Exhibit 10.28
Execution Copy
MANAGEMENT SERVICES
AGREEMENT
This Management Services Agreement
(this “ Agreement ”) is entered into as of
September 14, 2009 between Grande Communications Networks,
LLC, a Delaware limited liability company (“ Grande
”), Atlantic Broadband Finance, LLC, a Delaware limited
liability company (“ ABB ”) and Grande Manager
LLC, a Delaware limited liability company (“ Grande
Manager ”), who joins this Agreement only for the
purposes of Section 3(c) below. Capitalized terms not
otherwise defined herein (including in Section 7
hereof) shall have the meanings set forth in the Recapitalization
Agreement (as defined herein).
WHEREAS, Grande has entered into
that certain Recapitalization Agreement dated as of August 27,
2009 by and among ABRY Partners VI, L.P., Grande Communications
Networks, Inc., predecessor-in-interest to Grande, Grande
Communications Holdings, Inc., ABRY Partners, LLC, Grande
Investment L.P., and Grande Parent LLC (the “
Recapitalization Agreement ”), and Grande
Communications Holdings, Inc. has received the Grande Holdings
Stockholders’ Approval as contemplated by the
Recapitalization Agreement.
WHEREAS, Grande desires to engage
ABB to provide management and other services to Grande, and ABB is
willing to provide such services, all on the terms and conditions
set forth in this Agreement.
THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which they hereby
acknowledge, the parties agree as follows:
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1.
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Appointment . Grande hereby engages ABB, and ABB hereby
agrees pursuant to the terms and conditions set forth herein, to
provide certain services to Grande, as described in
Section 3 hereof.
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2.
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Term .
The term of this Agreement (the “ Term ”) shall
commence at 12:01 a.m., Texas time, on the date hereof and shall
continue until the earliest to occur of the following:
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(c)
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the Bankruptcy
or Dissolution of ABB;
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(d)
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the termination
of the Recapitalization Agreement pursuant to Article IX
thereof;
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(e)
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the termination
date upon which ABB and Grande mutually agree in writing;
or
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(f)
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termination by
Grande upon at least 30 days’ prior written notice to ABB,
except that notice need not be given in advance if Grande or Grande
Investment, L.P. determines that ABB has performed any of the
Services in an illegal or grossly negligent manner or in a manner
that constitutes willful misconduct.
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3.
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Services to
be Provided . During the
Term:
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(a)
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Subject at all
times to the authority of the board of directors (or the equivalent
governing body) of Grande, ABB, by and through the Designated
Personnel (who shall be employed by ABB), agrees to perform or
cause to be performed in a professional manner general managerial
oversight and such management services (including, finance,
marketing and strategic planning) as mutually agreed upon from time
to time by and among ABB and Grande (collectively, the “
Services ”) with respect to the business and
operations of Grande and, so long as it remains an Affiliate of
Grande, any Affiliated company to which all or a portion of
Grande’s present broadband transport business or network
services business may be transferred (an “ Affiliated
Non-Core Company ”). Such Services shall include
day-to-day oversight by the Designated Personnel of sales,
marketing, customer service, administrative, accounting, financial
reporting, and information technology services. Designated
Personnel shall not be required to devote their time exclusively to
Grande and/or to the performance of the Services.
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(b)
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ABB shall be
responsible for and shall pay (i) pursuant to ABB’s
customary payroll practices, the salaries, bonuses and other
compensation of the Designated Personnel (for any period, the
“ Designated Personnel Compensation ”),
including related taxes and all costs of related benefits and
perquisites, and (ii) any expenses of the Designated Personnel
incurred in connection with the Services (for any period, the
“ Expenses ” and together with the Designated
Personnel Compensation, the “ Total Expenses ”).
For the avoidance of doubt, any amounts owed and/or paid to the
Designated Personnel as a result of their ownership interests in
any Affiliate of Grande or ABB shall not be included in the amount
of Total Expenses.
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(c)
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Grande Manager
shall cause the Designated Personnel who serve as officers of ABB
to become officers of Grande after Closing, and such Designated
Personnel shall have the same titles at both ABB and
Grande.
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(a)
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In
consideration for ABB for providing the Services to Grande and any
Affiliated Non-Core Company, Grande shall pay to ABB during the
period beginning on the Closing Date through the expiration of the
Term (the “ Payment Period ”) the lesser amount
of (i) (A) 5.5% of the total revenue of Grande, minus
(B) the actual compensation expenses for all Grande employees
who have positions that were included in the
“corporate” compensation expense in the projections
that were furnished to the lenders providing financing under the
terms of the Recapitalization Agreement, or (ii) an amount
equal to 50% of the Total Expenses (such lesser amount, the “
Management Fee ”). Notwithstanding anything herein or
otherwise to the contrary, in no event will any Management Fee or
other amount be payable by Grande to ABB unless and until the
Closing occurs.
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(b)
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Within 30 days following the end
of each calendar quarter during the Payment Period, ABB shall
prepare a statement of the Management Fee for such calendar
quarter. Payment by Grande in an amount equal to the Management Fee
for such calendar quarter shall be due and payable by Grande on the
thirtieth (30 th ) day following its receipt of such
statement.
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5.
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Representations and Warranties
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(a)
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ABB is a
limited liability company duly organized, validly existing and in
good standing under the Laws of the State of Delaware, and is duly
qualified to do business as a foreign entity and is in good
standing in the jurisdictions in which the character of its
properties or the nature of its business makes such qualification
necessary, except in jurisdictions, if any, where the failure to be
so qualified would not, in the aggregate, reasonably be expected to
result, in a material adverse effect. ABB has all requisite power
and authority to own, use or lease its properties and to carry on
its business as it is now being conducted except as would not, in
the aggregate, reasonably be expected to cause a material adverse
effect. ABB has provided to Grande a complete and correct copy of
its certificate of formation as amended to date, which, as so made
available, is in full force and effect. ABB is not in default in
any respect in the performance, observation or fulfillment of any
provision of its certificate of formation or operating
agreement.
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(b)
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ABB has full
power and authority to execute and deliver this Agreement and to
perform the Services. The execution, delivery and performance of
this Agreement have been duly and validly authorized by ABB’s
Board of Managers or similar governing body, and no other limited
liability company proceedings on the part of ABB are necessary to
authorize this Agreement or to perform the Services. This Agreement
has been duly and validly executed and delivered by ABB and,
assuming the due authorization, execution and delivery hereof by
Grande, constitutes the valid and binding obligation of ABB
enforceable against ABB in accordance with their respective terms,
except as such enforceability may be subject to the Enforceability
Exception.
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(c)
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The execution
and delivery of this Agreement and the performance by ABB of its
respective obligations hereunder will not: (i) conflict with
any provision of the certificate of formation or operating
agreement of ABB; (ii) require ABB to obtain any consent,
waiver, approval, order, authorization or permit of, or make a
registration with, filing with or notification to, or breach any
requirement applicable to ABB with any Governmental Authority;
(iii) result in any violation of or the breach of or
constitute a default (with notice or lapse of time or both) under,
or give rise to any right of termination, cancellation or
acceleration or guaranteed payments or a loss of a material benefit
under, any of the terms, conditions or provisions of any Contract
to which ABB is a party or by which ABB or any of its respective
properties or assets may be bound; or (iv) violate the
provisions of any Court Order or other Law applicable to
ABB.
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6.
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Confidentiality and
Non-Disclosure Obligations . As of the date hereof, ABB and Grande have
entered into a Confidentiality Agreement in the form of the
attached Exhibit A (the “ Confidentiality
Agreement ”). ABB agrees and acknowledges that any and
all non-
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public information of Grande,
including personally identifiable information of subscribers, that
ABB obtains through or under the Recapitalization Agreement, this
Agreement, the provision of Services hereunder or otherwise will be
subject to the confidentiality and non-disclosure obligations of
the Confidentiality Agreement. All obligations and rights under the
Confidentiality Agreement shall survive the termination of this
Agreement.
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(a)
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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 ninety days after the date of its
filing or commencement.
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(b)
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“
Closing ” has the meaning set forth in the
Recapitalization Agreement.
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(c)
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“
Closing Date ” has the meaning set forth in the
Recapitalization Agreement.
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(d)
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“
Designated Personnel ” shall mean those ABB personnel
from time to time occupying the positions set forth on Schedule
A attached hereto.
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(e)
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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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(f)
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“
Grande Holdings Stockholders’ Approval ” has the
meaning set forth in the Recapitalization Agreement.
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(g)
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“ Sale
of ABB ” means (i) the consummation of any merger or
consolidation of ABB with or into any other person or any sale of
all or substantially all of the ownership interests or assets of
ABB (other than a transaction following which the direct or
indirect holders of the outstanding membership interests of ABB
prior to such transaction together own a majority of the
outstanding ownership interests of the surviving corporation or
business entity); or (ii) ABRY Partners LLC and its affiliates
shall cease to beneficially own and control, directly or
indirectly, at least 51.0% of the membership interests of ABB or
shall cease to have the right, directly or indirectly, to control
ABB’s Board of Managers or similar governing body.
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(h)
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“ Sale of Grande
” means (i) the consummation of any merger or
consolidation of Grande with or into any other person or any sale
of all or substantially all of the
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ownership interests or assets of
Grande (other than a transaction following which the direct or
indirect holders of the outstanding membership interests or
equivalent securities of Grande prior to such transaction together
own a majority of the outstanding ownership interests of the
surviving corporation or business entity, and other than pursuant
to the Recapitalization Agreement); or (ii) ABRY Partners LLC
and its affiliates shall cease to beneficially own and control,
directly or indirectly, at least 51.0% of the membership interests
of Grande or shall cease to have the right, directly or indirectly,
to control Grande’s Board of Managers or similar governing
body.
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(a)
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In the event
that ABB or any of its Affiliates, principals, members, partners,
directors, stockholders, employees (including the Designated
Personnel), agents and representatives (collectively, the “
Indemnified Parties ”) becomes involved in any
capacity in any action, proceeding or investigation in connection
with the provision of the Services hereunder by ABB, other than any
such action, proceeding or investigation by any ABRY Party, Grande
Holdings or their respective Affiliates, Grande will indemnify and
hold harmless the Indemnified Parties from and against any actual
or threatened claims, lawsuits, actions or liabilities (including
out-of-pocket expenses and the reasonable fees and expenses of
counsel and other litigation costs and the cost of any preparation
or investigation) of any kind or nature (“ Losses
”), arising as a result of or in connection with this
Agreement and the Services, and will periodically reimburse the
Indemnified Parties for their expenses as described above, except
that Grande will not be obligated to so indemnify any Indemnified
Party to the extent that, any such Losses arise as a result of or
in connection with any illegal activity, bad faith, gross
negligence or willful misconduct of such Indemnified Party or to
the extent that such Indemnified Party is adjudged to be liable to
Grande. ABB will certify to Grande in writing all Losses that are
payable to ABB or other Indemnified Parties hereunder. The
reimbursement and indemnity obligations of Grande under this
Section 8(a) shall be in addition to any liability
which Grande may otherwise have, shall extend upon the same terms
and conditions to any 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 Indemnified Party. The foregoing
provisions shall survive the termination of this
Agreement.
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(b)
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In the event that Grande or any
of its Affiliates, principals, members, partners, directors,
stockholders, employees, agents and representatives (collectively,
the “ Grande Indemnified Parties ”) becomes
involved in any capacity in any action, proceeding or investigation
in connection with the provision of the Services hereunder by ABB,
ABB 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 ABB. Grande will certify to ABB in writing all Losses
that are payable to Grande or other Grande Indemnified Parties
hereunder. The
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reimbursement and indemnity
obligations of ABB under this Section 8(b) shall be in
addition to any liability which ABB 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 ass
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