EXHIBIT 10.13
EXCLUSIVITY AGREEMENT
AGREEMENT dated as of April 9, 1998 among Xxxxxx Xxxxxxx Capital Partners
III, L.P., a Delaware limited partnership ("MSCP III"), MSCP III 892 Investors,
L.P., a Delaware limited partnership ("892 Investors"), Xxxxxx Xxxxxxx Capital
Investors, L.P., a Delaware limited partnership ("MSCI", and together with MSCP
III and 892 Investors, the "MSCP Funds"), and Xxxxxx Xxxxxxxxx, Xxxxxxx X. Xxxx,
Xxxxxxx Xxxxx, Xxxx Xxxxxx, Xxxx Xxxxxxx and Xxxxx X. Xxxxx (each, a "Management
Investor" and, collectively, the "Management Investors").
WHEREAS, the parties hereto have entered into the Limited Liability Company
Agreement (the "MSCP Carry Agreement") of MSCP Carry LLC ("MSCP Carry") dated as
of April 9, 1998;
WHEREAS, the MSCP Funds, TWI Cable Inc., a Delaware corporation ("Time
Warner"), and the Management Investors have entered into the Amended and
Restated Limited Liability Company Agreement of Renaissance Media Holdings LLC
("Renaissance Holdings") dated as of April 9, 1998, as contemplated to be
further amended and restated effective as of April 17, 1998 as the Second
Amended and Restated Limited Liability Company Agreement of Renaissance Holdings
among MSCP Carry, TWI Cable Carry LLC, a Delaware limited liability company, and
the Management Investors, as it may be further amended, modified, supplemented
or restated from time to time (the "Holdings LLC Agreement");
WHEREAS, Renaissance Media (Louisiana) LLC and Renaissance Media
(Tennessee) LLC, each an indirect wholly-owned subsidiary of Renaissance
Holdings, have entered into the Amended and Restated Limited Liability Company
Agreement of Renaissance Media LLC ("Renaissance Media") dated as of April 9,
1998;
WHEREAS, each of the Management Investors has entered into an employment
agreement (each, an "Employment Agreement" and collectively, the "Employment
Agreements") with Renaissance Media dated as of the date hereof pursuant to
which each Management Investor has agreed to spend substantially all of his or
her business time in the performance of his or her duties thereunder;
"Designated Cable System" means any cable television system located in the
United States or any business or Person whose assets consist (either directly or
through its Subsidiaries) of any such cable television system.
"EBITDA" means, for any period, the net income of the Company for such
period, adjusted to exclude the effect of any extraordinary or other non-
recurring gain or loss for such period plus, to the extent deducted in
determining the net income of the Company for such period, (i) the aggregate
amount of interest expense for such period, (ii) the aggregate amount of income
tax for such period and (iii) the aggregate amount of depreciation, amortization
(including amortization of goodwill and other intangibles) and other similar
non-cash charges for such period.
"Invest" means to participate in (as a partner, stockholder, founder, or
other equityholder), make a loan or provide financial assistance to, invest in,
purchase or otherwise acquire an interest in, directly or indirectly, any
Designated Cable System, and "Investment" means any such participation, making
of a loan or provision of financial assistance, investment, purchase or other
acquisition of an interest in, directly or indirectly, any Designated Cable
System.
"Manage" means to manage, operate or develop, participate in (as a
director, officer, employee or consultant), or provide services to, directly or
indirectly, any Designated Cable System.
"Subscriber" has the meaning assigned to such term in the Asset Purchase
Agreement dated as of November 14, 1997, as amended, between Renaissance
Holdings and TWI Cable Inc., except that (i) the definition of "System" as used
in such term shall be deemed to include any Designated Cable System acquired by
the Company following the date hereof and (ii) the definition of "Tier Cable" as
used in such term shall be deemed to include cable television services offered
to subscribers within any such additional Designated Cable System, which
services are comparable to those currently identified in the definition of "Tier
Cable."
Section 2. Management Investors Exclusivity. (a) Prior to the third
anniversary of the date hereof for so long as any Management Investor is
employed by the Company or its Affiliates, such Management Investor and his or
her Affiliates will not Manage or Invest in any Designated Cable System without
the prior written consent of the MSCP Funds. Following the third anniversary of
the date hereof for so long as any Management Investor is employed by the
Company or its Affiliates, such Management Investor and his or her Affiliates
(i) will not Manage any Designated Cable System without the prior written
consent of the MSCP Funds and (ii) may Invest in a Designated Cable System
(other than as a holder of less than 1% of the outstanding capital stock of a
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publicly traded corporation) only if such Management Investor first offers the
MSCP Funds the opportunity to participate in such Investment by delivery of
written notice (the "Investment Notice") to MSCP III describing such opportunity
and the terms of the proposed investment or participation therein; provided that
such Management Investor may, without the prior written consent of the MSCP
Funds, Manage a Designated Cable System in which such Management Investor has
Invested in accordance with this Section 2. Within 30 days following receipt of
the Investment Notice, MSCP III shall deliver written notice (the "Response
Notice") to the Management Investor stating whether or not the MSCP Funds (or
Renaissance Media, as assignee) wish to participate in such Investment. If the
MSCP Funds decline to pursue such Investment, then, subject to Section 2(b)
below, such Management Investor may pursue the Investment independently;
provided that (i) the terms of any such Investment, taken as a whole, are not
materially more favorable than those offered to the MSCP Funds, (ii) the
Benchmarks were achieved as of the third anniversary of the date hereof, (iii)
the obligations of such Management Investor in connection with such Investment
would not be inconsistent with his or her obligations under any employment
agreement entered into with the Company or any of its Affiliates, (iv) the scope
and nature of the Designated Cable System which is the subject of such
Investment are consistent with the strategic objective (described in Section
2.03(b) of the Holdings LLC Agreement) of Renaissance Holdings and its
Affiliates, including the Company, (v) the Designated Cable System which is the
subject of such Investment does not involve cable television systems that are
contiguous to the cable television systems then owned by the Company or that are
located within 100 miles of the principal headend of an existing cable
television system then owned by the Company, and (vi) the Company has fewer than
400,000 Subscribers as of the date of the Response Notice.
(b) (i) If the MSCP Funds decline to participate in any Investment
offered to them pursuant to Section 2(a) and if any Management Investor
intends to pursue such Investment independently, then prior to consummating
such Investment such Management Investor must deliver written notice (an
"Offer Notice") of such transaction to MSCP III setting forth the terms and
conditions of such Investment to the extent that the terms of such
Investment, taken as a whole, are materially more favorable than those
initially offered to the MSCP Funds.
(ii) The MSCP Funds shall have the right, exercisable by the delivery
of written notice (a "Notice of Exercise") to such Management Investor
within 15 Business Days after the date of delivery of such Offer Notice, to
participate in such Investment on such terms and conditions set forth in
such Offer Notice.
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(iii) If the MSCP Funds do not deliver a Notice of Exercise within 15
Business Days after delivery of an Offer Notice, such Management Investor
shall have the right for a period of 270 days from the earlier of (x) the
15th Business Day following delivery of such Offer Notice and (y) the date
on which such Management Investor receives written notice from the MSCP
Funds to the effect that they have elected not to participate in such
Investment on the terms described in the Offer Notice, to consummate the
Investment described in the Offer Notice on the terms and conditions
specified therein. In the event that such Management Investor shall not
have consummated such Investment in accordance with the immediately
preceding sentence before the expiration of the 270-day period described
therein, then such Management Investor may not consummate such Investment
without again complying with the provisions of this Section 2(b).
Section 3. MSCP III Exclusivity. Prior to the third anniversary of the
date hereof, the MSCP Funds will not purchase or acquire (other than through
Renaissance Holdings or its Subsidiaries or otherwise together with the
Management Investors), directly or indirectly, a controlling interest in any
Person that owns or manages a Designated Cable System the purchase or
acquisition of which would be consistent with the Company's business plan and
acquisition strategy in effect at such time; provided that the foregoing
prohibition shall not apply (i) if the Company has failed to achieve the
Benchmarks as of the date of the definitive documentation entered into by the
MSCP Funds with respect to such purchase or acquisition, (ii) if the Company has
at least 400,000 Subscribers as of the date of such definitive documentation,
(iii) to any acquisition of a diversified business having cable television
systems included among its assets unless the gross revenues of such diversified
business are primarily attributable to such cable television systems, or (iv) to
any transaction that is not reasonably likely to be offered or made available to
the Company (including, without limitation, any opportunity offered only to
financial investors or only to the MSCP Funds directly, any opportunity that is
of a size or scale that would not be reasonably possible for the Company to
undertake given the size and resources of the Company, or any opportunity that
is inconsistent with the Company's business plan and business strategy at such
time).
Section 4. Miscellaneous. (a) Notices. All notices, requests and other
communications to any party shall be in writing (including facsimile or similar
writing) and shall be given,
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if to any MSCP Fund, to:
MSCP III
c/x Xxxxxx Xxxxxxx Capital Partners III, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attention: General Counsel
with a copy to:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxxxxxx, Esq.
if to any Management Investor, to the
address of such Management Investor
indicated on the signature pages hereto,
or to such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties. All such notices, requests and
other communications shall be deemed received on the date of receipt by the
recipient thereof if received prior to 5 p.m. in the place of receipt and such
day is a Business Day in the place of receipt. Otherwise, any such notice,
request or communication shall be deemed not to have been received until the
next succeeding Business Day in the place of receipt.
(b) Amendments; Waivers. Any provision of this Agreement may be amended
or waived if, and only if, such amendment or waiver is in writing and signed, in
the case of an amendment, by (i) the MSCP Funds and (ii) either all of the
Management Investors or all but one of the Management Investors, or in the case
of a waiver, by the party or parties against whom the waiver is to be effective;
provided that any amendment that adversely affects a Management Investor and
does not affect other Management Investors in a similar manner shall also
require the consent of the Management Investor so affected in addition to the
required consents described above. Except as expressly set forth herein, no
failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. Except as otherwise provided herein,
the rights and remedies herein
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provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
(c) Expenses. All costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid in the manner
contemplated by the Holdings LLC Agreement.
(d) Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
personal or legal representatives, executors, administrators, successors, heirs,
legatees, devisees and permitted assigns. This Agreement is for the sole
benefit of the parties hereto and, except as otherwise contemplated herein,
nothing herein expressed or implied shall give or be construed to give any
Person (including Time Warner, either directly or indirectly through its equity
interest in TWI Cable Carry LLC or such entity's equity interest in Renaissance
Holdings), other than the parties hereto, any legal or equitable rights
hereunder. This Agreement shall not be assignable by any party hereto without
the prior written consent of (i) each MSCP Fund and (ii) a majority of the
Management Investors (excluding for this purpose the Percentage Interest of any
Management Investor requesting such assignment); provided that the MSCP Funds
may assign (in whole or in part) their rights under Section 2 of this Agreement
to Renaissance Media or its Affiliates without the consent of any party
hereunder.
(e) Headings. Headings are for ease of reference only and shall not form
a part of this Agreement.
(f) Governing Law; Jurisdiction. This Agreement shall be construed and
interpreted in accordance with and governed by the law of the State of Delaware
without giving effect to the principles of conflicts of laws thereof. Any suit,
action or proceeding seeking to enforce any provision of, or based on any matter
arising out of or in connection with, this Agreement or the transactions
contemplated hereby shall be brought in the United States Court for the District
of Delaware and the Chancery Court of the State of Delaware (and of the
appropriate appellate courts therefrom), and each of the parties hereby consents
to the exclusive jurisdiction of such courts in any such suit, action or
proceeding and irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding in any such court or that any such suit, action
or proceeding which is brought in any such court has been brought in an
inconvenient form. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 5(a) shall be deemed
effective service of process on such
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party. Nothing herein shall affect the right of any party to serve legal process
in any other manner permitted by law or at equity or to enforce in any lawful
manner a judgment obtained in one jurisdiction in any other jurisdiction. WITH
RESPECT TO A PROCEEDING IN ANY SUCH COURT, EACH OF THE PARTIES IRREVOCABLY
WAIVES AND RELEASES TO THE OTHER PARTIES HERETO ITS RIGHT TO A TRIAL BY JURY,
AND AGREES THAT IT WILL NOT SEEK A TRIAL BY JURY IN ANY SUCH PROCEEDING.
(g) Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be deemed an original.
(h) Severability. In case any one or more of the provisions or part of a
provision contained in this Agreement shall for any reason be held to be
invalid, illegal or unenforceable, such invalidity, illegality or
unenforceability shall be deemed not to affect any other provision or part of a
provision of this Agreement, but the Agreement shall be reformed and construed
as if such provision or part of a provision held to be invalid, illegal
unenforceable had never been contained herein and such provision or part
reformed so that it would be valid, legal and enforceable to the maximum extent
possible.
(i) Further Assurances. The parties hereto will execute and deliver such
further instruments and do such further acts and things as may be required to
carry out the intent and purpose of this Agreement.
(j) Remedies. Except as otherwise specifically provided for in this
Agreement, (i) the rights and remedies herein provided shall be cumulative and
not exclusive of any rights or remedies provided by law and (ii) the parties
hereto acknowledge and agree that in the event of any breach of this Agreement,
the parties would be irreparably harmed and could not be made whole by monetary
damages. Each party hereto accordingly agrees (i) not to assert by way of
defense or otherwise that a remedy at law would be adequate and (ii) that, in
addition to any other remedy to which it may be entitled, that the remedy of
specific performance of this Agreement is appropriate in any action in court.
(k) Termination. This Agreement shall terminate with respect to any
Management Investor (and such Management Investor shall cease to have any rights
or obligations hereunder, and shall be disregarded for purposes of obtaining any
consents or approvals required hereunder) on the date on which such Management
Investor ceases to be employed by the Company or any of its Affiliates.
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(l) Entire Agreement. This Agreement and each other Transaction Document,
including the exhibits and schedules thereto, constitute the entire agreement
among the parties hereto with respect to the subject matter hereof and thereof,
and supersede all other prior agreements or undertakings with respect thereto,
both written and oral. The parties acknowledge and agree that no
representations, warranties, instruments, promises, understandings or conditions
have been made or relied upon by the parties or any of their Affiliates in
connection with the transactions contemplated hereby except as set forth herein
and therein.
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In Witness Whereof, the parties hereto have entered into this
Exclusivity Agreement or have caused this Exclusivity Agreement to be duly
executed by their respective authorized officers, in each case as of the day and
year first above written.
XXXXXX XXXXXXX CAPITAL
PARTNERS III, L.P.
By: MSCP III, L.P.,
as General Partner
By: XXXXXX XXXXXXX CAPITAL
PARTNERS III, INC, as General
Partner
By: /s/ Xxxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Managing Director
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
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MSCP III 892 INVESTORS, L.P.
By: MSCP III, L.P.,
as General Partner
By: XXXXXX XXXXXXX CAPITAL
PARTNERS III, INC, as General Partner
By: /s/ Xxxxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Managing Director
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Managing Director
XXXXXX XXXXXXX CAPITAL INVESTORS, L.P.,
By: MSCP III, L.P., as General Partner
By: XXXXXX XXXXXXX CAPITAL PARTNERS III,
INC., as General Partner
By: /s/ Xxxxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Managing Director
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
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/s/ Xxxxxx Xxxxxxxxx
----------------------------------------
Xxxxxx Xxxxxxxxx
Address: Xxx Xxxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
/s/ Xxxxxxx X. Xxxx
----------------------------------------
Xxxxxxx X. Xxxx
Address: Xxx Xxxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
/s/ Xxxxxxx Xxxxx
----------------------------------------
Xxxxxxx Xxxxx
Address: Xxx Xxxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
/s/ Xxxx Xxxxxx
----------------------------------------
Xxxx Xxxxxx
Address: Xxx Xxxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
/s/ Xxxx Xxxxxxx
----------------------------------------
Xxxx Xxxxxxx
Address: Xxx Xxxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
/s/ Xxxxx X. Xxxxx
----------------------------------------
Xxxxx X. Xxxxx
Address: Xxx Xxxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
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