Exhibit 10.6
SHARED SERVICES
AGREEMENT
This Shared Services Agreement (this
“Agreement”) is made and entered into as of the 28th
day of May, 2008, by and between ED & F Man Holdings Ltd.,
a limited company organized under the laws of England and Wales
(individually and collectively with its Affiliates,
“Man”), and Westway Group, Inc., formerly known as
Shermen WSC Acquisition Corp., a Delaware corporation (individually
and collectively with its Affiliates, “ Westway
”).
R E C I T A L
S
WHEREAS, Man transferred its
worldwide bulk liquid terminaling and North American liquid animal
feed manufacturing and distribution businesses and related business
assets (collectively, the “Business”) to Westway
pursuant to the terms and conditions of that Transaction Agreement
dated November 25, 2008 (the “Transaction
Agreement”);
WHEREAS, prior to such transfer, Man
and the Business, as affiliated entities, shared executive office
space and certain administrative services and allocated the cost of
such services among them on a rational basis;
WHEREAS, following such transfer,
the Business relies upon certain services, the physical and human
resources for the provision of which remain with Man; and Man
relies upon certain services, the physical and human resources for
the provision of which have been transferred to Westway;
WHEREAS, Section 4.2 of the
Transaction Agreement provides that, on the Closing Date, Man and
Westway shall execute and deliver a shared services agreement,
pursuant to which Man will make available to Westway certain
services and Westway will make available to Man certain services,
on a basis substantially consistent with the parties’ recent
historical practice and for a price equal to the providing
party’s Fully Allocated Cost of the service (which shall be
substantially similar to that reflected with respect to such
services in the financial statements specified in Section 5.5
of the Transaction Agreement); and
WHEREAS, Westway desires to obtain
certain services from Man for the purpose of enabling Westway to
manage an orderly transition in its operation of the Business and
retain the benefit of operational efficiencies created by the
sharing of such services; and Man desires to obtain certain
services from Westway for the purpose of enabling Man to retain the
benefit of operational efficiencies created by the sharing of such
services;
NOW, THEREFORE, in consideration of
the mutual covenants and agreements contained herein and for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as
follows:
AGREEMENT
1.1 “Business” shall
have the meaning set forth in the first recital of this
Agreement.
1.2 “Fully Allocated
Cost” shall mean, with respect to any product or service, the
cost of all labor (including, without limitation, the cost of all
employment taxes and benefits), overhead, services, and materials
expenditures allocated (on a rational basis substantially
consistent with the methodology described for such Service on the
schedule hereto describing such Service and, to the extent not
inconsistent, with recent historical practice of Man and the
Business as reflected in the financial statements specified in
Section 5.5 of the Transaction Agreement), without markup, to
such product or service. The cost of any and all labor allocable to
a product or service will include a charge of 20% of the base
salary of such labor to account for bonuses payable, and any and
all actual bonuses payable to such employees will be excluded from
the calculation of Fully Allocated Cost.
1.3 “Man Services” shall
mean the NA Tax Services, ROW Tax Services, ROW HR Services, ROW
MIS Services, ROW Accounting Support Services, ROW HSEQ Services,
ROW Other Corporate Services, and ROW Office Services.
1.4 “NA Accounting Support
Services” shall mean, with respect to the purchase and sale
of products to third parties from North America, financial and
accounting support, recordkeeping, customer billing and
collections, order processing, accounts payable processing, and
preparing and reporting of monthly estimates and results, as
further specified in Schedule 1.4.
1.5 “NA HR Services”
shall mean the services of the internal human resources department
and staff located in North America, as provided to Man and the
Business in accordance with recent historical practice, as further
specified in Schedule 1.5.
1.6 “NA HSEQ Services”
shall mean the services of the Health, Safety, Environmental, and
Quality Department and staff located in North America, as provided
to Man and the Business in accordance with recent historical
practice, as further specified in Schedule 1.6.
1.7 “NA Insurance
Services” shall mean the services of the insurance department
and staff located in North America, as provided to Man and the
Business in accordance with recent historical practice, as further
specified in Schedule 1.7.
1.8 “NA MIS Services”
shall mean all computer and data-processing services and support
provided to Man and the Business in North America in accordance
with recent historical practice, as further specified in
Schedule 1.8.
1.9 “NA Office Services”
shall mean the office space, reception, parking, and related
services located in North America, as further specified in
Schedule 1.9.
1.10 “NA Tax Services”
shall mean the services of the internal tax department and staff in
North America, as provided to Man and the Business in accordance
with recent historical practice, as further specified in
Schedule 1.10.
1.11 “Other Services”
shall mean, with respect to Services provided by Westway, Services
that are not Westway Services; and, with respect to Services
provided by Man, Services that are not Man Services.
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1.12 “Rationalization
Expenses” shall mean the net expenses incurred by a Service
Provider pursuant to this Agreement directly resulting from the
termination of such Service and disposition of human and physical
resources no longer required due to the termination of such
Service, including without limitation the severance costs relating
to the termination of employees no longer required to provide such
Service, but net of any proceeds from the disposition of any
physical assets used in the provision of such Service.
1.13 “ROW Accounting Support
Services” shall mean, with respect to the purchase and sale
of products and services to third parties from outside of North
America, financial and accounting support, recordkeeping, customer
billing and collections, order processing, accounts payable
processing, and preparing and reporting of monthly estimates and
results, as further specified in Schedule 1.13.
1.14 “ROW HR Services”
shall mean the services of the internal human resources department
and staff located outside North America, as provided to Man and the
Business in accordance with recent historical practice, as further
specified in Schedule 1.14.
1.15 “ROW HSEQ Services”
shall mean the services of the Health, Safety, Environmental, and
Quality Department and staff located outside North America, as
provided to Man and the Business in accordance with recent
historical practice, as further specified in
Schedule 1.15.
1.16 “ROW Insurance
Services” shall mean the services of the insurance department
and staff located outside North America, as provided to Man and the
Business in accordance with recent historical practice, as further
specified in Schedule 1.16.
1.17 “ROW MIS Services”
shall mean all telecommunication, computer and data-processing
services and support provided to Man and the Business outside North
America in accordance with recent historical practice, as further
specified in Schedule 1.17.
1.18 “ROW Office
Services” shall mean the office space, reception, parking,
and related services located outside North America, as further
specified in Schedule 1.18.
1.19 “ROW Other Corporate
Services” shall mean the employee administrative services,
legal advisory services, and treasury management services located
outside North America, as further specified in
Schedule 1.19.
1.20 “ROW Tax Services”
shall mean the services of the internal tax department and staff
outside North America, as provided to Man and the Business in
accordance with recent historical practice, as further specified in
Schedule 1.20.
1.21 “Service Provider”
shall mean the party providing a particular Service pursuant to
this Agreement.
1.22 “Service Recipient”
shall mean the party receiving a particular Service pursuant to
this Agreement.
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1.23 “Services” shall
mean all services provided pursuant to this Agreement, individually
and collectively.
1.24 “Westway Services”
shall mean the NA HR Services, NA MIS Services, NA Accounting
Support Services, NA HSEQ Services, NA Insurance Services, and NA
Office Services.
Capitalized terms not expressly
defined in this Agreement shall have the meanings ascribed to them
in the Transaction Agreement.
2.1 Scheduled Services .
Subject to Article 7 hereof, Man will provide to Westway the
Man Services, and Westway will provide to Man the Westway Services,
commencing with the date hereof and continuing until terminated in
accordance with Section 7 hereof. It is understood by the
parties that the quantity of Services to be provided under this
Section 2.1 shall be substantially consistent with recent
historical practice. Where the quantity of Services to be provided
to either party is greater than an amount that is substantially
consistent with recent historical practice, the party providing
such Services reserves the right (after so advising the other
party) to utilize third-party providers to provide the
Services.
2.2 Unscheduled Services .
Man will employ its commercially reasonable efforts to provide such
Other Services to Westway as are reasonably requested by Westway.
Westway will employ its commercially reasonable efforts to provide
such Other Services to Man as are reasonably requested by Man.
Other Services provided by one party to the other will be charged
based upon the Fully Allocated Cost of such Services based upon
actual hours worked, unless otherwise agreed, which agreement shall
be pursued in good faith by both parties.
2.3 Consent of Third Parties
. The parties’ obligation to deliver any Service described in
this Agreement is conditional upon such party’s obtaining the
consent, where necessary, of any relevant third party provider,
provided, however, that if such consent cannot be obtained, the
parties shall use their respective commercially reasonable best
efforts to arrange for alternative methods of delivering such
Service. For the avoidance of doubt, the party responsible for
delivering a particular Service will be responsible for obtaining
any required licenses or consents necessary to deliver such
Service. Notwithstanding anything herein to the contrary, nothing
in this Agreement shall affect Man’s and its
affiliates’ obligations to obtain consents pursuant to, and
in accordance with, the Transaction Agreement.
2.4 Financial Reporting .
With respect to NA Accounting Support Services provided by Westway
to Man and ROW Accounting Support Services provided by Man to
Westway, all Accounting Support Services and access to accounting
information and systems shall be provided, on a time schedule and
in a manner consistent with recent historical practice. All
third-party invoices, financial reports and accounting information
shall be in substantially the form currently provided.
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3.
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PRICING,
BILLING AND PAYMENT
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3.1 Fees . All Services will
be charged to and payable by recipient of such Services at the
Fully Allocated Cost of such Service.
3.2 Payment . Charges for
Services shall be billed monthly by the Service Provider and shall
be payable by the Service Recipient on the fifteenth day of the
month following the month in which such Services are
rendered.
3.3 Misdirected Funds . Each
party will remit to the other any misdirected funds such other
party that it collects, without set-off for charges for
Services.
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4.
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WARRANTY,
LIABILITY AND INDEMNITY
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4.1 Standard of Service . The
parties shall provide Services to one another in a manner
consistent with the manner they have heretofore been provided.
Neither party makes any other warranties, express or implied, with
respect to the Services to be provided by such party
hereunder.
4.2 Limitation of Liability .
The maximum liability of the Service Provider to, and the sole
remedy of, the Service Recipient for breach of this Agreement or
otherwise with respect to Services is a refund of the price paid
for the particular Service or, at the option of Service Recipient,
a redelivery (or delivery) of the Service, unless the breach arises
out of the gross negligence or willful failure of performance of
the Service Provider. In no event shall either party be liable to
the other for any consequential, punitive or special damages
arising out of this Agreement, whether resulting from negligence or
otherwise.
4.3 Indemnity .
(a) Man agrees to indemnify and hold
Westway harmless from any damages, loss, cost or liability
(including legal fees and expenses and the cost of enforcing this
indemnity) arising out of or resulting from a third-party claim
regarding Man’s performance, purported performance or
nonperformance of this Agreement (whether arising out of
Man’s negligence, intentional misconduct, or otherwise),
provided, however, that Man will not indemnify Westway to the
extent that such third-party claim directly arises out of or
results from Westway’s performance, purported performance or
nonperformance of this Agreement (whether arising out of
Westway’s negligence, intentional misconduct, or
otherwise).
(b) Westway agrees to indemnify and
hold Man harmless from any damages, loss, cost or liability
(including legal fees and expenses and the cost of enforcing this
indemnity) arising out of or resulting from a third-party claim
regarding Westway’s performance, purported performance or
nonperformance of this Agreement (whether arising out of
Westway’s negligence, intentional misconduct, or otherwise),
provided, however, that Westway will not indemnify Man to the
extent that such third-party claim directly arises out of or
results from Man’s performance, purported performance or
nonperformance of this Agreement (whether arising out of
Man’s negligence, intentional misconduct, or
otherwise).
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Either party shall be temporarily
excused from performance under this Agreement if any force majeure,
including but not limited to disaster, fire, war, civil commotion,
strike, labor shortage, slowdown, or the unavailability of labor,
governmental regulation, energy shortage, or other occurrence
beyond the reasonable control of such party should have happened
and made it impossible for such party to perform its obligations
under this Agreement. Under such circumstances, performance under
this Agreement that relates to the delay shall be suspended for the
duration of the delay, provided that the party so affected resumes
the performance of its obligations with due diligence as soon as
practicable after the effects of such event have been alleviated
and provided that no such event shall relieve either party from any
of its payment obligations hereunder. In case of any such
suspension, the parties shall use their best efforts to overcome
the cause and effect of such suspension, but in no event shall
either party be required to settle any litigation, strike, lockout
or other labor difficulty contrary to its best interests in its
sole discretion. The provisions of this Section 5 will not
excuse any failure to pay, or delay the time for payment of, any
sum of money owing pursuant to this Agreement.
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6.
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PROPRIETARY
INFORMATION AND RIGHTS
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6.1 Confidentiality . Each
party acknowledges that the other possesses, and will continue to
possess, information that has been created, discovered or developed
by them and/or in which property rights have been assigned or
otherwise conveyed to them, which information has commercial value
and is not in the public domain. The proprietary information of
each party will be and remain the sole property of such party and
its assigns. Each party shall use the same degree of care that it
normally uses to protect its own proprietary information to prevent
the disclosure to third parties of information that has been
identified as proprietary by written notice to such party from the
other party. Neither party shall make any use of the information on
the other which has been identified as proprietary except as
contemplated or required by the terms of this Agreement.
Notwithstanding the foregoing, this Section 6 shall not apply
to any information that a party can demonstrate: (a) was, at
the time of disclosure to it, in the public domain through no fault
of such party; (b) was received after disclosure to it from a
third party who had a lawful right to disclose such information to
it; or (c) was independently developed by the receiving
party.
6.2 Nonsolicitation of
Employees . Each party, on behalf of itself and its affiliates,
agrees not to, directly or indirectly, (a) induce or attempt
to induce any employee of the other party or its affiliates
(individually and collectively, the “Employer”) to
leave the employ of the Employer; (b) in any way interfere
with the relationship between the Employer and any of its
employees; (c) employ or otherwise engage (as an employee,
independent contractor or otherwise) any current or former employee
of the Employer within six months following such employee’s
separation from employment of the Employer; or (d) induce or
attempt to induce any customer, supplier, licensee or other person
to cease doing business with the other party or its affiliates or
in any way interfere with the relationship between any such
customer, supplier, licensee or other business entity and the other
party or its affiliates.
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7.1 Master Agreement . This
is a master agreement and shall be construed as a separate and
independent agreement for each and every gro