Print Page  Close Window

SEC Filings

S-1/A
CHARTER COMMUNICATIONS, INC. /MO/ filed this Form S-1/A on 09/28/1999
Entire Document
 
<PAGE>   183
 
   
     THE NEW MANAGEMENT AGREEMENT.   On February 23, 1999, Charter Investment,
Inc. entered into a new management agreement with Charter Operating, which was
amended and restated as of March 17, 1999. Upon the closing of our current
credit facilities on March 18, 1999, our previous management agreements and the
management consulting agreement with Marcus Cable terminated and the new
management agreement became operative. Pursuant to the new management agreement,
Charter Investment, Inc. has agreed to manage the operations the cable
television systems owned by Charter Operating's subsidiaries, as well as any
cable television systems Charter Operating may subsequently acquire in the
future. The term of the new management agreement is ten years.
    
 
   
     The new management agreement provides that Charter Operating will reimburse
Charter Investment, Inc. for all expenses, costs, losses, liabilities or damages
incurred by it in connection with Charter Operating's ownership or operation of
Charter Operating's cable television systems. If Charter Investment, Inc. pays
or incurs any such expenses, costs, losses, liabilities or damages, it will be
reimbursed. In addition to any reimbursement of expenses, Charter Investment,
Inc. is paid a yearly management fee equal to 3.5% of our gross revenues. Gross
revenues include all revenues from the operation of Charter Operating's cable
systems, including, without limitation, subscriber payments, advertising
revenues, and revenues from other services provided by Charter Operating's cable
systems. Gross revenues do not include interest income or income from
investments unrelated to our cable systems.
    
 
   
     Payment of the management fee to Charter Investment, Inc. is permitted
under our current credit facilities, but ranks below our payment obligations
under our current credit facilities. In the event any portion of the management
fee due and payable is not paid by Charter Operating, it is deferred and accrued
as a liability. Any deferred amount of the management fee will bear interest at
the rate of 10% per annum, compounded annually, from the date it was due and
payable until the date it is paid. As of June 30, 1999, no interest had been
accrued.
    
 
   
     The management fee is payable to Charter Investment, Inc. quarterly in
arrears. If the current management agreement is terminated, Charter Investment,
Inc. is entitled to receive the fee payable for an entire quarter, even if
termination occurred before the end of that quarter. Additionally, Charter
Investment, Inc. is entitled to receive payment of any deferred amount.
    
 
   
     Pursuant to the terms of the new management agreement, Charter Operating
has agreed to indemnify and hold harmless Charter Investment, Inc. and its
shareholders, directors, officers and employees. This indemnity extends to any
and all claims or expenses, including reasonable attorneys' fees, incurred by
them in connection with any action not constituting gross negligence or willful
misconduct taken by them in good faith in the discharge of their duties to
Charter Operating.
    
 
                                       180