MANAGEMENT AGREEMENT
MANAGEMENT AGREEMENT, dated as of May 20, 1997 by and between
COMCAST CORPORATION, a Pennsylvania corporation, with an address at 0000 Xxxxxx
Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000 ("Comcast"), and COMCAST CELLULAR
COMMUNICATIONS, INC., a Delaware corporation with an address at 0000 Xxxxx
Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxxx, Xxxxxxxx 00000 (including its
subsidiaries as they may exist at any time, "CCCI").
WHEREAS, CCCI owns and operates certain cellular telephone
systems (the "Systems"); and
WHEREAS, Comcast is experienced in the management and
operation of cellular telephone systems, CCCI has requested Comcast to render
supervisory services in connection with the management and operation of the
Systems, and Comcast is willing to do so on the terms and conditions hereinafter
set forth;
WHEREAS, Comcast and CCCI are parties to a certain Management
Agreement, dated as of March 5, 1992 ("Original Management Agreement") and it is
the desire of the parties not to terminate said agreement as certain Zero Coupon
Notes ("Zero Notes") issued by Comcast Cellular Corporation on March 5, 1992
were repaid in full; and
WHEREAS, due to repayment in full of the Zero Notes on May 19,
1997, the parties hereto wish to supersede the Original Management Agreement
with this Agreement;
NOW THEREFORE, the parties hereto, intending to be legally
bound, agree as follows:
1. Comcast shall use its commercially reasonable efforts to
supervise and manage the development and operation of the Systems.
2. Specifically, Comcast shall, at the expense of CCCI,
arrange for and supervise the performance of the following functions, but will
not necessarily perform any of such functions itself:
(a) purchasing equipment and materials and the
provision of labor and
other services;
(b) interviewing, hiring, discharging and training
personnel;
(c) establishing office and accounting procedures and
administration thereof;
(d) establishing procedures for maintenance,
replacement, and expansion of the systems;
(e) preparing market surveys from time to time and,
on the basis thereof, preparing and submitting to CCCI operating projections
which will include (i) a breakdown of capital requirements for additional
operating facilities; annual operating budgets; and (ii) cash flow analysis;
(f) preparing advertising and sales promotion
programs, including newspaper, radio, and other advertising, direct selling, and
special events activities; and
(g) preparing periodic reports to CCCI regarding
operations and general developments in the cellular industry as they may affect
CCCI's operations.
3. As compensation for such services, Comcast shall be paid an
annual management fee, payable in quarterly installments, in an amount equal to
one and one-half
2
percent (1.5%) of the consolidated gross operating revenue ("Total Revenue") of
CCCI during the relevant fiscal year. Total Revenue shall include revenue
derived in the ordinary course of business in respect of the Cellular
Communications Systems of CCCI (excluding interest income and unusual or
extraordinary items) computed pursuant to CCCI's method of accounting for
reporting Total Revenue for federal income tax purposes.
Notwithstanding the foregoing, payment of the management fee
shall be limited in the manner set forth in the Credit Agreement, dated
September 15, 1995, by and among CCCI, Toronto Dominion (Texas), Inc. as
Administrative Agent and the other agents and banks named therein as such
agreement may be amended, supplemented, extended, or modified from time to time
(the "Credit Agreement") or in any credit agreement replacing, restating or
refinancing the indebtedness evidenced by the Credit Agreement and the Affiliate
Subordination Agreement referred to in such Credit Agreement.
4. Comcast shall be entitled to reimbursement from CCCI for
Comcast's reasonable out-of-pocket expenses allocable to the management and
operation of the Systems. These reimbursements will compensate Comcast for
services which otherwise would have been performed by CCCI itself. Operating and
management expenses may include telephone, travel, and copying charges and
salaries of any full or part-time employees used in pre-construction work,
construction supervision, marketing, engineering and non-supervisory services to
the extent required for the operations of the Systems, but may not include
reimbursements to Comcast for its own management salaries, corporate overhead,
rent, leasehold, or utilities expenses. Such reimbursement shall be made at the
end of each month for disbursements during such month.
5. Comcast may, in connection with the operation of the
Systems, render services or furnish facilities or equipment beyond the services
required to be performed under
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this Agreement, such as accounting and bookkeeping services. In such case,
Comcast shall be entitled to be paid for such services, facilities or equipment
in addition to compensation or reimbursement to be paid pursuant to any other
provision of this Agreement, at reasonable rates.
6. CCCI shall bear any and all losses resulting from the
operation of the Systems, and Comcast shall not, under any circumstances, be
held liable therefor so long as Comcast shall perform its duties hereunder in
good faith. Comcast shall not be held to have incurred any liability to CCCI or
to any third party by virtue of any action taken in good faith by it in
discharge of its duties hereunder, and CCCI agrees to indemnify Comcast and hold
Comcast harmless with respect to any and all claims that may be made against it
in respect thereof.
7. The parties recognize that Comcast is engaged directly or
through subsidiaries and affiliates in various similar and other businesses.
Nothing herein shall be construed to prevent the continued involvement of any
such entities in similar and other businesses, whether such involvement now
exists or occurs in the future, including, without limitation, the ownership or
management of other cellular businesses.
8. This Agreement shall continue in effect for 10 years from
the date hereof.
9. This Agreement sets forth the entire understanding of the
parties with respect to the subject matter hereof, supersedes all existing
agreements among them concerning such subject matter, and may be modified only
by a written instrument duly executed by each party.
10. Neither party may sell, assign, transfer, or otherwise
convey any of its rights or delegate any of its duties under this Agreement
except to a corporation which has succeeded to substantially all the business
and assets of the assignor and assumed in writing its
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obligations under this Agreement or to a corporation surviving a merger or
consolidation to which the party to this Agreement is a party, or in the case of
Comcast to any subsidiary corporation so long as such corporation remains a
subsidiary of Comcast, and this Agreement shall be binding upon and inure to the
benefit of the parties hereto and such respective successors and assigns
provided, however, CCCI (or its successors or assigns) may assign its rights and
duties hereunder to any Permitted Successor (as such term is defined in the
Credit Agreement) which becomes a Borrower under the Credit Agreement by doing
written notice of such assignment to Comcast. Any sale, assignment, transfer,
conveyance or delegation in violation of this Section 10 shall be void.
11. This Agreement does not create, and shall not be construed
as creating, any rights enforceable by any person not a party to this Agreement
(except as provided in Section 10).
12. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. It shall be governed by
and construed in accordance with the laws of Pennsylvania, without giving effect
to conflict of laws.
13. In providing the services to CCCI contemplated by this
Agreement, Comcast is acting as an independent contractor and nothing in this
Agreement shall be construed to imply that Comcast is a partner or joint
venturer with, or an agent of, CCCI.
14. This Agreement shall be effective as of the date first
above written upon execution by the parties hereto but not before repayment in
full of the Zero Notes. Upon the effectiveness of this Agreement, the Original
Management Agreement shall terminate.
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15. CCCI may assign all its rights and obligations hereunder
to any Permitted Successor which becomes a Borrower under the Credit Agreement
upon written notice to Comcast, which notice shall be signed by both CCCI and
the Permitted Successor. Upon delivery of said notice, (a) all rights hereunder
shall inure to and all obligations hereunder shall be borne by the Permitted
Successor and (b) all obligations and rights of Comcast Cellular Communications,
Inc. hereunder shall terminate.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first written.
COMCAST CORPORATION
By: /s/ XXXXXXX XXXX
------------------------------------
Name: Xxxxxxx Xxxx
Title: Senior Vice President & Secretary
COMCAST CELLULAR
COMMUNICATIONS, INC.
By: /s/ XXXXXXXX X. XXXXX
-------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Executive Vice President
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