ADMINISTRATIVE SERVICES AGREEMENT
THIS AGREEMENT, entered into as of the day of , 1996,
by and between Xxxx Xxxxxxx Inc., a Delaware corporation, with its principal
place of business at 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000-0000,
("AJI") and Larscom Incorporated, a Delaware corporation, with its principal
place of business at 0000 Xxxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000,
("Larscom"), (AJI and Larscom are at times referred to herein individually as
"Party" and collectively as "Parties");
Subject to the terms, conditions, covenants and provisions of this
Agreement, AJI and Larscom mutually covenant and agree as follows:
ARTICLE 1.
SERVICES PROVIDED
1.01 ADMINISTRATIVE AND SUPPORT SERVICES. During the term of this
Agreement upon the terms and subject to the conditions set forth in this
Agreement, AJI will provide to Larscom each of those administrative and support
services listed in Exhibit A, which is attached to and made part of this
Agreement, (hereinafter referred to individually as a "Support Service", and
collectively as the "Support Services").
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1.02 PERSONNEL. (a) In providing the Support Services, AJI, as it
deems necessary or appropriate in its discretion, may (i) use such personnel of
AJI or its affiliates, and (ii) utilize the services of third parties to the
extent such third party services are routinely utilized to provide similar
services to other AJI businesses or are reasonably necessary for the efficient
performance of any of such Support Services; provided, however, that if Larscom
is not satisfied with the quality or level of such Support Services, Larscom may
notify AJI and the Parties shall promptly attempt to resolve Larscom's concerns
in good faith.
(b) Larscom agrees that it will cooperate with AJI in the provision
of the Support Services.
1.03 LEVEL OF SUPPORT SERVICES. (a) AJI shall perform the Support
Services exercising the same degree of care as it exercises in performing the
same or similar services for its own account, with priority equal to that
provided to its own other affiliates, subsidiaries or divisions. Nothing in
this Agreement shall require AJI to favor Larscom's business over the businesses
of any of its other affiliates, subsidiaries nor divisions.
(b) Unless otherwise specifically set forth in Exhibit A or by AJI's
prior written consent, it is the
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intention of the Parties that Larscom's use of any Support Service that Larscom
elects to use shall not be higher than the level of use required by Larscom's
business prior to the Effective Date. In no event shall Larscom be entitled to
any new service of AJI without the prior written consent of AJI, which consent
may be withheld by AJI for any or no reason in its sole and absolute discretion.
In no event shall Larscom be entitled to increase its use of any of the Support
Services above the level of use specified in this Agreement without the prior
written consent of AJI (which consent shall not be unreasonably withheld, taking
into consideration the availability of AJI personnel and Larscom's needs).
(c) AJI shall not be required to provide Larscom Support Services
other than those defined and described in this Agreement, special studies,
support of new systems design and implementations, training, or the like, or the
advantage of systems, equipment, facilities, training or improvements procured,
obtained or made after the Effective Date by AJI unless, upon request by
Larscom, AJI elects to provide such service.
(d) In addition to being subject to the terms and conditions of this
Agreement for the provision of the Support Services, Larscom agrees that the
Support Services provided by
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third parties shall be subject to the terms and conditions of any agreements
between AJI and such third parties; provided, however, that at Larscom's
request, AJI will permit Larscom an opportunity to review any such third party
agreements to the extent that AJI is permitted to do so without a breach of its
confidentiality obligations to such third parties.
(e) With respect to any Support Service involving an AJI employee
benefit plan, AJI and Larscom agree that, in the event of a conflict between the
terms of this Agreement and the relevant plan document, the latter shall
prevail.
1.04 LIMITATION OF LIABILITY AND WARRANTY. (a) In the absence of
gross negligence or reckless or willful misconduct on AJI's part, and whether or
not it is negligent, AJI shall not be liable for any claims, liabilities,
damages, losses, costs, expenses (including, but not limited to, settlements,
judgments, court costs and reasonable attorneys' fees), fines and penalties,
arising out of any actual or alleged injury, loss or damage of any nature
whatsoever in providing or failing to provide the Support Services to Larscom.
In no event shall AJI be liable for any damages caused by Larscom's
failure to perform Larscom's responsibilities hereunder. Except as set forth in
Paragraph 5.01, AJI
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will not be liable to Larscom for (i) any act or omission of any other entity
(other than due to a default by AJI in any agreement between AJI and such other
entity furnishing any Support Service), or (ii) lost, altered or destroyed data
in providing any Support Service or (iii) for any interruption of any Support
Services relating to computer or telecommunications services. Notwithstanding
anything to the contrary herein, in the event AJI commits an error with respect
to or incorrectly performs or fails to perform any Support Service, at Larscom's
request, AJI shall use the same level of performance as set forth in Section
1.03 hereof, to correct such error, or re-perform or perform such Support
Service; provided, that AJI shall have no obligation to recreate any lost or
destroyed data to the extent the same cannot be cured by the re-performance of
the Support Service in question. If Larscom suffers any loss or damage arising
out of this Agreement which was caused by the gross negligence or reckless or
willful misconduct of AJI, AJI's sole liability to Larscom shall be to properly
and timely perform the Support Service(s) in question at no additional cost to
Larscom and to pay Larscom for any and all losses or damages suffered by
Larscom.
(b) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN OR AT
LAW OR IN EQUITY, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR PUNITIVE,
SPECIAL, INDIRECT,
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INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR
LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION OR ANY OTHER LOSS) ARISING FROM
OR RELATING TO ANY CLAIM MADE UNDER THIS AGREEMENT OR REGARDING THE PROVISION OF
OR THE FAILURE TO PROVIDE THE SUPPORT SERVICES, EVEN IF THE OTHER PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
1.05 NO OBLIGATION TO CONTINUE TO USE SERVICES. Larscom shall have no
obligation to continue to use any or all of the Support Services or any subset
thereof, that AJI is providing to Larscom by giving AJI at least forty-five (45)
days advance written notice of its desire to eliminate any or all Support
Services; provided, that Larscom may not discontinue use of any Support Service
relating to an AJI employee benefit plan unless the AJI Board of Directors has
agreed to such discontinuation.
1.06 AJI ACCESS. To the extent reasonably required for AJI personnel
to perform the Support Services, Larscom shall provide AJI personnel with
reasonable access to its employees, books and records, equipment, office space,
plants, telecommunications and computer equipment and systems, and any other
areas and equipment.
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ARTICLE 2.
COMPENSATION
2.01 CONSIDERATION AJI. (a) As consideration for the Support
Services, Larscom shall pay to AJI the price specified for each Support Service
as set forth in Exhibit A. If Larscom uses some, but not all, subsets of a
Support Service, the price for such Support Service shall be reduced in
proportion to the reduction of Larscom's usage of such Support Service. On the
first anniversary of the Effective Date, as hereinafter defined, such prices
shall increase three percent (3%). Consideration for any higher level of, or
new, Support Service which AJI consents to provide pursuant to Paragraph 1.03(b)
or (c) shall be mutually agreed by Larscom and AJI.
(b) In addition to the payment described in subparagraph (a) above,
Larscom shall reimburse to AJI an amount equal to the sum of (i) all of the out-
of-pocket payments, if any, incurred by AJI to obtain consents from such third
parties to permit AJI to provide any Support Service to Larscom hereunder, plus
(ii) any out-of-pocket payment by AJI on behalf of Larscom.
2.02 TAXES. Any taxes (other than income taxes) assessed on the
provision of the Support Services shall be paid by Larscom.
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2.03 INVOICES. Unless otherwise provided in Exhibit A, AJI will
submit to Larscom monthly invoices describing (a) all Support Services provided
to Larscom, and (b) those out-of-pocket payments described in Paragraph 2.01(b)
incurred during such month. Such monthly invoices will usually be issued by the
fifteenth day of the month following the month in which services are provided.
Each invoice shall include a summary list of the previously agreed upon Support
Service for which there are fixed dollar fees, together with documentation
supporting each of the invoiced amounts that are not covered by the fixed fee
agreements. The total of this list and supporting detail will equal the invoice
total, and will be provided with the invoice. All invoices shall be sent to
Larscom at the following address or to such other address as Larscom shall have
specified by notice in writing to Larscom:
Larscom Incorporated
0000 Xxxxxxx Xxxxx Xxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Vice President, Finance
2.04 PAYMENT OF INVOICES. (a) Payment of all invoices submitted shall
be made, at AJI's discretion, by check payable to AJI or by electronic funds
transmission in U.S. Dollars, without any offset or deduction of any nature
whatsoever, except if Larscom gives notice to AJI that is has a reasonable basis
for a dispute regarding a fee charged or
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service provided hereunder, within thirty (30) days of the invoice date. All
payments shall be made to the account set forth in written instructions by AJI
from time to time.
(b) Upon receipt of a notice of a dispute as provided in paragraph
2.04(a), the Parties shall use reasonable efforts to resolve such dispute. So
long as both Parties are negotiating the dispute in good faith, this Agreement
will continue in full force and effect but either Party may terminate the
service affected in the event the other Party ceases negotiating the dispute in
good faith. Otherwise, if any payment is not paid when due, AJI shall have the
right, without any liability to Larscom, or anyone claiming by or through
Larscom, upon ten (10) days written notice to cease providing the Support
Service(s) for which payment has not been made, which right may be exercised by
AJI in its sole and absolute discretion, until it receives such payment;
provided, that this right shall not affect AJI's ability to terminate this
Agreement as hereinafter set forth; and provided further, that with respect to a
Support Service involving an AJI employee benefit plan, this right shall be
subject to the terms of the plan document. Further, any payment that is not
paid when due shall be subject to interest at the rate of fifteen percent (15%)
per annum unless waived in writing by an officer of AJI. The foregoing remedies
of AJI shall be in addition to,
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and not in lieu of, any and all remedies available at equity and in law.
ARTICLE 3.
CONFIDENTIALITY
3.01 (i)OBLIGATION. (a) In addition to any obligations of
confidentiality pursuant to other agreements between the Parties, without the
prior written consent of the other Party, (i) any confidential information
received by it from the other Party during the provision of the Support
Services, including, without limitation, information which is not related to the
Support Services; provided such information is marked confidential, or if
provided orally, such information is reduced to writing and marked as
confidential within thirty (30) days of disclosure; and (ii) the specific terms,
conditions and information contained in this Agreement and any attachment
hereto.
(b) Each party agrees that it shall use the confidential information
received by it from the other Party only in connection with the provision or
receipt of the Support Services, and for no other purpose whatsoever.
(c) For the purposes of this Agreement, confidential information
shall not include information:
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(i) which is or becomes part of the public domain other than through
breach of this Agreement or through the fault of the receiving Party;
(ii) which is or becomes available to the receiving Party from a
source other than the disclosing Party, which source has, to the knowledge
of the receiving Party, no obligation of confidentiality to the disclosing
Party in respect thereof;
(iii) which is required to be disclosed by law or governmental
order;
(iv) the disclosure of which is mutually agreed to by the Parties;
(v) which has been independently developed by the other Party without
reference to the confidential information; or
(vi) which was known to the receiving Party prior to receipt of the
confidential information, as shown by its prior written records (which for
AJI were not records of Larscom's business prior to the date hereof).
3.02 EFFECTIVENESS. The foregoing obligations of confidentiality
shall be in effect during the term of this Agreement and any extensions thereof
and for a period of five (5) years after the termination or expiration of this
Agreement.
3.03 CARE AND INADVERTENT DISCLOSURE. With respect to any
confidential information, each Party agrees as follows:
(a) it shall use the same degree of care in safeguarding said
information as it uses to safeguard its own information which must be held in
confidence; and
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(b) upon the discovery of any disclosure or unauthorized use of said
information, or upon obtaining notice of such a disclosure or use from the other
Party, it shall take all necessary actions to prevent any further disclosure or
unauthorized use, and, subject to the provisions of Paragraph 1.04, such other
Party shall be entitled to pursue any other remedy which may be available to it.
ARTICLE 4.
TERM AND TERMINATION
4.01 TERM. This Agreement shall become effective on the Closing Date
of the initial public offering of the Class A Common Stock of Larscom
("Effective Date") and shall remain in force until the earliest occurrence of
the following events: (a) a date twenty-four (24) months after the Closing Date
(the "Time Period") or (b) until AJI's voting control of Larscom falls below
fifty (50%); PROVIDED, HOWEVER, that if such reduction of AJI's voting control
results from AJI's sale, transfer or other disposition of Class B Common Stock
held by AJI, then this Agreement shall remain in full force and effect for the
90 day period immediately following the occurrence of such event or (c) all of
the Support Services are eliminated by Larscom in accordance with Paragraph 1.05
above, at which time this Agreement shall automatically terminate upon the
payment of all amounts then due or (d) this Agreement is earlier terminated
under Paragraph 4.03 or 6.11 hereof.
4.02 EXTENSION. In the event that this Agreement is not terminated
pursuant to clauses (b), (c) and (d) of the first sentence of Paragraph 4.01,
Larscom may extend the Time Period for an additional twelve (12) months by
giving AJI at least forty-five (45) days
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prior written notice prior to the end of the Time Period.
4.03 DEFAULTS. (a) If either Party (hereafter called the "Defaulting
Party") shall fail to perform or default in the performance of any of its
obligations under this Agreement (other than as described in subparagraph (b)
below), the other Party (hereinafter called the "Non-Defaulting Party") may give
written notice to the Defaulting Party specifying the nature of such failure or
default and stating that the Non-Defaulting Party intends to terminate this
Agreement if such failure or default is not cured within forty-five (45) days of
such written notice. If any failure or default so specified is not cured within
such forty-five (45) day period, the Non-Defaulting Party may elect to
immediately terminate this Agreement. Such termination shall be effective upon
giving a written notice of termination from the Non-Defaulting Party to the
Defaulting Party and shall be without prejudice to any other remedy which may be
available to the Non-Defaulting Party against the Defaulting Party.
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(b) Either Party may immediately terminate this Agreement by a
written notice to the other without any prior notice upon the occurrence of any
of the following events:
(i) the other Party enters into proceedings in bankruptcy or
insolvency;
(ii) the other Party shall make an assignment for benefit of
creditors;
(iii) a petition shall be filed against the other Party under a
bankruptcy law, a corporate reorganization law, or any other law for relief
of debtors (or similar law in purpose or effect); or
(iv) the other Party enters into liquidation or dissolution
proceedings.
4.04 LARSCOM'S ADMINISTRATIVE AND SUPPORT SERVICES. (a) Larscom
acknowledges that AJI is providing the Support Services as an accommodation to
Larscom to allow Larscom a transitional period of time to obtain its own
administrative and support services. During the term of this Agreement, Larscom
agrees that it shall take all steps necessary to obtain its own administrative
and support services prior to the expiration of the Time Period.
(b) Larscom specifically agrees and acknowledges that AJI's
obligations to provide the Support Services shall immediately cease upon the
termination of this Agreement, unless extended in accordance with Section 4.02.
Upon the cessation of AJI's obligation to provide any Support Service,
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Larscom shall immediately cease using, directly or indirectly, such Support
Service (including, without limitation, any and all AJI software or third party
software provided through AJI, telecommunications services or equipment, or
computer systems or equipment).
(c) AJI SHALL HAVE NO LIABILITY OF ANY KIND OR NATURE WHATSOEVER
(INCLUDING, WITHOUT LIMITATION, INDIRECT, CONSEQUENTIAL, SPECIAL SUPPORT,
INCIDENTAL OR PUNITIVE DAMAGES) TO LARSCOM, OR TO ANYONE CLAIMING BY OR THROUGH
LARSCOM, FOR AJI'S CEASING TO PROVIDE ANY SUPPORT SERVICE UPON THE EXPIRATION OF
THE TIME PERIOD (AND ANY EXTENSION THEREOF IN ACCORDANCE WITH SECTION 4.02) FOR
SUCH SUPPORT SERVICE OR THE TERMINATION OF THIS AGREEMENT. LARSCOM SHALL HOLD
AJI HARMLESS AND WAIVES ANY AND ALL RIGHTS, AT LAW OR IN EQUITY, THAT IT MAY
HAVE TO BRING ANY SUIT, INCLUDING, BUT NOT LIMITED TO, INJUNCTIVE RELIEF, OR TO
ANY CLAIMS, DAMAGES, LOSSES, COSTS (INCLUDING ATTORNEY FEES), ACTIONS, OR
LIABILITY AGAINST AJI OR ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ASSIGNEES,
SUBSIDIARIES OR AFFILIATES ARISING OUT OF AJI'S CEASING TO PROVIDE ANY SUPPORT
SERVICE UPON THE EXPIRATION OF THE TIME PERIOD (AND ANY EXTENSION THEREOF IN
ACCORDANCE WITH SECTION 4.02) OR THE TERMINATION OF THIS AGREEMENT IN ACCORDANCE
WITH ITS TERMS.
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4.05 SURVIVAL OF CERTAIN OBLIGATIONS. The following obligations shall
survive the termination of this Agreement: (a) the obligations of each Party
under Articles 1.03(e), 3, 4 and 5, and (b) AJI's right to receive the
compensation for the Support Services provided, and reimbursement of the
payments described in Paragraph 2.01 above incurred, prior to the effective date
of termination.
ARTICLE 5.
INDEMNITIES
5.01 INDEMNITY BY AJI. Subject to the limitations set forth in
Paragraph 1.04 above, AJI shall indemnify, defend and hold Larscom harmless
against any and all claims, liabilities, damages, losses, costs, expenses
(including, but not limited to settlements, judgments, court costs and
reasonable attorneys' fees), fines and penalties arising out of any actual
injury, loss or damages of any nature whatsoever (including, without limitation,
loss of or damage to property, or damage to the environment) due or relating to
the provision of or failure to provide the Support Services, if and only if such
amounts are a direct result of the gross negligence or reckless or willful
misconduct of the personnel of AJI or its affiliates and/or any third parties
utilized by AJI to provide the Support Services to Larscom.
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5.02 INDEMNITY BY LARSCOM. Larscom shall indemnify, defend and hold
AJI harmless against any and all claims, liabilities, damages, losses, costs,
expenses (including, but not limited to, settlements, judgments, court costs and
reasonable attorneys' fees), fines and penalties arising out of any actual
injury, loss or damage of any nature whatsoever (including, without limitation,
loss of or damage to property, or damage to the environment) due or relating to
receiving or using the Support Services, if and only if such amounts are the
direct result of the gross negligence or reckless or willful misconduct of the
personnel of Larscom and/or any contract personnel or third parties whom Larscom
has assigned to assist AJI in providing the Support Services to Larscom.
5.03 TERM OF INDEMNITY. The indemnities contained in this Article
shall survive for a period of five (5) years after the termination of this
Agreement.
ARTICLE 6.
MISCELLANEOUS
6.01 AMENDMENTS. This Agreement shall not be amended or modified
except in a writing signed by the Parties.
6.02 SUCCESSORS AND ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of the Parties hereto and their respective successors
and permitted assigns.
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No Party shall assign this Agreement or any rights herein without the prior
written consent of the other Party, which consent may not be unreasonably
withheld.
6.03 MERGER. All understandings, representations, warranties and
agreements, if any, heretofore existing between the Parties regarding the
Support Services are merged into this Agreement, including Exhibit A attached
hereto, which fully and completely express the agreement of the Parties with
respect to the subject matter hereof. The Parties have entered into this
Agreement after adequate investigation with neither Party relying upon any
statement or representation not contained in this Agreement, or Exhibit A.
6.04 NOTICES. All notices, consents, requests, approvals, and other
communications provided for or required herein, and all legal process in regard
thereto, must be in writing and shall be deemed validly given, made or served,
(a) when delivered personally or sent by telecopy to the facsimile number
indicated below with a required confirmation copy sent in accordance with
subparagraph (c) below; or (b) on the next business day after delivery to a
nationally recognized express delivery service with instructions and payment for
overnight delivery; or (c) on the third day after deposited in any depository
regularly maintained by the United States Postal
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service, postage prepaid, certified or registered mail, return receipt
requested, addressed to the following address or to such other address as the
Party to be notified shall have specified to the other Party in accordance with
this paragraph:
If to AJI:
Xxxx Xxxxxxx Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Senior Vice President
and Chief Financial Officer
Facsimile: (000) 000-0000
If to Larscom:
Larscom Incorporated
0000 Xxxxxxx Xxxxx Xxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Vice President Finance
Facsimile: (000) 000-0000
6.05 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
6.06 HEADINGS. The various headings used in this Agreement are for
convenience only and are not to be used in interpreting the text of the Articles
or Paragraphs in which they appear or to which they relate.
6.07 SEVERABILITY. Wherever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law. If
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any portion of this Agreement is declared invalid or unenforceable for any
reason in any jurisdiction, such declaration shall have no effect upon the
remaining portions of this Agreement or on the validity or enforceability of the
offending portion in any other situation or in any other jurisdiction.
6.08 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which shall
constitute one and the same instrument.
6.09 RIGHTS OF THE PARTIES. Nothing expressed or implied in this
Agreement is intended or will be construed to confer upon or give any person or
entity, other than the Parities and their respective subsidiaries and
affiliates, any rights or remedies under or by reason of this Agreement or any
transaction contemplated hereby.
6.10 RESERVATION OF RIGHTS. Either Party's waiver of any of its
remedies afforded hereunder or at law is without prejudice and shall not operate
to waive any other remedies which that Party shall have available to it, nor
shall such waiver operate to waive the Party's rights to any remedies due to a
future breach, whether of a similar or different nature.
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6.11 FORCE MAJEURE. Any failure or omission by a Party in the
performance of any obligation under this Agreement shall not be deemed a breach
of this Agreement or create any liability, if the same arises from any cause or
causes beyond the control of such Party, including, but not limited to, the
following, which, for purposes of this Agreement shall be regarded as beyond the
control of each of the Parties hereto: acts of God, fire, storm, flood,
earthquake, governmental regulation or direction, acts of the public enemy, war,
rebellion, insurrection, riot, invasion, strike or lockout; provided, however,
that such Party shall promptly resume the performance whenever such causes are
removed. Notwithstanding the foregoing, if such Party cannot perform under this
Agreement for a period of forty-five (45) days due to such cause or causes,
either Party may immediately terminate this Agreement by providing written
notice to the other Party.
6.12 RELATIONSHIP OF THE PARTIES. It is expressly understood and
agreed that in rendering the Support Services hereunder, AJI is acting as an
independent contractor and that this Agreement does not constitute either Party
as an employee, agent or other representative of the other Party for any purpose
whatsoever. Except as set forth herein, neither Party has the right or
authority to enter into any contract, warranty, guarantee or other undertaking
in the name or for the
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account of the other Party, or to assume or create any obligation or liability
of any kind, express or implied, on behalf of the other Party, or to bind the
other Party in any manner whatsoever, or to hold itself out as having any right,
power or authority to create any such obligation or liability on behalf of the
other or to bind the other Party in any manner whatsoever (except as to any
actions by either Party at the express written request and direction of the
other Party).
6.13 WAIVER OF JURY TRIAL AND CONSENT TO JURISDICTION. EACH PARTY
HEREBY (a) WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO A JURY TRIAL IN CONNECTION
WITH ANY MATTER OR RIGHT ARISING UNDER THIS AGREEMENT OR RELATING TO THE SUPPORT
SERVICES, (b) CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL
COURT WITHIN THE STATE OF NEW YORK AND IRREVOCABLY AGREES THAT ALL ACTIONS OR
PROCEEDINGS ARISING UNDER OR RELATING TO THIS AGREEMENT OR THE SUPPORT SERVICES
SHALL BE LITIGATED IN ANY SUCH COURT, AND (c) WAIVES ANY OBJECTION WHICH IT MAY
HAVE BASED UPON IMPROPER VENUE OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY
PROCEEDINGS IN ANY SUCH COURT.
IN WITNESS WHEREOF, the parties hereto have caused this Administrative
Services Agreement to be executed the day and year first above written.
XXXX XXXXXXX INC.
By:
---------------------------------------
Name:
Title:
LARSCOM INCORPORATED
By:
-------------------------------------
Name:
Title:
Exhibit A-(1)
SERVICE AGREEMENT
TAX SUPPORT
DESCRIPTION OF SERVICE:
1. TAX COMPLIANCE. Manage and coordinate the preparation of Larscom's
income and franchise tax including:
* Separate company Federal Form 1120 and all accompanying forms and
schedules.
* 14 state income and franchise tax returns.
* Maintenance and utilization of tax compliance software to facilitate
preparation of company tax returns.
2. TAX ACCOUNTING. Determine tax accounts and footnotes for financial
statement purposes including:
* Computation of federal state and current and deferred tax provisions
and tax reserves.
* Preparation of financial statement footnotes.
* Presentation of above to outside auditors for review and sign off.
3. TAX AUDITS. Manage and coordinate all federal and state income and
franchise tax audits with regard to:
* Strategy, issues, exposure, presentation, documentation.
* Written responses, protests, appeals.
* State questionnaires.
Advise, as needed, on sales and use tax audits as well as other miscellaneous
tax audits. Represent Larscom before federal, state and local tax authorities.
5. TAX RESEARCH AND PLANNING. Identify tax planning opportunities,
research tax issues and implement strategies with regard to:
* Tax credits, restructuring, state nexus, etc.
* Tax legislation/rulings.
PRICE OF SERVICE: $95,000 per annum
Exhibit A-(2)
SERVICE AGREEMENT
ACCOUNTING SUPPORT
DESCRIPTION OF SERVICE:
1. Review monthly, quarterly and annual financial results for proper
classification and recording of transactions.
2. Assist Larscom in satisfying financial reporting requirements of a
public company.
3. Provide analyses and/or evaluations of material transactions,
including without limitation acquisitions, divestitures and capital
appropriations.
4. Obtain car rental contract on favorable terms.
PRICE OF SERVICE: $60,000 per annum
Exhibit A-(3)
SERVICE AGREEMENT
INTERNAL AUDIT SUPPORT
DESCRIPTION OF SERVICE:
1. Planning and performing operational audits of Larscom consisting of
rotation audit cycles focused on revenues, expenditures or production.
2. Preparation of audit reports, including recommendations, for
presentation to the managements of Larscom and Xxxx Xxxxxxx Inc., the Audit
Committees of the Boards of Directors of Larscom and AJI, and outside auditors.
3. Provide assistance with respect to due diligence for mergers,
acquisitions and divestitures.
PRICE OF SERVICE: $52,000 per annum.
Exhibit A-(4)
SERVICE AGREEMENT
TREASURY SERVICES
DESCRIPTION OF SERVICE:
1. FINANCING. Study and recommend capital structure; identify and
evaluate alternative financing vehicles; identify and evaluate vendors from whom
to obtain financing; negotiate financing contracts; administer financing
contracts; negotiate amendments, etc. as needed; consult on various financing
issues.
2. CASH MANAGEMENT. Design and implement cash management system;
concentrate all collected cash and fund disbursements daily; consult on cash
management matters.
3. INSURANCE. Define risks to be insured; obtain insurance coverages.
4. CREDIT AND COLLECTION MANAGEMENT. Advise on proper procedure; monitor
compliance with corporate policy. Purchase and administer Dun and Bradstreet
contract of credit information.
5. COMPANY CARS. Negotiate company car leases.
6. GENERAL. Advise on various matters, such as foreign exchange.
PRICE OF SERVICE: $105,000 per annum
Exhibit A-(5)
SERVICE AGREEMENT
HUMAN RESOURCES SERVICES
DESCRIPTION OF SERVICE:
1. Management of Qualified Plans - Retirement (RP) and Thrift (TP) and
Health & Welfare Plans (H&W) - Medical, Dental, Vision, Flex, Life and Long-Term
Disability, including:
* Process and correspond with retirees and deferred vesteds (RP).
* Process new entrants, loans, withdrawals, terminations (TP).
* Process monthly contribution and loan data (TP).
* Assist in data collection (RP).
* Determine FAS 87 cost and contribution requirement (RP).
* Perform non-discrimination testing (TP).
* Develop investment education programs for employees (TP).
* With Administrative Committee, review Plan fund choices, asset
performance and allocation (RP/TP).
* Assist with open enrollment (H&W).
* Process monthly contributions and confirm enrollment with carriers
(H&W).
* Determine annual premium payments (H&W).
* Provide ongoing analysis of claims experience and health care reserves
(H&W).
* Review and update contract with administrators (H&W).
* Prepare information for financials and Summary Annual Reports.
* File forms with government - 5500, PBGC and related forms.
* Prepare and update Plan text and file for determination letter as
necessary.
* Interpret Plan provisions, resolve problems.
* Prepare Summary Plan Descriptions and develop communications as
necessary.
* Interface with consultants, legal counsel, trustees, etc.
* Provide forms, programs, processes and direction for local benefit
advising.
* Design plan as necessary to meet Company and employee needs.
-2-
2. Surveys
* Develop and implement employees survey as appropriate, generally on a
biannual basis consistent with rest of AJI.
* Provide recommendations and analysis of result in context of entire
Company and databank.
3. Compensation
* Provide consulting/staff support as requested in areas of executive
and telecommunications salary and incentive programs.
* Provide guidelines for annual merit budget.
4. Training and Development
* Development of AJI executive education programs for executives at
which selected executives may participate.
* Provide lending library of training tapes of training materials.
* Organize AJI HR conference as appropriate for all AJI companies,
including Larscom.
5. HRIS
* Provide and maintain First Resource system.
6. Employee Relations
* Develop HR policy for all AJI, including Larscom.
* Troubleshoot and consult in all human resources areas.
PRICE OF SERVICE: $205,000 per annum
NOTE: Currently, Larscom will continue to participate in and be covered by
AJI's benefit and pension plans as appropriate. Larscom agrees to reimburse AJI
for the cost of the benefits received by Larscom's employees.
Exhibit A-(7)
SERVICE AGREEMENT
LEGAL SERVICES
DESCRIPTION OF SERVICE:
1. Provide legal counsel with respect to the full range of commercial
legal matters, including without limitation contract drafting, negotiation and
interpretation; employment law; environmental law; Uniform Commercial Code;
antitrust; mergers and acquisitions; and claims and dispute resolution.
2. Perform corporate recordkeeping and support.
3. Retain and manage outside counsel with expertise in litigation
intellectual property, securities law and environmental law.
PRICE OF SERVICE: $105,000 per annum
