1
MANAGEMENT SERVICES AGREEMENT
THIS MANAGEMENT SERVICES AGREEMENT (this "Agreement") is entered
into as of the 2nd day of February, 1999 between BCI (USA), LLC, a Delaware
limited liability company (the "Manager"), and Bresnan Communications Company
Limited Partnership, a Michigan limited partnership (the "Partnership"). All
capitalized terms used herein have those meanings ascribed to them in the
Partnership Agreement (as defined below). All section references used herein
relate to those sections of the Partnership Agreement (as defined below).
RECITALS
WHEREAS, the Partnership wishes to engage Manager to provide
management services to the Partnership, upon the terms and conditions set forth
herein and the Partnership desires to retain the Manager, upon the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, the receipt and sufficiency of which are
hereby acknowledged and intending to be legally bound hereby, the Manager and
the Partnership agree as follows.
1. Retention of Manager. Subject to the terms and conditions
hereinafter set forth, the Partnership hereby retains the Manager, and the
Manager hereby accepts such retention, as the manager of the Partnership, with
full power and authority during the term of this Agreement to carry out all
responsibilities of the Manager under this Agreement.
2. Management Generally. Except as otherwise provided in the Bresnan
Communications Company Limited Partnership Amended and Restated Limited
Partnership Agreement, dated as of February 2, 1999 (the "Partnership
Agreement"), the business of the Partnership will be conducted and managed
exclusively by the Manager. The Manager will devote such time, effort and skill
to the business and affairs of the Partnership and its management as may be
reasonable and necessary or appropriate to carry out the business of the
Partnership. Except as limited by the Partnership Agreement, the Manager will
have the rights, powers, duties and obligations
2
and be subject to all the restrictions and liabilities of a partner in a
partnership without limited partners.
3. Specific Authority of the Manager. Except as otherwise provided in
Section 4.7(b) of the Partnership Agreement or any other provision of the
Partnership Agreement, the Manager will have full power and authority to do all
things and to perform all acts, consistent with the approved five-year plan and
Annual Budget of the Partnership, that it reasonably deems necessary, advisable
or incidental to the conduct of the business and affairs of the Partnership,
without the consent of any Limited Partner, including full power and authority
to take the following actions:
(a) Enter into contracts in the ordinary course of the Partnership's
business and perform the obligations of the Partnership undertaken in such
contracts, including any contract entered into with the Manager or a Limited
Partner pursuant to Section 6.4 of the Partnership Agreement;
(b) Make all decisions with respect to the operation of the assets of
the Partnership;
(c) Employ such agents, consultants, advisers, attorneys, accountants
and other personnel as may be necessary or appropriate for the business of the
Partnership on such terms and conditions as the Manager determines reasonable;
(d) Open, maintain and close bank accounts and draw checks and other
orders for the payment of money;
(e) Collect accounts receivable, income and other payments due to the
Partnership;
(f) Keep the books and records of the Partnership and hire independent
certified public accountants;
(g) Pay accounts payable and other expenses of the Partnership;
(h) Transfer, hypothecate, compromise or release any Partnership claim
against unrelated third parties;
(i) Administer the financial affairs of the Partnership, make tax and
accounting elections, including an election or elections under section 754 of
the Code
2
3
(which election will be made upon the request of any Limited Partner), file all
required tax returns relating to the Partnership, pay the liabilities of the
Partnership and distribute the profits of the Partnership to the Partners;
(j) Borrow money and make, issue, accept, endorse and execute
promissory notes, drafts, bills of exchange, guarantees, and other instruments
and evidences of indebtedness in the name of the Partnership, including in
connection with and as part of purchasing assets and securities for the
Partnership, and mortgage, pledge, assign or grant security interests in all or
any part of the assets then owned or subsequently acquired by the Partnership;
(k) Cause the Partnership to purchase and maintain any insurance, in
amounts and on terms customary in the industry, covering the potential
liabilities of the Partnership, the Manager and its partners, officers,
directors, employees and agents of the partners of the Manager, as well as the
potential liabilities of any person serving at the request of the Partnership as
a director, officer, employee, agent, partner, member, consultant or adviser of
any corporation or other entity in which the Partnership has an investment;
(l) Commence or defend litigation that pertains to the Partnership or
any assets of the Partnership and investigate potential claims;
(m) Execute and file fictitious business name statements and similar
documents;
(n) Dissolve the Partnership pursuant to Section 7.2(g) of the
Partnership Agreement;
(o) Cause the Partnership to be qualified, formed, or registered under
assumed or fictitious name statutes or similar laws in any jurisdiction in which
the Partnership owns property or engages in activities if such qualification,
formation or registration is necessary to permit the Partnership lawfully to own
property and engage in the Partnership's business or transact business, and
execute, file and publish all such certificates, notices, statements or other
instruments necessary to permit the Partnership to engage in the Partnership's
business as a limited partnership in all jurisdictions where the Partnership
elects to engage in or do business; and
(p) Execute and deliver all documents and instruments necessary or
advisable to carry out the foregoing.
3
4
4. Compensation. As set forth in the Partnership Agreement (but without
duplication of amounts payable pursuant to Section 3.2(d) of the Partnership
Agreement), the Manager will receive an annual management fee, payable in
quarterly installments in advance on the first Business Day of each calendar
quarter, commencing on the date hereof (and pro rated for any payment period
that is not a full calendar quarter), equal to 3% of the Partnership's budgeted
consolidated gross operating revenues for such year (or partial year) with
respect to the Base Subscribers (pro rated with respect to any Base Subscribers
attributable to cable systems acquired or budgeted to be acquired other than at
the beginning of a calculation period for the management fee). Promptly after
information is available as to the amount of the Partnership's actual
consolidated gross operating revenues (the "True-Up Revenue Amount") for the
period ending on the month end nearest to the third anniversary of the date of
this Agreement (i) if the amount of management fees paid pursuant to the
preceding sentence for such three-year period (the "Three-Year Fee Payment")
exceeds 3% of the True-Up Revenue Amount for such period, the Manager will pay
the Partnership the excess (as reimbursement of excess fees and not as a Capital
Contribution), and (ii) if 3% of the True-Up Revenue Amount for such three-year
period exceeds the Three-Year Fee Payment, the Partnership will pay the Manager
the excess. Thereafter, a similar true up will be done annually promptly after
the True-Up Revenue Amount for the prior year is determined. The management fee
will be increased by such budgeted amount as agreed to by the Manager and
66-2/3% in interest of the Limited Partners to reflect the expected incremental
costs and expenses (for the items for which the Manager is responsible as set
forth in Section 5 below) associated with operating and managing additional
subscribers beyond the Base Subscribers.
5. Expenses. As set forth in Section 3.2(e) of the Partnership
Agreement, the Manger will bear the costs of all services provided by it and its
or its Affiliates' personnel to the Partnership in fulfilling the Manager's
duties and obligations to the Partnership pursuant to this Agreement, including
its duties and obligations pursuant to Section 4.2 of the Partnership Agreement,
which costs and expenses will be limited to all salaries and other expenses
(including bonuses and other compensation, and health, welfare, retirement,
insurance and other benefits) and overhead expenses (including rent, travel,
entertainment, and direct out-of-pocket costs) of its corporate office
management, including in-house counsel, development, internal accounting
management, finance management and human resources management personnel who
devote all or a portion of their time to the business and affairs of the
Partnership. The Manager will not bear any other costs of its White Plains, New
York corporate office.
6. Termination. This Agreement shall automatically terminate, without
any further action of the parties, in the event the Manager is no longer the
general partner of the Partnership.
7. Waiver. The waiver by the Partnership or the Manager of any breach
of any term, covenant or condition contained in this Agreement shall not be
deemed to be a waiver of any subsequent breach of the same or any other term,
covenant or condition
4
5
contained herein. No covenant, term or condition of this Agreement shall be
deemed to have been waived by the Partnership or the Manager, unless such waiver
is in writing and is signed by the party against whom such waiver is asserted;
provided if such waiver is given by the Partnership, it shall require the
approval of all the Limited Partners.
8. Amendment and Modification. This Agreement may be amended, modified
or supplemented only by written agreement of the Partnership and the Manager and
the unanimous consent of the Limited Partners.
9. Governing Law. The validity, performance and enforcement of this
Agreement will be governed by the laws of the State of Michigan.
10. Invalidity of Provision. Any term or provision of this Agreement
that is invalid or unenforceable will be ineffective to the extent of such
invalidity or unenforceability without rendering invalid or unenforceable any
other provisions of this Agreement.
11. Notices. All notices, requests, claims, demands, applications,
services of process and other communications that are required to be or may be
given under this Agreement will be in writing and will be deemed to have been
duly given if sent by telecopy or facsimile transmission, answer back requested,
or delivered by courier or mailed, certified first class mail, postage prepaid,
return receipt requested, to the parties hereto at the following addresses:
(A) If to the Partnership, to it at:
c/o Bresnan Communications, Inc.
000 Xxxxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx XxXxxx
Copy to: Xxxxxx X. Xxxxxxx
(B) If to the Manager, to it at:
c/o Bresnan Communications, Inc.
000 Xxxxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx XxXxxx
Copy to: Xxxxxx X. Xxxxxxx
5
6
With a copy of any such notice to the Partnership or the Manager also
being sent to:
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
or to such other address as any party will have furnished to the other by notice
given in accordance with this Section. Such notice will be effective, (i) if
delivered in person or by courier, upon actual receipt by the intended
recipient, or (ii) if sent be telecopy or facsimile transmission, when
confirmation is received, or (iii) if mailed, upon the date of delivery shown by
the return receipt therefor (rejection or other refusal to accept or inability
to deliver because of a change of address of which no notice was given will be
deemed to be receipt of notice).
12. Headings; Execution in Counterparts. The headings and captions
contained herein are for convenience and shall not control or affect the meaning
or construction of any provision hereof. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and
which together shall constitute one and the same instrument.
13. Assignment. This Agreement may not be assigned by any party without
the written consent of the Partnership, all of the Limited Partners and the
Manager.
14. Entire Agreement. This Agreement and the Partnership Agreement
embodies the entire agreement and understanding of the parties hereto in respect
of the subject matter contained herein.
15. Interpretation. The word "include" and all derivations of that
word are used in this Agreement in an illustrative sense, rather than a limiting
sense.
6
7
IN WITNESS WHEREOF, the Partnership and the Manager have executed this
Agreement as of the date first above written.
BRESNAN COMMUNICATIONS COMPANY
LIMITED PARTNERSHIP
By: BCI (USA), LLC, general partner
By: Bresnan Communications, Inc., general
partner
By: /s/ Xxxxxxx XxXxxx
-------------------------------------
BCI (USA), LLC
By: Bresnan Communications, Inc., general
partner
By: /s/ Xxxxxxx XxXxxx
-------------------------------------
7
