Exhibit 10.13
GENERAL AND ADMINISTRATIVE SERVICES AGREEMENT
GENERAL AND ADMINISTRATIVE SERVICES AGREEMENT dated as of April 30,
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1999 (the "Agreement"), between DIGEX, INCORPORATED, a Delaware corporation
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("Digex"), and INTERMEDIA COMMUNICATIONS INC., a Delaware corporation
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("Intermedia").
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R E C I T A L S:
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Digex desires to retain Intermedia to provide certain general and
administrative services, and Intermedia desires to provide such services to
Digex, all on the terms and subject to the conditions set forth herein.
In consideration of the foregoing recitals and the mutual agreements
set forth herein, the parties agree as follows:
1. Services by Intermedia. On the terms and subject to the conditions set
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forth herein, Digex hereby retains Intermedia, and Intermedia hereby agrees, to
provide to Digex the following services (collectively, the "Services"):
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1.1. (a) Employee and labor relations services, administered through
Intermedia's Employee Relations department ("Employee and Labor
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Relations Services").
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(b) Employee training management services, administered through
Intermedia's Training department ("Training Management
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Services").
(c) Compensation management services, administered through
Intermedia's Benefits and Compensation department ("Compensation
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Management Services").
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(d) Benefits management services, administered through Intermedia's
Benefits and Compensation department ("Benefits Management
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Services").
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(e) Human resources information management services, administered
through Intermedia's Human Resources Information Services
department ("Human
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Resources Information Management Services"). Throughout the
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earlier of the Term of this Agreement or the date upon which
Intermedia's voting power of Digex Common Stock falls below 20%,
Digex will provide Intermedia's Human Resources department with
timely access to all personnel records in order to support proper
distribution of payroll and to comply with all governmental
reporting requirements.
1.2 (a) Treasury management services, administered through Intermedia's
Treasury department ("Treasury Management Services").
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(b) Tax services, including the filing of federal and state tax
returns and administered through Intermedia's Tax department
("Tax Services").
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(c) Services administered through Intermedia's Corporate Development
department to assist Digex in identifying, evaluating and
structuring potential mergers and acquisitions ("Acquisition
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Services").
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(d) General accounting services, administered through Intermedia's
Accounting department ("Accounting Services").
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(e) Credit, collections and accounts receivable services,
administered through Intermedia's Accounting department ("Credit,
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Collections and Accounts Receivable Services").
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(f) Administrative services, such as travel management, building
maintenance, mailroom, security and other administrative
services, administered through Intermedia's Administration
department ("Administrative Services").
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(g) Financial planning and analysis services, administered through
Intermedia's Financial Planning and Enterprise Reporting
department ("Financial Planning and Analysis Services").
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(h) Investor relations services, administered through Intermedia's
Investor Relations department ("Investor Relations Services").
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1.3 (a) Legal services, administered through Intermedia's Legal
department ("Legal Services").
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1.4 Information management services in support of Digex's Information
Services department, administered through Intermedia's Information Services
department ("Information Management Services").
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2. Insurance. The parties acknowledge that, as of the date of this
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Agreement, Digex has general liability, property and casualty, automotive,
worker's compensation, and certain others insurance coverage under certain of
Intermedia's insurance policies, which are listed in Schedule A. Intermedia
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shall take all commercially reasonable actions to maintain during the Term such
coverage for Digex under such existing and successor insurance policies;
provided, that Digex may at any time notify Intermedia in writing that Digex has
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obtained, or arranged for, comparable, and otherwise customary, reasonable and
proper, insurance policies in its own name, and request that Intermedia
discontinue such insurance coverage for Digex effective as of a date specified
in such notice which shall be no sooner than 90 days after delivery of such
notice to Intermedia. Intermedia shall periodically invoice Digex for Digex's
pro rata portions of the premiums paid and related costs incurred, by Intermedia
in connection with maintaining such insurance coverage for Digex, including any
termination charges in the event Digex elects to discontinue coverage. Digex
shall pay to Intermedia the amounts so invoiced within 30 days after delivery of
each such invoice to Digex.
3. Independent Contractor; No Authority to Bind; Access to Books and
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Records; Designated Representatives.
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3.1. Intermedia shall perform its services hereunder as an independent
contractor. Employees of Intermedia performing services in connection with this
Agreement shall be and remain employees of Intermedia and not of Digex, and
Intermedia shall be responsible for all taxes, wages and benefits of its
employees and for all other costs, expenses and overhead incurred by Intermedia
in performing its obligations hereunder, except as specifically provided herein.
Intermedia is not and shall not be deemed to be the legal representative or
agent of Digex for any purpose other than to collect payments for the account of
Digex in providing the services described in Section 1.2(e). Intermedia may, in
its reasonable discretion, provide some of the Services through, or in
conjunction with, one or more of Intermedia's outside providers of such
Services.
3.2 Neither party shall have the right nor authority to act or bind the
other in any way or to sign the name of the other or to represent that the other
is in any way responsible for its acts or omissions.
3.3. In connection with Intermedia's performance of the Services, (a)
Digex shall provide to Intermedia all information, materials and data belonging
to or available to Digex as reasonably determined by Intermedia to be necessary
or appropriate to enable Intermedia to perform the Services, and (b) Intermedia
shall have full and complete access, at reasonable times and on reasonable prior
notice to Digex, to all of Digex's books of account and business records,
including, without limitation, personnel records, sales and purchase contracts
and invoices.
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3.4 Throughout the Term, Intermedia shall have an employee designated as
the primary contact and representative responsible for communicating with, and
coordinating the provision of Services to, Digex for and with respect to each
category of Services. The names and contact information of Intermedia's
designees with respect to each category of Services, as of the date of this
Agreement, are set forth in Schedules B. Intermedia may, from time to time,
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change such designee and contact information with respect to one or more
Services by delivering written notice thereof to Digex, and such change shall be
effective as of the date of delivery of such notice.
3.5 Within 15 days after the end of each calendar month, Intermedia will
provide to Digex a written report describing in reasonable detail all of the
Services performed by Intermedia during the preceding month.
4. Term; Termination.
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4.1 The term of this Agreement shall be, unless sooner terminated as
provided herein, for an initial period of two years commencing on the date
hereof (the "Term").
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4.2 Digex may terminate the Term at any time when Intermedia does not own
more than 50% of the voting power of the outstanding Common Stock of Digex by
giving Intermedia written notice, signed by Digex's President or Chief Executive
Officer, of such termination at least 90 days prior to the effective date of
such termination.
5. Compensation for Services; Disbursements.
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5.1. In consideration for the Services rendered by Intermedia hereunder,
Digex shall pay to Intermedia the following service fees (the "Service Fees"):
(a) with respect to each calendar month during the period commencing
on April 1, 1999 and ending on March 31, 2000, the fixed monthly
Service Fee set forth for such month in Schedule C; and
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(b) with respect to each calendar month during the period commencing
on April 1, 2000 and ending on March 31, 2001, the monthly
Service Fee shall equal the difference obtained by subtracting
from (i) the Service Fee payable with respect to the immediately
preceding month (ii) the product obtained by multiplying (x) the
total monthly salary expense for all employees hired by Digex
during such preceding month to perform any of the functions
included in the Services, by (y) 1.35.
5.2 All disbursements for costs, fees, expenses and other payments
that are determined by Intermedia to be reasonably necessary or appropriate in
connection with the
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Services shall be made directly by Digex upon presentation to it by Intermedia
of a check request or authorization, together with reasonable supporting
documentation if requested by Digex; provided, however, that Intermedia
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may make a disbursement on behalf of Digex, and Digex shall reimburse Intermedia
therefor as provided in Section 5.3, if, in Intermedia's good faith judgment,
such disbursement by Intermedia is advisable based on the circumstances and
timing requiring the disbursement.
5.3 The Service Fee with respect to each month during the Term shall
be due and payable by Digex to Intermedia on or prior to the 30th day of each
subsequent month, together with all other amounts that may be owing to
Intermedia as of the first day of such month for disbursements and expenditures
made on behalf of Digex during the preceding month.
6. Indemnification.
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6.1 Digex shall indemnify and hold harmless Intermedia, its agents
and affiliates, and their respective officers, directors and employees, from and
against any and all losses, damages, injuries, claims, demands, liabilities,
costs and expenses (including reasonable attorneys' and other professionals'
fees and expenses and herein collectively referred to as "Losses") attributable
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to, arising from or caused by the provision of Services by Intermedia pursuant
to this Agreement, except for Losses attributable to, arising from or caused by
a breach of this Agreement by Intermedia or Intermedia's willful misconduct or
gross negligence.
6.2 Intermedia shall indemnify and hold harmless Digex, its agents,
affiliates, and their respective officers, directors and employees from and
against any and all Losses attributable to, arising from or caused by
Intermedia's failure in any material respect to perform the Services pursuant to
and in accordance with this Agreement or by Intermedia's willful misconduct or
gross negligence in the performance of the Services, except for Losses
attributable to, arising from or caused by a material breach of this Agreement
by Digex or Digex's willful misconduct or gross negligence.
7. Limitation of Liability. NOTWITHSTANDING ANYTHING TO THE CONTRARY SET
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FORTH HEREIN, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY, ANY OF ITS
CUSTOMERS OR ANY OTHER PERSONS FOR ANY INDIRECT, SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES OR LOSSES (INCLUDING DAMAGES FOR LOSS OF BUSINESS, LOSS OF
PROFITS, OR THE LIKE), WHETHER BASED ON BREACH OF CONTRACT, TORT (INCLUDING
NEGLIGENCE), PRODUCT LIABILITY OR OTHERWISE, EVEN IF A PARTY OR ITS
REPRESENTATIVES HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
8. Force Majeure. Neither party shall be deemed to be in default hereunder or
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have failed or delayed to perform any obligation hereunder if it is prevented
from, or delayed in,
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performing any such obligation by reason of force majeure, act of God, labor
strike, civil unrest or similar occurrence which is beyond the control of such
party. The party affected by any of the foregoing shall advise the other party
as soon as possible about any threatened or existing circumstance that may
result in a failure or delay in performance, and use such party's commercially
reasonable efforts to commence or resume performance as soon as possible.
9. Notices. All notices, consents, approvals, instructions and other
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communications required or permitted under this Agreement (collectively,
"Notice") shall be effective only if given in writing and shall be considered to
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have been duly given when (i) delivered by hand, (ii) sent by telecopier (with
receipt confirmed), provided that a copy is mailed (on the same date) by
certified or registered mail, return receipt requested, postage prepaid, or
(iii) received by the addressee, if sent by Express Mail, Federal Express or
other reputable express delivery service (receipt requested), or by first class
certified or registered mail, return receipt requested, postage prepaid. Notice
shall be sent in each case to the appropriate addresses or telecopier numbers
set forth below (or to such other addresses and telecopier numbers as a party
may from time to time designate as to itself by notice similarly given to the
other parties in accordance herewith, which shall not be deemed given until
received by the addressee). Notice shall be given:
(a) to Digex at:
Digex, Incorporated
Xxx Xxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxxx
President
Telecopier: (000) 000-0000
(b) to Intermedia at:
Intermedia Communications
0000 Xxxxx Xxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: the person(s) designated pursuant to Section 3.4
with respect to a particular Service or Services
with copies to:
Attention: Xx. Xxxxxxxx Xxxxxx
Senior Director - Corporate Development
Telecopier: (000) 000-0000
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and
Attention: Xxxxxxxx X. Xxxxxx, Esq.
Senior Vice President and General Counsel
Telecopier: (000) 000-0000
10. Entire Agreement. This Agreement constitutes the entire agreement of the
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parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and undertakings, both written and oral, including without
limitation the General and Administrative Services Agreement, dated as of April
26, 1999, between the parties with respect to the same or any similar subject
matter.
11. Governing Law. This Agreement is made under and shall be governed by and
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construed in accordance with the laws of the State of Florida without giving
effect to principles of conflicts of laws.
12. Assignment. Neither party hereto may assign its rights hereunder without
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the prior written consent of the other party, which may be granted or withheld
at the sole discretion of such other party. This Agreement and all of the
provisions hereof shall be binding upon and inure only to the benefit of the
parties hereto and their respective successors and permitted assigns, it being
the intention of the parties that no person shall be a third party beneficiary
of any provisions of this Agreement.
13. No Waiver. The failure of a party to insist on strict adherence to any
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term of this Agreement on any occasion shall not be considered a waiver of, or
deprive that party of the right thereafter to insist upon strict adherence to,
that term or any other term of this Agreement. Any waiver must be in writing
signed by the party against which such waiver may be asserted. No waiver or
consent to any action on any one occasion shall be deemed to be or imply a
waiver or consent to other actions or similar actions not specifically waived or
consented to.
14. Amendments in Writing. Amendments to or modifications of this Agreement
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and Schedule C hereto shall only be valid if made in writing and signed by both
parties hereto. Any such amendments or modifications which are material, and
any extensions or renewals of the Term shall be approved by the board of
directors of Digex, including by a majority of its directors who are not
officers or directors of Intermedia.
[INTENTIONALLY LEFT BLANK]
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15. Headings. The headings in this Agreement are intended solely for
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convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on July _____, 1999 by their duly authorized representatives, effective
as of the day and year first above written.
DIGEX, INCORPORATED
By: /s/ Xxxx X. Xxxxx
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Name:
Title:
INTERMEDIA COMMUNICATIONS, INC.
By: /s/ Xxxxxx Xxxxxxx
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Name:
Title:
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SCHEDULE A
Insurance Policies
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Digex is covered under the following Intermedia corporate policies:
Property
Crime
General Liability
Business Auto
Umbrella
Foreign Liability
Errors & Omissions Liability
Fiduciary Liability
Aviation Liability & Physical Damage
Workers' Compensation
Director's & Officer's
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SCHEDULE B
Intermedia's Representatives
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Services: Intermedia Representative:
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Employee and Labor Relations Services Xx. Xxxxxx Xxxx 000-000-0000
Training Management Services Xx. Xxxxxxxx Xxxxxx 000-000-0000
Compensation Management Services Xx. Xxxxxxxx Xxxxxx 000-000-0000
Benefits Management Services Xx. Xxxxxxxx Xxxxxx 000-000-0000
Human Resources Information Management Services Xx. Xxxxxxxx Xxxxxx 000-000-0000
Treasury Management Services Xx. Xxx Xxxxxxx 000-000-0000
Tax Services Xx. Xxxxxx Xxxxxxx 000-000-0000
Acquisition Services Xx. Xxxxxxxx Xxxxxx 000-000-0000
Accounting Services Xx. Xxxxxx Xxxxxxx 000-000-0000
Credit, Collections and Accounts Receivable Services Xx. Xxxxxx Xxxxxxx 000-000-0000
Administrative Services Mr. Xxxx Xxxxxx 000-000-0000
Financial Planning and Analysis Services Xx. Xxxxxx Xxxxxxx 000-000-0000
Investor Relations Services Xx. Xxxxxx Xxxxxxxxx 000-000-0000
Legal Services Xx. Xxxxxxxx Xxxxxx 000-000-0000
Information Management Services Xx. Xxx Xxxx 000-000-0000
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SCHEDULE C
Monthly Management Fee
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(Dollar amounts in thousands)
Month Year Fee
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April 1999 $2,000.00
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May 1999 $2,000.00
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June 1999 $2,000.00
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July 1999 $1,500.00
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August 1999 $1,500.00
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September 1999 $1,500.00
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October 1999 $1,000.00
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November 1999 $1,000.00
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December 1999 $1,000.00
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January 2000 $1,000.00
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February 2000 $1,000.00
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March 2000 $1,000.00
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