Exhibit 10.1
ADMINISTRATIVE SERVICES AGREEMENT
This Administrative Services Agreement (the "Agreement"), dated as of
December 20, 2002, by and between Laid Back Enterprises, Inc., an Oklahoma
corporation ("Laid Back") and LBE Transition, Inc., an Oklahoma corporation
("LBE") which as of the date of this agreement is a wholly owned subsidiary of
Laid Back.
RECITALS:
Laid Back desires to separate its businesses into independent companies.
Laid Back intends to split-off (the "Split-off") to certain of its shareholders
all of the outstanding capital stock of LBE at the date and time of such
Split-off (the "Split-off Date") in exchange for all or a portion of said
shareholders' shares in Laid Back, thereby terminating the parent-subsidiary
relationship that has existed between the two companies.
The parties recognize that it will be necessary or advisable for each of
them to provide certain administrative and other services to the other on an
interim basis in order to facilitate their respective transitions into separate,
publicly owned companies.
Therefore, in consideration of the mutual covenants and subject to the
terms and conditions contained herein, the parties agree as follows:
1. Performance of Services.
(a) During such period as may be agreed to by the parties, LBE shall
serve as the transfer agent for the common stock of Laid Back until an
independent transfer agent is appointed.
(b) To the extent necessary personnel and facilities are employed by
and available to Laid Back and LBE, each of them agrees, from and after the
Split-off date and for a transition period of up to three years following
the Split-off date, to provide the other on an "as needed" basis with the
following services:
(1) Tax consultation and assistance with tax return preparation
and audits. Any taxes due shall be paid in accordance with that Tax
Sharing Agreement of even date herewith between the parties;
(2) Assistance with the preparation of (i) periodic filings under
the Securities Exchange Act of 1934 or with the National Association
of Securities Dealers, Inc., (ii) reports to stockholders, and (iii)
other external financial reports;
(3) Design and implementation of internal audit procedures;
(4) Coordination of independent audits by nonaffiliated auditors;
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(5) Consultation on cash management, financing and other treasury
matters;
(6) Insurance and risk management services involving
administration, placement of insurance, and broker selection for past
and future insurance and risk management programs; and
(7) Such other services as may be mutually agreed upon between
the parties.
(c) Each party shall use its respective best efforts in providing the
above services and, except for gross negligence or willful misconduct,
shall not be responsible for the accuracy, completeness or timeliness of
any advice or service or any return, report, filing or other document which
it provides, prepares or assists in preparing. Notwithstanding the
foregoing, neither party shall be obligated to provide the above services
if that party determines in its reasonable judgment that providing such
services would unreasonably interfere with the conduct of its own business
activities. The parties shall cooperate in planning the scope and timing of
services to be provided by each of them under this agreement so as to
lessen or eliminate any such interference.
2. Reimbursement. The parties agree to reimburse each other for services
rendered in accordance with an hourly fee schedule to be agreed upon from time
to time by the parties. The hourly fee schedule may provide different rates for
different categories of personnel. In addition, each party agrees to reimburse
the other for all out-of-pocket expenses incurred by the providing party in
connection with performing such services. The parties shall, on a periodic basis
to be agreed upon, but not less frequently than quarterly, submit to and
exchange with each other their respective statements of fees and expenses for
payment, accompanied by such supporting detail as the recipient of the statement
may reasonably request. Only the amount owed to one party for any period in
excess of the amount owed by that party for the same period need be paid.
Payment shall be due 30 days after date of the statement.
3. Staffing Plans. Nothing contained in this Agreement shall preclude
either party from obtaining the above services from other providers. During the
term of this Agreement, each party shall use reasonable efforts to hire or train
personnel and, in its discretion, establish consulting relationships with third
parties, so that each party will, with the passage of time, increasingly be able
to perform or have performed all of the above services for itself. Each party
shall keep the other generally informed of its plans in this regard in order for
the other party to make any appropriate adjustments in its staffing and hiring
plans.
4. Delivery of Records. As soon as is practicable after the Split-off date,
each party shall deliver to the other the originals of all certificates of
incorporation, bylaws, licenses, certificates, board of directors' meeting
minutes, stock certificates of their respective subsidiaries and all other
corporate records, documents and instruments of a permanent nature pertaining to
the other party which either of them may have in their possession in the
condition and order in which they then exist. Each party shall be permitted to
retain copies of such documents.
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5. Access to Properties and Records. Each party will provide the other, and
each of their respective officers, employees, representatives and agents full
access, during normal business hours, to any and all premises, properties,
books, records, data and other information relating to their respective
businesses, as well as to their respective employees, representatives and
agents, to acquire information for:
(a) The formulation and completion of: (a) any tax returns or other
forms or reports required to be filed by either party with any governmental
agency; (b) any amended tax returns or requests for tax refunds; and (c)
any tax audits or investigations;
(b) The preparation and completion of any financial statements which
require the inclusion of the other party's financial information;
(c) All insurance and bond matters;
(d) The defense or prosecution of any claims, lawsuits or proceedings,
if any, in which either party as a separate corporation has liability or
rights, contingent or otherwise; and
(e) Such other purposes as may be required, provided such purposes
shall be attributable to the corporate relationship that formerly existed
between Laid Back and LBE, or for purposes related to the services provided
pursuant to this Agreement or any other agreement entered into between Laid
Back and LBE in connection with the Split-off.
6. Records Retention. Each party shall retain all books, records, data and
other information relating to its business and operations for the longer of:
(a) Seven years;
(b) The time that party normally keeps its records based upon its past
custom and practice; or
(c) The time necessary to resolve any tax issue, claim, lawsuit,
action or proceeding that is pending at the time such records would
otherwise be destroyed, taking into account any statutes of limitation
which may have been waived.
Each party shall annually provide the other with a list, prepared in reasonable
detail, of books, records, data and other information scheduled for destruction
in the ordinary course, provided that it shall not be necessary to include on
the list any records which would clearly have no relevance to the other party.
At the recipient's request, the other party shall retain any records so
designated for an additional 12 months, at which time such records may again be
listed as scheduled for destruction.
7. Amendments. This Agreement may not be amended or revised except by a
written instrument signed by both parties to this Agreement.
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8. Waivers. The failure of any party to this Agreement at any time to
require strict performance by the other party to this Agreement of any provision
of this Agreement shall not waive or diminish such party's right to later demand
strict performance of that or any other provision of this Agreement.
9. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Oklahoma.
10. Notices. All notices and other communications shall be in writing and
shall be delivered by hand or mailed by registered or certified mail (return
receipt requested) to the parties at the following addresses (or such other
addresses for a party as shall be specified by like notices) and shall be deemed
given on the date on which such notice is received:
To Laid Back: 0000 Xxxx Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Attn: Xxxxxx Xxxx
To LBE: 0000 Xxxx Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Attn: Xxx Xxxxxxxxxx
11. No Third Party Beneficiaries. This Agreement is solely for the benefit
of the parties to it and their respective affiliates and should not be deemed to
confer upon third parties any remedy, claim, reimbursement, cause of action or
other right in excess of those existing without reference to this Agreement.
12. Successors and Assigns. This Agreement and the obligations and rights
incident hereto shall inure to the benefit of the successors and permitted
assigns of the parties to this Agreement.
13. Relationship of Parties. Nothing contained in this Agreement shall be
deemed to constitute the appointment of either party as the agent of the other.
* * * * * * *
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In witness, the parties have executed this agreement as of the date first
above written.
"Laid Back" Laid Back Enterprises, Inc., an Oklahoma
corporation
By: /s/ Xxxxxx Xxxx
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Xxxxxx Xxxx,
Executive Vice President
"LBE" LBE Transition, Inc., an Oklahoma corpo-
ration
By: /s/ Xxx Xxxxxxxxxx
------------------------------------
Xxx Xxxxxxxxxx, President
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