Exhibit 10.10
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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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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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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the Bankruptcy
or Dissolution of ABB;
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the termination
of the Recapitalization Agreement pursuant to Article IX
thereof;
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the termination
date upon which ABB and Grande mutually agree in writing;
or
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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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Services to
be Provided . During the Term:
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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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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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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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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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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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Representations and Warranties
.
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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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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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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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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-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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“
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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“
Closing ” has the meaning set forth in the
Recapitalization Agreement.
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“
Closing Date ” has the meaning set forth in the
Recapitalization Agreement.
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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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“
Dissolution ” means, with respect to an entity,
the
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