Exhibit 10.16
SERVICES AGREEMENT
This Services Agreement (the "Agreement") is entered into on, and effective
as of, April 30, 2005 (the "Effective Date"), by and between WOOD SERVICES LLC,
a Delaware limited liability company (the "Service Provider"), and Wood
Resources LLC, a Delaware limited liability company (the "Company").
RECITALS
WHEREAS, the Service Provider and the Company desire by their execution
of this Agreement to evidence their understanding concerning (1) the employment
by Service Provider of certain individuals currently employed by the Company or
its subsidiaries and provision of services by the Service Provider to the
Company and the subsidiaries of the Company (collectively, with the Company, the
"Relevant Entities") and (2) if and when the Company is converted into a master
limited partnership as is currently contemplated (the "Partnership"), the
transfer of the responsibility for the provision of such services by the Service
Provider to the general partner of the Partnership (which may be effected by
transfer of all member interests in the Service Provider to the general
partner).
AGREEMENTS
NOW, THEREFORE, in consideration of the premises recited above and the
covenants, conditions, and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto (each, a "Party" and together, the "Parties")
hereby agree as follows:
SECTION 1 TERM
The term of this Agreement shall commence on the Effective Date and shall
continue thereafter until terminated in accordance with Section 20 below.
SECTION 2 SERVICES
(a) Services by the Service Provider. During the term of this Agreement,
in consideration for the payments to be made by the Company as
described herein, the Service Provider agrees to provide on behalf of
the Company the corporate and administrative services described below
in this subparagraph (a) (collectively, the "Services").
(i) Management Services. The Service Provider shall provide, on a
regular and continuing basis, management services for the Company
and the Relevant Entities. Such services shall include those
services historically performed by the employees of the Company
and other Relevant Entities.
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Service Provider shall provide such services solely for the
Company and other Relevant Entities.
(ii) Payroll and Administrative Services. The Service Provider shall
employ from time to time such individuals as shall be designated
by the Company to provide services described in this Agreement
and shall terminate the employment of such individuals as shall
be designated from time to time by the Company. The Service
Provider shall employ such individuals pursuant to terms and
conditions of employment as shall be determined and designated in
writing by the Company. The employees of the Service Provider
shall be under the primary direction and control of the Company.
The Service Provider shall be responsible for all wages and
salaries payable to such employees and all employment and income
taxes required to be paid or withheld with respect to such
employees. The employees of Service Provider shall be eligible to
participate in the employee benefit plans of the Company to the
full extent permitted by applicable law. In the event, or to the
extent, that any employee of Service Provider cannot participate
in any employee benefit plan of the Company, Service Provider
shall provide substantially comparable benefits to employee and
the Company shall reimburse Service Provider for the cost of such
benefits.
(iii) Other Services. The Service Provider shall provide such other
services as the parties may deem to be necessary or advisable for
the operation of the business of the Relevant Entities, as
mutually agreed in writing by the Service Provider and the
Company.
(b) Management Responsibility. Nothing in this Agreement delegates or
assigns to the Service Provider any general right or responsibility to
set corporate policies for any Relevant Entity or to make decisions or
take actions commonly reserved to officers or managers, and nothing in
this Agreement shall be construed to relieve the managers or officers
of any Relevant Entity from the performance of their respective duties
or to limit the exercise of their powers in accordance with the
limited liability company agreement, charter or other organizational
documents of any Relevant Entity or in accordance with any applicable
statute or regulation.
SECTION 3 TRANSFER OF RESPONSIBILITY FOR THE PROVISION OF SERVICES
(a) General. The Service Provider and the Company acknowledge that this
Agreement is a transitional arrangement and that either
contemporaneous with or as soon as reasonably practicable after the
conversion of the Company into the Partnership, the Service Provider
shall in good faith endeavor to ensure that Services provided by the
Service Provider to the Relevant Entities will instead be provided by
the general partner of the Partnership on behalf of the Relevant
Entities. The Service Provider and the Relevant Entities shall
cooperate in such manner as may be necessary and appropriate for the
Relevant Entities or an
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affiliate to assume responsibility for the Services performed by the
Service Provider under this Agreement.
(b) Procedures for Transferring Services.
(i) Transfer. The Parties shall assign sufficient personnel and
resources to effect the transfer of responsibility for the
provision of Services in as efficient and orderly a manner as is
reasonably practicable, shall negotiate in good faith to agree
upon reasonable procedures and a timetable for the transfer, and
shall cause the transfer to occur in accordance with those
procedures and on the agreed timetable to the greatest extent
possible.
(ii) Information. The Service Provider shall deliver to the Company or
other Relevant Entity copies of all books, records, accounts,
documents, contracts, files, data bases, and other information
(collectively, "Information") reasonably necessary for such
Relevant Entity to assume responsibility for the Services
transferred, including, without limitation, those maintained in
electronic form. To the extent that the Service Provider may
lawfully do so, it shall also furnish the Relevant Entity with
copies of the computer programs, operating systems, codes,
instructions, training materials, and manuals necessary or useful
to receive, store, update, manipulate, use, and report the
Information; and to the extent that the Service Provider may not
lawfully furnish such copies, it shall assist the Relevant Entity
in obtaining them from third-parties.
(iii) Costs of Transfer. In addition to any other sums that the
Service Provider is entitled to be paid under this Agreement, the
Company shall reimburse the Service Provider for its reasonable,
documented out-of-pocket costs in transferring Services to the
Relevant Entities.
SECTION 4 REIMBURSEMENT
(a) General. Notwithstanding anything in this Agreement to the contrary,
the Company shall reimburse the Service Provider, on a
dollar-for-dollar basis, for:
(i) all direct expenses actually and reasonably incurred by the
Service Provider with respect to the provision of Services for
the direct or indirect benefit of any of the Relevant Entities
("Direct Costs"); and
(ii) all general and administrative expenses actually and reasonably
incurred by the Service Provider with respect to the provision of
Services for the direct or indirect benefit of any of the
Relevant Entities ("Administrative Expenses").
(b) Taxes. Any reimbursement under this Section 4 shall include
reimbursement for any FICA, unemployment, sales, use, excise,
value-added or similar taxes
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imposed on the Service Provider in connection with the provision of
Services under this Agreement.
SECTION 5 INVOICES
To the extent practicable, the Service Provider shall invoice the Company
for amounts subject to reimbursement for each calendar month within thirty (30)
days following the end of such calendar month; provided, that any failure by the
Service Provider to provide an invoice within such time period shall not relieve
the Company of its obligation to pay an invoice received after such date. All
invoices shall reflect in reasonable detail a description of the amounts to be
reimbursed, and the aggregate amount reflected on any such invoice shall be due
and payable within ten (10) days following the Company's receipt of the invoice.
SECTION 6 DISPUTES; UNPAID AMOUNTS
(a) Disputes. In the event of a dispute as to the propriety of invoiced
amounts, the Company shall pay all undisputed amounts on each invoice,
but shall be entitled to withhold payment of any amount in dispute and
shall notify the Service Provider, within ten (10) business days from
receipt of the disputed invoice, of the disputed amount and the
reasons each such charge is disputed by the Company; provided, that
any failure by the Company to so notify the Service Provider within
such time period shall not limit the Company's right to dispute
invoiced amounts. The Service Provider shall provide the Company with
records relating to the disputed amount so as to enable the Parties to
resolve the dispute.
(b) Unpaid Amounts. In the event the aggregate amount on any invoice is
not disputed and is not paid within ten (10) days following the
Company's receipt of the invoice, the unpaid amount thereof shall bear
interest at the prime rate of X.X. Xxxxxx Xxxxx Bank, New York, New
York, as reported in the Wall Street Journal for the period such
amount remains unpaid.
(c) Time Period for Disputes. Any statement or payment not disputed in
writing by either Party within one (1) year of the date of such
statement shall be considered final and no longer subject to
adjustment. Either Party shall not be obligated to pay for any charges
for which statements for payment are submitted more than one year
after the termination of this Agreement.
SECTION 7 DUTY TO ACT IN GOOD FAITH
The Company acknowledges that the Services shall be provided only with
respect to the business of the Relevant Entities as mutually agreed by
the Parties. The Parties agree to act in good faith with respect to
the request for, or the performance of, any Services under this
Agreement.
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SECTION 8 REPRESENTATIONS; LIMITED WARRANTY
(a) Representations. The Service Provider represents that (1) it will
provide the Services to the Relevant Entities, (2) it will use that
degree of diligence, care and skill generally exercised by other
companies in similar circumstances and (3) all such Services shall be
performed in accordance with all applicable laws and in a timely and
diligent fashion.
(b) Limited Warranty. EXCEPT AS SET FORTH IN SUBPARAGRAPH (A) OF THIS
SECTION 8, ALL SERVICES PROVIDED TO THE RELEVANT ENTITIES ARE AS IS,
WHERE IS, WITH ALL FAULTS. THE SERVICE PROVIDER MAKES NO (AND HEREBY
DISCLAIMS AND NEGATES ANY AND ALL) REPRESENTATIONS OR WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING THE WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE SERVICES
PROVIDED TO THE RELEVANT ENTITIES.
XXXXXXX 0 XXXXX XXXXXXX
The Service Provider shall have no obligation to perform or cause the
Services to be performed if its failure to do so is caused by or results from
any act of God, governmental action, natural disaster, strike, failure of
essential equipment or any other cause or circumstance beyond the control of the
Service Provider (an "Event of Force Majeure"). The Service Provider will
promptly notify the Company of any Event of Force Majeure affecting its Services
to any Relevant Entity. The Service Provider agrees that following any Event of
Force Majeure, the Service Provider will use its reasonable best efforts to
restore the Services.
SECTION 10 LIABILITY AND INDEMNIFICATION
(a) Liability of the Service Provider and Indemnitees.
(i) Notwithstanding anything to the contrary set forth in this
Agreement, neither the Service Provider nor any Indemnitee (as
defined in Section 10(b) below) shall be liable, responsible or
accountable in damages or otherwise to the Company or any other
Relevant Entity for any expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and
reasonably incurred by the Company or any other Relevant Entity
in connection with any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or
investigative if the Service Provider or such Indemnitee acted in
good faith in a manner the Service Provider or such Indemnitee
reasonably believes or believed to be in or not opposed to the
best interests of the Company (and, with respect to any criminal
action or proceeding, as to which such Indemnitee had no
reasonable cause to believe such conduct was unlawful) and the
Service Provider's (or Indemnitee's) conduct did
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not constitute gross negligence, willful misconduct or a material
breach of any representation, warranty or covenant by the Service
Provider contained herein. Neither the Service Provider nor any
Indemnitee shall be liable to the Company or any other Relevant
Entity for any action of any other employee or agent of the
Company or other Relevant Entity.
(ii) Subject to its obligations and duties under this Agreement set
forth in Section 2 and Section 3, the Service Provider may
exercise any powers granted to it by the Agreement and perform
any of the duties imposed upon it hereunder either directly, by
or through its employees or agents, or by or through third-party
contractors. The Service Provider shall have no liability
whatsoever for the Services provided by any such third-party
contractor unless (and only to the extent that) such Services are
provided in a manner which would evidence gross negligence or
willful misconduct on the part of the Service Provider.
(iii) Any amendment, modification or repeal of this Section 10 or any
provisions hereof shall be prospective only and shall not in any
way affect the limitations on the liability to the Company or
other Relevant Entity of the Indemnitees under this Section 10 as
in effect immediately prior to such amendment, modification or
repeal with respect to claims arising from or relating to matters
occurring, in whole or in part, prior to such amendment,
modification or repeal, regardless of when such claims may arise
or be asserted.
(b) Indemnification.
(i) The Company shall indemnify, defend and hold harmless (A) the
Service Provider and (B) any person who is or was an officer or
manager of the Service Provider (each an "Indemnitee") from and
against any and all losses, claims, damages, liabilities, joint
or several, reasonable expenses (including, without limitation,
legal fees and expenses), judgments, fines, penalties, interest,
settlements and other amounts arising from any and all claims,
demands, actions, suits or proceedings, whether civil, criminal,
administrative or investigative, in which the Service Provider or
any Indemnitee may be involved, or is threatened to be involved,
as a party or otherwise, by reason of its status as service
provider to the Relevant Entities or in connection with services
rendered to the Company or any other Relevant Entity; provided,
however, in each case that (1) the Service Provider or the
Indemnitee acted in good faith and in a manner that the Service
Provider or such Indemnitee reasonably believed to be in, or not
opposed to, the best interests of the Relevant Entities and, with
respect to any criminal proceeding, had no reasonable cause to
believe its conduct was unlawful and (2) the Service Provider's
or Indemnitee's conduct did not constitute gross negligence,
willful misconduct or a material breach of
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any representation, warranty or covenant by the Service Provider
contained herein.
(ii) The Service Provider shall indemnify, defend and hold harmless
the Company and any other of the Relevant Entities, or any of
their affiliates, or any of their respective officers, managers,
directors, employees, beneficial owners, agents, representatives,
trustees or affiliates, and any person who is or was an officer
or manager of the Company or the Relevant Entities (each a
"Company Indemnitee") from and against any and all losses,
claims, damages, liabilities, joint or several, reasonable
expenses (including, without limitation, legal fees and
expenses), judgments, fines, penalties, interest, settlements and
other amounts arising from any and all claims, demands, actions,
suits or proceedings, whether civil, criminal, administrative or
investigative, in which any Company Indemnitee may be involved,
or is threatened to be involved, as a party or otherwise, arising
from or associated with the Service Provider's or any
Indemnitee's (1) failure to act in good faith or in a manner
reasonably believed to be in, or not opposed to, the best
interests of the Relevant Entities, (2) knowing violation of law,
or (3) gross negligence, willful misconduct or a breach of any
representation, warranty or covenant made by the Service Provider
contained herein.
(iii) Reasonable expenses (including, without limitation, legal fees
and expenses) incurred by any party who is entitled to
indemnification pursuant to this Section 10 (an "Indemnified
Party") in defending any claim, demand, action, suit or
proceeding shall, from time to time, be advanced by the party
obligated to provide indemnification pursuant to this Section 10
(the "Indemnifying Party") prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by such
Indemnifying Party of an undertaking by or on behalf of the
Indemnified Party to repay such amount if it shall be determined
that the Indemnified Party is not entitled to be indemnified as
authorized in this Section 10.
(iv) The indemnification provided for by this Section 10 shall be in
addition to any other rights to which an Indemnified Party shall
be entitled under any agreement, as a matter of law, or
otherwise, and shall inure to the benefit of the heirs,
successors, assigns and administrators of such Indemnified Party.
(v) No amendment, modification or repeal of this Section 10 or any
provision hereof shall in any manner terminate, reduce or impair
the right of an Indemnified Party to be indemnified by an
Indemnifying Party, nor the obligation of an Indemnifying Party
to indemnify any such Indemnified Party under and in accordance
with the provisions of this Section 10 as in effect immediately
prior to such amendment, modification or repeal with respect to
claims arising from or relating to matters occurring, in whole or
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in part, prior to such amendment, modification or repeal,
regardless of when such claims may arise or be asserted.
SECTION 11 SEVERABILITY
In the event any portion of this Agreement shall be found by a court of
competent jurisdiction to be unenforceable, that portion of the Agreement will
be null and void ab initio and the remainder of the Agreement will be binding on
the Parties as if the unenforceable provisions had never been contained herein.
SECTION 12 ASSIGNABILITY
No Party shall have the right to assign its rights or obligations under
this Agreement without the prior written consent of the other Party; provided
that the Service Provider shall, upon formation of the Partnership, have the
right to assign its rights and obligations to the general partner of the
Partnership.
SECTION 13 ENTIRE AGREEMENT
This Agreement constitutes the only agreement of either Party relating to
the performance of the Services by the Service Provider, and this Agreement
represents the entire agreement between the Parties with respect to the subject
matter hereof.
SECTION 14 CHOICE OF LAW
This Agreement shall be subject to and governed by the laws of the State of
Delaware, excluding any conflicts-of-law rule or principle that might refer the
construction or interpretation of this Agreement to the laws of another state.
SECTION 15 AMENDMENT OR MODIFICATION
This Agreement may be amended or modified from time to time only by a
written agreement signed by the Service Provider and the Company.
SECTION 16 NOTICES
Any notice, request, approval, instruction, correspondence or other
document to be given hereunder by any Party to the other (herein collectively
called "Notice") shall be in writing and (i) delivered personally, (ii) mailed,
postage prepaid, by first class mail or overnight express mail or (iii)
delivered by telecopier, as follows:
IF TO THE SERVICE PROVIDER:
Wood Services LLC
c/o Atlas Holdings LLC
Xxx Xxxxx Xxxxx Xxxxx
0
Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
Facsimile: 000-000-0000
IF TO THE COMPANY OR ANY OTHER RELEVANT ENTITY:
Wood Resources LLC
000 X. Xxxxxxxx Xxxxxx
P. O. Xxx 000
Xxxxxxx, XX 00000
Attn: President
Facsimile: 000-000-0000
Notice given by personal delivery or mail shall be effective upon actual
receipt. Notice given by telecopier shall be effective upon actual receipt if
received during the recipient's normal business hours, or at the beginning of
the recipient's next business day after receipt if not received during the
recipient's normal business hours. Either Party may change any address to which
Notice is to be given to it by giving Notice as provided above of such change of
address.
SECTION 17 FURTHER ASSURANCES
In connection with this Agreement and all transactions contemplated by this
Agreement, by execution of this Agreement each signatory Party hereto agrees to
execute and deliver such additional documents and instruments as may be required
for the Service Provider to provide the Services hereunder and to perform such
other additional acts as may be necessary or appropriate to effectuate, carry
out and perform all of the terms, provisions, and conditions of this Agreement.
SECTION 18 NO THIRD-PARTY BENEFICIARY
The provisions of this Agreement are enforceable solely by the Parties to
this Agreement, and no Assignee or other person, other than pursuant to Section
10 hereof, shall have the right, separate and apart from the Company or the
Service Provider, to enforce any provision of this Agreement or to compel any
Party to this Agreement to comply with the terms of this Agreement.
SECTION 19 ARBITRATION
The Service Provider and the Company agree to negotiate in good faith in an
effort to resolve any dispute related to this Agreement that may arise between
the Parties. Any unresolved dispute, controversy or claim between the Parties
arising out of or relating to this Agreement will be finally settled by
arbitration in New York, New York before, and in accordance with the rules of,
the American Arbitration Association; provided, however, that nothing in this
section shall prohibit a party to this Agreement from instituting litigation to
enforce any arbitration award. The arbitrator's award shall be final and binding
on both Parties.
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SECTION 20 TERMINATION
This Agreement may be terminated as follows:
(a) By the Company. The Company shall have the right to terminate this
Agreement upon:
(i) a material failure by the Service Provider to perform its
obligations hereunder, in which case no further payment shall be
due the Service Provider pursuant to this Agreement, other than
obligations already accrued as of the Notice Date (as defined in
Section 20(d) below);
(ii) the date upon which the Company ceases to have ongoing
operations;
(iii) the date upon which (1) the Relevant Entities shall cease to
require the provision of Services by the Service Provider or (2)
responsibility for all required Services have been transferred to
the general partner of the Partnership.
(b) By the Service Provider. The Service Provider shall have the right to
terminate this Agreement upon:
(i) the failure by the Company to reimburse the Service Provider in
accordance with this Agreement, which failure continues for ten
(10) days after written notice to the Company of such failure;
(ii) the date upon which the Company ceases to have ongoing
operations; or
(iii) the date that is twelve (12) months after the date the
Partnership is formed.
(c) By Mutual Agreement. This Agreement may be terminated by mutual
agreement on the terms and date stipulated in a writing signed by the
Company and the Service Provider.
(d) Notice of Termination. Termination of this Agreement pursuant to this
Section 20 shall be effected by giving written notice, signed by the
terminating Party, to the other Party, and this Agreement shall
terminate thirty (30) days from the date on which such notice is
delivered (the "Notice Date").
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IN WITNESS WHEREOF, as of the date first above written, the Parties hereto
have caused this Agreement to be signed on their behalf by their duly authorized
officers.
WOOD RESOURCES LLC
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: CFO
WOOD SERVICES LLC
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chairman of the Board
