Retained Franchise Management Agreement

Exhibit 10.16


RETAINED FRANCHISE MANAGEMENT AGREEMENT


This Retained Franchise Management Agreement (this " Agreement" ) is made and entered into as of the 1st day of March, 2004, by and between Hornell Television Service, Inc. (" Seller" ), and Atlantic Broadband Finance, LLC (" Buyer" ).

W I T N E S S E T H:

WHEREAS, Seller and Buyer are among the parties to an Asset Purchase Agreement, dated as of September 3, 2003 (as amended, the " Purchase Agreement" ; capitalized terms used but not defined herein shall have the respective meanings ascribed to them in the Purchase Agreement);

WHEREAS, Section 6.14(a)(iii) of the Purchase Agreement provides that, at the Closing, Seller and Buyer shall enter into a management agreement pursuant to which Buyer will provide day-to-day management services for Seller' s cable television systems serving the Retained Consent Franchises (the " Managed Systems" ); and


WHEREAS, the Retained Consent Franchises are identified on Exhibit A hereto.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and undertakings set forth herein, the receipt and consideration of which hereby are acknowledged, the parties hereto, intending to be legally bound, agree as follows:


ARTICLE 1

TERM OF AGREEMENT


1.1 Definition of Term . This Agreement shall commence as of the date hereof and shall remain in effect until the earlier of (i) the occurrence of a Subsequent Consent Transfer with respect to each Retained Consent Franchise, or (ii) August 31, 2004 (the period of effectiveness of this Agreement is referred to herein as the " Term" ).


ARTICLE 2

MANAGEMENT RESPONSIBILITIES

2.1 Appointment . During the Term, Seller hereby appoints Buyer, and Buyer hereby accepts such appointment, to provide (or cause its Affiliate to provide) the management services described in Section 2.2 hereof, subject to the terms and conditions set forth in this Agreement.

2.2 Buyer' s Obligations . Subject to the limitations set forth in Sections 2.3, 2.4 and 3.1 during the Term, Buyer shall be responsible for conducting the day-to-day business and affairs of each Managed System. Without limiting the generality of the foregoing, Buyer shall (or shall cause its Affiliate to):


(a) maintain, construct and operate each Managed System in the ordinary course, consistent with Buyer' s operating budgets, if any, established for the period covered by this Agreement on a basis consistent with Buyer' s other cable systems;

(b) pay or cause to be paid all ordinary course expenses, liabilities and charges arising from the operation of any Managed System that are payable during the Term (in each case so long as such expenses, liabilities and charges are Assumed Liabilities or would have constituted Assumed Liabilities had the Retained Consent Franchise and/or Retained LLC Consent Franchise Assets to which such Managed System relates been included among the Assets transferred to Buyer at the Closing), including all franchise fees (if any), real and personal property taxes, copyright royalties, programming fees, insurance premiums, assessments and other impositions applicable to the operation of any Managed System during the Term hereof;

(c) obtain, maintain and pay all programming fees in connection with all programming to be distributed by any Managed System during the Term, subject to Section 2.3(c);


(d) prepare and file or cause to be filed all reports and statements of account required to be filed during the Term with respect to any Managed System with the U.S. Copyright Office;

(e) maintain all books and records relating to any Managed System; and


(f) coordinate the management and operation of any Managed System, including the performance of such functions as the collection of subscriber receivables and the providing of repair, maintenance and equipment replacement, as well as community and other services to be furnished by any Managed System under any applicable agreement, license or other instrument relating to the operation of any Managed System; provided in each case, that certain of these activities may be performed by (i) Seller pursuant to the Transition Services Agreement, or (ii) by a third party contracted by Buyer or its subsidiary at its sole cost; and provided further that Buyer may, but shall not be required to, make capital expenditures for improvements to the Managed Systems.

2.3 Negative Covenants . Buyer shall (or shall cause its Affiliate to) operate each Managed System, including the provision of the management services described in Section 2.2, in the ordinary course consistent with Buyer' s operation of the other cable television systems acquired from Seller and the other Sellers pursuant to the Purchase Agreement. Notwithstanding the generality of the foregoing or of Section 2.2, without Seller' s prior written consent, Buyer shall not:

(a) Sell or hypothecate any of the assets used in any Managed System, other than (i) the sale or abandonment of worn out or obsolete materials, supplies and equipment for which suitable replacements have been made, if necessary, (ii) the sale of equipment to subscribers of any Managed System to be used by subscribers to receive services from such Managed System, or (iii) Assets transferred to Buyer at the Closing or LLC Assets owned by LLCs whose LLC Interests are transferred to Buyer at the Closing;

(b) Change any of the rates charged to subscribers of any Managed System ;


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(c) Enter into, or cause Seller to enter into or become subject to, any contract or other instrument or understanding that will bind Seller, other than in the ordinary course of business not inconsistent with any express term hereof;

(d) Institute, defend or settle litigation o ...