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EXHIBIT 10.6
EXECUTION COPY
ADMINISTRATION AGREEMENT
THIS ADMINISTRATION AGREEMENT (this "Agreement"), made and
entered into as of the 30th day of July, 1996 by and between INTERMEDIA
MANAGEMENT, INC., a California corporation ("IMI"), and INTERMEDIA PARTNERS
SOUTHEAST, a California general partnership ("IPSE"), with reference to the
following facts and circumstances,
W I T N E S S E T H:
WHEREAS, IPSE is the owner or purchaser of cable television systems
located in and around Nashville, Tennessee (such systems, together with any
other cable television systems acquired by IPSE in the future, the "Systems");
and
WHEREAS, IPSE desires to retain IMI to provide certain administrative
services in connection with the management and operation of the Systems:
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. IPSE hereby engages IMI to provide the
administration services set forth in Section 3 hereof in connection with the
Systems, 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 either
party, at any time, on at least one hundred twenty (120) days' prior written
notice to the other party. In the event of any such termination, the provisions
of Paragraph 5(b) shall apply.
Section 3. Duties and Authority of IMI. IMI shall provide the following
administrative services with respect to the operation of the Systems 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 Systems and the preparation of appropriate
monthly financial reports to be furnished to IPSE;
(b) Payment of all expenses and expenditures of IPSE in
accordance with the budget (the "Budget") of IPSE; provided, however,
that any modification or
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deviation of greater than ten percent (10%) from any Budget item shall
require the approval of IPSE;
(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 Systems;
(e) Administration of IPSE's employee benefit plans, including
any plans, programs, agreements, policies, commitments or other
arrangements which provide benefits to the employees of IPSE, 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 IPSE
with respect to its business; and
(g) Maintenance of casualty, liability and other insurance
covering the business and assets of IPSE.
All records and reports established, prepared or maintained by IMI for
IPSE shall be the property of IPSE, and IPSE and its duly authorized
representatives, employees, partners, agents and attorneys shall have reasonable
access thereto.
Section 4. System Operating Accounts. IMI shall establish and maintain
with one or more banks reasonably acceptable to IPSE one or more checking
accounts ("System Operating Accounts") in the name and for the account of IPSE,
for the deposit of all funds collected by the Systems. IMI shall have the
authority to make deposits to the System Operating Accounts. IMI shall have the
authority to make disbursements and withdrawals therefrom for the expenses and
expenditures of IPSE in accordance with paragraph 3(b) and to make payment to
IMI of its fees earned under this Agreement.
Section 5. Administrative Fee.
(a) In consideration of the services to be provided to IPSE by IMI
pursuant to this Agreement, IMI shall be reimbursed such portion of IMI's
expenses (not including a profit but including: out-of-pocket expenses, salaries
and benefits, and
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reimbursement of equipment costs as IMI deems is reasonably related to the time
and expense actually devoted by IMI to IPSE hereunder; and general overhead
expenses of IMI attributable to the services provided to IPSE based on the ratio
of basic subscribers of IPSE to all basic subscribers served by systems for
which IMI provides administrative services similar to those provided hereunder)
reasonably incurred in connection with its services to IPSE hereunder as
described in Section 3 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) IPSE 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 IPSE 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 IPSE; provided, however, that IPSE shall continue to be liable
for such obligations if the corresponding rights are not assigned to IMI.
Section 6. Indemnification by IPSE. IPSE 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.
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 Systems together with all supplies and other items of property owned by
IPSE and in IMI's possession shall be delivered to IPSE, 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.
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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 Partners IV, L.P., a California limited
partnership, 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 IPSE; provided, however, that any
assignment to an entity described in clause (i), (ii) or (iii) immediately above
may be made only in the event that the management of such assignee shall be
essentially the same as IMI immediately prior to such assignment. 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 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 IPSE: InterMedia Partners Southeast
235 Montgomery St.
Suite 420
San Francisco, CA 94104
Attn.: Leo J. Hindery, Jr.
With copy to: Pillsbury Madison & Sutro LLP
235 Montgomery Street
San Francisco, CA 94104
Attn.: Gregg Vignos, Esq.
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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
235 Montgomery Street
San Francisco, CA 94104
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.
(f) Counterparts. This Agreement may be executed in 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
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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 PARTNERS SOUTHEAST,
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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