Exhibit 10.2
MANAGEMENT SERVICES AGREEMENT
This Management ;services Agreement (the "Agreement") is made and
entered into as of the 30th day of September, 1998, by and between ENSTAR CABLE
CORPORATION, a Georgia corporation ("Cable"), and FALCON COMMUNICATIONS L.P., a
California limited partnership ("NewFalcon"), with reference to the following
facts:
A. Cable manages various cable television systems (the "Systems") owned
and operated by certain partnerships affiliated with Cable (the "Affiliated
Partnerships") pursuant to a management agreement with each Affiliated
Partnership (collectively, the "Management Agreements").
B. Cable previously had contracted with Falcon Holding Group, L.P.
("FHGLP") for the provision of certain managerial services to Cable pursuant to
an Amended and Restated Management Services Agreement dated as of April 1, 1993
(the "1993 Management Services Agreement").
C. Pursuant to a Contribution and Purchase Agreement dated as of
December 30, 1997, as amended (the "Contribution Agreement") among FHGLP,
NewFalcon, FHGI, TCI Falcon Holdings, LLC ("TCI"), Belo Ventures, Inc. and the
other Persons signatory thereto, FHGLP on the date hereof assigned the 1993
Management Services Agreement to NewFalcon with the consent of Cable.
D. NewFalcon is familiar with the business of owning, operating and
constructing cable television systems and employs senior financial, marketing,
construction, engineering, and other personnel.
E. Following the assignment of the 1993 Management Services Agreement,
NewFalcon and Cable terminated the 1993 Management Services Agreement, and Cable
desires to contract with NewFalcon to provide for certain managerial services.
NOW, THEREFORE, it is agreed as follows:
1. Employment. Cable hereby retains NewFalcon and NewFalcon hereby
agrees to provide certain managerial services on the terms described below.
2. Management Services. Where the same would not violate any franchise,
license, contract, law or regulation applicable to the Systems or to NewFalcon,
NewFalcon hereby agrees to perform the following services involved in the
management, supervision and direction of the Systems now or hereafter managed by
Cable:
(a) The provision of financial, management and supervisory
services as Cable deems necessary to enable Cable to perform all of its
obligations under the Management Agreements;
(b) The hiring and firing of personnel of Cable and
maintaining overall supervision of the personnel of Cable required to maintain
and operate the Systems;
(c) The collection of all fees, charges or other compensation
due to Cable;
(d) The taking of all necessary actions to comply with the
rules and regulations and orders of any federal, state, county or municipal
authority having jurisdiction over Cable and/or over the Systems including,
where necessary, the preparation of all reports and statements of account for
filing with the Federal Communications Commission and the United States
Copyright office;
(e) The establishment of compensation levels for employees of
Cable and/or employees of the Systems;
(f) The maintenance of a comprehensive system of records,
books and accounts;
(g) The preparation of an annual budget with respect to
operation of the Systems including, but not limited to, financial planning,
establishment of rates and prices, advertising and promotional campaigns,
renegotiation or negotiation of franchise, pole and programming and agreements,
construction of new cable television plant and upgrading of existing cable
television plant and budgeting and planning of capital expenditures; and
(h) The provision of long range business and financial
planning.
3. Personnel, Offices and Supplies. NewFalcon shall supply itself with
suitable offices, equipment and management personnel (either employees or
independent contractors) to enable it to provide the management services
contemplated by this Agreement.
4. Compensation. Cable shall pay to NewFalcon, not later than the
fifteenth day of each month, compensation for services provided. The amount of
such compensation per month shall be equal to eighty percent (80%) of all
management fees received by Cable with respect to the Management Agreements.
5. Expenses, NewFalcon shall be reimbursed for all of its reasonable
expenses incurred in connection with the performance of its duties under this
Agreement including: (i) the actual cost of goods, materials and services used
for or by Cable and paid to third parties; (ii) the allocable cost of
administrative services rendered by NewFalcon hereunder or the amount that Cable
would be required to pay to unaffiliated parties for comparable administrative
services in the same geographic location; and (iii) Cable's allocable share of
costs associated with facilities
- 2 -
required to provide services under this Agreement, but not including
depreciation or amortization. Cable shall reimburse NewFalcon for all such
expenses upon presentation by NewFalcon from time to time, of an itemized
account of such expenditures or costs.
6. Term. The term of this Agreement shall commence on the date first
above written immediately following the assignment by NewFalcon of substantially
all of its assets to Falcon Cable Communications, LLC pursuant to the
Contribution Agreement, and shall continue with respect to the Partnership until
the earlier of: (1) the dissolution of the Affiliated Partnerships; (2) the sale
of all of the Systems owned or managed by Cable; (3) termination pursuant to
Paragraph 7; (4) the liquidation of NewFalcon in accordance with the provisions
of its partnership agreement; (5) the mutual agreement of the parties hereto or
(6) the delivery of 180 days written notice by either party to the other party.
7. Events of Default. Each of the following events shall constitute a
default by NewFalcon under this Agreement and shall entitle Cable to terminate
this Agreement upon written notice to NewFalcon, without any further obligation
or liability to NewFalcon (other than unpaid compensation and expenses).
(a) The failure by NewFalcon to perform any material duty or
obligation imposed under this Agreement, should such failure continue for thirty
(30) days after written notice thereof to NewFalcon from Cable;
(b) NewFalcon commences a voluntary case under the Federal
Bankruptcy Code, or consents to (or fails to controvert in a timely manner) the
commencement of an involuntary case against NewFalcon.
(c) NewFalcon institutes proceedings for rehabilitation,
readjustment or composition (or for any related or similar purpose) under any
law (other than the Federal Bankruptcy Code) relating to financially distressed
debtors, their creditors or property, or consents to (or fails to controvert in
a timely manner) the institution of any such proceedings against NewFalcon;
(d) NewFalcon is unable or admits in writing its inability to
pay its debts generally as they come due, or makes an assignment for the benefit
of creditors or enters into any arrangement for the adjustment or composition of
debts or claims;
(e) A court or government having jurisdiction in the premises
enters a decree or order (i) for the appointment of a receiver, liquidator,
assignee, trustee or sequestrator (or other similar official) of NewFalcon or of
any substantial part of the property of NewFalcon, or for the winding-up or
liquidation of the affairs of NewFalcon, and such decree or orders remain in
force undischarged and unstayed for a period of thirty (30) days, or (ii) for
the sequestration or attachment of any substantial part of the property of
NewFalcon, without its unconditional return to the possession of NewFalcon, or
its unconditional release from such sequestration or attachment, within thirty
(30) days thereafter;
- 3 -
(f) A court having jurisdiction in the premises enters an
order for relief in an involuntary case commenced against NewFalcon under the
Federal Bankruptcy Code, and such order remains in force undischarged and
unstayed for a period of thirty (30) days;
(g) A court or government having jurisdiction in the premises
enters a decree or order approving or acknowledging as properly filed or
commenced against NewFalcon a petition or proceedings for liquidation,
rehabilitation, readjustment or composition (or for any related or similar
purpose) under any law (other than the Federal Bankruptcy Code) relating to
financially distressed debtors, their creditors or property, and any such decree
or order remains in force undischarged and unstayed for a period of thirty (30)
days; or
(h) NewFalcon takes any action for the purpose or with the
effect of authorizing, acknowledging or confirming the taking or existence of
any action or condition specified in paragraph (b), (c) or (d).
8. Insurance. Liability and Indemnification of Manager
(a) NewFalcon shall not be liable to Cable for any damages,
losses, expenses or liabilities arising from any act, or omission to act, under
the terms of this Agreement, except where said act, or omission to act, was done
or occasioned by fraud, willful misconduct or gross negligence.
(b) NewFalcon shall be entitled to recover any damages,
losses, expenses or liabilities incurred by it with respect to third persons as
a result of any act, or omission to act, believed by it in good faith within the
scope of authority conferred upon it by this Agreement, except when said act, or
omission to act, was done by fraud, willful misconduct, gross negligence or
breach of fiduciary duty.
9. Notices. All notices, demands, and requests required or permitted to
be given under the provisions of this Agreement (a) shall be in writing, (b) may
be sent by telecopy (with automatic machine confirmation), delivered by personal
delivery, or sent by commercial delivery service or certified mail, return
receipt requested, (c) shall be deemed to have been given on the date of actual
receipt, which may be conclusively evidenced by the date set forth in the
records of any commercial delivery service or on the return receipt, and (d)
shall be addressed to the recipient at the address specified below, with respect
to any party, to any other address that such party may from time to time
designate in a writing delivered in accordance with this Section 9.
- 4 -
If to Cable:
Enstar Cable Corporation
10900 Wilshire Blvd., 15th Floor
Los Angeles, California 90024
If to NewFalcon:
Falcon Communications, L.P.
10900 Wilshire Blvd., 15th Floor
Los Angeles, California 90024
10. Assignment. This Agreement may not be voluntarily assigned by any
party hereto without the prior written consent of the other party, except that
NewFalcon can enter into agreements with affiliates pursuant to which such
affiliates will provide certain of the services to be provided by NewFalcon to
Cable and NewFalcon can assign its rights and obligations under this Agreement
to any entity which acquires substantially all of the assets of NewFalcon.
NewFalcon shall advise Cable of any assignment of its rights and obligations
under thus Agreement, or any agreement with any affiliate as aforesaid within
five (5) business days thereof.
11. Other Agreements Notwithstanding any other provision of this
Agreement, this Agreement shall not modify or affect the obligations of Cable
pursuant to any management agreement of Cable with respect to any System or the
limitations upon amounts or rates which may be charged by Cable for its services
with respect to any such System.
12. Successors and Assigns. Subject to Paragraph 10, this Agreement
shall inure to the benefit of and be binding upon the parties hereto and their
respective heirs, personal representatives, successors and assigns.
13. Entire Agreement. This Agreement contains the entire understanding
of the parties with respect to the provision of management services to Cable and
supersedes all prior agreements among the parties hereto and FHGI and FHGLP with
respect to the subject matter hereof, including the 1988 Management Services
Agreement. This Agreement may not be modified or amended except by a writing
signed by the parties hereto.
14. Governing Law. This Agreement shall be governed, construed, and
enforced in accordance with the laws of the State of California.
[THIS SPACE INTENTIONALLY LEFT BLANK]
- 5 -
IN WITNESS WHEREOF, the parties have executed this Management Services
Agreement as of the date first above written.
FALCON COMMUNICATIONS, L.P., a California
limited partnership
By: Falcon Holding Group, L.P., its
managing General Partner
By: Falcon Holding Group, Inc., its
General Partner
By: /s/ Stanley S. Itskowitch
--------------------------------------
Stanley S. Itskowitch
Executive Vice President
ENSTAR CABLE CORPORATION, a Georgia
corporation
By: /s/ Stanley S. Itskowitch
--------------------------------------
Stanley S. Itskowitch
Executive Vice President