Document:

EX-10.1 CONSULTING AGREEMENT WITH CERBERUS CAPITAL

 

EXHIBIT 10.1

CONSULTING AGREEMENT

     This
Consulting Agreement (“Agreement”), effective August 8, 2005, is made by and between
BlueLinx Corporation (“Company”) and Cerberus Capital Management, L.P. (“Cerberus”).

     WHEREAS, Company is engaged in the business of building products distribution (“Company’s
Business Field”);

     WHEREAS, Cerberus has under retainer consultants that specialize in operations management and
support, and who provide Cerberus with consulting advice concerning portfolio companies in which
funds and accounts for which Cerberus has investment discretion have invested;

     WHEREAS, the Company, with the approval of its Audit Committee, desires to retain the services
of certain of these consultants;

     WHEREAS, Cerberus is willing and desires to make available certain of its consultants’
services to the Company under the terms and conditions set forth herein;

     NOW, THEREFORE, in consideration of the mutual promises and agreements set forth herein, the
parties hereby agree as follows:

     1. Availability and Services of Consultants. Company, with the approval of its Audit
Committee, hereby requests and Cerberus hereby agrees to make available to the Company the
consultants listed on Exhibit A hereto and such other
consultants as may be requested by Company during the term of this
Agreement, at rates not to exceed those listed on Exhibit A (hereinafter referenced as “Consultants”). Each Consultant
shall be responsible for his work product and agrees to use his best efforts to perform all
consulting work on behalf of Company in a timely, competent, diligent, professional manner to the
best of Consultants’ ability and will carry out such duties in a manner consistent with his
fiduciary duties to Company notwithstanding any other obligation Consultant may have to Cerberus.
Cerberus and the Consultants agree that the Consultants’ fiduciary duties shall run solely to the
Company with respect to any work performed on the Company’s behalf.

     2. Compensation. The remuneration to be paid by Company to Cerberus for the performance of
the Consultants shall be identical to the rates paid by Cerberus to the Consultants. Cerberus
shall invoice the Company on a monthly basis (or for any ratable portion of a month actually
worked). The monthly rates for each of the Consultants are set forth in Exhibit A. Company shall
pay only that portion of Consultant’s monthly rate as the Consultant actually works on Company
matters at Company’s request and direction.

     3. Expenses. Consultants will be entitled to reimbursement for reasonable travel expenses
incurred by the Consultants at the request of Company and for other incidental, reasonable and
verifiable out-of-pocket expenses incurred by Consultants in and necessary for the performance of
Consultants’ services hereunder including Consultants’ attendance at meetings on Company’s behalf,
consistent with Company’s travel policies and upon the submission by Consultant of appropriate
receipts or other documentation of such expenses as

 

 

required thereby. Notwithstanding the foregoing, reimbursement of out-of- pocket expenses
shall not exceed dollar thresholds established from time to time by the Audit Committee.

     4. Confidentiality. Cerberus and Consultants recognize and acknowledge that as part of
Consultants engagement hereunder, Consultants will be afforded access to the Company’s confidential
information and that said confidentiality must be maintained for the protection of Company’s
business and proprietary rights. Accordingly, Cerberus and each Consultant agrees that it will
keep in strict confidence, will exercise reasonable efforts to assure safekeeping, and will not, at
any time during the Term of this Agreement or thereafter, except as pre-approved in writing by an
authorized officer of the Company, directly or indirectly, disclose, furnish, disseminate,
distribute, make available, use, copy, duplicate, transfer or remove any: (i) confidential
information of Company and its subsidiaries, parent(s) or other non-Cerberus affiliate(s) or (ii)
confidential information of their customers, vendors, licensors, licensees or suppliers or other
information that has not been the subject of public disclosure or which Company is obligated to
keep confidential. Disclosure of Confidential Information as required by law or court order to any
state, local or federal government or agency thereof shall not be deemed a breach of the Agreement,
provided that Consultant uses reasonable efforts to minimize the disclosure and reasonably
cooperates with Company in obtaining a protective order for the Confidential Information.

     5. Return of Property. Within ten (10) days after termination of this Agreement, Cerberus and
Consultants shall deliver to the Company all Documentation (as defined in Paragraph 7 below),
confidential information, records and reports under Paragraph 4 and property, information, data or
other materials of the Company either developed by or supplied to Consultants under this Agreement,
including the originals and all copies thereof in whatever and all forms stored, except those
materials made generally available to the public by Company without contractual obligation and this
Agreement.

     6. Term and Termination. This Agreement shall become effective as of the date first written
above and shall continue until the earlier of December 31, 2005 or written notice from the Company
or the Audit Committee that the services provided by the Consultants are no longer required. The
Audit Committee shall also have the right to terminate one or more of the Consultants during the
Term of the Agreement. Cerberus may terminate the Agreement upon thirty (30) days written notice.

     7. No License. This Agreement shall not be construed to grant and does not grant to Cerberus
or Consultants any right or license with respect to any invention, patent, trade secret, know-how,
trademark, copyright, confidential information, or confidential information of Company (apart from
the right to make necessary use of the same in rendering Consultants’ services hereunder).

     8. Independent Contractor. The Consultants’ relationship to Company during the Term of this
Agreement shall be that of an independent consultant and contractor, and not as an employee or
agent. Neither Cerberus nor Consultants shall make any commitments, or bind or purport to bind or
represent Company or any of its affiliates in any manner either as its agent or in any other
capacity. Cerberus and the Consultants shall be responsible for the payment of any

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and all taxes or contributions or other sums payable for Workers or Unemployment Compensation
or benefits, as well as all other federal, state or local taxes payable by reason of Cerberus’
receipt of compensation in return for Consultants’ consulting services hereunder and for the
preparation and filing of all related tax returns.

     9. Assignment of Agreement. This Agreement is personal to the Consultants, and neither this
Agreement nor any of Consultants’ obligations hereunder to perform consulting services may be
assigned or delegated by Cerberus or Consultants to anyone else without the written permission of
the Audit Committee.

     10. No Waiver. The failure of either party to object to or take action with regard to any
breach or noncompliance with any provision of this Agreement shall not be construed as a waiver or
modification of that or any other provision, or a waiver of any remedy for the breach or
noncompliance.

     11. Severability. If any provision of this Agreement should be determined by any court of
competent jurisdiction to be invalid, illegal or unenforceable in whole or in part, and such
determination should become final, such provision or portion thereof shall be deemed to be severed
or limited to the extent required to render the remaining provisions and portions of this Agreement
enforceable, and the Agreement shall be enforced to give effect to the intention of the parties
insofar as possible.

     12. Applicable Law. This Agreement is made under and shall be construed and interpreted in
accordance with and governed by the internal laws of the State of Georgia applicable to contracts
made and to be wholly performed within the State of Georgia.

     13. Entire Agreement. This Agreement including its Exhibits contains the entire understanding
of the parties with respect to its subject matter, and supercedes and replaces any prior
agreements, understandings or promises relating to the subject matter hereof. This Agreement may
be supplemented or amended only upon mutual agreement of the parties in writing.

     14. Headings. The Paragraph headings contained in this Agreement are for reference purposes
only and shall not affect in anyway the meaning or interpretation of this Agreement.

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     IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties have executed and
delivered this Agreement intending it to be effective as of the date and year first above written.

	 	 	 	 	 	 	 
	BLUELINX CORPORATION	 	CERBERUS CAPITAL
	 	 	 	 	MANAGEMENT, L.P.
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ Charles H. McElrea	 	By:	 	/s/ Mark Neporent
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Name:

	 	Charles H. McElrea	 	Name:	 	Mark Neporent
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Title:

	 	Chief Executive Officer	 	Title:	 	Managing Director
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Date:

	 	August 8, 2005	 	Date:	 	August 8, 2005
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	ACKNOWLEDGED AND AGREED TO BY:	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	 

	 	Duane Goodwin
	 	 	 	Marc Bourhis
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	 

	 	Peter Kirchof
	 	 	 	Matthew Prevost
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Varun Bedi	 	 	 	 

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EXHIBIT A

COMPENSATION SCHEDULE

	 	 	 	 	 
	Name	 	Focus Area	 	Monthly Rate*
	 
	 	 	 	 
	Duane Goodwin

	 	Specialty Procurement
	 	$25,000
	Peter Kirchof

	 	Sales and Pricing
	 	$20,000
	Varun Bedi

	 	Strategy
	 	$17,000
	Marc Bourhis

	 	Treasury
	 	$25,000
	Matthew Prevost

	 	Procurement
	 	$20,000

*Company will be billed based on the percentage of each consultant’s time spent working on
Company related matters. For example, if a consultant with a monthly rate of $20,000 spends
60% of their time, in a given month, working on Company matters, Cerberus will bill the
Company $12,000 that month for such service.

5Form of Amended Participation Agreement

 

EXHIBIT 10.1

AMENDMENT TO PARTICIPATION LETTER

     The Participation Letter dated January 13, 2005 from Benjamin C. Bishop, Jr., on behalf
of CRT Properties, Inc., to (the “Executive) is hereby amended by deleting the
second full paragraph on page 2 and substituting therefor the following:

     “If a Change in Control occurs during 2005 (or 2006 pursuant to an agreement
reached in 2005) and your employment is terminated by the Company without Cause (as
defined below) or you resign for Good Reason (as defined below), you shall be
entitled to an amount, payable in a lump sum as soon as practicable following the
date of your termination, equal to two times the sum of your annual base salary at
the rate in effect as of the date of your termination and an amount equal to the
average annual cash bonus earned by you for the three calendar years prior to the
date of termination (or actual number of calendar years of employment if fewer than
three, with bonuses annualized for any year of employment of less than 12 months),
provided that you execute, deliver and do not revoke (within the time period
permitted by applicable law) a general release substantially in the form attached
hereto as Appendix I.

     ‘Cause’ exists if you are convicted of, or plead guilty or nolo contendere to,
a felony (other than a felony involving a traffic violation or as a result of
vicarious liability) or if you engage in willful misconduct with regard to the
Company that has a material adverse effect on the Company. Misconduct will not be
deemed ‘willful’ unless you engage in it in bad faith and without a reasonable
belief that it is in, or not opposed to, the interests of the Company.

     ‘Good Reason’ exists if any of the following events occurs:

          (i) an adverse change, not consented to by you, in the nature or scope of your
responsibilities, authorities, powers, functions or duties from the
responsibilities, authorities, powers, functions or duties exercised by you
immediately prior to the Change in Control; or

          (ii) a reduction in your annual base salary or a material reduction in your
annual or long-term incentive opportunity as in effect on the date hereof or as the
same may be increased from time to time hereafter; or

          (iii) the relocation of the Company’s offices at which you are principally
employed immediately prior to the date of a Change in Control to any other location
more than 35 miles away; or

          (iv) the failure by the Company to obtain an effective agreement from any
successor to assume and agree to perform this Agreement.

     In the event that any payment of benefit made or provided to or for your
benefit in connection with this Agreement, your employment with the Company, or any
termination of such employment (a ‘Payment’) is determined to be subject

 

 

to any excise tax (‘Excise Tax’) imposed by Section 4999 of the Internal Revenue
Code of 1986 (or any successor to such Section), you shall be entitled to receive,
prior to the time any Excise Tax is payable with respect to such Payment (through
withholding or otherwise), an additional amount which, after the imposition of all
income, employment, excise and other taxes thereon, is equal to the sum of the
Excise Tax on such Payment plus any penalty and interest assessments
associated with such Excise Tax. The determination of whether any Payment is
subject to an Excise Tax and, if so, the amount to be paid to you and the time of
payment shall be made by an independent auditor (the ‘Auditor’) paid by the Company.
The Auditor shall be a nationally recognized United States public accounting firm
selected by the Company unless you reasonably object to the use of that firm, in
which event the Auditor shall be a nationally recognized United States public
accounting firm chosen by you in consultation with the Company. You agree to
cooperate with the Company in connection with any proceeding or claim relating to
the existence or amount of any liability for Excise Tax. All expenses relating to
any such proceeding or claim (including reasonable attorneys’ fees and other
expenses incurred by you in connection therewith) will be paid by the Company,
promptly upon your request, and any such payment shall (for the avoidance of doubt)
be subject to gross-up under this Agreement in the event that you are subject to
Excise Tax on it.”

     Executed this 17th day of June, 2005 by and between CRT Properties, Inc. and by the
Executive.

	 	 	 	 	 
	 	CRT PROPERTIES, INC.

 	 
	 	By:  	/s/
 	 
	 	 	Title: 	 
	 	 	 	 
	 
	 	 	 
	 	
 	 
	 	Executive

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