Exhibit 10.15
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 J.P. Morgan Partners
(BHCA), L.P., a Delaware limited partnership (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 Sponsor Management Entity has
entered into a Stockholders Agreement, dated as of
February 11, 2005, with Holdings and the other Investors (as
defined therein) (as the same may be amended from time to time
hereafter, the “ Stockholders Agreement ”),
relating to the ownership of the common stock of Holdings by the
Investors.
3.
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.
4.
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 $7,500,000 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. It is
expressly agreed that the services to be performed hereunder will
not include investment banking or other financial advisory services
which may be provided by the Sponsor Management Entity or any
of its affiliates to the Company or Holdings in connection with any
specific acquisition, divestiture, refinancing or recapitalization
of the Company or any of its subsidiaries or by Holdings. The
Sponsor Management Entity may be entitled to receive
additional compensation for providing services of the type
specified in the preceding sentence by mutual agreement of the
Company or such subsidiary or Holdings, on the one hand, and the
Sponsor Management Entity or its relevant affiliates, on the other
hand. 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 (the “ Management Fee ”) in
respect of each fiscal year from and including fiscal 2006 in an
annual amount equal to $1,500,000. 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 of the Management Fee shall be paid on January 1,
2006, in an amount equal to $375,000. On each subsequent payment
date, the Company shall pay to the Sponsor Management Entity
$375,000, 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
twelfth anniversary of the date hereof, (ii) such time as the
Sponsor Management Entity and its affiliates then owning beneficial
economic interests in the Company own less in the aggregate than
20% of the beneficial economic interests in the Company initially
owned by the Sponsor Management Entity 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
2
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.
SECTION 5.
Reimbursements
|
