1
EXHIBIT 10.11
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT (this "Agreement") is made and entered into
as of the 30th day of July, 1996, by and between ROBIN MEDIA GROUP, INC., a
Nevada corporation ("RMG"), and INTERMEDIA CAPITAL MANAGEMENT IV, L.P., a
California limited partnership (the "Manager").
W I T N E S S E T H:
WHEREAS, the Manager is the managing general partner of InterMedia
Partners IV, L.P., a California limited partnership ("IP-IV"), the owner of
ninety percent (90%) of the common stock of RMG; and
WHEREAS, RMG is the owner and operator of certain cable television
systems servicing areas located in Tennessee (such systems, together with any
other cable television systems acquired by RMG in the future, the "Systems");
and
WHEREAS, the Manager has experience in the operation and
management of cable television systems such as the Systems; and
WHEREAS, RMG and the Manager have agreed to enter into this Agreement,
pursuant to which the Manager, from and after the date hereof, shall manage the
Systems:
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein and the mutual benefits to be derived
therefrom, RMG and the Manager hereby agree as follows:
I. Appointment of Manager. RMG hereby designates the Manager and the
Manager hereby accepts the designation as exclusive manager of the Systems on
behalf of RMG, upon the conditions and for the term and compensation set forth
herein.
II. Term. The appointment of the Manager shall become effective as of
the date hereof, and shall continue for the duration of RMG's existence, subject
to Section 8 below.
III. Duties of Manager. Subject to the limitations on the authority of
the Manager set forth in Section 4 and subject to the right of RMG, after
consultation with the Manager, to perform certain functions itself and to direct
the Manager to take or omit to take actions specified by RMG and/or to otherwise
supervise the conduct of the business by the Manager, and in each case where the
same would not violate any existing franchise, license, contract, law or
regulation applicable to the Systems, the Manager shall have the following
authority:
1
2
A. Supervision and Consulting. The Manager shall supervise and conduct
the day-to-day operations of the Systems in the ordinary course of business.
B. Programming. Subject to the provisions of all applicable franchises
or ordinances or other binding contracts or legislation, the Manager shall
select, provide and price, at the lowest cost available to RMG, all programming
and services to be provided to the customers of the Systems; provided, however,
all costs and expenses incurred for programming and services will be borne by
RMG. Authority is hereby confirmed on the Manager to enter into programming
contracts on behalf of RMG or the Systems with such parties as the Manager deems
appropriate. To its knowledge the Manager believes that the services of
Satellite Services, Inc. ("SSI") will be available to the Systems. The Manager
shall use its best efforts to make the services of SSI available to the Systems
and shall use all reasonable efforts to retain access to SSI on behalf of the
Systems.
C. Maintenance and Construction of Systems. The Manager shall maintain
the Systems in good working order and repair and shall cause to be made such
capital improvements as (i) are necessary or appropriate to maintain the Systems
in compliance with the franchises for the Systems or (ii) are consistent with
the past practices of the Systems.
D. Employees. The Manager shall select, determine the compensation of,
supervise, instruct, discharge and otherwise manage all servants, employees,
agents, attorneys, accountants, engineers, consultants or contractors considered
by the Manager to be necessary for the efficient operation of the Systems
subject to the approval of RMG. All such servants, employees, agents, attorneys,
engineers, consultants or contractors shall remain and be in the employ of and
be compensated by RMG.
E. Negotiations of Contracts. The Manager shall assist RMG in the
negotiation of all contracts and the performance of all tasks necessary for the
financing, operation, construction, installation, maintenance, budgeting,
servicing, repair, protection, improvement, expansion, upkeep and other
management of the Systems, which contracts may be executed by the Manager on
behalf of RMG as owner of the Systems, provided RMG would have the authority to
execute such contracts under the terms of RMG's [Articles of Incorporation and
Bylaws] (collectively, the "RMG Articles").
F. Filings. The Manager shall assist RMG in the timely filing of all
federal, state and local reports with respect to the Systems as may be required
by franchise ordinances, Federal Communications Commission regulations or
copyright regulations.
G. Records. The Manager shall keep or cause to be kept all necessary
and appropriate books and records of all affairs
2
3
relating to the Systems. Originals or copies of such books and records shall be
maintained at the principal office of the Manager and shall be open to
inspection and examination by RMG or its representatives at any reasonable time
during the term of this Agreement.
H. Accounting. The Manager shall establish and/or maintain all
accounting, bookkeeping, billing, collections and other financial systems and
records relating to the Systems and the preparation of appropriate monthly
financial reports to be furnished to RMG.
I. Representation. To the extent appropriate, the Manager shall
represent RMG and the Systems before all governmental authorities with respect
to any matter necessary or desirable to the efficient management thereof.
J. Other Responsibilities. The Manager shall perform all other
management services necessary or desirable for the management, operation and
maintenance of the Systems as the Manager, in its reasonable discretion deems
appropriate or necessary in order to manage and operate the Systems. The
enumeration of services to be performed by the Manager herein shall not be
deemed to be exclusive, nor shall such enumeration prevent the Manager from
delegating its authority hereunder to RMG.
K. Cooperation. RMG shall cooperate with the Manager in the performance
of the Manager's duties hereunder and shall execute such documents, instruments
and certificates as may be necessary to evidence the Manager's authority
hereunder, to permit it to collect all revenue of the Systems, or to permit the
Manager to finalize necessary reports, filings, contracts or other matters.
IV. Authority of Manager. Notwithstanding any provision of this
Agreement to the contrary, the Manager shall not take any action under this
Agreement without the consent of the officers of RMG if the Manager is
prohibited from taking such action without the consent of the officers of RMG
under the terms of RMG's Articles. The Manager shall be authorized to perform
all services necessary for the management of the Systems, subject to the
preceding sentence and except that the Manager shall not have the authority to
sell or trade any assets of the Systems. To the extent RMG has entered into an
agreement with InterMedia Management, Inc., a California corporation ("IMI"), to
provide administrative services to the Systems, the Manager shall not be
responsible for providing such services and shall coordinate with IMI with
regard to the administration of the Systems.
V. Compensation of Manager. As compensation for its services hereunder,
the Manager shall be entitled to receive an annual fee of thirty-six thousand
nine hundred eighty four
3
4
dollars ($36,984) payable in quarterly installments in advance on the first
business day of each quarter. Any portion of the such fee which shall be past
due shall bear interest from the date due until paid at the lower of a rate of
ten percent (10%) per annum or the highest amount permitted by law.
VI. Bank Account.
A. Consolidation Accounts. The Manager shall create and maintain bank
accounts (hereinafter referred to as the "Consolidation Accounts") in which the
funds generated by the Systems shall be deposited. All funds in said accounts
from time to time shall be the property of the Systems, but said funds shall be
disbursed from said account by the Manager on the Systems' behalf in accordance
with the provisions of this Agreement. Only such person or persons as are
designated by the Manager or RMG shall have authority to draw checks or drafts
upon or make withdrawals from said accounts.
B. Payments. The Manager shall make or cause to be made all payments of
costs, expenses and charges payable with respect to the operations of the
Systems.
VII. Indemnification.
A. Indemnification by RMG. RMG shall indemnify and defend the Manager,
its partners, employees and control persons and hold them harmless from any and
all claims, damages, liabilities, costs and expenses (including reasonable
attorneys' fees and court costs) which they may incur by reason of the
performance of the Manager's duties on behalf of RMG hereunder, except where
such claims, damages, liabilities, costs and expenses are due to the gross
negligence, fraud or willful misconduct of the Manager and/or such persons.
Notwithstanding the foregoing, the Manager shall not be entitled to
indemnification hereunder with respect to any action or omission by the Manager
to the extent that the Manager would not be entitled to indemnification with
respect to such action or omission under the RMG Articles, had such action or
omission been taken by the Manager.
B. Indemnification by Manager. The Manager shall indemnify, defend and
hold RMG harmless from any and all claims, damages, liabilities, costs and
expenses (including reasonable attorneys' fees and court costs) suffered by RMG
as a result of the Manager's performance of its duties on behalf of RMG
hereunder only where such claims, damages, liabilities, costs and expenses are
due to the gross negligence, fraud or willful misconduct of the Manager, its
partners, employees or control persons, provided, however, the Manager shall not
be responsible for the acts or omissions of employees hired and supervised with
due care.
4
5
VIII. Termination.
A. Termination at Option of RMG. This Agreement shall be terminable at
the option of RMG in the event: (i) the Manager is convicted of a felony which
becomes final following expiration of the applicable appeal period; (ii) the
Manager shall file a voluntary petition in bankruptcy or shall be adjudicated a
bankrupt or insolvent, or shall file any petition or answer seeking or
acquiescing in any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future federal,
state, or other statute, law or regulation relating to bankruptcy, insolvency or
other relief for debtors; or shall seek to consent to or acquiesce in the
appointment of any trustee, receiver or liquidator or shall make any general
assignment for the benefit of creditors, or shall admit in writing its inability
to pay its debts generally as they become due; (iii) a court of competent
jurisdiction shall enter an order, judgment or decree approving a petition filed
against the Manager seeking any reorganization, dissolution or similar relief
under any present or future federal, state or other statute, law or regulation
relating to bankruptcy, insolvency or other relief for debtors, and such order,
judgment or decree shall remain unvacated and unstayed for an aggregate of sixty
(60) days (whether or not consecutive) from the first date of entry thereof; or
any trustee, receiver or liquidator of the Manager shall be appointed without
the consent or acquiescence of the Manager and such appointment shall remain
unvacated and unstayed for an aggregate of sixty (60) days (whether or not
consecutive); (iv) a final judgment shall be rendered against the Manager in
which it is determined that the Manager has engaged in fraudulent conduct (a)
materially and adversely affecting the Manager's ability to discharge its
obligations under this Agreement or (b) against RMG; (v) the Manager shall have
engaged in an act of gross negligence, fraud or willful misconduct, or in a
pattern of conduct wherein it shall have failed to perform its duties hereunder;
or (vi) the dissolution of the Manager. This Agreement shall also be terminable
at the option of RMG upon not less than ninety (90) days' prior written notice
to the Manager if: 1. RMG sells or enters into a contract to sell substantially
all of the assets of the Systems; or 2. any third party service contracts to be
entered into by the Manager on behalf of RMG, which were taken into
consideration by the parties hereto in determining to enter into this Agreement,
are not entered into or are materially changed or the operating economics of RMG
are otherwise materially adversely affected. The giving or receipt of notice to
terminate shall not relieve the Manager of its obligations during the period
prior to the time such termination takes effect.
B. Return of Information. Upon termination of this Agreement, all books
and records in the possession of the Manager relating to the maintenance and
operation of and accounting for the Systems together with all supplies and other
5
6
items of property owned by RMG and in the Manager's possession shall be
delivered to RMG, and the Manager's right to compensation shall cease; provided,
however, that the Manager shall be entitled to be fully compensated for services
rendered prior to the date of termination and shall be entitled to retain copies
of any records necessary to the Manager; and provided further, that the
provisions of Section 9 hereof shall remain in full force and effect and shall
survive such termination.
IX. Confidentiality. The terms of this Agreement and all information
furnished or made available by the Manager or RMG to the other in connection
with this Agreement, whether before or after the date hereof, are confidential
and such terms or information or any part thereof may not be disclosed to any
person or entity other than officers, directors and employees of the parties
hereto, and their accountants, attorneys and investment bankers and other
persons or entities to the extent that such disclosure is necessary for a party
to perform its obligations under this Agreement. The obligations with respect to
the disclosure of confidential information set forth in this Section 9, are not
applicable to confidential information which, according to tangible evidence,
(i) becomes available from a source, other than a party to this Agreement, who
has no obligation of confidentiality with respect to the confidential
information and who did not obtain such information pursuant to a breach of this
Section 9; (ii) is developed independently or is within the knowledge of the
party to whom it is delivered prior to receipt thereof; (iii) is within, or
later falls within, the public domain without breach of this Agreement by the
party hereto receiving such information; or (iv) is required to be disclosed in
connection with any legal proceeding pending before a court or other
governmental entity of competent jurisdiction, provided that the party required
to make such disclosure shall give immediate notice that it is compelled to make
such disclosure so that the other party may, if it so desires, seek a protective
order with respect to the confidentiality of the information covered thereby.
Each party to this Agreement agrees to use its reasonable efforts to protect the
confidential information and prevent its disclosure, publication, or
dissemination to third parties. No party shall be liable for the inadvertent or
accidental disclosure by it of confidential information if such disclosure
occurs despite the exercise of its reasonable efforts to protect the
confidentiality of such information.
X. Miscellaneous.
A. Notices. Except as otherwise provided in this Agreement, any notice,
approval, consent, waiver or other communication required or permitted to be
given or to be served upon any person in connection with this Agreement shall be
in writing and shall be hand delivered (including by messenger or recognized
commercial delivery or courier service), sent facsimile transmission or sent by
registered or certified mail,
6
7
postage prepaid, with return receipt requested addressed to the party intended
at the address set forth below or at such other address as such party may
designate by notice given to the other parties in the manner aforesaid and shall
be deemed given and received on the date it is delivered, in the case of
delivery by hand or by facsimile, or, in the case of delivery by mail, actual
delivery as shown by the addressee's return receipt. Rejection or other refusal
to accept or inability to deliver because of a change of address of which no
notice was given shall be deemed to be receipt of the notice.
To RMG:
Robin Media Group, Inc.
c/o InterMedia Partners
235 Montgomery Street
Suite 420
San Francisco, CA 94104
Telecopy: (415) 397-3978
Attention: Mr. Leo J. Hindery, Jr.
With a copy to:
Pillsbury Madison & Sutro LLP
Post Office Box 7880
San Francisco, CA 94120-7880
Attention: Gregg Vignos, Esq.
To the Manager:
InterMedia Capital Management IV, L.P.
235 Montgomery Street
Suite 420
San Francisco, CA 94104
Telecopy: (415) 397-3978
Attention: Mr. Leo J. Hindery, Jr.
With a copy to:
Pillsbury Madison & Sutro LLP
Post Office Box 7880
San Francisco, CA 94120-7880
Attention: Gregg Vignos, Esq.
B. Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and
assigns subject to all restrictions on the transfer of the interests set forth
in this Agreement.
C. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
ACCORDING TO THE LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD TO CONFLICTS OR
CHOICE OF LAW PRINCIPLES.
7
8
D. Independent Contractor. The Manager and RMG are not partners or
joint venturers with each other and nothing herein shall be construed so as to
make them such partners or joint ventures or impose any liability as such on
either of them.
E. Assignment. No party hereto shall have the right to assign this
Agreement without the written consent of the other party, nor shall this
Agreement or any of the rights or obligations of the parties hereunder be
transferable by operation of law or otherwise, except that either party's
interest may be assigned to: (i) a wholly owned subsidiary of such party; (ii) a
corporation or partnership which owns 100% of the capital interest (either stock
or partnership interest, as the case may be) in such party immediately prior to
such assignment; or (iii) a wholly owned subsidiary of the corporation or
partnership referred to in clause (ii) above; provided, however, that any
assignment to any entity described in clause (i), (ii) or (iii) immediately
above may be made only in the event that the management of such assignee shall
be essentially the same as the management of the assigning party immediately
prior to such assignment.
F. Amendment. This Agreement may not be modified, altered or amended in
any manner except by agreement in writing duly executed by the parties hereto.
G. Attorneys' Fees. If any action, suit or proceeding is brought by any
of the parties hereto arising out of or relating to the Agreement or its breach,
the successful or prevailing party in any such actions, suit or proceeding shall
be entitled to the full amount of its reasonable expenses, including all court
costs and attorneys fees paid or incurred in connection therewith, in addition
to such other relief as such party shall be entitled.
H. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
8
9
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
RMG:
ROBIN MEDIA GROUP, INC., a Nevada
corporation
By /s/ Leo J. Hindery, Jr.
------------------------------
Leo J. Hindery, Jr.
President
THE MANAGER:
INTERMEDIA CAPITAL MANAGEMENT IV, L.P.,
a California limited partnership
By /s/ Leo J. Hindery, Jr.
-------------------------------
Leo J. Hindery, Jr.
Managing General Partner
9