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EXHIBIT 10.20
SERVICES AGREEMENT
THIS IS A SERVICES AGREEMENT ("Agreement") dated as of the
20th day of February, 1998, by and between (i) XXXX.XXX, INC., a Kentucky
corporation ("CATV"); and (ii) OPM SERVICES, INC., a Kentucky corporation
("OPM").
R E C I T A L S:
1. CATV is a Kentucky corporation which is engaged in the business of
providing broadband Internet access and other services to cable TV subscribers
and other customers (the "Operations").
2. CATV wishes to enter into an agreement whereby OPM will provide to
CATV and on CATV's behalf, certain financial, accounting, professional staffing
and legal services (the "Services," as further described in Section 2 below).
3. OPM wishes to perform such Services on behalf of CATV, and the
parties hereto wish to reduce to writing their understanding with respect to the
matters contained herein.
NOW, THEREFORE, the parties hereto, in consideration of the
mutual covenants contained herein and for other good and valuable consideration,
the sufficiency of which is hereby acknowledged, agree as follows:
1. INDEPENDENT CONTRACTORS. It is understood and agreed that the
relationship between the parties hereto is that of independent contractors, and
nothing herein contained shall be deemed to create or authorize the creation of
the relationship of partnership or joint venture between OPM and CATV.
2. OPM'S SERVICES. OPM shall perform the following services for and on
behalf of CATV (collectively, the "Services"):
(1) Financial functions:
(i) billing and collections;
(ii) general accounting and financial reporting,
including cash flow and annual budgeting;
(iii) data processing, including central office
LAN design and management;
(iv) bookkeeping and general record-keeping;
(v) audit support services;
(vi) treasury and payroll, including banking and
cash management, i.e., the handling and
issuance of checks and other negotiable
instruments pertaining to CATV's accounts
payable and payroll;
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(vii) as it relates to the Operations,
governmental compliance functions necessary
to enable CATV to meet the reporting,
record-keeping, and budgetary requirements
of all applicable statutes, rules or
regulations of all governmental agencies.
(2) Legal services: Provide in-house legal and business
development support as requested by CATV. Billed legal services will not exceed
ten (10) hours per month without prior permission of the CATV Board.
In performing Services on behalf of CATV, OPM shall use the same degree of care
and diligence as is used in performance of comparable duties for its own
account, provided, that the OPM shall not be obligated to commence legal
proceedings on behalf CATV without express permission.
3. CATV'S OBLIGATIONS. The obligations of CATV shall consist of the
following:
(1) To provide assistance and cooperation in all billing of
services for the period in which this Agreement is effective and to pay over to
OPM, immediately upon receipt thereof, any payments or reimbursements for such
services.
(2) To establish policies affecting the Operations which are
not inconsistent with the responsibilities assigned to OPM under the terms of
this Agreement.
(3) To play an active role in promoting the good will and
public image of the Operations and OPM.
(4) To cooperate with OPM in executing all forms and returns
required pursuant to applicable taxing statutes, federal, state and local rules
and regulations and governmental reimbursement programs.
4. Revenues, Costs of Operations and Management Fee.
(1) All revenues from the Operations of, or any interest
earned on any deposits or accounts maintained under this Agreement for, CATV and
the Operations shall be deposited into and paid out of one or more bank accounts
established by CATV (at a financial institution selected by CATV) for the
payment of the following items on a monthly basis in the following order of
priority: i) the Costs of Operation; ii) the Management Fee (as defined in
Section 4(2) below. OPM shall not commingle any funds of CATV received or
controlled by it pursuant to this Agreement with any funds of OPM.
(2) The Management Fee payable to OPM shall be the fees
described on ANNEX A attached hereto. The retained portion of the fee shall
cover all financial functions listed under Section 2(1) above. The initial
retainer for financial services under section 2(1) shall be $1,000.00 per month
and such amount may not be changed without written authorization of the CATV
Board of Directors. Legal services 2(2) may be billed as such services are
incurred at the request of CATV provided that such legal services will not
exceed ten (10) hours per month
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without prior permission of the CATV Board. OPM is authorized to pay each
invoice for Management Fee to itself unless within ten (1) days of presentation
of such invoice CATV shall notify OPM of its objections.
5. TERM. Unless earlier terminated in accordance with Section 6 hereof
or further extended as provided herein, this Agreement shall commence effective
at 12:01 a.m. local time on February 1, 1998 (the "Commencement Date"). Either
party may terminate this agreement for any reason upon providing thirty (30)
days written notice.
6. DEFAULT, RIGHT TO CURE AND TERMINATION.
(1) The following shall be deemed to be an "Event of Default"
hereunder:
a) If any licenses or permits applicable to the
Operations are canceled or revoked because either
party has failed to perform its obligations hereunder
and such party is not, in good faith, diligently
pursuing the reinstatement of such licenses or
permits.
b) If either party becomes insolvent or makes an
assignment for the benefit of creditors or commits an
act of bankruptcy or files a voluntary petition under
the provisions of the United States Bankruptcy Code,
including without limitation, a petition for
reorganization or arrangement or consents to an
involuntary petition or is adjudicated a bankrupt.
c) If either party violates, or is in breach of, any
material term or condition of this Agreement.
(2) The party with respect to which an Event of Default is not
applicable (the "Non-Defaulting Party") may declare this Agreement terminated in
the event the other party (the "Defaulting Party") fails to cure the Event of
Default within sixty (60) days after written notice from the Non-Defaulting
Party, which notice shall specify in sufficient detail the specific
circumstances of the Event of Default so as to give the Defaulting Party
adequate notice and the opportunity to cure same; provided the Defaulting Party
shall not be deemed in default if the Defaulting Party takes reasonable steps to
cure the Event of Default within the sixty (60) day period and proceeds with due
diligence thereafter to cure the Event of Default.
7. COOPERATION AT TERMINATION. Upon the expiration or earlier
termination of this Agreement, the parties hereto shall cooperate fully with the
other in effecting an orderly transition to avoid any interruption in the
rendering of the above-described services and, in that connection, OPM shall
surrender to CATV all contracts, books, records and reports maintained by OPM
with respect to the Operations.
8. INDEMNIFICATION. Any Defaulting Party shall indemnify and hold the
Non-Defaulting Party and the Non-Defaulting Party's shareholders, directors,
officers, employees and agents harmless from any and all liabilities, losses,
damages, claims, and costs arising from an
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Event of Default, except for liabilities, losses, damages, claims, and costs
arising from the Non-Defaulting Party's gross negligence, bad faith or willful
misconduct.
9. PARTIES BOUND. The provisions of this Agreement shall be binding
upon the parties hereto and their respective successors and assigns. Except as
specifically provided herein, no assignment of rights or delegation of duties
shall relieve either party, as the case may be, of its obligations hereunder.
Except as specifically provided herein, neither party may assign its rights or
delegate its duties under this Agreement without the prior written consent of
the other party; provided that a party may assign its rights and delegate its
duties to any successor entity in the event of a merger or a sale of
substantially all of the party's assets if the successor entity assumes all of
the party's obligations hereunder.
10. ATTORNEYS' FEES. In the event of a dispute over this Agreement each
party shall bear its own attorneys' fees, respective court costs and other
expenses incurred in the enforcement of the obligations of this Agreement.
11. SEVERABILITY. In the event any provision hereof shall be modified
or held ineffective by any court in any respect, such adjudication shall not
invalidate or render ineffective the balance of the provisions of this
Agreement.
12. ENTIRE AGREEMENT; MODIFICATION; WAIVER. This Agreement constitutes
the entire agreement between the parties with respect to the subject matter
hereof and completely supersedes all prior oral agreements between the parties.
All other agreements with respect to the subject matter hereof between the
parties, whether written or oral, are merged herein. No supplement,
modification, or amendment of this Agreement shall be binding unless executed in
writing by the parties hereto. No waiver of any of the provisions of this
Agreement will be deemed, or will constitute, a waiver of any other provision,
whether or not similar, nor will any waiver constitute a continuing waiver. No
waiver will be binding unless executed in writing by the party making the
waiver.
13. EXECUTION IN COUNTERPARTS. This Agreement may be executed in
multiple counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same document.
14. FURTHER ASSURANCES. The parties each hereby agree to execute and
deliver all of the agreements, documents, and instruments required to be
executed and delivered by them in this Agreement and to execute and deliver such
additional instruments and documents and to take such additional actions as may
reasonably be required from time to time in order to effectuate the transactions
contemplated by this Agreement.
15. TENSE; CAPTIONS. In construing this Agreement, whenever
appropriate, the singular tense shall also be deemed to mean the plural, and
vice-versa, and the captions contained in this Agreement shall be ignored.
16. GOVERNING LAW. This Agreement shall be construed, interpreted, and
enforced in
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accordance with the substantive laws of the Commonwealth of Kentucky.
17. PARTIES IN INTEREST. Nothing in this Agreement, whether express or
implied, is intended to confer any rights or remedies under or by reason of this
Agreement on any persons other than OPM and CATV and their respective successors
and assigns, nor is anything in this Agreement intended to relieve or discharge
the obligation or liability of any third persons to any party to this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year set forth below.
XXXX.XXX, INC., a Kentucky corporation
By: /s/ Xxxx Xxxxx
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Its:
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("CATV")
OPM SERVICES, INC., a Kentucky corporation
By: /s/ Xxxx Xxxxx
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Its:
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("OPM")
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ANNEX A
FEES FOR SERVICES
Fees for OPM's management services rendered will be billed monthly. Hourly rates
will be rounded to the nearest quarter hour. The following fee schedule will
apply:
LEGAL SERVICES $90.00 PER HOUR
A transaction is defined as a cash disbursement (check or wire transfer), cash
receipt item, A/P invoice, A/R invoice or journal entry.
The initial retainer for base and variable financial services only under section
2(1) shall be $1,000.00 per month and such amount may not be changed without
written authorization of the CATV Board of Directors.
For costs related to the jointly shared administrative assistant in place as of
February 20, 1998, or other future employee(s) with the Boards of both OPM and
CATV determine to be in their mutual best interest of sharing, then each of OPM
and XXXX.xxx shall bear their respective share of the cost of such employee(s).
