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EXHIBIT 10.2
AGREEMENT FOR CONSULTING SERVICES
THIS AGREEMENT FOR CONSULTING SERVICES is entered into this March 31,
1998, by and between SIMCALA, INC., a Delaware corporation (the "Corporation"),
and CGW SOUTHEAST III, L.L.C., a Delaware limited liability company ("CGW").
BACKGROUND
A. The Corporation desires to engage CGW for the purpose of providing
financial and management consulting services to the Corporation.
B. CGW is willing to accept such engagement upon the terms and
conditions set forth herein.
AGREEMENT
For and in consideration of the above premises and the mutual covenants
and agreements hereinafter set forth, and other good and valuable consideration,
the receipt and sufficiency of which are acknowledged, the parties hereto agree
as follows:
1. SCOPE OF CONSULTING SERVICES. The Corporation retains CGW, and CGW
accepts engagement by the Corporation, to provide financial advisory and
management consulting services to the Corporation and its affiliates. In such
capacity, CGW will assist the Corporation and its affiliates in financial and
strategic planning and analysis. Such consulting services shall include having a
representative of CGW in attendance at all meetings of the Board of Directors of
the Corporation, evaluation of and negotiations with potential candidates for
acquisition by the Corporation, assisting the Corporation in relations with its
lenders, and providing advice to the Corporation on its capital needs and
structure, including general advice and assistance regarding refinancings or
public offerings or sale of the Corporation. CGW agrees to be available to the
Corporation as needed and to cause such services to be provided by persons
employed or retained by or affiliated with CGW or its general partner. Unless
required by reason of the nature of the particular consulting service, such
services may be performed at the offices of CGW.
2. TERM. The term (the "Term") of this Agreement shall commence on
the date hereof and end on the fifth anniversary of the date hereof. This
Agreement may be terminated prior to the expiration of the Term only (i) by
mutual agreement of CGW and the Corporation, (ii) as provided in Section 5
below, or (iii) by the Corporation upon the willful failure of CGW to provide
consulting services hereunder if such failure is not remedied within thirty (30)
days after receipt by CGW of written notice by the Corporation to CGW. Upon any
termination of this Agreement for any reason other than as provided in Section 5
below, CGW's right to receive compensation pursuant to Section 3 hereof shall
cease and terminate.
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3. COMPENSATION.
(a) For the services rendered by CGW hereunder, the Corporation
shall pay to CGW (i) a monthly fee of $15,000 on the first day of each calendar
month occurring during the Term, (ii) a fee with respect to each fiscal year of
the Corporation that ends during the Term in an amount equal to the bonus paid
to the Chief Executive Officer of the Corporation with respect to such fiscal
year, such additional fee to be paid at the same time as such bonus is paid to
the Chief Executive Officer, and (iii) a fee with respect to the portion of the
fiscal year of the Corporation in which this Agreement begins or ends and during
which this Agreement is in effect in an amount equal to the portion of the bonus
paid to the chief executive officer of the Corporation with respect to such
fiscal year pro rated based upon the number of days during such fiscal year this
Agreement is in effect. The amount payable under this Section 3(a) is herein
referred to as the "Retainer Fee."
(b) In addition to the Retainer Fee, the Corporation shall pay
to CGW fees in such amounts as shall be mutually agreed upon in advance for any
services provided by CGW with respect to services provided to the Corporation by
CGW at the request of the Corporation or any of its affiliates which fall
outside the scope of services generally contemplated by Section 1 of this
Agreement.
(c) Upon termination of this Agreement as provided in Section 5
below, the Corporation shall pay to CGW an amount equal to the aggregate
Retainer Fee that would have been paid over the remaining Term had such
termination not occurred. For purposes of determining such amount the bonus
deemed to be paid to the Chief Executive Officer of the Corporation for any
fiscal year of the Corporation ending after any such termination shall be the
average of the annual bonus paid to such officer for the full fiscal years of
the Corporation ended after the date hereof and prior to such termination, and
if no full fiscal years have ended during such period, then the bonus deemed to
be paid to the chief executive officer for each fiscal year of the Corporation
ending after such termination of this Agreement shall be $153,750.
4. EXPENSES. The Corporation shall reimburse CGW for all of CGW's
costs and expenses (other than ordinary overhead) reasonably incurred in
connection with (i) attendance at meetings with the Corporation or any
affiliate, and (ii) provision of its services hereunder. Such reimbursements
shall be paid to CGW in a timely manner in accordance with the regular expense
reimbursement policy of the Corporation and upon submission by CGW of all
documentation ordinarily required by the Corporation's policy on reimbursement
of expenses.
5. CHANGE OF CONTROL. This Agreement shall terminate upon the
occurrence of a Change in Control with respect to the Corporation. As used
herein, a "Change in Control" shall be deemed to have occurred with respect to
the Corporation upon (i) the consummation of any merger, share exchange or
consolidation (other than with an affiliate
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of the Corporation) of the Corporation in which the shareholders of the
Corporation immediately prior to such merger, share exchange or consolidation
shall not following such merger, share exchange or consolidation, own, directly
or indirectly, at least fifty percent (50%) of the aggregate voting power of the
outstanding securities of the continuing or surviving entity, (ii) any issuance
or sale by the Corporation in a single transaction or series of related
transactions of shares of the Corporation's capital stock which constitute after
such issuance and sale fifty percent (50%) or more of the aggregate voting power
of the outstanding securities of the Corporation, other than the issuance and
sale of capital stock in a public offering of such securities or in connection
with the exercise of options to purchase such voting securities granted to its
employees or lenders, (iii) any other transaction or series of transactions in
which the current holders of the Corporation's common stock cease to own,
directly or indirectly, fifty percent (50%) or more of the aggregate voting
power of the outstanding securities of the Corporation, other than through a
public offering of the voting securities of the Corporation or other than in
connection with the exercise of options to purchase voting securities of the
Corporation granted to employees or lenders of the Corporation, or (iv) any sale
in a single transaction or a series of related transactions of all or
substantially all of the assets of the Corporation. The Corporation agrees to
notify CGW promptly of any Change in Control of the Corporation by mailing to
CGW written notice of such Change in Control, it being the intent of this
provision that CGW be informed at all times concerning the ownership of the
Corporation.
6. ENTIRE AGREEMENT. This Agreement embodies the entire agreement of
the parties hereto with respect to the services to be provided by CGW hereunder.
No amendment or modification of this Agreement shall be valid or binding upon
the Corporation or CGW unless made in writing and signed by the parties hereto.
7. INDEPENDENT CONTRACTOR. CGW is and shall be an independent
contractor, and no employment relationship between the Corporation and CGW is
intended to be created hereby.
8. INDEMNIFICATION.
(a) The Corporation shall indemnify and hold harmless CGW and
its affiliates, their respective officers, directors,
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, employees and
agents of CGW or any of CGW's affiliates (each such person
being an "Indemnified Person") from and against any losses,
claims, damages or liabilities related to, arising out of
or in connection with CGW's engagement hereunder.
(b) The Corporation shall reimburse each Indemnified Person for
all reasonable expenses (including fees and expenses of
counsel) as they are incurred in connection with
investigating, preparing, pursuing or defending any action,
claim, suit, investigation or proceeding related to,
arising out of or in
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connection with CGW's engagement hereunder, whether or not
pending or threatened and whether or not any Indemnified
Person is a party; provided however, that if a final
judicial determination is made that any losses, claims,
damages or liabilities (or expenses related thereto) have
resulted from the bad faith or gross negligence of any
Indemnified Person, then each Indemnified Person will remit
to the Corporation any amounts reimbursed under this
subparagraph 8(b).
(c) The Corporation will not be responsible for any losses,
claims, damages or liabilities (or expenses related
thereto) that are finally judicially determined to have
resulted from the bad faith or gross negligence of any
Indemnified Person. The Corporation further agrees that no
Indemnified Person shall have any liability (whether direct
or indirect, in contract or tort or otherwise) to the
Corporation or to any person claiming through the
Corporation (including, without limitation, equity holders
and creditors of the Corporation) for or in connection with
CGW's engagement hereunder except for any such liability
for losses, claims, damages or liabilities incurred by the
Corporation that are finally judicially determined to have
resulted from the bad faith or gross negligence of such
Indemnified Person. If multiple claims are brought against
CGW in an arbitration, with respect to at least one of
which indemnification is permitted under applicable law and
provided for under this Agreement, the Corporation agrees
that any arbitration award shall be conclusively deemed to
be based on claims as to which indemnification is permitted
and provided for, except to the extent the arbitration
award expressly states that the award, or any portion
thereof, is based solely on a claim as to which
indemnification is not available.
(d) The Corporation agrees that each Indemnified Person is
entitled to retain separate counsel of its choice in
connection with any of the matters to which the
indemnification and reimbursement commitments set forth in
subparagraphs 8(a) and 8(b) above relate.
(e) No Indemnified Person seeking indemnification,
reimbursement or contribution under this Agreement will,
without the Corporation's prior written consent, settle,
compromise, consent to the entry of any judgment in or
otherwise seek to terminate any action, claim, suit,
investigation or proceeding referred to in this
subparagraph 8(a) above.
(f) The foregoing rights to indemnity and contribution shall be
in addition to any rights that CGW 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 CGW's engagement. The
Corporation hereby consents to personal jurisdiction and to
service and
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venue in any court in which any claim which is subject to
this Agreement is brought against CGW or any other
Indemnified Person.
(g) The Corporation and CGW agree that if any indemnification
or reimbursement sought pursuant to this Section 8 is
finally judicially determined to be unavailable (except by
reason of the gross negligence or bad faith of any
Indemnified Person), then, whether or not CGW is the person
entitled to indemnification or reimbursement, the
Corporation and CGW shall contribute to the losses, claims,
damages, liabilities and expenses for which such
indemnification or reimbursement is held unavailable in
such proportion as is appropriate to reflect the relative
benefits to the Corporation on the one hand, and CGW on the
other, in connection with the transaction to which such
indemnification or reimbursement relates, and other
equitable considerations; provided however, that in no
event shall the amount to be contributed by CGW exceed the
amount of the fee actually received by CGW hereunder.
9. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Georgia.
10. DELEGATION. CGW hereby delegates to CGW Southeast Management III,
L.L.C. ("Management") the performance of all duties of CGW hereunder, and
directs the Corporation to make payment of the Retainer Fee and all other
amounts due CGW hereunder to Management. The Corporation hereby consents to the
delegation of the performance of CGW's duties hereunder to Management, and
agrees to make payment of the Retainer Fee and such other amounts as so
directed. CGW may terminate the delegation of its duties hereunder to Management
by a written notice to the Corporation which shall be effective upon receipt by
the Corporation. From and after the receipt of such written notice, all amounts
payable hereunder to CGW shall be paid to CGW rather than to Management.
Management agrees to accept the delegation of the duties hereunder from CGW
until such delegation is terminated by CGW, and agrees to provide the consulting
services herein described in accordance with the terms hereof.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
SIMCALA, INC.
By: /s/ C. Edward Boardwine
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Name:
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Title:
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CGW SOUTHEAST III, L.L.C.
By: CGW, Inc., its Manager
By: /s/ William A. Davies
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William A. Davies
Managing Director
CGW SOUTHEAST MANAGEMENT III, L.L.C.
By: /s/ William A. Davies
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William A. Davies
Managing Director
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