Exhibit
10.3


 


Execution
Copy


 


ADVISORY AGREEMENT


 


This Advisory Agreement
(this “Agreement”) is made and entered into as of April 15, 2003 by
and among Euramax International, Inc., a Delaware corporation (“Euramax”
and together with all of the direct and indirect subsidiaries of Euramax, the “Euramax
Group”), and CVC Management LLC, a Delaware limited liability company (“Advisor”).


 


WHEREAS, pursuant to the
Stock Purchase Agreement, dated the date hereof, by and among Euramax,
Citigroup Venture Capital Equity Partners, L.P., CVC Executive Fund LLC and
CVC/SSB Employee Fund, L.P. (collectively, the “Fund”), and the
stockholders of Euramax named therein (the “Purchase Agreement”), the
Fund will purchase at the Closing (as defined in the Purchase Agreement) shares
of Euramax’s common stock from certain stockholders of the Company on the terms
and subject to the conditions set forth in the Purchase Agreement;


 


WHEREAS, Advisor is an
affiliate of the Fund and an indirect wholly-owned subsidiary of Citigroup
Inc.;


 


WHEREAS, Euramax, on
behalf of the Euramax Group, desires to retain Advisor and Advisor desires to
perform for Euramax and/or the Euramax Group certain services;


 


NOW, THEREFORE, in
consideration of the premises and the mutual covenants contained herein and
intending to be legally bound hereby, and for good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties
hereto, effective as of the Closing (the “Effective Time”) and without
any further action required by any party hereto, hereby agree as follows:


 


1.                                       Term.  This Agreement shall be in effect for an
initial term of ten (10) years commencing at the Effective Time (the “Term”),
and shall be automatically extended thereafter on a year to year basis unless
Euramax or Advisor provides written notice of its desire to terminate this
Agreement to the other party 90 days prior to the expiration of the Term or any
extension thereof; provided, however, that this Agreement shall
automatically terminate upon the closing of any transaction that constitutes a
“Change of Control” or a “Public Offering” (as each such term is defined in the
Company’s 2003 Equity Compensation Plan) of the Company.


 


2.                                       Services.
Advisor shall perform or cause to be performed such services for the Euramax
and/or members of the Euramax Group as directed by Euramax’s board of
directors, which may include, without limitation, the following:


 


(a)                                  identification,
support and analysis of acquisitions and dispositions by Euramax or its
subsidiaries;


 


(b)                                 support
and analysis of financing alternatives, including, without limitation, in
connection with acquisitions, capital expenditures and refinancing of existing
indebtedness;


 

















 


(c)                                  finance
functions, including assistance in the preparation of financial projections,
and monitoring of compliance with financing agreements;


 


(d)                                 human
resource functions, including searching and hiring of executives; and


 


(e)                                  other
services for Euramax or its subsidiaries upon which Euramax’s board of
directors and Advisor agree.


 


Notwithstanding any
provision in this Agreement to the contrary, each of the parties hereto
acknowledges and agrees that there are no minimum levels of services required
to be provided to the Euramax Group pursuant to this Agreement.


 


3.                                       Advisory
Fee.


 


(a)                                  Subject
to the terms and conditions herein, payment for services rendered by Advisor
and/or its affiliates pursuant to this Agreement will equal the greater of (i)
$600,000 per annum and (ii) One percent (1%) of annual Consolidated EBITDA (as
defined below).  All fees described in
this Section 3(a) shall be payable to Advisor or its designee on a quarterly
basis in advance (based upon the parties’ estimate of the amount of fees and
expenses that shall become due and payable for such quarter) commencing as of
the Effective Time with respect to the first quarter of the current fiscal year
(all such management fees, being “Advance Management Fees”).  Within ninety days after the end of each
fiscal year of Euramax (commencing with the current fiscal year of Euramax),
the Euramax Group will pay to Advisor an amount equal the greater of (A)
$600,000 and (B) One percent (1%) of Consolidated EBITDA for such fiscal year
as reflected in the audited consolidated financial statements of Euramax for
such year less the aggregate of all Advance Management Fees paid to
Advisor with respect to such fiscal year (the “Management Fees”); provided,
that in no event shall Advisor be required to return any portion of the Advance
Management Fees.  The Management Fees
pursuant to this Section 3(a) for the fiscal year ended December 26, 2003
shall be calculated for the period beginning on December 28, 2002 and
ending on the last day of such fiscal year. 
For purposes hereof, the term “Consolidated EBITDA” means for Euramax
and its subsidiaries, operating income, plus depreciation, amortization, any
non-cash charges relating to write-downs of impaired assets or any other
non-recurring charges and, to the extent deducted in determining operating
income, any fees and expenses incurred pursuant to this Agreement.


 


(b)                                 Transaction
Fees.  The Euramax Group hereby
agrees to pay to Advisor or its designee on the Closing Date (as defined in the
Purchase Agreement) upon the consummation of the transactions contemplated by
the Purchase Agreement a fee for services rendered in connection with the
structuring of and assistance with the transactions contemplated by the
Purchase Agreement and certain other management services in the amount of One
Million Dollars ($1,000,000.00), plus reasonable out-of-pocket expenses.  Such fees shall be payable to Advisor or its
designees by wire transfer to an account designated in writing by the
Advisor.  In addition, during the term
of this Agreement, the Euramax Group shall pay to Advisor or its designees a transaction
fee in connection with the consummation of each acquisition, divestiture or
financing (including any refinancing) by Euramax or any of its subsidiaries in
an amount equal to One (1%) of the value of such transaction, plus reasonable
out-of-pocket expenses;


 


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provided, however, that no
such transaction fee shall be payable in connection with transactions that are
acquisitions, divestitures or financings (including any refinancings) between
or among the Company and one or more of its subsidiaries or between or among
subsidiaries.


 


(c)                                  Collection
of Fee.  Subject to the limitation
described in Section 3(e) below, the decision whether to collect any fee
contemplated by this Agreement (an “Advisory Fee”) in a given period shall be
in the Advisor’s sole discretion.  The
Advisor’s decision not to collect or to defer an Advisory Fee in any given year
shall not be construed to be a waiver of the Advisor’s right to collect a
deferred Advisory Fee or an Advisory Fee in any future period.


 


(d)                                 Euramax
hereby agrees to pay the reasonable out-of-pocket expenses of Advisor and its
affiliates incurred in connection with the performance of the services
contemplated by this Agreement.


 


(e)                                  Restrictions.  Notwithstanding any other provision of this
Section 3, the Euramax Group shall not be required to pay any of the Management
Fees contemplated by Section 3(a), if and to the extent such payment is
expressly prohibited by the provisions of (i) the Indenture dated as of
September 25, 1996, as supplemented by the Amended and Restated
Supplemental Indenture, dated as of December 14, 1999, by and among
Euramax International Limited, certain other subsidiaries of Euramax named
therein and Chase Manhattan Bank as Trustee or (ii) the Second Amended and
Restated Credit Agreement, dated as of March 15, 2002, among the Company,
certain subsidiaries of the Company named therein, the Lenders named therein
and BNP Paribas as Agent, as the same may be amended, modified or supplemented,
from time to time (the “Facility Agreements”), or any other credit,
financing or other agreements or instruments binding upon the Euramax Group or
their properties; provided, however, that if, as a result of the
operation of any such prohibitions, payments otherwise owed hereunder are not
made, such payments shall not be cancelled but rather shall accrue, and shall
be payable by the Euramax group promptly when, and to the extent that, the
Euramax Group is no longer prohibited from making such payments, together with
accrued interest calculated at the Base Rate of interest then charged under the
foregoing Second Amended and Restated Credit Agreement from the date such
payment was due through the date of payment. 
No amendment to this Agreement which results or could reasonably be
expected to result in the incurrence of any additional liabilities by the
Company hereunder shall be effective without the affirmative consent of the
independent members of the board of directors of the Company.  This Section 3(e) will not prohibit nor
restrict, in any manner, the Euramax Group’s obligation to make the payments
specified in Section 3(a) or Section 3(b), to make reimbursements pursuant to
Section 3(d), to provide indemnification pursuant to Section 6, or to
make any other payments contemplated by this Agreement.


 


4.                                       Personnel.  Advisor shall provide and devote to the
performance of this Agreement such partners, employees and agents of Advisor as
Advisor shall deem appropriate to the furnishing of the services required.


 


5.                                       Liability.  Neither Advisor nor any other Indemnitee (as
defined in Section 6 below) shall be liable to Euramax or any of its
subsidiaries or affiliates for any loss, liability, damage or expense arising
out of or in connection with the performance of services contemplated


 


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by this Agreement, unless such loss, liability, damage or expense shall
be proven to result directly from gross negligence, willful misconduct or bad
faith on the part of an Indemnitee acting within the scope of such person’s
employment or authority. Advisor makes no representations or warranties,
express or implied, in respect of the services to be provided by Advisor or any
of the other Indemnitees.  Except as
Advisor may otherwise agree in writing after the date hereof:  (i) Advisor shall have the right to,
and shall have no duty (contractual or otherwise) not to, directly or
indirectly:  (A) engage in the same
or similar business activities or lines of business as Euramax or any of its
subsidiaries, including those competing with Euramax or any of its subsidiaries
and (B) do business with any client or customer of Euramax or any of its
subsidiaries; (ii) neither Advisor nor any officer, director, employee,
partner, affiliate or associated entity thereof shall be liable to Euramax or
any of its subsidiaries or affiliates for breach of any duty (contractual or
otherwise) by reason of any such activities of or of such person’s
participation therein; and (iii) in the event that Advisor acquires
knowledge of a potential transaction or matter that may be a corporate
opportunity for Euramax or any of its subsidiaries, on the one hand, and
Advisor, on the other hand, or any other person, Advisor shall have no duty
(contractual or otherwise) to communicate or present such corporate opportunity
to Euramax or any of its subsidiaries and, notwithstanding any provision of
this Agreement to the contrary, shall not be liable to the Euramax Group or any
of their affiliates for breach of any duty (contractual or otherwise) by
reasons of the fact that Advisor directly or indirectly pursues or acquires
such opportunity for itself, directs such opportunity to another person, or
does not present such opportunity to the Euramax Group.  In no event will any of the parties hereto
be liable to any other party hereto for any indirect, special, incidental or
consequential damages, including lost profits or savings, whether or not such
damages are foreseeable, or in respect of any liabilities relating to any third
party claims (whether based in contract, tort or otherwise) other than the
Claims (as defined in Section 6 below) relating to the service to be provided
by Advisor hereunder.


 


6.                                       Indemnity.  Each of Euramax and its subsidiaries shall
defend, indemnify and hold harmless each of Advisor, its affiliates, members,
partners, employees and agents (collectively, the “Indemnitees”) from
and against any and all loss, liability, damage or expenses arising from any
claim by any person with respect to, or in any way related to, the performance
of services contemplated by this Agreement (including attorneys’ fees)
(collectively, “Claims”) resulting from any act or omission of any of
the Indemnitees, other than for Claims which shall be proven to be the direct
result of gross negligence, bad faith or willful misconduct by an
Indemnitee.  Each of Euramax and its
subsidiaries shall defend at its own cost and expense any and all suits or
actions (just or unjust) which may be brought against Euramax, any of its
subsidiaries or any of the Indemnitees or in which any of the Indemnitees may
be impleaded with others upon any Claims, or upon any matter, directly or
indirectly, related to or arising out of this Agreement or the performance
hereof by any of the Indemnitees, except that if such damage shall be proven to
be the direct result of gross negligence, bad faith or willful misconduct by an
Indemnitee, then Advisor shall reimburse Euramax and its subsidiaries for the
costs of defense and other costs incurred by Euramax and its subsidiaries to
the extent due to such gross negligence, bad faith or willful misconduct.


 


7.                                       Notices.  All notices hereunder shall be in writing
and shall be delivered personally or mailed by United States mail, postage
prepaid, addressed to the parties as follows:


 


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To Euramax or the
Euramax Group:


 


Euramax International,
Inc.


5445 Triangle Parkway,
Suite 350


Norcross, Georgia 30092


Attention:  Chief Executive Officer


Facsimile:  770.263.8031


 


To Advisor:


 


CVC Management LLC


399 Park Avenue, 14th
Floor


New York, NY 10043


Attention:  Joseph M. Silvestri


Facsimile:  212.888.2940


 


8.                                       Assignment.  Neither Euramax nor any member of the
Euramax Group may assign any obligations hereunder to any other party without
the prior written consent of Advisor (which consent shall not be unreasonably
withheld), and Advisor may not assign any Advisor obligations hereunder to any
other party without the prior written consent of Euramax (which consent shall
not be unreasonably withheld); provided, that Advisor may, without
consent of Euramax, assign its rights and obligations under this Agreement to
any Permitted Transferee (as such term is defined in the Securities Holders
Agreement, dated the date hereof, by and among Euramax and the stockholders of
Euramax named therein) of the Fund.


 


9.                                       Successors.  This Agreement and all the obligations and
benefits hereunder shall inure to the successors and assigns of the parties.


 


10.                                 Counterparts.  This Agreement may be executed and delivered
by each party hereto in separate counterparts, each of which when so executed
and delivered shall be deemed an original and all of which taken together shall
constitute but one and the same agreement.


 


11.                                 Entire
Agreement; Modification; Governing Law. 
The terms and conditions hereof constitute the entire agreement between
the parties hereto with respect to the subject matter of this Agreement and
supersede all previous communications, either oral or written, representations
or warranties of any kind whatsoever, except as expressly set forth
herein.  No modifications of this
Agreement nor waiver of the terms or conditions thereof shall be binding upon
either party unless approved in writing by an authorized representative of such
party.  All issues concerning this
Agreement shall be governed by and construed in accordance with the laws of the
State of New York, without giving effect to any choice of law or conflict of
law provision or rule (whether of the State of New York or any other jurisdiction)
that would cause the application of the law of any jurisdiction other than the
State of New York.


 


12.                                 Effective
Time.  This Agreement shall be
effective as of the Effective Time without further action required on the part
of any party hereto.  If the Closing
does not


 


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occur and the Purchase Agreement is terminated, this Agreement shall
have no force or effect and shall be deemed void ab initio.


 


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IN WITNESS WHEREOF, the
parties have executed this Advisory Agreement as of the date first written
above.


 


 


	
   

  	
  EURAMAX INTERNATIONAL,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CVC MANAGEMENT LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


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