EXHIBIT 10.23
MANAGEMENT SERVICES AGREEMENT
MANAGEMENT SERVICES AGREEMENT, dated as of April 10, 1998, (the
"Agreement"), between Adelphia Communications Corporation, a Delaware
corporation ("Adelphia"), and Hyperion Telecommunications, Inc., a Delaware
corporation (the "Hyperion").
W I T N E S S E T H
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WHEREAS, Adelphia has provided and has agreed to continue to provide to
Hyperion and its subsidiaries services necessary for the management of the
businesses and operations of Hyperion and its subsidiaries, and Hyperion has
agreed to pay for such services from Adelphia; and
WHEREAS, Adelphia and Hyperion desire to make provision for certain ongoing
relationships among them regarding the services to be performed by Adelphia for
Hyperion.
NOW, THEREFORE, in consideration of the foregoing premises, and the mutual
promises of the parties hereinafter set forth, and intending to be legally bound
hereby, Adelphia and Hyperion hereby agree as follows:
SECTION 1. ENGAGEMENT.
1.1 Hyperion engages Adelphia to provide the services specified in Section
2 of this Agreement to its businesses, and Adelphia accepts this engagement, on
the terms and conditions set forth in this Agreement. For purposes of this
Agreement, services performed by Adelphia shall include services performed by
Adelphia and any of Adelphia's subsidiaries or affiliates (other than Hyperion).
SECTION 2. CERTAIN SERVICES RELATED TO MANAGEMENT.
2.1 Commencing on the date of this Agreement, and for the period provided
under Section 4 hereof, Adelphia shall make available to Hyperion or any of its
subsidiaries, upon the reasonable request by such party, management services,
including without limitation the following services (individually a "Service"
and collectively, the "Services"):
(a) The services of Adelphia's officers in management of Hyperion and the
subsidiaries of Hyperion.
(b) The services of Adelphia's officers in rendering general business
advice, including, without limitation, executive time and space, advice
regarding operations and production, distribution, marketing and the
acquisition, disposition and utilization of assets.
(c) The services of Adelphia's officers for financial advice and services,
including, without limitation, assistance with respect to matters such as the
raising of additional capital, cash management, risk management, insurance,
treasury, financial controls, financial accounting, interest rate hedging,
financial statement preparation, accounts and trade payables and receivables,
payroll, credit and collection, investor relations, and internal audit.
(d) The services of Adelphia's general counsel and legal department for
legal services, contract review, and general legal advice and counsel.
(e) The services of Adelphia's officers for advice concerning foreign and
domestic taxes.
(f) The services of Adelphia's officers for personnel and human resource
advice and services, including, without limitation, administration and design of
insurance, pension and other employee benefit plans, hiring and termination of
employees, compensation, performance reviews and maintenance of personnel
records.
(g) The services of Adelphia's other staff, and the use of office
equipment, office space, network and other facilities, aircraft and support
equipment for such other advice and services related to the operation of the
business of Hyperion or any of its subsidiaries as Hyperion or any of its
subsidiaries may reasonably request from time to time.
(h) The services, systems and systems resources of Adelphia related to the
provisions of information systems services.
(i) Such other services as Adelphia and Hyperion shall mutually agree.
2.2 As reasonably requested by Hyperion, Adelphia will sell or otherwise
make available to Hyperion the products, supplies and equipment, at Adelphia's
actual cost thereof, which Adelphia purchases or acquires or has the opportunity
to purchase or acquire in the ordinary course of its business, for use by
Hyperion. This provision shall include, on a pro-rata basis, the purchase,
lease or other form of financing of the acquisition or use of any products,
supplies or equipment which are used jointly by Adelphia or its affiliates on
the one hand and Hyperion or its subsidiaries on the other hand.
2.3 Notwithstanding the provisions of subsection 2.1 hereof, Adelphia may
contract with third parties to perform any or all of the Services. Such third
parties will be engaged by Adelphia after consultation with Hyperion.
SECTION 3. PRICING.
3.1 For the Services, Hyperion shall pay to Adelphia an amount necessary
to pay a reasonable allocation of the compensation and allocable costs for the
employees of Adelphia and a reasonable allocation of the other direct and
indirect overhead expenses of Adelphia including, without limitation, its
allocable share of any space rented or owned by Adelphia. Such reasonable
compensation and other reasonable overhead expenses shall, unless otherwise
agreed,
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be based on a pro-rata share of the department expenses as agreed to by the
parties for the applicable Service.
3.2 In addition to the payments under Section 3.1, Hyperion shall, within
30 days after its receipt of an invoice from Adelphia, reimburse Adelphia for
its reasonable out-of-pocket expenses (including, without limitation, the
reasonable fees and disbursements of its outside legal counsel and accountants)
incurred by it in providing Services to Hyperion or any of its subsidiaries, as
set forth in the invoice.
SECTION 4. TERM OF AGREEMENT.
4.1 The initial term of this Agreement will be for one year commencing on
the Closing Date (the "Initial Term") and automatically renewed on each
anniversary of the end of the Initial Term, subject to earlier termination as
provided herein.
4.2 After the Initial Term, either party may terminate the Agreement upon
at least 60 days written notice to the other party.
SECTION 5. ACCESS TO INFORMATION.
5.1 Hyperion shall provide to Adelphia all information necessary for
Adelphia to provide the Services.
SECTION 6. NOTICE.
6.1 Any notice, request, instruction, consent, approval or other
communication provided for herein shall be in writing and shall be delivered
personally, sent by certified or registered mail, postage prepaid, sent by
facsimile transmission, and shall be deemed given when so delivered personally,
if sent by facsimile transmission when sent, or if mailed, two business days
after the date of deposit in the United States mails, as follows:
To Adelphia Adelphia Communications Corporation
Main at ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
To Hyperion Hyperion Telecommunications, Inc.
▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 7. INDEMNIFICATION.
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7.1 Adelphia does not by this Agreement assume any of the obligations,
liabilities or debts of Hyperion or any of its subsidiaries, except as otherwise
expressly provided herein, and shall not, by virtue of its performance
hereunder, assume or become liable for any such obligations, liabilities or
debts of Hyperion or its subsidiaries. Hyperion agrees to indemnify and hold
Adelphia harmless from and against any and all such obligations, liabilities and
debts not assumed hereunder or otherwise by Adelphia. In addition, to the
fullest extent permitted by the Delaware General Corporation Law, Hyperion shall
indemnify and hold harmless Adelphia and its affiliates (other than Hyperion and
its subsidiaries), the respective directors, officers, agents, employees and
legal representatives of Adelphia and its affiliates (other than Hyperion and
its subsidiaries) from and against any and all losses, claims, damages,
liabilities, joint or several (and all actions in respect thereof), caused by,
related to or arising out of Adelphia acting for, or providing Services to,
Hyperion or any of its subsidiaries pursuant to this Agreement (collectively,
the "Other Liabilities"), and to reimburse Adelphia and any other parties
entitled to be indemnified hereunder for all reasonable expenses (including
attorneys' fees) incurred by Adelphia or any such other indemnified party in
connection with investigating, preparing or defending any such action or claim,
except to the extent that such Other Liabilities arise from the gross negligence
or willful misconduct of such persons ("Excepted Other Liabilities").
7.2 Hyperion does not by this Agreement assume any of the obligations,
liabilities or debts of Adelphia, except as otherwise provided herein, and shall
not by virtue of its performance hereunder, assume or become liable for any such
obligations, liabilities or debts of Adelphia. Adelphia agrees to indemnify and
hold Hyperion harmless from and against any and all such obligations,
liabilities and debts of Adelphia not assumed hereunder or otherwise by Hyperion
and any and all claims, actions, liabilities or losses of any kind, including
reasonable attorneys fees, arising out of or in connection with Excepted Other
Liabilities.
SECTION 8. CONFLICT RESOLUTION
8.1 Any dispute, controversy or claim relating to this Agreement (a
"Dispute") shall initially be referred to the executive management of the
parties to the Dispute who shall attempt to resolve such Dispute in good faith.
In the event such executive management cannot come to an agreement to resolve a
particular Dispute, then the matter shall be submitted to final and binding
arbitration by three (3) arbitrators selected by Adelphia and the Hyperion.
Adelphia and the Hyperion will each select one (1) arbitrator and the third
arbitrator will be selected by mutual agreement of the two (2) previously
selected arbitrators (the "Board of Arbitration"). The Board of Arbitration
will meet in Pittsburgh, Pennsylvania, or such other place as the parties may
agree upon, and will reach and render a decision in writing concurred in by a
majority of the members of the Board of Arbitration. The Board of Arbitration
will adopt and follow such rules and procedures as a majority of the members of
the Board of Arbitration deems necessary or appropriate. To the extent
practical, the Board of Arbitration will render decisions no more than thirty
(30) days following the commencement of proceedings. Each party will bear its
own costs and expenses in relation thereto, and the fees and expenses of the
members of the Board of Arbitration shall be shared equally by the parties
hereto.
SECTION 9. EVENTS OF DEFAULT AND REMEDIES
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9.1 An "Event of Default" shall include a material breach of a material
representation, agreement or other obligation of either of the parties to this
Agreement (any such breach is herein referred to as a "Material Breach");
provided, the non-breaching party provides the breaching party with written
notice of such Material Breach which describes in reasonable detail the nature
of such Material Breach and the breaching party does not cure such Material
Breach within sixty (60) days after receipt of such notice.
9.2 Each of the parties hereto shall be liable to the other party for
damages arising out of or in connection with any breach of this Agreement, to
the extent permitted by law, subject to the duty of the non-breaching party to
take all reasonable actions in order to mitigate such damages. The parties
agree that in no event shall either party to this Agreement be liable to the
other party for any punitive, indirect, special or consequential damages arising
out of a breach of this Agreement. It is understood and agreed that monetary
damages may not be a sufficient remedy for an Event of Default. Accordingly,
the non-breaching party shall, to the extent permitted by law or equity, be
entitled to specific performance and injunctive or other equitable relief as a
remedy for any Event of Default. The remedies described in this Section 9.2
shall not be deemed to be the exclusive remedies for any breach of, or Event of
Default under, this Agreement, but shall be in addition to all other remedies
available to the parties at law or in equity, subject to the limitations with
respect to damages set forth above in this Section 9.2.
SECTION 10. MISCELLANEOUS PROVISIONS.
(a) Assignment. No party to this Agreement may assign its rights or,
expect as permitted hereby, delegate its obligations under this Agreement to any
person, without the prior written consent of the other party.
(b) Successors Bound. Subject to the provisions of paragraph 10(a) above,
this Agreement is binding on, and inures to the benefit of, parties' respective
successors and permitted assigns.
(c) Headings. The paragraph headings in this Agreement are for reference
purposes only and will not affect the interpretation of this Agreement.
(d) Entire Agreement. This Agreement records the final, complete and
entire agreement among the parties regarding engagement of Adelphia to provide
management and consulting services to Hyperion, and it supersedes all prior oral
and written agreements, commitments or understandings with respect to the
matters provided for herein.
(e) Counterparts. This Agreement may be executed in counterparts, each of
which will constitute an original document and all of them, together, will
constitute the same agreement.
(f) Governing Law. The validity, construction, enforcement of this
Agreement are governed by the laws of Delaware.
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(g) Modification. A waiver, amendment, or modification of any provision of
this Agreement will be valid and effective only if it is evidenced by a writing
signed by each party to this Agreement.
(h) No Agency. This Agreement shall not be deemed expressly or by
implication to create an agency, employee, or servant relationship between or
among any of the parties hereto, or any affiliates of the parties hereto for any
purpose whatsoever.
(i) Force Majeure. Neither party shall be liable for any failure of or
delay in the performance of this Agreement for the period that such failure or
delay is due to acts of God, public enemy, war, strikes or labor disputes, or
any other cause beyond the parties' reasonable control; it being understood that
lack of financial resources is not to be deemed a cause beyond a party's
control. Each party shall notify the other party promptly of the occurrence of
any such cause and carry out this Agreement as promptly as practicable after
such cause is terminated; provided, however, that the existence of any such
cause shall not extend the term of this Agreement.
(j) Adherence to Applicable Law. In connection with the performance of
their respective obligations and the exercise of their respective rights
hereunder, the parties agree to comply in all material respects with all
applicable state, federal and local laws and regulations.
IN WITNESS WHEREOF, the parties have set their hands effective as of the
date first above.
ADELPHIA COMMUNICATIONS CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President
HYPERION TELECOMMUNICATIONS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
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