Exhibit 10.11
Execution Copy
MANAGEMENT SERVICES
AGREEMENT
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 ”).
(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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“
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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“
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.
(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.
(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, AB
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