EXHIBIT 10.9
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AMENDED AND RESTATED
MANAGEMENT AGREEMENT
between
CHARTER COMMUNICATIONS ENTERTAINMENT I, L.P.
and
CHARTER COMMUNICATIONS, INC.
Dated as of September 29, 1995
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TABLE OF CONTENTS
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Page
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RECITALS............................................................. 1
ARTICLE I Definitions............................................... 2
1.1 Defined Terms.............................................. 2
ARTICLE II Retention of the Manager................................. 4
2.1 Agreement to Manage........................................ 4
2.2 Standards of Performance................................... 5
2.3 Availability of Discounts, etc............................. 5
2.4 Conflicts of Interest...................................... 6
2.5 Annual Business Plan....................................... 6
2.6 Tax Returns, Financial Statements, Books, etc.............. 6
(a) Tax Returns........................................... 6
(b) Financial Statements.................................. 7
(c) Preparation of Documents under Financing Arrangements. 7
(d) Books and Records..................................... 7
(e) Appraisal............................................. 7
ARTICLE III Restricted Activities of the Manager.................... 8
3.1 Restricted Activities of the Manager....................... 8
4.1 Base Management Fee........................................ 10
(a) General............................................... 10
(b) Expenses.............................................. 10
(c) Employees............................................. 10
4.2 Cash Bonus............................................ 11
(a) Determination of Cash Bonus........................... 11
(b) Procedures for Payment of Cash Bonus.................. 11
4.3 Payment of Fee and Cash Bonus.............................. 11
4.4 Pro Rated Fee and Cash Bonus............................... 11
ARTICLE V Representations and Warranties............................ 12
5.1 Representations and Warranties of the Company.............. 12
(a) Due Organization; Power and Authority, etc............ 12
(b) Authorization; Enforceability......................... 12
(c) Executing Parties..................................... 12
5.2 Representations and Warranties of the Manager.............. 12
(a) Due Organization; Power and
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Authority, etc..................................... 12
(b) Authorization; Enforceability...................... 13
(c) Executing Parties.................................. 13
(d) Authorizations..................................... 13
5.3 Survival of Representations and Warranties......... 13
ARTICLE VI Insurance and Indemnity............................... 13
6.1 Insurance............................................... 13
6.2 Indemnification of the Manager.......................... 13
6.3 Indemnification by the Manager.......................... 14
6.4 Persons Indemnified..................................... 14
ARTICLE VII Termination.......................................... 15
7.1 Default by the Manager.................................. 15
7.2 Effect of Termination................................... 15
ARTICLE VIII Miscellaneous....................................... 15
8.1 Prohibited Transfers and Assignments.................... 15
8.2 Waiver.................................................. 16
8.3 Amendment and Modification.............................. 16
8.4 Governing Law........................................... 16
8.5 Invalidity of Provision................................. 16
8.6 Notices................................................. 17
8.7 Headings; Execution in Counterparts..................... 18
8.8 Successors.............................................. 18
8.9 Entire Agreement........................................ 18
SCHEDULES
Schedule 1 List of Cable Systems
Schedule 2 Projected OCF
AMENDED AND RESTATED MANAGEMENT AGREEMENT
AMENDED AND RESTATED MANAGEMENT AGREEMENT (the "Agreement"), dated as of
September 29, 1995, between Charter Communications, Inc., a Delaware corporation
(the "Manager"), and Charter Communications Entertainment I, L.P., a Delaware
limited partnership (the "Company").
RECITALS
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WHEREAS, the Manager and CCA Acquisition Corp., a Delaware corporation
("CCA Acquisition"), are party to a Management Agreement, dated as of January
18, 1995 (the "Original Management Agreement");
WHEREAS, CCA Acquisition is transferring all of its assets and liabilities
to the Company;
WHEREAS, the parties hereto desire to amend and restate the Original
Management Agreement, to provide, among other things, for the replacement of CCA
Acquisition by the Company as a party to this Agreement;
WHEREAS, upon the completion of such transfer, the Company and its
subsidiaries will own and operate the cable television systems listed on
Schedule 1;
WHEREAS, the Company desires to retain the Manager to manage and operate
the Cable Systems (as defined below) on its behalf, and the Manager has agreed
to manage and operate the Cable Systems, all upon the terms and subject to the
conditions hereinafter set forth;
NOW, THEREFORE, 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:
ARTICLE I
Definitions
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1.1 Defined Terms. When used in this Agreement, the following terms
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shall have the meanings ascribed to them in this Section 1.1:
"Affiliate" shall mean a Person that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common control
with, the Person specified.
"Cable Systems" shall mean the cable television systems listed on Schedule
1 and any cable television systems subsequently acquired by the Company or any
of its subsidiaries during the Term.
"Cash Bonus" shall mean the annual cash bonus payable to the Manager with
respect to a given Fiscal Year, which shall equal 30% of the excess, if any, of
OCF for such Fiscal Year over Projected OCF for such Fiscal Year.
"CCA Holdings" shall mean CCA Holdings Corp., a Delaware corporation.
"Closing Date" shall mean the date of the closing under the Asset Purchase
Agreement, dated as of March 30, 1995, as the same shall be amended from time to
time, among Cencom Cable Television, Inc., Lenoir T.V. Cable, Inc., CCT Holdings
Corp. and CCA Holdings.
"Equity Agreements" shall mean the Stockholders' Agreement, the
Registration Rights Agreement and the Subscription Agreements.
"Financial Advisory Agreement" shall mean the Amended and Restated
Financial Advisory Agreement, dated as of the Closing Date, between Kelso &
Company, L.P. and the Company.
"Fiscal Year" shall mean a year beginning on January 1 of one calendar
year and ending on December 31 of the same calendar year, or such other fiscal
year as the Company and the Manager may hereafter agree, provided, however, that
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the term "Fiscal Year" shall mean with respect to the Company's first period of
operations the period commencing on the Closing Date and ending on December 31
of the same calendar year.
"General Partner" shall mean CCA Acquisition, together with any other
entities which, in accordance with the terms of the Partnership Agreement, may
be admitted after the date hereof as a general partner of the Company.
"H C Crown" shall mean H C Crown Corp., a Delaware corporation.
"Kelso" shall mean Kelso Investment Associates V, L.P., a Delaware limited
partnership.
"Loan Agreement" shall mean the Amended and Restated Loan Agreement, dated
as of September 29, 1995, among the Company, Toronto Dominion (Texas), Inc., as
Documentation Agent and Managing Agent, and the other banks signatory thereto,
including any amendment, renewal, extension, substitution, refinancing,
replacement or other modification thereof.
"Partnership Agreement" shall mean the Agreement of Limited Partnership of
the Company, dated as of September 29, 1995, as the same shall be amended from
time to time, among the General Partner and the limited partners party thereto.
"OCF" for any period means the sum of (a) consolidated net income before
nonrecurring gains or losses for such period and (b) all amounts deducted in the
determination of such consolidated net income in respect of (i) depreciation
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and amortization, (ii) interest charges, (iii) federal, state and local income
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taxes, (iv) franchise and similar taxes and fees and (v) fees paid to Kelso &
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Company, L.P. pursuant to the Financial Advisory Agreement. OCF shall be
derived from the audited consolidated financial statements of the Company and
its subsidiaries delivered to the Company by the Manager pursuant to Section
2.6.
"Person" shall mean an individual, corporation, partnership, association,
trust or other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
"Principals" shall mean Howard L. Wood, Barry L. Babcock and Jerald L. Kent
or appropriate replacements, reasonably satisfactory to and approved by Kelso.
"Projected OCF" shall mean the projected OCF for a given Fiscal Year for
the Company and its subsidiaries set forth on Schedule 2. Schedule 2 shall be
amended by the
Company, with the consent of Kelso and the Manager, each acting
reasonably and in good faith, prior to any acquisition or disposition of
assets outside the ordinary course of business to reflect such acquisition or
disposition.
"Registration Rights Agreement" shall mean the Registration Rights
Agreement, dated as of January 18, 1995, as the same shall be amended from time
to time, among CCA Holdings, Kelso, Kelso Equity Partners V, L.P. and the
Manager.
"Stock Purchase Agreement" shall mean the Stock Purchase Agreement, dated
July 1, 1994, as amended, among H C Crown, CM Acquisition Corp., Marcus Cable
Partners, L.P., the Manager, the Company and Charter Communications II, L.P.
"Stockholders' Agreement" shall mean the Amended and Restated Stockholders'
Agreement, dated as of the date hereof, as the same shall be amended from time
to time, among CCA Holdings, Kelso, Kelso Equity Partners V, L.P. and the
Manager.
"Subscription Agreements" shall mean the Subscription Agreements, each
dated as of January 18, 1995, between CCA Holdings and each of the Manager,
Kelso and Kelso Equity Partners V, L.P.
"Subordinated Loan Agreement" shall mean the Senior Subordinated Loan
Agreement, dated as of January 18, 1995, as the same shall be amended from time
to time, between H C Crown and CCA Holdings.
"Term" shall mean the term of this Agreement which shall commence on the
Closing Date and end upon the tenth anniversary thereof, unless sooner
terminated pursuant to the terms hereof.
ARTICLE II
Retention of the Manager
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2.1 Agreement to Manage. (a) Subject to the terms and conditions
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hereinafter set forth, the Company hereby retains the Manager, and the Manager
hereby accepts such retention, as the manager of the Cable Systems, with full
power and authority during the Term to carry out all responsibilities of the
Manager under this Agreement.
(b) The Manager shall, subject to Section 3.1 and in accordance with all
applicable laws, administrative enactments and franchise agreements and
licenses, be responsible for the management and operation of the Cable Systems,
including, but not limited to, (i) determination of policy, (ii) preparation and
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filing of all materials with appropriate federal, state and local regulatory
agencies or departments (including but not limited to the Federal Communications
Commission, Equal Employment Opportunity Commission and state agencies having
similar jurisdiction), (iii) hiring, supervision and dismissal of all
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personnel, (iv) day-to-day system operations and (v) payment of all financial
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obligations and operating expenses relating to the Cable Systems. All such
responsibilities shall be undertaken under the Company's continuing oversight,
review, supervision and control. Notwithstanding the foregoing, the Company
shall retain unfettered use of all facilities and equipment of the Cable Systems
and all cash or other assets received by the Manager in connection with the
management and operation of the Cable Systems shall be the property of the
Company, other than the Manager's compensation pursuant to Section 4.
2.2 Standards of Performance. The Manager covenants with the Company to
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manage and operate the Cable Systems in substantially the same manner as cable
television systems managed or owned by the Manager are managed and operated, and
to perform its duties and obligations under this Agreement in accordance with
all applicable laws, the terms and conditions of all applicable franchise
agreements and licenses and standard industry practices with respect to the
management of similar cable television systems. The Company acknowledges that
the Manager manages and owns other cable television systems. Nevertheless, the
Manager agrees that at any given time at least two of the Principals will be
devoting a substantial amount of their respective time to the management and
operation of the Cable Systems.
2.3 Availability of Discounts, etc. To the extent that the Manager is
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able to negotiate discounts or other favorable terms with suppliers of
programming and other goods and services with respect to cable systems owned or
managed by it, which discounts or other favorable terms are based on the buying
power of the Manager or otherwise, the Manager shall use its commercially
reasonable efforts to make the benefit of such discounts or other favorable
terms available to the Cable Systems on the same terms. In no event shall the
Cable Systems receive goods and services
from the Manager on terms less favorable than what the Cable Systems would
receive from an unaffiliated third party.
2.4 Conflicts of Interest. The Manager shall not cause the Company, any
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of its subsidiaries or any Cable System to engage in any transaction or enter
into any agreement with the Manager or any Affiliate or employee thereof unless
(a) such transaction or agreement is in the ordinary course of business and upon
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terms and conditions substantially similar to those granted to or imposed by the
Manager on all other cable television systems owned or managed by the Manager or
(b) the General Partner shall have consented thereto (which consent may be
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granted or withheld in the sole discretion of the General Partner).
2.5 Annual Business Plan. On or before the Closing Date (but, in any
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event, not later than the date upon which the Company is required to deliver the
following budgets to the lenders under the Loan Agreement or to H C Crown under
the Subordinated Loan Agreement), the Manager shall prepare and submit to the
General Partner for its approval proposed capital and operating budgets for the
Company and its subsidiaries for the remaining portion of the 1995 Fiscal Year.
Commencing with the budget for the 1996 Fiscal Year, the Manager shall prepare
and submit to the General Partner for its approval at least 30 days prior to the
first day of each Fiscal Year (and, in any event, at least 30 days prior to any
required delivery of such budgets to the lenders under the Loan Agreement or to
H C Crown under the Subordinated Loan Agreement) proposed capital and operating
budgets for the Company and its subsidiaries for the forthcoming Fiscal Year.
As revised and approved by the General Partner, such proposed capital and
operating budgets shall become the "Annual Business Plan" for the Company and
its subsidiaries.
2.6 Tax Returns, Financial Statements, Books, etc. Without limiting the
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generality of the Manager's responsibilities set forth in Section 2.1(b), the
Manager shall:
(a) Tax Returns. Prepare or cause to be prepared and file all tax
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returns and statements, if any, that must be filed on behalf of the Company or
any of its subsidiaries with any taxing authority. The Manager will provide
copies of any such filings to Kelso or any of its Affiliates or any of their
respective representatives upon request.
(b) Financial Statements. Render to the Company (i) within 120 days
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following the end of each Fiscal Year, audited financial statements for each
prior Fiscal Year, (ii) within 45 days following the end of each fiscal quarter,
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unaudited financial statements for each prior fiscal quarter, (iii) within 45
days following the end of each month, monthly financial statements and (iv)
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such other information or reports as the General Partner may reasonably request.
All financial statements shall be for the Company and its subsidiaries on a
consolidated basis and shall be prepared in accordance with generally accepted
accounting principles, consistently applied. The Manager will provide copies of
any such financial statements, information or reports to Kelso or any of its
Affiliates or any of their respective representatives upon the reasonable
request of such parties.
(c) Preparation of Documents under Financing Arrangements. Prepare or
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cause to be prepared all documents, certificates, reports and other information
required to be delivered to the lenders under the Loan Agreement or H C Crown
under the Subordinated Loan Agreement and otherwise cause the Company and its
subsidiaries to comply with the terms thereof. The Manager will provide copies
of any such documents, certificates, reports and other information to Kelso or
any of its Affiliates or any of their respective representatives upon request.
(d) Books and Records. Maintain complete and accurate records and
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accounts pertaining to the business of the Company and its subsidiaries in
accordance with generally accepted accounting principles. Kelso, its Affiliates
and their respective representatives shall be entitled to inspect and audit the
books, records and accounts of the Company and its subsidiaries.
(e) Appraisal. Engage, from time to time, but not less often than once
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with respect to every Fiscal Year, commencing with the Fiscal Year ending on
Decem ber 31, 1995, and not later than 90 days after the end of each Fiscal
Year, an independent valuation consultant or appraiser of recognized national
standing reasonably satisfactory to Kelso to appraise the fair market value of
the Company and its subsidiaries on a consolidated basis as of the last day of
the Fiscal Year then most recently ended or, at the request of the
Company or Kelso, as of any more recent date and to prepare and deliver a
report to the Company and Kelso describing the results of such appraisal.
ARTICLE III
Restricted Activities of the Manager
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3.1 Restricted Activities of the Manager. Without the prior written
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consent of the General Partner, which consent may be granted or withheld in its
sole discretion, the Manager shall not do, or cause or permit to be done, the
following for or on behalf of the Company or any of its subsidiaries:
(a) Modify, amend or waive any material right under any agreement
between the Company or any of its subsidiaries, on the one hand, and the Manager
or any Affiliate or employee thereof, on the other hand, including, without
limitation, this Agreement and the Equity Agreements.
(b) Approve any additional payment by the Company or any of its
subsidiaries to the Manager or any Affiliate or employee thereof other than as
provided in subsection (k)(ii) below.
(c) Commence or settle any suit, action or other legal or administrative
proceeding, except for any suit, action or other proceeding brought or defended
in the ordinary course of business where the Manager has no reasonable
expectation that potential damages will exceed $1,000,000.
(d) Select or replace the Company's independent public accountants.
(e) Materially change the accounting practices of the Company or any of
its subsidiaries .
(f) Materially change any of the tax reporting positions or elections of
the Company or any of its subsidiaries.
(g) Assert any of the Company's rights under the Stock Purchase
Agreement, provided, however, that the failure of the Company to timely assert
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such rights in
accordance therewith shall not constitute a breach by the Manager hereunder.
(h) Operate any business or enter into any agreement not related to the
Cable Systems.
(i) Approve the Annual Business Plan, including the annual capital and
operating expense budget, or change any such approved budgets by more than 10%
in the aggregate.
(j) Incur or guarantee any indebtedness, except (i) indebtedness for
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borrowed money not in excess of $1,000,000, (ii) indebtedness pursuant to the
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Loan Agreement, (iii) indebtedness in connection with a programming contract
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or a cable television basic service supply contract entered into in the
ordinary course of business which requires aggregate payments of less than
$3,000,000 over the value assigned to such contract in the Company's most recent
operating expense budget, (iv) guarantees of any obligations under franchise
--
agreements of any of the Company's subsidiaries and (v) indebtedness in
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connection with those cable television programming services commonly known in
the cable television industry as "Pay-TV" or "premium services" entered into in
the ordinary course of business.
(k) Make any loans or advances to or investments in any Person other
than a subsidiary of the Company, except (i) extensions of trade credit in the
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ordinary course of business and (ii) loans and advances to employees of the
--
Company or any of its subsidiaries for reasonable travel, relocation and related
expenses in the ordinary course of business not to exceed $1 million in the
aggregate outstanding at any one time.
(l) Sell, pledge, encumber, donate, abandon, transfer or otherwise
dispose of any portion of the Company's or any of its subsidiaries' assets
having a fair market value in excess of $3,000,000.
(m) Unless included in the capital budget approved under subsection (i)
above, purchase, lease or acquire on behalf of the Company or any of its
subsidiaries any interest in any real property or other assets having a fair
market value in excess of $3,000,000.
(n) Unless included in the capital or operating budgets approved under
subsection (i) above or permit-
ted under subsection (j) above, enter into, or materially modify or waive any of
the Company's or any of its subsidiaries' material rights under, any agreement
or related set of agreements involving aggregate payments to or by the Company
or any of its subsidiaries in excess of $1,000,000 during the term of such
agreement or agreements.
ARTICLE IV
Compensation
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4.1 Base Management Fee. (a) General. As compensation to the Manager for the
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management and operation of the Cable Systems, the Company shall pay to the
Manager an aggregate fee (the "Base Management Fee") equal to $3,250,000 per
Fiscal Year, payable quarterly in arrears. In the event the Company acquires
Cable Systems after the Closing Date, the Company and the Manager shall
negotiate in good faith to effect a mutually acceptable increase to the Base
Management Fee to reflect such acquisitions.
(b) Expenses. The Base Management Fee shall cover all expenses related to the
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management and operation of the Cable Systems, provided, however, the Base
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Management Fee will not cover, and the Company or its subsidiaries will pay or
reimburse the Manager for, (i) in any given year, the kinds and amount of
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operating and capital expenses of the Cable Systems set forth in the Annual
Business Plan for such year and (ii) the reasonable out-of-pocket travel
--
expenses (and lodging and entertainment expenses incurred by the Manager in
connection therewith) incurred by the Manager in connection with the performance
of its duties hereunder. Notwithstanding the provisions of clause (i) above, in
the event that the amount of any actual operating and capital expense of the
Cable Systems in any given year exceeds the amount of such expense set forth in
the Annual Business Plan for such year, then the Company or its subsidiaries
shall pay or reimburse the Manager for such excess up to an amount equal to 10%
of such operating and capital expense set forth in the Annual Business Plan for
such year.
(c) Employees. It is understood by the parties that the Company and its
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subsidiaries shall have the benefit of the headquarters, facilities, officers
and employees of the Manager. The Manager shall be responsible for providing
all benefits to such employees and shall indemnify the
Company and its subsidiaries for any claim in connection therewith.
4.2 Cash Bonus. (a) Determination of Cash Bonus. Following the end of each
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Fiscal Year (beginning with the 1995 Fiscal Year) during the Term of this
Agreement, if OCF for such Fiscal Year exceeds Projected OCF for such Fiscal
Year, the Company shall pay to the Manager the Cash Bonus for such Fiscal Year.
(b) Procedures for Payment of Cash Bonus. Together with delivery of the
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Company's audited financial statements for each Fiscal Year, the Manager shall
cause the Company's auditors to deliver a schedule that sets forth, for such
Fiscal Year: (i) OCF, including the calculations made to determine OCF, (ii)
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Projected OCF and (iii) calculations showing the amount, if any, of the Cash
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Bonus, as determined in accordance with this Section 4.2 and the definition of
Cash Bonus. Such schedule will be presented to the General Partner for its
approval (which approval shall not be unreasonably withheld or delayed). If a
Cash Bonus is payable for any Fiscal Year, it will become due and payable to the
Manager within five days after delivery of such schedule to the General Partner
for its approval described in the preceding sentence.
4.3 Payment of Fee and Cash Bonus. Notwithstanding anything to the contrary
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herein, the Company shall not be permitted or obligated to pay the Base
Management Fee or any Cash Bonus to the extent the Company is restricted from
paying such Base Management Fee or Cash Bonus by any of the Loan Agreement or
the Subordinated Loan Agreement. In the event the Company is unable to pay the
full amount of any Base Management Fee or Cash Bonus due to any such
restriction, the Company shall pay such deferred amounts together with 8%
annual interest thereon, as soon as such payment is permissible under the Loan
Agreement, if ever, and the Subordinated Loan Agreement.
4.4 Pro Rated Fee and Cash Bonus. If this Agreement is terminated at any
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time during the Term other than the end of a Fiscal Year, the Base Management
Fee and any Cash Bonus to which the Manager might be entitled pursuant to
Section 4.2 shall be determined on a pro rata basis for the Fiscal Year during
which the termination occurs.
ARTICLE V
Representations and Warranties
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5.1 Representations and Warranties of the Company. As a material inducement
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to the Manager to enter into this Agreement, the Company represents and warrants
that:
(a) Due Organization; Power and Authority, etc. It is a limited partnership
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duly organized, validly existing and in good standing under the laws of the
State of Delaware, with all necessary partnership power and authority to enter
into this Agreement and to carry out the transactions contemplated herein. The
execution and delivery hereof and the performance by the Company of its
obligations hereunder will not violate or constitute a default under the terms
and provisions of its certificate of limited partnership or agreement of limited
partnership or of any agreement, law or court order to which the Company is a
party or by which the Company is bound.
(b) Authorization; Enforceability. All actions required to be taken by or on
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behalf of the Company to authorize it to execute, deliver and perform its
obligations under this Agreement have been taken, and this Agreement is a valid
and binding obligation of the Company, enforceable in accordance with its terms,
except as the same may be affected by bankruptcy, insolvency, moratorium or
similar laws, or by legal or equitable principles relating to or limiting the
rights of contracting parties generally.
(c) Executing Parties. The Person executing this Agreement on behalf of the
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Company has full power and authority to bind the Company to the terms hereof.
5.2 Representations and Warranties of the Manager. As a material inducement
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to the Company to enter into this Agreement, the Manager represents and warrants
that:
(a) Due Organization; Power and Authority, etc. It is a corporation duly
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organized, validly existing and in good standing under the laws of the State of
Delaware, with all necessary corporate power and authority to enter into this
Agreement and to carry out the transactions contemplated herein. The execution
and delivery hereof and the performance by the Manager of its obligations
hereunder will not violate or consti-
tute a default under the terms and provisions of its certificate of
incorporation or by-laws or of any agreement, law or court order to which the
Manager is a party or by which the Manager is bound.
(b) Authorization; Enforceability. All actions required to be taken by or on
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behalf of the Manager to authorize it to execute, deliver and perform its
obligations under this Agreement have been taken, and this Agreement is a valid
and binding obligation of the Manager, enforceable in accordance with its terms,
except as the same may be affected by bankruptcy, insolvency, moratorium or
similar laws, or by legal or equitable principles relating to or limiting the
rights of contracting parties generally.
(c) Executing Parties. The Person executing this Agreement on behalf of the
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Manager has full power and authority to bind the Manager to the terms hereof.
(d) Authorizations. The Manager has all necessary permits, licenses,
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franchises, authorizations and entitlements necessary to perform its obligations
under this Agreement.
5.3 Survival of Representations and Warranties. All representations,
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warranties and indemnities of the Company and the Manager in this Agreement
shall survive the execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby.
ARTICLE VI
Insurance and Indemnity
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6.1 Insurance. The Manager shall take out, or cause to be taken out, in each
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case at the expense of the Company, and maintain in force, such insurance
policies, bonds, or other sureties as are required by federal, state or local
law or by requirements of any franchise agreement or as are customary in the
normal course of business in the cable television industry.
6.2 Indemnification of the Manager. The Company hereby agrees to defend
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(with counsel approved by the Manager, which approval shall not be
unreasonably withheld), indemnify and hold the Manager harmless from and against
and reimburse the Manager for any loss, liability, claim, liti-
gation, damage, penalty, action, demand and expense arising out of, connected
with or incidental to: (a) the performance by the Manager of its duties under
-
this Agreement or any matter arising out of the relationship created hereby,
except to the extent that the Manager shall have acted with gross negligence,
dishonesty, willful malfeasance or gross misconduct or (b) any breach of any
-
representation by the Company in this Agreement. This obligation to indemnify
shall include reasonable attorneys' fees and investigation costs and all other
reasonable costs, expenses and liabilities incurred by the Manager or its
counsel in connection with any such claim. Such fees, costs and expenses shall
be paid by the Company in advance of the final disposition of such claim upon
receipt of an undertaking by or on behalf of the Manager to repay such amount if
it shall ultimately be determined that the Manager is not entitled to be
indemnified by the Company.
6.3 Indemnification by the Manager. The Manager hereby agrees to defend
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(with counsel approved by the Company, which approval shall not be
unreasonably withheld), indemnify and hold the Company and its subsidiaries
harmless from and against and reimburse the Company and its subsidi aries for
any loss, liability, claim, litigation, damage, penalty, action, demand and
expense arising out of, connected with or incidental to: (a) any gross
-
negligence, dishonesty, willful malfeasance or gross misconduct by the Manager
in connection with the performance by the Manager of its obligations contained
in this Agreement or (b) any breach of any representation made by the Manager in
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this Agreement. This obligation to indemnify shall include reasonable
attorneys' fees and investigation costs and all other reasonable costs, expenses
and liabilities incurred by the Company, its subsidiaries or its counsel in
connection with any such claim.
6.4 Persons Indemnified. The foregoing agreements by the Manager or the
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Company to indemnify and hold the other harmless shall inure to the benefit not
only of the respective indemnitee but also to that of its respective Affiliates,
and the directors, officers, employees, partners, agents and control persons
(as such term is defined in the Securities Act of 1933, as amended, and the
rules and regulations thereunder) of such indemnitee and its Affiliates. For
purposes of this Section 6.4, neither the Manager nor any of its officers,
directors, employees or stockholders shall be deemed to be an Affiliate of the
Company.
ARTICLE VII
Termination
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7.1 Default by the Manager. (a) If the Manager materially breaches this
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Agreement or the Stockholders' Agreement and the Manager fails to cure such
breach within 10 days after receipt of written notice from the Company advising
the Manager of the action allegedly resulting in such breach (or, if such breach
is not susceptible of cure within such period, fails to cure such breach as
promptly as possible, but in any event, within 90 days after receipt of written
notice from the Company), provided that the foregoing 90 day cure period will
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not apply to any willful breach of either such agreement by the Manager or (b)
-
if the Manager, or any employee or consultant thereof, engages in any act of
gross negligence, dishonesty, willful malfeasance or gross misconduct that is
materially injurious to the Company and its subsidiaries taken as a whole,
then the Company may elect, by written notice to the Manager, to terminate this
Agreement or (c) if the Manager defaults under any material agreement to which
-
it is a party and the Company reasonably believes that the Manager will be
unable to pay its debts as such debts become due (whether upon maturity,
acceleration or otherwise). Any such termination shall be effective as of the
date specified in the notice of termination. Without limiting the generality
of subsection (a) above, any breach of Section 8.1 hereof shall be deemed to be
a material breach of this Agreement entitling the Company to terminate this
Agreement. Kelso shall be entitled to exercise all of the Company's rights
under this Section 7.1.
Effect of Termination. If this Agreement is terminated pursuant to Section
---------------------
7.1, such termination will be without liability of any party and such party's
Affiliates to any other party and such other party's Affiliates, except for
liabilities resulting from any breach or default occurring prior to such
termination. The provisions of Article VI shall survive any termination of this
Agreement.
ARTICLE VIII
Miscellaneous
-------------
8.1 Prohibited Transfers and Assignments. The Manager shall not sell, convey,
------------------------------------
assign, transfer, hypothecate, pledge, or otherwise dispose of all or any part
of its interests in or obligations under this Agreement or agree to
do any of the foregoing, except that (i) with the prior written consent of
-
Kelso, the Manager may assign its rights and obligations hereunder to an
Affiliate of the Manager and (ii) with prior notice to the Company, the Manager
--
may assign to any commercial bank (a "Charter Lender") any of its rights
hereunder, including its rights to receive compensation hereunder, as collateral
for any loan made by such Charter Lender to the Manager. So long as this
Agreement shall remain in full force and effect, the Principals shall own, in
the aggregate, directly or indirectly, at least 51% of the voting interests and
35% of the economic interests of the Manager on a fully diluted basis, taking
into account agreements or understandings (other than a pledge agreement entered
into in accordance with the terms of the Stockholders' Agreement) in effect
entitling any other Person (other than a Charter Lender) to the economic benefit
of such securities, provided, however, that the Principals shall be permitted to
-------- -------
transfer their shares of common stock of the Manager to their respective spouses
or children, or to trusts established for the benefit of such spouses or
children. Notwithstanding the foregoing provisions of this Section 8.1, the
Manager shall not take any action and shall not permit any Principal to take any
action, that would cause a breach of the Loan Agreement or the Subordinated Loan
Agreement.
8.2 Waiver. The waiver by the Company 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 contained herein. No covenant, term or condition of this Agreement
shall be deemed to have been waived by the Company or the Manager, unless such
waiver is in writing and is signed by the party against whom such waiver is
asserted.
8.3 Amendment and Modification. This Agreement may be amended, modified or
--------------------------
supplemented only by written agreement of the Company and the Manager.
8.4 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 law of the State of New
York, without giving effect to the choice of law principles thereof.
8.5 Invalidity of Provision. The invalidity or unenforceability of any
-----------------------
provision of this Agreement in any
jurisdiction shall not affect the validity or enforceability of the remainder of
this Agreement in that jurisdiction or the validity or enforceability of this
Agreement, including that provision, in any other jurisdiction.
8.6 Notices. All notices, requests, demands, letters, waivers and other
-------
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if (a) delivered
-
personally, (b) mailed, certified or registered mail with postage prepaid, (c)
- -
sent by next-day or overnight mail or delivery or (d) sent by fax, as follows:
-
(i) If to the Company, to it at:
Charter Communications Entertainment I, L.P.
12444 Powerscourt Drive
400
St. Louis, Missouri 63131
Attention: Jerald L. Kent
(ii) If to the Manager, to it at:
Charter Communications, Inc.
12444 Powerscourt Drive
Suite 400
St. Louis, Missouri 63131
Attention: Jerald L. Kent
With a copy of any such notice to the Company or the Manager also being
sent to:
Kelso Investment Associates V, L.P.
c/o Kelso & Company
350 Park Avenue, 21st Floor
New York, New York 10022
Attention: James J. Connors, II, Esq.
or to such other person or address as any party shall specify by notice in
writing to the Company. All such notices, requests, demands, letters, waivers
and other communications shall be deemed to have been received (w) if by
-
personal delivery on the day after such delivery, (x) if by certified or
-
registered mail, on the fifth business day after the mailing thereof, (y) if by
-
next-day or overnight mail or delivery, on the day delivered or (z) if by fax,
-
on the next day following the day on which such fax was sent, provided that a
copy is also sent by certified or registered mail.
8.7 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.
8.8 Successors. Except as herein otherwise provided, the terms hereof
----------
shall be binding upon and shall inure to the benefit of the successors and
assigns, respectively, of the Company and the Manager.
8.9 Entire Agreement. This Agreement embodies the entire agreement and
----------------
understanding of the parties hereto in respect of the subject matter contained
herein. There are no restrictions, promises, representations, warranties,
covenants or undertakings relating to the subject matter contained herein, other
than those expressly set forth or referred to herein. This Agreement supersedes
all prior
agreements and understandings among the parties with respect to such subject
matter.
IN WITNESS WHEREOF, the Company and the Manager have executed this
Agreement as of the date first above written.
CHARTER COMMUNICATIONS
ENTERTAINMENT I, L.P.
By: CCA Acquisition Corp.,
as general partner
By:/s/ Theodore W. Browne, II
----------------------------
Theodore W. Browne
Executive Vice President
CHARTER COMMUNICATIONS, INC.
By:/s/ Theodore W. Browne, II
----------------------------
Theodore W. Browne
Executive Vice President
Schedule 1
----------
List of Cable Systems
---------------------
Connecticut Systems
-------------------
1. Department of Public Utility Control (Northeast Connecticut) of the State of
Connecticut for Ashford, Brooklyn-Danielson, Canterbury, Chaplin, Columbia,
Coventry and Eastford (New London, Tolland and Windham Counties) [Willimantic
System].
2. Department of Public Utility Control (West Connecticut) of the State of
Connecticut for Bethlehem, Bridgewater, Brookfield, Kent, Monroe, New
Fairfield, New Milford, Newtown, Roxbury, Sherman, Southbury, Trumbult,
Washington and Woodbury (Fairfield, Litchfield and New Haven Counties)
[Housatonic, Mid-Connecticut, New Milford and Newtown Systems].
Missouri Systems
----------------
1. Ballwin 30. Oakland
2. Bella Villa 31. Olivette
3. Black Jack 32. Pike County
4. Bowling Green 33. Richmond Heights
5. Bridgeton 34. Rock Hill
6. Charlack 35. Shrewsbury
7. Country Life Acres 36. St. George
8. Crestwood 37. St. John
9. Creve Coeur 38. St. Louis County Area A
10. Crystal Lake Park 39. St. Louis County Area D/E
11. Des Peres 40. Sunset Hills
12. Ellisville 41. Sycamore Hills
13. Eureka 42. Town & Country
14. Fenton 43. Troy
15. Florissant 44. Truesdale
16. Frontenac 45. Twin Oaks
17. Glendale 46. Unknown Area
18. Grantwood Village 47. Valley Park
19. Hanley Hills 48. Vinita Park
20. Huntleigh 49. Warren County
21. Kirkwood 50. Warrenton
22. Ladue 51. Warson Woods
23. Lakeshire 52. Webster Groves
24. Lakeview Estates 53. Westwood
25. Lincoln County 54. Wilbur Park
26. Mackenzie 55. Winchester
27. Manchester 56. Woodson Terrace
28. Marlborough 57. Wright City
29. Moscow Mills
Schedule 2
----------
Projected OCF
-------------
Final year Projected
Ended December 31 OCF
- --------------------------- -----------
1995 $43,111,178
1996 $47,531,358
1997 $52,566,181
1998 $58,243,378
1999 $64,198,510
2000 $70,572,412
2001 $77,352,348
2002 $84,651,332
2003 $92,483,668