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Exhibit 10.10
ADMINISTRATIVE SERVICES AGREEMENT
THIS ADMINISTRATIVE SERVICES AGREEMENT (this "Agreement"), dated as of
June 8, 1999, by and between espernet.com, inc., a Delaware corporation (the
"Company"), and Espernet.com, Inc., a New York corporation (the "Provider").
WHEREAS, the Company desires that the Provider perform certain
management and administration services for the Company, and the Provider desires
to perform such management and administrative services for the Company, subject
to the terms and conditions hereinafter set forth.
NOW, THEREFORE, IN CONSIDERATION of the foregoing, and of the mutual
premises, covenants, agreements, representations and warranties contained
herein, and other good and valuable consideration the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. Agreement to Provide Administrative Services. The Provider shall
provide or cause to be provided to the Company, if, when and to the extent
required by the Company, the administrative services described in Exhibit A and
such other services that the Provider, is capable of providing with its
then-current personnel and facilities without unreasonable interference with its
normal business operations (the "Administrative Services").
2. Charges for Services. For all costs and expenses, including
third-party charges, incurred by the Provider in providing the Administrative
Services to the Company that are separately identifiable, the Company shall pay
to the Provider the actual cost thereof. For Administrative Services provided by
the Provider's employees, the actual costs shall include, without limitation,
(i) an hourly charge for such employees' time which shall approximate the
Provider's cost of such employee's compensation and benefits and (ii) an
overhead charge in an amount equal to a pro rata share of the Provider's general
and administrative costs based on the ratio of employee time devoted to
providing the Administrative Services to the total Provider employee time. For
all costs and expenses, including third-party charges, incurred by the Provider
in providing the Administrative Services to the Company that are not separately
identifiable, the Company shall pay to the Provider that portion of such costs
and expenses reasonably attributable to the Company. The amount of such payments
shall be determined using generally accepted accounting principles consistently
applied.
3. Invoices. Except for items as to which other payment arrangements
have been made, the Provider shall submit to the Company, by the 15th day of
each month, an invoice for all charges associated with the Administrative
Services for the preceding month and any adjustments for prior months. Except as
provided in this Section 3 business hereof, the Company shall remit payment in
full before the last business day of the month in which the invoice is received
for all charges invoiced on or before the 15th day of such month. From the
Effective
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Date through the date of the Company's IPO, all charges shall be accrued but not
paid until the closing of the IPO. Notwithstanding any other provision of this
Section 3, the Provider shall timely make any and all payments to third parties
necessary to ensure continued services of the types contemplated in this
Agreement.
4. Disputes. In the event of a dispute as to an invoiced amount, the
Company shall promptly pay all undisputed amounts, but shall be entitled to
withhold amounts in dispute. The Company shall promptly notify the Provider of
any such dispute. Each party will provide the other sufficient records and
information to resolve any such dispute and, without limiting the rights and
remedies of the parties hereunder, will negotiate in good faith a resolution
thereto.
5. Method of Payment. Transfer of funds pursuant to this Agreement
shall be made in U.S. dollars by Company check or wire transfer of immediately
available funds to an account or accounts specified by the party receiving such
payment. Whenever any payment hereunder is required or requested on a day other
than a business day, such payment shall be made on the next succeeding business
day and any such extension of time shall be included in the computation of the
payment of interest.
6. Performance of Administrative Services.
(a) Degree of Care. The Provider shall perform the
Administrative Services with the same degree of care, skill and prudence
customarily exercised by it in respect of its own business, operations and
affairs.
(b) Certain Limitations. Each party acknowledges that the
Administrative Services shall be provided only with respect to the business of
the Company and its respective subsidiaries as such businesses exist as of the
Effective Date or as otherwise mutually agreed by the parties.
7. Limitations on Liability and Indemnification.
(a) Limitations on Liability. Neither party shall have any
liability under this Agreement (including any liability for its own negligence)
for damages, losses or expenses suffered by the other party or its subsidiaries
as a result of the performance or non-performance of such party's obligations
hereunder, unless such damages, losses or expenses are caused by or arise out of
the willful misconduct or gross negligence of such party or a breach by such
party of any of the express provisions hereof. In no event shall either party
have any liability to the other party for indirect, incidental or consequential
damages that such other party or its subsidiaries or any third party may incur
or experience on account of the performance or non-performance of such party's
obligations hereunder. Notwithstanding the foregoing, each party shall use its
best efforts to timely cure any defect in or failure of performance (whether as
a result of negligence or otherwise) and to otherwise correct or improve the
level of performance in order to render
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Administrative Services substantively and qualitatively equal to or better than
those presently being rendered.
(b) Indemnification. Subject to the limitations on liability
set forth in Section 7(a) hereof, each party shall indemnify, defend and hold
harmless the other party and its directors, officers, employees, agents and
representatives from and against all claims, liabilities, damages, losses and
expenses (including reasonable attorneys fees and expenses) caused by or arising
out of the willful misconduct or gross negligence of such indemnifying party in
the performance or non-performance of its obligations hereunder or the breach by
such indemnifying party of any of the express provisions hereof.
(c) Survival. The provisions of this Section 7 shall survive
any termination of this Agreement.
8. Term of Agreement. This Agreement shall be effective until it is
terminated by either party in accordance with Section 12 hereof.
9. Confidentiality. Each party will hold in trust and maintain
confidential and, except as required by law, not disclose to others without the
prior written approval of the other party, any information received by it from
the other party or developed or otherwise obtained by it in connection with the
performance of its obligations hereunder (the "Information"). Within ninety (90)
days after the date of termination of this Agreement, each party will return to
the other party, all documents, data and other materials of whatever nature
relating to the businesses of the other and its subsidiaries that it obtained in
connection with the performance of its obligations hereunder, provided that the
parties may retain any Information to the extent reasonably needed to comply
with applicable tax, accounting or financial reporting requirements or to
resolve any legal issues identified at the time of termination. The provisions
of this Section 9 shall survive any termination of this Agreement.
10. Representations and Covenants of the Company. The Company hereby
represents and covenants to the Provider as follows:
(a) The Company is a Delaware corporation, validly existing
and in good standing under the laws of the State of Delaware and has the power
and authority to carry on its business as it is now being conducted.
(b) The Company has and will continue to conduct its Internet
service provider in accordance and compliance with any and all laws, regulations
and professional business standards applicable thereto.
(c) The Company agrees to do everything within its ability to
reasonably protect the ongoing goodwill of the Provider.
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11. Relationship of the Parties.
(a) Independent Contracting Parties. The Provider and the
Company are independent contracting parties. Nothing in this Agreement shall be
construed to create a principal-agent, employer-employee, or master-servant
relationship.
(b) Benefits and Taxes. The Company and the Provider hereby
understand and agree that:
(i) The Company will not withhold on behalf of the
Provider, and the Provider will not withhold on behalf of the Company, any sums
for income tax, unemployment insurance, social security, or any other
withholding pursuant to any law or requirement of any governmental body; and
(ii) The Company and the Provider are individually
responsible for all of such payments, withholdings, and benefits, if any. Each
party hereby agrees to indemnify and hold the other party harmless for any of
the above costs which are not the responsibility of such other party.
12. Termination. This Agreement may be terminated by either party upon
30 days written notice to the other party. The Provider shall provide on invoice
for all Administrative Services provided pursuant to this Agreement within 15
days of such written notice and the Company shall have 15 days from receipt of
such invoice to make payment therefore in accordance with Paragraph 3 hereof.
13. Miscellaneous Provisions.
(a) Arbitration. In the event of any dispute, claim or
controversy concerning, arising out of or relating to this Agreement, its
effect, the breach thereof, or the transactions contemplated by it, including
without limitation, issues of arbitrability, the same shall be settled by
arbitration in accordance with the Federal Arbitration Act (Title 9 of the U.S.
Code) and the Commercial Arbitration Rules of the American Arbitration
Association (the "AAA Rules"). The arbitration shall be before one neutral
arbitrator to be selected in accordance with the AAA Rules whose decision shall
be rendered in writing. The results of the arbitration shall be final and
binding upon the parties, with costs paid by the party who does not prevail in
the arbitration as determined by the arbitrator, and judgment on the award may
be entered in any court having jurisdiction thereof. In rendering the award, the
arbitrator shall determine the rights and obligations of the parties according
to the substantive and procedural laws of the State of New York without regard
to principles of conflict of laws. The arbitration shall be held in New York, or
at such other place as may be selected by mutual agreement of the parties. The
arbitrator shall have no authority to award punitive damages or any other
damages not measured by the prevailing party's actual damages, and may not, in
any event, make any ruling, finding or award that does not conform to the terms
and conditions of this Agreement. Neither party nor the arbitrator may
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disclose the existence, content, or results of any arbitration hereunder without
the prior written consent of both parties, unless required to do so by order of
a governmental authority, or as required by either party's auditors in
connection with the preparation of audited financial statements, or as required
by the disclosure requirements of any U.S. or foreign securities law, regulation
or stock exchange rule, or if a petition to enforce arbitration is necessary to
be filed with a court of competent jurisdiction.
(b) Applicable Law. This Agreement will be deemed to be a
contract made under the laws of the State of New York and for all purposes will
be governed by and interpreted in accordance with the laws prevailing in the
State of New York, without regard to principles of conflict of laws.
(c) Prevailing Agreement. The terms and provisions of this
Agreement entirely supersede any other agreement between the parties with
respect to the subject matter hereof and constitute the entire agreement between
the parties.
(d) Inurement. This Agreement will inure to the benefit of and
be binding upon the parties, their heirs, administrators, successors and
assigns.
(e) Counterparts. This Agreement may be executed in several
counterparts, each of which when so executed will be deemed to be an original
and which will together constitute the one and the same agreement; and it will
not be necessary in proving this Agreement to produce or to prove more than one
such counterpart.
(f) Severability. If an arbitration proceeding or court of
competent jurisdiction, the parties agree that the arbitrator or court shall
limit the scope or duration shall find any term or provision deemed by an
arbitration proceeding or court of competent jurisdiction to be unenforceable
and invalid for any other reason shall be severed from this Agreement, and the
remainder of this Agreement shall continue in full force and effect.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the undersigned have executed this
Agreement on the day first above written.
THE COMPANY:
ESPERNET.COM. INC. (Delaware)
By:________________________________
Name:
Title:
THE PROVIDER:
ESPERNET.COM, INC. (New York)
By:________________________________
Name:
Title:
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EXHIBIT A
ADMINISTRATIVE SERVICES TO BE PROVIDED BY THE PROVIDER
The Provider shall provide or cause to be provided to the Company the
services of its employees and consultants, including, but not limited to:
management, accounting and financial, legal, research and development,
acquisition representatives and finders, systems and other support, and such
other administrative services as the Provider is capable of providing with its
then-current personnel and facilities without unreasonable interference with the
Provider's normal business operations.
The Provider shall also provide the Company with the use of the
Provider's facilities, equipment and supplies, including computer hardware and
software and peripherals, telephone, photocopiers, facsimile and postage
machines.