Exhibit 10.5
MANAGEMENT AGREEMENT
THIS AGREEMENT made as of the 21st day of August, 1998 by and between
Coaxial Communications of Central Ohio, Inc., an Ohio corporation ("Central"),
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and Insight Communications of Central Ohio, LLC, a Delaware limited liability
company ( "Manager"). All capitalized terms used herein and not defined herein
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shall have the same meanings as set forth in the Contribution Agreement referred
to below.
WHEREAS, pursuant to that certain Contribution Agreement, dated as of June
30, 1998, as amended (the "Contribution Agreement"), between Central and Insight
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Communications Company, L.P. ("Insight") (which has assigned all of its rights
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and obligations thereunder to Insight Holdings of Ohio LLC, a Delaware limited
liability company ("Holdings")), Central has agreed to contribute to Manager
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substantially all of Central's assets used in connection with the ownership and
operation of its cable television system in and around Columbus, Ohio (the
"System"); and
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WHEREAS, Central has informed Insight and Holdings that the consents (the
"Consents") required to transfer to the Manager the franchises covering those
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portions of the System that are listed on Schedule A hereto (the "Retained
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Assets") either will not be obtained prior to the Closing Date or have been
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obtained but will not become effective prior to the Closing Date; and
WHEREAS, on the date hereof, Central has transferred to and conveyed to
Manager all of the Assets of the System, other than the Retained Assets,
pursuant to a Xxxx of Sale, General Assignment and Instrument of Assumption of
Liabilities of even date herewith between Central and Manager (the "Conveyance")
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the terms of which provide that at such time as any Consent relating to any of
the Retained Assets shall be obtained and become effective, the Retained Assets
to which such Consent applies shall be automatically transferred by Central to
Manager pursuant to the term of the Conveyance; and
WHEREAS, Central and the Manager desire to enter into this Agreement and
set forth their agreements whereby the Manager will operate and manage the
Retained Assets, until such time as the Retained Assets are transferred and
conveyed to Manager.
NOW, THEREFORE, for the consideration herein stipulated, the parties hereby
agree as follows:
1. Management of the Retained Assets
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(a) From and after the date hereof, the parties shall cooperate with
each other and shall continue to assist each other consistent with the
Contribution Agreement in seeking the consent or approval of the applicable
Governmental Authorities to the transfer of the Retained Assets to the Manager
from Central.
(b) From and after the Closing Date,
(i) The Manager shall operate and manage the Retained Assets until the
earlier of (A) the transfer of the Retained Assets to the Manager pursuant
to the Conveyance or (B) the dissolution of the Manager pursuant to the
Operating Agreement of the Manager.
(ii) Until such time as the Retained Assets are conveyed to the
Manager, Central shall continue to own and exercise ultimate control over
the operation thereof. The Manager shall not, during the continuance of
this Agreement, take any action inconsistent with the terms and provisions
of this Agreement that would constitute (or fail to take any action
inconsistent with the terms and provisions of this Agreement the effect of
which failure would be to cause) (A) an impermissible change in control
under the franchise or applicable state or local laws or regulations or (B)
an impermissible transfer of a Federal Communications Commission ("FCC")
license.
2. Duties of the Manager. During the term of this Agreement, except as
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set forth in Section 1, this Section 2 or Section 3, the Manager shall have all
requisite authority to manage the day-to-day operations of the Retained Assets
for the benefit of Central. During the term of this Agreement, the Manager
agrees:
(a) to be responsible for the negotiation, consummation and
performance of any and all agreements, leases, contracts, documents and other
instruments reasonably necessary or convenient for the management and operation
of the Retained Assets;
(b) to supervise the collection of income and other amounts and the
payment of expenses (including but not limited to franchise fees) relating to
the Retained Assets and enforce the rights of Central as a creditor under any
contract in connection with the rendering of any service with respect to the
Retained Assets to the same extent as the Manager would enforce its own rights
as a creditor;
(c) to implement and maintain such accounting and administrative
records, procedures and reports as shall be reasonably necessary to operate the
Retained Assets;
(d) to purchase liability and other insurance reasonably necessary to
protect the Retained Assets and usual and customary for comparable businesses;
to name Central as an additional insured with respect to each such insurance
policy;
(e) to be responsible for all personnel matters, and to provide,
manage and train all employees and other personnel reasonably necessary to
operate the Retained Assets;
(f) to prepare status reports, financial reports and cash
disbursements reports relating to the operation of the Retained Assets;
(g) to keep, in the name and for the account of Central, full and
adequate books of account and other records reflecting the results of operation
of the Retained Assets on an accrual basis, in accordance with generally
accepted accounting principles;
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(h) to prepare annual tax reports necessary for the operation of the
Retained Assets (other than Federal, state and local income tax returns relating
to Central), 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 with respect to the operation of the Retained Assets), and
act as liaison with Federal, state and local governmental and regulatory
officials with respect thereto, and to provide Central on a timely basis all
information necessary to prepare its Federal, state and local income tax
returns;
(i) to pay all expenditures incurred by the Manager in the ordinary
course of operating the Retained Assets;
(j) to pay all expenses of the Retained Assets, including, but not
limited to, payroll and all other taxes;
(k) to make all capital expenditures reasonably appropriate or
necessary to maintain operation of the Retained Assets as currently operated;
(l) to manage and operate the Retained Assets in compliance in all
material respects with applicable law, including, not limited to, the
Communications Act of 1934, as amended, and all rules and regulations
promulgated thereunder, all applicable franchise requirements and all other
agreements relating to the Retained Assets;
(m) to operate and manage the Retained Assets with the same level of
care as it operates cable television systems owned by the Manager.
3. Obligations of Central. Notwithstanding anything in Section 1 or 2
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hereof to the contrary (a) during the term of this Agreement, Central shall be
responsible for decisions affecting the operations of the Retained Assets,
including the matters referred to in Sections 1 and 2 (and including
particularly all financial and personnel matters), to the extent Central must
continue to be responsible for any such decisions under any agreement, including
any and all franchise agreements relating to the Retained Assets, or applicable
law, and (b) Central shall be entitled to control any tax investigation or audit
relating in any way to the Retained Assets to the extent it could affect any
taxes payable by Central for periods prior to the Closing.
4. Compensation of the Manager. For its services pursuant to this
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Agreement, the Manager shall be entitled from and after the Closing to all
revenues attributable to the operations of the Retained Assets (the "Retained
Assets Revenue") for the period commencing at the Closing through the date that
the Manager ceases its operation and management of the Retained Assets in
accordance with Section 1 (b) (i) hereof (or such later date as the parties may
agree).
5. No Contributions by Central. During the term of this Agreement,
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Central shall not be obligated to contribute any capital to or make any funds
available for the operation of or the obligations or liabilities relating to the
Retained Assets and the Manager shall be solely responsible for all expenses and
expenditures thereof. Without limiting the generality of the foregoing, Central
will not be responsible for any compensation payable to the Manager; such
compensation shall be
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payable solely out of the Retained Assets Revenue as provided in Section 4
above. Nothing in this Agreement shall require the Manager to make any payments
for indebtedness of Central in respect of any Retained Assets.
6. Term of Agreement; Effect of Termination. This Agreement shall
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continue in full force and effect until the date that the Manager ceases its
operation and management of the Retained Assets in accordance with Section l(b)
(i) hereof. Central shall pay to the Manager within 10 days of termination of
this Agreement all amounts due under Section 4 for months ended prior to the
date of termination and a prorated portion, based on days elapsed prior to
termination in the month of termination, of all amounts due under Section 4 for
the month including the date of termination. To the extent that any amount
relating to the period prior to termination which would thereafter have become
due under Section 4 had this Agreement not been terminated, such amount shall be
paid to the Manager on the date it would have been paid had this Agreement not
been terminated.
7. Independent Contractor. The Manager and Central are not partners or
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joint venturers with each other with respect to the Retained Assets and nothing
herein shall be construed so as to make them such partners or joint venturers.
In fulfilling their obligations hereunder, the parties shall be independent
contractors with respect to one another and not the agent of the other for any
purpose.
8. Non-Assignability of Agreement. Neither party shall have the right to
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assign this Agreement.
9. Waiver. No waiver of any term, provision, or condition of this
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Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed or construed as a further and continuing waiver of any such term,
provision or condition, but any party hereto may waive its rights in any
particular instance by a written instrument of waiver.
10. Entire Agreement. This Agreement, together with the Contribution
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Agreement, represents the entire understanding of the parties hereto with
respect to the subject matter hereof, and may not be modified or amended, except
by a written instrument executed by each of the parties hereto designating
specifically the terms and provisions so modified and amended.
11. Choice of Law. The internal laws of the State of New York shall
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govern this Agreement and the construction of any of its terms.
12. Counterparts. This Agreement may be signed in one or more
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counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
13. Notices. Any notice, demand or request required or permitted to be
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given under the provisions of this Agreement shall be in writing and shall be
deemed to have been duly given and received (i) when delivered if delivered by
hand or by facsimile transmission or telex (with automatic machine confirmation)
and (ii) three business days after mailing if mailed by a nationally recognized
courier service or registered or certified mail, postage prepaid and return
receipt requested, to the parties at the following addresses (or to such other
address as any party may request in a notice
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delivered in accordance with this Section 13 to the other parties hereto,
provided that notices of a change of address shall be effective only upon
receipt thereof):
To Central:
c/o Coaxial Communications
0000 Xxxxx Xxxxxxxxx
Xxxxx X
Xxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx XxXxxxxxxxxx
Telecopier: 000-000-0000
With copy to:
Dow, Xxxxxx & Xxxxxxxxx, PLLC
0000 Xxx Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxxx Xxxx, Esq.
Telecopier: 202-776-2222
To Manager:
c/o Insight Communications, Inc.
000 Xxxx 00/xx/ Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telecopier: 000-000-0000
With copy to:
Xxxxxxxxx Xxxxxx Xxxxxxxx Xxxxxx & Xxxxxx, P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxx, Esq.
Telecopier: (000) 000-0000
14. Headings. The heading references herein are for convenience purposes
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only, do not constitute a part of this Agreement and shall not be deemed to
limit or affect any of the provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date set forth above.
COAXIAL COMMUNICATIONS OF CENTRAL OHIO, INC.
By: /s/
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Its: Chairman
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INSIGHT COMMUNICATIONS OF CENTRAL OHIO, LLC
By: Insight Holdings of Ohio, LLC, its Manager
By: Insight Communications Company, L.P., its Member
By: ICC Associates, L.P., its general partner
By: Insight Communications, Inc., its general partner
By: /s/
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Its:
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SCHEDULE A
1. Gahanna - effective September 9, 1998
2. Lockbourne
3. Madison Township
4. Reynoldsburg - effective August 27, 1998
5. Westerville
6. Lockbourne Lodge
7. NACC/Columbus and New Albany
8. Steepchase Village - effective September 17, 1998
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