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Memorandum <br />North Suburban Cable Commission <br />March 30, 1990 <br />Page 2 <br />E. For capital improvement funding, the company will provide to <br />the Commission $178,000 upon the effective date of the agreement. <br />The company will pay $650,000 upon sale of the system or renewal <br />of the franchise (approximately 1997). The company will pay the <br />Commission $50,000 annually after renewal. <br />F. As operating funds the company will provide $450,000 in 1990, <br />payable quarterly. This amount will be escalated annually by <br />the greater of the cost of living or a special escalator tied to <br />the company's increase in gross revenues whichever is greater. <br />C. Studio and office space: <br />The Commission will sublease from the company the access studios <br />and office space currently at Lake Owasso Elementary School in <br />Roseville. The sublease will be at the preferred rate currently <br />offered by the school district to the company. The studio <br />currently at Edgewood Community Center will be moved to Irondale <br />High School. The company will pay all reasonable costs of <br />relocating the equipment from Edgewood to Irondale. <br />H. The company will reimburse the Commission for all of its <br />expenses during the transfer up to $20,000. <br />I. The company will provide $2,500 to change the logos on the vans <br />and offices and will provide ad insertion time on the other <br />cable channels to promote community programming. <br />J. The Commission will reduce the payment of performance bonds <br />currently in place to $50,000 naming all 10 cities. The bonds <br />shall be replenishable so that if any one city draws on them <br />the bond will be replenished so that $50,000 is available at <br />all times to each of the other cities. The Commission or any <br />Member City in its sole discretion may require the amount of <br />the bond to be increased to up to $250,000. <br />There are other minor nuances to the transfer but these are the general terms <br />and conditions for your City Council. I did not get into some facts about the <br />history of the negotiations but they are in general: <br />1. The company asked to do this at the time they bought the system. <br />The Commission refused to discuss it for 1 year. <br />2. The company's first offer was 45C per month per subscriber and no <br />money for equipment. (That's about $108,000 per year). <br />Page 47 <br />