EX-10.4(a)
Managed Affiliate Management Agreement
MANAGED AFFILIATE MANAGEMENT AGREEMENT
This agreement is entered into as of this 30th day of December, 1997, by
and between TRI-STATE BROADCASTING, INC. ("Tri-State"), a Virginia corporation,
and TSB III, LLC, a Virginia limited liability company ("Company").
RECITALS
Tri-State owns and operates radio stations located in the Evansville,
Indiana, Owensboro, Kentucky, area. Company owns, operates, and manages one or
more local broadcast properties in this area and recognizes, therefore, that
Tri-State is in a unique position to render Company valuable services and
support, not now available to Company, and Company therefore, desires to employ
Tri-State as herein provided.
NOW, THEREFORE, in consideration of and relying upon the foregoing and for
other valuable considerations, Tri-State and Company agree as follows:
1. Employment of Tri-State. For the Term (hereinafter defined) Company
employs Tri-State to provide consultation, assistance, and support to Company's
management in the operation, promotion, marketing, and management of Company's
broadcast properties, and Tri-State hereby accepts such employment on the
conditions herein set forth.
2. Tri-State's Services and Relationship. During the Term, Tri-State shall
from time to time consult with counsel and advise Company, its management,
officers, agents, employees, accountants, auditors, and other consultants as, to
the extent, and in the manner Tri-State deems necessary and advisable, in
connection with the management and operation of Company's broadcast properties
and business and shall use its best efforts and judgment in rendering such
services without, however, guaranteeing the result.
3. Relationships. At all times Tri-State is and shall be only an
independent contractor as to Company; with respect to Company's operation and
management Tri-State will be subject to direction and supervision of Company's
officers and management, and no agency, joint venture, or partnership
relationship is intended to be or shall be created by and between Tri-State and
Company by this agreement or Tri-State's performance hereunder.
4. Intent. The basic intent and purpose of this agreement is that
Tri-State's experience and organization be made available
to assist Company in its operations, and Company and Tri-State believe, expect,
and expressly recognize that Tri-State's services and resources to be provided
hereby will be of real, if perhaps intangible, value to Company and will be of
great benefit and advantage to Company in the conduct of its business.
5. Compensation. During the Term, for Tri-State's services hereunder on or
before the 15th day in June and December of each year, Company will pay to
Tri-State the fee (the "Media Affiliate Management Fee") determined as set forth
and described in Attachment 5.1 hereto.
6. Term. The term ("Term") of this agreement shall be for a period ending
fifteen (15) years from its date, and thereafter shall be automatically renewed
for an additional five (5) year period, unless and until such time as either
party shall give the other written notice to terminate at least thirty (30) days
prior to the expiration of the then period.
7. Assignment. This agreement may not be assigned by Tri-State or Company.
8. Virginia Law. This agreement is made pursuant to and the rights of the
parties shall be governed by the laws of the Commonwealth of Virginia.
9. Entire Agreement. This agreement constitutes the entire agreement
between the parties on the subject matter hereof and may be changed, altered, or
amended only by an agreement in writing duly executed by all parties hereto.
IN WITNESS WHEREOF, the parties have hereunto set their signatures as of
the day, month, and year first above written.
Tri-State Broadcasting, Inc.
by:_________________________________
a duly authorized officer
TSB III, LCC
by: Tri-State Management, Inc.
Its manager
by:___________________________
a duly authorized officer
ATTACHMENT 5.1
Managed Affiliate Management Fee
The amount of the "Managed Affiliate Management Fee" (I) shall be
computed and accrued based on Available Media Cashflow and (II) shall be paid
from Net Media Cashflow pursuant to the following formula.
"Media Cashflow" is Net Income plus (or minus): (a) depreciation, (b)
amortization, (c) interest expense, (d) acquisition related charges (such as
consulting or time brokerage fees), (e) other financing related charges, (f)
other non-cash charges, (g) income taxes, (h) (gain) or loss on disposition
of assets, (i) Administrative Management Fees charged pursuant to the
Administrative Management Agreement, and, (j) Managed Affiliate Management
Fees. Media Cashflow represents all the cash that is generated by the
business (aside from timing differences for accrued income and expenses) and
that is available to the business to pay its obligations other than operating
obligations.
"Available Media Cashflow" is Media Cashflow reduced by interest
expense; acquisition related charges paid in cash; other financing related
charges paid in cash; income taxes and distribution in lieu of income taxes;
losses realized in cash on dispositions of assets, and the amount of the Base
Fee.
"Net Media Cashflow" is Media Cash Flow remaining after payment of the
following, in the order listed: debt service; other financing related
charges; acquisition related charges; income taxes and distributions in lieu
of taxes; capital expenditure requirements utilizing cash; working capital
expansion, and the amount of the Base Fee.
(I) The amount of the Managed Affiliate Management Fee shall be computed and
accrued as follows:
A. The "Base Fee" of $10,000.00 per month, and
B. The "Variable Fee" of (i) 75% of the positive amount of
Available Media Cashflow as adjusted below, until such time as the
Administrative Management Fee payable to Brill Media Company, L.P. is
provided for, and (ii) 90% of Available Media Cashflow thereafter.
In computing each of (i) and (ii), Available Media Cashflow shall
be adjusted to provide for the Administrative Management Fee (until
provided for to the full extent of its accrual) to the extent of 20% of
the positive amount of Available Media Cashflow.
(II) After the Base Fee has been paid and the Variable Fee has been accrued
in its entirety, the Variable Fee shall be paid from Net Media Cashflow as
follows:
(i) 20% of the amount of Net Media Cashflow shall be applied to
payment of the accrued Administrative Management Fee, until the accrual is
paid in full, and (ii) 75% of the amount of Net Media Cashflow shall be
applied to payment of the Variable Fee, until the Administrative Management
Fee is paid in full, and then (iii) 90% of Net Media Cashflow shall be
applied to payment of the Variable Fee until paid in full.