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Document Preview Advisory Agreement |
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Title: |
Advisory Agreement |
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Entities: |
Canadian Imperial Bank of Commerce; CIBC World Markets Corp.; Deutsche Bank Securities Inc.; Napco Inc ; UBS Securities LLC; Merrill Lynch & Co., Inc.; Paul, Weiss, Rifkind, Wharton & Garrison |
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Date: |
2004 |
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Size: |
Preview shows 4KB of 20KB total |
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Price: |
$40 |
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ID: |
#1943300 |
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ADVISORY AGREEMENT
ADVISORY AGREEMENT (this "AGREEMENT"), dated as of February 12, 2004,
between PLY GEM INDUSTRIES, INC., a Delaware corporation (the "COMPANY") and
CXCIC LLC, a Delaware limited liability company ("CIC").
WHEREAS, pursuant to a Stock Purchase Agreement, dated as of December
19, 2003 (the "STOCK PURCHASE AGREEMENT"), among Ply Gem Investment Holdings,
Inc., f/k/a CI Investment Holdings, Inc., (the "PARENT"), Nortek, Inc. and WDS
LLC (together with Nortek, Inc., the "SELLERS"), the Sellers have agreed to
sell, upon the terms and subject to the conditions set forth therein, all of the
outstanding shares of stock of the Company to the Parent (the "ACQUISITION");
WHEREAS, simultaneously with the execution and delivery of this
Agreement, the Parent, through its wholly owned subsidiary, Ply Gem Holdings,
Inc., is consummating the Acquisition;
WHEREAS, the Company desires for CIC to provide certain ongoing
advisory and management services to the Company, and CIC is willing to provide
such services subject to the terms and conditions contained herein; and
WHEREAS, all capitalized terms used in this Agreement but not otherwise
defined herein shall have the meaning ascribed to them in the Stock Purchase
Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto agree as follows:
SECTION 1. SERVICES. During the term of this Agreement, CIC
shall provide such acquisition and financial advisory services to the Company
and its subsidiaries as the Board of Directors of the Company shall reasonably
request, including without limitation: general executive and management
services; assistance with the identification, support, negotiation and analysis
of acquisitions and dispositions; assistance with the support, negotiation and
analysis of financial alternatives; and human resource functions.
SECTION 2. COMPENSATION.
(a) In consideration of the services to be provided in
accordance with Section 1, but subject to Sections 2(d) and 2(e), the Company
shall pay to CIC, for each fiscal year of the Company, an advisory fee (the
"ANNUAL FEE") equal to 2% of the Company's EBITDA (as defined below) for such
fiscal year. The Annual Fee shall be pro rated for partial years. The Annual Fee
for each fiscal year shall be paid in 12 installments, payable on or before the
10th day of each month (other than the first month) of such fiscal year and the
first month of the next fiscal year, in an amount equal to 2% of the Company's
EBITDA for the previous month. Notwithstanding the foregoing, at the election of
either CIC or the Company, the Annual Fee for such fiscal
{PAGE}
2
year may be paid in one installment in an amount equal to 99% of the estimated
Annual Fee for such fiscal year (the "ESTIMATED DISCOUNTED ANNUAL FEE"), payable
at any time on or after the Closing, in the case of the Annual Fee for fiscal
year 2004, and on or before the first day of the last month of the Company's
preceding fiscal year, in the case of the Annual Fee for each fiscal year after
fiscal year 2004; PROVIDED, HOWEVER, that if it is determined after the
calculation of the Company's EBITDA for such fiscal year that the amount of such
payment is less than or greater than 99% of the actual Annual Fee for such
fiscal year (the "ACTUAL DISCOUNTED ANNUAL FEE"), then (i) if the Actual
Discounted Annual Fee is greater than the Estimated Discounted Annual Fee, the
Company shall pay to CIC an amount equal to such difference, and (ii) if the
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