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PQ ASIA INC. | Niagara Holdings, Inc | PQ Corporation | J.P. Morgan Partners (BHCA), L.P. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
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Exhibit 10.15
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
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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.
(a)
In addition to the
fees payable pursuant to this Agreement, the Company will pay directly or
reimburse the Sponsorship Management Entity and its affiliates for their
respective Out-of-Pocket Expenses (as defined below). For the purposes of this
Agreement, the term “Out-of-Pocket Expenses” means the
reasonable out-of-pocket costs and expenses incurred by the Sponsor Management
Entity and its affiliates in connection with the Management Services provided
under this Agreement, including, without limitation, (a) fees and
disbursements of any independent professionals and organizations, including
independent accountants, outside legal counsel or consultants, retained by the
Sponsor Management Entity or any of its affiliates, (b) costs of any
outside services or independent contractors such as couriers, business
publications, on-line financial services or similar services, retained or used
by the Sponsor Management Entity or any of its affiliates and
(c) transportation, per diem costs, word processing expenses or any
similar expense not associated with its or its affiliates’ ordinary
operations. All payments or reimbursements for Out-of-Pocket Expenses will be
made by wire transfer in same-day funds to a bank account designated by the
Sponsorship Management Entity or its relevant affiliate promptly upon or as
soon as practicable following request for reimbursement in accordance with this
Agreement.
(b)
Apart from the
Out-of-Pocket Expenses of the Sponsorship Management Entity, Holdings will also
incur reimbursable expenses from time to time. For each fiscal year, the
Company shall make cash payments to Holdings in an amount equal to the sum of
(x) any fees payable by Holdings in order to maintain its corporate existence
and (y) any amounts attributable to (i) corporate overhead expenses of
Holdings incurred in the ordinary course of business and (ii) salaries or
other compensation of employees who perform services for both Holdings and
the Company (collectively, the “Holdings Expenses”); provided,
that reimbursements for Holdings Expenses made pursuant to this clause shall
not be deemed as part of the Management Fee or the Transaction Fee. Any
payments of Holdings Expenses made pursuant to this
Section 5(b) shall be made as requested by Holdings in its sole
discretion, exercised in good faith.
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
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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, preparing, pursuing, defending or assisting in the defense of any action, claim, suit, investigation or proceeding for which the Indemnified Party would be entitled to indemnification under the terms of the previous sentence, or any action or proceeding arising therefrom, whether or not such Indemnified Party is a party thereto. The Company will not be liable under the foregoing indemnification provision with respect to any particular loss, claim, damage, liability, cost or expense of an Indemnified Party that is determined by a court, in a final judgment from which no further appeal may be taken, to have resulted primarily from the gross negligence or willful misconduct of such Indemnified Party. The attorneys’ fees and other expenses of an Indemnified Party shall be paid by the Company as they are incurred upon receipt, in each case, of an undertaking by or on behalf of the Indemnified Party to repay such amounts if it is finally judicially determined that the Liabilities in question re
