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EXHIBIT 10.5
EXECUTION COPY
ADMINISTRATION AGREEMENT
THIS ADMINISTRATION AGREEMENT (this "Agreement"), made and entered into
as of the 19th day of March, 1996 by and between INTERMEDIA MANAGEMENT, INC., a
California corporation ("IMI"), INTERMEDIA CAPITAL PARTNERS IV, L.P., a
California limited partnership ("ICP"), and INTERMEDIA PARTNERS IV, L.P., a
California limited partnership ("IP-IV")(ICP and IP-IV, each a "Partnership" and
collectively, the "Partnerships") with reference to the following facts and
circumstances,
W I T N E S S E T H:
WHEREAS, the Partnerships are engaged in the businesses of owning and
operating subsidiaries (the "Businesses"), which subsidiaries own and operate
cable television systems; and
WHEREAS, the Partnerships desire to retain IMI to provide certain
administrative services in connection with the management and operation of the
Businesses:
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants herein set forth, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
Section 1. Engagement. the Partnerships hereby engage IMI to provide
the administration services set forth in Section 3 hereof in connection with the
Businesses, and IMI hereby accepts such engagement, subject to and upon the
terms and conditions hereof.
Section 2. Term. The term of this Agreement shall commence on the date
hereof and shall continue until terminated, with or without cause, by any party,
at any time, on at least one hundred twenty (120) days' prior written notice to
the other parties. In the event of any such termination by the Partnerships, the
provisions of Paragraph 5(b) shall apply.
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Section 3. Duties and Authority of IMI. IMI shall provide the following
administrative services with respect to the operation of the Businesses during
the term of this Agreement:
(a) Establishment and maintenance of all accounting,
bookkeeping, billing, collections and other financial systems and
records relating to the Businesses and the preparation of appropriate
monthly financial reports to be furnished to the Partnerships;
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(b) Payment of all expenses and expenditures of the
Partnerships in accordance with the respective budgets (each a "Budget
and together the "Budgets") of the Partnerships; provided, however,
that any modification or deviation of greater than ten percent (10%)
from any Budget item shall require the approval of the respective
Partnership;
(c) Preparation of all periodic reports to governmental and
regulatory agencies, and maintenance of all records, documents and
reports of operations, including employment and personnel activities,
in compliance with applicable laws and regulations, including, but not
limited to, any equal employment opportunity compliance reporting;
(d) Establishment and maintenance of all other
records relative to the operation of the Businesses;
(e) Administration of the Partnerships' employee benefit
plans, including any plans, programs, agreements, policies, commitments
or other arrangements which provide benefits to the employees of the
Partnerships, and ensuring compliance with applicable laws governing
the administration and operation of such employee benefit plans;
(f) Preparation of all required tax returns, reports or
statements of any nature related to taxable periods or portions thereof
that occur during the term hereof, including without limitation,
governmental charges, assessments and required contributions of the
Partnerships with respect to their business; and
(g) Maintenance of casualty, liability and other
insurance covering the business and assets of the
Partnerships.
All records and reports established, prepared or maintained by IMI for
the Partnerships shall be the property of the Partnerships, and the Partnerships
and their duly authorized representatives, employees, partners, agents and
attorneys shall have reasonable access thereto.
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Section 4. System Operating Accounts. IMI shall establish and maintain
with one or more banks reasonably acceptable to each Partnership, one or more
checking accounts ("Accounts") in the name and for the account of each
Partnership, for the deposit of all funds collected by the respective
Businesses. IMI shall have the authority to make deposits to the Accounts. IMI
shall have the authority to make disbursements and withdrawals therefrom for the
expenses and expenditures of the Partnerships in accordance with paragraph 3(b)
and to make payment to IMI of its fees earned under this Agreement.
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Section 5. Administrative Fee.
(a) In consideration of the services to be provided to the Partnerships
by IMI pursuant to this Agreement, IMI shall be reimbursed such portion of IMI's
expenses (not including a profit but including: all out-of-pocket expenses,
salaries and benefits, and reimbursement of equipment costs as IMI deems is
reasonably related to the time and expense actually devoted by IMI to the
Partnerships hereunder, and general overhead expenses of IMI attributable to the
services provided to the Partnerships) reasonably incurred in connection with
its services to the Partnerships hereunder as described in Section 4 hereof. IMI
shall not be entitled to any other fees or compensation for its services
pursuant to this Agreement.
(b) Notwithstanding any termination of this Agreement pursuant to
Section 2, IMI shall remain entitled (i) to receive the fee set forth in
Paragraph 5(a) until the termination notice period set forth in Section 2
lapses; and (ii) the Partnerships shall assume such portion of all of IMI's
contracts and obligations as IMI determines is comparable to the amount of such
contracts and obligations the Partnerships had been charged prior to such
termination, including without limitation a portion of its leases, equipment
contracts and personnel obligations for the remainder of the then applicable
term of such obligations or until the total number of basic subscribers served
by systems for which IMI provides administrative services similar to those
provided hereunder reaches the level of basic subscribers served by IMI
immediately prior to the termination of this Agreement by the Partnerships;
provided, however, that the Partnerships shall continue to be liable for such
obligations if the corresponding rights are not assigned to IMI.
Section 6. Indemnification by the Partnerships. the Partnerships shall
indemnify IMI, its officers, directors, employees and control persons and hold
them harmless to the fullest extent permitted by law from any and all claims,
damages, liabilities, costs and expenses (including reasonable attorneys' fees
and court costs) which they may incur by reason of IMI's duties or obligations
hereunder except with respect to gross negligence or criminal misconduct.
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Section 7. Return of Information Upon Termination.
Upon termination of this Agreement, all books and records in the
possession of IMI relating to the maintenance and operation of and accounting
for the Businesses together with all supplies and other items of property owned
by the Partnerships and in IMI's possession shall be delivered to the
Partnerships, and IMI's right to compensation shall cease; provided, however,
that IMI shall be entitled to be fully compensated for services rendered prior
to the date of termination as set forth in Section 5 hereof; and provided
further, that the provisions of Section 6 hereof shall remain in full force and
effect and shall survive such termination.
Section 8. Miscellaneous Provisions.
(a) Assignment. IMI shall be entitled to assign as collateral its right
to receive compensation hereunder, but may not assign this Agreement and its
other rights, duties and obligations hereunder to any person, other than: (i) a
wholly owned subsidiary of InterMedia Capital Partners IV, L.P., a California
limited partnership or of InterMedia Capital Management IV, L.P., a California
limited partnership; (ii) a corporation, partnership or individual which owns
100% of the stock in IMI immediately prior to such assignment; or (iii) a wholly
owned subsidiary of the corporation, partnership or individual referred to in
clause (ii) immediately above, without the consent of the Partnerships;
provided, however, that any assignment to an entity described in clause (i),
(ii) or (iii) immediately above may be made (x) only in the event that the
management of such assignee shall be essentially the same as IMI immediately
prior to such assignment and (y) only upon the consent of the Partnerships,
which consent shall not be unreasonably withheld. This Agreement may not
otherwise be assigned by any party hereto without the consent of the other
party.
(b) Successors Bound. Subject to the provisions of Section 8(a)
immediately above, this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns.
(c) Notices. Any notice or demand desired or required to be given
hereunder shall be in writing and deemed given when
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personally delivered, sent by overnight courier or deposited in the mail,
postage prepaid, sent certified or registered, return receipt requested, and
addressed as set forth below or to such other address as any party shall have
previously designated by such a notice. Any notice so delivered personally shall
be deemed to be received on the date of delivery; any notice so sent by
overnight courier shall be deemed to be received one (1) business day after the
date sent; and any notice so mailed shall be deemed to be received on the date
shown on the return receipt (evidence of rejection of delivery or inability to
deliver because of a changed address of which no notice was given pursuant to
the provisions of this Agreement shall be deemed to be a receipt).
If to either of InterMedia Partners
the Partnerships: 235 Montgomery St.
Suite 420
San Francisco, CA 94104
Attn.: Leo J. Hindery, Jr.
With copy to: Pillsbury Madison & Sutro LLP
P.O. Box 7880
San Francisco, CA 94120
Attn.: Gregg Vignos, Esq.
If to IMI: InterMedia Management, Inc.
235 Montgomery Street
Suite 420
San Francisco, CA 94104
Attn.: Leo J. Hindery, Jr.
With copy to: Pillsbury Madison & Sutro LLP
P.O. Box 7880
San Francisco, CA 94120
Attn.: Gregg Vignos, Esq.
(d) Section Headings. The section headings in this Agreement are for
reference purposes only and shall not affect the interpretation of this
Agreement.
(e) Entire Agreement. This Agreement represents the
entire agreement among the parties relating to the subject
matter hereof.
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(f) Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original,
but all of which shall constitute the same instrument.
(g) Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of
California.
(h) Severability. If any provision herein is found to be unenforceable,
invalid or illegal, such provision shall be deemed deleted from this Agreement,
and the remainder of this Agreement shall not be affected or impaired thereby.
(i) Attorneys' Fees. If any action, including, without limitation,
arbitration, should arise among the parties hereto under this Agreement, the
prevailing party in such action shall be reimbursed for all reasonable expenses
incurred in connection with such action, including reasonable attorneys' fees.
(j) Further Assurances. The parties hereto agree to execute any and all
such further agreements, instruments or documents, and to take any and all such
further action, as may be necessary or desirable to carry into effect the
purpose and intent of this Agreement.
IN WITNESS WHEREOF, the parties have set their hands effective as of
the date first written above.
INTERMEDIA CAPITAL PARTNERS IV, L.P., a
California limited partnership
By InterMedia Capital Management IV,
L.P., a California limited partnership,
Its Managing General Partner
By /s/ Leo J. Hindery, Jr.
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Leo J. Hindery, Jr.
Managing General Partner
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INTERMEDIA PARTNERS IV, L.P., a
California limited partnership
By InterMedia Capital Management IV,
L.P., a California limited
partnership, Its Managing General
Partner
By /s/ Leo J. Hindery, Jr.
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Leo J. Hindery, Jr.
Managing General Partner
INTERMEDIA MANAGEMENT, INC.,
a California corporation
By /s/ Leo J. Hindery, Jr.
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Leo J. Hindery, Jr.
President
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