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EXHIBIT 99(2)
FINANCIAL ADVISORY AGREEMENT
THIS FINANCIAL ADVISORY AGREEMENT (this "Agreement") is made and
entered into as of November 27, 1996 among Atrium Corporation, a Delaware
corporation, ("Holdings"), Atrium Companies, Inc., a Delaware corporation, (the
"Company"), and ▇▇▇▇▇, Muse & Co. Partners, L.P., a Texas limited partnership
(together with its successors, "HMCo").
WHEREAS, certain affiliates of HMCo are simultaneously with the
execution of this Agreement, purchasing 32,000,000 shares of the common stock
of Holdings (the "Acquisition") and as a result of the Acquisition, the debt
and equity financing thereof and certain other transactions related thereto
(collectively with the Acquisition, the "Transaction") such affiliates will own
82% of the outstanding shares of common stock of Holdings;
WHEREAS, Holdings and the Company have requested that HMCo render, and
HMCo has rendered, financial advisory services to Holdings and the Company in
connection with the negotiation of the Transaction; and
WHEREAS, Holdings and the Company have requested that HMCo render
financial advisory, investment banking and other similar services to them with
respect to any future proposals for a tender offer, acquisition, sale, merger,
exchange offer, recapitalization, restructuring or other similar transaction
directly involving the Company or any of its subsidiaries and any other person
or entity (collectively, "Add-on Transactions");
NOW, THEREFORE, in consideration of the services rendered and to be
rendered by HMCo to Holdings and the Company, and to evidence the obligations
of Holdings and the Company to HMCo and the mutual covenants herein contained,
Holdings and the Company hereby jointly and severally agree with HMCo as
follows:
1. Retention.
(a) Holdings and the Company hereby acknowledge that they
have retained HMCo, and HMCo acknowledges that it has acted, as financial
advisor to Holdings and the Company in connection with the Transaction.
(b) Each of Holdings and the Company acknowledges that it
has retained HMCo as its exclusive financial advisor in connection with any
Add-on Transactions that may be consummated during the term of this Agreement,
and that Holdings and the Company will not retain any other person or entity to
provide such services in connection with any such Add-on Transaction without
the prior written consent of HMCo. HMCO agrees that it shall provide such
financial advisory, investment banking and other similar services in connection
with any such Add-on Transaction as may be requested from time to time by the
board of directors of Holdings.
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2. Term. The term of this Agreement shall continue until the
earlier to occur of (i) the tenth anniversary of the date hereof or (ii) the
date on which HMCo's affiliates cease to own beneficially, directly or
indirectly, any securities of Holdings, the Company or their successors.
3. Compensation.
(a) As compensation for HMCo's services as financial
advisor to Holdings and the Company in connection with the Transaction, the
Company hereby irrevocably agrees to pay, and Holdings hereby agrees to cause
the Company to pay, to HMCo a cash fee of $2,000,000 to be paid at the closing
of the Transaction, which will occur substantially simultaneously with the
execution of this Agreement. The parties hereto agree that the compensation
due pursuant to this Section 3(a) shall be allocated among the segments of the
financing for the Transaction in proportion to the dollar amount of each such
segment.
(b) As compensation for HMCo's financial advisory,
investment banking and other similar services rendered in connection with any
Add-on Transaction pursuant to Section 1(b) hereof, Holdings and the Company
shall, and Holdings shall cause the Company to, pay to HMCo, at the closing of
any such Add-on Transaction, a cash fee in the amount of 1.5% of the
Transaction Value of such Add-on Transaction. As used herein, the term
"Transaction Value" means the total value of the Add-on Transaction, including,
without limitation, the aggregate amount of the funds required to complete the
Add-on Transaction (excluding any fees payable pursuant to this Section 3(b))
including the amount of any indebtedness, preferred stock or similar items
assumed (or remaining outstanding).
4. Reimbursement of Expenses. In addition to the compensation to
be paid pursuant to Section 3 hereof, Holdings and the Company agree to, and
Holdings shall cause the Company to, reimburse HMCo, promptly following demand
therefor, together with invoices or reasonably detailed descriptions thereof,
for all reasonable disbursements and out-of-pocket expenses (including fees and
disbursements of counsel) incurred by HMCo (i) as financial advisor to Holdings
and the Company in connection with the Transaction or (ii) in connection with
the performance by it of the services contemplated by Section 1(b) hereof.
5. Indemnification. Holdings and the Company jointly and
severally shall indemnify and hold harmless each of HMCo, its affiliates and
their respective directors, officers, controlling persons (within the meaning
of Section 15 of the Securities Act of 1933 or Section 20(a) of the Securities
Exchange Act of 1934), if any, agents and employees (HMCo, its affiliates, and
such other specified persons being collectively referred to as "Indemnified
Persons" and individually as an "Indemnified Person") from and against any and
all claims, liabilities, losses, damages and expenses incurred by any
Indemnified Person (including those arising out of an Indemnified Person's
negligence and fees and disbursements of the respective Indemnified Person's
counsel) which (A) are related to or arise out of (i) actions taken or omitted
to be taken (including any untrue statements made or any statements omitted to
be made) by Holdings and/or the Company or (ii) actions taken or omitted to be
taken by an Indemnified Person with Holdings' or the Company's consent or in
conformity with Holdings' or the Company's instructions or Holdings' or the
Company's actions or omissions or (B) are otherwise related to or arise out of
HMCo's engagement, and will reimburse each Indemnified Person for all costs and
expenses, including fees of any Indemnified Person's
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counsel, as they are incurred, in connection with investigating, preparing for,
defending, or appealing any action, formal or informal claim, investigation,
inquiry or other proceeding, whether or not in connection with pending or
threatened litigation, caused by or arising out of or in connection with HMCo's
acting pursuant to the engagement, whether or not any Indemnified Person is
named as a party thereto and whether or not any liability results therefrom.
Neither Holdings nor the Company will, however, be responsible for any claims,
liabilities, losses, damages or expenses pursuant to clause (B) of the
preceding sentence that have resulted primarily from HMCo's bad faith, gross
negligence or willful misconduct. Holdings and the Company also agree that
neither HMCo nor any other Indemnified Person shall have any liability to
Holdings or the Company for or in connection with such engagement except for
any such liability for claims, liabilities, losses, damages, or expenses
incurred by Holdings and/or the Company that have resulted primarily from
HMCo's bad faith, gross negligence or willful misconduct. Holdings and the
Company further agree that neither of them will, without the prior written
consent of HMCo, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action, suit or proceeding in respect of
which indemnification may be sought hereunder (whether or not any Indemnified
Person is an actual or potential party to such claim, action, suit or
proceeding) unless such settlement, compromise or consent includes an
unconditional release of HMCo and each other Indemnified Person hereunder from
all liability arising out of such claim, action, suit or proceeding. HOLDINGS
AND THE COMPANY EACH HEREBY ACKNOWLEDGE THAT THE FOREGOING INDEMNITY SHALL BE
APPLICABLE TO ALL CLAIMS, LIABILITIES, LOSSES, DAMAGES OR EXPENSES THAT HAVE
RESULTED FROM OR ARE ALLEGED TO HAVE RESULTED FROM THE ACTIVE OR PASSIVE OR THE
SOLE, JOINT OR CONCURRENT ORDINARY NEGLIGENCE OF HMCO OR ANY OTHER INDEMNIFIED
PERSON.
The foregoing right to indemnity shall be in addition to any rights
that HMCo and/or any other Indemnified Person may have at common law or
otherwise and shall remain in full force and effect following the completion or
any termination of the engagement. Holdings and the Company hereby consent to
personal jurisdiction and to service and venue in any court in which any claim
which is subject to this Agreement is brought against HMCo or any other
Indemnified Person.
It is understood that, in connection with HMCo's engagement, HMCo may
also be engaged to act for Holdings and/or the Company in one or more
additional capacities, and that the terms of this engagement or any such
additional engagements may be embodied in one or more separate written
agreements. This indemnification shall apply to the engagement specified in
the first paragraph hereof as well as to any such additional engagement(s)
(whether written or oral) and any modification of said engagement or such
additional engagement(s) and shall remain in full force and effect following
the completion or termination of said engagement or such additional
engagements.
Holdings and the Company further understand and agree that if HMCo is
asked to furnish Holdings and/or the Company a financial opinion letter or act
for Holdings and/or the Company in any other formal capacity, such further
action may be subject to a separate agreement containing provisions and terms
to be mutually agreed upon.
6. Confidential Information. In connection with the performance
of the services hereunder, HMCo agrees not to divulge any confidential
information, secret processes or trade secrets disclosed by Holdings or the
Company to it solely in its capacity as a financial advisor, unless Holdings
and the Company consent to the divulging thereof or such information, secret
processes
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or trade secrets are publicly available or otherwise available to HMCo without
restriction or breach of any confidentiality agreement or unless required by
any governmental authority or in response to any valid legal process.
7. Governing Law. This Agreement shall be construed,
interpreted, and enforced in accordance with the laws of the State of Texas,
excluding any choice-of-law provisions thereof.
8. Assignment. This Agreement and all provisions contained
herein shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns; provided, however, neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned (other than with respect to the rights and obligations of HMCo, which
may be assigned to any one or more of its principals or affiliates) by any of
the parties without the prior written consent of the other parties.
9. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, and the signature of any
party to any counterpart shall be deemed a signature to, and may be appended
to, any other counterpart.
10. Other Understandings. All discussions, understandings and
agreements heretofore made between any of the parties hereto with respect to
the subject matter hereof are merged in this Agreement, which alone fully and
completely expresses the Agreement of the parties hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
▇▇▇▇▇, MUSE & CO. PARTNERS, L.P.
By: HM PARTNERS INC.,
its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chief Financial Officer
ATRIUM CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
President
ATRIUM COMPANIES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
President
[SIGNATURE PAGE TO FINANCIAL ADVISORY AGREEMENT]
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