1
EXHIBIT 10.8
Execution Copy
INTERMEDIA PARTNERS OF WEST TENNESSEE, L.P.
AMENDED AND RESTATED ADMINISTRATION AGREEMENT
THIS AMENDED AND RESTATED ADMINISTRATION AGREEMENT (this
"Agreement"), made and entered into as of the 27th day of December, 1990 by and
between INTERMEDIA MANAGEMENT, INC., a California corporation ("IMI"), and
INTERMEDIA PARTNERS OF WEST TENNESSEE, L.P., a California limited partnership
("West Tennessee"), with reference to the following facts and circumstances,
W I T N E S S E T H:
Whereas West Tennessee is the owner of cable television
systems in various locations in the United States (such systems, together with
any other cable television systems acquired by West Tennessee in the future, the
"Systems"); and
Whereas West Tennessee desires to retain IMI to provide
certain administrative services in connection with the management and operation
of the Systems; and
Whereas West Tennessee understands that IMI is a multi-purpose
corporation and will be providing similar services to other cable systems:
N o w, T h e r e f o r e, 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. West Tennessee 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 initial term of this Agreement (the
"Initial Term") shall commence on the date hereof and shall continue until the
earlier of (i) three (3) years from the date hereof and (ii) the date this
Agreement is terminated by either party hereto in accordance with Section 6
hereof. Notwithstanding the foregoing, this Agreement shall be automatically
extended following the Initial Term for successive terms of six (6) months in
duration, unless one of the parties hereto has given at
-1-
2
least thirty (30) days' notice to the other that it wishes to terminate this
Agreement pursuant to Section 6(c) hereof.
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 West Tennessee;
(b) Preparing and filing, or causing to be prepared and filed,
all periodic reports to governmental and regulatory agencies, preparing
and maintaining, or causing to be prepared and maintained, 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;
(c) Establishment and maintenance of all other records
relative to the operation of the Systems; and
(d) Administration of West Tennessee's employee benefit plans,
including any plans, programs, agreements, policies, commitments or
other arrangements which provide benefits to the employees of West
Tennessee, and ensuring compliance with applicable laws governing the
administration and operation of such employee benefit plans.
All records and reports established, prepared or maintained by
IMI for West Tennessee shall be the property of West Tennessee, and West
Tennessee and its duly authorized representatives, partners, agents and
attorneys shall have reasonable access thereto.
Section 4. Direct Cost Reimbursement and
Administrative Fee.
(a) In consideration of the services to be provided to West
Tennessee by IMI pursuant to this Agreement, IMI shall be reimbursed for the
cost of IMI's Directly Allocated Expenditures ("Direct Expenditures") which are
incurred by IMI for the direct benefit of West Tennessee (including, but not
limited to, out-of-pocket expenses, insurance costs and consulting fees as IMI
deems
-2-
3
is directly related to the administration of West Tennessee).
(b) In consideration of the services to be provided to West
Tennessee by IMI pursuant to this Agreement, (i) IMI shall receive cost plus two
percent (2%) of such portion of IMI's General Overhead Expenditures ("Overhead")
which are incurred by IMI for the direct benefit of West Tennessee (including,
but not limited to, salaries and benefits; office rental and other costs
incurred to provide financial records); and (ii) IMI shall receive the cost, as
measured by the associated depreciation or amortization (as claimed in the
federal income tax return of IMI), plus two percent (2%) thereof, of such
portion of IMI's Capital Expenditures ("Capital Expenditures") which are
incurred by IMI in connection with the Overhead as incurred by IMI for the
direct benefit of West Tennessee (including, but not limited to, furniture,
computers and leasehold improvements.) All charges for the direct benefit of
West Tennessee under this subparagraph (b) shall be determined based on the
ratio of basic subscribers of West Tennessee to all basic subscribers served by
systems for which IMI provides administrative services similar to those provided
hereunder. The determination of which category an expenditure under either
subparagraph (a) or (b) relates to shall be determined by IMI. IMI shall not be
entitled to any other fees or compensation for its services pursuant to this
Agreement.
(c) Fifteen (15) days after the end of each month, IMI will
notify West Tennessee of the cost of the Direct Expenditures applicable to West
Tennessee. West Tennessee shall make payment to IMI of such costs within fifteen
(15) days of receipt of such notice.
(d) Fifteen (15) days after the end of each month, IMI will
notify West Tennessee of the cost of the Overhead applicable to West Tennessee.
West Tennessee shall make payment to IMI of such costs within fifteen (15) days
of receipt of such notice. The payment of the charge of two percent (2%) above
the cost of the Overhead shall be deferred as set forth in subparagraph (f)
below.
(e) Fifteen (15) days after the end of each year, IMI will
notify West Tennessee of the cost of the Capital Expenditures applicable to West
Tennessee and West Tennessee shall make payment to IMI within fifteen (15) days
of receipt of such notice. The payment of the charge of two percent (2%) above
the cost of the Capital Expenditures shall be deferred as set forth in
subparagraph (f) below.
(f) Payment of all remaining fees owing to IMI under this
Agreement after payment as provided for in
-3-
4
subparagraphs (d) and (e) above shall be deferred until the later of (i) the
sale of all or substantially all of the assets of West Tennessee; or (ii)
payment of all debt of West Tennessee which is currently outstanding or which is
incurred under that certain Loan Agreement dated as of September 11, 1990, among
West Tennessee, Robin Cable Systems, L.P. and General Electric Capital
Corporation.
(g) Notwithstanding any termination of this Agreement pursuant
to Section 2, IMI shall remain entitled (i) to receive the fees set forth in
Paragraphs 4(a) and 4(b) until the termination notice period set forth in
Section 2 lapses; (ii) to receive any amounts deferred under subparagraphs (d)
or (e), which shall be paid in accordance with subparagraph (f); and (iii) West
Tennessee 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
West Tennessee 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.
Section 5. Indemnification by West Tennessee. West Tennessee
shall indemnify IMI, its officers, directors, employees and control persons and
hold them harmless 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 that
indemnification shall not be permitted for acts constituting gross negligence or
willful misconduct.
Section 6. Termination.
(a) Termination at Option of West Tennessee. This Agreement
shall be terminable at the option of West Tennessee at any time in the event (i)
IMI is convicted of a felony crime which becomes final following expiration of
the applicable appeal period; (ii) IMI shall file a voluntary petition in
bankruptcy or shall be adjudicated a bankrupt or insolvent, or shall file any
petition or answer seeking or acquiescing in any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
present or future federal, state or other law or regulation relating to
bankruptcy, insolvency or other relief for debtors; or shall seek to consent to
or acquiesce in the appointment of any trustee, receiver or liquidator or shall
make any general assignment for the benefit of creditors, or shall admit in
writing its inability to pay its debts generally as they become due; (iii) a
court of competent jurisdiction shall enter an order, judgment or decree
approving a petition filed against IMI seeking any reorganization, dissolution
or similar relief under any
-4-
5
federal, state or other statute, law or regulation relating to bankruptcy,
insolvency or other relief for debtors, and such order, judgment or decree shall
remain unvacated and unstayed for an aggregate of sixty (60) days (whether or
not consecutive) from the first date of entry thereof; or any trustee, receiver
or liquidator of IMI shall be appointed without the consent or acquiescence of
IMI and such appointment shall remain unvacated and unstayed for an aggregate of
sixty (60) days (whether or not consecutive); (iv) a final judgment shall be
rendered against IMI in which it is determined that IMI has engaged in
fraudulent conduct (x) materially and adversely affecting IMI's ability to
discharge its obligations under this Agreement or (y) against West Tennessee and
had a material adverse impact on the operations (or the results of operations)
of the Systems; or (v) IMI shall have engaged in an act of gross negligence or
of willful misconduct, or in a pattern of conduct wherein it shall have failed
to perform its duties hereunder, such that such gross negligence, willful
misconduct or pattern of conduct, as the case may be, has resulted or would
result in a materially adverse impact on the operations (or the results of
operations) of the Systems. West Tennessee's rights to terminate this Agreement
set forth in this Section 6 are independent of each other and the giving or
receipt of notice to terminate this Agreement as provided in one clause of this
Section 6 shall not preclude West Tennessee earlier terminating this Agreement
as provided in any other clause of this Section 6. The giving or receipt of
notice to terminate shall not relieve IMI of its obligations during the period
prior to the time such termination takes effect.
(b) Termination at Option of IMI. This Agreement shall be
terminable at the option of IMI at any time in the event that West Tennessee
fails to pay the fees or reimburse the expenses within the time provided
hereunder and such failure to pay continues for thirty (30) days following
notice to West Tennessee of such failure.
(c) Termination After Initial Term. This Agreement may be
terminated by either West Tennessee or IMI (for any reason, with or without
cause) after the Initial Term by not less than thirty (30) days' written notice
delivered to the other party; provided that such termination shall be effective
only as of the end of the Initial Term (if such notice is given at least thirty
(30) days prior to the end of the Initial Term) or as of the end of any
successive six (6) month term thereafter (if such notice is given after the end
of the Initial Term or less than thirty (30) days prior to the end of the
Initial Term).
(d) Return of Information. Upon termination of this Agreement,
all books and records in the possession of IMI relating to the maintenance and
operation of and
-5-
6
accounting for the Systems together with all supplies and other items of
property owned by West Tennessee and in IMI's possession shall be delivered to
West Tennessee, 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; and provided further, that the provisions of Section
5 hereof shall remain in full force and effect and shall survive such
termination.
Section 7. 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 IMI; (ii) a corporation or partnership
which owns 100% of the stock in IMI immediately prior to such assignment; or
(iii) a wholly owned subsidiary of the corporation or partnership referred to in
clause (ii) immediately above, without the consent of West Tennessee; 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 West Tennessee, 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
7(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).
-6-
7
If to West Tennessee: InterMedia Partners
of West Tennessee, L.P.
235 Montgomery Street
Suite 420
San Francisco, CA 94104
Attn: Leo J. Hindery, Jr.
If to IMI: InterMedia Management, Inc.
235 Montgomery Street
Suite 420
San Francisco, CA 94104
Attn: Leo J. Hindery, Jr.
Both with Pillsbury, Madison & Sutro
copy to: 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.
(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
-7-
8
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 January 1, 1990.
INTERMEDIA PARTNERS OF WEST
TENNESSEE, L.P.
By INTERMEDIA PARTNERS, a
California limited partnership
Its General Partner
By INTERMEDIA CAPITAL MANAGEMENT,
a California limited
partnership
Its General Partner
By /s/ Leo J. Hindery, Jr.
__________________________
Leo J. Hindery, Jr.
Managing General Partner
INTERMEDIA MANAGEMENT, INC.,
a California corporation
By /s/ Leo J. Hindery, Jr.
____________________________
Leo J. Hindery, Jr.
President
-8-