MANAGEMENT SERVICES AGREEMENT
Exhibit
10.11
Execution
Copy
THIS
MANAGEMENT SERVICES AGREEMENT (this “Agreement”) is made
as of September 14, 2009, by and between ABRY Partners, LLC, a Delaware
limited liability company (“ABRY”), and Grande
Communications Networks, LLC, a Delaware limited liability company (the “Company”). Capitalized
terms used herein and not otherwise defined herein shall have the meanings
assigned to such terms in the Recapitalization Agreement.
WHEREAS,
ABRY has agreed to perform the management and consulting services set forth
herein pursuant to the terms hereof;
WHEREAS,
the execution and delivery of this Agreement are conditions precedent to the
transactions contemplated by that certain Recapitalization Agreement (the “Recapitalization
Agreement”), dated as August 27, 2009, by and among ABRY, Grande Parent
LLC, a Delaware limited liability company, ABRY Partners VI, L.P., a Delaware
limited partnership, Grande Communications Holdings, Inc., a Delaware
corporation, Grande Investment L.P., a Delaware limited partnership (“Grande Investment”),
and Grande Communications Networks, Inc., a Delaware corporation and
predecessor-in-interest to the Company; and
WHEREAS,
the Company is entering into that Credit Agreement dated as of the date hereof
by and among Company, as borrower, the financial institutions listed therein as
lenders, Société Générale, as administrative agent and the other parties thereto
(said Credit Agreement, as amended, restated, supplemented or otherwise modified
from time to time, the “Credit
Agreement”).
NOW,
THEREFORE, in consideration of the mutual covenants contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Management and Consulting
Services. ABRY hereby agrees during the term of this Agreement
to consult with the board of managers of Grande Manager LLC (the “Board”) and
management of the Company in such manner and on such business and financial
matters as the Board may reasonably request from time to time, including
corporate strategy, budgeting of future corporate investments, acquisition and
divestiture strategies, and debt and equity financing (the “Services”).
2. Term.
(a) ABRY
shall provide the Services set forth in Section 1 above from
the date of this Agreement until the termination of this Agreement, which shall
occur on the earliest of: (i) by mutual agreement of ABRY and the Company, (ii)
upon the Bankruptcy or Dissolution of ABRY or ABRY Partners VI, L.P., or (iii)
upon an Approved Sale (as defined in the Partners Agreement, dated as of the
date hereof, by and among Grande Investment and its Partners, as such agreement
may be amended, restated or modified from time to time).
(b) For
the purposes of this Agreement:
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(i)
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“Bankruptcy”
means, with respect to an entity, (i) the making of a general assignment
for the benefit of creditors, (ii) the entry of an order for relief in any
bankruptcy, reorganization or insolvency proceeding, (iii) the filing or
commencement by or against the entity of any application or petition for
the appointment of a trustee, receiver or other similar official over the
entity or any substantial part of the entity’s assets, or of any
proceeding under any bankruptcy, insolvency or reorganization statute or
liquidation or other law relating to relief of debtors, unless, in the
case of such an action or proceeding filed or commenced against the entity
without the entity’s acquiescence or consent, the action or proceeding is
dismissed within 60 days after the date of its filing or commencement;
and
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(ii)
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“Dissolution”
means, with respect to an entity, the liquidation, dissolution, or winding
up of such entity under (i) the entity’s governing documents or (ii)
applicable law.
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(c) No
termination of this Agreement, whether pursuant to this Section 2 or
otherwise, will affect the Company’s duty to pay any Management Fee (as defined
in Section 4)
accrued, or to reimburse any cost or expense incurred pursuant to Section 4
hereof, prior to
the effectiveness of that termination. Upon termination of this
Agreement, ABRY’s right to receive any further Management Fee or reimbursement
for costs and expenses that have not accrued or been incurred to the date of
termination shall cease and terminate.
3. Personnel. ABRY
will provide and devote to the performance of this Agreement and the Services
those officers, employees and agents of which ABRY deems are appropriate for the
furnishing of such Services.
4. Compensation. In
consideration for the Services performed hereunder, the Company shall pay to
ABRY the following compensation:
(a) A
management fee accruing daily at the rate of $500,000 per annum and from the
Closing through the termination described in Section 2(a) (the
“Management
Fee”). The Management Fee shall not accrue any interest
thereon and shall be payable by the Company only upon the closing of an Approved
Sale whether or not the Company actually requests that ABRY provide the
Services; provided that no such fee shall be due and payable until the Credit
Agreement has been terminated and all indebtedness and other amounts due
thereunder have been paid in full.
(b) Upon
the closing of an Approved Sale, in addition to the Management Fee, ABRY shall
be entitled to a 2% fee as described in Section 4(d) of the Partners Agreement
(the “Exit
Fee”); provided that no such fee shall be due and payable until the
Credit Agreement has been terminated and all indebtedness and other amounts due
thereunder have been paid in full.
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(c) In
addition to the Management Fee and the Exit Fee, the Company shall reimburse
ABRY for reasonable travel expenses and other out of pocket costs and expenses
incurred by ABRY or any director, officer, employee or other agent in connection
with the performance of the Services.
5. Indemnification.
(a) In
the event that ABRY or any of its Affiliates, directors, members, or
employees (collectively, the “Indemnified Parties”)
becomes involved in any capacity in any action, proceeding or investigation
brought by a third party in connection with the provision of the Services by
ABRY, the Company will indemnify and hold harmless the Indemnified Parties from
and against any actual or threatened claims, lawsuits, actions or liabilities
(including the out of pocket expenses and the reasonable fees and expenses of
counsel and other litigation and investigation costs reasonably incurred by the
Indemnified Party in connection with such third party claims,
lawsuits, actions or liabilities) (“Losses”), arising as
a result of the provision of Services, except that the Company will not be
obligated to so indemnify any Indemnified Party if, and to the extent that, such
Losses directly result (i) any such action, proceeding or investigation by any
party to the Recapitalization Agreement other than Grande Communications
Holdings, Inc. or the Grande Holdings Investor (as defined therein) or any
affiliates of such a party, (ii) from any illegal activity, bad faith, gross
negligence or willful misconduct of such Indemnified Party or (iii) to the
extent that such Indemnified Party is adjudged to be liable to the
Company. ABRY will certify to the Company in writing all Losses that
are payable to ABRY or other ABRY Indemnified Parties hereunder. The
reimbursement and indemnity obligations of the Company under this Section 5 shall
extend upon the same terms and conditions to any Indemnified Party, as the case
may be, of ABRY and any such affiliate and shall be binding upon and inure to
the benefit of any successors, assigns, heirs and personal representatives of
the Company, ABRY and any such Indemnified Party. Notwithstanding
Section 10
below, the foregoing provisions shall not supersede any obligation of a party
hereto to provide indemnification to another party hereto pursuant to any other
agreement not related to the provisions of Services hereunder among such
parties, or to release such indemnifying party from any indemnification
obligation pursuant to such other agreement. The provisions of this
Section 5 shall
survive the termination of this Agreement.
(b) In
the event that Grande Investment or any of its Subsidiaries or any directors or
officers thereof (collectively, the “Grande Indemnified
Parties”) becomes involved in any capacity in any action, proceeding or
investigation in connection with the provision of the Services by ABRY, ABRY
will indemnify and hold harmless the Grande Indemnified Parties from and against
any Losses arising as a result of or in connection with any illegal activity,
bad faith, gross negligence or willful misconduct of ABRY. Grande
will certify to ABRY in writing all Losses that are payable to Grande or other
Grande Indemnified Parties hereunder. The reimbursement and indemnity
obligations of ABRY under this Section 5(b) shall be
in addition to any liability which ABRY may otherwise have, shall extend upon
the same terms and conditions to any Grande Indemnified Party, as the case may
be, and shall be binding upon and inure to the benefit of any successors or
assigns of Grande, or ABB and of any successors, assigns, heirs and personal
representatives of such Grande Indemnified Party. The foregoing
provisions shall survive the termination of this Agreement.
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(c) IN
NO EVENT WILL EITHER PARTY BE LIABLE OR OBLIGATED UNDER THIS AGREEMENT OR UNDER
CONTRACT, NEGLIGENCE, BREACH OF WARRANTY, STRICT LIABILITY OR OTHER LEGAL OR
EQUITABLE THEORY FOR ANY SPECIAL, INDIRECT, OR CONSEQUENTIAL DAMAGES ARISING OUT
OF THIS AGREEMENT OR IN CONNECTION WITH THE DELIVERY, USE OR PERFORMANCE OF THE
SERVICES, INCLUDING LOST PROFITS, BUSINESS OPPORTUNITIES AND
REVENUES.
6. Independent
Contractors. Nothing herein shall be construed to create a joint venture
or partnership between the parties hereto or an employee/employer relationship
between ABRY and the Company. ABRY shall be an independent contractor
pursuant to this Agreement. No party hereto shall have any express or
implied right or authority to assume or create any obligations on behalf of or
in the name of any other party hereto or to bind any other party hereto to any
contract, agreement or undertaking with any third party.
7. No
Liability. The Company acknowledges and agrees that neither
ABRY nor its Affiliates, stockholders, officers, employees or agents will be
liable for any Losses arising out of, related to or incurred in connection with
the performance of the Services to the Company or its subsidiaries other than
Losses arising from ABRY’s illegal activity, bad faith, gross negligence or
willful misconduct.
8. Notices. All
notices, demands or other communications to be given or delivered by reason of
the provisions of this Agreement shall be in writing and shall be deemed to have
been given (a) on the date of personal delivery to the recipient or an officer
of the recipient, or (b) when sent by telecopy or facsimile machine to the
number shown below on the date of such confirmed facsimile or telecopy
transmission (provided that a confirming copy is sent via overnight mail), or
(c) when properly deposited for delivery by a nationally recognized commercial
overnight delivery service, prepaid, or three (3) Business Days after deposit in
the United States mail, certified or registered mail, postage prepaid, return
receipt requested. Such notices, demands and other communications
shall be sent to ABRY and the Company at the addresses set forth below (or to
such other address or to the attention of such other Person as the recipient
party has specified by prior written notice to the sending party):
Notices to the
Company:
Grande
Communications Networks, LLC
000
Xxxxxxx Xxxxxx
Xxx
Xxxxxx, Xxxxx 00000
Attention: Xxxx
Xxxxxx
Facsimile: (000)
000-0000
with a
copy (which shall not constitute notice to the Company) to:
ABRY
Partners VI, L.P.
000
Xxxxxxxxxx Xxxxxx
00xx
Xxxxx
Xxxxxx,
XX 00000
Telecopy: (000)
000-0000
Attention: Chief
Executive Officer
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Notices to
ABRY:
ABRY
Partners, LLC
000
Xxxxxxxxxx Xxxxxx
00xx
Xxxxx
Xxxxxx,
XX 00000
Telecopy: (000)
000-0000
Attention: Xxx
Xxxxxxxx
with a
copy (which shall not constitute notice to ABRY) to:
Xxxxxxxx
& Xxxxx LLP
000
Xxxxxxxxx Xxxxxx
Xxx Xxxx,
XX 00000
Attention: Xxxx
Xxxxx, Esq.
Facsimile: 000-000-0000
9. Remedies. Any
person having rights under any provision of this Agreement shall be entitled to
enforce such rights specifically, to recover damages and costs (including
reasonable attorneys’ fees) caused by reason of any breach of any provision of
this Agreement and to exercise all other rights existing in their
favor. The parties hereto agree and acknowledge that money damages
may not be an adequate remedy for any breach of the provisions of this Agreement
and that any party may in its sole discretion apply to any court of law or
equity of competent jurisdiction for specific performance and/or injunctive
relief (without posting a bond or other security) in order to enforce or prevent
any violation of the provisions of this Agreement. In any dispute
between the parties hereto or their representatives concerning any provision of
this Agreement or the rights and duties of any person or entity hereunder, the
party or parties prevailing in such dispute shall be entitled, in addition to
such other relief as may be granted, to reimbursement from the non-prevailing
party or parties of the attorneys’ fees and court costs incurred by such
prevailing party or parties by reason of such dispute.
10. Amendment;
Waiver. No provision of this Agreement may be waived, amended,
modified or supplemented unless pursuant to a written instrument executed by the
party against which any such waiver, amendment, modification or supplement is
effective. Notwithstanding the foregoing, no waiver of a breach of
any provision of this Agreement shall operate or be construed as a waiver of any
preceding or succeeding breach and no failure to exercise any right or privilege
hereunder shall be deemed a waiver of such rights or privileges hereunder or
shall be deemed a waiver of such rights to exercise the same at any subsequent
time or times hereunder.
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11. Assignment. No
party hereto may assign any of its rights or obligations hereunder without the
prior written consent of the other party hereto; provided that notwithstanding
the foregoing, either party may assign its rights and obligations under this
Agreement to any of its Affiliates without the consent of the other
party.
12. Successors and
Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties to this Agreement and their respective successors and
permitted assigns.
13. Counterparts. This
Agreement may be executed in any number of counterparts, each of which will be
deemed an original but all of which together will constitute one and the same
instrument. This Agreement will become effective when one or more
counterparts have been signed by each of the parties and delivered to the other
parties, which delivery may be made by exchange of copies of the signature page
by .pdf or other facsimile transmission.
14. Severability. Whenever
possible, each provision of this Agreement will be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect under
any applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision or any other jurisdiction,
but this Agreement will be reformed, construed and enforced in such jurisdiction
as if such invalid, illegal or unenforceable provision had never been contained
herein.
15. Entire
Agreement. This Agreement and the other documents referred to
or contemplated herein embody the entire agreement and understanding among the
parties hereto with respect to the subject matter hereof and supersede and
preempt all prior understandings, agreements or representations by or among the
parties, whether written or oral, which may have related to the subject matter
hereof in any way.
16. Governing
Law. The construction, validity, enforcement and
interpretation of this Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to any
choice of law or conflict of law provision or rule (whether of the State of
Delaware or any other jurisdiction) that would cause the application of the law
of any jurisdiction other than the State of Delaware.
17. Waiver of Jury
Trial. The parties to this Agreement each hereby waives, to
the fullest extent permitted by law, any right to trial by jury of any claim,
demand, action, or cause of action (i) arising under this Agreement or (ii) in
any way connected with or related or incidental to the dealings of the parties
hereto in respect of this Agreement or any of the transactions related hereto,
in each case whether now existing or hereafter arising, and whether in contract,
tort, equity, or otherwise. The parties to this Agreement each hereby
agrees and consents that any such claim, demand, action, or cause of action
shall be decided by court trial without a jury and that the parties to this
Agreement may file an original counterpart of a copy of this Agreement with any
court as written evidence of the consent of the parties hereto to the waiver of
their right to trial by jury.
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18. Descriptive
Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this
Agreement.
19. No Strict
Construction. The parties hereto have participated jointly in
the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto, and no presumption or
burden of proof shall arise favoring or disfavoring any party hereto by virtue
of the authorship of any of the provisions of this Agreement.
20. Time of the Essence;
Computation of Time. Time is of the essence for each and every
provision of this Agreement. Whenever the last day for the exercise
of any privilege or the discharge or any duty hereunder shall fall upon a
Saturday, Sunday, or any date on which banks in San Marcos, Texas or
Boston, Massachusetts are authorized to be closed, the party having such
privilege or duty may exercise such privilege or discharge such duty on the next
succeeding day which is a regular business day.
21. No Third Party
Beneficiaries. This Agreement is for the sole benefit of the
parties hereto and their permitted assigns and nothing in this Agreement,
express or implied, is intended or shall be construed to give any person
(including the Designated Personnel) other than the parties to this Agreement or
their respective successors or permitted assigns any legal or equitable right,
remedy or claim under or in respect of any agreement or any provision contained
herein; provided that each Indemnified Party shall be an express, third-party
beneficiary of the provisions of this Agreement that are applicable to such
Indemnified Party.
* * * * * *
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first written above.
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GRANDE
COMMUNICATIONS NETWORKS, LLC
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By:
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/s/ Xxxxxxx Xxxxxxx
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Name:
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Xxxxxxx
Xxxxxxx
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Title:
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Chief
Financial Officer
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ABRY
PARTNERS LLC
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By:
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/s/ Xxx X. Xxxxxxxx
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Name:
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Xxx
X. Xxxxxxxx
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Title:
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Managing
Partner
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