EXHIBIT (b)2
CONFIDENTIAL
MADISON CAPITAL FUNDING LLC
May 9, 2003
The Riverside Company
455 Market Street
Suite 1520
San Francisco, CA 94105-2420
Attention: Loren Schlachet
Re: Commitment Letter
Madison Capital Funding LLC ("Madison") is pleased to advise you, The Riverside
Company (the "Sponsor"), that it is wll1ing to commit $24,500,000 (the
"Commitment") toward senior secured credit facilities (the "Facilities")
consisting of a $10,000.000 term A loan facility, a $8,500,000 term B loan,
facility and a $6,000,000 revolving credit facility for your acquisition of all
or substantially all of the capital stock of The Dwyer Group, Inc. (the
"Borrower"). The Commitment is subject to the terms and conditions of this
commitment letter (the "Commitment Letter"), the attached term sheet (the "Term
Sheet"), and the attached fee letter (the "Fee Letter").
Upon your acceptance of this Commitment Letter, Madison intends to act as
arranger to form a group of financial institutions (together with Madison, the
"Lenders"), for which Madison will act as agent (in such capacity the "Agent"),
to provide a portion of the Facilities. You authorize Madison and its affiliates
to commence syndication efforts immediately and agree to actively assist Madison
in achieving a syndication that is satisfactory to Madison and you. Madison
reserves the right to allocate the commitments offered by the Lenders.
In addition to the conditions to funding or closing set forth in the Term Sheet,
the Commitment is subject to, among other conditions, (i) the satisfactory
completion of due diligence with respect to the Borrower, including, without
limitation, a satisfactory review of proposed organization and legal structure,
tax, labor, ERISA, insurance, significant contracts (including, without
limitation, franchise agreements), (ii) the negotiation and execution of a
definitive credit agreement, intercreditor agreement, and other related loan and
security documents satisfactory to Madison, (iii) there being no material
adverse change (in the reasonable opinion of Madison) in the business, assets,
properties, results of operations, condition (financial or otherwise) or
prospects of the Borrower since March 31, 2003, and (iv) there not having
occurred and being continuing a material disruption of or material adverse
change in the financial, banking or capital markets generally affecting credit
facilities similar to the Facilities which, in Madison's reasonable judgment,
could reasonably be expected to materially impair the syndication of the
Facilities.
You hereby represent and covenant that (a) all information (other than
projections) that has been or will be made available to Madison by you or any of
your representatives is or will be complete and correct in all material respects
and does not or will not contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements contained
therein not materially misleading in light of the circumstances under which such
statements are made and (b) all projections that have been or will be made
available to Madison by you or any of your representatives have been or will be
prepared in good faith based upon assumptions you believe to be reasonable (it
being understood that projections are subject to uncertainties and
contingencies, many of which are beyond your control, and that no
assurance can be given that such projections will be realized). You understand
that in arranging and syndicating the Facilities, we may use and rely on the
information and projections without independent verification thereof.
You hereby agree to indemnify and hold harmless Madison and its affiliates and
their respective directors, officers, employees and affiliates (each an
"indemnified person") from and against any and all losses, claims, damages,
liabilities, actions or other proceedings and expenses (collectively
"indemnified liabilities") that arise out of, result from or in any way relate
to this Commitment Letter or the providing or syndication of the Facilities, and
to reimburse each indemnified person, upon its demand, for any legal or other
expense incurred in connection with investigating, defending or participating in
any such indemnified liability (whether or not such indemnified person is a
party to any action or proceeding out of which any such expenses arise), other
than any of the foregoing incurred to the extent incurred by reason of the gross
negligence or willful misconduct of such indemnified person. No indemnified
person shall be responsible or liable to you or any of your affiliates for any
consequential, punitive or exemplary damages which may be alleged in connection
with this Commitment Letter or the Facilities or the syndication thereof. Your
obligations under this paragraph shall expire upon the execution and delivery by
the Borrower and Madison of definitive loan documentation, but otherwise will
survive the termination of this Commitment Letter.
The reasonable out-of-pocket costs and expenses (including legal fees and
expenses) incurred by Madison in connection with the Facilities shall be payable
upon demand by (x) you, if the transactions contemplated hereby are not
consummated and (y) the Borrower, if the transactions contemplated hereby are
consummated. The fees payable to Madison in connection with the Facilities are
set forth in the Fee Letter.
The terms contained in this Commitment Letter, the Fee Letter and the Term Sheet
are confidential and, except for disclosure to the board of director or managers
and executive officers of Sponsor and Borrower, to professional advisors
retained by Sponsor and Borrower in connection with this Transaction or as may
be required by law or court order, may not be disclosed in whole or in part to
any other person or entity without Madison's prior written consent. No
disclosure permitted above shall create any third-party beneficiary as to the
Commitment. This paragraph shall survive any termination of this Commitment
Letter.
This Commitment Letter will terminate on May 13, 2003, unless on or before that
date you sign and return an enclosed counterpart of this Commitment Letter and
the Fee Letter, and it will expire on September 30, 2003, if the Facilities have
not closed on or before that date.
If the foregoing is satisfactory to you, please indicate your agreement and
acceptance below and return a copy of this Commitment Letter to us, together
with the signed Fee Letter. Upon our receipt of such deliveries, this
Commitment Letter shall become a binding agreement under Illinois law as of the
date so accepted.
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We look forward to working with you towards a successful closing of the
Facilities.
Sincerely,
Madison Capital Funding LLC
By: /s/ CRAIG H. LACY
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Authorized Representative
Agreed and Accepted:
The Riverside Company
By: /s/ LOREN SCHLACHET
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Title: Vice President
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