required Lenders;

NOW THEREFORE, in consideration of the premises and mutual covenants hereinafter set forth, the parties hereto agree as follows:

SECTION 1. Definitions. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement. As used in this Incremental Amendment, the following terms shall have the meanings specified below:

“Specified Acquisition Agreement Representations” shall mean such of the representations and warranties made by or on behalf of the Target in the Acquisition Agreement as are material to the interests of the 2018 Incremental Term Loan Lenders, but only to the extent that the Borrower (or its affiliates) has the right (taking into account any applicable cure provisions) to terminate its (or their) obligations under the Acquisition Agreement or decline to consummate the Acquisition without any liability in accordance with the terms thereof as a result of a breach of such representations and warranties in the Acquisition Agreement.

“Specified Representations” shall mean the representations and warranties with respect to the Borrower and the Subsidiary Loan Parties set forth in the following sections of the Credit Agreement: Section 3.01 (but solely with respect to organizational status and organizational power and authority to execute, deliver and perform obligations with respect to this Incremental Amendment), Section 3.02(a) (but solely with respect to this Incremental Amendment), Section 3.02(b)(i) (but solely with respect to this Incremental Amendment, the incurrence of the 2018 Incremental Term Loans and the provision of guarantees and grant of security interests in respect thereof), Section 3.03 (but solely with respect to this Incremental Amendment), Section 3.10, Section 3.11, Section 3.17 (subject to the Limited Conditionality Provisions), Section 3.19 and Section 3.22(a) (solely as to the use of proceeds of the 2018 Incremental Term Loans).

SECTION 2. 2018 Incremental Term Loans.

(a) Subject to the terms and conditions set forth herein and in the Credit Agreement, each 2018 Incremental Term Loan Lender severally agrees (i) to make a 2018 Incremental Term Loan to the Borrower on and as of the Incremental Amendment Effective Date (as defined below) pursuant to Section 2.02 of the Amended Credit Agreement in an aggregate principal amount equal to its 2018 Incremental Term Loan Commitment and (ii) to the terms of the Amended Credit Agreement.

(b) The 2018 Incremental Term Loans shall be Term Loans for all purposes of the Amended Credit Agreement, with the terms and conditions set forth therein as applicable to the “2018 Incremental Term Loans”, the “Effective Date Term Loans” and the “Term Loans”, as applicable, and shall constitute one tranche of term loans with the Existing Term Loans. The 2018 Incremental Term Loans shall be funded on the Incremental Amendment Effective Date as Eurocurrency Loans bearing interest based on the Interest Period selected in the Borrowing Request delivered pursuant to Section 5 below, which Interest Period shall be the same as that of the Existing Term Loans. The 2018 Incremental Term Loan will be issued on the 2018 Incremental Amendment Effective Date in an amount equal to 99.75% of the stated principal amount of the 2018 Incremental Term Loan.

SECTION 3. 2018 Incremental Term Lenders.

(a) As of the Incremental Amendment Effective Date, each 2018 Incremental Term Lender shall be a party to the Amended Credit Agreement and, to the extent provided in this Incremental Amendment, have the rights and obligations of a Lender under the Amended Credit Agreement and under the other Loan Documents and shall be bound by the provisions thereof.

 

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(b) Each 2018 Incremental Term Lender (i) represents and warrants that (A) it has full power and authority, and has taken all action necessary, to execute and deliver this Incremental Amendment and to become a Lender under the Amended Credit Agreement, (B) it meets all the requirements to be a Lender under the Amended Credit Agreement, (C) from and after the Incremental Amendment Effective Date, it shall be bound by the provisions of the Amended Credit Agreement as a Lender thereunder and, to the extent provided in this Incremental Amendment, shall have the obligations of a Lender thereunder, (D) it has received copies of the most recent financial statements delivered pursuant to Section 5.04 of the Credit Agreement, and such other documents and information as it deems appropriate to make its own credit analysis and decision to become a Lender under the Amended Credit Agreement, (E) it has, independently and without reliance upon the Administrative Agent, Collateral Agent, or any other Lender under the Amended Credit Agreement and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to become a Lender under the Amended Credit Agreement, and (F) if it is a Foreign Lender, it has delivered to the Administrative Agent any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by such 2018 Incremental Term Loan; and (ii) agrees that (A) it will, independently and without reliance upon the Administrative Agent, the Collateral Agent or any other Lender under the Amended Credit Agreement, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (B) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender under the Amended Credit Agreement.

SECTION 4. Amendment. Effective as of the Incremental Amendment Effective Date, (a) the Credit Agreement shall be amended and restated in its entirety in the form of the Amended Credit Agreement attached as Exhibit A hereto, (b) the Schedules of the Credit Agreement shall be amended and restated in their entirety in the form attached as Exhibit B hereto and (c) the Exhibits of the Credit Agreement shall be amended and restated in their entirety the form attached as Exhibit C hereto.

SECTION 5. Incremental Amendment Effective Date. This Incremental Amendment shall become effective as of the date (the “Incremental Amendment Effective Date”) on which the following conditions precedent have been satisfied or waived:

(a) The Administrative Agent shall have received this Incremental Amendment, executed and delivered by the Administrative Agent, the Borrower, the 2018 Incremental Term Lenders and the Required Lenders.

(b) Prior to or substantially concurrently with the funding of the 2018 Incremental Term Loans, the Acquisition shall be consummated, in all material respects, in accordance with the terms of the Acquisition Agreement, as amended or otherwise modified, but without giving effect to any amendments, waivers, consents or other modifications thereto which would be materially adverse to the 2018 Incremental Term Loan Lenders without the prior written consent of the 2018 Incremental Term Loan Lenders, such consent not to be unreasonably withheld, delayed or conditioned; provided that (a) any decrease in the purchase price for the Acquisition shall not be deemed to be materially adverse to the 2018 Incremental Term Loan Lenders so long as such decrease is allocated to reduce the 2018 Incremental Term Loans and (b) any increase in the purchase price shall not be materially adverse to the 2018 Incremental Term Loan Lenders so long as such increase is funded by the amounts permitted to be drawn at closing under the 2018 Incremental Term Loans, the ABL Facility, equity contributions from the Sponsors and their respective Affiliates and other equity investors, or Borrower’s cash on hand.

 

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(c) All accrued fees required to be paid to the Administrative Agent, all fees owed to the 2018 Incremental Term Loan Lenders, and all expenses required to be paid or reimbursed on the Incremental Amendment Effective Date (to the extent such expenses are invoiced at least three business days prior to the Incremental Amendment Effective Date except as otherwise agreed by the Borrower), shall have been paid, including, at the Borrower’s option, from the proceeds of the 2018 Incremental Term Loans.

(d) The Administrative Agent shall have received, for the ratable benefit of the existing Lenders, all accrued and unpaid interest to, but not including, the Incremental Amendment Effective Date with respect to the outstanding Existing Term Loans.

(e) The Administrative Agent shall have received (a) from the Target and its Subsidiaries, audited financial statements for the fiscal years ended December 31, 2017, 2016 and 2015, unaudited financial statements for the fiscal quarter ended March 31, 2018 and unaudited financial statements for each subsequent fiscal quarter ended at least 45 days prior to the 2018 Incremental Amendment Effective Date and (b) from CPG Holdings LLC (“Holdings”) and its Subsidiaries audited financial statements for the fiscal years ending September 30, 2017, 2016 and 2015, unaudited financial statements for the fiscal quarter ended March 31, 2018 and unaudited financial statements for each subsequent fiscal quarter ended at least 45 days prior to the Incremental Amendment Effective Date. The Administrative Agent acknowledges receipt as of the date hereof of the audited financial statements for the fiscal years ended December 31, 2017, 2016 and 2015 and the unaudited financial statements for the fiscal quarter ended March 31, 2018, in the case of the Target and its Subsidiaries, and the audited financial statements for the fiscal years ended September 30, 2017, 2016 and 2015 and the unaudited financial statements for the fiscal quarter ended March 31, 2018, in the case of Holdings and its Subsidiaries.

(f) To the extent reasonable and customary and requested at least ten (10) Business Days prior to the Incremental Amendment Effective Date, the 2018 Incremental Term Loan Lenders shall have received all documentation and other information required by bank regulatory authorities under applicable “know-your-customer” and anti-money laundering rules and regulations, including the PATRIOT Act, at least three (3) business days prior to the Incremental Amendment Effective Date.

(g) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower with respect to each Loan Party dated the Incremental Amendment Effective Date and certifying:

(i) that attached thereto is a true and complete copy of the charter or other similar organizational document of each Loan Party and each amendment thereto, certified (as of a date reasonably near the Incremental Amendment Effective Date) as being a true and correct copy thereof by the Secretary of State or other applicable Governmental Authority of the jurisdiction in which each such Loan Party is organized;

(ii) that attached thereto is a true and complete copy of a certificate of the Secretary of State or other applicable Governmental Authority of the jurisdiction in which each such Loan Party is organized, dated reasonably near the Incremental Amendment Effective Date, listing the charter or other similar organizational document of such Loan Party and each amendment thereto on file in such office and, if available, certifying that (1) such amendments are the only amendments to such person’s charter on file in such office, (2) such person has paid all franchise taxes to the date of such certificate and (3) such person is duly organized and in good standing or full force and effect under the laws of such jurisdiction;

 

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(iii) that attached thereto is a true and complete copy of resolutions duly adopted by the Governing Persons of such Loan Party authorizing the execution, delivery and performance of this Incremental Amendment and any other document delivered in connection with this Incremental Amendment and that such resolutions have not been modified, rescinded or amended and are in full force and effect; and

(iv) as to the incumbency and specimen signature of each Responsible Officer executing this Incremental Amendment and any other document delivered in connection with this Incremental Amendment on behalf of such Loan Party (together with a certificate of another officer as to the incumbency and specimen signature of the Responsible Officer executing the certificate pursuant to this Section 5(g)(iv).

(h) The Administrative Agent shall have received a customary legal opinion, in form and substance reasonably acceptable to the Administrative Agent, of (i) Sullivan & Cromwell LLP, New York counsel to the Borrower, and (ii) Clark Hill PLC, special Pennsylvania counsel to Versatex Building Products, LLC.

(i) The Administrative Agent shall have received a solvency certificate substantially in the form of Exhibit D to the Amended Credit Agreement executed by a Financial Officer of Holdings.

(j) The Administrative Agent shall have received a notice pursuant to Section 2.19 of the Credit Agreement.

(k) Subject to the Limited Conditionality Provisions, (i) the Borrower shall have caused (or shall substantially simultaneously with the Incremental Amendment Effective Date cause) the Collateral and Guarantee Requirement to be satisfied, including with respect to the Target and each of its Subsidiaries (other than an Immaterial Subsidiary, an Unrestricted Subsidiary, a Qualified CFC Holding Company, a CFC or a Domestic Subsidiary of a CFC) (the Target and such Subsidiaries, the “Target Loan Parties”) and with respect to any Equity Interest in or Indebtedness of any Subsidiary (including the Target Loan Parties) owned by or on behalf of the Borrower or any other Subsidiary Loan Party and (ii) each document (including any UCC financing statement) required by the Security Documents or reasonably requested by the Administrative Agent (subject to the terms of the Collateral Agreement) to be filed, registered or recorded in order to create in favor of the Administrative Agent, for the benefit of the Secured Parties, a perfected Lien on the Collateral (including in respect of the Collateral of the Target Loan Parties) described therein, prior and superior in right to any other person (other than with respect to Permitted Liens), shall have been filed, registered or recorded or shall have been delivered to the Administrative Agent in proper form for filing, registration or recordation.

(l) No Specified Events of Default shall have occurred or be continuing as of the date hereof.

(m) The Specified Acquisition Agreement Representations shall be true and correct to the extent required by the Limited Conditionality Provisions and the Specified Representations shall be true and correct in all material respects (except in the case of any Specified Representation which expressly relates to a given date or period, such representation and warranty shall be true and correct in all material respects as of the respective date or for the respective period, as the case may be); provided that to the extent that any Specified Representation is qualified by or subject to a “material adverse effect”, “material adverse change” or similar term or qualification, (a) the definition thereof shall be the definition of “Material Adverse Effect” (as defined in the Acquisition Agreement) for purposes of the making or deemed making of such Specified Representation on, or as of, the Incremental Amendment Effective Date (or any date prior thereto) and (b) the same shall be true and correct in all respects.

 

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(n) There shall not have occurred any Material Adverse Effect (as defined in the Acquisition Agreement).

(o) The repayment of the existing indebtedness of the Target, including, without limitation, that certain Credit and Security Agreement by and among Versatex Building Products, LLC, and Versatex Holdings, LLC, the Lenders and Regions Bank, dated September 28, 2016, as amended by that First Amendment to Credit and Security Agreement, dated September 26, 2017 (the repayment of such debt, the “Debt Repayment”) shall have been consummated, or shall be consummated substantially simultaneously with, the borrowings of the 2018 Incremental Term Loans.

(p) Prior to the Incremental Amendment Effective Date, the Administrative Agent shall have received a Borrowing Request in respect of the 2018 Incremental Term Loans.

Notwithstanding anything to the contrary herein or otherwise, to the extent any security interest in the intended Collateral of the Target Loan Parties (other than (x) the delivery of certificates evidencing equity interests for the Borrower and the Guarantors (other than, in the case of the Target and its subsidiaries, with respect to any such certificate that has not been made available to the Borrower at least five business days prior to the Incremental Amendment Effective Date, to the extent the Borrower has used commercially reasonable efforts to procure delivery thereof and (y) any Collateral the security interest in which may be perfected by the filing of a UCC financing statement for entities organized in the United States) is not or cannot be provided or perfected on the Incremental Amendment Effective Date after use by the Borrower of commercially reasonable efforts to do so or without undue burden or expense, then the provision and/or perfection of security interests in such Collateral shall not constitute a condition precedent to the availability of the 2018 Incremental Term Loans on the Incremental Amendment Effective Date, but (a) in the case of certificates evidencing equity interests, may be delivered five Business Days after the Incremental Amendment Effective Date (or such later date as reasoanbly agreed by the Administrative Agent) and (b) in all other cases, may instead be delivered or perfected (notwithstanding anything to the contrary contained in the definition of “Collateral and Guarantee Requirement” in the Amended Credit Agreement or Section 5.10(c) thereof, within 90 days after the Incremental Amendment Effective Date (or such later date as reasonably agreed by the Administrative Agent). The provisions in this paragraph are referred to as the “Limited Conditionality Provisions”.

SECTION 6. Reaffirmation. Each Loan Party hereby:

(a) acknowledges its receipt of a copy of this Incremental Amendment and the Amended Credit Agreement and its review of the terms and conditions thereof and consents to the terms and conditions of this Incremental Amendment and the Amended Credit Agreement and the transactions contemplated thereby, including the extension of credit to the Borrower in the form of the 2018 Incremental Term Loans;

(b) agrees that, notwithstanding the effectiveness of this Incremental Amendment and the Amended Credit Agreement and the consummation of the transactions contemplated thereby, (i) each Security Document to which it is a party shall continue to be in full force and effect and (ii) all guarantees, pledges, grants and other commitments thereunder shall continue to be in full force and effect and shall accrue to the benefit of the Secured Parties, including the holders of the 2018 Incremental Term Loans; and

(c) confirms that neither the amendment and restatement of the Credit Agreement effected pursuant to this Incremental Amendment nor the execution, delivery, performance or effectiveness of this Incremental Amendment and the Amended Credit Agreement (i) impairs the validity, effectiveness or priority of the Liens granted pursuant to any Security Document, and such Liens continue unimpaired with the same priority to secure repayment of all Obligations as defined under the Amended Credit Agreement, whether heretofore or hereafter incurred or (ii) requires that any new filings be made or other action taken to perfect or to maintain the perfection of such Liens.

 

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SECTION 7. Effect of Amendment.

(a) Except as expressly set forth herein, this Incremental Amendment shall not by implication or otherwise limit, impair, constitute a waiver of or otherwise affect the rights and remedies of the Lenders or the Administrative Agent under the Credit Agreement or any other Loan Document, and shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other provision of the Credit Agreement or of any other Loan Document, all of which are ratified and affirmed in all respects and shall continue in full force and affect. Nothing herein shall be deemed to entitle the Borrower to a consent to, or a waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other Loan Document in similar or different circumstances. Nothing in this Incremental Amendment shall be deemed to be a novation of any obligations under the Credit Agreement or any other Loan Document.

(b) On and after the Incremental Amendment Effective Date, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein”, or words of like import, and each reference to the Credit Agreement in any other Loan Document shall be deemed a reference to the Credit Agreement as amended hereby. This Incremental Amendment shall constitute a “Loan Document” for all purposes of the Credit Agreement and the other Loan Documents.

(c) Except as expressly provided herein or in the Credit Agreement, the 2018 Incremental Term Loans shall be subject to the terms and provisions of the Credit Agreement and the other Loan Documents.

SECTION 8. General.

(a) APPLICABLE LAW. THIS INCREMENTAL AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

(b) Counterparts. This Incremental Amendment may be executed in two or more counterparts, each of which shall constitute an original but all of which, when taken together, shall constitute but one contract. Delivery of an executed counterpart to this Incremental Amendment by facsimile or other electronic transmission (e.g., “PDF” or “TIFF”) shall be as effective as delivery of a manually signed original.

(c) Amendments. This Incremental Amendment may be amended, modified or supplemented only by a writing signed by the Administrative Agent, the requisite Lenders and the Borrower in accordance with Section 9.08 of the Credit Agreement.

(d) Headings. Section headings used herein are for convenience of reference only, are not part of this Incremental Amendment and are not to affect the construction of, or be taken into consideration in interpreting, this Incremental Amendment.

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IN WITNESS WHEREOF, the parties hereto have caused this Incremental Amendment to be duly executed and delivered by their respective duly authorized officers as of the day and year first above written.

 

Incremental Amendment to Term Loan Credit Agreement

CPG International LLC

Incremental Amendment to Term Loan Credit Agreement

CPG International LLC