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EXHIBIT 10.2(e)
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT (this "Agreement") is made as of the 12th day of
November, 1999, by and between Falcon Cable Communications, LLC, a Delaware
limited liability company (the "Company"), and Charter Communications, Inc., a
Delaware corporation (the "Manager").
A. The Company desires to retain the Manager to manage and operate the
cable television systems owned by the Company and its subsidiaries and
any cable television systems subsequently acquired by the Company and
its subsidiaries (the "Cable Systems").
B. The Manager has agreed to manage and operate the Cable Systems, all
upon the terms and conditions hereinafter set forth.
In consideration of the mutual covenants and agreements contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto hereby agree as follows:
1. Retention of the Manager. The Company hereby appoints the Manager as a
manager for the Cable Systems, and the Manager hereby agrees to serve the
Company as a manager for the Cable Systems, pursuant to the terms and conditions
hereinafter set forth.
2. Authority and Duties of the Manager.
(a) The Company agrees to seek the advice of the Manager regarding the
business, properties and activities of the Cable Systems during the term hereof,
and subject to the direction, control and general supervision of the Company,
the Manager agrees to provide such advice. The Manager shall give such advice in
a businesslike, efficient, lawful and professional manner in accordance with
this Agreement.
(b) Without limiting the generality of the foregoing, the Manager
shall provide all management services with respect to the operation of the Cable
Systems, including, but not limited to the following:
(i) advice concerning the hiring, termination, performance and
training of personnel;
(ii) review, consultation and advice concerning personnel,
operations, engineering and other management and operating policies and
procedures;
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(iii) review, consultation and advice concerning maintenance
standards for plant and equipment of the Cable Systems, advice as to the Cable
Systems' normal repairs, replacements, maintenance and plant upgrades, and
provide for periodic inspections;
(iv) recommendations on all necessary action to keep the
operation of the Cable Systems in compliance, in all material respects, with the
conditions of the Company's franchises and all applicable rules, regulations and
orders of any federal, state, county or municipal authority having jurisdiction
over the Cable Systems;
(v) assistance in the negotiation, or directly negotiate, on
behalf of the Company, of operating agreements (including, but not limited to,
pole attachment agreements, office and headend leases, easements and
right-of-way agreements), contracts for the purchase, lease, license or use of
properties, equipment and rights as may be necessary or desirable in connection
with the operation or maintenance of the Cable Systems and such other agreements
on behalf of the Company as are necessary or advisable for the Cable Systems and
assistance in the procuring, or directly procuring, on behalf of the Company,
such programming, billing and other services and equipment deemed necessary and
advisable for the Cable Systems;
(vi) development of recommendations for, and negotiate the
acquisition and maintenance of, such insurance coverage with respect to the
Cable Systems as the Company may determine upon advice and consultation of the
Manager;
(vii) guidance on all marketing, sales promotions and advertising
for the Cable Systems;
(viii) assistance in the financial budgeting process and the
implementation of appropriate accounting, financial, administrative and
managerial controls for the Cable Systems;
(ix) preparation for use by the Company of financial reports and
maintenance of books of accounts and other records reflecting the results of
operation of each Cable System and/or subsidiary; and
(x) advice and consultation with the Company in connection with
any and all aspects of the Cable Systems and the day to day operation thereof
and consultation with the Company with respect to the selection of attorneys,
consultants and accountants.
3. Management Expenses.
The Manager shall charge to, or be reimbursed by the Company for, all
expenses, costs, losses, liabilities or damages incurred by the Manager
attributable to the ownership or operation of the Cable Systems, including,
where applicable, pro rata allocation for services and purchases made by the
Manager on behalf of the Cable Systems and other companies and cable systems
managed by the Manager, subject to the limitations set forth in
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Section 6 (the "Company Expenses"). In addition to reimbursement for Company
Expenses, the Manager shall be reimbursed for all other expenses, costs, losses,
liabilities or damages incurred by the Manager in connection with the
performance of its duties hereunder, including, without limitation, the
Manager's costs for overhead, administration and salaries (collectively, the
"Management Fee"), provided that the Management Fee shall not include expenses
incurred by Manager that are in the nature of the "Company Expenses" and are
paid to the Manager by another company or cable system managed by Manager.
Notwithstanding the foregoing, and subject to the payment priority provisions of
the following paragraph, in no event may the Management Fee portion of Company
Expenses be reimbursable in any year in an amount in excess five percent (5.0%)
of the Gross Revenue of the Company, payable monthly in arrears or as otherwise
agreed upon. "Gross Revenue" will include all revenues from the operation of the
Cable Systems including, without limitation, subscriber payments, advertising
revenues and revenues from other services provided by the Cable Systems, but not
including interest income or income from investments unrelated to the Cable
Systems. Management Fees shall only be paid to the Manager by the Company to the
extent permitted by the Credit Agreement (as defined below) and any other
material agreement and applicable charter document of the Company and the
Manager.
Notwithstanding the foregoing, the Management Fees (but not other
Company Expenses) due and payable as provided in the preceding paragraph of this
Section 3 shall be subordinated and junior in right of payment to the prior
payment in full in cash of all of the Senior Debt (as defined below) and shall
not be paid except to the extent allowed under the Credit Agreement (as defined
below). In the event of any bankruptcy or similar proceeding relative to the
Company (a "Reorganization"), then all of the Senior Debt shall first be paid in
full in cash before any payment of the Management Fees is made, and in any
Reorganization any amount payable in respect of the Management Fees shall be
paid directly to the Funding Agent referred to below, unless all the Senior Debt
has been paid in full in cash. The Manager hereby irrevocably authorizes the
Funding Agent, as attorney-in-fact for the Manager, to vote, file or prove any
claim or proof of claim in any Reorganization in respect of the Management Fees
and to demand, xxx for, collect and receive any such payment. The Manager shall
take any actions requested by the Funding Agent in order to accomplish any of
the foregoing. If the Manager receives any payment hereunder in violation of the
terms hereof or in connection with any Reorganization (prior to the payment in
full in cash of the Senior Debt), the Manager shall hold such payment in trust
for the benefit of the holders of the Senior Debt and forthwith pay it over to
the Funding Agent. Amounts payable to the Manager in accordance with this
Section 3 which remain unpaid by reason of the foregoing shall be accrued as a
liability of the Company and shall be payable as soon as the conditions to
payment are fulfilled. The deferred portion of the Management Fees will bear
interest at the rate of ten percent (10%) per annum, compounded annually, from
the date otherwise due and payable until the payment thereof.
As used herein, (i) "Credit Agreement" means the Credit Agreement,
dated as of November 12, 1999, among Falcon Cable Communications, LLC, certain
of its affiliates, the Lenders parties thereto, Toronto Dominion (Texas), Inc.,
as Administrative Agent (the "Funding Agent"), and various Syndication and other
Agents named therein, as amended, restated, supplemented or otherwise modified
from time to time, and (ii) "Senior Debt" means the
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principal amount of all loans and guarantee obligations from time to time
outstanding or owing under the Credit Agreement and the other loan documents
executed and delivered by the Company pursuant thereto, together with interest
thereon (including any interest subsequent to any filing for Reorganization,
whether or not such interest would constitute an allowed claim, calculated at
the rate set forth for overdue loans in the Credit Agreement) and all other
obligations of the Company under the Credit Agreement and such other loan
documents.
(b) Notwithstanding any termination of this Agreement pursuant to
Section 4, the Manager shall, subject to the limitations set forth in the
preceding paragraphs above, remain entitled (i) to receive the Management Fees
set forth in Section 3(a) incurred prior to the date of termination which have
not been paid to the Company; and (ii) to receive payment of the deferred
Management Fees at the time of such termination if, and to the extent that,
payment thereof is otherwise permitted under Section 3(a).
4. Effective Date. This Agreement shall become effective only upon the
closing (the "Effective Date") of the initial public offering of the Manager as
contemplated by its Registration Statement on Form S-1 filed with the Securities
and Exchange Commission.
5. Term of Agreement. The term of this Agreement shall be ten years
commencing on the Effective Date, unless sooner terminated pursuant to the terms
of this Agreement. This Agreement may be terminated as follows: (a) by the
Company immediately upon written notice to the manager for Cause (as defined
below) or (b) automatically on the consummation of the sale of all or
substantially all of the Company's assets. For purposes hereof, "Cause" shall
exist if the Manager has engaged in gross negligence or willful misconduct in
the performance of its duties hereunder which could have a material adverse
effect on the Company.
6. Liability. The Company shall bear any and all expenses, liabilities,
losses or damages resulting from the operation of the Cable Systems, and the
Manager, its partners, officers, directors and employees shall not, under any
circumstances, be held liable therefor, except that the Manager shall be liable
for any loss or damage which results from its own gross negligence or willful
misconduct. Neither the Manager nor any of its partners, members, officers,
directors and employees shall be held to have incurred any liability to the
Company, the Cable Systems or any third party by virtue of any action not
constituting gross negligence or willful misconduct taken in good faith by it in
discharge of its duties hereunder, and the Company agrees to indemnify the
manager and its shareholders, partners, directors, officers and employees and
hold the Manager and its partners, directors, officers and employees harmless
with respect of the foregoing, including, but not limited to, reasonable
attorneys' fees.
7. Notices. All notices, demands, requests or other communications which
may be or are required to be given, served or sent by a party pursuant to this
Agreement shall be in writing and shall be deemed given upon receipt if
personally delivered (including by messenger or recognized delivery or courier
service) or on the date of receipt on the return receipt if mailed by registered
or certified mail, return receipt requested, postage prepaid, delivered or
addressed
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as set forth below. Rejection or other refusal to accept or the inability to
deliver because of changed address of which no notice was given shall be deemed
receipt of the notice:
(a) If to the Company:
Falcon Cable Communications, LLC
00000 Xxxxxxxxxxx Xxxxx, Xxxxx 000
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxx
(b) If to the Manager:
Charter Communications, Inc.
00000 Xxxxxxxxxxx Xxxxx, Xxxxx 000
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxx
8. Governing Law. This Agreement and the rights and obligations of the
parties hereunder and the persons subject hereto shall be governed by, and
construed and interpreted in accordance with, the laws of the State of New York,
without giving effect to the choice of law principles thereof.
9. Miscellaneous. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by and against the parties hereto and their
respective successors and assigns. This Agreement embodies the entire agreement
and understanding among the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to the
subject matter hereof. The headings in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof. This
Agreement may be executed in any number of counterparts, each of which shall be
an original, but all of which together shall constitute one instrument. This
Agreement is not transferable or assignable by any of the parties hereto except
as may be expressly provided herein. This Agreement may not be amended,
supplemented or otherwise modified except in accordance with the Credit
Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written and effective as of the
Effective Date.
FALCON CABLE COMMUNICATIONS, LLC,
a Delaware limited liability company
By:______________________________________________
Name:
Title:
CHARTER COMMUNICATIONS, INC.,
a Delaware corporation
By:______________________________________________
Name:
Title:
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