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HomeMy WebLinkAbout1991- CATV Franchise Fee Relief Request w91�11� A.e REPORT/RECOMMENDATION •,N�bRPOV6, • lose To: MAYOR AND COUNCIL Agenda Item # IV.A & B From: KEN ROSLAND, MANAGER Consent ❑ Information Only ❑ Date: NOVEMBER 1, 1991 Mgr . Recommends ❑ To HRA Subject: 1991 CATV RELIEF EXTENTION 51 To Council Action ❑ Motion 7 Resolution ❑ Ordinance ❑ Discussion Recommendation: Adoption of the resolution approving settlement and adoption of the ordinance repealing the CATV Relief Ordinance, with waiver of second reading. Info/Background: At the August 5, 1991, meeting I informed the Council of the request by Paragon Cable for extention of the relief agreement that was approved by the member cities in 1985 and extended in 1988. Following an in-depth study of the issues involved, the Southwest Suburban Cable Commission (SWSCC) had recommended that the member cities approve Paragon's request. In summary, the modifications to the franchise ordinances are as follows: 1) Franchise Fee - Full 5% franchise fee would be paid to the cities beginning August 1, 1992. 2) Local Programming Funding - Current formula (1% match between the cities and cable company) would remain in effect until July 31, 1992. Some additional modifications would take place. 3) Local Programming Services - Paragon would continue to meet the service levels described in the Performance and Facilities contracts now in force. 4) Continued Cooperation - It in intended that coordination -and cooperation with Paragon would continue. At the August meeting, the Council approved the recommendation of SWSCC. The attached documents have been prepared, reviewed by attorneys for each city, and the member cities are now being asked to give formal approval as indicated in the letter dated October 23, 1991, from Karen Anderson, Chair of SWSCC. , r� Cn f l .�° REPORT/RECOMMENDATION e,~�bRPORt`Z�v• lose To. KEN ROSLAND, MANAGER Agenda Item # III.A From. MARCELLA DAEHN, CLERK Consent ❑ Information Only ❑ Date. NOVEMBER 15, 1991 Mgr . Recommends ❑ To HRA Subject. ORDINANCE NO. 1222 ❑ To Council RELATING TO CATV RELIEF EXTENTION Action ❑ Motion ❑ Resolution j 0 Ordinance ❑ Discussion Recommendation: Second Reading of Ordinance No. 1222 - Repealing CATV Relief Ordinance and Relief Ordinance Amendment, Providing for Continuance of Certain Aspects of CATV Relief Ordinance, and Restructuring Manner in Which Local Programming is Funded. Info/Background At its meeting of Noevember 4, 1991, the Council gave First Reading to Ordinance No. 1222 relating to CATV relief extention and adopted a resolution approving settlement with grantee under the Cable Franchise Ordinance. I have placed Ordinance No. 1222 on the agenda for Second Reading as previously requested by Karen Anderson, Chair of SWSCC. 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Y:Moss & Barnett ;11- 1-91 ;11 :30AM Minneapolis, MN-4 927 76454 2 Y NOTICE OF PUBLIC HEARING OF THE SOUTHWEST SUBURBAN CABLE C01MNICATIONS COMMISSION (THE SWSCC) Notice is hereby given that on October 23, 1991, at 5:00 p.m. , or as soon thereafter as this matter may be heard, the SWSCC, a Joint Powers Commission formed to oversee, administer and enforce the Cable Television Franchises for the Cities of Edina, Richfield, Hopkins, Eden Prairie and Minnetonka (the Member Cities) will conduct a public hearing concerning changes to the Cable Television Franchise for each Member City. The hearing will be conducted at a meeting of the SWSCC to be held at the Minnetonka Community Center, 14600 Minnetonka Boulevard, Minnetonka, Minnesota. The subject matter of the public hearing is the SWSCC's review of a request made by KBL Cablesystems of the Southwest, Inc. (Paragon) for continuation of financial relief originally granted by the Member Cities, pursuant to a recommendation of the SWSCC, in 1985. The 1985 financial relief permitted cost savings for Paragon by reducing its obligations for community programming, local origination programs,, and other costs and expenses, including the Franchise fee payment required by the Franchises of the Member Cities. Paragon has subsequently made numerous and beneficial changes in its operations, and Paragon recently requested that, because of its success under the modified Franchises, the financial relief continue. In response to Paragon' s request, the SWSCC has undertaken an extensive study of community programming needs and other requirements related to cable television, and has determined extension of the financial relief is reasonable, subject to certain additional modifications to the Franchises. These modifications include dedication by Paragon annually of a specific budgetary amount for community programming purposes; payment by Paragon of the full five percent (5%) Franchise fee to the Member Cities; performance by Paragon of all services for the production and development of a community news show; and Paragon's provision of equipment and facilities and maintenance for community programs . Finally, Paragon' s original obligation to maintain a separate studio in each of the five (5) Member Cities will not be enforced, and Paragon will continue to provide only three (3) studio facilities for community programming purposes. Specific information regarding this Proposal to be considered by the SWSCC is available at the SWSCC Administrator ' s office by contacting Adrian Herbst at 347-0300. Persons who wish to comment on this matter are welcome to attend the meeting at the Minnetonka Community Center and address the members of the SWSCC at that time. SENT BY:Moss & Barnett ;11- 1-91 ;11 :30AM Minneapolis, MN-4 927 76454 3 F ' The SWSCC will make a recommendation to the above five (5) Member Cities, which in turn will consider this matter further to determine whether each Member Cities' individual Franchise should be modified to incorporate the changes recommended by the SWSCC. Dated this day of 1991 SOUTHWEST SUBURBAN CABLE COMMUNICATIONS COMMISSION By: Karen Anderson, Chair 374Z040 -2- �iTv OF "EDINA 1801 WEST 50TH STREET,EDINA,MINNESCT4;6424 612-927-8861 November 19, 1991 Mr. Adrian Herbst Moss and Barnett 90 South 7th Street Minneapolis MN 55402 Re: 1991 CATV Relief Extension Dear Mr. Herbst: On November 4, 1991 the Edina City Council gave first reading to Ordinance No. 1122 Repealing the CATV Relief Ordinance and Amendment and Providing for Continuance of Certain Aspects of the CATV Relief Ordinance. The Council also adopted a resolution Approving a Settlement with the Grantee. At its meeting of November 18, 1991, the Edina City Council gave second reading to Ordinance No. 1122 and adopted the same. As requested by Karen Anderson, Chair of SWSCC, I am enclosing four signed copies of each of the following documents: Resolution Approving a Settlement with the Grantee Under the City's Cable Communications Franchise Ordinance Ordinance No. 1122 Repealing the CATV Relief Ordinance and Amendment and Providing Continuance of Certain Aspects of the CATV Relief Ordinance Restated Performance Agreement Consent Agreement and Guaranty of Performance Dates on several of the documents have been left open, pending signing by the other parties. If you have any questions regarding these enclosures, please give me a call. Sincerely yours, Marcella M. Daehn City Clerk cc: Jerry Gilligan, Counsel w/enclosures Dorsey and Whitney A RESOLUTION Approving a Settlement with the Grantee Under the City's Cable Communications Franchise Ordinance Regarding Revisions to and Extension of Certain Terms of the CATV Relief Ordinance as Amended, Based Upon Enactment of the Local Programming Restructuring Ordinance and Modifications to Other Related Agreements. WHEREAS, the -City Council of the City of Edina ("City") is the official governing body of City; and WHEREAS, City .has awarded a cable communications franchise ("Franchise") which is held by KBL Cablesystems of the Southwest, Inc. ("Grantee") ; and WHEREAS, the City adopted Ordinance No. 1121 in 1985 ("CATV Relief Ordinance" ) , providing for modification of certain requirements of the Franchise; and WHEREAS, Grantee underwent a change of control in 1989 and in connection thereto requested that City and the Southwest Suburban Cable Commission ("SWSCC") , a joint powers commission comprised of this City and the Cities of Eden Prairie, Hopkins, Minnetonka, and Richfield ("Member Cities") modify and extend the CATV Relief Ordinance as a part of the transfer of ownership; and WHEREAS, the City adopted Ordinance No. 1121-A1 providing modifications to the CATV Relief Ordinance in contemplation of a transfer of control. of the City' s Franchise ("CATV Relief Ordinance Amendment")_; and WHEREAS, the CATV Relief Ordinance, as amended by the CATV Relief Ordinance Amendment (collectively "Relief Ordinances" ) , provided that the relief would terminate as of March 1, 1992; and WHEREAS, the Relief Ordinances required Grantee to make any requests for extension of the relief prior to September 1, 1990; and WHEREAS, Grantee on August 27, 1990, notified City and the SWSCC of its desire to continue the provisions of the Relief Ordinances in effect after March 1, 1992; and WHEREAS, the SWSCC reviewed Grantee' s request during a series of meetings of the SWSCC`s operating committee and regularly scheduled commission meetings; and WHEREAS, the SWSCC, at a commission meeting, held on May 22, 1991, authorized its staff to enter into negotiations with Grantee to develop a SWSCC recommendation to City to continue in effect certain provisions of the Relief ordinances on a modified basis; and WHEREAS, the SWSCC, at a meeting held on October 23, 1991, adopted a Resolution ("SWSCC Resolution") recommending that the City approve and accept the conditions upon which certain provisions of the Relief Ordinances and certain agreements entered into pursuant to the Relief Ordinances would be modified and extended, a copy of which is attached hereto as Exhibit 1; and WHEREAS, the City has reviewed the recommendation of the SWSCC and documents modifying and extending certain provisions of the Relief Ordinances as set forth in Ordinance No. 11.2-)-- ("Local Programming Restructuring Ordinance") , as well as modifying certain provisions of those agreements entered into pursuant to the Relief Ordinances, and based upon this review accepts the recommendation of the SWSCC and finds said documents to be reasonable and acceptable to the City; and WHEREAS, the City and Grantee agree that the provisions of the Relief Ordinances shall expire March 1, 1992, unless and until the necessary actions set forth in the SWSCC Resolution are taken by all Member Cities; NOW, THEREFORE, in a regular meeting of the City Council of the City of Edina, the following is resolved: 1) The Mayor and City Manager are hereby authorized to sign, on behalf of City, all documents necessary to evidence the repeal the Relief Ordinances and effectuate the Local Programming Restructuring Ordinance. Such documents shall include, but shall not be limited to, those documents listed on Exhibit 2 attached hereto ("Documents" ) . 2) The terms of this Resolution are contingent upon adoption, approval, and/or execution of all necessary Documents by the City, other Member Cities of the SWSCC and the SWSCC. 3) This Resolution shall be null and void if a similar resolution is not approved by all Member Cities of the SWSCC within 90 days from the effective date of the enactment of the first such resolution by a Member City. 4) The terms of this Resolution shall be null and void unless the conditions precedent to the effective date of the Local Programming Restructuring Ordinances, as set forth in Section 9 thereof, have been satisfied. -2- 5) The City Clerk is authorized to forward to the SWSCC Administrator four (4) executed and certified copies of all Documents and this Resolution, and the SWSCC is authorized to coordinate a closing to be held within 90 days of the adoption of the Local Programming Restructuring Ordinance by the final Member City, at the office of the SWSCC Administrator. This Resolution is passed and adopted this W-4- day of �/�/c c kV 1991. CITY OF EDINA By e S Mayor 1198DAJ -3- EXHIBIT 1 TO RESOLUTI< RESOLUTION NO. 1-1991 A RESOLUTION Approving a Settlement with the Grantee Under the Cable Communications Franchise Ordinance Regarding Revisions to and Extension of Certain Terms of the CATV Relief Ordinance as Amended, Based Upon Enactment of the Local Programming Restructuring Ordinance and Modifications to Other Related Agreements. WHEREAS, the Southwest Suburban Cable Commission ( "SWSCC" ) , is a joint powers commission comprised of the Cities of Eden Prairie, Edina, Hopkins, Minnetonka, and Richfield ( "Member Cities" ) ; and WHEREAS, each of the Member Cities has awarded a cable communications franchise ( "Franchise") which is held by KBL Cablesystems of the Southwest, Inc. ("Grantee" ) ; and WHEREAS, the Member Cities have delegated to the SWSCC the day-to-day regulation of Grantee; and WHEREAS, in 1985, at the recommendation of the SWSCC, the Member Cities adopted a CATV Relief Ordinance ( "CATV Relief Ordinance" ) , providing for modification of certain requirements of the Franchise; and WHEREAS, Grantee underwent a change of control in 1989 and in connection therewith requested the SWSCC and the Member Cities to modify and extend the CATV Relief Ordinance; and WHEREAS, at the recommendation of the SWSCC, each Member City adopted an Ordinance providing modifications to the CATV Relief Ordinance in contemplation of a transfer of control of the City' s cable communication franchise ( "CATV Relief Ordinance Amendment") ; and WHEREAS, the CATV Relief Ordinance, as amended by the CATV Relief Ordinance Amendment (collectively "Relief Ordinances" ) , provided that the relief would terminate as of March 1 , 1992 ; and WHEREAS, the Relief Ordinances required Grantee to make any requests for extension of the relief prior to September 1, 1990 ; and WHEREAS, Grantee on August 27, 1990, notified City and the SWSCC of its desire to continue the provisions of the Relief Ordinances in effect after March 1, 1992 ; and WHEREAS, the SWSCC reviewed Grantee' s request during a series of meetings of the SWSCC' s operating committee and regularly scheduled commission meetings; and WHEREAS, the SWSCC, at a commission meeting, held on May 22, 1991, authorized staff to enter into negotiations with Grantee to continue in effect certain provisions of the Relief Ordinances on a modified basis; and WHEREAS, Grantee and Commission staff reached agreement on terms for the extension and modification of certain provisions of the Relief Ordinances which were in turn approved by the SWSCC at the regularly scheduled Commission meeting of July 24 , 1991, a summary of such terms being attached hereto as Exhibit 1; and WHEREAS, the SWSCC authorized staff to negotiate with Grantee the necessary documents to effectuate the terms summarized in Exhibit 1; and WHEREAS, the Commission has reviewed the necessary documents modifying and extending certain provisions of the Relief Ordinances, as set forth in ordinances to be enacted by each Member City ( "Local Programming Restructuring Ordinance" ) , as well as modifying certain provisions of certain agreements entered into pursuant to the Relief Ordinances, and finds them to be acceptable and recommends their adoption by the Member Cities ; NOW, THEREFORE, it is hereby resolved by the Southwest Suburban Cable Commission, at its regularly scheduled meeting of October 23 , 1991, that : 1) The Chairman and Administrator are directed to forward a copy of this Resolution and copies of the documents listed in Exhibit 2 to the Member Cities and further to provide additional assistance as necessary to the Member Cities in their deliberations . 2) The Chairman is hereby authorized to sign, on behalf of the SWSCC, all documents necessary to rescind the Relief Ordinances and to effectuate the Local Programming Restructuring Ordinance. Such documents shall include, but shall not be limited to, those documents listed on Exhibit 2 (hereto "Documents" ) . 3) The terms of this Resolution are contingent upon adoption, approval, and/or execution of all necessary Documents by the Member Cities of the SWSCC. 4) This Resolution shall be null and void if similar resolutions are not approved by all other Member Cities of the SWSCC within 90 days from the effective date of the first such resolution, as passed by a Member City. i -2- 5) The terms of this Resolution shall be null and void unless the conditions precedent to the effective date of the Local Programming Restructuring Ordinance, as set forth in Section 9 thereof, have been satisfied. This Resolution is passed and adopted this 23rd day of October, 1991 . SOUTHWEST SUBURBAN CABLE COMMISSION By Chairman 1101DAJ -3- Ivv ... � �� .. �.� vv++vaWtu � �.lu1LL t,VtrurllJJiV1\ I GO MOSS & BAR.ti ETT k -4800 Nom-est Center 90 Suuth Se%-emh Scree► ibineapolis. N1N 55-+02--+119 (612) 3-4--0300 EXHIBIT 1 to SWSCC RESOLUTION SUMMARY OF KEY ELEMENTS TO BE INCLUDED IN AGREEMENT TO EXTEND RELIEF 7/24/91 Unless otherwise identified the changes begin August 1 , 1992 : • 5% franchise fee to Cities • Paragon Cable assumes full responsibility for - local programming- News show production beginning November 24 , 1991 Annual budget $347, 000, escalated by 5% each year and deducted from gross revenues prior to calculation of the franchise fee • Beginning November, 1993 , news show will continue or $100, 000 of budget will be devoted to local origination • Continued coordination of programming with Cities and Commission • Retain service levels, equipment repair and replacement as defined in Performance Agreement and current contracts for local programming • No itemization of cost for local programming on customer bills for at least 2 years (July 31 , 1994 ) • Cooperation and participation between Paragon Cable and Commission to create meaningful reporting requirements • New agreement terminates upon sale or transfer 337ZO40 Cit,e� of Eden Prairie, Edina, Hopkins. Minnetonka h Richfield EXHIBIT 2 TO SWSCC RESOLUTION LIST OF DOCUMENTS 1 . SWSCC Resolution. 2 . Restated Performance Agreement . 3 . Restated Contract for Local Programming Facilities . 4 . Restated Contract for Public, Educational and Government Access Services . EXHIBIT 2 LIST OF DOCUMENTS 1 . City Resolution. 2 . Local Programming Restructuring Ordinance. 3 . Restated Performance Agreement. 4 . Consent Agreement and Guaranty of Performance. I I r ORDINANCE NO. 1122 An Ordinance Repealing the CATV Relief Ordinance, Ordinance No. 1121, and CATV Relief Ordinance Amendment, Ordinance No. 1121-A1, Providing for the Continuance of Certain Aspects of the CATV Relief Ordinance, As Amended, and Restructuring the Manner in which Local Programming is Funded. The City Council of the City of Edina ordains as follows : Section 1. Short Title. This Ordinance shall be known as the "Local Programming Restructuring Ordinance. " Section 2. Background and Purpose. In 1984 , Grantee requested that the Southwest Suburban Cable Commission ("SWSCC") and Member Cities substantially restructure certain aspects of the Franchise in response to the serious financial difficulties experienced by the Grantee. The Member Cities enacted the CATV Relief Ordinance and the SWSCC and the Member Cities entered into the Performance Agreement in response to Grantee' s request . The result was to reduce Grantee' s Local Programming Obligations and Franchise Fee requirement, provide Grantee with an incentive to refinance its debt obligation and increase the involvement of the SWSCC and Member Cities in funding Local Programming Obligations and monitoring Grantee' s performance. The CATV Relief Ordinance Amendment was enacted in 1988 as a part of the transfer of control of Grantee and resulted in the continuance of the CATV Relief Ordinance with some modification. In 1990, Grantee petitioned SWSCC to extend the provisions of the CATV Relief Ordinance and CATV Relief Ordinance Amendment (collectively "Relief Ordinances" ) through the term of the franchise. The SWSCC and Grantee reviewed the request through a series of meetings of the SWSCC operating committee and commission. The SWSCC, Member Cities and Grantee concur that the implementation of the Relief Ordinances has contributed to the achievement of the original goal of the SWSCC and its Member Cities : stabilizing and improving the financial condition of the Grantee. As a result, certain SWSCC oversight responsibilities and reporting requirements imposed by the Relief Ordinances and Performance Agreement are no longer necessary. The SWSCC and Grantee also concur that certain changes in the usage of channels on the cable system and the provision of access programming, community access programming and local origination programming (collectively "Local Programming") resulted in a channel line-up including more satellite programming services than originally proposed by Grantee, as well as focusing Local Programming channels so as to better serve the Member Cities . The resulting programming line-up provides diversity and appeal to CATV subscribers while maintaining a strong Local Programming component. It was agreed that the mix and level of satellite services and Local Programming should be continued. Finally, it was determined that since Grantee had improved and stabilized its financial condition, it should assume full responsibility for funding Local Programming as was contemplated at the time of the Franchise award. Since the SWSCC will no longer be a direct participant in the funding of Local Programming, it was determined that the role of the SWSCC in the oversight of Local Programming should be restructured. The SWSCC has adopted a resolution approving the modification and extension of certain provisions of the Relief Ordinances and related documents ("SWSCC Resolution") . Each of the Member Cities must also adopt a similar Resolution. This Ordinance will be effective only if the terms of the SWSCC Resolution are satisfied and Grantee agrees to be bound by the terms of this Ordinance through the execution of an Acceptance Agreement. Section 3 . Relationship to Cable Communications Ordinance. This Ordinance does not permanently amend any provision of the Cable Communications Ordinance (the "Franchise") but provides that certain provisions of that ordinance are modified for a period of time as provided herein. Except as expressly modified in this Ordinance and related agreements entered into pursuant to this Ordinance, the provisions of the Franchise remain in full force and effect . In the event of a conflict or inconsistency between the Franchise or offering and any provision of this Ordinance, the Restated Performance Agreement or any other document entered into pursuant to this Ordinance, the provision of this Ordinance, the Restated Performance Agreement or said document entered into pursuant to this Ordinance shall be controlling so long as this ordinance remains in effect . Section 4 . Definitions. Subdivision 1. The definitions in the Franchise also apply to this Ordinance. Subdivision 2. In addition, the following words and phrases shall have the meanings given them: (1) "Franchise" means the Cable Communications Ordinance as now or hereafter amended. -2- (2) "Local Programming" means access , community access and/or local origination programming as set forth in the Restated Performance Agreement . (3) "Local Programming Obligations" means Grantee ' s obligations under the Franchise and the Offering for cablecast access , community access and local origination programming . (4) "News Show" means that show produced by Grantee pursuant to an Agreement with the SWSCC dated January 23 , 1991 . (5) "Relief Ordinances" means the CATV Relief Ordinance as modified by the CATV Relief Ordinance Amendment . ( 6) "Restated Performance Agreement" means that contractual agreement between Grantee, City and SWSCC establishing the terms and conditions under which Grantee will be required to fund and otherwise fulfill its Local Programming requirements and establishing reporting standards and criteria for Franchise compliance in other areas . (7) "Restructured Local Programming Obligations" means Grantee ' s access , community access and local origination programming obligations as set forth in the Local Programming Restructuring Ordinance and the Restated Performance Agreement . Compliance with the Restructured Local Programming Obligations shall supersede and be in complete satisfaction of the Local Programming Obligations . Section 5 . Repeal of Relief Ordinances . This Ordinance hereby repeals the CATV Relief Ordinance, Ordinance No . 1121 and the CATV Relief Ordinance Amendment , Ordinance No . 1121-A1 effective August 1, 1992 . Through July 31, 1992 , the provisions of the Relief Ordinances shall remain in effect unless specifically superceded by this Ordinance. Due to a typographical error, Section 6 , Subdivision 1 of the CATV Relief Ordinance Amendment stated an Automatic Termination date of March 1 , 1991 . The correct date to be referred to is March 1 , 1992 . Section 6 . Financial Terms . While this Ordinance is in effect the obligations of Grantee are modified to the extent provided in this section. Subdivision 1 . Franchise Fees - Percentage . The annual franchise fee shall be 50 of Gross Revenues payable as follows . An annual franchise fee of 4% shall be paid to City in equal quarterly payments on or before the first day of each of the months of November , February, May and August next following the end of Grantee ' s fiscal year . These payments are consistent with -3- the payment arrangement contained in the Relief Ordinance. In addition and pursuant to the new local programming funding commitments set forth in Subdivision 4 herein, an annual franchise fee of 1% of Gross Revenues for the most recently completed quarter shall be paid to City in quarterly payments on or before the first day of each of the months of November, February, May and August on current year revenues beginning August 1, 1992. For purposes of calculating the annual franchise fee, all amounts spent to fund the Restructured Local Programming Obligations shall be deducted from Gross Revenues. Subdivision 2. Letters of Credit. The City Council may by resolution reduce the required amount of the Letter of Credit below $50,000 if in its sole discretion it determines that a lesser amount is reasonable and adequate to protect the public. It may thereafter, by resolution, require the amount of the Letter of Credit to be increased or fully restored to the amount of $50, 000 . Grantee shall comply with this requirement within sixty days after written notice has been given by the City. Subdivision 3 . Performance Bond. The Grantee may dispense with the $300, 000 performance bond required by the Franchise. The City Council may thereafter by resolution require that such bond, or similar bond in a lesser amount, be provided by Grantee. Grantee shall comply with this requirement within sixty days after written notice has been given by the City. Subdivision 4 . Restructured Local Programming Obligations . Beginning with the third weekly show of November, 1991, Grantee shall assume responsibility for funding the production of the News Show. The News Show shall continue to be produced in a manner which is generally consistent with the terms of the Agreement for Programming Services between Grantee and the SWSCC, a copy of which is attached hereto as Exhibit 1. However, the role of the SWSCC and the Member Cities shall be advisory in nature and neither the SWSCC or Member Cities shall be required to provide ongoing direct financial support for the News Show. Grantee shall be obligated to continue to fund and produce the News Show for a period of two (2) years through the second weekly show of November, 1993 . Thereafter, Grantee shall be required to expend at least $100, 000 annually of its total funding requirement under the Restructured Local Programming Obligations on local origination programming. Such funding shall be expended by Grantee in consultation with the SWSCC, as set forth in the Restated Performance Agreement. All provisions of the Relief Ordinances and Performance Agreement related to the funding of Local Programming shall remain in effect through July 31, 1992. Beginning August 1, 1992, Grantee shall assume full responsibility for funding the Restructured Local Programming Obligations. From August 1 through December 31, 1992, the budget for local programming shall be 5/12ths of $347, 000; -4- provided that Grantee shall be required to meet all Restructured Local Programming Obligations, including the production of the News Show, irrespective of the actual cost of meeting such obligations. Thereafter, the annual budget shall be escalated by an amount equal to five percent (5%) of such budget on an annualized basis as estimated in Exhibit 2 hereto. Throughout the term of this Ordinance, Grantee shall consult with the SWSCC concerning the provision of the Restructured Local Programming Obligations pursuant to the terms of the Restated Performance Agreement . The expenditures made pursuant to this subdivision shall be in complete satisfaction of Grantee' s total Restructured Local Programming Obligations during the period of this ordinance and shall be deemed to satisfy Grantee' s Local Programming Obligations as well. The amount of funding for the Restructured Local Programming Obligations shall not include any costs of operation, capital for access equipment replacement or administration not directly related to the provision of Local Programming. Grantee shall be responsible to maintain or replace, as necessary, the equipment listed in the Exhibit to the Contract for Local Programming Facilities, which is Exhibit 1 to the Performance Agreement, and shall not offset such expenditures against the funding for the Restructured Local Programming Obligations . Section 7. Automatic Termination. The provisions of this Ordinance, and the reduced financial terms contained herein may, at the option of City, cease to be effective, upon the occurrence of the earliest of any of the following events: Subdivision 1. Failure of the Grantee to restore or replace the full required amount of the Letter of Credit as provided in Article VIII, Section 4 , paragraph H of the Franchise. Subdivision 2. Failure of the Grantee to restore, replace or increase either a Letter of Credit or bond within sixty days of written notice by the City, as provided in Section 6, Subdivisions 2 and 3 of this Ordinance. Subdivision 3 . A holding or determination by any court or agency that any term, condition or provision of this Ordinance is invalid or unenforceable, as a result of any action taken by Grantee or anyone acting on Grantee' s behalf seeking such determination. Subdivision 4 . Sale or transfer of all or substantially all of the System to a person or entity other than a parent, subsidiary, related corporation, affiliated corporation, partner or joint venturer of Grantee or any parent of Grantee. Subdivision 5. Termination of the Franchise. -5- Section 8. Other Terminations. This Ordinance may also be terminated for cause, under the same procedures for termination as are contained in the Franchise, for the following reasons: Subdivision 1. All grounds for termination provided in the Franchise and the Local Programming Restructuring Ordinance, except to the extent that Grantee' s performance obligations are modified in the Local programming Restructuring Ordinance. Subdivision 2. Failure of the Grantee to comply with any of the material provisions of the Restated Performance Agreement. Section 9. Effective Date. This ordinance shall be effective upon passage and adoption by City and upon satisfaction of all of the following conditions: (1) Publication of this Ordinance; (2) Passage and adoption by each of the Member Cities of the SWSCC of an Ordinance similar to this Ordinance within 90 days of the adoption of such Ordinance by the first Member City; (3) Execution by Grantee of all documents necessary to repeal the Relief Ordinances and effectuate the Local Programming Restructuring Ordinance. Such documents shall include, but not be limited to, those documents listed on Exhibit 3 attached hereto ("Documents") . The executed Documents shall be delivered at a closing to be held at the office of the SWSCC administrator within 90 days of the passage of the Local Programming Restructuring Ordinance by the final Member City ("Closing") . (4) Conformance with the provisions of Article XIV of the Franchise including delivery to the City of the acceptance, opinion of legal counsel, guarantees, and other documents as required by said Article XIV, before or at Closing. Passed by the City Council of the City of Edina, Minne ota this 18th day of November , 1991. �- c By_ Q," Mayor Action on above ordinance: Date of first reading: 11-04-91 Date of second reading: 11-18-91 -6- Motion for Adoption: Kelly Seconded by: Smith Voted in favor:Kelly. Paulus . Smith, Richards Voted against: None Abstained: None Absent • Rice Ordinance adopted: November 18 , 1991 Date of Publication:November 27 , 1991 1208DAJ -7- — EXHIBIT 1 TO ORDINANCE _ AGREFMEIRT FOR PROGRAM SERVICES This AGREEMENT made and entered into by and between the Southwest Suburban Cable Commission, a Joint Powers Commission organized pursuant to the laws of the State of Minnesota, hereinafter referred to as the "SWSCC" , and Paragon Cable of Minnesota, hereinafter known as "Contractor" . WITNESSETH: WHEREAS, the SWSCC wishes to purchase the services of the Contractor to provide videotape programming for a news show to be known as "Southwest Community News" ; and WHEREAS, the Contractor has the capability and personnel to provide the programming desired by the SWSCC; and WHEREAS, the Contractor understands and the SWSCC likewise understands that in order to provide the programming that is desired by the SWSCC, the cooperation of both the SWSCC and Contractor will be essential; and WHEREAS, the SWSCC has made available funding for the purchase of the services of Contractor; and NOW, THEREFORE, in consideration of the mutual undertakings and agreements hereinafter set forth, the SWSCC and the contractor agree as follows : I . RESPONSIBILITIES OF THE PARTIES A. Contractor Responsibilities: 1 . Southwest Community News Show. Contractor will develop and produce fifty-two (52) weekly news shows covering events and issues both relevant and timely to the five Southwest Cities, members of the SWSCC. Contractor, in providing and developing the news show, will rely heavily on the cooperation and assistance of each of the five Southwest Cities . The story ideas and contacts will be provided by each of the Cities on a weekly basis. It is the understanding of the Contractor and the SWSCC that in the event any City does not provide information or assistance in a timely manner, it will result in uneven representation of the Cities and perhaps higher production costs . 2 . Southwest Community News Show Format . The program will be a 30-minute news show with generally short (1-4 minutes) news items . The Contractor will explore with the SWSCC the option of including studio interviews or more indepth reporting of complex W and/or controversial issues. Any change in the format brought about by specific requests of the SWSCC may require further costs . However, Contractor understands that any changes will not be initiated without first receiving the authority of the SWSCC. 3 . Southwest Community News Scheduling. The show will be simulcast on Channel 34 (to the five Member Cities) a minimum of fourteen (14) times over a seven (7) day period with each show being first shown each Friday at 6:30 p.m. The show will also be shown during two (2) time slots each week on Channel 6, the Regional Channel. Additionally, each Member City has the option to request the contractor to schedule up to three (3) narrowcasts (to that City) each week. All such requests for narrowcasting shall be in writing every thirty (30) days and with not less than seven (7) days advance notice to contractor. All playback of the show will be within the regularly scheduled playback hours (as defined by the Access Rules) . Contractor will experiment with other time slots in order to identify the most watched time slots; however, schedules will be published in advance and minimal changes will be made. 4 . Southwest Community News Show Viewer Feedback. Contractor will have a dedicated phone line providing 24-hour feedback by subscribers to its Cable system. The purpose of this will be to provide timely information to contractor, as well as the SWSCC, about the interest of the viewing public in the news show. 5 . Promotion & Evaluation: a . The Contractor will cooperate with the Cities in providing information to enable the SWSCC to promote the program. Press releases and schedules will be prepared by the SWSCC on its letterhead. b. Contractor will assist in evaluation, providing information and counsel based on its experience and resources. 6. Cooperation. Contractor understands that its timely performance of the provisions of its responsibilities included herein are essential to bring about the best possible news show. Further, Contractor understands that it will need to assist and work with appropriate representatives designated by each of the five Southwest Member Cities . Contractor agrees that it will designate specific persons who will have the responsibility to ensure the production of the programming and to coordinate with representatives of the City. 1 -2- B. , Responsibilities of SWSCC: 1. Cooperation in the Development of News Shows . Each of the Member Cities to the SWSCC will designate a contact person for the Contractor. It will be the responsibility of each person so designated by the City to coordinate with and work with the representatives of the Contractor to ensure the initiation of the story, ideas, and content of programming to be developed by the Contractor. 2 . Facilities . The SWSCC will ensure that its Member Cities will provide reasonable access to their facilities for the Contractor to ensure that the Contractor is able to provide at the various Cities ' facilities news shows in response to the request of the designated individuals of the City. 3 . Promotion. The SWSCC will be responsible for promotion and marketing the show and for costs it incurs for such purposes. However, it is understood that it will have the assistance of Contractor and its expertise. Further, it is understood that Contractor will include a listing of the show in the Cable Guide. 4 . Focus . The SWSCC may, at any time, with the assistance of Contractor, conduct a survey, focus group review, or incorporate other measures to evaluate the impact of the show and the subscriber acceptance of it. Costs for any such evaluation shall be the responsibility of the SWSCC, except the reasonable time and service of Contractor devoted to providing assistance. II. TERM AND TERMINATION A. Term: This Agreement shall be for a 12-month term consisting of fifty-two (52) weekly shows beginning November 17, 1990. B. Termination: Either party may terminate this Agreement by giving 30 days written notice to the other. III . COST AND PAYMENT A. Cost: Each show will be produced at a cost not to exceed $1, 962.50. B. Monthly Statements : Contractor will submit monthly billing statements to the SWSCC with payment due within 30 days of the date of the billing statement . �� -3- IV. INDEPENDENT CONTRACTOR The Contractor shall select the means, method, and manner of performing the services herein. Nothing is intended or should be construed in any manner as creating or establishing the relationship of co-partners between the parties hereto or as constituting the Contractor as the agent, representative, or employee of the SWSCC for any purpose or in any manner whatsoever. The Contractor is to be and shall remain an independent Contractor with respect to all services performed under this Agreement. The Contractor represents that it has or will secure at its own expense all personnel required in performing services under this Agreement. Any and all personnel of the Contractor or other persons while engaged in the performance of any work or services required by the Contractor under this Agreement shall not have any contractual relationship with the SWSCC or its Member Cities; and shall not be considered employees of the SWSCC or its Member Cities . Any and all claims that may or might arise under the Unemployment Compensation Act or the Workers ' Compensation Act of the State of Minnesota on behalf of said personnel, arising out of employment or alleged employment, including, without limitation, claims of discrimination against Contractor, its officers, agents, contractors, or employees, shall, in no way, be the responsibility of the SWSCC or its Member Cities . The Contractor shall defend, indemnify, and hold the SWSCC and its Member Cities and any of their officers, agents, and employees, harmless from any and all such claims irrespective of any determination of any pertinent, tribunal, agency, board, commission, or court. Such personnel or other persons shall neither require nor be entitled to any. compensation, rights, or benefits of any kind whatsoever from the SWSCC or its Member Cities, including, without limitation, tenure rights, medical and hospital care, sick and vacation leave, workers ' compensation, unemployment insurance, disability, severance pay, and PERA. V. INDEMNITY AND INSURANCE A. The Contractor agrees to defend, indemnify, and hold the SWSCC, its officers, employees, and agents, harmless from ,any liability, claims, damages, costs, judgments, or expenses, including reasonable attorney' s fees, resulting directly or indirectly from any act or omission (including without limitation professional errors or omissions) of the Contractor, its agents, employees, or assignees in performance of the services provided by this Agreement and against all loss by reason of the failure of said Contractor to fully perform, in any respect, all obligations under this Agreement. _ B. In order to protect itself, as well as the SWSCC, under the indemnity provisions here and above set forth, the Contractor agrees at all times during the term of this Agreement to have and keep in force: -4- 1. A single limit or combined limit or access umbrella professional liability insurance policy covering the activities of the Contractor while performing services for the SWSCC, through its Member Cities, in the following amounts: $1-million for personal injuries and/or damages, and $1-million for total personal injuries and/or damages arising from one occurrence. 2 . A single limit or combined limit or access umbrella commercial general liability insurance policy of an amount of not less than $1-million for property damage arising from one occurrence, $1-million for total bodily injuries and/or damages arising from one occurrence, and $1-million for total personal injuries and/or damages arising from one occurrence. VI . DATA PRIVACY Contractor agrees to abide by all applicable state and federal laws and regulations concerning the handling and disclosure of private and confidential information concerning individuals and/or data including, but not limited to, information made nonpublic by such laws or regulations . VII . OWNERSHIP Contractor understands, and SWSCC agrees, that all programs produced by the Contractor shall be the property of the SWSCC and the SWSCC shall be responsible for the maintenance and storage of each program videotape. Further, the - SWSCC shall have the responsibility to ensure that any applicable requirements with respect to the storage of these program tapes are accomplished by it. Contractor will retain the video tapes during the term of this Agreement. After the term of this Agreement, SWSCC will be responsible for the location and storage of the video tapes . VIII . NON-ASSIGNMENT The Contractor shall not assign, subcontract, transfer, or pledge this Agreement and/or the services to be performed tender, whether in whole or in part, without the prior written consent of the SWSCC. IX. MERGER AND MODIFICATION A. It is understood and agreed that the entire Agreement between the parties is contained herein and that this Agreement supersedes all oral agreements and negotiations between the parties relating to the subject matter hereof . All items referred to in this Agreement are incorporated or attached and are deemed to be part of this Agreement. 0 -5- B. Any alterations, variations, modifications, or waivers of provisions of this Agreement shall only be valid when they have been reduced to writing as an amendment to this Agreement signed by the parties hereto. IX. CONTRACT ADMINISTRATION In order to coordinate the services of the Contractor with the activities of the SWSCC and its Member Cities so as to accomplish the purpose of this Agreement, Adrian Herbst, administrator for the SWSCC, shall manage this Agreement on behalf of the SWSCC and serve as liaison between the SWSCC, its Member Cities, and the Contractor. X. NOTICES Any notice or demand which must be given or made by a party hereto under the terms of this Agreement or any statute or ordinance shall be in writing and shall be sent registered or certified mail. Notices to the SWSCC shall be sent to the SWSCC administrator at 4800 Norwest Center, Minneapolis, Minnesota 55402. Notices to the Contractor shall be sent to the attention of Debra Cottone, at 801 Plymouth Ave. No. , Minneapolis, Minnesota 55411. XI . LAW AND JURISDICTION This Agreement is entered into and may be enforced pursuant to the laws of the State of Minnesota and courts of applicable jurisdiction in Hennepin County, Minnesota. The foregoing Agreement/, has been entered into between the parties this ,z��� day of ,., , 1991 . Each of the parties have read the Agr ment, IF erstand it, and agree to be bound by it . PARAGON AB E/J SWSCC �x�:� v.P.a ��►� N!GR zlHl9 � 26Z040 1/4/91 -6- i EXHIBIT 2 TO ORDINANCE EXHIBIT 2 SCHEDULE OF ESTIMATED ANNUAL MINIMUM LOCAL PROGRAMMING EXPENDITURES YEAR ESTIMATED BUDGET (SOOO'S) 1992 $ 347* 1993 364 1994 383 1995 402 1996 422 1997 443 1998 465 1999 488 *1992 estimate based on 2% of gross revenues for 7 months (Jan - July) and 5/12ths of $347 ,000. 1992 base will be escalated by 5% annually thereafter. LPEST EXHIBIT 3 LIST OF DOCUMENTS 1. Restated Performance Agreement . 2 . Restated Contract for Local Programming Facilities . 3 . Restated Contract for Public, Educational and Government Access Services . 4 . Acceptance of Local Programming Restructuring Ordinance. 5 . Consent Agreement and Guaranty of Performance. I f RESTATED PERFORMANCE AGREEMENT This Agreement is made this day of , 1991, between KBL CABLESYSTEMS OF THE SOUTHWEST, INC. ("Grantee") , a Minnesota corporation, the CITY OF EDINA, MINNESOTA ("City" ) , a municipal corporation and political subdivision of the State of Minnesota, and the SOUTHWEST SUBURBAN CABLE COMMISSION ("SWSCC") , a joint powers organization created by the Cities of Eden Prairie, Edina, Hopkins, Minnetonka, and Richfield, Minnesota ("Member Cities" ) . This Agreement shall supercede the 1985 Performance Agreement between Grantee, City and SWSCC as amended in 1988 and shall be referred to as the Restated Performance Agreement. Section 1. Background. The SWSCC, its Member Cities and Grantee originally entered into the Relief Ordinances and Performance Agreement ("Relief Package") in 1985 in response to serious financial difficulties which Grantee was experiencing. The result of the Relief Package was to reduce the financial obligations of Grantee for Local Programming and Franchise Fees, to provide Grantee with an incentive to refinance its debt obligations and to increase the involvement of the SWSCC and its Member Cities in funding Local Programming Obligations and monitoring Grantee' s performance. The CATV Relief Ordinance Amendment was enacted in 1988 as a part of the transfer of control of Grantee and resulted in the continuance of the CATV Relief Ordinance with some modifications . In adopting Ordinance No. , the Local Programming Restructuring Ordinance, the SWSCC, its Member Cities and Grantee in 1991 acknowledged the success of the Relief Package. Grantee' s financial situation had improved significantly such that Grantee could resume full payment of franchise fees and responsibility for funding all Restructured Local Programming Obligations . It was determined that the mix of Local Programming and satellite services developed as a result of the Relief Package had proven successful and should be continued. Finally, with Grantee' s financial situation stabilized and with the Member Cities no longer involved in funding Local Programming Obligations, it was agreed that many of the increased oversight and reporting requirements contained in the Performance Agreement were no longer necessary and should be modified. Section 2. Definitions. The words and phrases used in this Agreement shall have the meaning given to them in the Franchise, Relief Ordinances and Local Programming Restructuring Ordinance. Attached as Exhibit 1 is a glossary of such words and phrases. Section 3 . Term. This Agreement shall commence upon the Effective Date, as defined herein, and shall cease upon the occurrence of any event causing termination of the Local Programming Restructuring Ordinance, pursuant to any provision of Sections 7 or 8 thereof . Section 4. Local Programming. 4 . 01 The parties agree to cooperate with one another to ensure that Local Programming is maintained and the needs of users are met. 4 .02 The obligations and responsibilities of Grantee with respect to public, educational and governmental access facilities shall be accomplished according to the terms of a contract between -2- i Grantee and SWSCC (the "Restated Facilities Contract") . This contract shall be executed by Grantee and the SWSCC and be in the form and substance attached hereto as Exhibit 2. 4 . 03 Grantee' s responsibilities for public, educational and governmental access personnel shall be established pursuant to a contract between Grantee and SWSCC (the "Restated Services Contract") . This contract shall be executed by the Grantee and SWSCC and be in the form and substance attached hereto as Exhibit 3 . 4 . 04 Grantee' s restructured obligations in support of Local Origination Programming ("Restructured Local Programming Obligations" ) shall be as follows : A. Grantee shall assume responsibility for the funding, production and cablecasting of the News Show as of the third weekly show of November, 1991. Grantee' s obligation to fund the News Show shall be for a period of two years through the second weekly show of November, 1993 . The News Show shall be produced in a manner generally consistent of the terms of the Agreement between Grantee and the SWSCC dated January 23, 1991; provided, however, the role of the City shall be advisory in nature and the City shall not be required to provide financial support for the News Show. B. Not less than Ninety (90) days before the expiration of the above-referenced two-year period, Grantee shall consult with the SWSCC and Member Cities concerning the effectiveness of the News Show, as well as alternative Local Origination Programming options . Based upon this consultation and Grantee' s -3- 1 1 assessment of the needs and desires of the communities and subscribers served by Grantee, Grantee shall formulate a Local Origination proposal which shall be included in its 1994 Local Programming Plan pursuant to Section 7. 04 hereof. C. So long as this Agreement remains in effect, Grantee shall allocate to Local Origination Programming, at least $100, 000 of its expenditures pursuant to its Restructured Local Programming Obligations . 4 . 05 Grantee' s financial support for its Restructured Local Programming Obligations shall meet those obligations set forth in Section 6 .4 of the Local Programming Restructuring Ordinance. 4 . 06 Upon the termination of this Agreement, the parties shall review in good faith any transition to be made in the organizational structure of local programming. 4 .07 Grantee agrees that it will not itemize expenses related to its Restructured Local Programming Obligations on its monthly subscriber statements for a period of two years from the effective date of this Agreement. Thereafter, Grantee reserves the right to itemize such expenses on its monthly subscriber statements; provided that Grantee shall provide SWSCC and City with notice of its intention to itemize such expenses together with a sample subscriber statement indicating the language to be used in itemizing such expenses and showing how such language will appear on the subscriber statement. Notice shall be provided at least 90 days prior to such language appearing on any monthly subscriber statement. -4- f . Grantee' s agreement not to itemize such expenses during the above-stated period is offered freely as an accommodation to the SWSCC and City and does not constitute an act of regulation by the SWSCC or the City. Grantee' s agreement not to itemize such expenses is done with full reservation of Grantee' s rights upon expiration of the above-stated period. SWSCC and City also fully reserve their rights to regulate the itemization of Local Programming expenses on monthly subscriber statements upon the expiration of the above-stated period. Section 5. Institutional Network. 5 . 01 The parties acknowledge that as of enactment of the Relief Ordinance, Grantee had not complied with provisions of the Franchise relating to the institutional network. Due to changes in the cable communications industry, community needs and financial projections since the granting of the Franchise, the need for and economic viability of an institutional network were unclear and required study. It was also recognized that institutional networks have not generally succeeded without substantial public initiation. In light of these factors, and in order for the City to make a final determination on the development of an institutional network, the parties created the SOUTHWEST INSTITUTIONAL NETWORK GROUP ("SWING") . 5 . 02 SWING consisted of nine (9) members, including a chairperson appointed by the SWSCC. Grantee appointed four (4) members and SWSCC also appointed four (4) additional members in consultation with the Member Cities . The staff of Grantee and SWSCC served as staff for SWING in the manner and to the extent designated by SWSCC. -5- Within eighteen (18) months from the date of the original Performance Agreement, SWING was mandated to produce a final report containing its recommendations to be provided to SWSCC, each Member City and Grantee. The report was to include, but not be limited to, recommendations on whether or not construction should occur, time for construction, method of financing construction and any special institutional services suggested or having a clear community need. In preparing its report and recommendations, SWING was to take into account the economic viability of such a network on a stand-alone basis, and the effect, if any, the construction of the network would have on the financial condition of Grantee and residential subscriber rates. 5.03 Pursuant to the report and recommendations issued by SWING, as amended in 1988 in anticipation of the transfer of control of Grantee, development of an institutional network shall be deferred for the longer of : (i) November 16, 1993, or (ii) until such time as the SWSCC reconvenes and/or reappoints SWING and SWING determines that the institutional network is economically viable and that the construction of the network would not have an adverse impact on the financial condition of Grantee and residential subscriber rates . Section 6. Service to New Residential Developments. 6 . 01 The City acknowledges that extensions of the System to new residential developments before those residential developments are completed leads to frequent damage to the System. This damage to the System results in increased construction costs passed on to subscribers, the interruption of service to many subscribers and increased maintenance expenses . -6- t 6 . 02 In recognition of these costs and disruptions, Grantee and the City agree that the System need not be extended to new residential developments until those developments are sufficiently complete, as reasonably determined by Grantee, to minimize the above-described problems . 6 . 03 Notwithstanding anything to the contrary, the City may require Grantee to extend the System to any new residential development in accordance with the terms and conditions of the Franchise as amended. 6 . 04 If the construction of any portion of the System is to be delayed pursuant to this Section, the terms of such delay shall be approved, in writing, by the City. Section 7. Reports and Reviews. 7.01 Monthly Reports. Grantee shall provide to the SWSCC and City copies of its monthly reports concerning subscriber statistics, subscriber complaints to the SWSCC or City and the status of their resolution, and local programming facilities and services usage statistics . 7 . 02 Franchise Fee Payment Report. Grantee shall submit to SWSCC and City a report detailing how the franchise fees payable for the quarter were calculated. The report shall be in a format developed in conjunction with the SWSCC. 7. 03 Annual Report. Grantee shall submit a report annually, by the later of May 1 or within one hundred and twenty (120) days after the close of Grantee's fiscal year, in a form provided to it by the City or SWSCC. The City or SWSCC shall provide Grantee with this form by the later of July 1 or six (6) -7- months prior to the end of Grantee' s fiscal year and it shall contain a description of the information reasonably required to inform the City and SWSCC of Grantee' s activity. The information to be provided shall include at a minimum: A. Subscriber statistics for the then prior fiscal year; B. A financial statement; C. Changes in management; D. Changes in ownership; E. Marketing activities; F. Evidence that the events causing termination of the Local Programming Restructuring Ordinance have not occurred; G. Confirmation that Grantee' s expenditures for Local Programming Obligations met or exceeded levels specified in the Local Programming Restructuring Ordinance. H. Subscriber and revenue projections for the then next fiscal year . The annual report shall be in addition to all other required reports and is intended to help the City determine Grantee' s compliance with the terms and conditions of this Agreement, the Franchise and Relief Ordinances, as amended by the Local Programming Restructuring Ordinance. 7. 04 Local Programming Plan. By the later of December 1 or thirty (30) days prior to the commencement of each of its fiscal years, Grantee shall submit to the SWSCC and City a Local Programming Plan. The Local Programming Plan shall include a budget and a narrative description of goals, objectives and strategies for the upcoming year. It shall also document -8- anticipated changes and/or enhancements to services or facilities . Grantee shall specify its plans for Local Origination Programming (as distinct from its plans for access programming) . The SWSCC and City shall have the opportunity to review and comment upon the Local Programming Plan. 7. 05 Additional Reports. Grantee shall prepare and furnish to the SWSCC and City, at the times and in the form prescribed by the SWSCC or City, such additional reports with respect to its operations, affairs, transactions or property which the SWSCC or City deems necessary. Where possible, the SWSCC or City shall utilize reports that have been already prepared by Grantee. 7. 06 Form of Reports. All reports required of Grantee shall be prepared as follows: A. All financial statements or other financial reports shall be prepared in accordance with generally accepted accounting principles and certified by Grantee' s chief financial officer. B. All other reports shall be signed and verified by at least one (1) officer authorized to sign on behalf of Grantee. 7. 07 Annual Review. Within sixty (60) days after receipt of the annual report, the SWSCC and City may conduct an annual review of Grantee' s performance. A. Grantee shall respond to questions and requests from the City concerning its annual report, its performance, and/or financial condition. B. If the annual report, as described in Section 7.03 above, fails to establish to the satisfaction of the SWSCC and City that the terms of the Local Programming Restructuring -9- Ordinance should continue by demonstrating that the events causing termination have not occurred, then Grantee shall respond to questions and requests from the City for additional evidence. C. Upon a written determination by the City that Grantee has failed to meet the showing required in subsection B. above, the City may require Grantee to enter into good faith negotiations to modify or terminate the Local Programming Restructuring Ordinance. D. In the event Grantee fails to negotiate in good faith, the City may terminate the Local Programming Restructuring Ordinance. 7. 08 Annual Subscriber Survey. A. Grantee shall conduct an annual survey of its subscribers concerning satisfaction with the programming offered by Grantee and satisfaction with the overall quality of service provided by Grantee. The manner and form of the survey and any questionnaires shall be designed to provide statistically reliable information. B. At least thirty (30) days prior to the survey being conducted, Grantee shall contact the SWSCC and City concerning any specific information which the SWSCC or City would like to ascertain through the survey. Grantee shall make a good faith effort to incorporate any requests from the SWSCC or City into the survey. C. The results of the survey shall be discussed with the SWSCC and City at the first SWSCC meeting scheduled after such results have been completed and reviewed by Grantee. The City -10- shall have the right to inspect and review subscriber-returned surveys . Section 8. Cooperation Between Parties. The SWSCC, City and Grantee shall meet regularly or at the request of any party during the term of this Agreement to discuss and review issues including, but not limited to, (i) changes in the cable industry; (ii) Grantee' s performance under this Agreement and the Franchise; and (iii) solutions to problems confronting Grantee and the System. Section 9. Validity of Franchise Provisions. 9 .01 Grantee agrees that the temporary reduction of the franchise fee provided in the Relief Ordinances as amended by the Local Programming Restructuring Ordinance in no way affects the validity of the franchise fee established in the Franchise. Grantee further agrees that it will in no way challenge the validity of the franchise fee established in the Franchise when that fee is restored upon termination of the Relief Ordinance, as amended by the Local Programming Restructuring Ordinance. 9 . 02 Grantee represents and warrants that the rates now in force and those rates to be in force and effect in the future include all costs of a five percent (5%) franchise fee. Section 10. Breach. Any breach of this Agreement by Grantee as finally determined by City after proceeding in accordance with the provisions of Article IX of the Franchise shall constitute cause for termination of the Local Programming Restructuring Ordinance. -11- Section 11. Miscellaneous Provisions. 11. 01 No Recourse Against City. Grantee shall have no recourse whatsoever against the SWSCC or the City or their elected officials, agents, employees or commissions for any loss, costs, expense or damage arising out of any provision or requirement of this Agreement, the Relief Ordinances or the Local Programming Restructuring Ordinance, or because of the enforcement of this Agreement, the Relief Ordinances or the Local Programming Restructuring Ordinance. No receipt or review, or objection or other action made or taken, by the City or SWSCC or any Member City, as to any report, statement, plan or study given or received pursuant to this Agreement shall impose any liability or obligation of any kind upon the City, other Member Cities or the SWSCC, or be, or be deemed to be, an amendment to the Franchise, Relief Ordinances or Local Programming Restructuring Ordinance. 11. 02 Indemnification and Insurance. The provisions of Article VIII of the Franchise pertaining to indemnification and insurance are applicable to this Agreement and the performance of this Agreement by the City, SWSCC and their employees, officers, officials, representatives and agents and said Article VIII of Franchise is hereby incorporated in this Agreement and made a part of it . 11. 03 Severability. A holding or determination by any court or agency that any term, condition or provision of this Agreement is invalid or unenforceable, as a result of any action taken by Grantee or anyone acting on Grantee' s behalf seeking such determination, shall render this Agreement at City's discretion wholly null and void. -12- 11. 04 Complete Agreement. This Agreement constitutes the entire agreement and understanding between the parties and no oral modifications or additions shall be binding. No verbal or written statement of the parties shall be considered a modification of this Agreement except by a written document signed by the parties expressly stating that it is modifying the Agreement and setting forth the new conditions or provisions of the Agreement . 11. 05 Governing Law. This Agreement shall be interpreted in accordance with the laws of the State of Minnesota. 11. 06 Captions . The captions to sections throughout this Agreement are intended solely to facilitate reading and reference to the sections and provisions of this Agreement . Such captions shall not affect the meaning or interpretation of this Agreement. 11. 07 Interpretation. This Agreement has been arrived at by negotiation and shall not be construed against any party. In the event of any dispute or question as to the meaning, interpretation or application of any term, provision or condition of this Agreement, the Relief Ordinances, or the Local Programming Restructuring Ordinance, the City, in its sole discretion, shall resolve such dispute or question; provided however that, to the extent the terms of this Agreement, the Relief Ordinances or the Local Programming Restructuring Ordinance are in conflict with the Franchise or the Offering, the terms of this Agreement, the Relief Ordinances or the Local Programming Restructuring Ordinance shall be governing. 11. 08 Other Laws . This Agreement is subject to federal, state and local laws and rules and to the requirements of the Federal Communications Commission. -13- 11. 09 Notices . Any notice required to be given or served upon any party in connection with this Agreement shall be in writing and shall be deemed to have been given and received, (1) three business days after a registered or certified letter containing the notice, properly addressed, with postage prepaid, is deposited in the United States mail; or (2) if made in any other manner, upon actual delivery to and receipt by the party to whom it is addressed. Notice shall be given to the parties at the following addresses : If to Grantee: KBL Cablesystems of the Southwest, Inc. 801 Plymouth Avenue North Minneapolis, Minnesota 55411 If to SWSCC: Adrian E. Herbst Southwest Suburban Cable Commission c/o Moss & Barnett 4800 Norwest Center 90 South Seventh Street Minneapolis, Minnesota 55402-4119 If to City: City Manager City of Edina 4801 West 50th Street Edina, Minnesota 55424 The foregoing addresses may be changed by notice given as above provided. Any address change shall be effective ten (10) days after such notice of change is given as above provided. Section 12. Effective Date. This Agreement shall become effective upon its execution, provided that all terms and conditions set forth in Section 9 ("Effective Date") of the Local Programming Restructuring Ordinance, a copy of which is attached hereto as Exhibit 4, have -14- been satisfied, and provided further that the terms of the Relief Ordinances and Performance Agreement shall be deemed to be in effect through July 31, 1992,. and shall supercede any requirements set forth in this Agreement except for those obligations related to Local Origination Programming set forth in Section 4 .04A herein. CITY OF EDI A, M NESOTA c. By Its la By Its M nu r SOUTHWEST SUBURBAN CABLE COMMISSION By Its By Its KBL CABLESYSTEMS OF THE SOUTHWEST, INC. By Its 1203DAJ -15- EXHIBIT 1 GLOSSARY For the purpose of this Agreement, the following terms, phrases, words and their derivations shall have the meaning given herein. When not inconsistent with the context, words used in the present tense include the future, words in the plural number include the singular number, and words in the singular number include the plural number. The words "shall" and "will" are mandatory and "may" is permissive. Words not defined shall be given their common and ordinary meaning. 1. Access or Community Access shall mean the right or privilege of the general public, local educational authorities, and local government to use designated facilities, equipment or channels of the Company. Channels shall be made available pursuant to Section IV of the Restated Contract for Local Programming Facilities . 2 . Basic Service means all subscriber services provided by Grantee, including the delivery of broadcast signals, covered by the regular monthly charge paid by all subscribers, excluding optional services for which a separate charge is made. 3 . Cablecast shall mean programming in a video, audio or data format transmitted through the cable communications system to users and subscribers. 4 . Channel or Television Channel shall mean a six megahertz (6 MHz) frequency band, including adjacent vertical blanking interval, which is capable of carrying one standard video signal, a number of audio, digital or other non-video signals, or some combination of such signals . 5 . City means the City of Eden Prairie, Edina, Hopkins, Minnetonka or Richfield, a municipal corporation in the State of Minnesota which has granted the Franchise. 6 . Class IV Channel means a signaling path provided by a System to transmit signals of any type from a subscriber terminal to another point in System. 7. Connection means the attachment of the drop to the first radio or television set of the subscriber. 8 . Converter means an electronic device which converts signals to a frequency not susceptible to interference within the television receiver of a subscriber, and by an appropriate channel selector, also permits a subscriber to view all basic subscriber signals, including the basic service delivered at designated converter dial locations . 9 . Council means the governing body of City. 10 . Drop shall mean the cable that connects the subscriber terminal to the nearest feeder cable of the cable. 11. FCC shall mean the Federal Communications Commission and any legally appointed, designated or elected agent or successor. 12 . Franchise shall mean the Cable Communications Ordinance, as now or hereafter amended, of Member Cities . 13 . Franchise Area shall mean the cities of Edina, Eden Prairie, Hopkins, Minnetonka and Richfield, Minnesota, together with any future annexations or lawful expansions. 14 . Grantee shall mean KBL Cablesystems of the Southwest, Inc. a Minnesota corporation. 15 . Gross Revenues shall mean all revenue derived directly or indirectly by Grantee, its affiliates, subsidiaries, parent, and any person in which Grantee has a financial interest of five percent (5%) or more from or in connection with the operation of the System, including, but not limited to, basic subscriber service monthly fees, pay cable fees, installation and reconnection fees, leased channel fees, converter rentals, studio rental, production equipment and personnel fees, and advertising revenues . The term does not include any taxes on services furnished by Grantee and imposed directly upon any subscriber or user by the State, City or other governmental unit and collected by Grantee on behalf of said governmental unit. For purposes of calculating the annual franchise fee, all amounts spent to fund the Restructured Local Programming Obligations shall be deducted from Gross Revenues . 16 . Installation means the connection of the System from feeder cable to the point of connection. 17. Local Programming shall mean access, community access, and/or local origination programming. 18 . Local Programming Obligations means Grantee' s obligations under the Franchise and the Offering for cablecast access, community access and local origination programming. 19 . Local Origination Programming shall mean programming produced under the control of the Company which is of interest to those living on the Franchise Area. 20 . Lockout Device is an optional mechanical or electrical accessory to a subscriber' s terminal which inhibits the viewing of a certain channel or channels provided by way of cable communications system. -2- 21. Member Cities shall mean the cities of Edina, Eden Prairie, Hopkins, Minnetonka and Richfield, Minnesota. 22. News Show means that show produced by Grantee pursuant to an Agreement with the SWSCC dated January 23, 1991. 23 . Offering of Grantee or Offering shall mean that certain document dated December 5, 1980, entitled "Offering of Grantee" and signed by Grantee and City, which document is on file with the City Clerk. 24 . Playback Operator shall mean that employee of Company whose responsibilities shall include, but not be limited to, the codification and implementation of all access schedules . 25 . Programming shall mean any video, audio, teat or data signal carried over the system. 26 . Public Building is any building owned or operated by the United States government or any subdivision thereof, or the State of Minnesota or any subdivision thereof, or the City or any other governmental subdivision, or school district or educational institutions . (Article I, Section 2, Paragraph V, amended effective 09/83 . ) 27. Public Property is any real property owned by City other than a street. 28 . Relief Ordinances means the CATV Relief Ordinance as modified by the CATV Relief Ordinance Amendment. 29 . Restated Performance Agreement means that contractual agreement between Grantee, City and SWSCC establishing the terms and conditions under which Grantee will be required to fund and otherwise fulfill its Local Programming requirements and establishing reporting standards and criteria for franchise compliance in other areas. 30. Restructured Local Programming Obligations means Grantee' s access, community access and local origination programming obligations as set forth in the Local Programming Restructuring Ordinance and the Restated Performance Agreement. Compliance with the Restructured Local Programming Obligations shall supersede and be in complete satisfaction of the Local Programming Obligations . 31. Scrambler/Descrambler refers respectively to the equipment installed to the cable communications - system' s headend equipment and subscriber terminal used to isolate pay cable and other ancillary service channels from basic service which is accomplished by electronically distorting the signal prior to its transmission through the cable communications system and -3- reconstituting the signal at each authorized location for subsequent display. 32. Sidewalk is the portion of a street delineated for pedestrian travel . 33 . Street shall mean the surface of and the space above and below any public street, road, highway, freeway, lane, path, public way, alley, court, sidewalk, boulevard, parkway, drive or any easement or right-of-way now or hereafter held by City which shall, within its proper use and meaning in the sole opinion of City, entitle Grantee to the use thereof for the purpose of installing or transmitting over poles, wires, cables, conductors, ducts, conduits, vaults, manholes, amplifiers, appliances, attachments and other property as may be ordinarily necessary and pertinent to a System. 34 . SWSCC shall mean the Southwest Suburban Cable Commission. 35 . Subscriber means any person or entity who subscribes to a service provided by Grantee by means of or in connection with the System regardless of whether a fee is paid for such service. 36. Subscriber Network shall mean a single trunk 440 MHz cable activated with 54 downstream channels and 4 return or upstream channels, as it may be upgraded from time to time. 37. Syst.em means a system of antennas, cables, wires, lines, towers, waveguides or other conductors, converters, equipment or facilities, designed and constructed for the purpose of producing, receiving, transmitting, amplifying and distributing, audio, video and other forms of electronic or electrical signals, located in City. Said definition shall not include any system wholly internal to one or more multiple unit dwellings under common ownership, control or management, and does not use City streets or other public property. In any event, system as defined herein shall not be inconsistent with any definition as set out in state law. 38 . User or Local Programming User shall mean any person who utilizes the System studio or facilities, whether for a charge or without charge. 1203DAJ -4- I EXHIBIT 2 TO THE RESTATED PERFORMANCE AGREEME RESTATED CONTRACT FOR LOCAL PROGRAMMING FACILITIES THIS AGREEMENT is made and entered into this day of 1991, by and between the SOUTHWEST SUBURBAN CABLE COMMISSION (hereinafter SWSCC) and KBL CABLESYSTEMS OF THE SOUTHWEST, INC. (hereinafter Grantee) , a Minnesota corporation. W I T N E S S E T H WHEREAS, Grantee pursuant to Chapter 238 of the Minnesota Statutes and pursuant to the Franchise of member cities has been granted a Franchise to construct, own and operate a cable communications system in the cable service territory; and WHEREAS, residents of the cable service territory will benefit from valuable public access opportunities available through the System; and IN CONSIDERATION of the covenants, conditions , undertakings and promises contained herein the parties agree as follows : SECTION I DEFINITIONS For the purposes of this Agreement, the terms, phrases, words and their derivations shall have the meaning given in the glossary attached hereto as Exhibit 1 . When not inconsistent with the context, words used in the present tense include the future, words in the plural number include the singular number . The words "shall" and "will" are mandatory and "may" is permissive. Words defined in the Franchise or the Local Programming Restructuring Ordinance shall have same meaning herein. Words not defined shall be given their common and ordinary meaning . SECTION II STUDIOS 2.01 Location. Grantee shall provide, maintain and staff at a minimum three Local Programming production studios to serve the communities as follows : 1) a 2, 000 square-foot production studio located at 10210 Crosstown Circle in Eden Prairie which shall be utilized for large production projects as well as primarily serving residents of Eden Prairie; 2) a 1, 000 square-foot studio located at 904 Mainstreet in Hopkins which shall primarily serve residents of Hopkins and Minnetonka; and 3) a 1, 000 square-foot studio located at 6400 Penn Avenue in Richfield which shall primarily serve residents of Richfield and Edina . Each studio will be equipped with standard production equipment including but not limited to one editing suite, cameras , lighting and control room and shall be for Local Programming use subject to the limitations set forth within. 2.02 Initial Condition of Premises . SWSCC acknowledges that it has examined the above-described premises and that said premises are now, to the best of SWSCC' s knowledge, in good and satisfactory condition. Grantee represents that it is aware of no substantial defect in the premises which was not reasonably observable by SWSCC and that Grantee is aware of no condition, restriction or limitation that would interfere with the use of said premises for public access studios. 2. 03 Hours of Availability. A. At least one studio described above shall be available for Access use from 8 : 00 a.m. until midnight, seven days per week -2- by appointment, except legal holidays as defined at Minn. Stat . S 645.44, subd. 5, as it may from time to time be amended. Grantee shall, to the maximum extent possible, provide all Users unimpeded entry and exit to and from the studios during all hours of studio availability. B. Grantee shall provide to SWSCC updated written schedules of access studio hours as those hours may change from time to time. SWSCC and Grantee shall review the schedule at the request of either party. 2. 04 Alterations and Improvements . Grantee shall not make alterations or improvements in the studios if they would substantially interfere with the use of said premises for access purposes on a long term basis . Any such alterations and improvements shall be made in a good and workmanlike manner and in compliance with all laws and regulations of any governmental agency having jurisdiction over said premises . 2 . 05 Maintenance and Repair . A. Grantee shall have the responsibility to ensure that the studios are maintained and kept in good repair and order . All maintenance, repairs and replacement shall be made promptly and in good and workmanlike manner and so that the defective portions of said premises are put in good and satisfactory condition. B. In the event SWSCC determines, in its sole discretion, that the condition of said premises represent a threat to the safety and welfare of Users or that the condition of said premises is unsuitable for access Users due to the need for repair or maintenance, SWSCC may undertake such repairs or maintenance -3- provided that Grantee shall first be given ten (10) business days advance notice and the opportunity to undertake such repairs or maintenance. The time for Grantee to undertake such repairs or maintenance may be extended by SWSCC. 1 . If, pursuant to paragraph B above, SWSCC repairs or maintains the premises, SWSCC may charge Grantee for SWSCC costs in undertaking such repairs or maintenance including reasonable overhead. 2. If, pursuant to paragraph 1 above, SWSCC repairs or maintains the premises such action shall be documented within thirty (30) days and invoices shall be submitted to Grantee at such time. Payment shall be due upon receipt of such invoices . 2.06 Hazard Insurance. Grantee shall, at all times during the term of this Agreement procure and maintain at Grantee ' s expense fire insurance with an extended coverage endorsement, insuring the improvements located on the premises to the full extent of the insurable value thereof . SECTION III EQUIPMENT 3 .01 Local Programming Equipment . Grantee shall, at a minimum, locate the equipment set forth in Exhibit 2, attached hereto and made a part hereof, at the designated studio for Local Programming use. SWSCC shall not acquire any title or interest in the equipment, either legal or equitable, except as expressly granted herein. -4- A. The equipment set forth in Exhibit 2 shall at all times be the sole and exclusive property of Grantee. SWSCC shall have no rights or property interest in the equipment except for the right to use the equipment in the normal operation of Local Programming . B. Grantee shall keep the equipment at all times free and clear from all claims, levies, liens, encumbrances and process except where necessary for financing purposes . Grantee shall give SWSCC immediate written notice of any such attachment or other judicial process affecting any article of equipment. C. Grantee shall not pledge, lend or create a security interest in or sublet the equipment or any part thereof or attempt in any manner to dispose thereof or remove the equipment, or any part thereof, from the designated studios without SWSCC prior written consent, except where necessary for financing purposes . D. Grantee shall display notice of Grantee' s ownership on each article of equipment by means of a suitable stencil, label or plaque affixed thereto. 3 .02 SWSCC Inspection of Equipment . SWSCC reserves the right to inspect the equipment . 3 . 03 Repair of Equipment . A. Grantee shall maintain all equipment in good operating condition and repair and shall repair, fix, replace or adjust such equipment promptly. If SWSCC alleges or receives a complaint alleging that any equipment is not in good operating condition and repair, SWSCC shall notify Grantee of such condition. Grantee shall inspect, repair, fix, replace or adjust such equipment -5- within fifteen (15) days of receipt of this notice. SWSCC and Grantee may agree to extend this period. If Grantee determines that such equipment is in good operating condition, Grantee shall make a written report of such determination and make this report available to SWSCC. B. If SWSCC disagrees with Grantee' s report, SWSCC may determine, in its sole discretion, that any item of equipment set forth in Exhibit 2 is not in good operating condition and repair, SWSCC may repair, fix, replace or adjust such equipment provided that Grantee shall be given five (5) business days advance notice and the opportunity to repair, fix, replace or adjust such equipment . The time for Grantee to repair, fix, replace or adjust such equipment may be extended by SWSCC. C. If, pursuant to paragraph B above, SWSCC repairs, fixes, replaces or adjusts any item of equipment, SWSCC shall have such work done by a vendor, approved in advance by Grantee in accordance with paragraph F below, and charge Grantee for SWSCC costs in repairing, fixing, replacing or adjusting said equipment i including reasonable overhead and the cost of any special items needed to maintain or repair the equipment. D. If, pursuant to paragraph C above, SWSCC repairs, fixes, replaces or adjusts any item of equipment such action shall be documented within thirty (30) days and paid invoices shall be submitted to Grantee at such time. Payment shall be due upon receipt of such invoices. E. Grantee shall keep maintenance records and logs of all production equipment on standard forms indicating the nature of -6- any repairs and/or maintenance and the date of same. Such records shall be retained for the term of this Agreement and shall be available for inspection by SWSCC during regular business hours upon forty-eight (48) hours advance notice. F. During the term of this Agreement, Grantee shall maintain on file with SWSCC a list of at least one firm, business or institution located within the seven-county metropolitan area as defined in Minnesota Statutes, Section 473 . 121, Subd. 2 . , acceptable to Grantee, for the repair of equipment as described in this Section 3 . 03 . Failure to meet this requirement constitutes an acceptance of any vendor chosen by SWSCC. 3 .04 Location of Equipment . The equipment shall be installed, maintained and stored at locations as set forth in Exhibit 1. Grantee shall maintain sufficient records so as to at all times keep SWSCC informed as to the location of all equipment . 3 .05 Insurance of Equipment . Grantee shall maintain such insurance as may be required by the Franchise or by federal, state or local law. SECTION IV CHANNELS AND PROGRAMMING 4 .01 Subscriber Network. A. Grantee shall make available during the term of this Agreement the following access channels : Channel 32 - Educational Access Channel 6 - Regional Interconnect Channel 33 - Public Access Channel 35 - Educational Access Channel 25 - Leased Access Channel 34 - Municipal Access -7- B. No charges may be made for channel time, playback of prerecorded programming or live studio presentations. However, under certain circumstances, as set forth in the ACCESS RULES (a copy of which shall be on file with the Commission) , charges for production costs may be assessed according to the provisions of the ACCESS RULES. C. Channel capacity, in addition to that set forth in paragraph (a) above, shall be made available in accordance with federal, state, and local law. 4 .02 Proarammin4 . Grantee shall be fully responsible for administering the programming of Access channels and all decisions regarding such programming shall be at the sole discretion of Grantee until SWSCC determines otherwise. SECTION V TERM, EFFECTIVE DATE AND TERMINATION 5.01 Term. This Agreement shall be coterminous with the Restated Performance Agreement. It shall terminate upon the expiration or termination of the Restated Performance Agreement . 5.02 Effective Date. This Agreement shall become effective as of August 1, 1992; provided that all terms and conditions set forth in Section 9 ("Effective Date") of the Local Programming Restructuring Ordinance have been satisfied. SECTION VI PERSONNEL 6 .01 Technical Employees . Grantee shall employ sufficient staff including, but not limited to, a minimum of one (1) part-time (a minimum of ten (10) hours per week) Regional Video -8- Technical Supervisor and one (1) full-time equivalent Video Technician who shall maintain and repair studios and equipment as specified herein. 6.02 Playback Employees . Grantee shall employ sufficient staff including, but not limited to, a minimum of one (1) full-time equivalent and one (1) part-time (a minimum of ten (10) hours per week) Playback Operator who shall be responsible for, but not limited to, the codification and implementation of all access schedules . SECTION VII MISCELLANEOUS PROVISIONS 7.01 Binding on Successors . This Agreement shall be binding upon and shall inure to the benefit of the parties hereto, their respective successors and assigns . 7.02 Force Maieure. If by reason of force majeure, any party to this Agreement is unable in whole or in part to carry out its obligations hereunder, said party shall not be deemed in violation or default during the continuance of such inability. The term "force majeure" as used in this Agreement shall mean the following: strikes, acts of God, orders of the federal or state governments, or any of their departments or agencies, lightning, fires, storms, floods, civil disturbances, explosions, partial or entire failure of utilities, or any other cause or event not reasonably within the control of that party. 7 . 03 Severability. A. If any law, ordinance or regulation shall require or permit any party to this Agreement to perform any service or shall -9- prohibit any party from performing any service which may be in conflict with the terms of this Agreement, then as soon as possible following knowledge thereof, said party shall give notice to the other party of the point of conflict believed to exist between such law, ordinance or regulation. B. If any Section, sentence, paragraph, term or provision of this Agreement is determined to be illegal, invalid, or unconstitutional by any court of competent jurisdiction or by any state or federal regulatory agency having jurisdiction thereof, such determination shall have no effect on the validity of any other Section, sentence, paragraph, term or provision hereof . C. In the event such decision, law, rule or regulation is subsequently reversed, repealed, rescinded, amended or otherwise changed, so that the Section, sentence, paragraph, term or provision hereof which had been invalid or modified is no longer in conflict with the decisions, law, rules and regulations then in effect, said Section, sentence, paragraph, term or provision shall thereupon return to full force and effect and shall thereafter be binding on all parties, provided that the party relying on the Section, sentence, paragraph, term or provision shall give the other party or parties thirty (30) days written notice of such change before requiring compliance with said provision. I 7. 04 Liquidated Damages . Upon the breach of any term, condition, or provision of this Agreement, Grantee shall pay to SWSCC a sum of up to and including two hundred dollars ($200 . 00) per day as determined by SWSCC for each and every day of the breach as a liquidated damage pursuant to the Default Proceedings -10- i I set forth in Section 7.05 of this Agreement. In assessing liquidated damages, SWSCC shall seek to ascertain the actual damages incurred by SWSCC and it is not the intent of this Section to be punitive. The parties hereby agree that the services to be performed under this Agreement are in the public interest and will further the development of the System within the Franchise Area and that the continuation of the relationship established by this Agreement is mutually beneficial . Consequently, the parties acknowledge that damage due to a breach of this Agreement will be difficult to determine and that the liquidated damages set forth above are fair and reasonable and will not be contested. 7.05 Default Proceedinas. In the event Grantee has breached any of its obligations hereunder, SWSCC shall give written notice of the default to Grantee and SWSCC' s intention to terminate this Agreement or impose liquidated damages, whichever SWSCC deems appropriate. A. Grantee shall have thirty (30) days after the giving of such notice (or if such default is of such a character as to require more than 30 days within which to cure the same, and Grantee fails to commence to cure the same within said 30 day period and thereafter fails to use reasonable diligence, in SWSCC's sole opinion, to cure such default as soon as possible) within which to cure such default. In the event Grantee fails to cure such default, as described above, SWSCC may terminate this Agreement or impose liquidated damages, at its option. B. Grantee may, within ten (10) days �of notice, notify SWSCC that there is a dispute as to whether a default has, in -11- fact, occurred. Such notice by Grantee to SWSCC shall specify with particularity the matters disputed by. Grantee. Such notice shall stay the running of the above described thirty (30) day period. C. SWSCC shall hear Grantee's dispute at the next regularly scheduled SWSCC meeting and shall make a determination at that meeting as to whether Grantee' s actions constitute a default hereunder. SWSCC shall supplement its decision with written findings of fact. D. If after hearing the dispute SWSCC finds that there is a default, Grantee shall have twenty (20) days from such a determination to cure the default. At any time after that twenty (20) day period, SWSCC may terminate this Agreement, seek specific performance or impose liquidated damages, at its option. E. Notwithstanding anything to the contrary, if Grantee is in default on any insurance premium, rental payment or other amounts to be paid by Grantee in order to perform the obligation of this Agreement or any other agreement between the parties, SWSCC may cure such default on behalf of Grantee, in which event SWSCC shall be entitled to reimbursement for all sums paid to effect such cure, together with interest at the rate of 6% per annum and reasonable attorney' s fees. 7.06 Captions . The Captions to Sections throughout this Agreement are intended solely to facilitate reading and reference to the Sections and provisions of this Agreement. Such captions shall not affect the meaning or interpretation of this Agreement . 7. 07 Interpretation. This Agreement has been arrived at by negotiation and shall not be construed against any party. In the -12- i event of any dispute or question as to the meaning, interpretation or application of any term, provision or condition of this Agreement or Relief Ordinance, the SWSCC, in its sole discretion, shall resolve such dispute or question, provided that it is agreed that to the extent the terms of this Agreement or the Relief Ordinances as amended by the Local Programming Restructuring Ordinance are in conflict with the Franchise or the Offering, the terms of this Agreement or the Relief Ordinances as amended shall be governing. 7. 08 Governing Law. This Agreement shall be interpreted in accordance with Minnesota law. 7.09 Other Laws . This Agreement shall be subject to all applicable federal, state and local laws . 7. 10 Notices . Any notice required to be given or served upon any party in connection with this Agreement shall be in writing and shall be deemed to have been given and received, ( 1) three business days after a registered or certified letter containing the notice, properly addressed, with postage prepaid, is deposited in the United States mail; or (2) if made in any other manner, upon actual delivery to and receipt by the party to whom it is addressed. Notice shall be given to the parties at the following addresses : SWSCC Adrian E. Herbst Southwest Suburban Cable Commission c/o Moss & Barnett 4800 Norwest Center 90 South Seventh Street Minneapolis, MN 55402 -13- Grantee KBL Cablesystems of the Southwest, Inc. 801 Plymouth Avenue North Minneapolis, MN 55411 7. 11 Entire Aareement . This Agreement constitutes the entire agreement and understanding between the parties and no oral modifications or additions hereto shall be binding. No verbal or written statements of the parties shall be considered a modification of this Agreement except by a written document signed by all parties expressly stating that it is modifying the Agreement and setting forth the new condition or provision of the Agreement . 7 . 12 No Joint Venture. Nothing in this Agreement shall create a joint venture or principal-agent relationship between the parties and no party is authorized to (and no party shall) act toward third parties or the public in any manner which would indicate any such relationship with the other. 7 . 13 Nonenforcement . The failure of any party to strictly enforce any provisions of this Agreement shall not be construed as a waiver or as excusing that party from future performance. 7. 14 Attorneys Fees . If it is necessary for SWSCC to retain the services of an attorney of law to enforce any of the terms, covenants or provisions hereof or to collect any sums due hereunder, Grantee shall pay to the SWSCC the actual cost of such services . 7. 15 Indemnification and Insurance. The provisions of Article VIII of the Franchise pertaining to indemnification and insurance are applicable to this Agreement and the performance of this Agreement by SWSCC and its officers , officials , -14- representatives, employees and agents and said Article VIII of Franchise is hereby incorporated in this Agreement and made part of it. 7. 16 Assignments . This Agreement shall not be assigned or performance of the duties hereunder delegated without the express prior written consent of the parties. 7. 17 Production of Local Origination Programming. Grantee shall have the right to utilize the channels, facilities , equipment, and personnel set forth herein for the production and cablecasting of Local Origination Programming, provided that such usage shall not excuse Grantee from meeting its Access obligations under this Agreement. This Agreement is accepted, and we agree to be bound by all its terms and conditions . DATED: SOUTHWEST SUBURBAN CABLE COMMISSION By Its : By Its : STATE OF MINNESOTA) ) ss . COUNTY OF HENNEPIN) The foregoing instrument was subscribed and sworn to before me this day of , 1991, by the of SOUTHWEST SUBURBAN CABLE COMMISSION, a Minnesota corporation, on behalf of said corporation. Notary Public My commission expires : -15- DATED: KBL CABLESYSTEMS OF THE SOUTHWEST, INC. a Minnesota Corporation By Its• STATE OF MINNESOTA) ) ss. COUNTY OF HENNEPIN) The foregoing instrument was subscribed and sworn to before me this day of , 1991, by , the of KBL CABLESYSTEMS OF THE SOUTHWEST, INC. , a Minnesota corporation, on behalf of said corporation. Notary Public My commission expires : 1100DAJ I -16- Ii EXHIBIT 1 GLOSSARY For the purpose of this Agreement, the following terms, phrases, words and their derivations shall have the meaning given herein. When not inconsistent with the context, words used in the present tense include the future, words in the plural number include the singular number, and words in the singular number include the plural number. The words "shall" and "will" are mandatory and "may" is permissive. Words not defined shall be given their common and ordinary meaning. 1. Access or Community Access shall mean the right or privilege of the general public, local educational authorities, and local government to use designated facilities, equipment or channels of Grantee. Channels shall be made available pursuant to Section IV of the Restated Contract for Local Programming Facilities . 2 . Basic Service means all subscriber services provided by Grantee, including the delivery of broadcast signals, covered by the regular monthly charge paid by all subscribers, excluding optional services for which a separate charge is made. 3 . Cablecast shall mean programming in a video, audio or data format transmitted through the cable communications system to users and subscribers. 4 . Channel or Television Channel shall mean a six megahertz (6 MHz) frequency band, including adjacent vertical blanking interval, which is capable of carrying one standard video signal , a number of audio, digital or other non-video signals, or some combination of such signals . 5 . City means the City of Eden Prairie, Edina, Hopkins , Minnetonka or Richfield, a municipal corporation in the State of Minnesota which has granted the Franchise. 6 . Class IV Channel means a signaling path provided by a System to transmit signals of any type from a subscriber terminal to another point in System. 7 . Connection means the attachment of the drop to the first radio or television set of the subscriber. 8 . Converter means an electronic device which converts signals to a frequency not susceptible to interference within the television receiver of a subscriber, and by an appropriate channel selector, also permits a subscriber to view all basic subscriber signals, including the basic service delivered at designated converter dial locations . 9 . Council means the governing body of City. 10. Drop shall mean the cable that connects the subscriber terminal to the nearest feeder cable of the cable. 11. FCC shall mean the Federal Communications Commission and any legally appointed, designated or elected agent or successor. 12. Franchise shall mean the Cable Communications Ordinance, as now or hereafter amended, of Member Cities . 13 . Franchise Area shall mean the cities of Edina, Eden Prairie, Hopkins, Minnetonka and Richfield, Minnesota, together with any future annexations or lawful expansions. 14 . Grantee shall mean KBL Cablesystems of the Southwest, Inc. a Minnesota corporation. 15 . Gross Revenues shall mean all revenue derived directly or indirectly by Grantee, its affiliates, subsidiaries, parent, and any person in which Grantee has a financial interest of five percent (5%) or more from or in connection with the operation of the System, including, but not limited to, basic subscriber service monthly fees, pay cable fees, installation and reconnection fees, leased channel fees, converter rentals, studio rental, production equipment and personnel fees, and advertising revenues . The term does not include any taxes on services furnished by Grantee and imposed directly upon any subscriber or user by the State, City or other governmental unit and collected by Grantee on behalf of said governmental unit . For purposes of calculating the annual franchise fee, all amounts spent to fund the Restructured Local Programming Obligations shall be deducted from Gross Revenues . 16 . Installation means the connection of the System from feeder cable to the point of connection. 17. Local Programming shall mean access, community access, and/or local origination programming . 18. Local Programming Obligations means Grantee' s obligations under the Franchise and the Offering for cablecast access, community access and local origination programming . 19 . Local Origination Programming shall mean programming produced under the control of Grantee which is of interest to those living on the Franchise Area . 20 . Lockout Device is an optional mechanical or electrical accessory to a subscriber ' s terminal which inhibits the viewing of a certain channel or channels provided by way of cable communications system. -2- I 21. Member Cities shall mean the cities of Edina, Eden Prairie, Hopkins, Minnetonka and Richfield, Minnesota. 22. News Show means that show produced by Grantee pursuant to an Agreement with SWSCC dated January 23, 1991. 23 . Offering of Grantee or Offering shall mean that certain document dated December 5, 1980, entitled "Offering of Grantee" and signed by Grantee and City, which document is on file with the City Clerk. 24 . Playback Overator shall mean that employee of Grantee whose responsibilities shall include, but not be limited to, the codification and implementation of all access schedules. 25. Programming shall mean any video, audio, text or data signal carried over the system. 26. Public Building is any building owned or operated by the United States government or any subdivision thereof, or the State of Minnesota or any subdivision thereof, or the City or any other governmental subdivision, or school district or educational institutions. (Article I, Section 2, Paragraph V, amended effective 09/83 . ) 27. Public Proverty is any real property owned by City other than a street. 28. Relief Ordinances means the CATV Relief Ordinance as modified by the CATV Relief Ordinance Amendment . 29 . Restated Performance Agreement means that contractual agreement between Grantee, City and SWSCC establishing the terms and conditions under which Grantee will be required to fund and otherwise fulfill its Local Programming requirements and establishing reporting standards and criteria for franchise compliance in other areas. 30: Restructured Local Programming Obligations means Grantee' s access, community access and local origination programming obligations as set forth in the Local Programming Restructuring Ordinance and the Restated Performance Agreement . Compliance with the Restructured Local Programming Obligations shall supersede and be in complete satisfaction of the Local Programming Obligations. 31. Scrambler/Descrambler refers respectively to the equipment installed to the cable communications system' s headend equipment and subscriber terminal used to isolate pay cable and other ancillary service channels from basic service which is accomplished by electronically distorting the signal prior to its transmission through the cable communications system and -3- reconstituting the signal at each authorized location for subsequent display. 32. Sidewalk is the portion of a street delineated for pedestrian travel. 33 . Street shall mean the surface of and the space above and below any public street, road, highway, freeway, lane, path, public way, alley, court, sidewalk, boulevard, parkway, drive or any easement or right-of-way now or hereafter held by City which shall, within its proper use and meaning in the sole opinion of City, entitle Grantee to the use thereof for the purpose of installing or transmitting over poles, wires, cables, conductors, ducts, conduits, vaults, manholes, amplifiers, appliances, attachments and other property as may be ordinarily necessary and pertinent to a System. 34 . SWSCC shall mean the Southwest Suburban Cable Commission. 35 . Subscriber means any person or entity who subscribes to a service provided by Grantee by means of or in connection with the System regardless of whether a fee is paid for such service. 36 . Subscriber Network shall mean a single trunk 440 MHz cable activated with 54 downstream channels and 4 return or upstream channels, as it may be upgraded from time to time. 37 . System means a system of antennas, cables, wires, lines, towers, waveguides or other conductors, converters, equipment or facilities, designed and constructed for the purpose of producing, receiving, transmitting, amplifying and distributing, audio, video and other forms of electronic or electrical signals, located in City. Said definition shall not include any system wholly internal to one or more multiple unit dwellings under common ownership, control or management, and does not use City streets or other public property. In any event, system as defined herein shall not be inconsistent with any definition as set out in state law. 38 . User or Local Programming User shall mean any person who utilizes the System studio or facilities, whether for a charge or without charge. -4- EXHIBIT 2 EDEN PRAIRIE STUDIO EQUIPMENT 2 Hitachi FP-50s Color Studio Camera 1 ISI 902 Production Switcher 1 ISI 660 Chroma Keyer 1 ISI 501 Rack Frame 1 ISI 505 Power Supply 6 ISI 500 Blank Panels 1 Knox K-128 Character Generator with roll and crawl option 1 Sony VO-5600 Recorder 1 Sony FM-500 Remote control 1 Sony RCC-15FT Extension Cable 1 Sony PVM-1211F 12" color monitor 1 Sony CVM-1270 12" color monitor/receiver 1 RCA JFR-985SV 25" color monitor/receiver 2 Panasonic TR-932 dual 9" B/W monitor 1 Panasonic WV--58562 Dual High Res . 9" B/W monitor 1 Tektronics 1420 Vectorscope 2 Tektronics 528A Waveform monitor 1 Tektronics 016-0115-02 Dual rack adapter 1 Ryan VDA-200 video DA 1 Lenco PFM-300 Frame with following modules : PP-302 Power Supply P56-310 Sync. Gen. PCB-320 Color Bar Gen. PBB-321 Blackburst Gen. PBD-322 Bar Dot Gen. PMB-323 Multiburst Gen. PSS-324 Stairstep Ramp Gen. 2 PVA-350 Video DA 4 Panasonic WJ-225R 12 pos . video routing switcher 1 Panasonic WJ-220R 6 pos . video routing switcher EDEN PRAIRIE STUDIO EQUIPMENT Page 2 1 Microtime Time Base Corrector 1 Sony VO-5850 Edit recorder 1 Sony -5800 Recorder (used as source machine) 1 Sony RM-440 Edit Controller 2 Sony RCC-5F Connecting cables 1 Sony VDC-5 Dub Cable 1 Panasonic CT-110 10" color monitor 1 Panasonic WR-5360 High Res . 9" B/W monitor 2 ITE-H2 Cam head 2 ITE-RH Right handle 2 ITE-H25T Adapter 2 ITE-T6A Tripod 2 ITE-D6G Dolly with cable guards 1 Tascam M-30 mixer 1 Tascam 22-4 Reel to Reel recorder 1 Tascam RM-42 Rackmount kit 1 Tascam 124 cassette recorder 1 BGV 75 Stereo power amp 4 Electrovoice Sentury 100 Loudspeakers 2 Ryan Audio DA 4 Trampeter patch panels 1 Russco Studio pro turntable 1 Microtrak 303 tone arm 1 Stanton 500EE phono cartridge 1 Bretford MPS-48 TV cart 5 Sony DR- 10 Headset EDEN PRAIRIE STUDIO EQUIPMENT Page 3 1 VAC PLS-1 Intercom power supply 1 VAC PL-11BC Intercom w/beltchip 1 VACK PL-1 Intercom 3 Winstead 85-R55 Rackslide kit 2 Emcor Equipment Racks 1 Custom Production console 1 Custom Editing console 1 Sony VO-5800 Port . 3/4" VCR 1 Portabrace VTR carrying Use 1 Sony DXC-1800K Port. Color camera system 4 Sony BP-60 Batteries 1 Sony AC-340B VCR power sppply 1 Sony BC-20 Battery Charger 1 ITE t-20 Tripod 3 Sony ECM-30 Lavalier Mic. 2 Electrovoice 635A handheld mic. 1 Sony EMC-23A Handheld mic. 1 4-way extension cord EDEN PRAIRIE STUDIO LIGHTNING EQUIPMENT Pie Grid lY2" schedule 40 black pipe grid Drapery Tlack Approx. 140 ' of ADC #140 single track Drapery 1 Seamless muslin cyclorama. 13 ' 6" high by 40 ' wide, mounted on pipe in CBS gray 2 Black velour drapery panels, 13 ' 6" high by 15 ' wide with 50% fullness 1 cherry velour panel, 13 ' 6" high by 20 ' wide with 50% fullness Fixtures 6 Strand-Century 3342 6" Fresnels 6 Strand-Century 1312 Barndoors 8 Strand-Century 3413 8" Fresnels 8 Strand-Century 1313 Barndoors 6 Strand-Century 5911 Single cyc light 3 Strand-Century 5913 Triple cyc light 8 Strand-Century 4271 14" scoop i HOPKINS-MINNETONKA STUDIO EQUIPMENT 2 Hitachi FP-10 color camera and studio support equipment 1 RCA TC-2011 B/W titleing camera 1 Panasonic WJ-5500A production switcher 1 Knox K-50 Charactor Generator 1 Sony VO 5600 recorder 1 Sony RM-500 remote control 1 Videotek RM-17 17" color monitor/receiver 1 RCA JFR-9855V 25" color monitor/receiver 1 Videotek VM8-PRW 8" color monitor 3 Panasonic TR-932 Dual 9" B/W' monitor 1 Videotek TSM-5 waveform monitor 1 Panasonic WR-450 audio mixer 1 Sony PS-LX2 turntable 1 Sony TC-FX20 stereo cassette deck 1 Ryan Audio DA 1 Ryan VDA 200 Video DA 1 Panasonic WJ-220R 6 pos. video routing switcher 1 Panasonic WJ-225R 12 pos . video routing switcher 1 Microtime T-120 Time Base Corrector 1 Sony VC-2860 Editor Recorder 1 Sony VP 2260 Player 1 Sony RM-430 Edit controller 2 Sony RCC-5F connecting cables 1 Sony VDC-5 Dub cable 2 Panasonic CT-1320 13" color mon. 2 ITE T-6A tripod i HOPKINS-MINNETONKA STUDIO EQUIPMENT Page 2 I 2 ITE D-66 Dolly w/cable guard 2 ITE H-13 fluid head 2 ITE RM right handle ITE MHP-56 tripod adaptor Sony DR-10 Intercom headset Atlas MS-12C mic stand Bretford MPS-48 TV cart Trompeter patch panels Equipto VTR shelf Emcor Equipmemt Rack Custom production console Winstead editing console Sony VO-4800 Port. 3/4" VCR Porta-brace VTR carrying case Sony DXC-1800K Port. color camera system Sony BP-60 Batteries Sony AC-340B power supply Sony BC-20 Battery charger ITE T-20 Tripod Sony ECM-30 Lavalier mic. Electrovoice 635A handheld mic. Sony ECM-23A handheld mic 4 way 75ft extension cord Sony VO-4800 Port. 3/4" VCR Porta-Brace BTR Carrying Case Sony DCX-1800K Port. Color Camera System Sony BP-60 Batteries i HOPKINS-MINNETONKA STUDIO EQUIPMENT Page 3 Sony AC-340B VCR power supply Sony BC-20 Battery Charger ITE T-20 Tripod Sony ECM-30 Lavalier Mic. Electrovoice 635 Handheld mic. Sony ECM-23A Handheld Mic. 4-way 75ft extension cord HOPKINS-MINNETONKA STUDIO LIGHTING EQUIPMENT PIPE GRID A" schedule 40 pipe DPAPERY TRACK 50 ' of ADC #140 single track DRAPERY 1 Seemless natural muslin Cyclorama, 11' high by 32 ' wide 2 Black velour drapery panels, 11' high by 15 ' wide with 50% fulness i FIXTURES 4 Strand-Century 3342 TV 6" Fresnels 4 Strand-Century 1312 Barndoors 2 Strand-Century 3413 8" Fresnels 2 Strand-Century 1313 Barndoors 4 Strand-Century 4271 14" Scoop Floodlight 1 Strand-Century 2209 6x9 Ellipsoidal EDINA-RICHFIELD STUDIO EQUIPMENT 2 Hitachi PF-10 color camera and studio support equipment 1 RCA TC-2011 B/W titleing camera 1 Panasonic WJ-5500A production switcher 1 Knox K-50 Character Generator 1 Sony VO-5600 recorder 1 Sony RM-500 remote control 1 Videotek RM-17 17" color monitor/receiver 1 RCA JFR-9855V 25" color moitor/receiver 1 Videotek VM8-PRW 8" color monitor 3 Panasonic TR-932 Dual 9" B/W monitor 1 Videotek TSM-5 waveform monitor 1 Panasonic WR-450 audio mixer 1 Sony PS-LX2 turntable 1 Sony TC-FX20 stereo cassette deck 1 Ryan Audio DA 1 Ryan VDA-200 Video DA 1 Panasonic WK-22OR 6 pos . Video Routing switcher 1 Panasonic WK-225R 12pos. video routing switcher 1 Microtime T-120 Time base corrector 1 Sony VO-5850 Editor Recorder 1 SonO VO-5800 Recorder (used as source machine) 1 Sony RM-440 edit controller 2 Sony RCC-5F connecting cables 1 Sony VDC-5 dub cable 1 Panasonic CT-110 10" color monitor 1 Panasonic WV-5860 High Ris. 9" B/W monitor EDINA-RICHFIELD STUDIO EQUIPMENT Page 2 2 ITE T-6A tripod 2 ITE D-66 Dolly w/cable guard 2 ITE H-13 Fluid head 2 ITE RHM right handle 2 ITE MHT-56 tripod adaptor 4 Sony DR-10 Intercom headset 2 Atlas MS-12C mic stand 1 Bretford MPS-48 TV cart 2 Trampeter patch panels 1 Equito VTR shelf 1 Equipto equipment rack 1 Custom production console 1 Cust&n editing console 1 Sony VO-4800 Port. 3/4" VCR 1 Porta-brace VTR carrying case 1 Sony DXC-1800K Port. color camera system 4 Sony BP-60 Batteries 1 Sony AC-340B VCR power supply 1 Sony BC-20 Battery charger 1 ITE T-20 Tripod 3 Sony ECM-30 Lavalier mic. 2 Electrovoice 635A handheld mic 1 Sony ECM-23A handheld mic 1 4 way 75ft extension cord 2 Hitachi FP-10 color camera and studio support equipment 1 RCA TC-2011 B/W titleing camera i EDINA-RICHFIELD STUDIO EQUIPMENT Page 3 1 Panasonic WJ-5500A production switcher 1 Knox K-50 Character Generator 1 Sony VO-5600 recorder 1 Sony RM500 remote control 1 Videotek RM-17 17" color monitor/receiver 1 RCA JFR-9855V 25" color monitor/receiver 1 Videotek VM8-PRW 8" color monitor 3 Panasonic TR-932 Dual 9" B/W monitor 1 Videotek TSM-5 waveform monitor 1 Panasonic WR-450 audio mixer 1 Sony PS-LX2 turntable 1 SonyTC-FX20 stereo cassette deck 1 Ryan Audio DA 1 Ryan VDA-200 Video DA 1 Panasonic WJ-220R 6 pos . Video Routing switcher 1 Panasonic WJ-225R 12 pos . video routing switcher 1 Microtime T-120 Time base corrector 1 Sony VO-2860 Editor Recorder 1 Sony VP-2260 Player 1 Sony RM-440 edit controller 2 Sony RCC-5E connecting cables 1 Sony VDC-5 dub cable 1 Panasonic CT-110 10" color monitor 1 Panasonic WV-5360 High Ris. 9" B/W monitor 2 ITE T-6A tripod 2 ITE D-66 Dolly w/cable guard EDINA-RICHFIELD STUDIO EQUIPMENT Page 4 2 ITE H-18 fluid head 2 ITE RHM right handle 2 ITE MHT-56 tripod adaptor 4 Sony DR-10 Intercom headset 2 Atlas MS-12C mic stand 1 Bretford MPS-48 TV cart 2 Trompeter patch panels 1 Equipto VTR shelf 1 Emcor equipment rack 1 Custom production console 1 Sony VO-4800 Port . %" VCR 1 Porta-brace VTR carrying case 1 Sony DXC-1800K Port. color camera system 4 Sony BP-60 Batteries 1 Sony AC-340B VCR power supply 1 Sony BC-20 Batery charger 1 ITE T-20 Tripod 3 Sony ECM-30 Lavalier mic. 2 Electrovoice 635A handheld mic. 1 Sony ECM-23A handheld mic. 1 4-way 75 ft . extension cord EDINA-RICHFIELD STUDIO LIGHTING EQUIPMENT Pipe Grid 1%" schedule 40 pipe Drapery Track 70 ' of ADC 140 single track Drapery 1 seamless natural muslin Cyclorama, 10 ' 6" high by 50 ' wide 2 black velour drapery panels, 10 ' 6" high by 15 ' wide with 50% fullness Fixtures 4 Strand-Century 3342 TV 6" Fresnels 4 . Strand-Century 1312 barn doors 2 Strand-Century 4313 8" Fresnels 2 Strand-Century 1313 Barn doors 4 Strand-Century 4271 14" Scoop Floodlights 1 Strand-Century 2209 6 x 9 Ellipsoidal MOBILE VAN INVENTORY 1 Sony DXC-1800 Sony Color Camera 1 Sony VCL-110Y Sony 10: 1 Zoom Lens 2 Sony CCU-1800 Camera Control Units 2 Sony CMA-7 AC Adapter 2 Sony COQ-50AR 165 ' Camera Cable 1 Sony VO-5600 %" Recorder 1 Panasonic WJ5500B Production Switcher 2 Panasonic WJ225R Routing Switcher 1 Panasonic TR-932 Dual 9" B/W Monitor 1 Videotek VM8PRW 8" Color Monitor 1 Videotek RM-12A 12" Color Monitor 1 Video TSM-5A Waveform Monitor 1 Videotek Single Case for Wvfm Monitor 1 Knox K-50 Character Generator 2 Shure M-267 Mic Mixer 1 RTS ATS-410 Monitor Amp 2 ITE F-12 Tripod 2 ITE H-12 Ball Type Fluid Head 2 ITE LQRM Quick Release 2 ITE RFPI Rubber Foot Pad 2 Electrovoice EV-635A Mic 1 Electrovoice RE-15 Mic 1 Electrovoice 432A Deck Stand 2 Sennheiser HD-400 Headphones 5 Sony DR-10 Intercom Headsets 1 V.A.C. PLS-1 Party line System with Belt Clip. 1 Panasonic WV-5203 Triple 5" B/W Monsitor 1 Winsted 85-RS5 Rackslide Kit 1 Topaz 91002-12 AC Isolation Transformer 2 Realistic 40-2035 Speakers 1 Realistic 40-2031 Bracket Kit 3 Emcor Vertical Equipment Racks 2 Emcor Rack Mount Drawers 1 Custom Production Console 2 100 ' 3 wire Extension Cords All Installed In: 1 Ford % Ton fully customized van with Industrial type air conditioning and roof mount camera platform. I PLAYBACK EQUIPMENT INVENTORY 1 Videotek RM-12RA 12" Rcvr/Mon. 8 Panasonic CT-1320 13" Mon. 2 Sony CVM-1250 12" Rcvr./Mon. 1 Sony KV-1207 12" Rcvr. 3 Sony VP-5000 Player 2 Sony VO-5600 Recorder 3 Sony VP-2260 Player 1 JVC CR-640OU 'h" Recorder (VHS) 7 Microtime T-120 Time Base Corrector 3 3M 15 x 6 Remote Control Routing Switcher 6 3M 15 x 2 Remote Control Routing Switcher 2 3M 15 x 1 Remote Control Routing Switcher 2 3M 15 x 1 Local Routing Switcher 2 VideoTek TSM-5A Waveform Monitor 1 VideoTek VSM-5 Vectorscope 2 VideoTek Duel Rack Fraame Assy. 5 Sony RM-410 Remote Control Unit 1 Monroe 3000R-14D Dual Channel VCR Controller 1 Monroe 3000R-14C Single Channel VCR Controller 7 Shure M-63 Audio Master 1, Technics SA-222 AM/FM Receiver 1 Todd Custom Audio Monitor 1 Robbins Bulk Tape Eraser 1 Scientific Atlanta 6603 Satellite Receiver 1 Scientific Atlanta 6250 Demodulator 1 Dynair TX-4A Modulator 1 Tektronix R/C 1900 Remote Contorl Unit 1 Trompeter Patch Panel Assy. 1 Wilk RP-350 Rackframe Assy. w/power supply 1 Wilk SG-300 Sync Generator 1 Wilk CG-350 Color Bar Gen. 1 Wilk BG-350 Black Burst Gen. 2 Wilk SI-350 Source Identifier 1 Wilk TG-350 Tone Gen. 2 Ryan Dual Video D.A. 1 Ryan Dual Pulse D.A. 1 Lectro 115/6A Standby Power Supply 7 Zenith ST-1082 Z-tac Convertor 7 Zenith ST-1000 Z-tac convertor 2 Vaco Compac-50 speakers 1 Equatorial 5100 Satellite Data Controller (provided by Reuters) 1 Computer Video CDD-10 Character Gen. 1 Computer Video CKB-1 Keyboard 3 Video Precision 3520 Dual Channel Character Gen. 6 Video Prevision TM-3510 Keyboard (1 in P.B. , 5 in City Halls) 1 V.D.S. Microsystem I (provided by DIP) 1 Norpak IPS-2 Page Creation System 6 Hemton EPS-1 64K Character Gen. 6 Zenith RGB Encoder 1 Radio Shack CTR-80A Cassette Recorder 2 Winsted VTR Racks PLAYBACK EQUIPMENT INVENTORY Page 2 4 Winsted Vertical Equipment Racks 1 Optima Console 1 Custom CG Keyboard Table 1 Custom Wall Shelf Unit EXHIBIT 3 TO RESTATED PERFORMANCE AGREEMENT RESTATED CONTRACT FOR PUBLIC, EDUCATIONAL AND GOVERNMENT ACCESS SERVICES THIS AGREEMENT, is made and entered into this day of 1991, by and between SOUTHWEST SUBURBAN CABLE COMMISSION (hereinafter SWSCC) and KBL CABLESYSTEMS OF THE SOUTHWEST, INC. (hereinafter Grantee) , a Minnesota corporation. W I T N E S S E T H WHEREAS, Grantee pursuant to Chapter 238 of the Minnesota Statutes and pursuant to the Franchise of the Member Cities has been granted a Franchise to construct , own and operate a cable communications system in the cable service territory; and WHEREAS, residents of the cable service territory will benefit from valuable public access opportunities available through the System; and IN CONSIDERATION of the covenants , conditions , undertakings and promises contained herein the parties agree as follows : SECTION I DEFINITIONS For the purposes of this Agreement, the following terms , phrases , words and their derivations shall have the meaning given in the glossary attached hereto as Exhibit 1 . When not inconsistent with the context, words used in the present tense include the future, words in the plural number include the singular number . The words "shall" and "will" are mandatory and "may" is permissive. Words defined in the Franchise or the Local i Programming Restructuring Ordinance shall have the same meaning herein. Words not defined shall be given their common and ordinary meaning. SECTION II PERSONNEL 2. 01 Programming Manaaer . A. Grantee shall employ at least one ( 1) part-time (a minimum of ten (10) hours per week) Programming Manager who shall be responsible for the administration, promotion and implementation of Local Programming in the Franchise Area . B. The Programming Manager, or designee, shall be responsible for scheduling all Local Programming, use of mobile van and studios . The Programming Manager, or designee, in conjunction with a Playback Operator, shall endeavor to schedule programming with a view to overall program consistency to maximize audience potential by seeking to develop an overall regular program format. Playback Operators shall be responsible for the codification of Local Programming schedules . 2. 02 Access Coordinators . A. In addition to the Programming Manager, Grantee shall i employ at least three (3) full-time Access Coordinators . The Access Coordinators shall report to the Programming Manager. B. The specific duties and responsibilities of the Access Coordinators are: 1. Train individuals and groups in the use of equipment in accordance with plans, schedules and materials approved by SWSCC or designee; -2- i 2 . Inform Users of the value and procedures for care of the equipment to insure least possible damage; 3 . Maintain a written "check-out" system for the equipment, both when it is removed from the studio and upon its return; 4 . Report to the Programming Manager all damage or malfunction of equipment; 5 . Provide to the Programming Manager a monthly written report of access use, including a brief written statement of access projects; 6. Maintain a log of all access users and equipment and file required reports with the Programming Manager; 7. Work closely with the Programming Manager to schedule use of facilities; 8 . Implement access programming pursuant to and in accordance with programming schedules developed by the Programming Manager, or his designee and the Playback Operators; 9 . Maintain a log of all complaints related to access . 10. Other duties as assigned. 2.03 Educational Access Consultant . A. Grantee shall employ at least one (1) full-time educational access consultant in addition to the public access personnel described above. The educational access consultant shall report to the Programming Manager . B. The specific duties and responsibilities of the Educational Consultant are: -3- i i 1. Work with Southwest Suburban Schools Cable Commission to research and develop methods for using cable television in education. 2 . Provide models for school staff members in the specific use of cable television. 3 . Develop and recommend educational cable television policies to school administrators in the Southwest system. 4 . Work with school staff and students to elicit ideas and assist in organization and implementation of educational access programming. 5 . Work with school administrators and staff to encourage a high regard for school programming. 6 . Offer workshops on a regular basis for staff and students on various aspects of program production. 7. Work with Programming Manager, Playback Operations Supervisor and Access Managers to insure access programming opportunities for school staff and students . 8 . Work with school staff members and Company Technical and Programming staff to develop interactive cable television projects . 9 . Consult with school district personnel about equipment acquisition and set-up for individual project needs . 10 . Serve as an advisor to the Educational Cable Coordinating Committee. 11. Provide the Programming Manager with a weekly and monthly report of activities . -4- I a 12. Perform miscellaneous duties as assigned by the Programming Manager, including assisting with Access Coordinator duties, to the extent that such duties do not interfere with educational responsibilities. 2. 04 Equipment Logs . A. The Access Coordinators shall maintain daily log forms, and, on a daily basis, be responsible that equipment logs are prepared and a record of the use of all equipment is recorded. Such equipment logs shall contain information regarding the name and address of the equipment user, the item of equipment used and the time of expected actual use; provided, however, that no piece of equipment shall be checked out for more than forty-eight (48) hours . B. The equipment logs shall be available for inspection by SWSCC upon request . 2 .05 Other Personnel . Grantee shall employ such other personnel as may be necessary to meet the duties and obligations imposed hereunder upon Grantee as may be consistent with the budget then in effect. 2 .06 Production of Local Origination Programming . Personnel designated in this Section may, at Grantee' s direction, be involved in the production of Local Origination Programming; provided that such involvement in Local Origination Programming by the personnel shall not excuse Grantee from meeting its Access obligations as set forth herein. -5- i SECTION III ADMINISTRATION 3 . 01 Access Promotion. A. The promoting of public access opportunities in the Franchise Area shall be the . sole responsibility of Grantee and shall be addressed in the annual Local Programming Plan submitted pursuant to Section 7.04 of the Restated Performance Agreement. B. Notwithstanding anything to the contrary, such promotions to the extent allowable under the budget then in effect, shall include, but not be limited to, the following : 1. Development of special meetings for community groups at which access opportunities will be discussed and access experiences from other communities shared. 2. Speakers provided to community organizations to explore access opportunities . 3 . Development of displays at public places explaining access principles and equipment . 4 . Distribution of literature to subscribers informing them of ongoing access activity and encouraging their i participation. 5 . Development of workshops focused on production techniques and communication principles . 6 . Promotion through cable and conventional media, including playback of special explanatory programs on access and theme channels . 7. Listings in community newspapers . 8. Special brochures for schools, libraries and community centers with weekly listings and descriptive material . i I -6- I 9 . "Creative Marketing" initiatives for special programs, with targeted messages to involved groups, areas, institutions. 3 .02 Trainina. A. Grantee shall seek the advice of SWSCC concerning training classes to be offered by Grantee. Training classes, for the purposes of this Agreement shall include, but not be limited to, basic television production, location production, post-production, on-camera lessons, or any other training intended by Grantee to assist in access opportunities. B. SWSCC may advise Grantee concerning the curriculum, fees, course material, class locations and class size. C. The classes described in paragraph A above shall , at a minimum, be offered on a quarterly basis or at such other intervals as the parties may agree upon. SECTION IV TERM, EFFECTIVE DATE AND TERMINATION 4 .01 Term. This Agreement shall be coterminous with the Restated Performance Agreement . It shall terminate on the expiration or termination of the Restated Performance Agreement . 4 .02 Effective Date. This Agreement shall become effective as of August 1, 1992; provided that all terms and conditions set forth in Section 9 ( "Effective Date") of the Local Programming Restructuring Ordinance have been satisfied. SECTION V MISCELLANEOUS PROVISIONS 5 . 01 Binding on Successors . This Agreement shall be -7- , I binding upon and shall inure to the benefit of the parties hereto, their respective successors and assigns . 5 . 02 Force Maieure. If by reason of force majeure, any party to this Agreement is unable in whole or in part to carry out its obligations hereunder, said party shall not be deemed in violation or default during the continuance of such inability. The term "force majeure" as used in this Agreement shall mean the following: strikes, acts of God, orders of the federal or state governments, or any of their departments or agencies, lightning, fires, storms, floods, civil disturbances, explosions, partial or entire failure of utilities, or any other cause or event not reasonably within the control of that party. 5. 03 Severability. A. If any law, ordinance or regulation shall require or permit any party to this Agreement to perform any service or shall prohibit any party from performing any service which may be in conflict with the terms of this Agreement, then as soon as possible following knowledge thereof , said party shall give notice to the other party of the point of conflict believed to exist between such law, ordinance or regulation. B. If any Section, sentence, paragraph, term or provision of this Agreement is determined to be illegal, invalid, or unconstitutional by any court of competent jurisdiction or by any state or federal regulatory agency having jurisdiction thereof, such determination shall have no effect on the validity of any other Section, sentence, paragraph, term or provision hereof . -8- C. In the event such decision, law, rule or regulation is subsequently reversed, repealed, rescinded, amended or otherwise changed, so that the Section, sentence, paragraph, term or provision hereof which had been invalid or modified is no longer in conflict with the decisions, law, rules and regulations then in effect, said Section, sentence, paragraph, term or provision shall thereupon return to full force and effect and shall thereafter be binding on all parties, provided that the party relying on the Section, sentence, paragraph, term or provision shall give the other party or parties thirty (30) days written notice of such change before requiring compliance with said provision. 5 . 04 Liquidated Damages. Upon the breach of any term, condition, or provision of this Agreement by Grantee, Grantee shall pay to SWSCC a sum of up to and including, Two Hundred Dollars ($200 . 00) per day, as determined by SWSCC, for each and every day of the breach as a liquidated damage pursuant to •the Default Proceedings set forth in Section 5.05 of this Agreement . In assessing liquidated damages, SWSCC shall seek to ascertain the actual damages incurred by SWSCC and it is not the intent of this Section to be punitive. The parties agree that the services to be performed under this Agreement are in the public interest and will further the development of the System within the Franchise Area and that continuation of the relationship established by this Agreement is mutually beneficial. Consequently, the parties acknowledge that damages due to a breach of this Agreement are -9- difficult to determine and that the liquidated damage set forth above is fair and reasonable and will not be contested. 5 . 05 Default Proceedings . In the event Grantee has breached any of its obligations hereunder, SWSCC shall give written notice of the default to Grantee and SWSCC' s intention to terminate this Agreement or impose liquidated damages, whichever SWSCC deems appropriate. A. Grantee shall have thirty (30) days after the giving of such notice (or if such default is of such a character as to require more than 30 days within which to cure the same, and Grantee fails to commence to cure the same within said 30 day period and thereafter fails to use reasonable diligence, in SWSCC' s sole opinion, to cure such default as soon as possible) within which to cure such default . In the event Grantee fails to cure such default, as described above, SWSCC may terminate this Agreement or impose liquidated damages, whichever the case may be . B. Grantee may, within ten (10) days of notice, notify SWSCC that there is a dispute as to whether a default has , in fact, occurred. Such notice by Grantee to SWSCC shall specify with particularity the matters disputed by Grantee. Such notice shall stay the running of the above described thirty (30) day period. C. SWSCC shall hear Grantee' s dispute at the next regularly scheduled SWSCC meeting and shall make a determination at that meeting as to whether Grantee' s actions constitute a default hereunder . SWSCC shall supplement its decision with written findings of fact. i -10- F D. If after hearing the dispute SWSCC finds that there is a default, Grantee shall have twenty (20) days from such a determination to cure the default. At any time after that twenty (20) day period, SWSCC may terminate this Agreement or impose liquidated damages, whichever the case may be. E. In addition to any other remedy provided to SWSCC under this Agreement or at law or equity, SWSCC may, at its discretion, take a credit on any future payments to Grantee in the event SWSCC finds Grantee to be in default in accordance with the procedures described in this paragraph 5 .08 . The credit shall be in a prorated daily basis . 5 .06 Captions . The Captions to Sections throughout this Agreement are intended solely to facilitate reading and reference to the Sections and provisions of this Agreement. Such captions shall not affect the meaning or interpretation of this Agreement . 5.07 Interpretation. This Agreement has been arrived at by negotiation and shall not be construed against any party. In the event of any dispute or question as to the meaning, interpretation or application of any term, provision or condition of this Agreement or Relief Ordinance, the SWSCC, in its sole discretion, shall resolve such dispute or question, provided however that, to the extent the terms of this Agreement or the Relief Ordinances as amended by the Local Programming Restructuring Ordinance are in conflict with the Franchise or the Offering, the terms of this Agreement or the Relief Ordinances as amended shall be governing. 5 . 08 Governing Law. This Agreement shall be interpreted in accordance with Minnesota law. -11- 5. 09 Other Law. This Agreement shall be subject to all applicable federal, state and local law. 5. 10 Notices . Any notice required to be given or served upon any party in connection with this Agreement shall be in writing and shall be deemed to have been given and received, (1) three business days after a registered or certified letter containing the notice, properly addressed, with postage prepaid, is deposited in the United States mail; or (2) if made in any other manner, upon actual delivery to and receipt by the party to whom it is addressed. Notice shall be given to the parties at the following addresses : SWSCC Adrian E. Herbst Southwest Suburban Cable Commission c/o Moss & Barnett 4800 Norwest Center 90 South Seventh Street Minneapolis, MN 55402 Grantee KBL Cablesystems of the Southwest, Inc. 801 Plymouth Avenue North Minneapolis, MN 55411 5 . 11 Entire Agreement . This Agreement constitutes the entire agreement and understanding between the parties and no oral modifications or additions hereto shall be binding. No verbal or written statements of the parties shall be considered a modification of this Agreement except by a written document signed by all parties expressly stating that it is modifying the Agreement and setting forth the new condition or provision of the Agreement. 5. 12 No Joint Venture. Nothing in this Agreement shall create a joint venture or principal-agent relationship between the -12- i parties and no party is authorized to (and no party shall) act toward third parties or the public in any manner which would indicate any such relationship with the other. 5 . 13 Nonenforcement . The failure of any party to strictly enforce any provisions of this Agreement shall not be construed as a waiver or as excusing that party from future performance. 5.14 Attorneys Fees. If it is necessary for SWSCC to retain the services of an attorney of law to enforce any of the terms, covenants or provisions hereof or to collect any sums due hereunder, Grantee shall pay to the other party the actual cost of such services . 5 . 15 Indemnification and Insurance. The provisions of Article VIII of the Franchise pertaining to indemnification and insurance are applicable to this Agreement and the performance of this Agreement by SWSCC and its officers, officials, representatives, employees and agents and said Article VIII of Franchise is hereby incorporated in this Agreement and made part of it . 5 . 16 Assignments. This Agreement shall not be assigned or performance of the duties hereunder delegated without the express written consent of the parties . This Agreement is accepted, and we agree to be bound by all its terms and conditions. DATED: SOUTHWEST SUBURBAN CABLE COMMISSION By Its: -13- By Its : STATE OF MINNESOTA) ) ss. COUNTY OF HENNEPIN) The foregoing instrument was subscribed and sworn to before me this day of , 1991, by , the of SOUTHWEST SUBURBAN CABLE COMMISSION, a Minnesota corporation, on behalf of said corporation. Notary Public My commission expires : DATED: KBL CABLESYSTEMS OF THE SOUTHWEST, INC. a Minnesota Corporation By Its : STATE OF MINNESOTA) ) ss . COUNTY OF HENNEPIN) The foregoing instrument was subscribed and sworn to before me this day of , 1991, by , the of KBL CABLESYSTEMS OF THE SOUTHWEST, INC. , a Minnesota corporation, on behalf of said corporation. Notary Public I My commission expires : 1099DAJ -14- EXHIBIT 1 GLOSSARY For the purpose of this Agreement, the following terms, phrases, words and their derivations shall have the meaning given herein. When not inconsistent with the context, words used in the present tense include the future, words in the plural number include the singular number, and words in the singular number include the plural number. The words "shall" and "will" are mandatory and "may" is permissive. Words not defined shall be given their common and ordinary meaning. 1. Access or Community Access shall mean the right or privilege of the general public, local educational authorities, and local government to use designated facilities, equipment or channels of the Grantee. Channels shall be made available pursuant to Section IV of the Restated Contract for Local Programming Facilities. 2 . Basic Service means all subscriber services provided by Grantee, including the delivery of broadcast signals, covered by the regular monthly charge paid by all subscribers, excluding optional services for which a separate charge is made. 3 . Cablecast shall mean programming in a video, audio or data format transmitted through the cable communications system to users and subscribers. 4 . Channel or Television Channel shall mean a six megahertz (6 MHz) frequency band, including adjacent vertical blanking interval, which is capable of carrying one standard video signal , a number of audio, digital or other non-video signals, or some combination of such signals . 5. City means the City of Eden Prairie, Edina, Hopkins, Minnetonka or Richfield, a municipal corporation in the State of Minnesota which has granted the Franchise. 6. Class IV Channel means a signaling path provided by a System to transmit signals of any type from a subscriber terminal to another point in System. 7. Connection means the attachment of the drop to the first radio or television set of the subscriber. 8 . Converter means an electronic device which converts signals to a frequency not susceptible to interference within the television receiver of a subscriber, and by an appropriate channel selector, also permits a subscriber to view all basic subscriber signals, including the basic service delivered at designated converter dial locations . 9 . Council means the governing body of City. i 10. Drop shall mean the cable that connects the subscriber terminal to the nearest feeder cable of the cable. 11. FCC shall mean the Federal Communications Commission and any legally appointed, designated or elected agent or successor. 12. Franchise shall mean the Cable Communications Ordinance, as now or hereafter amended, of Member Cities . 13 . Franchise Area shall mean the cities of Edina, Eden Prairie, Hopkins, Minnetonka and Richfield, Minnesota, together with any future annexations or lawful expansions . 14 . Grantee shall mean KBL Cablesystems of the Southwest, Inc. a Minnesota corporation. 15. Gross Revenues shall mean all revenue derived directly or indirectly by Grantee, its affiliates, subsidiaries, parent, and any person in which Grantee has a financial interest of five percent (5%) or more from or in connection with the operation of the System, including, but not limited to, basic subscriber service monthly fees, pay cable fees, installation and reconnection fees, leased channel fees, converter rentals, studio rental, production equipment and personnel fees, and advertising revenues. The term does not include any taxes on services furnished by Grantee and imposed directly upon any subscriber or user by the State, City or other governmental unit and collected by Grantee on behalf of said governmental unit. For purposes of calculating the annual franchise fee, all amounts spent to fund the Restructured Local Programming Obligations shall be deducted from Gross Revenues. 16. Installation means the connection of the System from feeder cable to the point of connection. 17. Local Programming shall mean access, community access , and/or local origination programming. 18. Local Programming Obligations means Grantee ' s obligations under the Franchise and the Offering for cablecast access, community access and local origination programming . 19 . Local Origination Programming shall mean programming produced under the control of the Grantee which is of interest to those living on the Franchise Area. 20. Lockout Device is an optional mechanical or electrical accessory to a subscriber ' s terminal which inhibits the viewing of a certain channel or channels provided by way of cable communications system. -2- i 21. Member Cities shall mean the cities of Edina, Eden Prairie, Hopkins, Minnetonka and Richfield, Minnesota. 22. News Show means that show produced by Grantee pursuant to an Agreement with SWSCC dated January 23, 1991. 23 . Offering of Grantee or Offering shall mean that certain document dated December 5, 1980, entitled "Offering of Grantee" and signed by Grantee and City, which document is on file with the City Clerk. 24 . Playback Operator shall mean that employee of Grantee whose responsibilities shall include, but not be limited to, the codification and implementation of all access schedules. 25. Programming shall mean any video, audio, text or data signal carried over the system. 26 . Public Building is any building owned or operated by the United States government or any subdivision thereof, or the State of Minnesota or any subdivision thereof, or the City or any other governmental subdivision, or school district or educational institutions . (Article I, Section 2, Paragraph V, amended effective 09/83 . ) 27. Public Property is any real property owned by City other than a street. 28. Relief Ordinances means the CATV Relief Ordinance as modified by the CATV Relief Ordinance Amendment. 29 . Restated Performance Agreement means that contractual agreement between Grantee, City and SWSCC establishing the terms and conditions under which Grantee will be required to fund and otherwise fulfill its Local Programming requirements and establishing reporting standards and criteria for franchise compliance in other areas. 30. Restructured Local Programming Obligations means Grantee' s access, community access and local origination programming obligations as set forth in the Local Programming Restructuring Ordinance and the Restated Performance Agreement . Compliance with the Restructured Local Programming Obligations shall supersede and be in complete satisfaction of the Local Programming Obligations . 31. Scrambler/Descrambler refers respectively to the equipment installed to the cable communications system' s headend equipment and subscriber terminal used to isolate pay cable and other ancillary service channels from basic service which is accomplished by electronically distorting the signal prior to its transmission through the cable communications system and -3- reconstituting the signal at each authorized location for subsequent display. i 32. Sidewalk is the portion of a street delineated for pedestrian travel . 33 . Street shall mean the surface of and the space above and below any public street, road, highway, freeway, lane, path, public way, alley, court, sidewalk, boulevard, parkway, drive or any easement or right-of-way now or hereafter held by City which shall, within its proper use and meaning in the sole opinion of City, entitle Grantee to the use thereof for the purpose of installing or transmitting over poles, wires, cables, conductors, ducts, conduits, vaults, manholes, amplifiers, appliances, attachments and other property as may be ordinarily necessary and pertinent to a System. 34 . SWSCC shall mean the Southwest Suburban Cable Commission. 35. Subscriber means any person or entity who subscribes to a service provided by Grantee by means of or in connection with the System regardless of whether a fee is paid for such service . 36 . Subscriber Network shall mean a single trunk 440 MHz cable activated with 54 downstream channels and 4 return or upstream channels, as it may be upgraded from time to time. 37. System means a system of antennas, cables , wires, lines , towers, waveguides or other conductors, converters, equipment or facilities, designed and constructed for the purpose of producing , receiving, transmitting, amplifying and distributing, audio, video and other forms of electronic or electrical signals, located in City. Said definition shall not include any system wholly internal to one or more multiple unit dwellings under common ownership, control or management, and does not use City streets or other public property. In any event, system as defined herein shall not be inconsistent with any definition as set out in state law. 38 . User or Local Programming User shall mean any person who utilizes the System studio or facilities, whether for a charge or without charge. 1099DAJ -4- I EXHIBIT 4 TO RESTATED PERFORMANCE AGREEMEN Acceptance of Ordinance No. Repealing CATV Relief Ordinance No. 1985-13 and CATV Relief Ordinance Amendment No. 1988-22 and Creating Restructured Local Programming Obligations WHEREAS, pursuant to the Acceptance of a Franchise for a Cable Television System dated , for the City of Richfield (the "Acceptance") , KBL Cablesystems of the Southwest, Inc. (hereinafter referred to as the "Grantee, " including those instances where it is acting as the successor in interest to the rights and obligations of the original franchisee) , the current franchisee under the City' s Cable Communications Franchise ordinance, as amended (the "Franchise") , agreed to be bound by the Franchise, the Offering (as defined in the Franchise) , as amended and Ordinance No. of the City (the "Local Programming Restructuring Ordinance") , and to timely and fully perform and fulfill the terms, provisions, and conditions of the Franchise, the Offering, and the Local Programming Restructuring Ordinance, and the Restated Performance Agreement between the City and Grantee dated —A, including the contracts attached thereto as Exhibit 2 and 3 (together called the "Restated Performance Agreement") , as amended, and to be bound by the Franchise for the System through December 31, 1999; and WHEREAS, by Ordinance No. dated (the "Local Programming Restructuring Ordinance") , the governing body of the city repealed the CATV Relief Ordinance and CATV Relief Ordinance Amendment replacing certain obligations set forth in these Ordinances while modifying and extending other obligations; and WHEREAS, the Local Programming Restructuring Ordinance requires, among other requirements, that it be accepted in writing by Grantee in form and substance acceptable to the City, and that the Grantee comply with the provisions of Article XIV of the Franchise; and WHEREAS, the City and Grantee have agreed on the form and substance of this Acceptance. NOW, THEREFORE, pursuant to the terms and requirements of the Local Programming Restructuring Ordinance, and in consideration of the adoption of the Local Programming Restructuring Ordinance, Grantee hereby accepts the Local Programming Restructuring Ordinance, together with the Restated Performance Agreement, upon the following terms and makes the following representations and warranties to the City. 1. Grantee agrees to be bound by the Local Programming Restructuring Ordinance, to the extent the Local Programming Restructuring Ordinance is not inconsistent with state and federal law, including the Cable Communications Policy Act of 1984 , and to timely and fully perform and fulfill the lawful terms, provisions, and conditions of the Local Programming Restructuring Ordinance. 2. Grantee agrees to provide, and warrants and represents that it is able to provide, all lawful services and offerings set forth in the Local Programming Restructuring Ordinance. 3 . The reservation of lawful rights contained in paragraphs numbers 1, 2 and .5 hereof shall not modify, enlarge or diminish any lawful rights held by or that would have been held by Grantee, nor shall it modify, enlarge or diminish any lawful rights held by or that would have been held by the City, had this Acceptance and the transactions contemplated by it never taken place. Subject to the specific reservation of rights stated in this paragraph, Grantee states that it does not intend to challenge the legality of the franchise fee and access support contained in the Local Programming Restructuring Ordinance, at least until there is established a sufficient body of applicable law with respect to the lawfulness of franchise fee and access support requirements in cable television franchise agreements . 4 . Grantee further agrees to hold the City and its officers , agents, employees and representatives harmless from and to indemnify against any and all loss, cost , damage and expense, including, without limitation, attorneys ' fees, now or hereafter incurred by it, and its respective officers, agents, employees or representatives, and arising out of or due to, or claimed to arise out of or be due to, the grant of the Local Programming Restructuring Ordinance or the process followed by City in enacting the Local Programming Restructuring Ordinance. 5 . Grantee agrees that all lawful provisions of the agreements, representations and warranties set forth herein, or in the Local Programming Restructuring Ordinance, shall be binding upon it and its successors and assigns, and shall inure to the benefit of the City and its successors and assigns. 6 . This Acceptance shall be effective upon the satisfaction of the requirements of Section 9 of the Local Programming Restructuring Ordinance. -2- i IN WITNESS WHEREOF, Grantee has caused this Acceptance to be duly executed and delivered this day of , 1991 . KBL CABLESYSTEMS OF THE SOUTHWEST, INC. , a Minnesota corporation By Its• STATE OF MINNESOTA) ) ss . COUNTY OF HENNEPIN) The foregoing instrument was subscribed and sworn to before me this day of 1991, by , the of KBL CABLESYSTEMS OF THE SOUTHWEST, INC. , a Minnesota corporation, on behalf of said corporation. Notary Public My commission expires : 1210DAJ -3- CONSENT AGREEMENT AND GUARANTY OF PERFORMANCE Parties : City of Edina, a Minnesota municipal corporation (the "City") KBL Cable, Inc. , a Texas corporation ("KBLC" ) KBLCOM Incorporated, a Texas corporation ("KBLCOM") Effective Date: 1991 Recitals : 1. Pursuant to the City' s cable communications ordinance, the City granted a cable television franchise (the ordinance and the grant of the franchise are referred to collectively as the "Franchise") to Rogers Cablesystems of Minnesota Limited Partnership, a Minnesota limited partnership in which Rogers Cablesystems of the Southwest, Inc. ("RCTSI") was the general partner. Pursuant to Amending Ordinance No. //_24-41, the City approved the transfer of the Franchise to RCTSI, subject to the dissolution of Rogers Cablesystems of Minnesota Limited Partnership. The partnership has subsequently been dissolved and the franchise holder, RCTSI, has been renamed KBL Cablesystems of the Southwest, Inc. ("KCTSI") . 2. KCTSI is a wholly-owned subsidiary of KBL U.S. Cablesystems, Inc. (formerly known as Rogers U.S. Cablesystems, Inc. and hereinafter "KUSCI") , which is a wholly-owned subsidiary of KBL Cablesystems of America, Inc. (formerly known as Rogers Cablesystems of America, Inc. and hereinafter "KCA") , which in turn is a wholly-owned subsidiary of KBL Cable, Inc. ("KBLC") . KBL Cable, Inc. is a wholly-owned subsidiary of KBLCOM Incorporated ("KBLCOM") , which in turn is indirectly wholly-owned by Houston Industries, Inc. 3 . KCTSI and City have agreed to certain modifications to the way in which Local Programming is to be funded and regulated. These terms are set forth in the Local Programming Restructuring Ordinance, Ordinance No. LLJJ, and the Restated Performance Agreement dated , 1991. The Local Programming Restructuring Ordinance, Restated Performance Agreement and documents entered into in furtherance thereof (collectively, "Documents") supersede the CATV Relief Ordinance, Ordinance No. 1121 and CATV Relief Ordinance Amendment, Ordinance No. 1121-A1 which have been repealed and set forth Grantee' s ongoing obligations for Local Programming. 4 . KCTSI and KBLC desire to obtain the City' s consent and approval of the restructured local programming obligations under the Local Programming Restructuring Ordinance and, in consideration therefore and to the extent not inconsistent with state and federal law, including the Cable Communications Policy Act of 1984, KBLC is willing to guarantee, unconditionally, all of the lawful obligations and commitments of KCTSI and its parent companies under the Franchise and other ordinances and agreements between the City and KCTSI and its parent companies . 5. In consideration of the City' s consent to and approval of the changes in KCTSI ' s local programming obligations to be effectuated through the Local Programming Restructuring Ordinance, KBLCOM is willing to guarantee the performance of KBLC's lawful obligations and duties under this Agreement. Agreements : The parties hereto agree as follows: A. Except as specified in this paragraph A, KBLC hereby unconditionally and absolutely guarantees to the City the full, prompt and complete performance of all lawful obligations, duties, and agreements of KCTSI, KUSCI, and KCA, respectively, to the extent not inconsistent with state and federal law, including the Cable Communications Policy Act of 1984 , under Acceptance of Ordinance No. // _ Repealing CATV Relief Ordinance No. 1121 and CATV Relief Ordinance Amendment No. 1121-A1 and creating Restructured Local Programming Obligations (the "Acceptance") , all of the ordinances, amending ordinances, agreements, and exhibits referred to and incorporated therein, as the same from time to time may have been amended (collectively referred to herein as the "Guaranteed Documents") . B. KBLCOM hereby unconditionally guarantees to the City the full, prompt and complete performance of all of KBLC' s (and of any successor or assign of KBLC) lawful obligations under this Agreement to the extent not inconsistent with state and federal law, including the Cable Communications Policy Act of 1984 . C. The obligations of KBLC and the guaranty of KBLCOM hereunder shall be absolute, complete, continuing, and irrevocable, and KBLC and KBLCOM shall not be released of their respective obligations and guaranty hereunder so long as any claim of the City against KCTSI arising out of the Franchise, the Guaranteed Documents, or otherwise is not settled or discharged in full . KBLC (or, in the event KBLC defaults on the terms of its obligations, KBLCOM) will pay to the City all reasonable expenses, costs, and attorneys ' fees incurred by the City in protecting or enforcing the City' s lawful rights under this Agreement or any of the Guaranteed Documents, whether suit be brought or not. D. In the event either KBLC or KBLCOM chooses, or is required, to perform in Minnesota KCTSI 's obligations under this Agreement, KBLC or KBLCOM, as the case may be, shall obtain all authorizations, licenses, permits and regulatory approval -2- necessary to do business in Minnesota and to perform KCTSI ' s obligations under the Franchise. E. In the event KCTSI defaults in the performance of any of its lawful obligations under the Franchise or the Guaranteed Documents, the City shall give written notice of the default to KCTSI pursuant to the terms of Article IX of the Franchise and shall concurrently give the same notice to KBLC and KBLCOM. In the event of such default, and in the event of KBLCOM's failure to perform its obligations under its guaranty, the City, at its option, may elect to invoke some or all of the provisions of Article IX of the Franchise. The City shall have the right to enforce against KBLC any obligations, agreements, warranties, representations, penalties or performances under this Agreement or the Guaranteed Documents without the requirement that the City follow any different or additional procedures as to KBLC than the City would follow as to KCTSI. KBLCOM agrees that in the event KBLC does not cause KCTSI to cure any default under this Agreement or the Guaranteed Documents within thirty (30) days of receiving notice of the default from the City, the City may, at its election, require KBLCOM to cause to be performed KCTSI ' s obligations . KBLCOM agrees that in the event KBLC does not cure any such default within said thirty (30) days, the City, at its election, may require KBLCOM to cause to be performed KCTSI ' s obligations, at which time the City shall have the same rights and remedies against KBLCOM under this paragraph E as it has against KBLC in the event of any default by KCTSI . F. No right or power of the City hereunder shall be deemed to have been waived by any act or conduct on the part of the City, or by any neglect to exercise such right or power, or by any delay in so doing; and every right or power of the City shall continue in full force and effect until specifically waived or released by an instrument in writing executed by the City. Unless specifically waived or released by the City in writing, the respective obligations and guarantees of KBLC and KBLCOM under this Agreement and under the Guaranteed Documents shall remain unchanged in the event the City either obtains additional guarantees, security, or agreements securing KCTSI ' s performance hereunder, or releases or waives such guarantees, security or agreements . G. Provided KCTSI is a party to any such amendments, renewals, or extensions, KBLC (and KBLCOM with respect to its guaranty of KBLC' s obligations) hereby consents to the Guaranteed Documents being amended, renewed, or extended in writing, with or without notice to KBLC and KBLCOM, and KBLC (and KBLCOM, with respect to its guaranty of KBLC' s obligations) agrees that it will remain the unconditional guarantor of KCTSI ' s obligations under the Guaranteed Documents as so amended, renewed, or extended. H. Each of KBLC and KBLCOM warrants and represents to the City as follows : -3- 1. That it is lawfully incorporated under the laws of Texas and is in good standing in Texas. 2. That it has full right and authority to enter into this Consent Agreement and Guaranty of Performance, and in the event of KCTSI ' s default on any of its lawful obligations to the City in connection with the Franchise, to cause to be performed KCTSI 's obligations. 3 . That it has taken all corporate action required to authorize the execution and delivery of this Agreement. I . At such time as KBLC and KBLCOM execute this Agreement, each of them shall deliver to the City a certified copy of its Articles of Incorporation and an opinion from its legal counsel stating that it has duly entered into this Agreement with full and proper corporate authority and that, to the extent not inconsistent with state and federal law, including the Cable Communications Policy Act of 1984, this Agreement is enforceable against KBLC and KBLCOM, as the case may be, in accordance with its terms, subject to (i) any applicable bankruptcy, insolvency, reorganization or other laws relating to or affecting creditors ' rights generally, and (ii) general principles of equity (regardless of whether such enforceability is considered a proceeding in equity or law) . Such legal opinion shall be in a form and substance acceptable to the City. J. KBLC shall, at the time it executes this Agreement, fully comply with the terms and conditions of Article XIV, Section 2, of the Franchise. To the extent not inconsistent with state and federal law, including the Cable Communications Policy Act of 1984, KBLC shall cause KCTSI to comply with all of the insurance, letter of credit, and bonding requirements of Article VIII of the Franchise. K. KBLC agrees to indemnify and to hold the SWSCC and the City harmless from (i) any liability or responsibility with respect to KCTSI ' s obligations as set forth in the Documents, and (ii) all reasonable costs, expenses and professional fees of any nature that arise from third-party claims directly resulting from the City' s consent to and approval of the Guaranteed Documents. L. This Agreement shall be governed, interpreted and enforced according to the laws of the State of Minnesota and relevant federal law. In connection with all matters arising out of this Agreement, KBLC and KBLCOM hereby submit to the jurisdiction of the state and federal courts of Minnesota, exclusively. M. This Agreement shall remain in force as long as KCTSI or any subsidiary of KBLC operates or controls the Franchise. -4- N. Any right or remedy granted to the City under this Agreement or the Guaranteed Documents which shall be found to be unenforceable for any reason shall be severable and all remaining rights and remedies shall continue to be valid and enforceable. All rights and remedies of the City shall be separate and cumulative, and the exercise of one shall not limit or prejudice the exercise of any other remedy at the same or at a later time. 0. This Agreement shall be binding upon, and inure to the benefit of, the parties and their respective successors and assigns. Any change or amendment to this Agreement shall be valid only if made in a writing duly executed by each of the parties hereto. P. All notices or demands required or permitted to be given in writing under this Agreement shall be deemed to be given when delivered personally to any officer of KBLC or KBLCOM, as the case may be, or the City' s Administrator of the Franchise, or forty-eight (48) hours after such notice or demand is deposited in the United States Mail in a sealed envelope, with registered or certified mail postage prepaid thereon, addressed to the party to which notice is being given, as follows: If to the City: City of Edina 4801 West 50th Street Edina, MN 55424 If to KBLC: KBL Cable, Inc. 800 Gessner Suite 700 Houston, TX 77024-4270 If to KBLCOM: KBLCOM Incorporated 800 Gessner Suite 700 Houston, TX 77024-4270 An address may be changed by a party upon notice to each of the other parties given as provided in this paragraph. CITY OF�DI A S By )Z" Its a r By Its Manager KBL CABLE, INC. By Its -5- KBLCOM INCORPORATED By Its STATE OF MINNESOTA) ) ss. COUNTY OF HENNEPIN) The foregoing instrument was subscribed a,�1d sworn to before me this � day of A/u:.er...k- , 19q�, by F-rfderrck S. Zd ,,dx , the Mayor of the CITY OF EDINA, a Minnesota municipal corporation, on behalf of said corporation. ..Po..,. MARCELLA M. DAEHN �r NOTARY HENNEPIN -':.:''X - .a OT HENNEPt�I O�11'1"X� My Commission Expir= A;r.'21.1996 Notary Public STATE OF MINNESOTA) ) ss . COUNTY OF HENNEPIN) The foregoing instrument was subscribed and sworn tp before me this (Y-!-� day of /Na,;e.,.,k- , 19 jL, by Kenmef� � -S I...d , the City Manager of the CITY OF EDINA, a Minnesota municipal corporation, on behalf of said corporation. - MARCELLA M. DAEHN NOTARY PUuLIC ati, HENNEPIN My commission Expirca Notary Public STATE OF MINNESOTA) ) ss. COUNTY OF HENNEPIN) The foregoing instrument was subscribed and sworn to before me this day of , 19 _, by the of KBL CABLE, INC. , a Texas corporation, on behalf of said corporation. Notary Public -6- STATE OF MINNESOTA) ) ss. COUNTY OF HENNEPIN) The foregoing instrument was subscribed and sworn to before me this day of , 19 _, by , the of KBLCOM INCORPORATED, a Texas corporation, on behalf of said corporation. Notary Public 1218DAJ -7- LAW OFFICES MOSS & BARNETT A PROFESSIONAL ASSOCIATION 4800 NORWEST CENTER 90 SOUTH SEVENTH STREET MINNEAPOLIS, MINNESOTA 55402-4119 M. CECILIA RAY TELEPHONE (612) 347-0300 TELECOPIER (612) 339-6686 (612) 347-0289 October 31, 1991 VIA MESSENGER Marcella Daehn City of Edina 4301 Wcst 50th Street Edina, MN 55424 Re: Southwest Suburban Cable Commission - 1991 CATV Relief Extension Dear Ms. Daehn: Enclosed is a set of documents for the City of Edina, pertaining to the aboN/e--referenced matter. Specifically, we have enclosed: 1. A copy of Resolution No. 1-1991, adopted by the Southwest Suburban Cable Commission at its meeting on October 23, 1991; 2. Transmittal letter dated October 23, 1991, from Karen J. Anderson, Chair of the Southwest Suburban Cable Commission; 3. Calendar of Action; 4. A Resolution for adoption by the City of Edina; 5. An Ordinance for adoption by the City of Edina; 6. Restated Performance Agreement, to be entered into by the franchise holder and the City of Edina; 7. A Consent Agreement and Guaranty of Performance, to be entered into by the City of Edina, KBL Cable, Inc. and KBLCOM Incorporated, parent companies of the franchise holder; 8. SWSCC Memorandum dated July 24, 1991, summarizing the Relief Extension request of Paragon Cable; and MOSS & BARNETT A PROFESSIONAL ASSOCIATION Marcella Daehn Page 2 October 31, 1991 9. Series of frequently asked questions, and responsive answers, concerning the 1991 CATV Relief Extension. I understand the City of Edina is prepared to have its first reading on the Ordinance amendment on Monday, November 4. The second reading, and public hearing, will be held on Monday, November 18. Please note that, pursuant to the enclosed City Resolution, (a) four executed copies of each of the City Resolution, the Ordinance, the Restated Performance Agreement, and the Consent Agreement should be returned to Moss & Barnett and (b) the Resolution and Ordinance will be ineffective unless each of the Member Cities of the Southwest Suburban Cable Commission adopts similar resolutions and ordinances within 90 days of adoption by the first Member City. If you have any questions regarding these enclosures, please do not hesitate to contact me. Sincerely, MOSS & BARNETT A 7Cecilia ssociation M. MCR/dmb 193ZDMB Enclosures cc: Adrian E. Herbst, Esq. w/o enc. Debra Cottone w/o enc. David A. Jones, Esq. w/o enc. Thomas S. Erickson, Esq. w/enc. RESOLUTION NO. 1-1991 4 A RESOLUTION Approving a Settlement with the Grantee Under the Cable Communications Franchise Ordinance Regarding Revisions to and Extension of Certain Terms of the CATV Relief Ordinance as Amended, Based Upon Enactment of the Local Programming Restructuring Ordinance and Modifications to Other Related Agreements. WHEREAS, the Southwest Suburban Cable Commission ("SWSCC") , is a joint powers commission comprised of the Cities of Eden Prairie, Edina, Hopkins, Minnetonka, and Richfield ("Member Cities") ; and WHEREAS, each of the Member Cities has awarded a cable communications franchise ("Franchise") which is held by KBL Cablesystems of the Southwest, Inc. ("Grantee") ; and WHEREAS, the Member Cities have delegated to the SWSCC the day-to-day regulation of Grantee; and WHEREAS, in 1985, at the recommendation of the SWSCC, the Member Cities adopted a CATV Relief Ordinance ("CATV Relief Ordinance" ) , providing for modification of certain requirements of the Franchise; and WHEREAS, Grantee underwent a change of control in 1989 and in connection therewith requested the SWSCC and the Member Cities to modify and extend the CATV Relief Ordinance; and WHEREAS, at the recommendation of the SWSCC, each Member City adopted an Ordinance providing modifications to the CATV Relief Ordinance in contemplation of a transfer of control of the City' s cable communication franchise ("CATV Relief Ordinance Amendment" ) ; and WHEREAS, the CATV Relief Ordinance, as amended by the CATV Relief Ordinance Amendment (collectively "Relief Ordinances") , provided that the relief would terminate as of March 1, 1992; and WHEREAS, the Relief Ordinances required Grantee to make any requests for extension of the relief prior to September 1, 1990; and WHEREAS, Grantee on August 27, 1990, notified City and the SWSCC of its desire to continue the provisions of the Relief Ordinances in effect after March 1, 1992; and WHEREAS, the SWSCC reviewed Grantee' s request during a • series of meetings of the SWSCC' s operating committee and regularly scheduled commission meetings; and WHEREAS, the SWSCC, at a commission meeting, held on May 22, 1991, authorized staff to enter into negotiations with Grantee to continue in effect certain provisions of the Relief Ordinances on a modified basis; and WHEREAS, Grantee and Commission staff reached agreement on terms for the extension and modification of certain provisions of the Relief Ordinances which were in turn approved by the SWSCC at the regularly scheduled Commission meeting of July 24, 1991, a summary of such terms being attached hereto as Exhibit 1; and WHEREAS, the SWSCC authorized staff to negotiate with Grantee the necessary documents to effectuate the terms summarized in Exhibit 1; and WHEREAS, the Commission has reviewed the necessary documents modifying and extending certain provisions of the Relief Ordinances, as set forth in ordinances to be enacted by each Member City ("Local Programming Restructuring Ordinance" ) , as well as modifying certain provisions of certain agreements entered into pursuant to the Relief Ordinances, and finds them to be acceptable and recommends their adoption by the Member Cities; NOW, THEREFORE, it is hereby resolved by the Southwest Suburban Cable Commission, at its regularly scheduled meeting of October 23, 1991, that: 1) The Chairman and Administrator are directed to forward a copy of this Resolution and copies of the documents listed in Exhibit 2 to the Member Cities and further to provide additional assistance as necessary to the Member Cities in their deliberations . 2) The Chairman is hereby authorized to sign, on behalf of the SWSCC, all documents necessary to rescind the Relief Ordinances and to effectuate the Local Programming Restructuring Ordinance. Such documents shall include, but shall not be limited to, those documents listed on Exhibit 2 (hereto "Documents") . 3) The terms of this Resolution are contingent upon adoption, approval, and/or execution of all necessary Documents by the Member Cities of the SWSCC. 4) This Resolution shall be null and void if similar resolutions are not approved by all other Member Cities of the SWSCC within 90 days from the effective date of the first such resolution, as passed by a Member City. -2- 5) The terms of this Resolution shall be null and void s unless the conditions precedent to the effective date of the Local Programming Restructuring Ordinance, as set forth in Section 9 thereof, have been satisfied. This Resolution is passed and adopted this 23rd day of October, 1991. SOUTHWEST SUBURBAN CABLE COMMISSION By5 airman 1101DAJ -3- SO ST SUBURBAN CABLE COMMISSION C/O !MOSS & BARNETT 4 -4800 Nom-est Center 90 South Seventh Street %W1ne:1polis, %1N 55-402--4119 / (612)3-4--0300 EXHIBIT 1 to SWSCC RESOLUTION SUMMARY OF KEY ELEMENTS TO BE INCLUDED IN AGREEMENT TO EXTEND RELIEF 7/24/91 Unless otherwise identified the changes begin August 1, 1992: • 5% franchise fee to Cities • Paragon Cable assumes full responsibility for -local programming' • News show production beginning November 24 , 1991 • Annual budget $347, 000, escalated by 5% each year and deducted from gross revenues prior to calculation of the franchise fee • Beginning November, 1993, news show will continue or $100,000 of budget will be devoted to local origination • Continued coordination of programming with Cities and Commission • Retain service levels, equipment repair and replacement as defined in Performance Agreement and current contracts for local programming • No itemization of cost for local programming on customer bills for at least 2 years (July 31, 1994) • Cooperation and participation between Paragon Cable and Commission to create meaningful reporting requirements • New agreement terminates upon sale or transfer 337ZO40 Cities of Eden Prairie, Edina, Hopkins. Minnetonka & Richfield EXHIBIT 2 LIST OF DOCUMENTS 1. SWSCC Resolution. 2 . Restated Performance Agreement . 3 . Restated Contract for Local Programming Facilities . 4 . Restated Contract for Public, Educational and Government Access Services . A RESOLUTION Approving a Settlement with the Grantee Under the City's Cable Communications Franchise Ordinance Regarding Revisions to and Extension of Certain Terms of the CATV Relief Ordinance as Amended, Based Upon Enactment of the Local Programming Restructuring Ordinance and Modifications to Other Related Agreements. WHEREAS, the City Council of the City of Edina ("City") is the official governing body of City; and WHEREAS, City has awarded a cable communications franchise ("Franchise") which is held by KBL Cablesystems of the Southwest, Inc. ("Grantee") ; and WHEREAS, the City adopted Ordinance No. 1121 in 1985 ("CATV Relief Ordinance" ) , providing for modification of certain requirements of the Franchise; and WHEREAS, Grantee underwent a change of control in 1989 and in connection thereto requested that City and the Southwest Suburban Cable Commission ("SWSCC") , a joint powers commission comprised of this City and the Cities of Eden Prairie, Hopkins, Minnetonka, and Richfield ("Member Cities") modify and extend the CATV Relief Ordinance as a part of the transfer of ownership; and WHEREAS, the City adopted Ordinance No. 1121-A1 providing modifications to the CATV Relief Ordinance in contemplation of a transfer of control of the City' s Franchise ("CATV Relief Ordinance Amendment") ; and WHEREAS, the CATV Relief Ordinance, as amended by the CATV Relief Ordinance Amendment (collectively "Relief Ordinances") , provided that the relief would terminate as of March 1, 1992; and WHEREAS, the Relief Ordinances required Grantee to make any requests for extension of the relief prior to September 1, 1990; and WHEREAS, Grantee on August 27, 1990, notified City and the SWSCC of its desire to continue the provisions of the Relief Ordinances in effect after March 1, 1992; and WHEREAS, the SWSCC reviewed Grantee' s request during a series of meetings of the SWSCC' s operating committee and regularly scheduled commission meetings; and WHEREAS, the SWSCC, at a commission meeting, held on May 22, 1991, authorized its staff to enter into negotiations with Grantee to develop a SWSCC recommendation to City to continue in effect certain provisions of the Relief Ordinances on a modified basis; and WHEREAS, the SWSCC, at a meeting held on October 23, 1991, adopted a Resolution ("SWSCC Resolution") recommending that the City approve and accept the conditions upon which certain provisions of the Relief Ordinances and certain agreements entered into pursuant to the Relief Ordinances would be modified and extended, a copy of which is attached hereto as Exhibit 1; and WHEREAS, the City has reviewed the recommendation of the SWSCC and documents modifying and extending certain provisions of the Relief Ordinances as set forth in Ordinance No. ("Local Programming Restructuring Ordinance") , as well as modifying certain provisions of those agreements entered into pursuant to the Relief Ordinances, and based upon this review accepts the recommendation of the SWSCC and finds said documents to be reasonable and acceptable to the City; and WHEREAS, the City and Grantee agree that the provisions of the Relief Ordinances shall expire March 1, 1992, unless and until the necessary actions set forth in the SWSCC Resolution are taken by all Member Cities; NOW, THEREFORE, in a regular meeting of the City Council of the City of Edina, the following is resolved: 1) The Mayor and City Manager are hereby authorized to sign, on behalf of City, all documents necessary to evidence the repeal the Relief Ordinances and effectuate the Local Programming Restructuring Ordinance. Such documents shall include, but shall not be limited to, those documents listed on Exhibit 2 attached hereto ("Documents") . 2) The terms of this Resolution are contingent upon adoption, approval, and/or execution of all necessary Documents by the City, other Member Cities of the SWSCC and the SWSCC. 3) This Resolution shall be null and void if a similar resolution is not approved by all Member Cities of the SWSCC within 90 days from the effective date of the enactment of the first such resolution by a Member City. 4) The terms of this Resolution shall be null and void unless the conditions precedent to the effective date of the Local Programming Restructuring Ordinances, as set forth in Section 9 thereof, have been satisfied. -2- 5) The City Clerk is authorized to forward to the SWSCC Administrator four (4) executed and certified copies of all Documents and this Resolution, and the SWSCC is authorized to coordinate a closing to be held within 90 days of the adoption of the Local Programming Restructuring Ordinance by the final Member City, at the office of the SWSCC Administrator. This Resolution is passed and adopted this day of 1991. CITY OF EDINA By Mayor 1198DAJ i -3- EXHIBIT 1 TO RESOLUTI( RESOLUTION NO. 1-1991 A RESOLUTION Approving a Settlement with the Grantee Under the Cable Communications Franchise Ordinance Regarding Revisions to and Extension of Certain Terms of the CATV Relief Ordinance as Amended, Based Upon Enactment of the Local Programming Restructuring Ordinance and Modifications to Other Related Agreements. WHEREAS, the Southwest Suburban Cable Commission ( "SWSCC" ) , is a joint powers commission comprised of the Cities of Eden Prairie, Edina, Hopkins, Minnetonka, and Richfield ("Member Cities" ) ; and WHEREAS, each of the Member Cities has awarded a cable communications franchise ("Franchise") which is held by KBL Cablesystems of the Southwest, Inc. ("Grantee" ) ; and WHEREAS, the Member Cities have delegated to the SWSCC the day-to-day regulation of Grantee; and WHEREAS, in 1985, at the recommendation of the SWSCC, the Member Cities adopted a CATV Relief Ordinance ( "CATV Relief Ordinance") , providing for modification of certain requirements of the Franchise; and WHEREAS, Grantee underwent a change of control in 1989 and in connection therewith requested the SWSCC and the Member Cities to modify and extend the CATV Relief Ordinance; and WHEREAS, at the recommendation of the SWSCC, each Member City adopted an Ordinance providing modifications to the CATV Relief Ordinance in contemplation of a transfer of control of the City' s cable communication franchise ("CATV Relief Ordinance Amendment") ; and WHEREAS, the CATV Relief Ordinance, as amended by the CATV Relief Ordinance Amendment (collectively "Relief Ordinances" ) , provided that the relief would terminate as of March 1, 1992; and WHEREAS, the Relief Ordinances required Grantee to make any requests for extension of the relief prior to September 1 , 1990; and WHEREAS, Grantee on August 27, 1990, notified City and the SWSCC of its desire to continue the provisions of the Relief Ordinances in effect after March 1, 1992; and WHEREAS, the SWSCC reviewed Grantee's request during a series of meetings of the SWSCC's operating committee and regularly scheduled commission meetings; and WHEREAS, the SWSCC, at a commission meeting, held on May 22, 1991, authorized staff to enter into negotiations with Grantee to continue in effect certain provisions of the Relief Ordinances on a modified basis; and WHEREAS, Grantee and Commission staff reached agreement on terms for the extension and modification of certain provisions of the Relief Ordinances which were in turn approved by the SWSCC at the regularly scheduled Commission meeting of July 24 , 1991, a summary of such terms being attached hereto as Exhibit 1; and WHEREAS, the SWSCC authorized staff to negotiate with Grantee the necessary documents to effectuate the terms summarized in Exhibit 1; and WHEREAS, the Commission has reviewed the necessary documents modifying and extending certain provisions of the Relief Ordinances, as set forth in ordinances to be enacted by each Member City ("Local Programming Restructuring Ordinance" ) , as well as modifying certain provisions of certain agreements entered into pursuant to the Relief Ordinances, and finds them to be acceptable and recommends their adoption by the Member Cities; NOW, THEREFORE, it is hereby resolved by the Southwest Suburban Cable Commission, at its regularly scheduled meeting of October 23 , 1991, that : 1) The Chairman and Administrator are directed to forward a copy of this Resolution and copies of the documents listed in Exhibit 2 to the Member Cities and further to provide additional assistance as necessary to the Member Cities in their deliberations . 2) The Chairman is hereby authorized to sign, on behalf of the SWSCC, all documents necessary to rescind the Relief Ordinances and to effectuate the Local Programming Restructuring Ordinance. Such documents shall include, but shall not be limited to, those documents listed on Exhibit 2 (hereto "Documents") . 3) The terms of this Resolution are contingent upon adoption, approval , and/or execution of all necessary Documents by the Member Cities of the SWSCC. 4) This Resolution shall be null and void if similar resolutions are not approved by all other Member Cities of the SWSCC within 90 days from the effective date of the first such resolution, as passed by a Member City. -2- 5) The terms of this Resolution shall be null and void unless the conditions precedent to the effective date of the Local Programming Restructuring Ordinance, as set forth in Section 9 thereof, have been satisfied. This Resolution is passed and adopted this 23rd day of October, 1991 . SOUTHWEST SUBURBAN CABLE COMMISSION By Chairman 1101DAJ -3- r vvv • •• •• �i• vvaiVLtLl111 • `..[X1)1.1" t,V1�L�11JJiV1\ 00 MOSS & B/' RNETT 4800 Nom-est Center 90 South Se%-enth Street NlWneapolis, NIN 55-+02--+119 (G 12) 3-1,-0300 EXHIBIT 1 to SWSCC RESOLUTION SUMMARY OF KEY ELEMENTS TO BE INCLUDED IN AGREEMENT TO EXTEND RELIEF 7/24/91 Unless otherwise identified the changes begin August 1 , 1992 : • 5% franchise fee to Cities • Paragon Cable assumes full responsibility for - local programming' • News. show production beginning November 24 , 1991 0 Annual budget $347, 000, escalated by 5% each year and deducted from gross revenues prior to calculation of the franchise fee • Beginning November, 1993, news show will continue or $100, 000 of budget will be devoted to local origination • Continued coordination of programming with Cities and Commission • Retain service levels, equipment repair and replacement as defined in Performance Agreement and current contracts for local programming • No itemization of cost for local programming on customer bills for at least 2 years (July 31 , 1994) • Cooperation and participation between Paragon Cable and Commission to create meaningful reporting requirements • New agreement terminates upon sale or transfer 337ZO40 Cines of Eden Prairie, Edina, Hopkins. Minnetonka & Richfield EXHIBIT 2 TO SWSCC RESOLUTION LIST OF DOCUMENTS 1 . SWSCC Resolution. 2 . Restated Performance Agreement . 3 . Restated Contract for Local Programming Facilities . 4 . Restated Contract for Public, Educational and Government Access Services . EXHIBIT 2 LIST OF DOCUMENTS 1. City Resolution. 2 . Local Programming Restructuring Ordinance. 3 . Restated Performance Agreement. 4 . Consent Agreement and Guaranty of Performance. SOUTHWEST SUBURBAN CABLE COMMISSION C/O MOSS & BARNETT 4800 Norwest Center 90 South Seventh Street Minneapolis,MN 55402-4119 (612)347-0300 October 23, 1991 Re: 1991 CATV Relief Extension TO: The Honorable Mayor and Members of the City Council of the City of Edina, Minnesota Transmitted to you under cover of this letter are various documents relating to the above referenced matter. Some of these enclosures are provided for action by your City. Others are for your information only and do not require any action by you. Each of the Member Cities of. the SWSCC must give its approval to the 1991 CATV Relief Extension in order for the Relief Agreement, first entered into in 1985 and extended in 1988, to remain in effect. The enclosed Calendar of Action sets dates for hearings by each of the Member Cities of the SWSCC. We ask that you place this matter for consideration on the agenda for your City's council meetings, on the two dates shown on the Calendar of Action. Members of the SWSCC staff will work with your City staff to accomplish any necessary publications. Specifically, you are asked to consider and approve at your council meetings the following items, which are enclosed with this letter: 1. A Resolution Approving Settlement with the Grantee under 'the City's Cable Communication Franchise Ordinance Regarding Revisions to and Extension of Certain terms of the CATV Relief Ordinance as Amended, Based Upon Enactment of the Local Programming Restructuring Ordinance and Modifications to Other Related Agreements (the "Resolution") . 2. An Ordinance Repealing the CATV Relief Ordinance, Ordinance No. 1121, and CATV Relief Ordinance Amendment, Ordinance No. 1121-A1, Providing for the Continuance of Certain Aspects of the CATV Relief Ordinance, as Amended, and Restructuring the Manner in which Local Programming is Funded (the "Relief Ordinance") . 3. Restated Performance Agreement. 4. Consent Agreement and Guaranty of Performance ("Consent Agreement") . Cities of Eden Prairie, Edina, Hopkins, Minnetonka & Richfield Page 2 October 23, 1991 Earlier drafts of each of these documents were provided to your City Attorney for review and comment. The enclosed documents are final documents and incorporate suggested revisions, to the extent they were agreeable to the franchise grantee and the SWSCC. Again, your City Attorney is aware of any revisions made, and those which were not made. Once your City has given all necessary approvals to the Resolution, Relief Ordinance, Restated Performance Agreement and Consent Agreement, please notify Adrian Herbst at Moss & Barnett (90 South 7th Street, Minneapolis, MN 55402), the administrator of the SWSCC. Please have your City Clerk provide Adrian Herbst with four (4) signed originals of each of these documents. We will compile the fully signed documents into closing books, when this matter is completed. Our goal is to complete this by the end of the year. Your assistance and cooperation in meeting this objective is greatly appreciated. Finally, we enclose for your information a Summary of the Key Elements of the 1991 CATV Relief Extension, and a series of frequently asked questions, and their answers, concerning the 1991 CATV Relief Extension. We hope these enclosures will provide you with answers to your questions about the 1991 CATV Relief Extension, and will assure you of the beneficial effects of its adoption. Very truly yours, Karen Anderson, Chair AEH/ral 171/172ZDMB CALENDAR OF ACTION Sundav Monday Tuesday Wednesday Thursday Friday Saturday 13 OC 14 15 16 17 18 19 Publish SWSCC Notice-Star/Trib. 20 21 22 23 24 25 26 -- SWSCC Meeting 27 28 29 30 31 1 NOV 2 Richfield (1) 3 4 5 6 7 8 9 Edina (1) Hopkins (1) 10 11 12 13 14 15 16 17 18 19 20 21 22 Edina (2) Hopkins (2) Eden Prairie (1) 24 25 26 27 28 29 30 Richfield (2) Minnetonka (1) 1 DEC 2 3 Minnetonka (2) Eden Prairie (2) SWSCC Meeting - Wednesday, October 23 Eden Prairie Meetings - Tuesday, November 19 and December 3 Edina Meetings - Monday, November 4 and 18 Hopkins Meetings - Tuesday, November 5 and 19 Minnetonka Meetings - Monday, November 25 and December 2 Richfield Meetings - Monday, October 28 and November 25 ORDINANCE NO. 1122 An Ordinance Repealing the CATV Relief Ordinance, Ordinance No. 1121, and CATV Relief Ordinance Amendment, Ordinance No. 1121-A1, Providing for the Continuance of Certain Aspects of the CATV Relief Ordinance, As Amended, and Restructuring the Manner in which Local Programming is Funded. The City Council of the City of Edina ordains as follows : Section 1. Short Title. This Ordinance shall be known as the "Local Programming Restructuring Ordinance. " Section 2. Background and Purpose. In 1984, Grantee requested that the Southwest Suburban Cable Commission ("SWSCC") and Member Cities substantially restructure certain aspects of the Franchise in response to the serious financial difficulties experienced by the Grantee. The Member Cities enacted the CATV Relief Ordinance and the SWSCC and the Member Cities entered into the Performance Agreement in response to Grantee ' s request . The result was to reduce Grantee' s Local Programming Obligations and Franchise Fee requirement, provide Grantee with an incentive to refinance its debt obligation and increase the involvement of the SWSCC and Member Cities in funding Local Programming Obligations and monitoring Grantee' s performance. The CATV Relief Ordinance Amendment was enacted in 1988 as a part of the transfer of control of Grantee and resulted in the continuance of the CATV Relief Ordinance with some modification. In 1990, Grantee petitioned SWSCC to extend the provisions of the CATV Relief Ordinance and CATV Relief Ordinance Amendment (collectively "Relief Ordinances") through the term of the franchise. The SWSCC and Grantee reviewed the request through a series of meetings of the SWSCC operating committee and commission. The SWSCC, Member Cities and Grantee concur that the implementation of the Relief Ordinances has contributed to the achievement of the original goal of the SWSCC and its Member Cities : stabilizing and improving the financial condition of the Grantee. As a result, certain SWSCC oversight responsibilities and reporting requirements imposed by the Relief Ordinances and Performance Agreement are no longer necessary. The SWSCC and Grantee also concur that certain changes in the usage of channels on the cable system and the provision of access programming, community access programming and local origination programming (collectively "Local Programming") resulted in a channel line-up including more satellite programming services than originally proposed by Grantee, as well as focusing Local Programming channels so as to better serve the Member Cities . The resulting programming line-up provides diversity and appeal to CATV subscribers while maintaining a strong Local Programming component . It was agreed that the mix and level of satellite services and Local Programming should be continued. Finally, it was determined that since Grantee had improved and stabilized its financial condition, it should assume full responsibility for funding Local Programming as was contemplated at the time of the Franchise award. Since the SWSCC will no longer be a direct participant in the funding of Local Programming, it was determined that the role of the SWSCC in the oversight of Local Programming should be restructured. The SWSCC has adopted a resolution approving the modification and extension of certain provisions of the Relief Ordinances and related documents ("SWSCC Resolution") . Each of the Member Cities must also adopt a similar Resolution. This Ordinance will be effective only if the terms of the SWSCC Resolution are satisfied and Grantee agrees to be bound by the terms of this Ordinance through the execution of an Acceptance Agreement. Section 3. Relationship to Cable Communications Ordinance. This Ordinance does not permanently amend any provision of the Cable Communications Ordinance (the "Franchise") but provides that certain provisions of that ordinance are modified for a period of time as provided herein. Except as expressly modified in this Ordinance and related agreements entered into pursuant to this Ordinance, the provisions of the Franchise remain in full force and effect. In the event of a conflict or inconsistency between the Franchise or offering and any provision of this Ordinance, the Restated Performance Agreement or any other document entered into pursuant to this Ordinance, the provision of this Ordinance, the Restated Performance Agreement or said document entered into pursuant to this Ordinance shall be controlling so long as this ordinance remains in effect. Section 4. Definitions. Subdivision 1. The definitions in the Franchise also apply to this Ordinance. Subdivision 2. In addition, the following words and phrases shall have the meanings given them: (1) "Franchise" means the Cable Communications Ordinance as now or hereafter amended. -2- (2) "Local Programming" means access, community access and/or local origination programming as set forth in the Restated Performance Agreement . (3) "Local Programming Obligations" means Grantee ' s obligations under the Franchise and the Offering for cablecast access , community access and local origination programming . (4) "News Show" means that show produced by Grantee pursuant to an Agreement with the SWSCC dated January 23 , 1991 . (5) "Relief Ordinances" means the CATV Relief Ordinance as modified by the CATV Relief Ordinance Amendment . ( 6) "Restated Performance Agreement" means that contractual agreement between Grantee, City and SWSCC establishing the terms and conditions under which Grantee will be required to fund and otherwise fulfill its Local Programming requirements and establishing reporting standards and criteria for Franchise compliance in other areas . (7) "Restructured Local Programming Obligations" means Grantee' s access , community access and local origination programming obligations as set forth in the Local Programming Restructuring Ordinance and the Restated Performance Agreement . Compliance with the Restructured Local Programming Obligations shall supersede and be in complete satisfaction of the Local Programming Obligations . Section 5 . Repeal of Relief Ordinances . This Ordinance hereby repeals the CATV Relief Ordinance, Ordinance No . 1121 and the CATV Relief Ordinance Amendment, Ordinance No . 1121-A1 effective August 1, 1992 . Through July 31, 1992 , the provisions of the Relief Ordinances shall remain in effect unless specifically superceded by this Ordinance . Due to a typographical error, Section 6 , Subdivision 1 of the CATV Relief Ordinance Amendment stated an Automatic Termination date of March 1, 1991 . The correct date to be referred to is March 1, 1992 . Section 6 . Financial Terms . While this Ordinance is in effect the obligations of Grantee are modified to the extent provided in this section. Subdivision 1 . Franchise Fees - Percentage . The annual franchise fee shall be 50 of Gross Revenues payable as follows . An annual franchise fee of 4% shall be paid to City in equal quarterly payments on or before the first day of each of the months of November , February, May and August next following the end of Grantee ' s fiscal year . These payments are consistent with -3- the payment arrangement contained in the Relief Ordinance. In addition and pursuant to the new local programming funding commitments set forth in Subdivision 4 herein, an annual franchise fee of 1% of Gross Revenues for the most recently completed quarter shall be paid to City in quarterly payments on or before the first day of each of the months of November, February, May and August on current year revenues beginning August 1, 1992. For purposes of calculating the annual franchise fee, all amounts spent to fund the Restructured Local Programming Obligations shall be deducted from Gross Revenues . Subdivision 2 . Letters of Credit. The City Council may by resolution reduce the required amount of the Letter of Credit below $50, 000 if in its sole discretion it determines that a lesser amount is reasonable and adequate to protect the public. It may thereafter, by resolution, require the amount of the Letter of Credit to be increased or fully restored to the amount of $50,000 . Grantee shall comply with this requirement within sixty days after written notice has been given by the City. Subdivision 3 . Performance Bond. The Grantee may dispense with the $300, 000 performance bond required by the Franchise. The City Council may thereafter by resolution require that such bond, or similar bond in a lesser amount, be provided by Grantee. Grantee shall comply with this requirement within sixty days after written notice has been given by the City. Subdivision 4 . Restructured Local Programming Obligations. Beginning with the third weekly show of November, 1991, Grantee shall assume responsibility for funding the production of the News Show. The News Show shall continue to be produced in a manner which is generally consistent with the terms of the Agreement for Programming Services between Grantee and the SWSCC, a copy of which is attached hereto as Exhibit 1. However, the role of the SWSCC and the Member Cities shall be advisory in nature and neither the SWSCC or Member Cities shall be required to provide ongoing direct financial support for the News Show. Grantee shall be obligated to continue to fund and produce the News Show for a period of two (2) years through the second weekly show of November, 1993 . Thereafter, Grantee shall be required to expend at least $100, 000 annually of its total funding requirement under the Restructured Local Programming Obligations on local origination programming. Such funding shall be expended by Grantee in consultation with the SWSCC, as set forth in the Restated Performance Agreement. All provisions of the Relief Ordinances and Performance Agreement related to the funding of Local Programming shall remain in effect through July 31, 1992 . Beginning August 1, 1992, Grantee shall assume full responsibility for funding the Restructured Local Programming Obligations. From August 1 through December 31, 1992, the budget for local programming shall be 5/12ths of $347, 000; -4- provided that Grantee shall be required to meet all Restructured Local Programming Obligations, including the production of the News Show, irrespective of the actual cost of meeting such obligations. Thereafter, the annual budget shall be escalated by an amount equal to five percent (5%) of such budget on an annualized basis as estimated in Exhibit 2 hereto. Throughout the term of this Ordinance, Grantee shall consult with the SWSCC concerning the provision of the Restructured Local Programming Obligations pursuant to the terms of the Restated Performance Agreement . The expenditures made pursuant to this subdivision shall be in complete satisfaction of Grantee' s total Restructured Local Programming Obligations during the period of this ordinance and shall be deemed to satisfy Grantee' s Local Programming Obligations as well. The amount of funding for the Restructured Local Programming Obligations shall not include any costs of operation, capital for access equipment replacement or administration not directly related to the provision of Local Programming. Grantee shall be responsible to maintain or replace, as necessary, the equipment listed in the Exhibit to the Contract for Local Programming Facilities, which is Exhibit 1 to the Performance Agreement, and shall not offset such expenditures against the funding for the Restructured Local Programming Obligations . Section 7. Automatic Termination. The provisions of this Ordinance, and the reduced financial terms contained herein may, at the option of City, cease to be effective, upon the occurrence of the earliest of any of the following events : Subdivision 1. Failure of the Grantee to restore or replace the full required amount of the Letter of Credit as provided in Article VIII , Section 4 , paragraph H of the Franchise. Subdivision 2. Failure of the Grantee to restore, replace or increase either a Letter of Credit or bond within sixty days of written notice by the City, as provided in Section 6, Subdivisions 2 and 3 of this Ordinance. Subdivision 3 . A holding or determination by any court or agency that any term, condition or provision of this Ordinance is invalid or unenforceable, as a result of any action taken by Grantee or anyone acting on Grantee' s behalf seeking such determination. Subdivision 4 . Sale or transfer of all or substantially all of the System to a person or entity other than a parent, subsidiary, related corporation, affiliated corporation, partner or joint venturer of Grantee or any parent of Grantee. Subdivision 5 . Termination of the Franchise. -5- Section 8. Other Terminations. This Ordinance may also be terminated for cause, under the same procedures for termination as are contained in the Franchise, for the following reasons: Subdivision 1. All grounds for termination provided in the Franchise and the Local Programming Restructuring Ordinance, except to the extent that Grantee' s performance obligations are modified in the Local Programming Restructuring Ordinance. Subdivision 2. Failure of the Grantee to comply with any of the material provisions of the Restated Performance Agreement. Section 9. Effective Date. This ordinance shall be effective upon passage and adoption by City and upon satisfaction of all of the following conditions : (1) Publication of this Ordinance; (2) Passage and adoption by each of the Member Cities of the SWSCC of an Ordinance similar to this Ordinance within 90 days of the adoption of such Ordinance by the first Member City; (3) Execution by Grantee of all documents necessary to repeal the Relief Ordinances and effectuate the Local Programming Restructuring Ordinance. Such documents shall include, but not be limited to, those documents listed on Exhibit 3 attached hereto ("Documents") . The executed Documents shall be delivered at a closing to be held at the office of the SWSCC administrator within 90 days of the passage of the Local Programming Restructuring Ordinance by the final Member City ("Closing") . (4) Conformance with the provisions of Article XIV of the Franchise including delivery to the City of the acceptance, opinion of legal counsel, guarantees, and other documents as required by said Article XIV, before or at Closing. Passed by the City Council of the City of Edina, Minnesota this day of 1991. By Mayor Action on above ordinance: Date of first reading: Date of second reading : -6- Motion for Adoption: Seconded by: Voted in favor: Voted against• Abstained: Absent• Ordinance adopted: Date of Publication: 1208DAJ -7- EXHIBIT 1 TO ORDINANCE _ AGREEMENT FOR PROGRAM SERVICES This AGREEMENT made and entered into by and between the Southwest Suburban Cable Commission, a Joint Powers Commission organized pursuant to the laws of the State of Minnesota, hereinafter referred to as the "SWSCC" , and Paragon Cable of Minnesota, hereinafter known as "Contractor" . WITNESSETH: WHEREAS, the SWSCC wishes to purchase the services of the Contractor to provide videotape programming for a news show to be known as "Southwest Community News" ; and WHEREAS, the Contractor has the capability and personnel to provide the programming desired by the SWSCC; and WHEREAS, the Contractor understands and the SWSCC likewise understands that in order to provide the programming that is desired by the SWSCC, the cooperation of both the SWSCC and Contractor will be essential; and WHEREAS, the SWSCC has made available funding for the purchase of the services of Contractor; and NOW, THEREFORE, in consideration of the mutual undertakings and agreements hereinafter set forth, the SWSCC and the contractor agree as follows : I . RESPONSIBILITIES OF THE PARTIES A. Contractor Responsibilities : 1. Southwest Community News Show. Contractor will develop and produce fifty-two (52) weekly news shows covering events and issues both relevant and timely to the five Southwest Cities, members of the SWSCC. Contractor, in providing and developing the news show, will rely heavily on the cooperation and assistance of each of the five Southwest Cities . The story ideas and contacts will be provided by each of the Cities on a weekly basis . It is the understanding of the Contractor and the SWSCC that in the event any City does not provide information or assistance in a timely manner, it will result in uneven representation of the Cities and perhaps higher production costs . 2. Southwest Community News Show Format . The program will be a 30-minute news show with generally short (1-4 minutes) news items . The Contractor will explore with the SWSCC the option of including studio interviews or more indepth reporting of complex 0 and/or controversial issues. Any change in the format brought about by specific requests of the SWSCC may require further costs. However, Contractor understands that any changes will not be initiated without first receiving the authority of the SWSCC. 3 . Southwest Community News Scheduling. The show will be simulcast on Channel 34 (to the five Member Cities) a minimum of fourteen (14) times over a seven (7) day period with each show being first shown each Friday at 6:30 p.m. The show will also be shown during two (2) time slots each week on Channel 6, the Regional Channel. Additionally, each Member City has the option to request the contractor to schedule up to three (3) narrowcasts (to that City) each week. All such requests for narrowcasting shall be in writing every thirty (30) days and with not less than seven (7) days advance notice to contractor. All playback of the show will be within the regularly scheduled playback hours (as defined by the Access Rules) . Contractor will experiment with other time slots in order to identify -the most watched time slots; however, schedules will be published in advance and minimal changes will be made. 4 . Southwest Community News Show Viewer Feedback. Contractor will have a dedicated phone line providing 24-hour feedback by subscribers to its Cable system. The purpose of this will be to provide timely information to contractor, as well as the SWSCC, about the interest of the viewing public in the news show. 5 . Promotion & Evaluation: a . The Contractor will cooperate with the Cities in providing information to enable the SWSCC to promote the program. Press releases and schedules will be prepared by the SWSCC on its letterhead. b. Contractor will assist in evaluation, providing information and counsel based on its experience and resources . 6 . Cooperation. Contractor understands that its timely performance of the provisions of its responsibilities included herein are essential to bring about the best possible news show. Further, Contractor understands that it will need to assist and work with appropriate representatives designated by each of the five Southwest Member Cities . Contractor agrees that it will designate specific persons who will have the responsibility to ensure the production of the programming and to coordinate with representatives of the City. 0 -2- B. , Responsibilities of SWSCC: 1. Cooperation in the Development of News Shows . Each of the Member Cities to the SWSCC will designate a contact person for the Contractor. It will be the responsibility of each person so designated by the City to coordinate with and work with the representatives of * the Contractor to ensure the initiation of the story, ideas, and content of programming to be developed by the Contractor. 2 . Facilities . The SWSCC will ensure that its Member Cities will provide reasonable access to their facilities for the Contractor to ensure that the Contractor is able to provide at the various Cities ' facilities news shows in response to the request of the designated individuals of the City. 3 . Promotion. The SWSCC will be responsible for promotion and marketing the show and for costs it incurs for such purposes. However, it is understood that it will have the assistance of Contractor and its expertise. Further, it is understood that Contractor will include a listing of the show in the Cable Guide. 4 . Focus . The SWSCC may, at any time, with the assistance of Contractor, conduct a survey, focus group review, or incorporate other measures to evaluate the impact of the show and the subscriber acceptance of it. Costs for any such evaluation shall be the responsibility of the SWSCC, except the reasonable time and service of Contractor devoted to providing assistance. II . TERM AND TERMINATION A. Term: This Agreement shall be for a 12-month term consisting of fifty-two (52) weekly shows beginning November 17, 1990. B. Termination: Either party may terminate this Agreement by giving 30 days written notice to the other. III . COST AND PAYMENT A. Cost : Each show will be produced at a cost not to exceed $1, 962. 50 . B. Monthly Statements : Contractor will submit monthly billing statements to the SWSCC with payment due within 30 days of the date of the billing statement . �� -3- IV. INDEPENDENT CONTRACTOR The Contractor shall select the means, method, and manner of performing the services herein. Nothing is intended or should be construed in any manner as creating or establishing the relationship of co-partners between the parties hereto or as constituting the Contractor as the agent, representative, or employee of the SWSCC. for any purpose or in any manner whatsoever. The Contractor is to be and shall remain an independent Contractor with respect to all services performed under this Agreement. The Contractor represents that it has or will secure at its own expense all personnel required in performing services under this Agreement. Any and all personnel of the Contractor or other persons while engaged in the performance of any work or services required by the Contractor under this Agreement shall not have any contractual relationship with the SWSCC or its Member Cities; and shall not be considered employees of the SWSCC or its Member Cities . Any and all claims that may or might arise under the Unemployment Compensation Act or the Workers ' Compensation Act of the State of Minnesota on behalf of said personnel, arising out of employment or alleged employment, including, without limitation, claims of discrimination against Contractor, its officers, agents, contractors, or employees, shall, in no way, be the responsibility of the SWSCC or its Member Cities . The Contractor shall defend, indemnify, and hold the SWSCC and its Member Cities and any of their officers, agents, and employees, harmless from any and all such claims irrespective of any determination of any pertinent, tribunal, agency, board, commission, or court . Such personnel or other persons shall neither require nor be entitled to any. compensation, rights, or benefits of any kind whatsoever from the SWSCC or its Member Cities, including, without limitation, tenure rights, medical and hospital care, sick and vacation leave, workers ' compensation, unemployment insurance, disability, severance pay, and PERA. V. INDEMNITY AND INSURANCE A. The Contractor agrees to defend, indemnify, and hold the SWSCC, its officers, employees, and agents, harmless from ,any liability, claims, damages, costs, judgments, or expenses, including reasonable attorney' s fees, resulting directly or indirectly from any act or omission (including without limitation professional errors or omissions) of the Contractor, its agents, employees, or assignees in performance of the services provided by this Agreement and against all loss by reason of the failure of said Contractor to fully perform, in any respect, all obligations under this Agreement. B. In order to protect itself, as well as the SWSCC, under the indemnity provisions here and above set forth, the Contractor agrees at all times during the term of this Agreement to have and keep in force: �� -4- 1. A single limit or combined limit or access umbrella professional liability insurance policy covering the activities of the Contractor while performing services for the SWSCC, through its Member Cities, in the following amounts: $1-million for personal injuries and/or damages, and $1-million for total personal injuries and/or damages arising from one occurrence. 2. A single limit or combined limit or access umbrella commercial general liability insurance policy of an amount of not less than $1-million for property damage arising from one occurrence, $1-million for total bodily injuries and/or damages arising from one occurrence, and $1-million for total personal injuries and/or damages arising from one occurrence. VI . DATA PRIVACY Contractor agrees to abide by all applicable state and federal laws and regulations concerning the handling and disclosure of private and confidential information concerning individuals and/or data including, but not limited to, information made nonpublic by such laws or regulations . VII . OWNERSHIP Contractor understands, and SWSCC agrees, that all programs produced by the Contractor shall be the property of the SWSCC and the SWSCC shall be responsible for the maintenance and storage of each program videotape. Further, the - SWSCC shall have the responsibility to ensure that any applicable requirements with respect to the storage of these program tapes are accomplished by it. Contractor will retain the video tapes during the term of this Agreement. After the term of this Agreement, SWSCC will be responsible for the location and storage of the video tapes. VIII . NON-ASSIGNMENT The Contractor shall not assign, subcontract, transfer, or pledge this Agreement and/or the services to be performed tender, whether in whole or in part, without the prior written consent of the SWSCC. IX. MERGER AND MODIFICATION A. It is understood and agreed that the entire Agreement between the parties is contained herein and that this Agreement supersedes all oral agreements and negotiations between the parties relating to the subject matter hereof . All items referred to in this Agreement are incorporated or attached and are deemed to be part of this Agreement. IJ -5- B. Any alterations, variations, modifications, or waivers of provisions of this Agreement shall only be valid when they .have been reduced to writing as an amendment to this Agreement signed by the parties hereto. IX. CONTRACT ADMINISTRATION In order to coordinate the services of the Contractor with the activities of the SWSCC and its Member Cities so as to accomplish the purpose of this Agreement, Adrian Herbst, administrator for the SWSCC, shall manage this Agreement on behalf of the SWSCC and serve as liaison between the SWSCC, its Member Cities, and the Contractor. X. NOTICES Any notice or demand which must be given or made by a party hereto under the terms of this Agreement or any statute or ordinance shall be in writing and shall be sent registered or certified mail . Notices to the SWSCC shall be sent to the SWSCC administrator at 4800 Norwest Center, Minneapolis, Minnesota 55402. Notices to the Contractor shall be sent to the attention of Debra Cottone, at 801 Plymouth Ave. No. , Minneapolis, Minnesota 55411. XI . LAW AND JURISDICTION This Agreement is entered into and may be enforced pursuant to the laws of the State of Minnesota and courts of applicable jurisdiction in Hennepin County, Minnesota . The foregoing Agreement has been entered into between the parties this ,�J day of 1� 1991. Each of the parties have read the Agr ment, erstand it, and agree to be bound by it . PARAGON AB EY SWSCC or zlA4 26Z040 1/4/91 -6- EXHIBIT 2 TO ORDINANCE EXHIBIT 2 SCHEDULE OF ESTIMATED ANNUAL MINIMUM LOCAL PROGRAMMING EXPENDITURES YEAR ESTIMATED BUDGET ($000'S) 1992 $ 347* 1993 364 1994 383 1995 402 1996 422 1997 443 1998 465 1999 488 *1992 estimate based on 2% of gross revenues for 7 months (Jan - July) and 5/12ths of $347,000. 1992 base will be escalated by 5% annually thereafter. LPEST EXHIBIT 3 LIST OF DOCUMENTS 1. Restated Performance Agreement . 2 . Restated Contract for Local Programming Facilities . 3 . Restated Contract for Public, Educational and Government Access Services . 4 . Acceptance of Local Programming Restructuring Ordinance. 5 . Consent Agreement and Guaranty of Performance. Y RESTATED PERFORMANCE AGREEMENT This Agreement is made this day of ' 1991, between KBL CABLESYSTEMS OF THE SOUTHWEST, INC. ("Grantee") , a Minnesota corporation, the CITY OF EDINA, MINNESOTA ("City") , a municipal corporation and political subdivision of the State of Minnesota, and the SOUTHWEST SUBURBAN CABLE COMMISSION ("SWSCC") , a joint powers organization created by the Cities of Eden Prairie, Edina, Hopkins, Minnetonka, and Richfield, Minnesota ("Member Cities") . This Agreement shall supercede the 1985 Performance Agreement between Grantee, City and SWSCC as amended in 1988 and shall be referred to as the Restated Performance Agreement. Section 1. Background. The SWSCC, its Member Cities and Grantee originally entered into the Relief Ordinances and Performance Agreement ("Relief Package") in 1985 in response to serious financial difficulties which Grantee was experiencing . The result of the Relief Package was to reduce the financial obligations of Grantee for Local Programming and Franchise Fees, to provide Grantee with an incentive to refinance its debt obligations and to increase the involvement of the SWSCC and its Member Cities in funding Local Programming Obligations and monitoring Grantee' s performance. The CATV Relief Ordinance Amendment was enacted in 1988 as a part of the transfer of control of Grantee and resulted in the continuance of the CATV Relief Ordinance with some modifications . In adopting Ordinance No. the Local Programming Restructuring Ordinance, the SWSCC, its Member Cities and Grantee in 1991 acknowledged the success of the Relief Package. Grantee' s financial situation had improved significantly such that Grantee K 1 could resume full payment of franchise fees and responsibility for funding all Restructured Local Programming Obligations. It was determined that the mix of Local Programming and satellite services developed as a result of the Relief Package had proven successful and should be continued. Finally, with Grantee' s financial situation stabilized and with the Member Cities no longer involved in funding Local Programming Obligations, it was agreed that many of the increased oversight and reporting requirements contained in the Performance Agreement were no longer necessary and should be modified. Section 2. Definitions. The words and phrases used in this Agreement shall have the meaning given to them in the Franchise, Relief Ordinances and Local Programming Restructuring Ordinance. Attached as Exhibit 1 is a glossary of such words and phrases . Section 3. Term. This Agreement shall commence upon the Effective Date, as defined herein, and shall cease upon the occurrence of any event causing termination of the Local Programming Restructuring Ordinance, pursuant to any provision of Sections 7 or 8 thereof . Section 4. Local Programming. 4 . 01 The parties agree to cooperate with one another to ensure that Local Programming is maintained and the needs of users are met . 4 . 02 The obligations and responsibilities of Grantee with respect to public, educational and governmental access facilities shall be accomplished according to the terms of a contract between -2- Grantee and SWSCC (the "Restated Facilities Contract") . This contract shall be executed by Grantee and the SWSCC and be in the form and substance attached hereto as Exhibit 2. 4 . 03 Grantee' s responsibilities for public, educational and governmental access personnel shall be established pursuant to a contract between Grantee and SWSCC (the "Restated Services Contract") . This contract shall be executed by the Grantee and SWSCC and be in the form and substance attached hereto as Exhibit 3 . 4 .04 Grantee' s restructured obligations in support of Local Origination Programming ("Restructured Local Programming Obligations" ) shall be as follows : A. Grantee shall assume responsibility for the funding, production and cablecasting of the News Show as of the third weekly show of November, 1991. Grantee' s obligation to fund the News Show shall be for a period of two years through the second weekly show of November, 1993 . The News Show shall be produced in a manner generally consistent of the terms of the Agreement between Grantee and the SWSCC dated January 23, 1991; provided, however, the role of the City shall be advisory in nature and the City shall not be required to provide financial support for the News Show. B. Not less than Ninety (90) days before the expiration of the above-referenced two-year period, Grantee shall consult with the SWSCC and Member Cities concerning the effectiveness of the News Show, as well as alternative Local Origination Programming options . Based upon this consultation and Grantee' s -3- assessment of the needs and desires of the communities and subscribers served by Grantee, Grantee shall formulate a Local Origination proposal which shall be included in its 1994 Local Programming Plan pursuant to Section 7. 04 hereof. C. So long as this Agreement remains in effect, Grantee shall allocate to Local Origination Programming, at least $100, 000 of its expenditures pursuant to its Restructured Local Programming Obligations . 4 . 05 Grantee' s financial support for its Restructured Local Programming Obligations shall meet those obligations set forth in Section 6 .4 of the Local Programming Restructuring Ordinance. 4 . 06 Upon the termination of this Agreement, the parties shall review in good faith any transition to be made in the organizational structure of local programming. 4 .07 Grantee agrees that it will not itemize expenses related to its Restructured Local Programming Obligations on its monthly subscriber statements for a period of two years from the effective date of this Agreement . Thereafter, Grantee reserves the right to itemize such expenses on its monthly subscriber statements; provided that Grantee shall provide SWSCC and City with notice of its intention to itemize such expenses together with a sample subscriber statement indicating the language to be used in itemizing such expenses and showing how such language will appear on the subscriber statement. Notice shall be provided at least 90 days prior to such language appearing on any monthly subscriber statement . -4- Grantee' s agreement not to itemize such expenses during the above-stated period is offered freely as an accommodation to the SWSCC and City and does not constitute an act of regulation by the SWSCC or the City. Grantee' s agreement not to itemize such expenses is done with full reservation of Grantee' s rights upon expiration of the above-stated period. SWSCC and City also fully reserve their rights to regulate the itemization of Local Programming expenses on monthly subscriber statements upon the expiration of the above-stated period. Section 5. Institutional Network. 5. 01 The parties acknowledge that as of enactment of the Relief Ordinance, Grantee had not complied with provisions of the Franchise relating to the institutional network. Due to changes in the cable communications industry, community needs and financial projections since the granting of the Franchise, the need for and economic viability of an institutional network were unclear and required study. It was also recognized that institutional networks have not generally succeeded without substantial public initiation. In light of these factors, and in order for the City to make a final determination on the development of an institutional network, the parties created the SOUTHWEST INSTITUTIONAL NETWORK GROUP ("SWING") . 5 . 02 SWING consisted of nine (9) members, including a chairperson appointed by the SWSCC. Grantee appointed four (4) members and SWSCC also appointed four (4) additional members in consultation with the Member Cities . The staff of Grantee and SWSCC served as staff for SWING in the manner and to the extent designated by SWSCC. -5- Within eighteen (18) months from the date of the original Performance Agreement, SWING was mandated to produce a final report containing its recommendations to be provided to SWSCC, each Member City and Grantee. The report was to include, but not be limited to, recommendations on whether or not construction should occur, time for construction, method of financing construction and any special institutional services suggested or having a clear community need. In preparing its report and recommendations, SWING was to take into account the economic viability of such a network on a stand-alone basis, and the effect, if any, the construction of the network would have on the financial condition of Grantee and residential subscriber rates. 5 . 03 Pursuant to the report and recommendations issued by SWING, as amended in 1988 in anticipation of the transfer of control of Grantee, development of an institutional network shall be deferred for the longer of : (i) November 16, 1993, or (ii) until such time as the SWSCC reconvenes and/or reappoints SWING and SWING determines that the institutional network is economically viable and that the construction of the network would not have an adverse impact on the financial condition of Grantee and residential subscriber rates. Section 6. Service to New Residential Develonments. 6 . 01 The City acknowledges that extensions of the System to new residential developments before those residential developments are completed leads to frequent damage to the System. This damage to the System results in increased construction costs passed on to subscribers, the interruption of service to many subscribers and increased maintenance expenses. -6- 6 . 02 In recognition of these costs and disruptions, Grantee and the City agree that the System need not be extended to new residential developments until those developments are sufficiently complete, as reasonably determined by Grantee, to minimize the above-described problems . 6 . 03 Notwithstanding anything to the contrary, the City may require Grantee to extend the System to any new residential development in accordance with the terms and conditions of the Franchise as amended. 6 . 04 If the construction of any portion of the System is to be delayed pursuant to this Section, the terms of such delay shall be approved, in writing, by the City. Section 7. Reports and Reviews. 7 . 01 Monthly Reports. Grantee shall provide to the SWSCC and City copies of its monthly reports concerning subscriber statistics, subscriber complaints to the SWSCC or City and the status of their resolution, and local programming facilities and services usage statistics . 7. 02 Franchise Fee Payment Report. Grantee shall submit to SWSCC and City a report detailing how the franchise fees payable for the quarter were calculated. The report shall be in a format developed in conjunction with the SWSCC. 7. 03 Annual Report . Grantee shall submit a report annually, by the later of May 1 or within one hundred and twenty (120) days after the close of Grantee' s fiscal year, in a form provided to it by the City or SWSCC. The City or SWSCC shall provide Grantee with this form by the later of July 1 or six (6) -7- months prior to the end of Grantee' s fiscal year and it shall contain a description of the information reasonably required to inform the City and SWSCC of Grantee' s activity. The information to be provided shall include at a minimum: A. Subscriber statistics for the then prior fiscal year; B. A financial statement; C. Changes in management; D. Changes in ownership; E. Marketing activities; F. Evidence that the events causing termination of the Local Programming Restructuring Ordinance have not occurred; G. Confirmation that Grantee' s expenditures for Local Programming Obligations met or exceeded levels specified in the Local Programming Restructuring Ordinance. H. Subscriber and revenue projections for the then next fiscal year. The annual report shall be in addition to all other required reports and is intended to help the City determine Grantee's compliance with the terms and conditions of this Agreement, the Franchise and Relief Ordinances, as amended by the Local Programming Restructuring Ordinance. 7.04 Local Programming Plan. By the later of December 1 or thirty (30) days prior to the commencement of each of its fiscal years, Grantee shall submit to the SWSCC and City a Local Programming Plan. The Local Programming Plan shall include a budget and a narrative description of goals, objectives and strategies for the upcoming year. It shall also document -8- anticipated changes and/or enhancements to services or facilities . Grantee shall specify its plans for Local Origination Programming (as distinct from its plans for access programming) . The SWSCC and City shall have the opportunity to review and comment upon the Local Programming Plan. 7. 05 Additional Reports . Grantee shall prepare and furnish to the SWSCC and City, at the times and in the form prescribed by the SWSCC or City, such additional reports with respect to its operations, affairs, transactions or property which the SWSCC or City deems necessary. Where possible, the SWSCC or City shall utilize reports that have been already prepared by Grantee. 7. 06 Form of Reports. All reports required of Grantee shall be prepared as follows: A. All financial statements or other financial reports shall be prepared in accordance with generally accepted accounting principles and certified by Grantee' s chief financial officer. B. All other reports shall be signed and verified by at least one (1) officer authorized to sign on behalf of Grantee. 7. 07 Annual Review. Within sixty (60) days after receipt I of the annual report, the SWSCC and City may conduct an annual review of Grantee' s performance. A. Grantee shall respond to questions and requests from the City concerning its annual report, its performance, and/or financial condition. B. If the annual report, as described in Section 7.03 above, fails to establish to the satisfaction of the SWSCC and City that the terms of the Local Programming Restructuring -9- Ordinance should continue by demonstrating that the events causing termination have not occurred, then Grantee shall respond to questions and requests from the City for additional evidence. C. Upon a written determination by the City that Grantee has failed to meet the showing required in subsection B. above, the City may require Grantee to enter into good faith negotiations to modify or terminate the Local Programming Restructuring Ordinance. D. In the event Grantee fails to negotiate in good faith, the City may terminate the Local Programming Restructuring Ordinance. 7 . 08 Annual Subscriber Survey. A. Grantee shall conduct an annual survey of its subscribers concerning satisfaction with the programming offered by Grantee and satisfaction with the overall quality of service provided by Grantee. The manner and form of the survey and any questionnaires shall be designed to provide statistically reliable information. B. At least thirty (30) days prior to the survey being conducted, Grantee shall contact the SWSCC and City concerning any specific information which the SWSCC or City would like to ascertain through the survey. Grantee shall make a good faith effort to incorporate any requests from the SWSCC or City into the survey. C. The results of the survey shall be discussed with the SWSCC and City at the first SWSCC meeting scheduled after such results have been completed and reviewed by Grantee. The City -10- shall have the right to inspect and review subscriber-returned surveys . Section 8. Cooperation Between Parties. The SWSCC, City and Grantee shall meet regularly or at the request of any party during the term of this Agreement to discuss and review issues including, but not limited to, (i) changes in the cable industry; (ii) Grantee' s performance under this Agreement and the Franchise; and (iii) solutions to problems confronting Grantee and the System. Section 9. Validity of Franchise Provisions. 9 . 01 Grantee agrees that the temporary reduction of the franchise fee provided in the Relief Ordinances as amended by the Local Programming Restructuring Ordinance in no way affects the validity of the franchise fee established in the Franchise. Grantee further agrees that it will in no way challenge the validity of the franchise fee established in the Franchise when that fee is restored upon termination of the Relief Ordinance, as amended by the Local Programming Restructuring Ordinance. 9 . 02 Grantee represents and warrants that the rates now in force and those rates to be in force and effect in the future include all costs of a five percent (5%) franchise fee. Section 10. Breach. Any breach of this Agreement by Grantee as finally determined by City after proceeding in accordance with the provisions of Article IX of the Franchise shall constitute cause for termination of the Local Programming Restructuring Ordinance. -11- Section 11. Miscellaneous Provisions. 11. 01 No Recourse Against City. Grantee shall have no recourse whatsoever against the SWSCC or the City or their elected officials, agents, employees or commissions for any loss, costs, expense or damage arising out of any provision or requirement of this Agreement, the Relief Ordinances or the Local Programming Restructuring Ordinance, or because of the enforcement of this Agreement, the Relief Ordinances or the Local Programming Restructuring Ordinance. No receipt or review, or objection or other action made or taken, by the City or SWSCC or any Member City, as to any report, statement, plan or study given or received pursuant to this Agreement shall impose any liability or obligation of any kind upon the City, other Member Cities or the SWSCC, or be, or be deemed to be, an amendment to the Franchise, Relief Ordinances or Local Programming Restructuring Ordinance. 11. 02 Indemnification and Insurance. The provisions of Article VIII of the Franchise pertaining to indemnification and insurance are applicable to this Agreement and the performance of this Agreement by the City, SWSCC and their employees, officers, officials, representatives and agents and said Article VIII of Franchise is hereby incorporated in this Agreement and made a part of it . 11. 03 Severability. A holding or determination by any court or agency that any term, condition or provision of this Agreement is invalid or unenforceable, as a result of any action taken by Grantee or anyone acting on Grantee' s behalf seeking such determination, shall render this Agreement at City' s discretion wholly null and void. -12- 11. 04 Complete Agreement. This Agreement constitutes the entire agreement and understanding between the parties and no oral modifications or additions shall be binding. No verbal or written statement of the parties shall be considered a modification of this Agreement except by a written document signed by the parties expressly stating that it is modifying the Agreement and setting forth the new conditions or provisions of the Agreement. 11. 05 Governing Law. This Agreement shall be interpreted in accordance with the laws of the State of Minnesota. 11. 06 Captions . The captions to sections throughout this Agreement are intended solely to facilitate reading and reference to the sections and provisions of this Agreement. Such captions shall not affect the meaning or interpretation of this Agreement. 11. 07 Interpretation. This Agreement has been arrived at by negotiation and shall not be construed against any party. In the event of any dispute or question as to the meaning, interpretation or application of any term, provision or condition of this Agreement, the Relief Ordinances, or the Local Programming Restructuring Ordinance, the City, in its sole discretion, shall resolve such dispute or question; provided however that, to the extent the terms of this Agreement, the Relief Ordinances or the Local Programming Restructuring Ordinance are in conflict with the Franchise or the Offering, the terms of this Agreement, the Relief Ordinances or the Local Programming Restructuring Ordinance shall be governing . 11. 08 Other Laws . This Agreement is subject to federal, state and local laws and rules and to the requirements of the Federal Communications Commission. -13- 11. 09 Notices . Any notice required to be given or served upon any party in connection with this Agreement shall be in writing and shall be deemed to have been given and received, (1) three business days after a registered or certified letter containing the notice, properly addressed, with postage prepaid, is deposited in the United States mail; or (2) if made in any other manner, upon actual delivery to and receipt by the party to whom it is addressed. Notice shall be given to the parties at the following addresses : If to Grantee: KBL Cablesystems of the Southwest, Inc. 801 Plymouth Avenue North Minneapolis, Minnesota 55411 If to SWSCC: Adrian E. Herbst Southwest Suburban Cable Commission c/o Moss & Barnett 4800 Norwest Center 90 South Seventh Street Minneapolis, Minnesota 55402-4119 If to City: City Manager City of Edina 4801 West 50th Street Edina, Minnesota 55424 The foregoing addresses may be changed by notice given as above provided. Any address change shall be effective ten (10) days after such notice of change is given as above provided. Section 12. Effective Date. This Agreement shall become effective upon its execution, provided that all terms and conditions set forth in Section 9 ("Effective Date") of the Local Programming Restructuring Ordinance, a copy of which is attached hereto as Exhibit 4, have -14- been satisfied, and provided further that the terms of the Relief Ordinances and Performance Agreement shall be deemed to be in effect through July 31, 1992, and shall supercede any requirements set forth in this Agreement except for those obligations related to Local Origination Programming set forth in Section 4 .04A herein. CITY OF EDINA, MINNESOTA By Its By Its SOUTHWEST SUBURBAN CABLE COMMISSION By Its By Its KBL CABLESYSTEMS OF THE SOUTHWEST, INC. By Its 1203DAJ -15- EXHIBIT 1 GLOSSARY For the purpose of this Agreement, the following terms, phrases, words and their derivations shall have the meaning given herein. When not inconsistent with the context, words used in the present tense include the future, words in the plural number include the singular number, and words in the singular number include the plural number. The words "shall" and "will" are mandatory and "may" is permissive. Words not defined shall be given their common and ordinary meaning. 1. Access or Community Access shall mean the right or privilege of the general public, local educational authorities, and local government to use designated facilities, equipment or channels of the Company. Channels shall be made available pursuant to Section IV of the Restated Contract for Local Programming Facilities . 2. Basic Service means all subscriber services provided by Grantee, including the delivery of broadcast signals, covered by the regular monthly charge paid by all subscribers, excluding optional services for which a separate charge is made. 3 . Cablecast shall mean programming in a video, audio or data format transmitted through the cable communications system to users and subscribers . 4 . Channel or Television Channel shall mean a six megahertz (6 MHz) frequency band, including adjacent vertical blanking interval, which is capable of carrying one standard video signal, a number of audio, digital or other non-video signals, or some combination of such signals . 5 . City means the City of Eden Prairie, Edina, Hopkins, Minnetonka or Richfield, a municipal corporation in the State of Minnesota which has granted the Franchise. 6 . Class IV Channel means a signaling path provided by a System to transmit signals of any type from a subscriber terminal to another point in System. 7. Connection means the attachment of the drop to the first radio or television set of the subscriber. 8 . Converter means an electronic device which converts signals to a frequency not susceptible to interference within the television receiver of a subscriber, and by an appropriate channel selector, also permits a subscriber to view all basic subscriber signals, including the basic service delivered at designated converter dial locations . 9 . Council means the governing body of City. 10 . Drop shall mean the cable that connects the subscriber terminal to the nearest feeder cable of the cable. 11. FCC shall mean the Federal Communications Commission and any legally appointed, designated or elected agent or successor. 12 . Franchise shall mean the Cable Communications Ordinance, as now or hereafter amended, of Member Cities . 13 . Franchise Area shall mean the cities of Edina, Eden Prairie, Hopkins, Minnetonka and Richfield, Minnesota, together with any future annexations or lawful expansions . 14 . Grantee shall mean KBL Cablesystems of the Southwest, Inc. a Minnesota corporation. 15 . Gross Revenues shall mean all revenue derived directly or indirectly by Grantee, its affiliates, subsidiaries, parent, and any person in which Grantee has a financial interest of five percent (5%) or more from or in connection with the operation of the System, including, but not limited to, basic subscriber service monthly fees, pay cable fees, installation and reconnection fees, leased channel fees, converter rentals, studio rental, production equipment and personnel fees, and advertising revenues . The term does not include any taxes on services furnished by Grantee and imposed directly upon any subscriber or user by the State, City or other governmental unit and collected by Grantee on behalf of said governmental unit. For purposes of calculating the annual franchise fee, all amounts spent to fund the Restructured Local Programming Obligations shall be deducted from Gross Revenues . 16 . Installation means the connection of the System from feeder cable to the point of connection. 17 . Local Programming shall mean access, community access, and/or local origination programming. 18 . Local Programming Obligations means Grantee' s obligations under the Franchise and the Offering for cablecast access, community access and local origination programming. 19 . Local Origination Programming shall mean programming produced under the control of the Company which is of interest to those living on the Franchise Area. 20 . Lockout Device is an optional mechanical or electrical accessory to a subscriber's terminal which inhibits the viewing of a certain channel or channels provided by way of cable communications system. -2- 21. Member Cities shall mean the cities of Edina, Eden Prairie, Hopkins, Minnetonka and Richfield, Minnesota. 22 . News Show means that show produced by Grantee pursuant to an Agreement with the SWSCC dated January 23, 1991. 23 . Offering of Grantee or Offering shall mean that certain document dated December 5, 1980, entitled "Offering of Grantee" and signed by Grantee and City, which document is on file with the City Clerk. 24 . Playback Operator shall mean that employee of Company whose responsibilities shall include, but not be limited to, the codification and implementation of all access schedules . 25 . Programming shall mean any video, audio, text or data signal carried over the system. 26 . Public Building is any building owned or operated by the United States government or any subdivision thereof, or the State of Minnesota or any subdivision thereof, or the City or any other governmental subdivision, or school district or educational institutions . (Article I, Section 2, Paragraph V, amended effective 09/83 . ) 27. Public Property is any real property owned by City other than a street . 28 . Relief Ordinances means the CATV Relief Ordinance as modified by the CATV Relief Ordinance Amendment. 29 . Restated Performance Agreement means that contractual agreement between Grantee, City and SWSCC establishing the terms and conditions under which Grantee will be required to fund and otherwise fulfill its Local Programming requirements and establishing reporting standards and criteria for franchise compliance in other areas . 30 . Restructured Local Programming Obligations means Grantee' s access, community access and local origination programming obligations as set forth in the Local Programming Restructuring Ordinance and the Restated Performance Agreement. Compliance with the Restructured Local Programming Obligations shall supersede and be in complete satisfaction of the Local Programming Obligations . 31. Scrambler/Descrambler refers respectively to the equipment installed to the cable communications system' s headend equipment and subscriber terminal used to isolate pay cable and other ancillary service channels from basic service which is accomplished by electronically distorting the signal prior to its transmission through the cable communications system and -3- reconstituting the signal at each authorized location for subsequent display. 32 . Sidewalk is the portion of a street delineated for pedestrian travel . 33 . Street shall mean the surface of and the space above and below any public street, road, highway, freeway, lane, path, public way, alley, court, sidewalk, boulevard, parkway, drive or any easement or right-of-way now or hereafter held by City which shall, within its proper use and meaning in the sole opinion of City, entitle Grantee to the use thereof for the purpose of installing or transmitting over poles, wires, cables, conductors, ducts, conduits, vaults, manholes, amplifiers, appliances, attachments and other property as may be ordinarily necessary and pertinent to a System. 34 . WS SCC shall mean the Southwest Suburban Cable Commission. 35 . Subscriber means any person or entity who subscribes to a service provided by Grantee by means of or in connection with the System regardless of whether a fee is paid for such service. 36 . Subscriber Network shall mean a single trunk 440 MHz cable activated with 54 downstream channels and 4 return or upstream channels, as it may be upgraded from time to time. 37. System means a system of antennas, cables, wires, lines, towers, waveguides or other conductors, converters, equipment or facilities, designed and constructed for the purpose of producing, receiving, transmitting, amplifying and distributing, audio, video and other forms of electronic or electrical signals, located in City. Said definition shall not include any system wholly internal to one or more multiple unit dwellings under common ownership, control or management, and does not use City streets or other public property. In any event, system as defined herein shall not be inconsistent with any definition as set out in state law. 38 . User or Local Programming User shall mean any person who utilizes the System studio or facilities, whether for a charge or without charge. 1203DAJ -4- EXHIBIT 2 TO THE RESTATED PERFORMANCE AGREEME' RESTATED CONTRACT FOR LOCAL PROGRAMMING FACILITIES THIS AGREEMENT is made and entered into this day of 1991, by and between the SOUTHWEST SUBURBAN CABLE COMMISSION (hereinafter SWSCC) and KBL CABLESYSTEMS OF THE SOUTHWEST, INC. (hereinafter Grantee) , a Minnesota corporation. W I T N E S S E T H WHEREAS, Grantee pursuant to Chapter 238 of the Minnesota Statutes and pursuant to the Franchise of member cities has been granted a Franchise to construct, own and operate a cable communications system in the cable service territory; and WHEREAS, residents of the cable service territory will benefit from valuable public access opportunities available through the System; and IN CONSIDERATION of the covenants, conditions, undertakings and promises contained herein the parties agree as follows : SECTION I DEFINITIONS For the purposes of this Agreement, the terms, phrases, words and their derivations shall have the meaning given in the glossary attached hereto as Exhibit 1 . When not inconsistent with the context, words used in the present tense include the future, words in the plural number include the singular number . The words "shall" and "will" are mandatory and "may" is permissive. Words defined in the Franchise or the Local Programming Restructuring Ordinance shall have same meaning herein. Words not defined shall be given their common and ordinary meaning . SECTION II STUDIOS 2.01 Location. Grantee shall provide, maintain and staff at a minimum three Local Programming production studios to serve the communities as follows : 1) a 2,000 square-foot production studio located at 10210 Crosstown Circle in Eden Prairie which shall be utilized for large production projects as well as primarily serving residents of Eden Prairie; 2) a 1, 000 square-foot studio located at 904 Mainstreet in Hopkins which shall primarily serve residents of Hopkins and Minnetonka; and 3) a 1, 000 square-foot studio located at 6400 Penn Avenue in Richfield which shall primarily serve residents of Richfield and Edina. Each studio will be equipped with standard production equipment including but not limited to one editing suite, cameras, lighting and control room and shall be for Local Programming use subject to the limitations set forth within. 2.02 Initial Condition of Premises. SWSCC acknowledges that it has examined the above-described premises and that said premises are now, to the best of SWSCC' s knowledge, in good and satisfactory condition. Grantee represents that it is aware of no substantial defect in the premises which was not reasonably observable by SWSCC and that Grantee is aware of no condition, restriction or limitation that would interfere with the use of said premises for public access studios. 2. 03 Hours of Availability. A. At least one studio described above shall be available for Access use from 8: 00 a .m. until midnight, seven days per week -2- by appointment, except legal holidays as defined at Minn. Stat. S 645 .44 , subd. 5, as it may from time to time be amended. Grantee shall, to the maximum extent possible, provide all Users unimpeded entry and exit to and from the studios during all hours of studio availability. B. Grantee shall provide to SWSCC updated written schedules of access studio hours as those hours may change from time to time. SWSCC and Grantee shall review the schedule at the request of either party. 2. 04 Alterations and Improvements . Grantee shall not make alterations or improvements in the studios if they would substantially interfere with the use of said premises for access purposes on a long term basis . Any such alterations and improvements shall be made in a good and workmanlike manner and in compliance with all laws and regulations of any governmental agency having jurisdiction over said premises . 2 . 05 Maintenance and Repair. A. Grantee shall have the responsibility to ensure that the studios are maintained and kept in good repair and order. All maintenance, repairs and replacement shall be made promptly and in good and workmanlike manner and so that the defective portions of said premises are put in good and satisfactory condition. B. In the event SWSCC determines, in its sole discretion, that the condition of said premises represent a threat to the safety and welfare of Users or that the condition of said premises is unsuitable for access Users due to the need for repair or maintenance, SWSCC may undertake such repairs or maintenance -3- provided that Grantee shall first be given ten (10) business days advance notice and the opportunity to undertake such repairs or maintenance. The time for Grantee to undertake such repairs or maintenance may be extended by SWSCC. 1. If, pursuant to paragraph B above, SWSCC repairs or maintains the premises, SWSCC may charge Grantee for SWSCC costs in undertaking such repairs or maintenance including reasonable overhead. 2 . If, pursuant to paragraph 1 above, SWSCC repairs or maintains the premises such action shall be documented within thirty (30) days and invoices shall be submitted to Grantee at such time. Payment shall be due upon receipt of such invoices. 2.06 Hazard Insurance. Grantee shall, at all times during the term of this Agreement procure and maintain at Grantee' s expense fire insurance with an extended coverage endorsement, insuring the improvements located on the premises to the full extent of the insurable value thereof . SECTION III EQUIPMENT 3 .01 Local Programming Equipment . Grantee shall, at a minimum, locate the equipment set forth in Exhibit 2, attached hereto and made a part hereof, at the designated studio for Local Programming use. SWSCC shall not acquire any title or interest in the equipment, either legal or equitable, except as expressly granted herein. -4- A. The equipment set forth in Exhibit 2 shall at all times be the sole and exclusive property of Grantee. SWSCC shall have no rights or property interest in the equipment except for the right to use the equipment in the normal operation of Local Programming. B. Grantee shall keep the equipment at all times free and clear from all claims, levies, liens, encumbrances and process except where necessary for financing purposes. Grantee shall give SWSCC immediate written notice of any such attachment or other judicial process affecting any article of equipment . C. Grantee shall not pledge, lend or create a security interest in or sublet the equipment or any part thereof or attempt in any manner to dispose thereof or remove the equipment, or any part thereof, from the designated studios without SWSCC prior written consent, except where necessary for financing purposes . D. Grantee shall display notice of Grantee' s ownership on each article of equipment by means of a suitable stencil, label or plaque affixed thereto. 3 . 02 SWSCC Inspection of Equipment . SWSCC reserves the right to inspect the equipment . 3 .03 Repair of Equipment . A. Grantee shall maintain all equipment in good operating condition and repair and shall repair, fix, replace or adjust such equipment promptly. If SWSCC alleges or receives a complaint alleging that any equipment is not in good operating condition and repair, SWSCC shall notify Grantee of such condition. Grantee shall inspect, repair, fix, replace or adjust such equipment -5- within fifteen (15) days of receipt of this notice. SWSCC and Grantee may agree to extend this period. If Grantee determines that such equipment is in good operating condition, Grantee shall make a written report of such determination and make this report available to SWSCC. B. If SWSCC disagrees with Grantee's report, SWSCC may determine, in its sole discretion, that any item of equipment set forth in Exhibit 2 is not in good operating condition and repair, SWSCC may repair, fix, replace or adjust such equipment provided that Grantee shall be given five (5) business days advance notice and the opportunity to repair, fix, replace or adjust such equipment . The time for Grantee to repair, fix, replace or adjust such equipment may be extended by SWSCC. C. If, pursuant to paragraph B above, SWSCC repairs, fixes, replaces or adjusts any item of equipment, SWSCC shall have such work done by a vendor, approved in advance by Grantee in accordance with paragraph F below, and charge Grantee for SWSCC costs in repairing, fixing, replacing or adjusting said equipment including reasonable overhead and the cost of any special items needed to maintain or repair the equipment. D. If, pursuant to paragraph C above, SWSCC repairs , fixes, replaces or adjusts any item of equipment such action shall be documented within thirty (30) days and paid invoices shall be submitted to Grantee at such time. Payment shall be due upon receipt of such invoices . E. Grantee shall keep maintenance records and logs of all production equipment on standard forms indicating the nature of -6- any repairs and/or maintenance and the date of same. Such records shall be retained for the term of this Agreement and shall be available for inspection by SWSCC during regular business hours upon forty-eight (48) hours advance notice. F. During the term of this Agreement, Grantee shall maintain on file with SWSCC a list of at least one firm, business or institution located within the seven-county metropolitan area as defined in Minnesota Statutes, Section 473 . 121, Subd. 2 . , acceptable to Grantee, for the repair of equipment as described in this Section 3 . 03 . Failure to meet this requirement constitutes an acceptance of any vendor chosen by SWSCC. 3 .04 Location of Equipment . The equipment shall be installed, maintained and stored at locations as set forth in Exhibit 1. Grantee shall maintain sufficient records so as to at all times keep SWSCC informed as to the location of all equipment . 3 . 05 Insurance of Equipment . Grantee shall maintain such insurance as may be required by the Franchise or by federal, state or local law. SECTION IV CHANNELS AND PROGRAMMING 4 .01 Subscriber Network. A. Grantee shall make available during the term of this Agreement the following access channels : Channel 32 - Educational Access Channel 6 - Regional Interconnect Channel 33 - Public Access Channel 35 - Educational Access Channel 25 - Leased Access Channel 34 - Municipal Access -7- B. No charges may be made for channel time, playback of prerecorded programming or live studio presentations. However, under certain circumstances, as set forth in the ACCESS RULES (a copy of which shall be on file with the Commission) , charges for production costs may be assessed according to the provisions of the ACCESS RULES. C. Channel capacity, in addition to that set forth in paragraph (a) above, shall be made available in accordance with federal, state, and local law. 4 .02 Programming. Grantee shall be fully responsible for administering the programming of Access channels and all decisions regarding such programming shall be at the sole discretion of Grantee until SWSCC determines otherwise. SECTION V TERM, EFFECTIVE DATE AND TERMINATION 5 . 01 Term. This Agreement shall be coterminous with the Restated Performance Agreement. It shall terminate upon the expiration or termination of the Restated Performance Agreement. 5 .02 Effective Date. This Agreement shall become effective as of August 1, 1992; provided that all terms and conditions set forth in Section 9 ("Effective Date") of the Local Programming Restructuring Ordinance have been satisfied. SECTION VI PERSONNEL 6 . 01 Technical Employees . Grantee shall employ sufficient staff including, but not limited to, a minimum of one (1) part-time (a minimum of ten (10) hours per week) Regional Video -8- _Technical Supervisor and one (1) full-time equivalent Video Technician who shall maintain and repair studios and equipment as specified herein. 6 .02 Playback Emnlovees. Grantee shall employ sufficient staff including, but not limited to, a minimum of one (1) full-time equivalent and one (1) part-time (a minimum of ten (10) hours per week) Playback Operator who shall be responsible for, but not limited to, the codification and implementation of all access schedules. SECTION VII MISCELLANEOUS PROVISIONS 7.01 Binding on Successors . This Agreement shall be binding upon and shall inure to the benefit of the parties hereto, their respective successors and assigns . 7.02 Force Maieure. If by reason of force majeure, any party to this Agreement is unable in whole or in part to carry out its obligations hereunder, said party shall not be deemed in violation or default during the continuance of such inability. The term "force majeure" as used in this Agreement shall mean the following: strikes, acts of God, orders of the federal or state governments, or any of their departments or agencies, lightning, fires, storms, floods, civil disturbances, explosions, partial or entire failure of utilities, or any other cause or event not reasonably within the control of that party. 7 . 03 Severability. A. If any law, ordinance or regulation shall require or permit any party to this Agreement to perform any service or shall -9- prohibit any party from performing any service which may be in conflict with the terms of this Agreement, then as soon as possible following knowledge thereof, said party shall give notice to the other party of the point of conflict believed to exist between such law, ordinance or regulation. B. If any Section, sentence, paragraph, term or provision of this Agreement is determined to be illegal, invalid, or unconstitutional by any court of competent jurisdiction or by any state or federal regulatory agency having jurisdiction thereof, such determination shall have no effect on the validity of any other Section, sentence, paragraph, term or provision hereof . C. In the event such decision, law, rule or regulation is subsequently reversed, repealed, rescinded, amended or otherwise changed, so that the Section, sentence, paragraph, term or provision hereof which had been invalid or modified is no longer in conflict with the decisions, law, rules and regulations then in effect, said Section, sentence, paragraph, term or provision shall thereupon return to full force and effect and shall thereafter be binding on all parties, provided that the party relying on the Section, sentence, paragraph, term or provision shall give the other party or parties thirty (30) days written notice of such change before requiring compliance with said provision. 7. 04 Liquidated Damages . Upon the breach of any term, condition, or provision of this Agreement, Grantee shall pay to SWSCC a sum of up to and including two hundred dollars ($200 . 00) per day as determined by SWSCC for each and every day of the breach as a liquidated damage pursuant to the Default Proceedings -10- set forth in Section 7.05 of this Agreement. In assessing liquidated damages, SWSCC shall seek to ascertain the actual damages incurred by SWSCC and it is not the intent of this Section to be punitive. The parties hereby agree that the services to be performed under this Agreement are in the public interest and will further the development of the System within the Franchise Area and that the continuation of the relationship established by this Agreement is mutually beneficial. Consequently, the parties acknowledge that damage due to a breach of this Agreement will be difficult to determine and that the liquidated damages set forth above are fair and reasonable and will not be contested. 7. 05 Default Proceedings . In the event Grantee has breached any of its obligations hereunder, SWSCC shall give written notice of the default to Grantee and SWSCC' s intention to terminate this Agreement or impose liquidated damages, whichever SWSCC deems appropriate. A. Grantee shall have thirty (30) days after the giving of such notice (or if such default is of such a character as to require more than 30 days within which to cure the same, and Grantee fails to commence to cure- the same within said 30 day period and thereafter fails to use reasonable diligence, in SWSCC' s sole opinion, to cure such default as soon as possible) within which to cure such default. In the event Grantee fails to cure such default, as described above, SWSCC may terminate this Agreement or impose liquidated damages, at its option. B. Grantee may, within ten (10) days of notice, notify SWSCC that there is a dispute as to whether a default has , in -11- fact, occurred. Such notice by Grantee to SWSCC shall specify with particularity the matters disputed by Grantee. Such notice shall stay the running of the above described thirty (30) day period. C. SWSCC shall hear Grantee's dispute at the next regularly scheduled SWSCC meeting and shall make a determination at that meeting as to whether Grantee' s actions constitute a default hereunder. SWSCC shall supplement its decision with written findings of fact. D. If after hearing the dispute SWSCC finds that there is a default, Grantee shall have twenty (20) days from such a determination to cure the default. At any time after that twenty (20) day period, SWSCC may terminate this Agreement, seek specific performance or impose liquidated damages, at its option. E. Notwithstanding anything to the contrary, if Grantee is in default on any insurance premium, rental payment or other amounts to be paid by Grantee in order to perform the obligation of this Agreement or any other agreement between the parties, SWSCC may cure such default on behalf of Grantee, in which event SWSCC shall be entitled to reimbursement for all sums paid to effect such cure, together with interest at the rate of 6% per annum and reasonable attorney' s fees . 7. 06 Captions . The Captions to Sections throughout this Agreement are intended solely to facilitate reading and reference to the Sections and provisions of this Agreement. Such captions shall not affect the meaning or interpretation of this Agreement . 7. 07 Interpretation. This Agreement has been arrived at by negotiation and shall not be construed against any party. In the -12- event of any dispute or question as to the meaning, interpretation or application of any term, provision or condition of this Agreement or Relief Ordinance, the SWSCC, in its sole discretion, shall resolve such dispute or question, provided that it is agreed that to the extent the terms of this Agreement or the Relief Ordinances as amended by the Local Programming Restructuring Ordinance are in conflict with the Franchise or the Offering, the terms of this Agreement or the Relief Ordinances as amended shall be governing. 7. 08 Governing Law. This Agreement shall be interpreted in accordance with Minnesota law. 7. 09 Other Laws . This Agreement shall be subject to all applicable federal, state and local laws. 7. 10 Notices . Any notice required to be given or served upon any party in connection with this Agreement shall be in writing and shall be deemed to have been given and received, (1) three business days after a registered or certified letter containing the notice, properly addressed, with postage prepaid, is deposited in the United States mail; or (2) if made in any other manner, upon actual delivery to and receipt by the party to whom it is addressed. Notice shall be given to the parties at the following addresses : SWSCC Adrian E. Herbst Southwest Suburban Cable Commission c/o Moss & Barnett 4800 Norwest Center 90 South Seventh Street Minneapolis, MN 55402 -13- Grantee KBL Cablesystems of the Southwest, Inc. 801 Plymouth Avenue North Minneapolis, MN 55411 7. 11 Entire Agreement. This Agreement constitutes the entire agreement and understanding between the parties and no oral modifications or additions hereto shall be binding. No verbal or written statements of the parties shall be considered a modification of this Agreement except by a written document signed by all parties expressly stating that it is modifying the Agreement and setting forth the new condition or provision of the Agreement . 7. 12 No Joint Venture. Nothing in this Agreement shall create a joint venture or principal-agent relationship between the parties and no party is authorized to (and no party shall) act toward third parties or the public in any manner which would indicate any such relationship with the other. 7. 13 Nonenforcement . The failure of any party to strictly enforce any provisions of this Agreement shall not be construed as a waiver or as excusing that party from future performance. 7. 14 Attorneys Fees. If it is necessary for SWSCC to retain the services of an attorney of law to enforce any of the terms, covenants or provisions hereof or to collect any sums due hereunder, Grantee shall pay to the SWSCC the actual cost of such services . 7. 15 Indemnification and Insurance. The provisions of Article VIII of the Franchise pertaining to indemnification and insurance are applicable to this Agreement and the performance of this Agreement by SWSCC and its officers, officials, -14- representatives, employees and agents and said Article VIII of Franchise is hereby incorporated in this Agreement and made part of it. 7. 16 Assignments . This Agreement shall not be assigned or performance of the duties hereunder delegated without the express prior written consent of the parties. 7. 17 Production of Local Origination Programming. Grantee shall have the right to utilize the channels, facilities, equipment, and personnel set forth herein for the production and cablecasting of Local Origination Programming, provided that such usage shall not excuse Grantee from meeting its Access obligations under this Agreement. This Agreement is accepted, and we agree to be bound by all its terms and conditions . DATED: SOUTHWEST SUBURBAN CABLE COMMISSION By Its : By Its : STATE OF MINNESOTA) ) ss . COUNTY OF HENNEPIN) The foregoing instrument was subscribed and sworn to before me this day of , 1991, by 11 the of SOUTHWEST SUBURBAN CABLE COMMISSION, a Minnesota corporation, on behalf of said corporation. Notary Public My commission expires : -15- DATED: KBL CABLESYSTEMS OF THE SOUTHWEST, INC. a Minnesota Corporation By Its : STATE OF MINNESOTA) ) ss. COUNTY OF HENNEPIN) The foregoing instrument was subscribed and sworn to before me this day of , 1991, by , the of KBL CABLESYSTEMS OF THE SOUTHWEST, INC. , a Minnesota corporation, on behalf of said corporation. Notary Public My commission expires : 1100DAJ -16- EXHIBIT 1 GLOSSARY For the purpose of this Agreement, the following terms, phrases, words and their derivations shall have the meaning given herein. When not inconsistent with the context, words used in the present tense include the future, words in the plural number include the singular number, and words in the singular number include the plural number. The words "shall" and "will" are mandatory and "may" is permissive. Words not defined shall be given their common and ordinary meaning. 1. Access or Community Access shall mean the right or privilege of the general public, local educational authorities, and local government to use designated facilities, equipment or channels of Grantee. Channels shall be made available pursuant to Section IV of the Restated Contract for Local Programming Facilities. 2. Basic Service means all subscriber services provided by Grantee, including the delivery of broadcast signals, covered by the regular monthly charge paid by all subscribers, excluding optional services for which a separate charge is made. 3 . Cablecast shall mean programming in a video, audio or data format transmitted through the cable communications system to users and subscribers . 4 . Channel or Television Channel shall mean a six megahertz (6 MHz) frequency band, including adjacent vertical blanking interval, which is capable of carrying one standard video signal, a number of audio, digital or other non-video signals, or some combination of such signals. 5 . City means the City of Eden Prairie, Edina, Hopkins, Minnetonka or Richfield, a municipal corporation in the State of Minnesota which has granted the Franchise. 6 . Class IV Channel means a signaling path provided by a System to transmit signals of any type from a subscriber terminal to another point in System. 7 . Connection means the attachment of the drop to the first radio or television set of the subscriber. 8 . Converter means an electronic device which converts signals to a frequency not susceptible to interference within the television receiver of a subscriber, and by an appropriate channel selector, also permits a subscriber to view all basic subscriber signals, including the basic service delivered at designated converter dial locations . 9 . Council means the governing body of City. 10. Drop shall mean the cable that connects the subscriber terminal to the nearest feeder cable of the cable. 11. FCC shall mean the Federal Communications Commission and any legally appointed, designated or elected agent or successor. 12. Franchise shall mean the Cable Communications Ordinance, as now or hereafter amended, of Member Cities . 13 . Franchise Area shall mean the cities of Edina, Eden Prairie, Hopkins, Minnetonka and Richfield, Minnesota, together with any future annexations or lawful expansions. 14 . Grantee shall mean KBL Cablesystems of the Southwest, Inc. a Minnesota corporation. 15. Gross Revenues shall mean all revenue derived directly or indirectly by Grantee, its affiliates, subsidiaries, parent, and any person in which Grantee has a financial interest of five percent (5%) or more from or in connection with the operation of the System, including, but not limited to, basic subscriber service monthly fees, pay cable fees, installation and reconnection fees, leased channel fees, converter rentals, studio rental, production equipment and personnel fees, and advertising revenues . The term does not include any taxes on services furnished by Grantee and imposed directly upon any subscriber or user by the State, City or other governmental unit and collected by Grantee on behalf of said governmental unit. For purposes of calculating the annual franchise fee, all amounts spent to fund the Restructured Local Programming Obligations shall be deducted from Gross Revenues. 16 . Installation means the connection of the System from feeder cable to the point of connection. 17. Local Programming shall mean access, community access, and/or -local origination programming. 18. Local Programming Obligations means Grantee' s obligations under the Franchise and the Offering for cablecast access, community access and local origination programming . 19 . Local Origination Programming shall mean programming produced under the control of Grantee which is of interest to those living on the Franchise Area . 20 . Lockout Device is an optional mechanical or electrical accessory to a subscriber ' s terminal which inhibits the viewing of a certain channel or channels provided by way of cable communications system. -2- 21. Member Cities shall mean the cities of Edina, Eden Prairie, Hopkins, Minnetonka and Richfield, Minnesota. 22. News Show means that show produced by Grantee pursuant to an Agreement with SWSCC dated January 23, 1991. 23 . Offering of Grantee or Offering shall mean that certain document dated December 5, 1980, entitled "Offering of Grantee" and signed by Grantee and City, which document is on file with the City Clerk. 24 . Playback Operator shall mean that employee of Grantee whose responsibilities shall include, but not be limited to, the codification and implementation of all access schedules . 25. Programming shall mean any video, audio, text or data signal carried over the system. 26 . Public Building is any building owned or operated by the United States government or any subdivision thereof, or the State of Minnesota or any subdivision thereof, or the City or any other governmental subdivision, or school district or educational institutions. (Article I, Section 2, Paragraph V, amended effective 09/83 . ) 27. Public Property is any real property owned by City other than . a street. 28 . Relief Ordinances means the CATV Relief Ordinance as modified by the CATV Relief Ordinance Amendment . 29 . Restated Performance Agreement means that contractual agreement between Grantee, City and SWSCC establishing the terms and conditions under which Grantee will be required to fund and otherwise fulfill its Local Programming requirements and establishing reporting standards and criteria for franchise compliance in other areas . 30: Restructured Local Programming Obligations means Grantee' s access, community access and local origination programming obligations as set forth in the Local Programming Restructuring Ordinance and the Restated Performance Agreement . Compliance with the Restructured Local Programming Obligations shall supersede and be in complete satisfaction of the Local Programming Obligations. 31 . Scrambler/Descrambler refers respectively to the equipment installed to the cable communications system' s headend equipment and subscriber terminal used to isolate pay cable and other ancillary service channels from basic service which is accomplished by electronically distorting the signal prior to its transmission through the cable communications system and -3- reconstituting the signal at each authorized location for subsequent display. 32 . Sidewalk is the portion of a street delineated for pedestrian travel. 33 . Street shall mean the surface of and the space above and below any public street, road, highway, freeway, lane, path, public way, alley, court, sidewalk, boulevard, parkway, drive or any easement or right-of-way now or hereafter held by City which shall, within its proper use and meaning in the sole opinion of City, entitle Grantee to the use thereof for the purpose of installing or transmitting over poles, wires, cables, conductors, ducts, conduits, vaults, manholes, amplifiers, appliances, attachments and other property as may be ordinarily necessary and pertinent to a System. 34 . SWSCC shall mean the Southwest Suburban Cable Commission. 35. Subscriber means any person or entity who subscribes to a service provided by Grantee by means of or in connection with the System regardless of whether a fee is paid for such service. 36 . Subscriber Network shall mean a single trunk 440 MHz cable activated with 54 downstream channels and 4 return or upstream channels, as it may be upgraded from time to time. 37 . System means a system of antennas, cables, wires, lines, towers, waveguides or other conductors, converters, equipment or facilities, designed and constructed for the purpose of producing, receiving, transmitting, amplifying and distributing, audio, video and other forms of electronic or electrical signals, located in City. Said definition shall not include any system wholly internal to one or more multiple unit dwellings under common ownership, control or management, and does not use City streets or other public property. In any event, system as defined herein shall not be inconsistent with any definition as set out in state law. 38. User or Local Programming User shall mean any person who utilizes the System studio or facilities, whether for a charge or without charge. -4- EXHIBIT 2 EDEN PRAIRIE STUDIO EQUIPMENT 2 Hitachi FP-50s Color Studio Camera 1 ISI 902 Production Switcher 1 ISI 660 Chroma Keyer 1 ISI 501 Rack Frame 1 ISI 505 Power Supply 6 ISI 500 Blank Panels 1 Knox K-128 Character Generator with roll and crawl option 1 Sony VO-5600 Recorder 1 Sony FM-500 Remote control 1 Sony RCC-15FT Extension Cable 1 Sony PVM-1211F 12" color monitor 1 Sony CVM-1270 12" color monitor/receiver 1 RCA JFR-985SV 25" color monitor/receiver 2 Panasonic TR-932 dual 9" B/W monitor 1 Panasonic WV--58562 Dual High Res . 9" B/W monitor 1 Tektronics 1420 Vectorscope 2 Tektronics 528A Waveform monitor 1 Tektronics 016-0115-02 Dual rack adapter 1 Ryan VDA-200 video DA 1 Lenco PFM-300 Frame with following modules : PP-302 Power Supply P56-310 Sync. Gen. PCB-320 Color Bar Gen. PBB-321 Blackburst Gen. PBD-322 Bar Dot Gen. PMB-323 Multiburst Gen. PSS-324 Stairstep Ramp Gen. 2 PVA-350 Video DA 4 Panasonic WJ-225R 12 pos . video routing switcher 1 Panasonic WJ-220R 6 pos . video routing switcher EDEN PRAIRIE STUDIO EQUIPMENT Page 2 1 Microtime Time Base Corrector 1 Sony VO-5850 Edit recorder 1 Sony -5800 Recorder (used as source machine) 1 Sony RM-440 Edit Controller 2 Sony RCC-5F Connecting cables 1 Sony VDC-5 Dub Cable 1 Panasonic CT-110 10" color monitor 1 Panasonic WR-5360 High Res . 9" B/W monitor 2 ITE-H2 Cam head 2 ITE-RH Right handle 2 ITE-H25T Adapter 2 ITE-T6A Tripod 2 ITE-D6G Dolly with cable guards 1 Tascam M-30 mixer 1 Tascam 22-4 Reel to Reel recorder 1 Tascam RM-42 Rackmount kit 1 Tascam 124 cassette recorder 1 BGV 75 Stereo power amp 4 Electrovoice Sentury 100 Loudspeakers 2 Ryan Audio DA 4 Trampeter patch panels 1 Russco Studio pro turntable 1 Microtrak 303 tone arm 1 Stanton 500EE phono cartridge 1 Bretford MPS-48 TV cart 5 Sony DR- 10 Headset EDEN PRAIRIE STUDIO EQUIPMENT Page 3 1 VAC PLS-1 Intercom power supply 1 VAC PL-11BC Intercom w/beltchip 1 VACK PL-1 Intercom 3 Winstead 85-R55 Rackslide kit 2 Emcor Equipment Racks 1 Custom Production console 1 Custom Editing console 1 Sony VO-5800 Port. 3/4" VCR 1 Portabrace VTR carrying Use 1 Sony DXC-1800K Port. Color camera system 4 Sony BP-60 Batteries 1 Sony AC-340B VCR power sppply 1 Sony BC-20 Battery Charger 1 ITE t-20 Tripod 3 Sony ECM-30 Lavalier Mic. 2 Electrovoice 635A handheld mic. 1 Sony EMC-23A Handheld mic. 1 4-way extension cord EDEN PRAIRIE STUDIO LIGHTNING EQUIPMENT Pie Grid 1%" schedule 40 black pipe grid Drapery Tlack Approx. 140 ' of ADC #140 single track Drapery 1 Seamless muslin cyclorama. 13 ' 6" high by 40 ' wide, mounted on pipe in CBS gray 2 Black velour drapery panels, 13 ' 6" high by 15 ' wide with 50% fullness 1 cherry velour panel, 13 ' 6" high by 20 ' wide with 50% fullness Fixtures 6 Strand-Century 3342 6" Fresnels 6 Strand-Century 1312 Barndoors 8 Strand-Century 3413 8" Fresnels 8 Strand-Century 1313 Barndoors 6 Strand-Century 5911 Single cyc light 3 Strand-Century 5913 Triple cyc light 8 Strand-Century 4271 14" scoop HOPKINS-MINNETONKA STUDIO EQUIPMENT 2 Hitachi FP-10 color camera and studio support equipment 1 RCA TC-2011 B/W titleing camera 1 Panasonic WJ-5500A production switcher 1 Knox K-50 Charactor Generator 1 Sony VO 5600 recorder 1 Sony RM-500 remote control 1 Videotek RM-17 17" color monitor/receiver 1 RCA JFR-9855V 25" color monitor/receiver 1 Videotek VM8-PRW 8" color monitor 3 Panasonic TR-932 Dual 9" B/W' monitor 1 Videotek TSM-5 waveform monitor 1 Panasonic WR-450 audio mixer 1 Sony PS-LX2 turntable 1 Sony TC-FX20 stereo cassette deck 1 Ryan Audio DA 1 Ryan VDA 200 Video DA 1 Panasonic WJ-220R 6 pos. video routing switcher 1 Panasonic WJ-225R 12 pos. video routing switcher 1 Microtime T-120 Time Base Corrector 1 Sony VC-2860 Editor Recorder 1 Sony VP 2260 Player 1 Sony RM-430 Edit controller 2 Sony RCC-5F connecting cables 1 Sony VDC-5 Dub cable 2 Panasonic CT-1320 13" color mon. 2 ITE T-6A tripod HOPKINS-MINNETONKA STUDIO EQUIPMENT Page 2 2 ITE D-66 Dolly w/cable guard 2 ITE H-13 fluid head 2 ITE RM right handle ITE MHP-56 tripod adaptor Sony DR-10 Intercom headset Atlas MS-12C mic stand Bretford MPS-48 TV cart Trompeter patch panels Equipto VTR shelf Emcor Equipmemt Rack Custom production console Winstead editing console Sony VO-4800 Port. 3/4" VCR Porta-brace VTR carrying case Sony DXC-1800K Port. color camera system Sony BP-60 Batteries Sony AC-340B power supply Sony BC-20 Battery charger ITE T-20 Tripod Sony ECM-30 Lavalier mic. Electrovoice 635A handheld mic. Sony ECM-23A handheld mic 4 way 75ft extension cord Sony VO-4800 Port. 3/4" VCR Porta-Brace BTR Carrying Case Sony DCX-1800K Port. Color Camera System Sony BP-60 Batteries HOPKINS-MINNETONKA STUDIO EQUIPMENT Page 3 Sony AC-340B VCR power supply Sony BC-20 Battery Charger ITE T-20 Tripod Sony ECM-30 Lavalier Mic. Electrovoice 635 Handheld mic. Sony ECM-23A Handheld Mic. 4-way 75ft extension cord HOPKINS-MINNETONKA STUDIO LIGHTING EQUIPMENT PIPE GRID 1%" schedule 40 pipe DPAPERY TRACK 50 ' of ADC #140 single track DRAPERY 1 Seemless natural muslin Cyclorama, 11 ' high by 32 ' wide 2 Black velour drapery panels, 11' high by 15 ' wide with 50% fulness FIXTURES 4 Strand-Century 3342 TV 6" Fresnels 4 Strand-Century 1312 Barndoors 2 Strand-Century 3413 8" Fresnels 2 Strand-Century 1313 Barndoors 4 Strand-Century 4271 14" Scoop Floodlight 1 Strand-Century 2209 6x9 Ellipsoidal EDINA-RICHFIELD STUDIO EQUIPMENT 2 Hitachi PF-10 color camera and studio support equipment 1 RCA TC-2011 B/W titleing camera 1 Panasonic WJ-5500A production switcher 1 Knox K-50 Character Generator 1 Sony VO-5600 recorder 1 Sony RM-500 remote control 1 Videotek RM-17 17" color monitor/receiver 1 RCA JFR-9855V 25" color moitor/receiver 1 Videotek VM8-PRW 8" color monitor 3 Panasonic TR-932 Dual 9" B/W monitor 1 Videotek TSM-5 waveform monitor 1 Panasonic WR-450 audio mixer 1 Sony PS-LX2 turntable 1 Sony TC-FX20 stereo cassette deck 1 Ryan Audio DA 1 Ryan VDA-200 Video DA 1 Panasonic WK-22OR 6 pos. Video Routing switcher 1 Panasonic WK-225R 12pos . video routing switcher 1 Microtime T-120 Time base corrector 1 Sony VO-5850 Editor Recorder 1 SonO VO-5800 Recorder (used as source machine) 1 Sony RM-440 edit controller 2 Sony RCC-5F connecting cables 1 Sony VDC-5 dub cable 1 Panasonic CT-110 10" color monitor 1 Panasonic WV-5860 High Ris . 9" B/W monitor EDINA-RICHFIELD STUDIO EQUIPMENT Page 2 2 ITE T-6A tripod 2 ITE D-66 Dolly w/cable guard 2 ITE H-13 Fluid head 2 ITE RHM right handle 2 ITE MHT-56 tripod adaptor 4 Sony DR-10 Intercom headset 2 Atlas MS-12C mic stand 1 Bretford MPS-48 TV cart 2 Trampeter patch panels 1 Equito VTR shelf 1 Equipto equipment rack 1 Custom production console 1 Custom editing console 1 Sony VO-4800 Port. 3/4" VCR 1 Porta-brace VTR carrying case 1 Sony DXC-1800K Port . color camera system 4 Sony BP-60 Batteries 1 Sony AC-340B VCR power supply 1 Sony BC-20 Battery charger 1 ITE T-20 Tripod 3 Sony ECM-30 Lavalier mic. 2 Electrovoice 635A handheld mic 1 Sony ECM-23A handheld mic 1 4 way 75ft extension cord 2 Hitachi FP-10 color camera and studio support equipment 1 RCA TC-2011 B/W titleing camera EDINA-RICHFIELD STUDIO EQUIPMENT Page 3 1 Panasonic WJ-5500A production switcher 1 Knox K-50 Character Generator 1 Sony VO-5600 recorder 1 Sony RM500 remote control 1 Videotek RM-17 17" color monitor/receiver 1 RCA JFR-9855V 25" color monitor/receiver 1 Videotek VM8-PRW 8" color monitor 3 Panasonic TR-932 Dual 9" B/W monitor 1 Videotek TSM-5 waveform monitor 1 Panasonic WR-450 audio mixer 1 Sony PS-LX2 turntable 1 SonyTC-FX20 stereo cassette deck 1 Ryan Audio DA 1 Ryan VDA-200 Video DA 1 Panasonic WJ-220R 6 pos . Video Routing switcher 1 Panasonic WJ-225R 12 pos . video routing switcher 1 Microtime T-120 Time base corrector 1 Sony VO-2860 Editor Recorder 1 Sony VP-2260 Player 1 Sony RM-440 edit controller 2 Sony RCC-5E connecting cables 1 Sony VDC-5 dub cable 1 Panasonic CT-110 10" color monitor 1 Panasonic WV-5360 High Ris. 9" B/W monitor 2 ITE T-6A tripod 2 ITE D-66 Dolly w/cable guard EDINA-RICHFIELD STUDIO EQUIPMENT Page 4 2 ITE H-18 fluid head 2 ITE RHM right handle 2 ITE MHT-56 tripod adaptor 4 Sony DR-10 Intercom headset 2 Atlas MS-12C mic stand 1 Bretford MPS-48 TV cart 2 Trompeter patch panels 1 Equipto VTR shelf 1 Emcor equipment rack 1 Custom production console 1 Sony VO-4800 Port. %" VCR 1 Porta-brace VTR carrying case 1 Sony DXC-1800K Port. color camera system 4 Sony BP-60 Batteries 1 Sony AC-340B VCR power supply 1 Sony BC-20 Batery charger 1 ITE T-20 Tripod 3 Sony ECM-30 Lavalier mic. 2 Electrovoice 635A handheld mic. 1 Sony ECM-23A handheld mic. 1 4-way 75 ft. extension cord EDINA-RICHFIELD STUDIO LIGHTING EQUIPMENT Pipe Grid 1'h" schedule 40 pipe Drapery Track 70 ' of ADC 140 single track Drapery 1 seamless natural muslin Cyclorama, 10 ' 6" high by 50 ' wide 2 black velour drapery panels, 10 ' 6" high by 15 ' wide with 50% fullness Fixtures 4 Strand-Century 3342 TV 6" Fresnels 4 Strand-Century 1312 barn doors 2 Strand-Century 4313 8" Fresnels 2 Strand-Century 1313 Barn doors 4 Strand-Century 4271 14" Scoop Floodlights 1 Strand-Century 2209 6 x 9 Ellipsoidal MOBILE VAN INVENTORY 1 Sony DXC-1800 Sony Color Camera 1 Sony VCL-110Y Sony 10: 1 Zoom Lens 2 Sony CCU-1800 Camera Control Units 2 Sony CMA-7 AC Adapter 2 Sony COQ-50AR 165 ' Camera Cable 1 Sony VO-5600 %" Recorder 1 Panasonic WJ5500B Production Switcher 2 Panasonic WJ225R Routing Switcher 1 Panasonic TR-932 Dual 9" B/W Monitor 1 Videotek VM8PRW 8" Color Monitor 1 Videotek RM-12A 12" Color Monitor 1 Video TSM-5A Waveform Monitor 1 Videotek Single Case for Wvfm Monitor 1 Knox K-50 Character Generator 2 Shure M-267 Mic Mixer 1 RTS ATS-410 Monitor Amp 2 ITE F-12 Tripod 2 ITE H-12 Ball Type Fluid Head 2 ITE LQRM Quick Release 2 ITE RFPI Rubber Foot Pad 2 Electrovoice EV-635A Mic 1 Electrovoice RE-15 Mic 1 Electrovoice 432A Deck Stand 2 Sennheiser HD-400 Headphones 5 Sony DR-10 Intercom Headsets 1 V.A.C. PLS-1 Party line System with Belt Clip. 1 Panasonic WV-5203 Triple 5" B/W Monsitor 1 Winsted 85-RS5 Rackslide Kit 1 Topaz 91002-12 AC Isolation Transformer 2 Realistic 40-2035 Speakers 1 Realistic 40-2031 Bracket Kit 3 Emcor Vertical Equipment Racks 2 Emcor Rack Mount Drawers 1 Custom Production Console 2 100 ' 3 wire Extension Cords All Installed In: 1 Ford % Ton fully customized van with Industrial type air conditioning and roof mount camera platform. PLAYBACK EQUIPMENT INVENTORY 1 Videotek RM-12RA 12" Rcvr/Mon. 8 Panasonic CT-1320 13" Mon. 2 Sony CVM-1250 12" Rcvr./Mon. 1 Sony KV-1207 12" Rcvr. 3 Sony VP-5000 %" Player 2 Sony VO-5600 V Recorder 3 Sony VP-2260 V Player 1 JVC CR-6400U Y' Recorder (VHS) 7 Microtime T-120 Time Base Corrector 3 3M 15 x 6 Remote Control Routing Switcher 6 3M 15 x 2 Remote Control Routing Switcher 2 3M 15 x 1 Remote Control Routing Switcher 2 3M 15 x 1 Local Routing Switcher 2 VideoTek TSM-5A Waveform Monitor 1 VideoTek VSM-5 Vectorscope 2 VideoTek Duel Rack Fraame Assy. 5 Sony RM-410 Remote Control Unit 1 Monroe 3000R-14D Dual Channel VCR Controller 1 Monroe 3000R-14C Single Channel VCR Controller 7 Shure M-63 Audio Master 1 Technics SA-222 AM/FM Receiver 1 Todd Custom Audio Monitor 1 Robbins Bulk Tape Eraser 1 Scientific Atlanta 6603 Satellite Receiver 1 Scientific Atlanta 6250 Demodulator 1 Dynair TX-4A Modulator 1 Tektronix R/C 1900 Remote Contorl Unit 1 Trompeter Patch Panel Assy. 1 Wilk RP-350 Rackframe Assy. w/power supply 1 Wilk SG-300 Sync Generator 1 Wilk CG-350 Color Bar Gen. 1 Wilk BG-350 Black Burst Gen. 2 Wilk SI-350 Source Identifier 1 Wilk TG-350 Tone Gen. 2 Ryan Dual Video D.A. 1 Ryan Dual Pulse D.A. 1 Lectro 115/6A Standby Power Supply 7 Zenith ST-1082 Z-tac Convertor 7 Zenith ST-1000 Z-tac convertor 2 Vaco Compac-50 speakers 1 Equatorial 5100 Satellite Data Controller (provided by Reuters) 1 Computer Video CDD-10 Character Gen. 1 Computer Video CKB-1 Keyboard 3 Video Precision 3520 Dual Channel Character Gen. 6 Video Prevision TM-3510 Keyboard (1 in P.B. , 5 in City Halls) 1 V.D.S. Microsystem I (provided by DIP) 1 Norpak IPS-2 Page Creation System 6 Hemton EPS-1 64K Character Gen. 6 Zenith RGB Encoder 1 Radio Shack CTR-80A Cassette Recorder 2 Winsted VTR Racks PLAYBACK EQUIPMENT INVENTORY Page 2 4 Winsted Vertical Equipment Racks 1 Optima Console 1 Custom CG Keyboard Table 1 Custom Wall Shelf Unit EXHIBIT 3 TO RESTATED PERFORMANCE AGREEMENT RESTATED CONTRACT FOR PUBLIC, EDUCATIONAL AND GOVERNMENT ACCESS SERVICES THIS AGREEMENT, is made and entered into this day of 1991, by and between SOUTHWEST SUBURBAN CABLE COMMISSION (hereinafter SWSCC) and KBL CABLESYSTEMS OF THE SOUTHWEST, INC. (hereinafter Grantee) , a Minnesota corporation. W I T N E S S E T H WHEREAS, Grantee pursuant to Chapter 238 of the Minnesota Statutes and pursuant to the Franchise of the Member Cities has been granted a Franchise to construct , own and operate a cable communications system in the cable service territory; and WHEREAS, residents of the cable service territory will benefit from valuable public access opportunities available through the System; and IN CONSIDERATION of the covenants, conditions, undertakings and promises contained herein the parties agree as follows : SECTION I DEFINITIONS For the purposes of this Agreement, the following terms , phrases , words and their derivations shall have the meaning given in the glossary attached hereto as Exhibit 1 . When not inconsistent with the context , words used in the present tense include the future, words in the plural number include the singular number . The words "shall" and "will" are mandatory and "may" is permissive. Words defined in the Franchise or the Local Programming Restructuring Ordinance shall have the same meaning herein. Words not defined shall be given their common and ordinary meaning. SECTION II PERSONNEL 2 . 01 Programming Manager. A. Grantee shall employ at least one (1) part-time (a minimum of ten (10) hours per week) Programming Manager who shall be responsible for the administration, promotion and implementation of Local Programming in the Franchise Area. B. The Programming Manager, or designee, shall be responsible for scheduling all Local Programming, use of mobile van and studios . The Programming Manager, or designee, in conjunction with a Playback Operator, shall endeavor to schedule programming with a view to overall program consistency to maximize audience potential by seeking to develop an overall regular program format . Playback Operators shall be responsible for the codification of Local Programming schedules . 2. 02 Access Coordinators . A. In addition to the Programming Manager, Grantee shall employ at least three (3) full-time Access Coordinators . The Access Coordinators shall report to the Programming Manager. B. The specific duties and responsibilities of the Access Coordinators are: 1. Train individuals and groups in the use of equipment in accordance with plans, schedules and materials approved by SWSCC or designee; -2- 2 . Inform Users of the value and procedures for care of the equipment to insure least possible damage; 3 . Maintain a written "check-out" system for the equipment, both when it is removed from the studio and upon its return; 4 . Report to the Programming Manager all damage or malfunction of equipment; 5. Provide to the Programming Manager a monthly written report of access use, including a brief written statement of access projects; 6 . Maintain a log of all access users and equipment and file required reports with the Programming Manager; 7. Work closely with the Programming Manager to schedule use of facilities; 8. Implement access programming pursuant to and in accordance with programming schedules developed by the Programming Manager, or his designee and the Playback Operators; 9 . Maintain a log of all complaints related to access . 10. Other duties as assigned. 2 . 03 Educational Access Consultant . A. Grantee shall employ at least one (1) full-time educational access consultant in addition to the public access personnel described above. The educational access consultant shall report to the Programming Manager. B. The specific duties and responsibilities of the Educational Consultant are: -3- 1. Work with Southwest Suburban Schools Cable Commission to research and develop methods for using cable television in education. 2 . Provide models for school staff members in the specific use of cable television. 3 . Develop and recommend educational cable television policies to school administrators in the Southwest system. 4 . Work with school staff and students to elicit ideas and assist in organization and implementation of educational access programming. 5 . Work with school administrators and staff to encourage a high regard for school programming . 6 . Offer workshops on a regular basis for staff and students on various aspects of program production. 7. Work with Programming Manager, Playback Operations Supervisor and Access Managers to insure access programming opportunities for school staff and students. 8 . Work with school staff members and Company Technical and Programming staff to develop interactive cable television projects . 9 . Consult with school district personnel about equipment acquisition and set-up for individual project needs . 10 . Serve as an advisor to the Educational Cable Coordinating Committee. 11 . Provide the Programming Manager with a weekly and monthly report of activities . -4- 12. Perform miscellaneous duties as assigned by the Programming Manager, including assisting with Access Coordinator duties, to the extent that such duties do not interfere with educational responsibilities. 2 . 04 Equipment Logs . A. The Access Coordinators shall maintain daily log forms, and, on a daily basis, be responsible that equipment logs are prepared and a record of the use of all equipment is recorded. Such equipment logs shall contain information regarding the name and address of the equipment user, the item of equipment used and the time of expected actual use; provided, however, that no piece of equipment shall be checked out for more than forty-eight (48) hours . B. The equipment logs shall be available for inspection by SWSCC upon request . 2.05 Other Personnel . Grantee shall employ such other personnel as may be necessary to meet the duties and obligations imposed hereunder upon Grantee as may be consistent with the budget then in effect. 2 .06 Production of Local Origination Programming. Personnel designated in this Section may, at Grantee' s direction, be involved in the production of Local Origination Programming; provided that such involvement in Local Origination Programming by the personnel shall not excuse Grantee from meeting its Access obligations as set forth herein. -5- SECTION III LADMINISTRATION 3 .01 Access Promotion. A. The promoting of public access opportunities in the Franchise Area shall be the . sole responsibility of Grantee and shall be addressed in the annual Local Programming Plan submitted pursuant to Section 7.04 of the Restated Performance Agreement . B. Notwithstanding anything to the contrary, such promotions to the extent allowable under the budget then in effect, shall include, but not be limited to, the following: 1. Development of special meetings for community groups at which access opportunities will be discussed and access experiences from other communities shared. 2 . Speakers provided to community organizations to explore access opportunities . 3 . Development of displays at public places explaining access principles and equipment . 4 . Distribution of literature to subscribers informing them of ongoing access activity and encouraging their participation. 5. Development of workshops focused on production techniques and communication principles . 6 . Promotion through cable and conventional media, including playback of special explanatory programs on access and theme channels . 7. Listings in community newspapers . 8 . Special brochures for schools, libraries and community centers with weekly listings and descriptive material . -6- 9 . "Creative Marketing" initiatives for special programs, with targeted messages to involved groups, areas, institutions. 3 .02 Training. A. Grantee shall seek the advice of SWSCC concerning training classes to be offered by Grantee. Training classes, for the purposes of this Agreement shall include, but not be limited to, basic television production, location production, post-production, on-camera lessons, or any other training intended by Grantee to assist in access opportunities . B. SWSCC may advise Grantee concerning the curriculum, fees, course material, class locations and class size. C. The classes described in paragraph A above shall, at a minimum, be offered on a quarterly basis or at such other intervals as the parties may agree upon. SECTION IV TERM, EFFECTIVE DATE AND TERMINATION 4 . 01 Term. This Agreement shall be coterminous with the Restated Performance Agreement. It shall terminate on the expiration or termination of the Restated Performance Agreement . 4 .02 Effective Date. This Agreement shall become effective as of August 1, 1992; provided that all terms and conditions set forth in Section 9 ("Effective Date") of the Local Programming Restructuring Ordinance have been satisfied. SECTION V MISCELLANEOUS PROVISIONS 5 . 01 Binding on Successors . This Agreement shall be -7- binding upon and shall inure to the benefit of the parties hereto, their respective successors and assigns . 5.02 Force Maieure. If by reason of force majeure, any party to this Agreement is unable in whole or in part to carry out its obligations hereunder, said party shall not be deemed in violation or default during the continuance of such inability. The term "force majeure" as used in this Agreement shall mean the following : strikes, acts of God, orders of the federal or state governments, or any of their departments or agencies, lightning, fires, storms, floods, civil disturbances, explosions, partial or entire failure of utilities, or any other cause or event not reasonably within the control of that party. 5 . 03 Severability. A. If any law, ordinance or regulation shall require or permit any party to this Agreement to perform any service or shall prohibit any party from performing any service which may be in conflict with the terms of this Agreement, then as soon as possible following knowledge thereof, said party shall give notice to the other party of the point of conflict believed to exist between such law, ordinance or regulation. B. If any Section, sentence, paragraph, term or provision of this Agreement is determined to be illegal, invalid, or unconstitutional by any court of competent jurisdiction or by any state or federal regulatory agency having jurisdiction thereof, such determination shall have no effect on the validity of any other Section, sentence, paragraph, term or provision hereof . -8- C. In the event such decision, law, rule or regulation is subsequently reversed, repealed, rescinded, amended or otherwise changed, so that the Section, sentence, paragraph, term or provision hereof which had been invalid or modified is no longer in conflict with the decisions, law, rules and regulations then in effect, said Section, sentence, paragraph, term or provision shall thereupon return to full force and effect and shall thereafter be binding on all parties, provided that the party relying on the Section, sentence, paragraph, term or provision shall give the other party or parties thirty (30) days written notice of such change before requiring compliance with said provision. 5 . 04 Liquidated Damages . Upon the breach of any term, condition, or provision of this Agreement by Grantee, Grantee shall pay to SWSCC a sum of up to and including, Two Hundred Dollars ($200 .00) per day, as determined by SWSCC, for each and every day of the breach as a liquidated damage pursuant to the Default Proceedings set forth in Section 5. 05 of this Agreement . In assessing liquidated damages, SWSCC shall seek to ascertain the actual damages incurred by SWSCC and it is not the intent of this Section to be punitive. The parties agree that the services to be performed under this Agreement are in the public interest and will further the development of the System within the Franchise Area and that continuation of the relationship established by this Agreement is mutually beneficial . Consequently, the parties acknowledge that damages due to a breach of this Agreement are -9- difficult to determine and that the liquidated damage set forth above is fair and reasonable and will not be contested. 5 . 05 Default Proceedings . In the event Grantee has breached any of its obligations hereunder, SWSCC shall give written notice of the default to Grantee and SWSCC's intention to terminate this Agreement or impose liquidated damages, whichever SWSCC deems appropriate. A. Grantee shall have thirty (30) days after the giving of such notice (or if such default is of such a character as to require more than 30 days within which to cure the same, and Grantee fails to commence to cure the same within said 30 day period and thereafter fails to use reasonable diligence, in SWSCC' s sole opinion, to cure such default as soon as possible) within which to cure such default . In the event Grantee fails to cure such default, as described above, SWSCC may terminate this Agreement or impose liquidated damages, whichever the case may be. B. Grantee may, within ten (10) days of notice, notify SWSCC that there is a dispute as to whether a default has, in fact, occurred. Such notice by Grantee to SWSCC shall specify with particularity the matters disputed by Grantee. Such notice shall stay the running of the above described thirty (30) day period. C. SWSCC shall hear Grantee' s dispute at the next regularly scheduled SWSCC meeting and shall make a determination at that meeting as to whether Grantee' s actions constitute a default hereunder. SWSCC shall supplement its decision with written findings of fact . -10- D. If after hearing the dispute SWSCC finds that there is a default, Grantee shall have twenty (20) days from such a determination to cure the default . At any time after that twenty (20) day period, SWSCC may terminate this Agreement or impose liquidated damages, whichever the case may be. E. In addition to any other remedy provided to SWSCC under this Agreement or at law or equity, SWSCC may, at its discretion, take a credit on any future payments to Grantee in the event SWSCC finds Grantee to be in default in accordance with the procedures described in this paragraph 5 . 08 . The credit shall be in a prorated daily basis . 5 . 06 Captions . The Captions to Sections throughout this Agreement are intended solely to facilitate reading and reference to the Sections and provisions of this Agreement . Such captions shall not affect the meaning or interpretation of this Agreement . 5 .07 Interpretation. This Agreement has been arrived at by negotiation and shall not be construed against any party. In the event of any dispute or question as to the meaning, interpretation or application of any term, provision or condition of this Agreement or Relief Ordinance, the SWSCC, in its sole discretion, shall resolve such dispute or question, provided however that, to the extent the terms of this Agreement or the Relief Ordinances as amended by the Local Programming Restructuring Ordinance are in conflict with the Franchise or the Offering, the terms of this Agreement or the Relief Ordinances as amended shall be governing. 5 . 08 Governing Law. This Agreement shall be interpreted in accordance with Minnesota law. -11- 5.09 Other Law. This Agreement shall be subject to all applicable federal, state and local law. 5. 10 Notices. Any notice required to be given or served upon any party in connection with this Agreement shall be in writing and shall be deemed to have been given and received, ( 1) three business days after a registered or certified letter containing the notice, properly addressed, with postage prepaid, is deposited in the United States mail; or (2) if made in any other manner, upon actual delivery to and receipt by the party to whom it is addressed. Notice shall be given to the parties at the following .addresses : SWSCC Adrian E. Herbst Southwest Suburban Cable Commission c/o Moss & Barnett 4800 Norwest Center 90 South Seventh Street Minneapolis, MN 55402 Grantee KBL Cablesystems of the Southwest, Inc. 801 Plymouth Avenue North Minneapolis, MN 55411 5 . 11 Entire Agreement . This Agreement constitutes the entire agreement and understanding between the parties and no oral modifications or additions hereto shall be binding . No verbal or written statements of the parties shall be considered a modification of this Agreement except by a written document signed by all parties expressly stating that it is modifying the Agreement and setting forth the new condition or provision of the Agreement . 5. 12 No Joint Venture. Nothing in this Agreement shall create a joint venture or principal-agent relationship between the -12- parties and no party is authorized to (and no party shall) act toward third parties or the public in any manner which would indicate any such relationship with the other. 5. 13 Nonenforcement. The failure of any party to strictly enforce any provisions of this Agreement shall not be construed as a waiver or as excusing that party from future performance. 5 . 14 Attorneys Fees . If it is necessary for SWSCC to retain the services of an attorney of law to enforce any of the terms, covenants or provisions hereof or to collect any sums due hereunder, Grantee shall pay to the other party the actual cost of such services . 5 . 15 Indemnification and Insurance. The provisions of Article VIII of the Franchise pertaining to indemnification and insurance are applicable to this Agreement and the performance of this Agreement by SWSCC and its officers, officials, representatives, employees and agents and said Article VIII of Franchise is hereby incorporated in this Agreement and made part of it. 5. 16 Assignments . This Agreement shall not be assigned or performance of the duties hereunder delegated without the express written consent of the parties . This Agreement is accepted, and we agree to be bound by all its terms and conditions . DATED: SOUTHWEST SUBURBAN CABLE COMMISSION By Its : -13- a By Its : STATE OF MINNESOTA) ) ss . COUNTY OF HENNEPIN) The foregoing instrument was subscribed and sworn to before me this day of , 1991, by the of SOUTHWEST SUBURBAN CABLE COMMISSION, a Minnesota corporation, on behalf of said corporation. Notary Public My commission expires: DATED: KBL CABLESYSTEMS OF THE SOUTHWEST, INC. a Minnesota Corporation By Its : STATE OF MINNESOTA) ) ss . COUNTY OF HENNEPIN) The foregoing instrument was subscribed and sworn to before me this day of , 1991, by , the of KBL CABLESYSTEMS OF THE SOUTHWEST, INC. , a Minnesota corporation, on behalf of said corporation. Notary Public My commission expires : 1099DAJ -14- EXHIBIT 1 GLOSSARY For the purpose of this Agreement, the following terms, phrases, words and their derivations shall have the meaning given herein. When not inconsistent with the context, words used in the present tense include the future, words in the plural number include the singular number, and words in the singular number include the plural number. The words "shall" and "will" are mandatory and "may" is permissive. Words not defined shall be given their common and ordinary meaning. 1. Access or Community Access shall mean the right or privilege of the general public, local educational authorities, and local government to use designated facilities, equipment or channels of the Grantee. Channels shall be made available pursuant to Section IV of the Restated Contract for Local Programming Facilities. 2. Basic Service means all subscriber services provided by Grantee, including the delivery of broadcast signals, covered by the regular monthly charge paid by all subscribers, excluding optional services for which a separate charge is made. 3 . Cablecast shall mean programming in a video, audio or data format transmitted through the cable communications system to users and subscribers . 4 . Channel or Television Channel shall mean a six megahertz (6 MHz) frequency band, including adjacent vertical blanking interval, which is capable of carrying one standard video signal, a number of audio, digital or other non-video signals, or some combination of such signals. 5 . City means the City of Eden Prairie, Edina, Hopkins, Minnetonka or Richfield, a municipal corporation in the State of Minnesota which has granted the Franchise. 6. Class IV Channel means a signaling path provided by a System to transmit signals of any type from a subscriber terminal to another point in System. 7. Connection means the attachment of the drop to the first radio or television set of the subscriber. 8 . Converter means an electronic device which converts signals to a frequency not susceptible to interference within the television receiver of a subscriber, and by an appropriate channel selector, also permits a subscriber to view all basic subscriber signals, including the basic service delivered at designated converter dial locations . 9 . Council means the governing body of City. 10. Drop shall mean the cable that connects the subscriber terminal to the nearest feeder cable of the cable. 11. FCC shall mean the Federal Communications Commission and any legally appointed, designated or elected agent or successor. 12. Franchise shall mean the Cable Communications Ordinance, as now or hereafter amended, of Member Cities . 13 . Franchise Area shall mean the cities of Edina, Eden Prairie, Hopkins, Minnetonka and Richfield, Minnesota, together with any future annexations or lawful expansions. 14 . Grantee shall mean KBL Cablesystems of the Southwest, Inc. a Minnesota corporation. 15. Gross Revenues shall mean all revenue derived directly or indirectly by Grantee, its affiliates, subsidiaries, parent, and any person in which Grantee has a financial interest of five percent (5%) or more from or in connection with the operation of the System, including, but not limited to, basic subscriber service monthly fees, pay cable fees, installation and reconnection fees, leased channel fees, converter rentals, studio rental, production equipment and personnel fees, and advertising revenues. The term does not include any taxes on services furnished by Grantee and imposed directly upon any subscriber or user by the State, City or other governmental unit and collected by Grantee on behalf of said governmental unit . For purposes of calculating the annual franchise fee, all amounts spent to fund the Restructured Local Programming Obligations shall be deducted from Gross Revenues. 16 . Installation means the connection of the System from feeder cable to the point of connection. 17. Local Programming shall mean access, community access, and/or 1ocal origination programming . 18. Local Programming Obligations means Grantee ' s obligations under the Franchise and the Offering for cablecast access, community access and local origination programming . 19 . Local Origination Programming shall mean programming produced under the control of the Grantee which is of interest to those living on the Franchise Area. 20. Lockout Device is an optional mechanical or electrical accessory to a subscriber ' s terminal which inhibits the viewing of a certain channel or channels provided by way of cable communications system. -2- 21. Member Cities shall mean the cities of Edina, Eden Prairie, Hopkins, Minnetonka and Richfield, Minnesota. 22. News Show means that show produced by Grantee pursuant to an Agreement with SWSCC dated January 23, 1991. 23 . Offering of Grantee or Offering shall mean that certain document dated December 5, 1980, entitled "Offering of Grantee" and signed by Grantee and City, which document is on file with the City Clerk. 24 . Playback Overator shall mean that employee of Grantee whose responsibilities shall include, but not be limited to, the codification and implementation of all access schedules. 25. Programming shall mean any video, audio, text or data signal carried over the system. 26 . Public Building is any building owned or operated by the United States government or any subdivision thereof, or the State of Minnesota or any subdivision thereof, or the City or any other governmental subdivision, or school district or educational institutions . (Article I, Section 2, Paragraph V, amended effective 09/83 . ) 27. Public Property is any real property owned by City other than a street. 28 . Relief Ordinances means the CATV Relief Ordinance as modified by the CATV Relief Ordinance Amendment . 29 . Restated Performance Agreement means that contractual agreement between Grantee, City and SWSCC establishing the terms and conditions under which Grantee will be required to fund and otherwise fulfill its Local Programming requirements and establishing reporting standards and criteria for franchise compliance in other areas. 30. Restructured Local Programming Obligations means Grantee' s access, community access and local origination programming obligations as set forth in the Local Programming Restructuring Ordinance and the Restated Performance Agreement . Compliance with the Restructured Local Programming Obligations shall supersede and be in complete satisfaction of the Local Programming Obligations . 31. Scrambler/Descrambler refers respectively to the equipment installed to the cable communications system' s headend equipment and subscriber terminal used to isolate pay cable and other ancillary service channels from basic service which is accomplished by electronically distorting the signal prior to its transmission through the cable communications system and -3- reconstituting the signal at each authorized location for subsequent display. • 32 . Sidewalk is the portion of a street delineated for pedestrian travel. 33 . Street shall mean the surface of and the space above and below any public street, road, highway, freeway, lane, path, public way, alley, court, sidewalk, boulevard, parkway, drive or any easement or right-of-way now or hereafter held by City which shall, within its proper use and meaning in the sole opinion of City, entitle Grantee to the use thereof for the purpose of installing or transmitting over poles, wires, cables, conductors, ducts, conduits, vaults, manholes, amplifiers, appliances, attachments and other property as may be ordinarily necessary and pertinent to a System. 34 . SWSCC shall mean the Southwest Suburban Cable Commission. 35. Subscriber means any person or entity who subscribes to a service provided by Grantee by means of or in connection with the System regardless of whether a fee is paid for such service . 36 . Subscriber Network shall mean a single trunk 440 MHz cable activated with 54 downstream channels and 4 return or upstream channels, as it may be upgraded from time to time. 37. System means a system of antennas, cables, wires, lines, towers, waveguides or other conductors, converters, equipment or facilities, designed and constructed for the purpose of producing, receiving, transmitting, amplifying and distributing, audio, video and other forms of electronic or electrical signals, located in City. Said definition shall not include any system wholly internal to one or more multiple unit dwellings under common ownership, control or management, and does not use City streets or other public property. In any event, system as defined herein shall not be inconsistent with any definition as set out in state law. 38. User or Local Proarammina User shall mean any person who utilizes the System studio or facilities, whether for a charge or without charge. 1099DAJ -4- • EXHIBIT 4 TO RESTATED PERFORMANCE AGREEMENT Acceptance of Ordinance No. Repealing CATV Relief Ordinance No. 1985-13 and CATV Relief Ordinance Amendment No. 1988-22 and Creating Restructured Local Programming Obligations WHEREAS, pursuant to the Acceptance of a Franchise for a Cable Television System dated , for the City of Richfield (the "Acceptance") , KBL Cablesystems of the Southwest, Inc. (hereinafter referred to as the "Grantee, " including those instances where it is acting as the successor in interest to the rights and obligations of the original franchisee) , the current franchisee under the City' s Cable Communications Franchise ordinance, as amended (the "Franchise") , agreed to be bound by the Franchise, the Offering (as defined in the Franchise) , as amended and Ordinance No. of the City (the "Local Programming Restructuring Ordinance") , and to timely and fully perform and fulfill the terms, provisions, and conditions of the Franchise, the Offering, and the Local Programming Restructuring Ordinance, and the Restated Performance Agreement between the City and Grantee dated , including the contracts attached thereto as Exhibit 2 and 3 (together called the "Restated Performance Agreement") , as amended, and to be bound by the Franchise for the System through December 31, 1999; and WHEREAS, by Ordinance No. dated (the "Local Programming Restructuring Ordinance") , the governing body of the city repealed the CATV Relief Ordinance and CATV Relief Ordinance Amendment replacing certain obligations set forth in these Ordinances while modifying and extending other obligations; and WHEREAS, the Local Programming Restructuring Ordinance requires, among other requirements, that it be accepted in writing by Grantee in form and substance acceptable to the City, and that the Grantee comply with the provisions of Article XIV of the Franchise; and WHEREAS, the City and Grantee have agreed on the form and substance of this Acceptance. NOW, THEREFORE, pursuant to the terms and requirements of the Local Programming Restructuring Ordinance, and in consideration of the adoption of the Local Programming Restructuring Ordinance, Grantee hereby accepts the Local Programming Restructuring Ordinance, together with the Restated Performance Agreement, upon the following terms and makes the following representations and warranties to the City. 1 . Grantee agrees to be bound by the Local Programming Restructuring Ordinance, to the extent the Local Programming Restructuring Ordinance is not inconsistent with state and federal law, including the Cable r Communications Policy Act of 1984 , and to timely and fully perform and fulfill the lawful terms, provisions, and conditions of the Local Programming Restructuring Ordinance. 2 . Grantee agrees to provide, and warrants and represents that it is able to provide, all lawful services and offerings set forth in the Local Programming Restructuring Ordinance. 3 . The reservation of lawful rights contained in paragraphs numbers 1, 2 and .5 hereof shall not modify, enlarge or diminish any lawful rights held by or that would have been held by Grantee, nor shall it modify, enlarge or diminish any lawful rights held by or that would have been held by the City, had this Acceptance and the transactions contemplated by it never taken place. Subject to the specific reservation of rights stated in this paragraph, Grantee states that it does not intend to challenge the legality of the franchise fee and access support contained in the Local Programming Restructuring Ordinance, at least until there is established a sufficient body of applicable law with respect to the lawfulness of franchise fee and access support requirements in cable television franchise agreements . 4 . Grantee further agrees to hold the City and its officers, agents, employees and representatives harmless from and to indemnify against any and all loss, cost, damage and expense, including, without limitation, attorneys ' fees, now or hereafter incurred by it, and its respective officers, agents, employees or representatives, and arising out of or due to, or claimed to arise out of or be due to, the grant of the Local Programming Restructuring Ordinance or the process followed by City in enacting the Local Programming Restructuring Ordinance. 5 . - Grantee agrees that all lawful provisions of the agreements, representations and warranties set forth herein, or in the Local Programming Restructuring Ordinance, shall be binding upon it and its successors and assigns, and shall inure to the benefit of the City and its successors and assigns. 6 . This Acceptance shall be effective upon the satisfaction of the requirements of Section 9 of the Local Programming Restructuring Ordinance. -2- IN WITNESS WHEREOF, Grantee has caused this Acceptance to be duly executed and delivered this day of , 1991 . KBL CABLESYSTEMS OF THE SOUTHWEST, INC. , a Minnesota corporation By Its : STATE OF MINNESOTA) ) ss . COUNTY OF HENNEPIN) The foregoing instrument was subscribed and sworn to before me this day of 1991, by the of KBL CABLESYSTEMS OF THE SOUTHWEST, INC. , a Minnesota corporation, on behalf of said corporation. Notary Public My commission expires : 1210DAJ -3- CONSENT AGREEMENT AND GUARANTY OF PERFORMANCE Parties : City of Edina, a Minnesota municipal corporation (the "City") KBL Cable, Inc. , a Texas corporation ("KBLC") KBLCOM Incorporated, a Texas corporation ("KBLCOM") Effective Date: 1991 Recitals : 1 . Pursuant to the City' s cable communications ordinance, the City granted a cable television franchise (the ordinance and the grant of the franchise are referred to collectively as the "Franchise") to Rogers Cablesystems of Minnesota Limited Partnership, a Minnesota limited partnership in which Rogers Cablesystems of the Southwest, Inc. ("RCTSI") was the general partner. Pursuant to Amending Ordinance No. , the City approved the transfer of the Franchise to RCTSI, subject to the dissolution of Rogers Cablesystems of Minnesota Limited Partnership. The partnership has subsequently been dissolved and the franchise holder, RCTSI, has been renamed KBL Cablesystems of the Southwest, Inc. ("KCTSI") . 2 . KCTSI is a wholly-owned subsidiary of KBL U.S. Cablesystems, Inc. (formerly known as Rogers U.S. Cablesystems, Inc. and hereinafter "KUSCI") , which is a wholly-owned subsidiary of KBL Cablesystems of America, Inc. (formerly known as Rogers Cablesystems of America, Inc. and hereinafter "KCA") , which in turn is a wholly-owned subsidiary of KBL Cable, Inc. ("KBLC") . KBL Cable, Inc. is a wholly-owned subsidiary of KBLCOM Incorporated ("KBLCOM") , which in turn is indirectly wholly-owned by Houston Industries, Inc. 3 . KCTSI and City have agreed to certain modifications to the way in which Local Programming is to be funded and regulated. These terms are set forth in the Local Programming Restructuring Ordinance, Ordinance No. , and the Restated Performance Agreement dated , 1991. The Local Programming Restructuring Ordinance, Restated Performance Agreement and documents entered into in furtherance thereof (collectively, "Documents" ) supersede the CATV Relief Ordinance, Ordinance No. 1121 and CATV Relief Ordinance Amendment, Ordinance No. 1121-A1 which have been repealed and set forth Grantee' s ongoing obligations for Local Programming. 4 . KCTSI and KBLC desire to obtain the City' s consent and approval of the restructured local programming obligations under the Local Programming Restructuring Ordinance and, in consideration therefore and to the extent not inconsistent with state and federal law, including the Cable Communications Policy Act of 1984, KBLC is willing to guarantee, unconditionally, all of the lawful obligations and commitments of KCTSI and its parent companies under the Franchise and other ordinances and agreements between the City and KCTSI and its parent companies . 5. In consideration of the City's consent to and approval of the changes in KCTSI ' s local programming obligations to be effectuated through the Local Programming Restructuring Ordinance, KBLCOM is willing to guarantee the performance of KBLC' s lawful obligations and duties under this Agreement. Agreements: The parties hereto agree as follows: A. Except as specified in this paragraph A, KBLC hereby unconditionally and absolutely guarantees to the City the full, prompt and complete performance of all lawful obligations, duties, and agreements of KCTSI, KUSCI, and KCA, respectively, to the extent not inconsistent with state and federal law, including the Cable Communications Policy Act of 1984, under Acceptance of Ordinance No. Repealing CATV Relief Ordinance No. 1121 and CATV Relief Ordinance Amendment No. 1121-A1 and creating Restructured Local Programming Obligations (the "Acceptance") , all of the ordinances, amending ordinances, agreements, and exhibits referred to and incorporated therein, as the same from time to time may have been amended (collectively referred to herein as the "Guaranteed Documents") . B. KBLCOM hereby unconditionally guarantees to the City the full, prompt and complete performance of all of KBLC' s (and of any successor or assign of KBLC) lawful obligations under this Agreement to the extent not inconsistent with state and federal law, including the Cable Communications Policy Act of 1984 . C. The obligations of KBLC and the guaranty of KBLCOM hereunder shall be absolute, complete, continuing, and irrevocable, and KBLC and KBLCOM shall not be released of their respective obligations and guaranty hereunder so long as any claim of the City against KCTSI arising out of the Franchise, the Guaranteed Documents, or otherwise is not settled or discharged in full . KBLC (or, in the event KBLC defaults on the terms of its obligations, KBLCOM) will pay to the City all reasonable expenses, costs, and attorneys ' fees incurred by the City in protecting or enforcing the City' s lawful rights under this Agreement or any of the Guaranteed Documents, whether suit be brought or not . D. In the event either KBLC or KBLCOM chooses, or is required, to perform in Minnesota KCTSI ' s obligations under this Agreement, KBLC or KBLCOM, as the case may be, shall obtain all authorizations, licenses, permits and regulatory approval -2- necessary to do business in Minnesota and to perform KCTSI ' s obligations under the Franchise. E. In the event KCTSI defaults in the performance of any of its lawful obligations under the Franchise or the Guaranteed Documents, the City shall give written notice of the default to KCTSI pursuant to the terms of Article IX of the Franchise and shall concurrently give the same notice to KBLC and KBLCOM. In the event of such default, and in the event of KBLCOM' s failure to perform its obligations under its guaranty, the City, at its option, may elect to invoke some or all of the provisions of Article IX of the Franchise. The City shall have the right to enforce against KBLC any obligations, agreements, warranties, representations, penalties or performances under this Agreement or the Guaranteed Documents without the requirement that the City follow any different or additional procedures as to KBLC than the City would follow as to KCTSI . KBLCOM agrees that in the event KBLC does not cause KCTSI to cure any default under this Agreement or the Guaranteed Documents within thirty (30) days of receiving notice of the default from the City, the City may, at its election, require KBLCOM to cause to be performed KCTSI ' s obligations . KBLCOM agrees that in the event KBLC does not cure any such default within said thirty (30) days, the City, at its election, may require KBLCOM to cause to be performed KCTSI ' s obligations, at which time the City shall have the same rights and remedies against KBLCOM under this paragraph E as it has against KBLC in the event of any default by KCTSI . F. No right or power of the City hereunder shall be deemed to have been waived by any act or conduct on the part of the City, or by any neglect to exercise such right or power, or by any delay in so doing; and every right or power of the City shall continue in full force and effect until specifically waived or released by an instrument in writing executed by the City. Unless specifically waived or released by the City in writing, the respective obligations and guarantees of KBLC and KBLCOM under this Agreement and under the Guaranteed Documents shall remain unchanged in the event the City either obtains additional guarantees, security, or agreements securing KCTSI ' s performance hereunder, or releases or waives such guarantees, security or agreements . G. Provided KCTSI is a party to any such amendments, renewals, or extensions, KBLC (and KBLCOM with respect to its guaranty of KBLC' s obligations) hereby consents to the Guaranteed Documents being amended, renewed, or extended in writing, with or without notice to KBLC and KBLCOM, and KBLC (and KBLCOM, with respect to its guaranty of KBLC' s obligations) agrees that it will remain the unconditional guarantor of KCTSI ' s obligations under the Guaranteed Documents as so amended, renewed, or extended. H. Each of KBLC and KBLCOM warrants and represents to the City as follows : -3- 1. That it is lawfully incorporated under the laws of Texas and is in good standing in Texas. 2. That it has full right and authority to enter into this Consent Agreement and Guaranty of Performance, and in the event of KCTSI ' s default on any of its lawful obligations to the City in connection with the Franchise, to cause to be performed KCTSI ' s obligations . 3 . That it has taken all corporate action required to authorize the execution and delivery of this Agreement. I . At such time as KBLC and KBLCOM execute this Agreement, each of them shall deliver to the City a certified copy of its Articles of Incorporation and an opinion from its legal counsel stating that it has duly entered into this Agreement with full and proper corporate authority and that, to the extent not inconsistent with state and federal law, including the Cable Communications Policy Act of 1984, this Agreement is enforceable against KBLC and KBLCOM, as the case may be, in accordance with its terms, subject to (i) any applicable bankruptcy, insolvency, reorganization or other laws relating to or affecting creditors ' rights generally, and (ii) general principles of equity (regardless of whether such enforceability is considered a proceeding in equity or law) . Such legal opinion shall be in a form and substance acceptable to the City. J. KBLC shall, at the time it executes this Agreement, fully comply with the terms and conditions of Article XIV, Section 2, of the Franchise. To the extent not inconsistent with state and federal law, including the Cable Communications Policy Act of 1984, KBLC shall cause KCTSI to comply with all of the insurance, letter of credit, and bonding requirements of Article VIII of the Franchise. K. KBLC agrees to indemnify and to hold the SWSCC and the City harmless from (i) any liability or responsibility with respect to KCTSI ' s obligations as set forth in the Documents, and (ii) all reasonable costs, expenses and professional fees of any nature that arise from third-party claims directly resulting from the City' s consent to and approval of the Guaranteed Documents. L. This Agreement shall be governed, interpreted and enforced according to the laws of the State of Minnesota and relevant federal law. In connection with all matters arising out of this Agreement, KBLC and KBLCOM hereby submit to the jurisdiction of the state and federal courts of Minnesota, exclusively. M. This Agreement shall remain in force as long as KCTSI or any subsidiary of KBLC operates or controls the Franchise. -4- N. Any right or remedy granted to the City under this Agreement or the Guaranteed Documents which shall be found to be unenforceable for any reason shall be severable and all remaining rights and remedies shall continue to be valid and enforceable. All rights and remedies of the City shall be separate and cumulative, and the exercise of one shall not limit or prejudice the exercise of any other remedy at the same or at a later time. O. This Agreement shall be binding upon, and inure to the benefit of, the parties and their respective successors and assigns . Any change or amendment to this Agreement shall be valid only if made in a writing duly executed by each of the parties hereto. P. All notices or demands required or permitted to be given in writing under this Agreement shall be deemed to be given when delivered personally to any officer of KBLC or KBLCOM, as the case may be, or the City' s Administrator of the Franchise, or forty-eight (48) hours after such notice or demand is deposited in the United States Mail in a sealed envelope, with registered or certified mail postage prepaid thereon, addressed to the party to which notice is being given, as follows: If to the City: City of Edina 4801 West 50th Street Edina, MN 55424 If to KBLC: KBL Cable, Inc. 800 Gessner Suite 700 Houston, TX 77024-4270 If to KBLCOM: KBLCOM Incorporated 800 Gessner Suite 700 Houston, TX 77024-4270 An address may be changed by a party upon notice to each of the other parties given as provided in this paragraph. CITY OF EDINA By Its Mayor By Its Manager KBL CABLE, INC. By Its -5- KBLCOM INCORPORATED By Its STATE OF MINNESOTA) ) ss . COUNTY OF HENNEPIN) The foregoing instrument was subscribed and sworn to before me this day of , 19 _, by the Mayor of the CITY OF EDINA, a Minnesota municipal corporation, on behalf of said corporation. Notary Public STATE OF MINNESOTA) ) ss . COUNTY OF HENNEPIN) The foregoing instrument was subscribed and sworn to before me this day of , 19 _, by , the City Manager of the CITY OF EDINA, a Minnesota municipal corporation, on behalf of said corporation. Notary Public STATE OF MINNESOTA) ) ss. COUNTY OF HENNEPIN) The foregoing instrument was subscribed and sworn to before me this day of , 19 _, by , the of KBL CABLE, INC. , a Texas corporation, on behalf of said corporation. Notary Public -6- v STATE OF MINNESOTA) ) ss . COUNTY OF HENNEPIN) The foregoing instrument was subscribed and sworn to before me this day of , 19 _, by , the of KBLCOM INCORPORATED, a Texas corporation, on behalf of said corporation. Notary Public 1218DAJ -7- SWSCC MEM4RANpE M 7/24/91 RELIEF EXTENSION REQUEST The following is the summary of an agreement that has been reached between representatives of Paragon Cable and the Southwest Suburban Cable Commission ( "SWSCC" ) at its meeting of July 24 , 1991. Paragon Cable has requested that the Relief Agreement remain in effect until the end of the Franchise term, which is December 31, 1999 (the current termination date for the Relief Agreement is March 1, 1992) . The SWSCC recommends acceptance of the relief extension request, with certain modifications (summarized below) as mutually agreed to by the parties . 1. Franchise Fee. The full 5% Franchise fee would be paid to the Cities beginning August 1, 1992 . According to calculations made by Paragon Cable, the additional 1% Franchise fee that would then be received by the Member Cities from August 1, 1992 through December 31, 1999 would amount 'to approximately two million dollars . 2. _Local Proaramming Overview. The current formula for local programming funding, that is the 1% match between the Cities and the cable company, would remain in effect until July 31, 1992 . The following funding and services would take effect August 1, 1992 : a. Leal Origination Programming. This is currently funded by the Member Cities in the amount of $115, 000 per year for the "Southwest Community News" show. This obligation wi _be assu by aragon -Cable upon expiration of the current contract between Paragon Cable and the Commission. The current date of termination of the contract is November 17-,' 1991. Therefore, Paragon Cabe will start production of the news show after that date and continue to provide production through November 17, 1993 . Thereafter Paragon Cable will spend a minimum of $100,000 from the local programming budget annually on local origination projects. Paragon Cable acknowledges that its spending ( in at least 1992 and 1993) may exceed the figures proposed due to the costs associated with production of the news show. b. Local Programming Funding. The Operating Committee intended that the annual budget would approximate the current level ($115, 000 for the -2- news show and $260,000 for public access) . The negotiations resulted in a funding formula that established a base of $347, 000 in 1992 which will escalate at an annual rate of 5% thereafter. These funds will support both local origination and public access . C. Local Programming Expenses Franchise Fee Calculation. The annual budget for local programming will be deducted from gross revenues prior to calculation of the franchise fee when proposed changes become effective. In other words, the $347, 000 amount will not be included as part of the revenue of Paragon Cable against which the 5% Franchise fee is calculated. d. Other Local Programming Obligations . Paragon Cable will continue to meet the service levels described in the Performance Agreement and Service And Facilities contracts . However, as subscribers (and this funding) increase, it is anticipated that the playback hours will be expanded and additional staff hired as necessary. Paragon Cable will notify the Commission of all plans for service enhancements . e. Local Programming+ Reports. Because Paragon Cable and the Commission and Member Cities will no longer be, in effect, partners in the development of local programming due to the match no longer existing, Paragon Cable will not submit its annual budget to the SWSCC for approval. However, Paragon Cable will certify its local programming expenditures and will provide an overview of local programming services and enhancements in its annual report to the SWSCC. Also, pursuant to the CATV Relief Agreement, Paragon Cable will also provide a preview of the upcoming year ' s activity in its annual business plan. f. Continued Cooperation. It is intended that coordination and cooperation in the production of local programming will continue between the Cities and Paragon Cable. First, Paragon Cable proposes to continue production of the "Southwest Community News" show for a period of at least two (2) years from November 17, 1991 to the end of 1993 . Thereafter, Paragon Cable proposes to allocate at least $100,000 annually to local origination (from the local programming budget) and to discuss program ideas and requests with the Commission. It may well be that both parties will agree to continue the -3- news show through 1999 . It may also be determined that another format or type of weekly show would better serve the Cities. Second, Paragon Cable believes that its local programming staff has made every effort to be responsive to the Cities ' requests for programming. Most programming is developed individually with the Cities and it is recommended that this cooperative effort continue. Lastly, local programming has functioned as a hybrid of public access and local origination . This is necessary to assure production of community events, to assist producers in completing projects, to respond to the myriad of public requests and to maximize the benefit of volunteer activity. Paragon Cable proposes to continue this flexible, needs-based approach to the delivery of local programming services . q. Bill Itemization. Paragon Cable will agree to refrain from separately itemizing local programming charges on customer bills through July 31, 1994 . Thereafter, Paragon Cable will reserve its right to do so. However, in the event Paragon Cable decides to itemize such local programming charges on customer bills after July 31, 1994, the company will provide a sixty day notice to the SWSCC and allow the Commission time to comment. Further, the SWSCC and Member Cities retain the right to legally challenge or object to Paragon Cable ' s itemization. h. Stipulation for Renewal Purvoses . Paragon Cable will agree to enter into a stipulation indicating that, for purposes of Franchise renewal, the levels of support for local programming contained in the Agreement extending the CATV Relief Agreement should be treated as if they were contained in the original Franchise proposal. 3 . Termination of Agreement. It will be understood between Paragon Cable and the Member Cities, that although the Relief Agreement is extended through December 31, 1999, this new Agreement will terminate upon the sale or transfer of the cable system. 4 . Revorting Requirements. The reporting requirements included in the CATV Relief Agreement will be reviewed and revised, as necessary, to assure that -4- meaningful reports are prepared for purposes of the SWSCC's ongoing administration of the Franchise and in preparation for Franchise renewal . In conclusion, the above summary outlines an agreement in principle that was recently approved by the SWSCC. The review of the request for extension of relief has been a highly complex matter. We believe that what is presented in this memorandum provides a simple straight forward approach in resolving any issues or concerns and allows both the Commission and Paragon Cable to achieve their goals . The Commission will continue to keep the Member Cities apprised of the process leading to ordinance amendments in ongoing updates as necessary and appropriate. -5- 548Z124 FREQUENTLY ASKED QUESTIONS REGARDING THE 1991 CATV RELIEF EXTENSION The following are frequently asked questions regarding the 1991 CATV relief extension and answers to these questions: 1. As part of the Relief Extension, can we require that the cable operator provide particular programming to subscribers, such as the Midwest Sports Channel? Response: No. The Federal Cable Act prohibits the franchising authority from requiring that the cable operator designate channel capacity for any particular use, except in the case of public, educational or governmental use. 2. Can we require that the cable operator freeze its rate increases for some period of time, in connection with the Relief Extension? Response: No. The Federal Cable Act prohibits the franchising authority from regulating the rates charged by the cable operator for services, except in certain circumstances which do not apply here. 3. Can the SWSCC and its member cities benefit from the cost savings and ultimate economic return to the cable operator afforded by Relief Extension, by requiring that the cable operator pay a portion of its profit in the event of a sale of its system? Response: It is possible that an agreement with the cable operator to share in system equity could be challenged as a franchise fee, in excess of the 5% limit set under the Federal Cable Act. There have been no court decisions on this issue. Similarly, an agreement requiring a rebate to subscribers, in the event of a profitable sale of the system or on renewal, could also be seen as a franchise fee payment. Given the lack of clarity in this area, it is advisable for the Commission to pursue benefits in other areas, such as local origination programming and outright payment of the full 5% franchise fee. PA RAGO N C A B L E M I N N E S O T A January 30, 1992 Revised Mr. R. D. Kohlstedt 5521 Kellogg Avenue Edina, MN 55424 Dear Mr. Kohlstedt: This letter is to confirm the agreement which we reached during our January 27, 1992, telephone conversation. I found the conversation to be very constructive. I now have a better understanding of past events as they relate to the most recent issues which occurred in October, 1991. We have agreed as follows: 1) By no later than May 15, 1992, Paragon Cable will bury the drop feeding the residence at 5521 Oaklawn. w e] 2) Precautions will be taken to ensure that no It new aerial drops will be attached to the poles 'S,� i I « I I o g 5 located on either the north or south side of (t- P R a4 your property. Any new drops serving resi- dences which are adjacent to your property will be buried. 3) You have agreed that so long as Paragon ab' es by items #1 and #2 above, compliance with these provisions will resolve all ongoing disputes and/or claims concerning Paragon's rights as they relate to your property. If this letter correctly reflects our understanding, please sign and date this letter in the space indicated below, and return it to me in the enclosed pre-addressed, postage-paid envelope. For your convenience, I have enclosed a second executed copy of this letter for your files. 801 Plymouth Avenue North,Minneapolis, Minnesota 55411 612/522-5200 TDD 612/522-4538 FAX 612/521-7 A KBLCOM incorporated company * Mr. R. D. Kohlstedt Page 2 January 30, 1992 Mr. Kohlstedt, I would like to apologize for the delay involved in resolving this situation. However, I think we now have a solid understanding which serves the interest of all concerned and should avoid any future problems. Very truly yours, �� Matt Haviland, Director Engineering & Technical Services MH:jws cc: David A. Jones, Esq. Debra Cottone Jerome Gilligan Ralph Campbell -qa-WbE6� Ophyll D'Costa, Esq. Accepted: R. D. Kohlstedt Date: 92-2486.