Exhibit 10.3

 

Information in this exhibit identified by [***] is confidential and has been
excluded pursuant to Item 601(b)(10)(iv) of Regulation S-K because it is both
(i) not material and (ii) would likely cause competitive harm to the registrant
if publicly disclosed.

 

MANAGEMENT AGREEMENT

 

THIS MANAGEMENT AGREEMENT (this “Agreement”) is entered into as of November 25,
2019 (the “Effective Date”) by and between Emmis Operating Company, an Indiana
corporation (“Management Company”), and MediaCo Holding Inc., an Indiana
corporation (“Mediaco”).  Management Company and Mediaco are sometimes referred
to together in this Agreement as the “Parties” and each individually as a
“Party.”  All capitalized terms used but not specifically defined in this
Agreement shall have the meanings ascribed to such terms in the Contribution
Agreement (as defined below).

 

RECITALS

 

WHEREAS, Management Company’s parent, Emmis Communications Corporation (“ECC”),
SG Broadcasting LLC and Mediaco have entered into that certain Contribution and
Distribution Agreement, dated as of June 28, 2019 (the “Contribution
Agreement”);

 

WHEREAS, in connection with the transactions contemplated by the Contribution
Agreement, ECC and Management Company have contributed to Mediaco substantially
all of the assets and business relating to radio stations WBLS-FM and WQHT-FM
(together, the “Stations”); and

 

WHEREAS, the Parties desire to enter into this Agreement to provide for the
management by Management Company, as set forth herein, of the Stations in New
York, NY, and, to the extent consented to by Management Company, other
businesses acquired or created by Mediaco (collectively, the “Business”).

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the premises and the mutual promises
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

1.                                      Retention.

 

(a)                                 Mediaco hereby retains Management Company,
and Management Company hereby agrees to serve, on the terms and conditions set
forth herein, as the management company to the Stations.  Management Company, on
behalf of itself and the Managers (as defined below), covenants to use
professional skill and prudent business judgment in performing its duties and
responsibilities as set forth herein.  The parties acknowledge that Management
Company and the Managers’ service hereunder is not exclusive, and that
Management Company and the Managers may manage stations and businesses
separately from those set forth in this Agreement and the transactions
contemplated by the Contribution Agreement.

 

(b)                                 The Management Services (as defined below)
are for (i) the direct management of the Stations, and (ii) the overall
management of Mediaco’s financial reporting, SEC compliance and other similar
obligations as a public company.  If Mediaco acquires additional businesses,
Mediaco and Management Company will have good faith discussions on the terms, if
any, under

 

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which Management Company would directly manage such acquired businesses and will
amend this Agreement to reflect any agreement coming out of those discussions. 
For avoidance of doubt, even if Management Company is not engaged to directly
manage such additional businesses, Management Company shall continue to provide
the public company-related services for Mediaco.

 

2.                                      Responsibilities.

 

(a)                                 Generally.  Subject in all respects to the
ultimate authority of Mediaco, such authority to be exercised in good faith
compliance with applicable law, Management Company shall in good faith make
decisions with respect to the operation and management of the Stations and the
Business in providing the management functions and services set forth on
Schedule A attached hereto (the “Management Services”).  The initial officers of
Mediaco shall be the individuals listed on Schedule B as officers of Mediaco, to
serve in the capacities set forth opposite their names and to have the power and
authority commensurate with such capacities.  Management Company shall make
available to Mediaco the senior executives of Management Company set forth on
Schedule C (as the same may be substituted or replaced from time to time by
Management Company, the “Managers”) to serve as officers of Mediaco and to
provide the services to Mediaco contemplated by this Agreement; provided that
any attorneys employed by Management Company who are providing Management
Services shall be officers of Mediaco.    In the event that an individual
Manager is terminated by Management Company or otherwise terminates his or her
employment with Management Company, Management Company agrees to engage in good
faith consultation with Mediaco with respect to the replacement of services
provided by any such Manager, either by replacement of such Manager or by the
absorption by the remaining Managers of the responsibilities of the outgoing
Manager; provided, that (A) if Management Company elects to replace the outgoing
Manager, such replacement shall be capable of providing an equivalent level of
service to Mediaco as the outgoing Manager; or (B) if Management Company elects
not to replace the outgoing Manager, the existing Managers shall, in the
aggregate, provide an equivalent level of service to Mediaco hereunder as the
outgoing Manager without a material diminution in the aggregate level of
Management Services provided to  Mediaco hereunder.  Mediaco shall have the
right to appoint any replacement Manager as an officer of Mediaco, to serve in
the capacities designated by Mediaco and to have the power and authority
commensurate with such capacities.  In performing the Management Services,
Management Company agrees, on behalf of itself and the Managers, to use
commercially reasonable efforts to make such decisions and take such actions as
are materially consistent with, and not in contravention of, the provisions of
this Agreement, the Contribution Agreement, and the governing documents of
Mediaco effective as of the date hereof (as amended and/or restated from time to
time with, in the case of this Agreement or the Contribution Agreement, the
consent of Management Company, such consent not to be unreasonably withheld,
conditioned or delayed, the “Governing Agreements” and, together with this
Agreement and the Contribution Agreement, the “Transaction Documents”). 
Management Company hereby represents and warrants to Mediaco that the services
provided under this Agreement constitute all of the services necessary to run
the Stations and the Business in substantially the same manner as immediately
prior to this Agreement.

 

(b)                                 Sources of Funds.  Any and all payments,
disbursements, liabilities and financial obligations in connection with
Mediaco’s operations and actions, including without limitation any matter that
is the subject of the duties and responsibilities of Management Company
hereunder,

 

2

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shall be solely for the account of Mediaco, subject to and taking into account
the provisions of Section 4 below, and shall be made solely from and only to the
extent of such sums as are available in the operating account of Mediaco or
otherwise approved by Mediaco.  Management Company shall not be obligated to
make any advance to or for the account of Mediaco or to pay any sum, liability,
expense or obligation of Mediaco, except from funds held or provided by Mediaco.

 

(c)                                  Transaction Documents.  All actions taken
by Management Company and each Manager under the provisions of this Section 2
shall be taken as agent of Mediaco and shall be taken by Management Company or
by the individual Manager in a manner that Management Company or the individual
Manager reasonably believes to be consistent with, and not in violation of, or
reasonably likely to cause or create a default under, the Transaction
Documents.  Management Company has been provided with copies of and/or is a
party to the Transaction Documents, and expressly agrees that its management of
the business and affairs of Mediaco is limited to the extent set forth therein.

 

(d)                                 Benefit Plans and other Systems. For so long
as Management Company is providing Management Services relating to the following
systems, Mediaco shall use commercially reasonable efforts to implement the same
or substantially similar benefit plans, payroll processing, accounting, treasury
management and other systems as are used by Management Company in the conduct of
its business for the benefit of the Leased Employees (as defined in the Leasing
Agreement).  To the extent that different plans or systems are used by Mediaco,
Management Company shall use commercially reasonable efforts to manage such
plans and systems, but Mediaco acknowledges and agrees that Mediaco shall engage
additional personnel or incur additional expense to the extent reasonably
required to manage the implementation, operation and administration of such
plans and systems.

 

3.                                      Compensation.  Mediaco shall pay
Management Company, and Management Company shall accept as full compensation for
Management Company and/or Managers’ services in accordance with this Agreement,
an annual management fee (the “Management Fee”) equal to $1,250,000.  Mediaco
shall pay the Management Fee monthly in an amount equal to one-twelfth (1/12) of
the Management Fee no later than five (5) business days following the end of
each month.  Management Company shall have no right to receive a Management Fee
after the expiration or earlier termination of this Agreement, except for such
Management Fees as are earned through the termination date.  The Management Fee
for any partial month or year shall be pro-rated based upon the number of days
in such month or the number of days in such year.  The parties agree to
negotiate in good faith a reasonable increase in the Management Fee to reflect
any increases in the costs incurred by Management Company with respect to any
new businesses acquired by Mediaco that Management Company is not directly
managing or any material increase in the activities of the Stations.  Further,
if, with respect to actions taken pursuant to clause (A) or (B) of Section 2(a),
the aggregate compensation payable by Management Company to all Managers
declines by more than ten percent (10%), the parties agree to negotiate in good
faith a reasonable decrease in the Management Fee to reflect any decreases in
the level of services being provided by Management Company hereunder.

 

3

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4.                                      Expenses.

 

(a)                                 Generally.  Management Company shall not be
entitled to receive from Mediaco reimbursement for (i) any wages or benefits of
Management Company employees (other than those pursuant to that certain Employee
Leasing Agreement between the Parties of even date herewith (the “Leasing
Agreement”) and other than with respect to two (2) non-executive Management
Company digital employees for whom the wages and benefits shall be split evenly
between Mediaco and Management Company), or (ii) any out-of-pocket expenses
incurred by Management Company in the conduct of those portions of Management
Company’s business that are not Management Services under this Agreement, but
shall be entitled to reimbursement for any (A) out-of-pocket costs incurred
directly for the benefit of Mediaco (e.g., legal, accounting and other third
party costs, as well as travel and similar expenses, incurred for the benefit of
Mediaco), and  (B) any Incremental Costs (as defined below).  Management Company
will use commercially reasonable efforts to operate the Business in accordance
with the annual budget established by Mediaco, but Mediaco acknowledges and
agrees that neither Management Company nor any Manager shall be liable for any
expenses in excess of such budget that are incurred in good faith by Management
Company.  For the avoidance of doubt, Management Company shall not be permitted
to be reimbursed for the same costs under both this Agreement and the Leasing
Agreement.  “Incremental Costs” means any incremental out-of-pocket costs
incurred by Management Company for goods or services that are necessary for the
provision of the Management Services as well as for other business activities of
Management Company, and that can be reasonably demonstrated by Management
Company to represent an increase to the cost for such goods or services as
compared to the cost that would have been incurred by Management Company for
such goods or services if it were not providing the Management Services. 
Incremental Costs shall not include any allocation of a portion of any costs
that would have been incurred by Management Company regardless of its provision
of the Management Services.

 

(b)                                 Reimbursable Costs.

 

1.                                      Management Company shall invoice Mediaco
on or before the [***] of each month for the estimated costs and expenses
incurred by Management Company under this Agreement (other than the Management
Fee) for such month plus a true-up of the actual to estimated expenses incurred
by Management Company under this Agreement for any prior months (the “Invoice”),
and Mediaco shall pay such amount on or before the [***] of such month.  Upon
Mediaco’s request, Management Company shall provide Mediaco with reasonably
detailed information to verify the accuracy of any Invoice, including an
itemized list of all third party fees or expenses.  If, at any time during the
[***] period following the delivery of an Invoice, Mediaco delivers to
Management Company in writing a dispute notice, then the Parties shall use
commercially reasonable efforts to resolve the disputes set forth in such notice
during the [***] period commencing on such delivery.  If, following such [***]
period, the dispute between the Parties is not resolved, then the Parties shall
engage a mutually agreed upon accounting firm to resolve the dispute.  The final
decision of the accounting firm shall be mutually binding on both Parties.  The
costs associated with the engagement of the accounting firm shall be borne
equally by the Parties.  During such period of time that the Invoice is under
dispute, the interest rate penalty set forth in Section 4(b)(2) will be tolled
and will not accrue with respect to the disputed amount.

 

2.                                      Subject to Section 4(b)(1), Mediaco
agrees to pay interest to Management Company for any past due amounts that are
not disputed by Mediaco in good faith at the lesser of

 

4

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the highest rate allowable by law or [***] from the due date until such amounts
are paid. In addition, Mediaco shall promptly reimburse Management Company for
all reasonable costs incurred in collecting any past due amounts, including but
not limited to reasonable attorneys’ fees and expenses.  This section shall not
limit or waive any other legal and equitable rights and remedies Management
Company shall have under this Agreement for a delinquent payment.

 

(c)                                  Non-Reimbursable Costs.  For the avoidance
of doubt, the following expenses or costs incurred by Management Company in
connection with the performance of its duties hereunder will be at the sole cost
and expense of Management Company and will not be reimbursed by Mediaco:

 

1.                                      except as set forth in Section 4(a),
cost of salary and wages, payroll taxes, insurance, worker’s compensation and
other benefits of the Management Company’s employees and any other agents or
consultants of the Management Company (excluding Leased Employees, and excluding
agents and consultants retained by the Management Company to perform services on
behalf of Mediaco);

 

2.                                      the cost of all rent, utilities,
telecommunications, data processing, administration and related expenses with
respect to the Management Company’s primary office space in Indianapolis or any
secondary space outside the New York metropolitan area, other than under the
Antenna Site Agreement of even date herewith (WBLS back up antenna) and other
than Incremental Costs such as those related to:  Unclaimed Property, 1099
Prepare and Mail, Accounting and tax research software, Stock option
administration software, Bank Service Fees, LinkedIn recruiting tools, HRIS
system fees, General ledger system, Hardware and software maintenance, Data
backup and redundancy, teleconferencing systems, Corporate
telecom/data/network, ITGC Audit, or Insurance agent; and

 

3.                                      dues of the Management Company or of any
of its employees (other than Leased Employees) in professional organizations or
the cost of any of the Management Company’s employees (other than Leased
Employees) participating in industry conventions, meetings or other functions,
and all subscriptions, newsletters and other trade or industry periodicals
(including online services) other than subscriptions, newsletters and other
trade or industry periodicals used by Leased Employees.

 

5.                                      Management Company Covenants.

 

(a)                                 Management Company shall, at Management
Company’s non-reimbursable expense, maintain its legal existence and good
standing and obtain and maintain in effect all licenses and permits not directly
attributable to Mediaco or the Business that are necessary or desirable to carry
out its duties hereunder (other than licenses and permits directly attributable
to the Stations or the Business).

 

(b)                                 Management Company will maintain (except
under and subject to the terms and conditions of the Leasing Agreement) workers’
compensation and similar insurance as required by applicable Laws and shall
maintain (at its own expense to the extent not attributable to the operations of
the Stations or the Business) commercial general liability insurance and such
other

 

5

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insurance coverage for its own operations as is reasonably comparable to
prevailing industry standards.  Such insurance shall be in addition to any
insurance, including but not limited to directors and officer’s insurance,
obtained by or on behalf of Mediaco with respect to which Management Company
shall be an additional insured.

 

(c)                                  Upon the written request of Mediaco
following its determination that such individual has engaged in conduct or whose
acts or omissions otherwise satisfy the criteria for a termination for “Cause,”
Mediaco shall if applicable terminate such Manager’s status as an officer of
Mediaco and Management Company shall terminate the employment of such employee
of Management Company (including any Leased Employee) with respect to the
provision of services under this Management Agreement.  For purposes of this
Agreement, “Cause” means, with respect to any Person, any of the following:
(1) the making of dishonest statements or acts with respect to Mediaco or any of
its Affiliates (as defined in the Contribution Agreement); (2) the commission
of, or indictment for, (A) a felony or (B) any misdemeanor involving moral
turpitude, deceit, dishonesty or fraud (“indictment,” for these purposes,
meaning an indictment, probable cause hearing or any other procedure pursuant to
which an initial determination of probable or reasonable cause with respect to
such offense is made); (3) the material and sustained failure to perform, to the
reasonable satisfaction of Mediaco, the duties and responsibilities assigned or
delegated under this Agreement, which failure continues, after notice to such
Person specifying in reasonable detail the basis for asserting such failure, for
an unreasonable period of time, as determined by Mediaco (but in no event less
than [***] after such notice); or (4) the material breach of this Agreement and,
to the extent such breach is curable, which breach remains uncured following
notice thereof (providing in reasonable detail the basis for asserting such
breach) and the expiration of [***] thereafter.

 

(d)                                 Management Company will not, and will cause
the Managers not to, without the prior written approval of the Approval
Committee (as defined below), take any of the following actions with respect to
Mediaco, the Stations or the Business, or directly or indirectly cause Mediaco
or its Affiliates to:

 

1.                                      take any action that adversely affects
the preferences, power, rights or privileges of any class of equity securities
of Mediaco;

 

2.                                      enter into any agreement, whether
written or oral, relating to the lease, license, sale or other disposition of
the assets or equity securities of any of Mediaco;

 

3.                                      enter into any agreement, written or
oral, or otherwise obligate Mediaco, to issue any equity securities, debt or
debt convertible into or exchangeable for equity securities;

 

4.                                      acquire or invest in any new business
(whether effected by stock or asset acquisition, consolidation, merger or
otherwise);

 

5.                                      adopt or materially alter any budget of
Mediaco;

 

6.                                      enter into, or obligate Mediaco to enter
into, any new line of business;

 

7.                                      change the size, composition or powers
of the board of Mediaco, or any committee thereof, including the formation of
any new committee;

 

6

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8.                                      make any change to, appoint or terminate
any member of senior management, including without limitation, the General
Manager (defined below) or      of Mediaco;

 

9.                                      enter into any transaction or agreement
between Mediaco, on the one hand, and any officer, director, member, employee or
other Affiliate of Mediaco or Management Company, or persons controlling,
controlled by, under common control with or otherwise affiliated with such
officer, director, member or employee, including any Affiliate of Management
Company, on the other hand; provided that this prohibition shall not apply to
any cost sharing arrangements to which Mediaco consents where a third party
provides goods or services to both Management Company (and/or its Affiliates)
and Mediaco and the costs are allocated using a reasonable allocation method;

 

10.                               enter into any material litigation or any
material settlement, or make any other material decision with respect to any
litigation, arbitration, mediation, investigation or similar proceeding
involving Mediaco, the Stations or the Business (including any bankruptcy
proceeding in which Mediaco has an interest);

 

11.                               incur or issue any indebtedness for borrowed
money (including without limitation capital leases), or grant any mortgage,
security interest or any other lien on any assets;

 

12.                               execute, amend or otherwise modify or renew
any retransmission consent or network affiliation agreement, any joint venture,
partnership, local marketing agreement, shared services agreement or joint sales
agreement, or any material agreement with any other owner or operator of
broadcast radio or television stations (including any contract or agreement that
would restrict Mediaco or its Affiliates from entering into any line of business
or acquiring or disposing of any securities, indebtedness or other assets, or
conducting any other business activities), or any multi-station contract;

 

13.                               effect a conversion or other change in the
status or tax status of Mediaco;

 

14.                               adopt or amend any incentive plan, employee
unit ownership plan or phantom unit or similar plan, or other employee benefit
plan, policy, arrangement or practice for Mediaco (such restriction not to apply
to Management Company’s employees that provide services to Mediaco under the
Leasing Agreement);

 

15.                               hire or engage an investment banker or broker
on behalf of Mediaco;

 

16.                               take any action or waive any rights on behalf
of Mediaco with respect to the Transaction Documents, including the exhibits or
schedules thereto, including, without limitation, initiating or defending any
lawsuit or proceeding, or initiating any claim for indemnity thereunder
(provided that this provision shall not in any way affect or limit Management
Company’s or ECC’s right to assert claims and otherwise defend its rights under
the Transaction Documents);

 

17.                               dissolve, liquidate or wind-up the operations
of any of Mediaco;

 

18.                               effect any sale, merger, consolidation,
refinancing or restructuring of Mediaco or all or substantially all of its
assets;

 

7

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19.                               amend the organizational documents of Mediaco;

 

20.                               declare or pay any dividend or make any
distribution, or redeem or acquire any equity securities of Mediaco; or

 

21.                               enter into any agreement to do any of the
foregoing.

 

Mediaco acknowledges that Mediaco’s failure to timely take action with respect
to any of the foregoing could adversely impact Mediaco and the Business.  For
the purposes of this Section 5, the “Approval Committee” means a duly
constituted and empowered committee of the board of directors of Mediaco
dedicated to the responsibility of approving the matters set forth in this
Section 5 and comprised of one individual who shall initially be David Glazek.

 

6.                                      Notices.  Without limiting any other
obligations hereunder or under the Transaction Documents, Management Company
shall provide notice to Mediaco of the following:

 

(a)                                 (i) any litigation affecting the Stations,
the Business, Mediaco or its assets; (ii) upon becoming aware, or receiving
notice, of any threatened litigation that could reasonably be expected to have
an adverse effect on the Stations, the Business and/or Mediaco, and (iii) any
litigation affecting Management Company or the Managers that could reasonably be
expected to have an adverse effect on Management Company and its ability to
perform its duties hereunder promptly upon Management Company becoming aware
thereof;

 

(b)                                 upon notice, or becoming aware, of a
violation of any material agreement of Mediaco that is likely, if not cured, to
have an adverse effect on the Stations, the Business and/or Mediaco;

 

(c)                                  prompt notice upon becoming aware of the
commission of any act or omission or other conduct by an employee of Mediaco,
Management Company or the Managers, including any Leased Employee which
constitutes or could reasonably be likely to constitute “Cause”; and

 

(d)                                 prompt notice of the receipt of any notice
under the Contribution and Distribution Agreement or any notice or request from
the Federal Communications Commission.

 

7.                                      Term.  The term of this Agreement shall
commence on the Effective Date and, unless earlier terminated in accordance with
Section 8, remain in full force and effect following the Effective Date for a
term of two (2) years (the “Initial Term” as extended pursuant to this
Section 7, the “Term”); provided that following the Initial Term, the Term shall
automatically continue for successive one (1) year periods.

 

8.                                      Termination.

 

(a)                                 During the Initial Term, Mediaco may
terminate this Agreement in its discretion for any reason upon six (6) months’
prior written notice of termination to Management Company; provided that if the
termination is effective prior to the end of the eighteenth month after the
Effective Date, Mediaco shall continue to pay Management Company the Management
Fee through the end of the [***] after the Effective Date as if the Agreement
were in full force and effect.

 

8

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(b)                                 Following the Initial Term, either Party may
terminate this Agreement by providing the other Party written notice of
termination, in which case, the Term shall end and the Agreement shall terminate
six (6) months’ after delivery of such written notice (which may, for the
avoidance of doubt, be delivered at any time after the date that is [***] after
the Effective Date).

 

(c)                                  Mediaco may at any time and for any reason
terminate one or more categories of Management Services set forth on Schedule A
at Mediaco’s convenience, whereupon the parties shall agree in good faith on a
reduction of the Management Fees to account for such terminated Management
Services; provided that if such termination is effective prior to the end of the
[***] after the Effective Date, no such reduction of the Management Fees shall
be effective until after the end of the [***] after the Effective Date.

 

(d)                                 Any Party may terminate this Agreement in
the event of material breach of any provision of this Agreement by another Party
hereto by giving notice to the defaulting Party, and:

 

1.                                      If such breach is for nonpayment of an
amount that is not in dispute, the defaulting Party shall cure the breach within
[***] of receipt of such notice.  If the defaulting Party does not cure such
breach by such date, then the non-defaulting Party shall have the right to
terminate this Agreement effective immediately upon notice to the defaulting
Party.  The defaulting Party shall remain liable to the non-defaulting Party for
any amounts due to the non-defaulting Party through the end of the cure period.

 

2.                                      If such breach is for any other material
failure to perform in accordance with this Agreement, the defaulting Party shall
cure such breach within [***] of the date of its receipt of such notice.  If the
defaulting Party does not cure such breach within such period, then the
non-defaulting Party shall have the right to terminate this Agreement effective
immediately upon notice to the defaulting Party.

 

(e)                                  The provisions of Sections 4 (with respect
to any expenses or costs incurred prior to any termination of the Agreement), 8,
11, 13 and 15 through 24 shall survive the termination or expiration of this
Agreement unless otherwise agreed to in writing.

 

9.                                      Entire Agreement.  This Agreement, the
Contribution Agreement and other documents referred to herein or therein shall
constitute the entire agreement between the Parties with respect to the subject
matter hereof and shall supersede all previous negotiations, commitments and
writings with respect to such subject matter.

 

10.                               Notices.  All notices, requests, claims,
demands and other communications to be given or delivered under or by the
provisions of this Agreement shall be in writing and shall be deemed given only
(i) when delivered personally to the recipient, (ii) one (1) Business Day after
being sent to the recipient by reputable overnight courier service (charges
prepaid), provided that confirmation of delivery is received, (iii) upon
machine-generated acknowledgment of receipt after transmittal by facsimile
(iv) five (5) days after being mailed to the recipient by certified or
registered mail (return receipt requested and postage prepaid), or (v) the date
such delivery is made (or, if such date is not a Business Day, the next
subsequent Business Day), if delivered via email to the Operational Email
Address (as defined below) of the other Party set forth below.  Such

 

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notices, demands and other communications shall be sent to the Parties at the
following addresses (or at such address for a Party as will be specified by like
notice):

 

If to Management Company:

 

One Emmis Plaza, Suite 700

40 Monument Circle

Indianapolis, Indiana 46204

Telephone: 317.684.6565

Facsimile: 317.684.5583

Attention: Legal Department

Operational Email Address:  legal@emmis.com

 

with a copy (which shall not constitute notice) to:

 

Taft Stettinius & Hollister LLP
One Indiana Square, Suite 3500

Indianapolis, Indiana 46204

Telephone: 317.713.3569
Facsimile: 317.713.3699
Attention: Ian D. Arnold

 

If to Mediaco:

 

MediaCo Holding Inc.

C/O SG Broadcasting LLC

767 Fifth Ave, 12th Floor

New York, NY 10153

Attention: Gail Steiner, General Counsel

Tel:        

Fax:       

Operational Email Address:

 

with a copy (which shall not constitute notice) to:

 

Morgan, Lewis & Bockius LLP
1701 Market Street

Philadelphia, PA 19103

Telephone: 215.963.5061
Facsimile: 215.963.5001
Attention: Justin W. Chairman

 

Any Party to this Agreement may notify any other Party of any changes to the
address or any of the other details specified in this paragraph; provided that
such notification shall only be effective on the date specified in such notice
or five (5) Business Days after the notice is given, whichever is later. 
Rejection or other refusal to accept or the inability to deliver because of
changed address of which no notice was given shall be deemed to be receipt of
the notice as of the date of such rejection, refusal or inability to deliver.

 

11.                               Non-Competition; Non-Solicitation.

 

(a)                                 During the Term and for the applicable
“Post-Term Non-Compete Period” (as defined below), neither any Manager (to the
extent permitted by applicable law), nor Management

 

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Company, nor any of its Affiliates shall, without the prior written approval of
Mediaco, directly or indirectly through an entity controlled by any of them,
whether as an owner, partner, shareholder, member of a limited liability
company, guarantor, surety, co-venturer or otherwise, either (i) engage or
participate in or (ii) make any investment, directly or indirectly, in the debt
or equity securities (an “Investment”) of, any business that owns or operates
any broadcasting business in New York City (each, a “Competitive Business”);
provided, however, that (x) Management Company, the Managers or their Affiliates
shall be permitted to make Investments in securities of publicly traded
companies engaging in a Competitive Business that in the aggregate do not
constitute more than [***] of any such publicly traded company’s total
outstanding equity, and (y) this restriction shall not apply to the ownership or
operation of any radio station owned or operated by Management Company or its
Affiliates as of the Effective Date.  The “Post-Term Non-Compete Period” shall
mean (1) with respect to the Management Company and any of its Affiliates, a
period of [***] following the Term and (2) with respect to any Manager subject
to an employment agreement with Management Company (other than Managers residing
in a state that prohibits non-competition or similar agreements as applicable to
such Managers), a period of [***] following the earlier of (A) termination of
such Manager’s employment relationship with Management Company or any of its
Affiliates and (B) the end of the Term; provided that if such Manager is hired
by Management Company or any of its Affiliates during such Manager’s Post-Term
Non-Compete Period, such Post-Term Non-Compete Period shall end and a new
Post-Term Non-Compete period shall begin in accordance with this clause (2).

 

(b)                                 During the Term and until the end of the
[***] of the date of termination of the Leasing Agreement, neither Management
Company, the Managers nor any of its Affiliates shall, directly or indirectly,
solicit for employment or attempt to hire, employ or solicit for employment any
then-current employee of Mediaco or its Affiliates whom Management Company, the
applicable Manager or applicable Affiliate managed under this Agreement during
the Term; provided that this provision shall not prohibit Management Company
from employing such employees to provide part time services to Management
Company in a manner consistent with past practices with respect to Management
Company’s operation of radio stations WEPN-FM or WLIB-AM, and provided further
that this provision shall not prohibit general solicitations of employment not
targeted at any employee of Mediaco or its Affiliates.

 

(c)                                  During the Term and until the end of the
[***] of the date of termination of the Leasing Agreement, neither Mediaco,
Standard General, nor any of their respective Affiliates shall, directly or
indirectly, except as contemplated by the Leasing Agreement, solicit for
employment or attempt to hire, employ or solicit for employment any then-current
employee of Management Company or its Affiliates to whom Mediaco, Standard
General or its applicable Affiliate were introduced by Management Company or its
Affiliates during the Term or in connection with the negotiation of the
transactions contemplated by the Transaction Documents; provided that this
provision shall not prohibit general solicitations of employment not targeted at
any employee of Management Company or its Affiliates.

 

12.                               Confidentiality.  Management Company
acknowledges that it will have access to confidential and proprietary
information of Mediaco and agrees that it shall use such information only in
furtherance of its performance under this Agreement, shall not disclose or use
for any other purpose such information and shall cause the Managers to comply
with this confidentiality

 

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provision.  Management Company shall have no obligation to keep confidential any
information that: (i) is or becomes generally known or available by publication,
commercial use or otherwise through no action or fault of Management Company;
(ii) is known, without violation of any obligation hereunder, and has been
reduced to tangible form by Management Company prior to the time of disclosure
and is not subject to restriction; (iii) is independently developed by
Management Company without reference to Mediaco’s confidential information; or
(iv) is lawfully obtained from a third party who has the right to make such
disclosure. In the event that Management Company or a Manager receives a request
or becomes legally required to disclose any confidential and proprietary
information of Mediaco under the terms of a valid and effective subpoena or
order issued by a court of competent jurisdiction or in an investigatory, legal,
regulatory or administrative proceeding, Management Company agrees to, to the
extent permitted by law, (i) immediately notify Mediaco of the existence, terms
and circumstances surrounding such requirement, (ii) consult with Mediaco on the
advisability of taking legally available steps (all at Mediaco’s cost and
expense) to resist or narrow such requirement, and (iii) if disclosure of such
information is required, use its best efforts to cooperate with Mediaco in its
efforts to obtain an order or other reliable assurance that confidential
treatment will be accorded to such information.  Notwithstanding any of the
foregoing, Management Company may disclose confidential and proprietary
information of Mediaco, following prior notice to Mediaco, to any regulatory
authority (including any self-regulatory authority) with jurisdiction over
Management Company in connection with any routine examination, investigation,
regulatory sweep or other regulatory inquiry.

 

13.                               Right to Audit.  Mediaco shall have, upon
reasonable prior notice and during normal working hours, the right to conduct
audits and examinations of, and to make copies of, the books and records of
Management Company relating to the Stations or to Mediaco (to the extent related
to the Business), no matter where such books and records are located.  Such
right may be exercised through any agent or employee of Mediaco or any certified
public accountant or other representative designated by Mediaco.  In the event
that Mediaco discovers either a material weaknesses in internal control or
material errors in record keeping, Management Company will use commercially
reasonable efforts to correct such discrepancies promptly upon Mediaco’s written
request and reasonable recommendation and will inform Mediaco in writing of the
action taken to correct such audit discrepancies.  All audits conducted by or on
behalf of Mediaco will be at its sole expense and shall not take place more than
once annually absent any finding of material weaknesses in internal control or
material errors in record keeping.

 

14.                               Assignment.  Neither this Agreement nor any of
the rights, benefits or obligations hereunder may be assigned by any of the
Parties (whether by operation of law or otherwise) without the prior written
consent of the other Parties, and any purported assignment without such consent
shall be null and void.  Subject to the preceding sentence, this Agreement will
be binding upon, inure to the benefit of and be enforceable by the Parties and
their respective successors and permitted assigns.

 

15.                               Limitation on Liability and Indemnification.

 

(a)                                 Neither the Management Company, nor its
Affiliates or any officer, director, employee, partner, manager or other agent
of Management Company or its Affiliates (“Management Agents”) will have any
liability to Mediaco hereunder for any action under this

 

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Management Agreement unless such conduct is not taken in accordance with the
standards of conduct under Indiana Code 23-1-35-1 (taking into account
Management Company’s obligations under this Agreement), and the failure to meet
that standard has been judicially determined to have constituted fraud,
recklessness or willful misconduct.  The Parties agree that Indiana Code
23-1-35-1 is the standard of conduct applicable to directors of an Indiana
corporation, that Mediaco is an Indiana corporation, that the same standard that
applies to the directors of Mediaco should apply to the Management Agents, and
that such standard is different than the standard of conduct applicable to
directors of a Delaware corporation (see, the Official Indiana Comment to
Indiana Code 23-1-35-1).

 

(b)                                 Mediaco hereby agrees to indemnify defend
and hold harmless Management Company, Managers and their respective Affiliates
and any of their respective current or former officers, directors, employees,
partners, managers or other agents (individually and collectively, “Indemnified
Person”) from any and all loss, liability, cost and expense (including but not
limited to reasonable attorneys’ fees and expenses) incurred by the Indemnified
Person in connection with, arising from or related to the performance by it of
its obligations hereunder or otherwise related to Mediaco or the Business,
except if such loss, liability, cost or expense results from fraud, recklessness
or willful misconduct of Management Company.  To the extent permitted by law,
Mediaco will reimburse each Indemnified Person for the reasonable out-of-pocket
costs and expenses (including attorneys’ fees and expenses) of investigating,
preparing for and responding to any actual or threatened action, claim, suit,
investigation or proceeding or enforcing this Agreement, as they are incurred;
provided that Management Company shall promptly reimburse Mediaco for any
amounts advanced to the extent that a court of competent jurisdiction determines
that an Indemnified Person acted fraudulently, recklessly or engaged in willful
misconduct.

 

(c)                                  Management Company hereby agrees to
indemnify defend and hold harmless Mediaco and its Affiliates for any and all
loss, liability, cost and expense (including but not limited to reasonable
attorneys’ fees and expenses) incurred by Mediaco or its Affiliates arising out
of the fraud, recklessness or the willful misconduct of Management Company or
any Manager.  The maximum liability of the Management Company or Mediaco in
respect of an indemnification claim under this Section 15 shall not exceed [***]
hereunder; provided, however, that the foregoing limitation shall not apply to
any claims based on, related to or in connection with fraud, willful misconduct
and/or a breach of the provisions of Sections 11 and 12 of this Agreement.

 

16.                               Governing Law; Waiver of Jury Trial.

 

(a)                                 Except as otherwise set forth in this
Agreement, this Agreement and all issues and questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by, and construed in accordance with, the Laws of the State of
Delaware, without giving effect to any choice of law or conflict of law rules or
provisions (whether of the State of Delaware or any other jurisdiction) that
would cause the application of the Laws of any jurisdiction other than the State
of Delaware.  In furtherance of the foregoing, the internal Laws of the State of
Delaware shall control the interpretation and construction of this Agreement,
even though under that jurisdiction’s choice of law or conflict of law analysis,
the substantive Law of some other jurisdiction would ordinarily apply.

 

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(b)                                 AS A SPECIFICALLY BARGAINED INDUCEMENT FOR
EACH OF THE PARTIES TO ENTER INTO THIS AGREEMENT (WITH EACH PARTY HAVING HAD
OPPORTUNITY TO CONSULT COUNSEL), EACH OF THE PARTIES EXPRESSLY AND IRREVOCABLY
WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING UNDER THIS
AGREEMENT OR ANY ACTION OR PROCEEDING ARISING OUT OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR ANY OTHER TRANSACTION AGREEMENT, REGARDLESS OF WHICH
PARTY INITIATES SUCH ACTION OR PROCEEDING, AND ANY ACTION OR PROCEEDING UNDER
THIS AGREEMENT OR ANY ACTION OR PROCEEDING ARISING OUT OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR ANY OTHER TRANSACTION AGREEMENT SHALL BE TRIED IN A COURT
OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

 

17.                               Jurisdiction; Service of Process.  ANY ACTION
WITH RESPECT TO THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS ARISING HEREUNDER,
OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT OF THIS AGREEMENT
AND THE RIGHTS AND OBLIGATIONS ARISING HEREUNDER BROUGHT BY THE OTHER PARTY OR
PARTIES OR THEIR SUCCESSORS OR ASSIGNS, IN EACH CASE, SHALL BE BROUGHT AND
DETERMINED EXCLUSIVELY IN DELAWARE STATE COURT AND ANY STATE APPELLATE COURT
THEREFROM WITHIN THE STATE OF DELAWARE (OR, IF THE DELAWARE COURT DECLINES TO
ACCEPT JURISDICTION OVER A PARTICULAR MATTER, ANY STATE OR FEDERAL COURT WITHIN
THE STATE OF INDIANA). EACH OF THE PARTIES HEREBY IRREVOCABLY AGREES AND
CONSENTS TO PERSONAL JURISDICTION, SERVICE OF PROCESS AND VENUE IN THE AFORESAID
COURTS AND WAIVES, AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE,
COUNTERCLAIM OR OTHERWISE, IN ANY ACTION WITH RESPECT TO THIS AGREEMENT (I) ANY
CLAIM THAT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF THE ABOVE NAMED
COURTS FOR ANY REASON OTHER THAN THE FAILURE TO SERVE IN ACCORDANCE WITH THIS
SECTION 17, (II) ANY CLAIM THAT IT OR ITS PROPERTY IS EXEMPT OR IMMUNE FROM
JURISDICTION OF ANY SUCH COURT OR FROM ANY LEGAL PROCESS COMMENCED IN SUCH
COURTS (WHETHER THROUGH SERVICE OF NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OF JUDGMENT, EXECUTION OF JUDGMENT OR OTHERWISE)
AND (III) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY CLAIM THAT
(A) THE ACTION IN SUCH COURT IS BROUGHT IN AN INCONVENIENT FORUM, (B) THE VENUE
OF SUCH ACTION IS IMPROPER OR (C) THIS AGREEMENT, OR THE SUBJECT MATTER HEREOF,
MAY NOT BE ENFORCED IN OR BY SUCH COURTS.  THE PARTIES HEREBY AGREE THAT MAILING
OF PROCESS OR OTHER PAPERS IN CONNECTION WITH ANY SUCH ACTION OR PROCEEDING IN
THE MANNER PROVIDED IN SECTION 10, OR IN SUCH OTHER MANNER AS MAY BE PERMITTED
BY LAW, SHALL BE VALID AND SUFFICIENT SERVICE THEREOF AND HEREBY WAIVE ANY
OBJECTIONS TO SERVICE ACCOMPLISHED IN THE MANNER HEREIN PROVIDED.

 

18.                               Further Assurances.  The parties shall execute
and deliver such further instruments and do such further acts and things as may
reasonably be required to carry out the intent and purposes of this Agreement.

 

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19.                               Amendment; Waiver.  This Agreement may not be
amended except by an instrument in writing signed by each of the Parties.  No
failure or delay by any Party in exercising any right hereunder shall operate as
a waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right hereunder. 
Any agreement on the part of any Party to any such waiver shall be valid only if
set forth in an instrument in writing signed on behalf of such Party.

 

20.                               Counterparts.  This Agreement may be executed
in one or more counterparts, each of which shall be deemed an original and all
of which together shall constitute one and the same instrument.  Electronically
transmitted copies of this Agreement and electronically transmitted signature
pages shall be binding and effective as to all Parties and may be used in lieu
of the original Agreement, and, in particular, in lieu of original signatures,
for any purpose whatsoever.

 

21.                               Remedies.  Each of the parties agree that
money damages would not be a sufficient remedy for any breach by either Party or
any of its Affiliates of this Agreement, and that, in addition to all other
remedies that may be available, Mediaco shall be entitled to specific
performance and injunctive or other equitable relief as a remedy for any such
breach, and each Party further agrees to waive and to use its best efforts to
waive, any requirement for the securing or posting of any bond in connection
with any such remedy.

 

22.                               Construction of Agreement.  The Parties have
participated jointly in the negotiation and drafting of this Agreement, and in
the event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the Parties, and no
presumption or burden of proof shall arise favoring or disfavoring any Party by
virtue of the authorship of any provisions of this Agreement.

 

23.                               No Joint Venture.  This Agreement is not
intended to be and shall not be construed as a partnership or joint venture
agreement between the Parties.  Except as otherwise specifically provided in
this Agreement, no party to this Agreement shall be authorized to act as agent
of or otherwise represent any other Party to this Agreement.

 

24.                               No Third Party Beneficiaries.  Nothing in this
Agreement, express or implied, is intended to or shall confer upon any Person
(other than the Parties and their respective successors and permitted assigns
and any Management Indemnified Persons or Mediaco Indemnified Persons) any legal
or equitable right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the parties have executed this Management Agreement as of
the day and year first above written.

 

 

Management Company

 

 

 

 

 

 

By:

/s/ J. Scott Enright

 

Name:

J. Scott Enright

 

Title:

Executive Vice President, General Counsel and
Secretary

 

Signature Page to Management Agreement

 

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MediaCo

 

 

 

 

 

 

By:

/s/ J. Scott Enright

 

Name:

J. Scott Enright

 

Title:

Executive Vice President, General Counsel and
Secretary

 

Signature Page to Management Agreement

 

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