Exhibit 10.1
August 9, 2005
Beacon Sales Acquisition, Inc.
Beacon Roofing Supply Canada Company
50 Webster Ave.
Somerville, MA 02143
Attention: David Grace
Re:
Commitment for Financing for a
$310,000,000 Senior Secured US Credit Facility and a C$15,000,000
Senior Secured Canadian Credit Facility
Ladies and Gentlemen:
General Electric Capital Corporation
(“GE Capital” or “Agent”) has approved the
terms of a $310,000,000 US Senior Secured Credit Facility, and GE
Canada Finance Holding Company has approved the terms of a
C$15,000,000 Canadian Senior Secured Credit Facility (together with
the US Senior Secured Credit Facility, the “Credit
Facility”), upon the general terms and conditions outlined in
the summary of terms attached to this commitment letter (the
“Summary of Terms”). This commitment is based
upon our understanding of the transactions described in the Summary
of Terms and upon the information that you have provided to
us. The Credit Facility would be used to refinance existing
senior indebtedness of Beacon Sales Acquisition, Inc.
(“Beacon”), provide financing for the acquisition by
Beacon of all of the issued and outstanding shares of capital stock
and outstanding warrants to purchase shares of capital stock of SDI
Holding, Inc., a Delaware corporation (“SDI
Holding”), and, indirectly, all of the issued and outstanding
shares of capital stock of SDI Acquisition Guarantor, Inc., a
Delaware corporation (“SDI Acquisition”) and of Shelter
Distribution, Inc., a Delaware corporation
(“Shelter”, together with SDI Holding and SDI
Acquisition, the “Target”), including the repayment of
certain indebtedness of the Target, and provide financing for
future acquisitions, ongoing working capital needs and expenses
relating to the Credit Facility. Unless otherwise indicated,
dollar amounts indicated herein mean lawful currency of the United
States of America.
GE Capital’s affiliate, GE
Capital Markets, Inc. (“GECM”), will seek to
syndicate a portion of the loans and loan commitments under the
Credit Facility to other financial institutions identified by GECM
on the terms and conditions more fully described in the fee letter
dated as of the date hereof between you, GE Capital and GE Canada
(the “Fee Letter”).
By your acceptance of this
Commitment Letter, you agree to pay all costs and expenses incurred
by GE Capital, GE Canada and GECM in connection with due diligence
and analysis, examination and appraisals, environmental analysis,
documentation, negotiation, syndication and closing of the Credit
Facility including, but not limited to, per diem charges of
auditors, appraisers and consultants, legal fees and other
out-of-pocket expenses incurred by GE Capital, GE Canada and GECM,
whether or not GE Capital and GE Canada close the proposed Credit
Facility.
The Summary of Terms is intended to
be indicative of the principal terms of the Credit Facility and
does not purport to specify all of the terms, conditions,
representations and warranties, covenants and other provisions that
will be contained in the final loan documents for the Credit
Facility.
GE Capital and GE Canada are
delivering this Commitment Letter to you in reliance upon the
accuracy of all information furnished to GE Capital and GE Canada
by you or on your behalf and with the understanding that you will
not disclose the contents of this letter or GE Capital’s, GE
Canada’s or GECM’s involvement or interest in providing
financing for the proposed transaction to any third party
(including, without limitation, any financial institution or
intermediary) without GE Capital’s or GE Canada’s prior
written consent other than to the board of directors of Target,
governmental and regulatory authorities and your advisors and
officers on a need-to-know basis. You agree to inform all
such persons who receive information concerning GE Capital, GE
Canada, GECM or this commitment that such information is
confidential and may not be disclosed to any other person. GE
Capital and GE Canada reserve the right to review and approve, in
advance, all materials, press releases, advertisements and
disclosures that you or your affiliates prepare that contain GE
Capital’s, GE Canada’s or any affiliate’s name or
describe GE Capital’s or GE Canada’s financing
commitment.
By executing this Commitment Letter,
you agree, whether or not GE Capital or GE Canada closes the
proposed Credit Facility, to indemnify GE Capital, GE Canada, GECM,
each other lender involved in the Credit Facility, and their
respective affiliates, and their respective directors, officers,
employees, agents, auditors, accountants, consultants and counsel
(each, an “Indemnitee”) from, and hold each of them
harmless against, any and all losses, liabilities, claims, actions,
suits, proceedings, damages or expenses including amounts paid in
settlement, legal fees and defense costs, incurred by any of them
arising out of or by reason of any environmental matters,
investigation, litigation or other proceeding brought or threatened
relating to any loan made or proposed to be made hereunder or
otherwise relating to any such loan made or proposed to be made
hereunder, provided, that you shall have no obligation to an
Indemnitee under this paragraph to the extent resulting from the
gross negligence or willful misconduct of that Indemnitee as
determined by a court of competent jurisdiction. You agree
that in any action arising in connection with this letter or any
transaction contemplated hereby the only damages that may be sought
from GE Capital, GE Canada, GECM, their affiliates, each other
lender or any Indemnitee are those which are direct and reasonably
foreseeable as the probable result of any breach hereof and any
right to indirect, special, exemplary, consequential, or punitive
damages or lost anticipated profits is hereby waived.
You, GE Capital and GE Canada
hereby expressly waive any right to trial by jury of any claim,
demand, action or cause of action arising in connection with this
Commitment Letter, any transaction relating hereto, or any other
instrument, document or agreement executed or delivered in
connection herewith, whether sounding in contract, tort or
otherwise. You, GE Capital and GE Canada consent and agree
that the state or federal courts located in Cook
County, State of Illinois, shall
have exclusive jurisdiction to hear and determine any claims or
disputes between or among any of the parties hereto pertaining to
this Commitment Letter, any transaction relating hereto, any other
financing related thereto, and any investigation, litigation, or
proceeding related to or arising out of any such matters,
provided , that you, GE Capital and GE Canada acknowledge
that any
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appeals from those courts may have to be heard
by a court located outside of such jurisdiction. You, GE
Capital and GE Canada expressly submit and consent in advance to
such jurisdiction in any action or suit commenced in any such
court, and hereby waive any objection which either of them may have
based upon lack of personal jurisdiction, improper venue or
inconvenient forum.
This Commitment Letter is governed
by and shall be construed in accordance with the laws of the State
of Illinois applicable to contracts made and performed in that
State.
GE Capital, GE Canada and GECM shall
have access to all relevant facilities, personnel and accountants,
and copies of all documents which GE Capital, GE Canada or GECM may
request, including business plans, financial statements (actual and
pro forma), books, records, and other documents.
This Commitment Letter and the Fee
Letter supersede all prior discussions, writings, indications of
interest and proposals with respect to the Credit Facility
previously delivered to you or your affiliates by GE Capital or any
of its affiliates. Unless extended in writing by GE Capital,
in its discretion, the commitment contained herein shall expire
upon the first to occur of: (a) 5:00 p.m., Chicago
time on August 10, 2005, unless you shall have executed and
delivered a copy of this letter and the Fee Letter to the attention
of the undersigned prior to that date and time; or
(b) 5:00 p.m., Chicago time on November 1, 2005,
unless the transactions contemplated and described by this
Commitment Letter are consummated on or before that date pursuant
to written credit documentation signed by GE Capital and GE
Canada. Upon expiration of the commitment contained herein,
GE Capital, GE Canada GECM and their affiliates shall have no
liability or obligation hereunder. Expiration of this
commitment shall not affect your obligations hereunder, including
to pay any fees, costs or expenses provided for herein or in any
other agreements entered into between you and GE Capital and GE
Canada.
We appreciate the opportunity you
have given us to deliver a financing commitment and look forward to
working with you.
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Sincerely,
GENERAL ELECTRIC CAPITAL CORPORATION
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By:
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/s/ Jill K. Carabelli
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Name:
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Jill K. Carabelli
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Its Duly Authorized
Signatory
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GE CANADA FINANCE HOLDING COMPANY
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By:
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/s/ Jack F. Morrone
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Name:
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Jack F. Morrone
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Its Duly Authorized
Signatory
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Accepted and Agreed to
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this 9 th day of August,
2005:
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Beacon Sales Acquisition, Inc.
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By:
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/s/ David R. Grace
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Name:
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David R. Grace
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Title:
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CFO
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Accepted and Agreed to
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this 9 th day of August,
2005:
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Beacon Roofing Supply Canada Company
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By:
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/s/ David R. Grace
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Name:
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David R. Grace
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Title:
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CFO
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4
August 9, 2005
Summary of Terms
$310,000,000 Senior Secured US
Credit Facility
C$15,000,000 Senior Secured
Canadian Credit Facility
in Support of Beacon Sales
Acquisition, Inc.’s Acquisition of Target
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US Borrower:
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Beacon Sales Acquisition, Inc. (“US
Borrower”), a company that will acquire all of the equity
interests of Target (as defined in the Commitment
Letter).
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Canadian Borrower:
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Beacon Roofing Supply Canada Company
(“Canadian Borrower”; and together with the US Borrower
“Borrowers”).
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Guarantors:
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Beacon Roofing Supply, Inc. and/or any
other holding company formed to hold US Borrower’s equity
interests (“US Holdings”) and each of US
Borrower’s subsidiaries would be required to unconditionally
guaranty Borrowers’ indebtedness to Agents and Lenders, and
each Borrower would be required to unconditionally guaranty the
other Borrower’s indebtedness to Agents and Lenders. US
Holdings will be a single purpose entity whose sole business will
be to hold its equity position in US Borrower.
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Sponsor:
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Code, Hennessy & Simmons
(“CHS”).
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Administrative Agent:
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General Electric Capital Corporation (“GE
Capital”) would serve as agent
(“Agent”).
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Canadian Agent:
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GE Canada Finance Holding Company (“GE
Canada”) or an affiliate thereof designated by GE Canada
would serve as Canadian agent (“Canadian Agent, together with
Agent, “Agents”)
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Sole Lead Arranger and Sole
Bookrunner:
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GE Capital Markets, Inc.
(“GECM”).
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Lenders:
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A syndicate of financial institutions (including
GE Capital individually) assembled by GECM to provide the Credit
Facility.
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Use of Proceeds:
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i. Acquire the capital stock of Target and
refinance existing indebtedness of Target.
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ii. Refinance and/or restate existing
indebtedness under US Borrower’s existing credit facilities
agented by US Agent (the “Existing US Credit Facility”)
and under Canadian Borrower’s existing credit facilities
agented by Canadian Agent (the “Existing Canadian Credit
Facility” and, together with the Existing US Credit Facility,
the “Existing Credit Facility”).
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iii. Provide for Borrowers’ ongoing
working capital requirements.
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iv. Provide for costs and expenses associated
with the transaction.
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Credit Facility:
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A $310,000,000 US senior secured credit facility
(the “US Credit Facility”) provided by GE Capital and
other Lenders to US Borrower consisting of a revolving credit
facility of $230,000,000 (the “US Revolving Credit
Facility”), which includes a subfacility for $10,000,000 of
letters of credit issued by GE Capital or an affiliate of GE
Capital or by one or more banks or other legally authorized persons
acceptable to GE Capital and guaranteed or otherwise backed by GE
Capital and the other Lenders participating in the Revolving Credit
Facility (the “US LC Subfacility”), a $25,000,000 term
loan A (“US Term Loan
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