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"),
and Insight Communications of Central Ohio, LLC, a Delaware limited liability
company ( "Manager"). All capitalized terms used herein and not defined herein
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 Communications Company, L.P. ("Insight") (which has assigned all of its
rights and obligations thereunder to Insight Holdings of Ohio LLC, a Delaware
limited liability company ("Holdings")), Central has agreed to contribute to
Manager 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
WHEREAS, Central has informed Insight and Holdings that the consents
(the "Consents") required to transfer to the Manager the franchises covering
those portions of the System that are listed on Schedule A hereto (the "Retained
Assets") either will not be obtained prior to the Closing Date or have been
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 ▇▇▇▇ of Sale, General Assignment and Instrument of Assumption of
Liabilities of even date herewith between Central and Manager (the "Conveyance")
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
(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
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 and consummation 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
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
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,
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
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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 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
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
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 assign this Agreement.
9. Waiver. No waiver of any term, provision, or condition of this
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
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
govern this Agreement and the construction of any of its terms.
12. Counterparts. This Agreement may be signed in one or more
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
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
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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 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
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
With copy to:
Dow, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, PLLC
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇, Esq.
Telecopier: 202-776-2222
To Manager:
c/o Insight Communications, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
With copy to:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
14. Headings. The heading references herein are for convenience
purposes 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/
------------------------------------
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/
----------------------------
Its: Executive Vice President and
Chief Financial and Operating Officer
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