Exhibit 10.13
MANAGEMENT AGREEMENT
This MANAGEMENT AGREEMENT is between COMCAST CABLE
COMMUNICATIONS, INC., a Delaware corporation ("Cable") and
COMCAST CORPORATION, a Pennsylvania corporation ("Comcast").
BACKGROUND
WHEREAS, subsidiaries of Cable own at least a
majority interest in the cable communications systems listed
on Schedule A attached hereto and may in the future own at
least a majority interest in certain other cable
communications systems (collectively, the "Systems"); and
WHEREAS, Comcast is experienced in the management
and operation of cable communications systems, and Cable, on
behalf and for the benefit of the Systems, has requested
Comcast to render management services in connection with the
management and operation of the Systems' multichannel video
business and any other businesses the Systems are or may be
engaged in, and Comcast is willing to do so on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto, intending to
be legally bound hereby, agree as follows:
1. Comcast will use its best efforts to supervise the
management and operation of the day-to-day activities of the
Systems, including the expansion or rebuilding of the
Systems. Schedule A will be amended by the parties from
time to time to reflect the addition or deletion of Systems
as to which this Agreement will apply. The parties agree
that Cable's subsidiaries listed on Schedule A as owning the
Systems are intended to be third party beneficiaries and
third party obligors of this Agreement with respect to the
System or Systems owned; Comcast agrees that (at the request
of Cable) it will enter into agreements with such
subsidiaries to effect such relationships. Cable agrees
that Comcast may cause one or more of its subsidiaries
(other than Cable and its subsidiaries) to provide services
under this Agreement, and that (at the request of Comcast),
Cable will enter into agreements with such subsidiaries to
effect such relationships.
2. Specifically, and without limiting the generality
of the foregoing, Comcast will provide or arrange for and
supervise the performance of the following functions or
services:
(a) establishing procedures for the maintenance,
construction, expansion and rebuilding of the Systems;
(b) purchasing equipment and materials and providing
labor and other services for the maintenance, construction,
expansion or rebuilding of the Systems;
(c) interviewing, hiring, discharging and training
personnel;
(d) establishing office management procedures and the
administration thereof;
(e) preparing projections including (i) a breakdown of
capital requirements, (ii) annual operating budgets and
(iii) cash flow analyses;
(f) preparing sales and marketing programs,
including newspaper, radio and other advertising, direct
selling and special events activities;
(g) preparing monthly reports regarding operations and
general developments in the cable communications industry;
(h) providing accounting, computer, tax, internal
audit, risk management, finance, treasury, investor
relations, legal and regulatory services;
(i) providing programming; and
(j) hiring and conducting the relationships with
consultants, accountants, lenders, technical advisors,
attorneys, investment bankers and appraisers.
3. As compensation for such services, Comcast will be
paid the following fees:
(a) An annual management fee in an amount equal
to six percent (6%) of gross revenues from all sources of
the Systems.
(b) An annual accounting services fee in the amounts
indicated in Cable's books and records for fiscal years 1992
to 1996, and in an amount of up to one percent (1%) of the
gross revenues from all sources of the Systems for each
fiscal year after 1996. Of such fee, six percent (6%) has
been and will be paid on account of related computer and
information services.
(c) Each such fee will be paid in monthly
installments in arrears based on good faith estimates, and
appropriate adjustments based on actual gross revenues will
be made following completion of the Systems' financial
statements for a fiscal year.
4. Comcast will be entitled to reimbursement from
Cable for Comcast's actual costs in rendering services
hereunder, including without limitation salaries and
benefits (including without limitation health and welfare,
retirement investment plan
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(401K) and restricted stock) of Cable Division divisional, regional and area
employees; rent, leasehold, office and related expenses of Cable Division
divisional, regional and area offices; and insurance (including any
retainages or deductibles paid). Such reimbursement will be made monthly in
arrears.
5. (a) Notwithstanding the provisions of paragraph 4, and in addition
to the payments required to be made pursuant to paragraph 4, Cable will pay
Comcast for programming (other than pay-per-view) provided by Comcast to a
System an amount which will not exceed that which the System would pay in an
arm's-length transaction to the provider of the programming services if such
System were a stand-alone operator of a cable television system with a
subscriber base equal to that of such System. Such payment will be made
monthly in arrears.
(b) Comcast will remit to Cable or its
subsidiaries promptly following its receipt by Comcast, any
amount received by Comcast on or for the account of the
Systems (including without limitation any commissions on
sales of merchandise by a home shopping service to the
Systems' subscribers) to which Comcast is not entitled to be
paid hereunder.
6. Notwithstanding the provisions of paragraph 4, and
in addition to the payments required to be made pursuant to
paragraph 4, Cable will pay Comcast in respect of income
taxes of Comcast or any of its other subsidiaries as Comcast
directs, provided that the cumulative sum of such payments
will not exceed the cumulative sum of income taxes which
Cable and its subsidiaries would have paid: (a) in respect
of federal and state income taxes if Cable and its
subsidiaries had at all times (including at all times prior
to the date hereof) filed a separate consolidated federal
income tax return, with Cable as the "common parent" (within
the meaning of Section 1504 of the Internal Revenue Code);
and (b) taking into account all net operating loss
carryforwards pursuant to Section 172 of the Internal
Revenue Code that would have been available to Cable and its
subsidiaries had they filed a separate return.
7. (a) The parties acknowledge that Comcast or a
subsidiary has entered into the agreements listed on
Schedule B attached hereto (the "Other Agreements") pursuant
to which Comcast or the subsidiary provides management,
programming, tax sharing and other services to the
subsidiary of Cable indicated on Schedule B. The parties
agree that the terms and conditions of this Agreement
supercede and supplement the terms and conditions of the
Other Agreements to the extent that they are not
inconsistent or in conflict with, or limited, restricted or
prohibited by, the terms and conditions of the Other
Agreements, or to the extent that their application requires
a consent of a third party under the Other Agreements or any
other agreement (in which case the terms and conditions of
the Other Agreements will prevail).
(b) The parties acknowledge that certain
subsidiaries of Cable have entered into, or may in the
future enter into, agreements with lenders to the Systems
which limit, restrict or prohibit such subsidiaries from
providing funds to Cable for
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Cable's use in its making payments to Comcast hereunder. The parties
acknowledge that for so long as they remain in effect, the terms and
conditions of such agreements will be complied with by such subsidiaries but
such compliance will not relieve Cable of any of its obligations under this
Agreement.
(c) Any amounts which are not paid when they
otherwise would have been paid as a result of the operation
of this paragraph 7 will be paid (without interest thereon)
as soon as the provision which prohibited payment lapses,
expires or terminates.
8. Comcast may, in connection with the management and
operation of the Systems, be requested to render services or
furnish facilities or equipment beyond the services to be
performed under this Agreement. In such case, if Comcast
agrees to perform as requested, it will be entitled to be
paid for such services, facilities or equipment in addition
to the compensation or reimbursement to be paid pursuant to
this Agreement, at rates to be agreed by Comcast and Cable.
9. Comcast will not, under any circumstances, be held
liable for the results of operations or liabilities of the
Systems, so long as Comcast performs its duties hereunder in
good faith. Comcast will not be held to have incurred any
liability to Cable, any of Cable's subsidiaries or any third
party by virtue of any action taken or omitted to be taken
in good faith by Comcast in discharge of its duties
hereunder, and Cable agrees to indemnify Comcast and hold
Comcast harmless with respect to any and all claims that may
be made against Comcast in respect thereof.
10. Cable acknowledges that Comcast is engaged
directly or through subsidiaries and affiliates in various
other businesses. Nothing herein will be construed to
prevent the continued involvement of Comcast or any of its
subsidiaries or affiliates in other businesses, whether such
involvement now exists or occurs in the future.
11. This Agreement will be deemed effective as of
January 1, 1992 and will terminate on such date as Comcast
no longer directly or indirectly owns at least a majority
interest in Cable.
IN WITNESS WHEREOF, the parties hereto have executed and
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delivered this Management Agreement on April 24, 1997.
COMCAST CABLE COMMUNICATIONS, INC.
By: /s/ Xxxxxx X. Block
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Title: VICE PRESIDENT
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COMCAST CORPORATION
By: /s/ Xxxxxx X. Block
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Title: VICE PRESIDENT
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