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PQ ASIA INC. | Niagara Holdings, Inc | PQ Corporation | Peak Investments LLC. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
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Exhibit 10.14
THIS FEE AGREEMENT (this “Agreement”) is made as of February 11, 2005, and is effective as of the Effective Time (as defined below), by and among Niagara Holdings, Inc., a Delaware corporation ( “Holdings”), PQ Corporation, a Pennsylvania corporation (“PQ”), and Peak Investments LLC, a Delaware limited liability company (the “Sponsor Management Entity”).
RECITALS
1.
Holdings, Niagara Acquisition, Inc.,
a wholly-owned subsidiary of Holdings (“Niagara”) and PQ are
parties to that certain Agreement and Plan of Merger, dated as of
December 15, 2004 (the “Merger Agreement”), pursuant to
which Niagara was merged with and into PQ, with PQ remaining as the surviving
entity and a wholly-owned subsidiary of Holdings (the “Merger”).
References in this Agreement to the “Company” refer to PQ as
the surviving corporation in the Merger.
2.
The parties hereto have agreed that the
Company shall pay a Transaction Fee (as defined below) to the Sponsor
Management Entity in connection with the closing of the Merger and the
capitalization of Holdings.
3.
The parties hereto desire that the
Company avail itself, for the term of this Agreement, of the Sponsor Management
Entity’s expertise in providing financial and structural analysis, due
diligence investigations, corporate strategy, other advice and negotiation
assistance, which the parties believe will be beneficial to the Company, and the
Sponsor Management Entity wishes to provide the services to the Company as set
forth in this Agreement in consideration of the payment of a Management Fee (as
defined below).
In consideration of the premises and agreements contained herein and of other good and valuable consideration, the sufficiency of which are hereby acknowledged, the parties agree as follows:
AGREEMENT
SECTION 1. Transaction Fee. Upon the consummation of the Merger, the Company shall
pay a one-time sponsorship fee (the “Transaction Fee”) in
the amount of $2,500,000 to the Sponsor Management Entity, in immediately
available funds, in consideration of the consummation of the Merger and the
capitalization of Holdings.
SECTION 2. Appointment. The Company hereby engages the Sponsor Management
Entity to provide the management services to the Company described in
Section 3 (the “Management Services”) for the term of
this Agreement on the terms and subject to the conditions of this Agreement.
SECTION 3. Management Services.
The Sponsor Management Entity agrees
that during the term of this Agreement, it will provide to the Company, by and
through itself, its affiliates and such officers, employees, representatives
and third parties as the Sponsor Management Entity in its sole discretion may designate
from time to time, management,
advisory and consulting services in relation to the affairs of the Company and its subsidiaries, including, without limitation, (a) advice regarding the structure, terms, conditions and other provisions, distribution and timing of debt and equity offerings and advice regarding relationships with the lenders and bankers of the Company and its subsidiaries, (b) advice regarding the strategy of the Company, (c) advice regarding dispositions and/or acquisitions and (d) such other advice directly related or ancillary to the above financial advisory services as may be reasonably requested by the Company. The obligation of the Sponsor Management Entity to provide Management Services shall terminate on the Termination Date (as defined below).
SECTION 4. Management Fee.
(a)
In consideration of
the Management Services being provided by the Sponsor Management Entity, the
Company will pay to the Sponsor Management Entity a management fee in respect
of each fiscal year from and including fiscal 2006 in the amount of $500,000
annually (the “Management Fee”). The Management Fee shall be paid quarterly and in
advance on the first day of each fiscal quarter of the Company and the first
payment to the Sponsor Management Entity in respect thereof shall be paid on
January 1, 2006, in the amount of $125,000. On each subsequent payment
date, the Company shall pay to the Sponsor Management Entity $125,000, in
respect of the fiscal quarter then beginning. The Management Fee will accrue
and be payable through the first day of the fiscal quarter in which the
Termination Date (as defined below) occurs. All amounts paid by the Company to
the Sponsor Management Entity pursuant to this Section 4 shall be made by
wire transfer in same-day funds to a bank account designated by the Sponsor
Management Entity, and shall not be refundable under any circumstances. For
purposes of this Agreement, “Termination Date” means the earliest of
(i) the fifth anniversary of the date hereof, (ii) the date on which
the Company consummates an initial public offering of its shares of capital
stock registered on Form S-1 (or any equivalent or successor
form under the Securities Act of 1933 and (iii) such earlier date as
the Company and the Sponsor Management Entity may mutually agree upon. For
purposes of this Agreement, it is understood that “beneficial economic
interests in the Company” and “percentage interests in the
Company” shall include indirect interests in the Company through the
ownership of interests in Holdings.
(b)
To the extent the
Company does not pay the Management Fee for any reason, including if prohibited
by any agreement or indenture governing indebtedness of the Company or its subsidiaries,
the payment by the Company to the Sponsor Management Entity of the Management
Fee will be payable immediately on the earlier of (i) the first date on
which the payment of such deferred Management Fee, as the case may be, is
no longer prohibited under any contract applicable to the Company and the
Company is otherwise able to make such payment, and (ii) total or partial
liquidation, dissolution or winding up of the Company. Any quarterly payment of
the Management Fee that is not paid on the scheduled due date will bear
interest, payable in cash on each scheduled due date, at an annual rate of 10%,
compounded quarterly, from the date due until paid.
(c)
Notwithstanding
anything to the contrary herein, (i) the Sponsorship Management Entity
shall have no right to receive the Management Fee in the event Michael R. Boyce
is no longer serving as Chief Executive Officer of the Company at the time any
portion of the Management Fee is payable under this Agreement and (ii) immediately
upon the Sponsorship
2
Management Entity’s receipt from the Company of
notice thereof (a “Waiver Notice”), in the event and for so
long as J.P. Morgan Partners (BHCA), L.P. (“JPMP”) waives
its right to receive all or any portion of the management fee payable to JPMP
(the “JPMP Management Fee”) under that certain Fee
Agreement, dated as of the date hereof (the “JPMP Fee Agreement”),
between Holdings, Niagara and JPMP, the Sponsorship Management Entity shall be
deemed to have waived, and hereby waives, its right to receive the Management
Fee in an amount equal to the product of (x) the quotient of (A) the
portion of the JPMP Management Fee waived by JPMP over (B) the
portion of the JPMP Management Fee that would otherwise have been payable under
the JPMP Fee Agreement during the period covered by JPMP’s waiver, times
(y) the Management Fee payable to the Sponsor Management Entity during the
period covered by JPMP’s waiver. The Waiver Notice shall be signed by the
Company and JPMP and set forth the portion of the JPMP Management Fee waived by
JPMP as well as the duration of JPMP’s waiver thereof, and a calculation
of the amount of the Management Fee being waived by the Sponsorship Management
Entity as provided above, which amount shall not be payable by the Company
without any further action on the part of the Company, JPMP or the
Sponsorship Management Entity.
SECTION 5. Effective Time. This Agreement will become effective at the
“Effective Time”, as defined in the Merger Agreement.
SECTION 6. Indemnification. The Company will indemnify and hold harmless the Sponsor Management Entity, its affiliates and partners (both general and limited), members (both managing and otherwise), officers, directors, employees, agents and representatives (each such person being an “Indemnified Party”) from and against any and all losses, claims, damages and liabilities, including in connection with seeking indemnification, whether joint or several (the “Liabilities”), related to, arising out of or in connection with the Management Services contemplated by this Agreement or the engagement of the Sponsor Management Entity pursuant to, and the performance by the Sponsor Management Entity or its affiliates of the Management Services contemplated by, this Agreement, whether or not pending or threatened, whether or not an Indemnified Party is a party, whether or not resulting in any liability and whether or not such action, claim, suit, investigation or proceeding is initiated or brought by the Company. The Company will reimburse any Indemnified Party for all reasonable costs and expenses (including reasonable attorneys’ fees and expenses) as they are incurred in connection with investigating, pre
