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Exhibit 10.2
AMENDED AND RESTATED
MANAGEMENT AGREEMENT
THIS AMENDED AND RESTATED MANAGEMENT AGREEMENT (this "Agreement") is made
as of the 17th day of March, 1999, by and between Charter Communications
Operating, 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 Company and its subsidiaries on
the date hereof 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.
C. This Agreement amends and restates in its entirety the Management
Agreement dated as of February 23, 1999 between the parties hereto.
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 managing 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;
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(ii) review, consultation and advice concerning personnel,
operations, engineering and other management and operating policies and
procedures;
(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, 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 furnishing of program services 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 Fee; Expenses.
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(a) All expenses, costs, losses, liabilities or damages incurred
with respect to the ownership or operation of the Cable Systems, including,
without limitation, wages, salaries and other labor costs incurred in the
construction, maintenance, expansion or operation of the Cable Systems, or
personnel working on special projects or services for the Company, will be paid
by the Company and, to the extent that the Manager pays or incurs any obligation
for any such expenses, costs, losses, liabilities or damages, the Company,
subject to the limitations set forth in Section 5, will pay or reimburse the
Manager therefor, as well as for any reasonable out-of-pocket expenses incurred
by the Manager in the performance of its obligations under this Agreement.
Subject to the payment priority provisions of this Section 3, the Company agrees
to pay the Manager, in addition to any reimbursement of expenses, and the
Manager shall be entitled to receive, as the Manager's compensation for the
services to be rendered hereunder, a yearly management fee (the "Management
Fee") equal to three and one-half percent (3.5%) of the Gross Revenue (as
determined in accordance with generally accepted accounting principles) of the
Company, payable quarterly in arrears. "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. Accrual of such Management Fee shall
commence upon February 23, 1999. The fee payable pursuant to this paragraph for
any quarter shall be reduced by the amount of any management fees with respect
to Gross Revenue of a subsidiary of the Company and separately paid to the
Manager for such quarter pursuant to a separate management agreement between the
Manager and a subsidiary of the Company.
Notwithstanding the foregoing, the Management Fee due and payable as
provided in 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
Fee is made, and in any Reorganization any amount payable in respect of the
Management Fee 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 Fee 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
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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 March 18, 1999, among the Company, certain of its affiliates, the
Lenders parties thereto and the Funding Agent, Documentation Agents, Syndication
Agents and Administrative Agents named therein, as amended, restated,
supplemented or otherwise modified from time to time, and (ii) "Senior Debt"
means the 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 above, remain
entitled (i) to receive the fee set forth in Section 3(a) for the remaining
portion of the calendar quarter in which such termination occurred (payable in
the same manner and at the same time as if the Manager were entitled to receive
such fee with respect to the entire quarter); 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. Term of Agreement. The term of this Agreement shall be ten years,
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.
5. 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 to any and all claims that may be made against any of them in
respect of the foregoing, including, but not limited to, reasonable attorneys'
fees.
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6. 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 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:
Charter Communications Operating, L.L.C.
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
7. 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.
8. 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in the manner appropriate to each as of the day and year first above
written.
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CHARTER COMMUNICATIONS OPERATING, LLC,
a Delaware limited liability company
By: /S/ Xxxxxx X. Xxxx
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Name: Xxxxxx X. Xxxx
Title: Senior Vice President
CHARTER COMMUNICATIONS, INC.,
a Delaware corporation
By: /S/ Xxxxxx X. Xxxx
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Name: Xxxxxx X. Xxxx
Title: Senior Vice President
