Exhibit 10.17
TRANSITION SERVICES
AGREEMENT
This TRANSITION SERVICES AGREEMENT
(this “Agreement”) is made and entered into on this 1st
day of March, 2004, by and among Charter Communications, VI, LLC, a
limited liability company (the “Seller
Representative”), The Helicon Group, L.P., a limited
partnership, Interlink Communications Partners, LLC, a limited
liability company, and Charter Communications, LLC, a limited
liability company, each organized under the laws of the State of
Delaware, Hornell Television Service, Inc., a corporation organized
under the laws of the State of New York, and Falcon Telecable, a
California limited partnership (collectively, the
“Sellers” and each individually, a
“Seller”), and Atlantic Broadband Finance, LLC, a
limited liability company organized under the laws of the State of
Delaware (“Buyer”).
RECITALS:
WHEREAS, Sellers and Buyer have
executed an Asset Purchase Agreement dated September 3, 2003, as
amended October 31, 2003, December 3, 2003 and February 27, 2004
(the “Purchase Agreement”), pursuant to which Buyer has
agreed to buy substantially all of the assets relating to
Sellers’ cable television systems located in and around the
communities of Cumberland, Maryland; Salamanca, New York;
Middletown, Delaware; Altoona, Bradford, Uniontown and Johnstown,
Pennsylvania; Davis, Moorefield, and Paw Paw, West Virginia; and
Miami, Florida (the “System”);
WHEREAS, as an inducement for Buyer
to enter into the Purchase Agreement, Sellers have agreed pursuant
to Section 6.16 of the Purchase Agreement to provide or cause their
affiliates to provide certain transition services in connection
with the operation of the System after the date hereof, as set
forth herein; and
WHEREAS, on the date hereof (the
“Closing Date”), Buyer desires to engage Sellers to
provide such transition services to Buyer, and Sellers desire to
provide such services to Buyer for a limited period of time, all as
set forth in this Agreement.
NOW THEREFORE, in consideration of
the premises and mutual covenants contained herein and other good
and valuable consideration, the receipt, adequacy and sufficiency
of which are hereby acknowledged, Sellers and Buyer hereby agree as
follows:
1. Transition Services .
1.1 Services . During the
term of this Agreement, each Seller will provide, or will cause an
affiliate of such Seller to provide, to Buyer and its subsidiaries,
as applicable, the services described on Exhibit A attached
hereto (the “Transition Services”). All Transition
Services shall be provided in accordance with Section 1.3
hereof.
1.2 Limitation on Authority .
Sellers will have no responsibility or authority under this
Agreement, directly or indirectly, with respect to the operation or
management of Buyer’s business or operations.
1.3 Level and Quality of
Services . Sellers will provide, or cause an affiliate of
Sellers to provide, to Buyer and its subsidiaries, as applicable,
the Transition Services on substantially the same terms as, and at
a level of quality that is no less or worse in any respect than,
the terms and level of quality on which Charter performs such
services with respect to the System and the other cable television
reception and distribution systems operated by Sellers in the
conduct of their cable television businesses, generally, in
the
ordinary course of Sellers’ business
consistent with past custom and practice (including with respect to
quality, scope, frequency and timeliness); provided, however, Buyer
acknowledges that the foregoing obligations of Sellers shall not
apply with respect to changes in the level of quality, scope,
frequency and timeliness of the Transaction Services which Sellers
determine in good faith are reasonably necessary as a result of the
transition of the System to Buyer and the consummation of the
transactions contemplated by the Purchase Agreement. Sellers and
Sellers’ affiliates, as the case may be, shall perform the
Transition Services in compliance in all material respects with
applicable federal, state, county, municipal and other laws,
ordinances, rules and regulations in effect from time to time.
During the term of this Agreement, Sellers and Sellers’
affiliates performing services hereunder shall preserve and keep in
full force and effect their corporate existence, rights and
franchises required for performance hereunder and maintain all
assets and properties required for performance hereunder. All
Transition Services shall be provided with reasonable care and
skill in accordance with the terms of this Agreement.
1.4 Point-of-Contact . Each
of Sellers and Buyer will designate in writing a point-of-contact
for the parties to resolve expeditiously issues which may arise in
connection with the provision of Transition Services under this
Agreement. Buyer’s initial point-of-contact will be Matt
Murphy. Sellers’ initial point-of-contact will be Stacey
Elfrink. Buyer’s point-of-contact will promptly notify
Sellers’ point-of-contact regarding any customer requests for
service by Sellers or complaints about service by Sellers during
the term of this Agreement. Each party may conclusively and
absolutely rely, without inquiry, upon any action of any other
party’s point-of-contact as the action of such other party in
all matters referred to herein. Each party will have the right at
any time and from time to time to replace its point-of-contact, or
add additional points-of-contact, by delivering written notice of
such replacement to the other parties.
2. Term . Sellers shall provide, or shall
cause their affiliates to provide, the Transition Services to Buyer
on a monthly basis for the period commencing on the Closing Date
and ending on the earlier to occur of: (i) the first anniversary of
the Closing Date, (ii) the day agreed in writing by Buyer and
Seller, and (iii) the day on which this Agreement is terminated in
accordance with Section 8 hereof (such earlier day, the
“Termination Date”). Notwithstanding the foregoing, at
any time and from time to time prior to the Termination Date, Buyer
may elect to terminate any or all of the Transition Services or
otherwise reduce Sellers’ level of efforts with respect to
any Transition Service at any time and from time to time prior to
the Termination Date, provided that at least 30 days’ advance
notice is provided to Sellers. Sellers and their affiliates will
have no duty or obligation to provide any Transition Services after
the Termination Date. Upon Buyer’s request, each Seller may
choose to continue to provide, or cause its affiliate to continue
to provide, any or all Transition Services on a monthly basis
beyond the Termination Date for an additional fee as mutually
agreed by Buyer and Sellers.
3. Fees . As a fee for each Transition
Service to be provided by any Seller hereunder (“Fee”),
Buyer will pay to such Seller an amount equal to either: (i) such
Seller’s actual cost of providing such Transition Service
(“Cost-based Fee”), or (ii) the cost of such Transition
Service allocated by such Seller’s affiliates to the System,
or to such Seller, in a manner consistent with past custom and
practice, including, but not limited to, corporate and regional
overhead costs (“Allocated Fee”). For purposes of this
Section 3, “actual cost” shall mean, with respect to
the provision of any Transition Service, the direct cost incurred
by Sellers and their affiliates in connection with providing such
service. Each Transition Service shall be designated as being
charged to Buyer during the term of this Agreement on a Cost-based
Fee basis, or an Allocated Fee basis, which designation is set
forth on Exhibit B . Exhibit B also sets forth (i) an
example of the calculation of the Fee for each Transition Service
for a monthly period during the term of this Agreement, and (ii) a
description of the corporate and regional overhead costs which are
part of the Allocated Fee; provided, that the parties acknowledge
that the services and calculation set forth on Exhibit B is
given by way of example only and the actual services and amount of
the Fee may vary. Any Transition Services provided to
Buyer
after the initial six-month period of this
Agreement will be provided to Buyer at the Fee for such Transition
Service plus a premium of 150% of the Fee per month.
Notwithstanding anything contained herein to the contrary, to the
extent Buyer instructs Sellers prior to the Termination Date to
discontinue providing Transition Services or to reduce
Sellers’ level of efforts with respect to the Transition
Services pursuant to Section 2, then Buyer shall be responsible for
reimbursing Sellers for all costs incurred by Sellers directly and
solely relating to such discontinued or reduced Transition
Services, including, but not limited to, costs incurred by Sellers
and due to any third-party service provider (other than any
affiliate of Seller) through any notice period, until such time as
such third-party service provider ceases providing and charging
Sellers for such services. Upon receipt of notice from Buyer that
Buyer intends to terminate any Transition Service or reduce the
level of Sellers’ efforts with respect thereto, Sellers will
use their respective commercially reasonable efforts to mitigate
any costs due to third-party service providers after the intended
date of termination or reduction in services.
3.1 Invoicing and Payment .
The Fee shall be payable by Buyer to the Seller Representative (on
behalf of Sellers) monthly in advance in accordance with the terms
of this Section 3.1. Buyer shall pay the Fee for the first month on
or before March 10, 2004 in an amount equal to the Fee set forth on
Exhibit B . The Seller Representative shall thereafter
invoice Buyer in advance at least ten days prior to the end of each
month for the following month’s anticipated Fee (together
with reasonably detailed documentation for such anticipated amount)
and Buyer shall pay such amount no later than ten days following
Buyer’s receipt of such invoice. The Seller Representative
(on behalf of Sellers) shall calculate the actual Fee for a
particular month after the end of such month and provide a
statement to Buyer of the amount of the actual Fee, together with
reasonably detailed documentation substantiating all direct costs
shown thereon. Buyer may conclusively and absolutely rely, without
inquiry, upon the invoice prepared and delivered by the Seller
Representative for such actual Fee, which shall be final and
binding on each Seller. To the extent that the anticipated Fee paid
by Buyer for a month exceeds the actual Fee calculated by Sellers
for such month (“Overpayment”), the amount of the
Overpayment shall be applied by Sellers to offset amounts set forth
on the next invoice sent to Buyer for anticipated Fees, or if no
additional invoice will be sent to Buyer due to the expiration or
earlier termination of this Agreement, then Sellers shall reimburse
the amount of the Overpayment to Buyer within ten days of such
calculation. To the extent that the anticipated Fee paid by Buyer
for a month is less than the actual Fee calculated by Sellers for
such month (“Underpayment”), the amount of the
Underpayment shall be invoiced by Sellers to Buyer with and in
addition to amounts set forth on the next invoice sent to Buyer for
anticipated Fees, or if no additional invoice will be sent to Buyer
due to the expiration or earlier termination of this Agreement,
then Sellers shall invoice Buyer for the amount of the Underpayment
and Buyer shall pay such invoice within ten days of receipt. If
there are any direct one-time costs associated with the Transition
Services, including, but not limited to, special billing projects
and lock box administration, Buyer agrees to reimburse Sellers for
such costs. Amounts not timely paid by Buyer (other than disputed
amounts being contested by Buyer in good faith) shall bear interest
at an annual rate equal to the lower of 6% or the highest rate
allowed by law until paid, without prejudice to the Sellers’
rights to exercise any and all remedies available hereunder or
under otherwise applicable law. Upon receipt of such payments, the
Seller Representative shall forthwith pay to each Seller the
portion of such payment attributable to the Transition Services
provided by such Seller as indicated in the applicable invoice.
Sellers shall, and shall cause their affiliates that provide
Transition Services hereunder to, respond to all reasonable
requests for additional information made by Buyer or its
representatives in connection with any and all amounts invoiced
hereunder.
3.2 Taxes . Each party shall
assume the cost of any sales, use, privilege and other transfer or
similar taxes imposed upon that party as a result of the
transactions contemplated hereby. To the extent any exemptions from
such taxes are available, Buyer and Sellers shall cooperate to
prepare any certificates or other documents necessary to claim such
exemptions.
4. Cooperation .
4.1 Sellers’ Practices;
Necessary Actions . Buyer will comply with Sellers’
reasonable policies, procedures and practices in effect on the
Closing Date and communicated to Buyer by Sellers’
point-of-contact with respect to the Transition Services. Each of
the parties hereto shall use such party’s commercially
reasonable efforts to take such actions as may be necessary or
reasonably requested by any other party hereto to carry out and
consummate the transactions contemplated by this
Agreement.
4.2 Re-Performance . Subject
to Sections 6A and 8.1, Sellers’ sole responsibility to Buyer
for errors or failures in providing Transition Services will be an
obligation to re-perform such Transition Services properly in a
diligent manner; provided, however, that each party will use
commercially reasonable efforts to detect any such errors or
omissions and Buyer will advise Sellers with reasonable promptness
of any such error or omission of which it becomes aware. If the
re-p
