Exhibit 10.2

 

EXECUTION VERSION

 

FIRST AMENDMENT

 

This FIRST AMENDMENT, dated as of September 16, 2016 (this “Amendment
Agreement”), to the TERM LOAN CREDIT AGREEMENT dated as of October 1, 2015 (the
“Existing Credit Agreement”), among Beacon roofing supply, inc., a Delaware
corporation (the “Borrower”), the lenders party thereto and CITIBANK, N.A., as
Administrative Agent (the “Administrative Agent”) (capitalized terms used but
not defined herein having the meaning provided in the Existing Credit
Agreement).

 

WITNESSETH

 

WHEREAS, Wells Fargo Securities, LLC and Citibank, N.A. have been appointed to
act as joint lead arrangers and joint bookrunners in connection with this
Agreement (in such capacities, the “Arrangers”);

 

WHEREAS, pursuant to the Existing Credit Agreement, the Existing Term Loan
Lenders (as defined below) have made Initial Term Loans to the Borrower on the
terms and subject to the conditions set forth therein;

 

WHEREAS, each lender holding outstanding Initial Term Loans immediately prior to
the First Amendment Effective Date (as defined below) (each, an “Existing Term
Loan Lender”) that executes and delivers a signature page to this Amendment
Agreement as a “Continuing Term Loan Lender” (each, a “Continuing Term Loan
Lender”) at or prior to 5:00 p.m., New York City time, on September 15, 2016
(the “Signing Date and Time”) will have agreed to the terms of this Amendment
Agreement upon the effectiveness of this Amendment Agreement on the First
Amendment Effective Date. Each Existing Term Loan Lender that does not execute
and deliver a signature page to this Amendment Agreement at or prior to the
Signing Date and Time (each, a “Departing Term Loan Lender”) will be deemed not
to have agreed to this Amendment Agreement, and will be subject to the mandatory
assignment provisions of Section 6.12(b) of the Amended Credit Agreement (as
defined below) upon the effectiveness of this Amendment Agreement on the First
Amendment Effective Date (it being understood that the interests, rights and
obligations of the Departing Term Loan Lenders under the Loan Documents will be
assumed by Wells Fargo Bank, National Association (“Wells Fargo”, in such
capacity, the “New Lender”), in accordance with Section 6.12(b) of the Amended
Credit Agreement and Section 2 hereof);

 

WHEREAS, effective as of the First Amendment Effective Date, the New Lender will
constitute, and each Continuing Term Loan Lender will continue to constitute, a
“Term Loan Lender” and a “Lender” for all purposes of the Amended Credit
Agreement and the other Loan Documents; and

 

WHEREAS, the Borrower has requested that the Existing Credit Agreement be
amended (as so amended, the “Amended Credit Agreement”), to provide for:

 

(a)the reduction of the Applicable Margin applicable to the Initial Term Loans;

 

 

 

 

(b)the reduction of the LIBOR Rate and Base Rate “floor” applicable to the
Initial Term Loans; and

 

(c)the addition and/or modification of certain other provisions, as reflected
herein.

 

NOW, THEREFORE, the parties hereto agree as follows:

 

SECTION 1.          Amendment of the Existing Credit Agreement. Effective as of
the First Amendment Effective Date, the Existing Credit Agreement is hereby
amended as follows:

 

(a)          The following definitions are added in the appropriate alphabetical
order to Section 1.1 of the Existing Credit Agreement:

 

“Bail-In Action” means, as to any EEA Financial Institution, the exercise of any
Write-Down and Conversion Powers by the applicable EEA Resolution Authority in
respect of any liability of such EEA Financial Institution.

 

“Bail-In Legislation” means, with respect to any EEA Member Country implementing
Article 55 of Directive 2014/59/EU of the European Parliament and of the Council
of the European Union, the implementing law for such EEA Member Country from
time to time which is described in the EU Bail-In Legislation Schedule.

 

“EEA Financial Institution” means (a) any credit institution or investment firm
established in any EEA Member Country which is subject to the supervision of an
EEA Resolution Authority, (b) any entity established in an EEA Member Country
which is a parent of an institution described in clause (a) of this definition,
or (c) any financial institution established in an EEA Member Country which is a
subsidiary of an institution described in clause (a) or (b) of this definition
and is subject to consolidated supervision with its parent.

 

“EEA Member Country” means any member state of the European Union, Iceland,
Liechtenstein and Norway.

 

“EEA Resolution Authority” means any public administrative authority or any
person entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.

 

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule
published by the Loan Market Association (or any successor person), as in effect
from time to time.

 

“First Amendment” shall mean that certain First Amendment to the Term Loan
Credit Agreement, dated as of the First Amendment Effective Date, among, inter
alia, the Borrower, the Administrative Agent and the Term Loan Lenders party
thereto.

 

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“First Amendment Effective Date” means September 16, 2016.

 

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution
Authority, the write-down and conversion powers of such EEA Resolution Authority
from time to time under the Bail-In Legislation for the applicable EEA Member
Country, which write-down and conversion powers are described in the EU Bail-In
Legislation Schedule.

 

(b)          The definition of the term “Applicable Margin” set forth in Section
1.1 of the Credit Agreement is hereby amended and restated in its entirety as
follows:

 

“Applicable Margin” means, as of any date, with respect to Initial Term Loans, a
percentage per annum equal to (i) for any day up to (but excluding) the First
Amendment Effective Date, (x) in the case of Initial Term Loans maintained as
Base Rate Loans, 2.00%, and (y) in the case of Initial Term Loans maintained as
LIBOR Loans, 3.00%, and (ii) for any day from (and including) the First
Amendment Effective Date and thereafter, (x) in the case of Initial Term Loans
maintained as Base Rate Loans, 1.75%, and (y) in the case of Initial Term Loans
maintained as LIBOR Loans, 2.75%.

 

(c)          The definition of the term “Base Rate” is hereby amended by
replacing the “2.00%” that appears in clause (d) of such definition with
“1.75%”.

 

(d)          The definition of the term “LIBOR Rate” is hereby amended by
replacing the “1.00%” that appears in the proviso of such definition with
“0.75%”.

 

(e)          Section 5.4(b) is hereby amended by adding immediately after the
phrase “Closing Date” that appears in the first sentence of such section the
following phrase:

 

“or at any time after the First Amendment Effective Date and prior to the date
that is six months after the First Amendment Effective Date”

 

(f)          Section 6.2 is hereby amended to add the following sentence after
the last sentence of such section:

 

“Notwithstanding any other provision contained herein to the contrary, the last
day of each Interest Period in effect with respect to each LIBOR Rate Loan
outstanding immediately prior to the First Amendment Effective Date shall be
deemed to be the First Amendment Effective Date and on the First Amendment
Effective Date, the Borrower shall pay interest on the unpaid principal amount
of each LIBOR Rate Loan that is accrued and unpaid to (but excluding) the First
Amendment Effective Date at the rate per annum applicable to such Interest
Period under Section 6.1(a). Each LIBOR Rate Loan outstanding as of the First
Amendment Effective Date will be deemed continued on the First Amendment
Effective Date as a new LIBOR Rate Loan with an initial Interest Period as set
forth on the Notice of Conversion/Continuation delivered to the Administrative
Agent on the First Amendment Effective Date.

 

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(g)          Section 6.12(b)(ii) is hereby amended to delete the text,
immediately following the word “from” through the end of such clause, and adding
the following in lieu thereof:

 

“(x) the assignee (to the extent of such outstanding principal), (y) the
assignee and/or, with the Borrower’s prior consent, the Borrower (to the extent
of such outstanding accrued interest and fees) or (z) the Borrower (in the case
of all other amounts)”

 

(h)          Section 6.12 is hereby amended to add the following new clause (c)
at the end thereof:

 

“(c) Each party hereto agrees that an assignment and delegation required
pursuant to clause (b) above may, at the Administrative Agent’s request and
notwithstanding anything in Section 13.10 or elsewhere herein to the contrary,
be effected pursuant to an assignment and assumption agreement (or any other
written instrument), in each case, in a form acceptable to the Administrative
Agent, executed by the Borrower, the Administrative Agent and the assignee, and
that the Lender required to make such assignment and delegation need not be a
party thereto.”

 

(i)          Article XIII of the Existing Credit Agreement is hereby amended to
add the following new Section 13.22 in the appropriate numerical order:

 

“SECTION 13.22. Acknowledgement and Consent to Bail-In of EEA Financial
Institutions. Notwithstanding anything to the contrary in any Loan Document or
in any other agreement, arrangement or understanding among the parties hereto or
to any other Loan Document, each party hereto acknowledges that any liability of
any EEA Financial Institution arising under any Loan Document, to the extent
such liability is unsecured, may be subject to the Write-Down and Conversion
Powers of an EEA Resolution Authority and agrees and consents to, and
acknowledges and agrees to be bound by:

 

(a)          the application of any Write-Down and Conversion Powers by an EEA
Resolution Authority to any such liabilities arising hereunder which may be
payable to it by any party hereto that is an EEA Financial Institution; and

 

(b)          the effects of any Bail-in Action on any such liability, including,
if applicable, (i) a reduction in full or in part or cancellation of any such
liability, (ii) a conversion of all, or a portion of, such liability into shares
or other instruments of ownership in such EEA Financial Institution, its parent
entity, or a bridge institution that may be issued to it or otherwise conferred
on it, and that such shares or other instruments of ownership will be accepted
by it in lieu of any rights with respect to any such liability under this
Agreement or any other Loan Document, or (iii) the variation of the terms of
such liability in connection with the exercise of the Write-Down and Conversion
Powers of any EEA Resolution Authority.”

 

  - 4 -

 

 

SECTION 2.          Concerning the Term Loan Lenders and Initial Term Loans.
(a) Subject to the terms and conditions set forth herein and in the Amended
Credit Agreement, on the First Amendment Effective Date, (i) the New Lender
shall become, and each Continuing Term Loan Lender shall continue to be, a “Term
Loan Lender” under the Amended Credit Agreement and (ii) the New Lender shall
have, and each Continuing Term Loan Lender shall continue to have, all the
rights and obligations of a “Term Loan Lender” and a “Lender” holding an Initial
Term Loan under the Amended Credit Agreement.

 

(b)          Pursuant to Section 6.12(b) of the Amended Credit Agreement, on the
First Amendment Effective Date, each Departing Term Loan Lender shall be deemed
to have assigned and delegated its Initial Term Loans to Wells Fargo, as
assignee, at a purchase price equal to par (the “Purchase Price”) and Wells
Fargo agrees to assume the Initial Term Loans of such Departing Term Loan
Lender. Upon (i) payment to a Departing Term Loan Lender of (x) the Purchase
Price with respect to its Initial Term Loans, (y) accrued and unpaid interest to
(but excluding) the First Amendment Effective Date and (z) all other amounts
payable to such Departing Term Loan Lender under the Loan Documents (including
any amounts under Section 6.9 of the Existing Credit Agreement), which, in the
case of clauses (y) and (z) shall be paid by the Borrower and (ii) the
satisfaction of the conditions set forth in Section 6.12(b) of the Amended
Credit Agreement, such Departing Term Loan Lender shall cease to be a party to
the Existing Credit Agreement with respect to the Initial Term Loans so assigned
(and shall not become a party to the Amended Credit Agreement).

 

(c)          Subject to the terms and conditions set forth herein, on the First
Amendment Effective Date, each Continuing Term Loan Lender agrees (x) if the
aggregate principal amount of such Continuing Term Loan Lender’s Initial Term
Loans immediately prior to the First Amendment Effective Date exceeds the
aggregate principal amount of Initial Term Loans such Continuing Term Loan
Lender will be allocated as of the First Amendment Effective Date, to assign to
Wells Fargo, for a purchase price equal to par, a portion of its Initial Term
Loans having an aggregate principal amount equal to the aggregate principal
amount of such Continuing Term Loan Lender’s Initial Term Loans immediately
prior to the First Amendment Effective Date less the aggregate principal amount
of Initial Term Loans such Continuing Term Loan Lender will be allocated as of
the First Amendment Effective Date (as disclosed to such Continuing Term Loan
Lender and the Administrative Agent by Wells Fargo prior to the date hereof) and
Wells Fargo agrees to assume such portion of the Initial Term Loans of such
Continuing Term Loan Lender or (y) if the aggregate principal amount of Initial
Term Loans such Continuing Term Loan Lender will be allocated as of the First
Amendment Effective Date exceeds the aggregate principal amount of such
Continuing Term Loan Lender’s Initial Term Loans immediately prior to the First
Amendment Effective Date, to assume from Wells Fargo, for a purchase price equal
to par, the aggregate principal amount of Initial Term Loans such Continuing
Term Loan Lender will be allocated as of the First Amendment Effective Date (as
disclosed to such Continuing Term Loan Lender and the Administrative Agent by
Wells Fargo prior to the date hereof) less the aggregate principal amount of the
Initial Term Loans of such Continuing Term Loan Lender immediately prior to the
First Amendment Effective Date.

 

(d)          The New Lender, by delivering its signature page to this Amendment
Agreement and assuming Initial Term Loans in accordance with Section 2 hereof,
shall be deemed to have acknowledged receipt of, and consented to and approved,
each Loan Document and each other document required to be approved by the
Administrative Agent (including in its capacity as “collateral agent” under the
Loan Documents), the Required Lenders or any other Lenders, as applicable, on
the First Amendment Effective Date.

 

  - 5 -

 

 

(e)          The Administrative Agent, by delivering its signature page to this
Amendment Agreement, consents to this Amendment Agreement and confirms that the
New Lender is acceptable to it.

 

SECTION 3.          Conditions to Effectiveness of Agreement. The amendment of
the Existing Credit Agreement and associated provisions set forth herein shall
become effective as of the first date on which the following occur or have been
waived in accordance with Section 13.2 of the Existing Credit Agreement (the
“First Amendment Effective Date”):

 

(a)          The Administrative Agent shall have received duly executed
counterparts of (i) this Amendment Agreement from (A) the Borrower, (B)
Continuing Term Loan Lenders constituting the Required Lenders, (C) the New
Lender and (D) the Administrative Agent and (ii) the Reaffirmation Agreement
attached hereto from each Credit Party.

 

(b)          The Borrower shall have paid to the Administrative Agent, for the
account of the Existing Term Loan Lenders, accrued and unpaid interest to (but
excluding) the First Amendment Effective Date and, for the account of the
Departing Term Loan Lenders only, any other amounts payable to them in
connection with this Amendment Agreement in accordance with the terms of the
Loan Documents. In addition, the Borrower shall have paid all fees and other
amounts due and payable on or prior to the First Amendment Effective Date
pursuant to this Amendment Agreement or as separately agreed by the Borrower and
any of the Arrangers and the Borrower shall also have reimbursed all reasonable
and invoiced out-of-pocket expenses of the Administrative Agent and the
Arrangers relating hereto (including those of counsel to the Administrative
Agent and the Arrangers).

 

(c)          At the time of and immediately after giving effect to this
Amendment Agreement, no Default or Event of Default shall have occurred and be
continuing or would result therefrom.

 

(d)          The representations and warranties made or deemed to be made in
Section 4 of this Amendment Agreement shall be true and correct in all material
respects, except for any such representation or warranty that is qualified by
materiality or by reference to Material Adverse Effect, which shall be true and
correct in all respects.

 

(e)          The Administrative Agent shall have received a certificate, dated
the First Amendment Effective Date and signed by an officer of the Borrower,
certifying to the matters set forth in clauses (c) and (d) of this Section 3.

 

(f)          [reserved]

 

(g)          The Borrower shall have given notice to the Administrative Agent
and each Departing Term Loan Lender as required by Section 6.12(b) of the
Existing Credit Agreement.

 

  - 6 -

 

 

(h)          The Administrative Agent shall have received a Notice of
Conversion/Continuation from the Borrower with respect to the Initial Term
Loans.

 

The Administrative Agent shall notify the Borrower, the Existing Term Loan
Lenders and the New Lender of the First Amendment Effective Date and such notice
shall be conclusive and binding. Notwithstanding the foregoing, this Amendment
Agreement shall not become effective, and the obligations of the applicable
Continuing Term Loan Lenders and the New Lender to assume Initial Term Loans as
provided for herein will automatically terminate, if each of the conditions set
forth or referred to in this Section 3 has not been satisfied at or prior to
11:59 p.m., New York City time, on September 16, 2016 (it being understood that
any such failure of this Amendment Agreement to become effective will not affect
any rights or obligations of any Person under the Existing Credit Agreement).

 

SECTION 4.          Representations and Warranties. The Borrower hereby
represents and warrants to the Administrative Agent and each Lender on the First
Amendment Effective Date that:

 

(a)          This Amendment Agreement has been duly authorized, executed and
delivered by the Borrower and constitutes a legal, valid and binding obligation
of the Borrower, enforceable against the Borrower in accordance with its terms,
subject to applicable Debtor Relief Laws or other laws affecting creditors’
rights generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.

 

(b)          The representations and warranties of each Credit Party set forth
in the Loan Documents are true and correct in all material respects, except for
any such representation or warranty that is qualified by materiality or by
reference to Material Adverse Effect, which are true and correct in all
respects, in each case on and as of the First Amendment Effective Date with the
same effect as of made on and as of the First Amendment Effective Date (except
for any such representation or warranty that by its terms is made only as of an
earlier date, which representation and warranty is true and correct in all
material respects as of such earlier date, except for any such representation
and warranty that is qualified by materiality or by reference to Material
Adverse Effect, which are true and correct in all respects as of such earlier
date), and except that the phrase “After giving effect to the Transactions” in
Section 8.16 shall be deemed to be “After giving effect to the transactions to
be consummated on the First Amendment Effective Date”.

 

(c)          No Default or Event of Default has occurred and is continuing or
would result from this Amendment Agreement.

 

SECTION 5.          Effects on Loan Documents; No Novation. (a) Except as
expressly set forth herein, this Amendment Agreement shall not alter, modify,
amend or in any way affect any of the terms, conditions, obligations, covenants
or agreements contained in the Existing Credit Agreement, the Amended Credit
Agreement or any other Loan Document, all of which shall continue to be in full
force and effect and are hereby in all respects ratified and confirmed.

 

  - 7 -

 

 

(b)          The execution, delivery and effectiveness of this Amendment
Agreement shall not operate as a waiver of any right, power or remedy of any
Lender or the Administrative Agent under any of the Loan Documents, nor
constitute a waiver of any provision of the Loan Documents or in any way limit,
impair or otherwise affect the rights and remedies of the Administrative Agent
or the Lenders under the Loan Documents. Nothing herein shall be deemed to
entitle the Borrower or any other Credit Party 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 Amended Credit Agreement
or any other Loan Document in similar or different circumstances.

 

(c)          On and after the First Amendment Effective Date, each reference in
the Amended Credit Agreement to “this Agreement”, “hereunder”, “hereof”,
“herein” or words of like import, and each reference to the “Credit Agreement”,
“thereunder”, “thereof”, “therein” or words of like import (in each case, if
referring to the Existing Credit Agreement) in any other Loan Document, shall be
deemed a reference to the Amended Credit Agreement. The Borrower and the other
parties hereto acknowledge and agree that this Amendment Agreement shall
constitute a Loan Document for all purposes of the Existing Credit Agreement,
the Amended Credit Agreement and the other Loan Documents.

 

(d)          Neither this Amendment Agreement nor the effectiveness of the
Amended Credit Agreement shall extinguish the obligations for the payment of
money outstanding under the Existing Credit Agreement or discharge or release
the Lien or priority of any Security Document or any other security therefor or
any guarantee thereof. Nothing herein contained shall be construed as a
substitution or novation of the Obligations outstanding under the Existing
Credit Agreement or the Security Documents or instruments guaranteeing or
securing the same, which shall remain in full force and effect, except as
modified hereby or by instruments executed concurrently herewith. Nothing
expressed or implied in this Amendment Agreement, the Amended Credit Agreement
or any other document contemplated hereby or thereby shall be construed as a
release or other discharge of any Credit Party under any Loan Document from any
of its obligations and liabilities thereunder.

 

SECTION 6.          Acknowledgement. Each party hereto hereby acknowledges and
agrees that this Amendment Agreement constitutes a written instrument of
assignment and delegation as required by Section 6.12(b) of the Amended Credit
Agreement.

 

SECTION 7.          Further Assurances. The Borrower and each other Credit Party
agrees to take any further action that is reasonably requested by Administrative
Agent to effect the purposes of this Amendment Agreement and the transactions
contemplated hereby.

 

SECTION 8.          GOVERNING LAW, JURISDICTION, WAIVER OF JURY TRIAL. THE
PROVISIONS OF SECTIONS 13.5 AND 13.6 OF THE EXISTING CREDIT AGREEMENT ARE HEREBY
INCORPORATED BY REFERENCE HEREIN, MUTATIS MUTANDIS.

 

  - 8 -

 

 

SECTION 9.          Counterparts. This Amendment Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. Delivery of an executed counterpart of a
signature page of this Amendment Agreement by facsimile or in electronic (i.e.,
“pdf” or “tif”) format shall be effective as delivery of a manually executed
counterpart of this Amendment Agreement.

 

SECTION 10.         Notices. All notices, requests and demands to or upon the
respective parties hereto shall be given in the manner, and become effective, as
set forth in Section 13.1 of the Amended Credit Agreement.

 

[Remainder of page intentionally left blank.]

 

  - 9 -

 

 

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

 

  BEACON ROOFING SUPPLY, INC.       By: /s/ Joseph M. Nowicki     Name: Joseph
M. Nowicki     Title: Executive Vice President, Chief Financial Officer and
Treasurer

 

[Signature Page to First Amendment to Term Loan Credit Agreement]

 

 

 

 

  CITIBANK, N.A., as the Administrative Agent and Collateral Agent       By: /s/
Justin Tichaver     Name: Justin Tichaver     Title: Director

 

[Signature Page to Reaffirmation]