Exhibit 10.7
EXECUTION COPY
SECOND AMENDMENT TO
MANAGEMENT SERVICES AGREEMENT
This Second Amendment to Management Services Agreement (this "Second
Amendment") is entered into by and between Atlas FRM LLC, a Delaware limited
liability company ("Atlas"), and Wood Resources LLC, a Delaware limited
liability company (including any successor to the business of Wood Resources LLC
by merger, conversion or otherwise, the "Company"), as of October 21, 2005 but
shall only be effective (the period of such effectiveness, the "Term") from and
including the closing date (the "Effective Date") of a Qualified IPO (as defined
below) to and including the closing date (the "Termination Date") of a Change of
Control (as defined below).
RECITALS
WHEREAS, pursuant to that certain Management Services Agreement, dated as
of April 4, 2003, and amended by the First Amendment thereto, dated as of
December 22, 2004 (the "Existing Agreement"), Atlas performs Services for the
Company in consideration of payment by the Company to Atlas of seven hundred
fifty thousand dollars ($750,000.00) per annum; and
WHEREAS, Atlas and the Company have agreed that, during the Term, Atlas
shall be entitled to receive from the Company (x) Transaction Fees (as defined
below) and (y) an annual fee of three hundred fifty thousand dollars
($350,000.00), which fee will be reduced from the seven hundred fifty thousand
dollar ($750,000.00) fee described above upon the Effective Date and is subject
to further reduction as described below upon the payment of Transaction Fees;
NOW, THEREFORE, in consideration of these recitals and for other good and
sufficient consideration, receipt and sufficiency of which are acknowledged,
Atlas and the Company agree as follows:
1. DEFINED TERMS.
Capitalized terms used but not otherwise defined herein shall have the
meanings ascribed to them in the Existing Agreement. In addition, the following
terms shall have the following meanings:
(a) This "Agreement" shall mean the Existing Agreement as amended by this
Second Amendment.
(b) "Board" shall mean the board of directors governing the affairs of the
Issuer.
(c) A "Change of Control" shall mean any transaction or series of related
transactions, other than public offerings, pursuant to which (A) a Person or
group (as defined in Section
13(d)(3) of the Exchange Act) of Persons that did not hold equity securities in
any of Wood MLP GP LLC, a Delaware limited liability company, GP Holdco LLC, a
Delaware limited liability company, WRP GP LLC, a Delaware limited liability
company, or WRP GP Holdco LLC, a Delaware limited liability company, as of the
initiation of such transaction or transactions acquires voting or economic
control of fifty percent (50.0%) or more of the total outstanding equity
securities of one or more of such entities upon consummation of the transaction
or transactions or (B) those directors who constituted the Board upon the
initiation of such transaction or transactions cease to represent at least fifty
percent (50.0%) of the total membership of the Board upon consummation of the
transaction or transactions.
(d) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(e) "Independent Directors" means those members of the Board who are
affirmatively determined by the Board not to have any material relationship with
the Issuer (either directly or as partners, shareholders or officers of an
organization that has a relationship with the Issuer).
(f) "Issuer" means the issuer of equity securities in a Qualified IPO
(including, without limitation, the Partnership).
(g) "Partnership" means Wood Resources LP, a Delaware limited partnership;
provided that, for purposes of this Agreement, upon the merger of Wood Resources
LP with and into Wood Resources LLC, all references to Wood Resources LP shall
instead refer to the Company.
(h) "Qualified IPO" means a firm commitment initial public offering of
equity securities of the Company (including, without limitation, an initial
public offering of common units representing limited partnership interests in
the Partnership) that results in the issuer receiving net proceeds of fifty
million dollars ($50,000,000.00) or more.
(i) "Transaction Fee" means (A) in respect of any acquisition, divestiture,
financing or other non-ordinary course transaction involving total consideration
of ten million dollars ($10,000,000.00) or less as to which Atlas provides
transaction advisory services to the Company, a cash fee of (x) two percent (2%)
of the total value of the transaction (including, without limitation, all
consideration paid, whether in the form of cash, equity, notes or otherwise, and
all indebtedness assumed) in the case of any acquisition, divestiture or other
non-ordinary course transactions (excluding financings, which are addressed in
clause (y)) and (y) one percent (1%) of the gross proceeds to the Company in the
case of any financing, which cash fee shall be approved by a majority of the
Independent Directors acting in their sole discretion, and (B) in respect of any
acquisition, divestiture, financing or other non-ordinary course transaction
involving total consideration in excess of ten million dollars ($10,000,000.00),
a cash fee in such amount--not to exceed two percent (2%) of the total value of
any acquisition, divestiture or other non-ordinary course transactions
(excluding financings) or one percent (1%) or the gross proceeds from any
financing--as shall be approved by a majority of the Independent Directors
acting in their sole discretion.
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2. COMPENSATION.
The Existing Agreement is hereby amended by this Second Amendment to
provide that, during the Term, in consideration for the performance of the
Services, Atlas shall be entitled to (A) a Management Fee from the Company in an
amount equal to three hundred fifty thousand dollars ($350,000.00) per annum,
payable quarterly in advance on the first day of each calendar quarter (and
appropriately prorated as to fees theretofore paid under the Existing Agreement
and fees payable under the Agreement if the closing of a Qualified IPO shall
occur other than on the first day of a calendar quarter) and (B) a Transaction
Fee from the Company in respect of each acquisition, divestiture, financing or
other non-ordinary course transaction as to which Atlas provides transaction
advisory services to the Company, which fee shall be payable to Atlas upon the
closing of the transaction that gives rise to the fee or as soon as practicable
thereafter; provided, however, that (x) in any year during the term of the
Agreement that Atlas receives a Transaction Fee, the annual Management Fee of
three hundred fifty thousand dollars ($350,000.00) for that year shall be
reduced by the amount of such Transaction Fee, which reduction may be effected
by offset, remittance or any other method mutually acceptable to the parties,
and (y) in respect of any transaction where, in addition to receiving
transaction advisory services from Atlas, the Company receives transaction
advisory services from an investment banking firm or other third party financial
advisor that receives a fee based on the total value of the transaction, the
Transaction Fee shall be reduced by such amount as is determined appropriate by
a majority of the Independent Directors acting in their sole discretion. For the
avoidance of doubt, the parties hereto expressly agree that any successor to the
assets or business of Wood Resources LLC (including, without limitation, Wood
Resources LP) that acts as the Issuer in a Qualified IPO shall be the party
obligated to pay the Management Fees and Transaction Fees described above and
shall be deemed to have expressly assumed such obligation, as well as all other
rights and duties of the Wood Resources LLC under the Agreement, as a result of
such succession.
3. TERM.
The Existing Agreement is hereby further amended by this Second Amendment
to provide that the Agreement shall have a Term commencing on the Effective Date
and ending on the Termination Date, which term shall not be subject to early
termination under any scenario not involving a Change of Control.
4. NO OTHER AMENDMENTS.
Except as specifically amended by this Second Amendment, the Existing
Agreement shall remain in full force and effect.
5. COUNTERPARTS.
This Second Amendment may be executed in any number of counterparts, and
each such counterpart hereof shall be deemed to be an original instrument, but
all such counterparts together shall constitute but one agreement.
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IN WITNESS WHEREOF, the parties have caused this Second Amendment to be
duly executed as of the date first set forth above.
ATLAS FRM LLC: WOOD RESOURCES LLC:
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxxx Xxxxxxxxx
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Name: Xxxxxx X. Xxxxxx Name: Xxxxxxx Xxxxxxxxx
Title: Managing Partner Title: Chief Executive Officer and
President
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