EXHIBIT 10.25
AMENDED AND RESTATED
CONSULTING AGREEMENT
THIS AMENDED AND RESTATED CONSULTING AGREEMENT (this "Agreement") is made
as of this 17th day of March, 2000, by and between InterMedia Partners
Southeast, a California general partnership ("Company"), and Insight
Communications Company, L.P., a Delaware limited partnership ("Consultant").
RECITALS
A. The Company is the owner of cable television systems that operate in and
around Columbus, Connersville, Crawfordsville, Peru, Logansport, Monticello,
Frankfort, and Warsaw, Indiana (the "Indiana Systems") and Shelbyville, Kentucky
(the "Kentucky System") (as the Indiana Systems and the Kentucky System are
described in more detail on Exhibit A, the "Systems"). The Company and
Consultant desire that Consultant provide services to the Systems in accordance
with the terms and provisions of this Agreement.
B. This Agreement amends and restates in its entirety, the Consulting
Agreement with respect to the Systems dated as of December 29, 1999 between the
Company and Consultant.
AGREEMENT
THEREFORE, it is agreed as follows:
1. Appointment. The Company hereby appoints Consultant to supervise and manage
the day-to-day operations of the Systems on the terms and conditions set forth
herein.
2. Term. The term of this Agreement shall commence as of October 1, 1999 with
respect to the Kentucky System and, with respect to the Indiana Systems, as of
the later to occur of May 1, 2000 and the 30th day following the closing date of
the sale of the Columbus, Indiana System to the Company (provided that if such
30th day is not the first day of a calendar month, the commencement date with
respect to the Indiana Systems shall be the first day of the immediately
succeeding calendar month) or such other date as may be agreed to by the parties
(the "Applicable Effective Date") and continue for a period of two years after
the latest Applicable Effective Date, unless terminated earlier pursuant to the
terms of this Agreement.
3. Duties of Consultant. During the term of this Agreement, but subject to the
limitations set forth in this Agreement, Consultant is hereby granted and agrees
to exercise all requisite authority to manage the day-to-day operations of the
Systems on behalf of the Company. Subject to the terms and conditions of this
Agreement, Consultant will provide the Company with such services as may, from
time to time, be appropriate or reasonably required for the proper and efficient
operation and conduct of the Systems in accordance with sound business
principles and practices customary in the cable television industry. Without
limiting the foregoing, but subject to the
limitations of the budget then in effect (as described in Section 11) and any
other limitations expressly set forth in this Agreement, Consultant agrees:
(a) to be responsible for the negotiation of any and all agreements,
leases, contracts, documents and other instruments necessary or convenient for
the management and operation of the Systems including, without limitation,
franchises; provided that (i) except as specified in Section 8, Consultant may
not negotiate or enter into agreements for the carriage of cable television
programming by the Systems, (ii) the Company will have the sole authority to
consummate franchise agreements and (iii) Consultant shall obtain the consent of
the Company prior to consummating any other agreement that involves the payment
of $50,000 or more annually or is not terminable without penalty upon 60 or
fewer days' notice;
(b) to act on behalf of the Company with respect to customer service
matters, franchise renewals, and refunds; provided that the Company has the
right to review and approve any amendment to the franchises, renewals of
franchises or other such commitments;
(c) to evaluate new equipment, materials and techniques for the Systems and
make recommendations regarding the same to the Company;
(d) to establish and direct the implementation of general technical
standards and procedures for the Systems and to establish and monitor programs
for preventive maintenance for the Systems;
(e) to supervise the purchasing of property, real, personal or mixed, and
all materials and supplies, if any, necessary to complete any construction and
development arising out of or related to the Systems;
(f) to formulate and supervise all advertising, marketing and sales
programs and engagement for the Systems and appointment on behalf of the Company
of advertising, marketing and public relations agencies and consultants for the
Systems for such purposes;
(g) to supervise the collection of income and other amounts due to the
Company and the payment on behalf of the Company of expenses (including, but not
limited, to franchise and copyright fees) relating to the Systems in conformity
with the budgets then in effect pursuant to Section 11;
(h) to be responsible for all personnel matters, and to hire, employ,
manage and adequately train all employees and other personnel necessary to
operate the Systems, who will be employees of Consultant or an affiliate of
Consultant (provided that Consultant will be reimbursed for employee expenses
pursuant to Section 13);
(i) to prepare with the assistance of any necessary accountants, annual tax
reports necessary for the operation of the Systems in the ordinary course of
business (other than
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federal, state and local income tax returns of the Company), to prepare, as
necessary, any reports and other documents required to be filed with
governmental and regulatory agencies (other than with respect to income tax
matters), and act as liaison with federal, state and local governmental and
regulatory officials with respect thereto, and to provide the Company on a
timely basis all information relating to the Systems and necessary to prepare
its federal, state and local income tax returns;
(j) to pay on behalf of the Company, in conformity with the budget
described in Section 11, all expenditures incurred by Consultant (provided that
they are "System Level Expenses" as defined in Section 13.4) or the Company in
the ordinary course of operating the Systems and other expenses of the Systems,
including all levies and assessments of any kind or nature imposed by any
governmental authority, including all sales, use, ad valorem, value added,
franchise, severance, net or gross proceeds, withholding, payroll, employment,
or excise taxes and levies or assessments related to unclaimed property,
together with any interest thereon and any penalties, additions to tax or
additional amounts applicable thereto ("Taxes"), other than federal, state and
local income taxes;
(k) to make on behalf of the Company all capital expenditures in conformity
with the budget described in Section 11 and to supervise all approved
construction and development for the Systems, including the selection and
appointment of subcontractors, equipment, suppliers and vendors;
(l) to manage and operate the Systems in compliance with applicable law,
including, but not limited to, the Communications Act of 1934, as amended, and
all rules and regulations promulgated by the FCC thereunder (including making
any necessary modifications to, or renewals of, the Systems' FCC licenses and
making any other filings required under FCC rules and regulations), and the
terms and provisions of the franchises and all other agreements relating to the
Systems;
(m) to provide the Company with any information with respect to the Systems
as the Company may reasonably request or of which, in Consultant's reasonable
discretion, the Company should be aware; and
(n) to use commercially reasonable efforts to ensure at the Company's
expense (including but not limited to all capital expenditures and travel
expenses) that the Systems are "Year 2000" compliant by December 31, 1999.
4. Ownership of Systems. Notwithstanding anything in this Agreement to the
contrary, the Company will continue to own the Systems and to exercise the
rights of an owner with respect thereto. Without limiting the foregoing, the
Company will continue to be the franchisee, licensee and permittee, as
applicable, of all authorizations of any nature whatsoever issued by any
governmental authority or third party in connection with the operation of the
Systems and will
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continue to exercise ultimate control over all tax matters, franchise and other
regulatory matters and extraordinary transactions with respect to the Systems.
5. Limitations on the Authority of Consultant.
5.1 The Company will be entitled to control any tax investigation or audit
relating in any way to the Systems to the extent it could affect any Taxes
payable by the Company.
5.2 Consultant has no authority to take any action that would constitute
(or fail to take any action the effect of which failure would be to cause): (a)
an impermissible transfer or change in control under the franchises of the
Systems or (b) an impermissible transfer of a Federal Communications Commission
("FCC") license; provided, however, that the parties agree that the execution,
delivery and performance of this Agreement by Consultant or its affiliates does
not constitute an impermissible transfer or change in control of any franchise
or FCC license held by the Company in connection with the operation of the
Systems.
5.3 Consultant will not, without prior written authorization of the
Company, take any action that is not in the ordinary course of business for the
Systems. Without limiting the foregoing, Consultant agrees that it will not:
(a) sell or hypothecate any of the assets of the Systems other than
the sale or abandonment of worn out or obsolete materials, supplies and
equipment, any proceeds of which will be the property of the Company;
(b) cause the Company to acquire any cable television systems or
related businesses or any other company;
(c) cause the Company to merge, consolidate, dissolve or wind up;
(d) cause the Company to borrow from banks or other lending
institutions for any purpose of the Company;
(e) cause the Company to issue any notes, debentures or other debt
instruments or grant any mortgage, pledge, encumbrance or hypothecation of
Company assets to secure repayment of borrowed sums or replace, modify,
extend or consolidate any mortgage, pledge, encumbrance or hypothecation;
(f) institute, defend or settle litigation or other legal action in
the name of the Company or apply for injunctive relief or give releases and
discharges with respect to any of the foregoing, except that Consultant
shall institute collection proceedings, and legal actions incident to such
collection proceedings, in the name of and at the expense of the Company in
accordance with the Company's customary practices, to enforce the
collection of payments due from customers of the Systems;
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(g) employ on behalf of the Company or cause the Company to employ any
brokers or finders;
(h) cause the Company to enter into any contract with Consultant or
any affiliate of Consultant; it being agreed that the Company hereby
consents to the offering of Source Suite LLC's "LocalSource" product
through the Systems; provided that the agreement or arrangement between
Source Suite LLC and Consultant is on arms-length, third party terms, and
provided that the offering of such product does not conflict with, or
constitute a breach or default under, any agreement of the Company);
(i) make any expenditures or commitment to make expenditures on behalf
of the Company except in accordance with the Budget then in effect; or
(j) cause the Systems to offer or have the Company enter into any
agreement for the Systems to offer or to provide capacity of the Systems
for a third person to offer any communications services other than
traditional cable television service. For example, Consultant may not cause
the Systems to offer telephony or internet access services without the
prior written consent of the Company, it being agreed that the Company
consents to the offering of Insight@Home Internet access service through
the Systems and except as provided in Section 5(h) above.
6. Acquisition of Systems. The Systems are being acquired by the Company
pursuant to the Asset Exchange Agreement dated as of April 20, 1999 (the
"Exchange Agreement") among the Company, on the one hand, and Charter
Communications, LLC, Charter Communications Properties, LLC and Marcus Cable
Associates, L.L.C., on the other hand (the "Charter Parties"). Consultant agrees
that it will take, at the Company's expense, such actions as may be required in
order for the Company to fulfill its post-closing obligations under the Exchange
Agreement with respect to the Systems, including, without limitation, its
obligations under Section 7.17 of the Exchange Agreement with respect to
cooperation on rate proceedings.
7. Headends.
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7.1 The Company agrees that Consultant, at Consultant's expense, may
connect the Company's headends listed on the attached Exhibit C as the "Charter
Headends" (defined herein as the "Satellite Headends") to the headends listed on
Exhibit C as the "Insight Headends," which are owned by Consultant or its
affiliate (the "Master Headends"). Notwithstanding the foregoing, Consultant
will not dismantle or dispose of the Satellite Headends and if requested to do
so by the Company will, at Consultant's expense, render the Satellite Headends
operational upon termination of this Agreement. Without limiting the foregoing,
Consultant agrees to not terminate and to renew in the ordinary course, any
leases or other rights to use real property associated with the Satellite
Headends and to use commercially reasonable efforts to keep them in full force
and effect during the term of this Agreement. In lieu of restoring the Satellite
Headends, and if requested to do so by the Company, Consultant will arrange for
the Systems to continue to receive programming from the Master Headends
following termination of this Agreement on reasonable terms and conditions.
7.2 If the Company's copyright liability with respect to the subscribers
served by the Satellite Headends or contiguous headends is higher as a result of
such Satellite Headends being collapsed into Master Headends, Consultant will be
responsible for the payment of any increased copyright fees.
8. [Intentionally Omitted.]
9. Insurance; Books and Records.
9.1 During the term of this Agreement, Consultant is responsible at the
Company's expense for maintaining liability and all other insurance for the
Systems at such levels as are consistent with industry practice and are approved
by the Company, including, without limitation, worker's compensation insurance
for System Employees.
9.2 During the term of this Agreement, Consultant will keep books and
records for the Systems and will prepare reports in accordance with this Section
9.2.
(a) Consultant will cause to be maintained all necessary books and
records for the Systems, which shall be open to the inspection and
examination of the Company or its representatives during normal business
hours and upon reasonable notice. The books of account shall be kept on an
accrual basis in accordance with generally accepted accounting principles
consistently applied. Notwithstanding the foregoing, and as an exception to
each provision of this Section 9.2 that requires compliance with generally
accepted accounting principles or Regulation S-X, personnel, operating and
SG&A expenses of the Systems will be allocated in accordance with the
methodologies described on Exhibit B. The Company agrees that the income
statements and statements of assets and liabilities required to be
delivered by Consultant pursuant to this Section 9.2 will be in the form
set forth on Exhibit B.
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(b) Within forty-five days after the close of each fiscal year,
Consultant shall prepare and deliver to the Company (i) a preliminary
unaudited income statement of the Systems for such fiscal year, and (ii) a
preliminary unaudited statement of assets and liabilities of the Systems as
of the end of such fiscal year.
(c) As soon as practicable after the close of each fiscal year, and,
in any event, by March 15 of the year following the close of such fiscal
year, Consultant shall prepare and deliver to the Company (i) a final
unaudited income statement of the Systems for such fiscal year, and (ii) a
final unaudited statement of assets and liabilities of the Systems as of
the end of such fiscal year, all of which shall be prepared in accordance
with Regulation S-X and generally accepted accounting principles
consistently applied.
(d) Within twenty days after the close of each of the first three
quarterly accounting periods in each fiscal year, Consultant shall prepare
and deliver to the Company (i) a preliminary unaudited income statement of
the Systems for such year to date period, and (ii) a preliminary unaudited
statement of assets and liabilities of the Systems as of the end of such
quarterly period, all prepared in accordance with generally accepted
accounting principles consistently applied. Within 15 days thereafter,
Consultant shall provide any material adjustments to the above referenced
preliminary financial statements.
(e) Within twenty days after the close of each calendar month,
Consultant shall prepare and deliver to the Company (i) an unaudited income
statement and statement of assets and liabilities of the Systems for such
calendar month complete with year-to-date comparisons to budget and,
commencing with the statement delivered with respect to the first full
month following the first anniversary of the Closing, the corresponding
period of the prior year, and (ii) an unaudited report of actual capital
expenditures of the Systems for the month and year-to-date, as compared to
budgeted capital expenditures.
(f) Within twenty days after the close of each calendar month,
Consultant shall prepare and deliver to the Company a report setting forth
for such calendar month with respect to the Systems the following
information: (i) the cumulative number of households having access to such
Systems, (ii) the number of equivalent basic subscribers and equivalent
expanded basic subscribers to such Systems, (iii) the number of subscribers
to each pay television service, (iv) the number of plant miles, (v) the
number of digital subscribers of each System, (vi) the number of telephony
subscribers of each System and (vii) such other operating statistics as may
be reasonably requested by the Company.
10. Employees.
10.1 All employees involved in the operations of the Systems that are hired
by Consultant will be employees of Consultant or an affiliate of Consultant
("System Employees"; provided, that the term "System Employees" does not include
regional, division or corporate employees of Consultant engaged by it to perform
its obligations under this Agreement).
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10.2 Consultant agrees not to solicit for employment, without the written
consent of the Company, any employee listed on Schedule 7.3 to the Exchange
Agreement or any other employee of the Charter Parties whose position is System
manager or higher.
10.3 If the Charter Parties determine that the transactions contemplated by
the Exchange Agreement will not permit a distribution to be made to a Hired
Employee (as defined below) from the tax qualified plan of the Charter Parties
in accordance with Section 401(k)(10) of the Code, then Consultant may accept a
plan-to-plan transfer of Hired Employees' plan benefits to its own tax qualified
plan. If there is no plan-to-plan transfer, in order to permit the Charter
Parties or their affiliates, to make distributions to any former employee of the
Charter Parties who becomes a Hired Employee of the balance of such employee's
401(k) account in the Charter Parties' or their affiliate's tax qualified plan,
if any, as soon as legally permitted, Consultant shall notify the Company and
the Charter Parties of the date of termination of such employee's employment
with Consultant for any reason.
10.4 Notwithstanding anything to the contrary herein, Consultant shall:
(a) credit each employee of the Systems prior to the Applicable
Effective Date who is offered employment by Consultant and becomes an
employee of Consultant or an affiliate of Consultant (a "Hired Employee")
the amount of vacation time (to a maximum of four weeks) and sick time (to
a maximum of 10 days) accrued by him or her as an employee of the Charter
Parties through and including the Applicable Effective Date, to the extent
the Company is required to so credit such employees pursuant to the
Exchange Agreement;
(b) permit each Hired Employee to participate in Consultant's employee
benefit plans to the same extent as similarly situated employees of
Consultant and their dependents are permitted to participate;
(c) give each Hired Employee credit for such employee's past service
with the Charter Parties and their affiliates as of the Applicable
Effective Date (including past service with any prior owner or operator of
the Systems) for purposes of eligibility and vesting under Consultant's
employee benefit and other plans to the same extent as other similarly
situated employees of Consultant, to the extent the Company is required to
so credit such employees pursuant to the Exchange Agreement;
(d) to the extent provided in the Exchange Agreement not subject any
Hired Employee to any waiting periods or limitations on benefits for
pre-existing conditions under Consultant's employee benefit plans,
including any group health and disability plans, except to the extent such
employees were subject to such limitations under the employee benefit plans
of the Charter Parties or any affiliate of the Charter Parties; and
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(e) credit each Hired Employee under any group health plan for any
deductible amount previously met by such Hired Employee as of the
Applicable Effective Date under any of the group health plans of the
Charter Parties or any of their affiliates, to the extent the Company is
required to so credit such employees pursuant to the Exchange Agreement.
10.5 Consultant will not terminate the employment of any Hired Employee
other than "for cause" during the 120 days following the Applicable Effective
Date for such Hired Employee without the prior written consent of the Company;
provided, that if Consultant breaches this Section 10.5, Consultant shall be
responsible for any severance that the Company is required to pay to any such
employee. For purposes of this Section 10.5, "cause" shall have the meaning set
forth in the Company's employment policies, procedures or agreements that would
be applicable to the discharged Hired Employee if such person were an employee
of the Company.
11. Operating Budgets.
11.1 On or before June 30, 2000, Consultant will prepare and submit to the
Company for its approval a proposed operating budget ("Operating Budget") and a
proposed capital budget ("Capital Budget" and, together with the Operating
Budget, the "Budgets")) for calendar year 2000 for the Kentucky System and the
Indiana Systems, each in a format reasonably acceptable to the Company, setting
forth the proposed expenditures for the operation, repair, maintenance or
expansion of the Systems for such fiscal year and including the programming
line-up for the Systems and which budgets will be subject to the approval of the
Company. Consultant and Company will negotiate in good faith to reach agreement
on the fiscal year 2000 Budgets for the Systems as promptly as practicable
following the Company's receipt of such Budgets from Consultant. From and after
the Applicable Effective Date for the Kentucky System and the Indiana Systems
until agreement has been reached on the fiscal year 2000 Budgets, Consultant
agrees to operate the Systems in the ordinary course of business consistent with
past practice.
11.2 Beginning with fiscal year 2001, at least 30 days prior to the
beginning of each fiscal year of the Company during the term of this Agreement,
Consultant will prepare and submit to the Company a proposed Operating Budget
and a proposed Capital Budget for the Kentucky System and the Indiana Systems,
each in a format reasonably acceptable to the Company, setting forth the
proposed expenditures for the operation, repair, maintenance or expansion of the
Systems for such fiscal year and including the programming line-up for the
Systems. If the Company does not approve the proposed budgets in writing within
20 days after the Company's receipt of the proposed budgets, the Company and
Consultant will negotiate in good faith to resolve any disputes between
Consultant and the Company with respect to the proposed budgets prior to the
commencement of the fiscal year to which the proposed budgets relate. If the
Company and Consultant cannot agree as to the proposed budgets within that time
period, Consultant will operate the Systems pursuant to the prior fiscal year's
budgets, with an adjustment for inflation equal to the percentage increase in
the Consumers Price Index for the United States as published by the United
States Department of Labor, Bureau of Labor Statistics.
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11.3 To the extent that Consultant reasonably believes that expenditures in
excess of the budgets then in effect are or will be in the reasonably
foreseeable future necessary for the proper operation of the Systems, Consultant
may submit a written notice to the Company. Such written notice will state the
reasons why such excess expenditures are believed to be necessary, the amount by
which the expenditures are expected to exceed the budgeted line item amounts and
the time frame within which the excess expenditures are reasonably expected to
become necessary. The Company may reject or accept Consultant's recommendations
in whole or in part in its sole discretion by written notice to Consultant. If
the Company does not approve the recommendations within 30 days by written
notice to Consultant, the Company will be deemed to have rejected the
recommendation. To the extent that the Company accepts Consultant's recommended
changes, the budgets then in effect will be deemed to be amended to reflect such
changes.
12. Systems and Operating Account.
12.1 Consultant will create and maintain on behalf of the Company separate
and apart from any account kept and maintained by it for any other purpose a
bank account at a bank approved by the Company (the "Systems Account"). Any and
all receipts of whatever nature and from whatever source derived from the
operation of the Systems will be promptly deposited in the Systems Account. All
funds in the Systems Account from time to time will be the property of the
Company, but the funds will be disbursed from the Systems Account by Consultant
on the Company's behalf in accordance with the provisions of this Agreement. At
Consultant's option, one or more additional operating bank accounts (the
"Operating Account") may be created and maintained on behalf of the Company in
such commercial bank or banks as Consultant may select with the approval of the
Company for the purpose of making funds available to the operating personnel of
the Systems for the conduct of day-to-day business. Only such person or persons
as Consultant may designate from time to time will be authorized to draw or
issue checks or drafts upon or make withdrawals from the Systems Account or the
Operating Account. At the request and expense of the Company, any persons having
authority to draw checks or drafts upon or make withdrawals from the Systems
Account or the Operating Account will be bonded in such amount as the Company
will direct. Unless approved in writing by the Company, no more than $250,000
will be maintained in the Operating Account at any one time.
12.2 Consultant will make or cause to be made from the Systems Account
and/or the Operating Account all payments of costs, expenses, fees, and charges
payable with respect to the Systems in conformity with the budget then in effect
pursuant to Section 11 or as otherwise provided in this Agreement. Consultant
agrees to provide the Company with any documentation as may be requested by the
Company to substantiate the amount of such costs, expenses, fees and charges
payable with respect to the Systems. In the event that at any time there are
insufficient funds in the Systems Account and/or the Operating Account with
which to make any payment provided for in this Agreement, then, upon the request
of Consultant, the Company will immediately deposit in such account a sufficient
sum as reasonably determined by the Company and Consultant to make all then due
payments and in no event will Consultant be responsible for
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any such payments out of its own funds. Periodically, but not less often than
quarterly, Consultant will pay to the Company the balance of the Systems Account
after reserving such amount as in its reasonable discretion is necessary to
provide for amounts currently necessary to pay all costs, expenses, fees and
charges payable with respect to the System in conformity with the budget then in
effect pursuant to Section 11 during the following 60 days and provided that
Consultant may also reserve a reasonable amount for contingencies.
13. Compensation of Consultant; Expenses.
13.1 As compensation for services rendered under this Agreement, Consultant
shall be paid an annual consulting fee, payable on a quarterly basis, equal to
Gross Operating Revenues multiplied by three percent (3.0%) (the "Consulting
Fee"). The term "Gross Operating Revenues" means all revenues arising out of or
in connection with the operation of the Systems, but exclusive of proceeds from
the sale of assets or from other extraordinary or non-recurring items, and
exclusive of all interest, dividends, royalties and other similar types of
investment income.
13.2 Within 30 days after the end of each fiscal quarter, Consultant will
submit to the Company a quarterly and a cumulative year-to-date statement
detailing the amount of Gross Operating Revenues and indicating the quarterly
Consulting Fee payable and the cumulative year-to-date Consulting Fee payable to
Consultant together with appropriate supporting documentation. Each quarterly
Consultant Fee payable hereunder shall be adjusted to reflect any cumulative
year-to-date adjustments in Gross Operating Revenues. The Consulting Fee will be
payable each quarter within 10 days after the Consulting Fee statement for such
quarter has been received by the Company.
13.3 Within 90 days after the end of each fiscal year, the Company shall
cause its independent public accountants to determine Gross Operating Revenues
for that year and the amount of the Consulting Fee payable to Consultant for
that year and deliver a copy to Consultant. Consultant shall have the right to
consult with the accountants regarding the determination of Gross Operating
Revenues prior to the final determination thereof by the accountants. The
accountants' determination shall be final and binding on the Company and
Consultant.
13.4 The Consulting Fee described above shall be exclusive of reimbursement
by the Company to Consultant for direct out-of-pocket expenses incurred by
Consultant that are directly related to the operation of the Systems (including
System Employee expenses and travel expenses of Consultant, "System Level
Expenses"). Consultant shall act in good faith and in a reasonable manner in
making determinations of reimbursement. To the extent reimbursable expenses
incurred by Consultant are applicable both to the Systems and to other systems
managed or owned by Consultant, such expenses will be allocated among the
Systems and such other systems in a manner mutually agreed to by the Company and
Consultant. It is understood and agreed that the intent of the expense
reimbursement provisions contained in this Section 13.4 is to reimburse
Consultant only for System Level Expenses and not to reimburse Consultant for
any corporate
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overhead (including bonuses and health, welfare, retirement and other benefits
and overhead expenses, including salaries, of its division, regional or
corporate office management, and its development, internal accounting and
finance management personnel), which shall be paid out of the Consulting Fee.
Payment of expense reimbursement shall be made monthly by the Company to
Consultant within five days after receipt by the Company of a statement (the
"Monthly Expense Statement") of Consultant's estimated reimbursable expenses for
the preceding month; provided, that Company may elect to direct Consultant to
obtain reimbursement from the System Account. The Monthly Expense Statement
shall include an adjustment to reflect the amount by which actual reimbursable
expenses incurred during the month immediately preceding the month of payment
exceeded, or were exceeded by, Consultant's estimated reimbursable expenses with
respect to such month.
14. Indemnification.
14.1 By the Company. The Company shall indemnify, defend and hold harmless
Consultant, its affiliates and all direct and indirect partners, stockholders,
owners, officers, directors, agents and employees of Consultant and its
affiliates from and against any pending or threatened claims, losses,
liabilities and demands of every kind and nature whatsoever, including, without
limitation, the costs as and when incurred of investigating and defending any
such claims, liabilities and demands, including, without limitation, attorneys',
accountants' and experts' fees and disbursements therefor, arising in connection
with Consultant's authorized activities set forth herein, regardless of whether
this Agreement continues to be in effect or such indemnitee continues to be an
affiliate or direct or indirect partner, stockholder, member, owner, officer,
director, agent or employee of Consultant or its affiliates at the time of the
claim, losses, liabilities or demands; provided, however, that the Company shall
not be required to indemnify or hold harmless Consultant from any claims,
losses, liabilities or demands which arise from actions (or failures to act)
which are performed in bad faith or which arise out of willful misconduct, gross
negligence or fraud by Consultant, or any of its owners, agents or employees.
14.2 By the Consultant. Consultant shall indemnify, defend and hold
harmless the Company, its affiliates and all direct and indirect partners,
stockholders, owners, officers, directors, agents and employees of the Company
and its affiliates from and against any pending or threatened claims, losses,
liabilities and demands of every kind and nature whatsoever, including, without
limitation, the costs as and when incurred of defending any such claims,
liabilities and demands, including, without limitation, attorneys', accountants'
and experts' fees and disbursements therefore, arising in connection with
Consultant's actions (or failure to act) which are performed in bad faith or
which arise out of willful misconduct, gross negligence or fraud by Consultant,
or any of its owners, agents or employees regardless of whether this Agreement
continues to be in effect or such indemnitee continues to be an affiliate or
direct or indirect partner, stockholder, member, owner, officer, director, agent
or employee of the Company or its affiliates at the time of the claim, losses,
liabilities or demands. The Consultant will use reasonable commercial efforts in
managing the Systems, provided that notwithstanding anything herein or
applicable law to the contrary, neither the Consultant nor any of its direct or
indirect
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partners, shareholders, members, owners, officers, directors, affiliates,
employees or agents shall have any liability, express or implied, for any action
taken or omitted to be taken by Consultant or for any failure or delay in
performing or exercising any obligation, duty, right, power or authority
possessed by Consultant under this Agreement, or any other document related
hereto, except for actual losses, if any, suffered by the Company that are
proximately caused either by Consultant's bad faith, willful misconduct, gross
negligence or fraud.
15. Events of Termination. This Agreement may be terminated as follows (each, an
"Event of Termination"):
(a) by either party for convenience upon six month's prior written
notice to the other party;
(b) by the Company if Consultant breaches any material term of this
Agreement (subject to the right of Consultant to cure within 60 days after
notice of such breach is received by Consultant from the Company);
(c) by the Company if Consultant commits any act constituting bad
faith, gross negligence, willful misconduct or fraud; or
(d) by the Company upon the bankruptcy or dissolution of Consultant;
or
(e) by Consultant upon dissolution of the Company or upon the sale or
other disposition of all or substantially all of the assets related to the
Systems.
16. Termination. This Agreement will be terminated upon the first to occur of
any of the following events: (a) the expiration of the term specified in Section
2; (b) the written consent to terminate of all parties to this Agreement; or (c)
an Event of Termination if the applicable party exercises its option to
terminate upon such Event of Termination. In the event this Agreement is
terminated pursuant to this Section 16, the Company shall be relieved from any
further obligation to pay Consultant compensation hereunder, other than
compensation and reimbursable expenses accrued up to the date of such
termination which shall be paid within 30 days of such termination. The
provisions of Section 14 shall survive any termination hereof.
17. Miscellaneous.
17.1 All notices and communications hereunder shall be in writing and shall
be deemed to have been duly given to a party hereunder when delivered in person,
via messenger service or by telecopy to such party, or three (3) business days
after being deposited in the U.S. Mail, registered or certified, with postage
prepaid, addressed as follows (or such other address as the parties may
designate in writing):
- 13 -
If to Consultant: Insight Communications Company, L.P.
126 East 56th Street
New York, NY 10022
Attn: Elliot Brecher, General Counsel
Telecopy: 212-371-1549
with a copy to: Dow, Lohnes & Albertson, PLLC
1200 New Hampshire Avenue, N.W., Suite 800
Washington, D.C. 20036
Attn: Leonard J. Baxt, Esq.
Telecopy: 202-776-2222
If to the Company: c/o AT&T Broadband and Internet Services
9197 South Peoria Street
Englewood, CO 80112
Attn: Carol O'Keeffe
Telecopy: 720-875-5396
with a copy to: the same address
Attn: Legal Department
17.2 No party hereto shall have the right to assign this Agreement without
the written consent of the other party; provided, that Consultant may assign its
rights and duties under this Agreement without the consent of the Company to the
parent or any wholly-owned subsidiary of Consultant.
17.3 This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns and no
other third party will be entitled to any of the benefits conferred by this
Agreement.
17.4 This Agreement may not be modified, altered or amended in any manner
except by an agreement in writing, duly executed by all parties hereto.
17.5 Consultant and the Company shall not, by virtue of this Agreement, be
deemed partners, joint venturers or co-employers, nor shall Consultant be deemed
to be the agent or employee of the Company. Consultant shall not, by entering
into and performing this Agreement, incur any liability for any of the existing
obligations, liabilities or debts of the Company, and Consultant shall not, by
acting hereunder assume or become liable for any of the future obligations,
debts, or liabilities of the Company.
- 14 -
17.6 All matters affecting the interpretation of this Agreement and the
rights of the parties hereto shall be governed by the laws of the State of
Delaware, without regard to its conflict of law principles.
17.7 Each of the respective rights and obligations of the parties hereunder
shall be deemed independent and may be enforced independently irrespective of
any of the other rights and obligations set forth herein. No waivers, express or
implied, by either party of any breach of any of the covenants, agreements or
duties hereunder of the other party shall be deemed to be a waiver of any other
breach thereof or the waiver of any other covenant, agreement or duty.
17.8 This Agreement contains the entire understanding of the parties with
respect to the subject matter hereof, and the parties hereto hereby acknowledge
that there have not been and are no representations, warranties, covenants or
understandings other than those expressly set forth herein and therein which
relate to the subject matter hereof.
17.9 Nothing herein shall limit the right of Consultant to engage in any
other business or to devote its time and attention to the management or other
aspects of any other business or to render services of any kind. The Company
acknowledges that Consultant and its affiliates own, manage or operate cable
television systems throughout the United States.
- 15 -
IN WITNESS WHEREOF, the parties hereto have executed this Consulting
Agreement as of the date first written above.
CONSULTANT:
INSIGHT COMMUNICATIONS COMPANY, L.P.
By: Insight Communications Company, Inc.,
its general partner
By: ___________________________
Name: Kim D. Kelly
Title: Executive Vice President
COMPANY:
INTERMEDIA PARTNERS SOUTHEAST
By: TCI Spartanburg IP-IV, LLC,
its managing general partner
By: _______________________________
Name: _____________________________
Title: ____________________________
- 16 -
EXHIBIT A
Systems
Headend Communities
Indiana
Columbus Bartholomew County
Elizabethtown
Clifford
Columbus
Sunnybrook Trailer Park
Seymour Jennings County
Vernon
North Vernon
Jackson County
Seymour
Westport Decatur County
Westport
Elizabethtown Bartholomew County
(Apollo) Elizabethtown
Jonesville
Jennings County
Hartsville
Jackson County
Tippecanoe Tippecanoe County
Woods Edge Mobile Village
Lake Cicott Lake Cicott
Silver Lake Silver Lake
Akron Akron
Fulton County
Liberty Liberty
Union County
A-1
Rushville Rush County
Rushville
Frankfort Jefferson
Antioch
Clinton
Frankfort
Monticello Burnettsville
Buffalo
Reynolds
Carrol County
White County
Monticello
Batesville Oldenberg
Batesville
Franklin County
Wolcott White
Jasper
Monon
Wolcott
Chalmers
Brookston
Remington
Veedersburg Veedersburg
Connersville Fayette County
Connersville
Brookville Brookville
Covington Fountain County
Covington
Flora Clinton
Rockfield
Camden
Burlington
Rossville
Flora
A-2
Delphi
Montpelier Montpelier
Warsaw Burket
Etna Green
Atwood
Winona Lake
Warsaw
Kosciusko County
Logansport Cass County
Denver
Bunker Hill
Wabash
Miami County
Grissom Air Force
Logansport
Wabash
Peru
New Albany Harrison County
Lanesville
Palmyra
Greenville
Georgetown
Floyd County
New Albany
Corydon
Crawfordsville Montgomery County
Crawfordsville
Kentucky
Shelbyville Shelbyville
Eminence
Henry County
New Castle
Pleasureville
Shelby County
Simpsonville
A-3