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                                                                  EXHIBIT 10.1.1
 
                                    CITY OF 

                                   MANITOWOC





                                     CABLE

                                  TELEVISION

                                   FRANCHISE

                                   AGREEMENT
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                               TABLE OF CONTENTS
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<S>             <C>                                               <C>
Section 1.      Definitions.......................................   1

Section 2.      Grant of Franchise................................   4
                (a)   Grant of Authority..........................   4
                (b)   Franchise Area..............................   4  
                (C)   Provision of Service........................   4
                (d)   Police Powers...............................   5
                (e)   Acceptance by Franchisee....................   5
                (f)   Grant Not Exclusive.........................   6
                (g)   Exclusive Service and Certain Ownership
                        Prohibited................................   6
                      (1)   No Exclusive Service..................   6
                      (2)   Other System Ownership Prohibited.....   6
                (h    Familiarity with Franchise Agreement........   6

Section 3.      Franchise Term....................................   6

Section 4.      Franchise Fee.....................................   6
                (a)   Fee.........................................   6
                (b)   Not a Tax or In Lieu of Any Other
                        Tax or Fee................................   6
                (c)   Payments....................................   7
                (d)   Documentation...............................   7
                (e)   Audit.......................................   7
                (f)   No Accord or Satisfaction...................   7

Section 5.      Use of Public and Private Property................   7
                (a)   Public Right of Way Installation............   7
                      (1)   Generally.............................   7
                      (2)   No Vested Rights Created..............   7
                      (3)   Underground and Aerial Construction...   8
                (b)   Subscriber Property Installation............   8
                      (1)   Permission Required...................   8
                      (2)   Subscriber Right to Install...........   8
                      (3)   Consultation with Subscriber..........   8
                      (4)   Consultation on Internal Wiring.......   9
                      (g)   Terms of Extension of Service.........   9
                (c)   No Hindrance to Public Works................   9
                (d)   Relocation of Facilities....................   9
                      (1)   For Government........................   9
                      (2)   For Other Users of Rights of Way......  10
                      (3)   For Third parties.....................  10
                      (4)   Removal or Relocation in Event
                               of Emergency.......................  10
                (e)   Duty to Protect Public and Private Property.  10
                      (1)   Generally.............................  10
                      (2)   Duty to Notify........................  11
</TABLE> 

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<TABLE> 
<S>             <C>                                               <C> 
                (f)   Failure to Move, Replace or Restore.........  11
                (g)   Contractors.................................  11
                (h)   Identification..............................  11
                (i)   Excavation..................................  12
                (j)   Tree Trimming...............................  12
Section 6.      Technical and Construction Requirements...........  12
                (a)   Generally...................................  12
                (b)   Codes and Industry Standards................  12
                (c)   Technical Standards.........................  13
                (d)   Maintenance Policies........................  13
                (e)   Picture Quality.............................  14
                (f)   Interference with Reception.................  14
                (g)   Inspection..................................  14
                (h)   Submission of Plans for System Upgrade......  14
                (i)   Competition of Plans for Upgrade
                        or Change-out.............................  15
                (j)   Location of Physical Facilities.............  15
                      (1)   Franchisee's System...................  15
                      (2)   No Guarantee of Accuracy of Maps......  16
                                                       
Section 7.      Rates and Customer Service........................  16
                (a)   Rates.......................................  16
                (b)   Notice Requirements.........................  16
                      (1)   Prior Notice Required.................  16
                      (2)   Explanation of changes................  16
                      (3)   Effect of Changes without Notice......  16
                (c)   Customer Service............................  17

Section 8.      Systems Facilities, Equipment and Services........  17
                (a)   Cable System Design.........................  17
                (b)   System Facilities and Equipment.............  17
                      (1)   High Quality Equipment................  17
                      (2)   Engineered and Activated Capacity.....  17
                      (3)   Non-duplication Limitation............  17
                      (4)   Parental Control Device...............  17
                      (5)   Subscriber Equipment..................  18
                      (6)   Stereo Capability.....................  18
                      (7)   Emergency Alert.......................  18  
                      (8)   Standby Power.........................  18  
                (c)   Public, Educational and Governmental Use....  19
                      (1)   Channel Capacity......................  19
                      (2)   Institutional Network.................  19
                      (3)   Drops to Public Buildings.............  20
                      (4)   Support of PEG and Local Origination
                              programming.........................  21
                (d)   Leased Use..................................  21
                (e)   Subscriber Services.........................  21
                      (1)   Basic Services........................  21
                      (2)   Categories of Services................  21
                      (3)   Satisfaction of Requirements..........  22

Section 9.      Nondiscrimination.................................  22
                      (a)   No Discrimination in Service or Rates.  22

</TABLE> 

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<TABLE> 
<S>             <C>                                               <C> 
                      (1)   No Discrimination in Service..........  22
                      (2)   No Discrimination for Enforcement
                              of Rights...........................  22
                      (3)   No Redlining..........................  22
                      (4)   No Rate Discrimination................  22
                (b)   Equal Employment Opportunity................  23

Section 10.     Records...........................................  23
                (a)   Maintenance and Access......................  23
                (b)   Location....................................  23
                (c)   Court and Agency Reports and Filings........  23
                (d)   Records Maintained..........................  23
                      (1)   Complaints............................  23
                      (2)   Outage Records........................  24
                      (3)   Service Call Records..................  24
                      (4)   Installation/Connection/Extension
                              Records.............................  24
                      (5)   Maps..................................  24
                      (6)   Technical Tests.......................  24
                      (7)   Financial Records.....................  24
                      (8)   Capital Additions and Retirements.....  24
                (e)   Monthly Reports.............................  24
                      (1)   Service Calls.........................  24
                      (2)   Outages...............................  24
                      (3)   Subscriber Information................  25
                      (4)   Customer Service Statistics...........  25
                (f)   Annual Reports..............................  25
                      (1)   Summary of Activities.................  25
                      (2)   Financial Statement...................  25
                      (3)   Maps..................................  25
                (g)   Format......................................  26
                (h)   Responses to Questions......................  26
                (j)   Maintenance of Records by Others............  26

Section 11.     Transfers.........................................  26
                (a)   Franchisee Ownership........................  26
                (b)   Transactions Involving Facilities...........  26
                (c)   Limitation..................................  27
                (d)   Other Transfers.............................  27
                (e)   What Constitutes a Transfer.................  27
                (f)   Notice of Transfer..........................  27
                (g)   Matters for Consideration...................  27
                (h)   Prohibited Transfers........................  28
                (i)   Securing Debt...............................  28
                (j)   Public Hearing; Time for Consideration......  28
                (k)   Concurrence in Approval.....................  28
                (l)   Effect of Unlawful Transfer.................  29
                (n)   Costs.......................................  29

Section 12.     Indemnification and Insurance.....................  29
                (a)   Indemnification.............................  29
                (b)   Insurance...................................  30
                      (1)   Insurance Required....................  30
</TABLE> 

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<TABLE> 
<S>             <C>                                               <C> 
                      (2)   Endorsements in Favor of 
                              Municipalities......................  30
                      (3)   Evidence of Insurance.................  31
                      (4)   Approval..............................  31
                      (5)   Other Policies........................  31
                      (6)   Additional Insurance..................  31
                                                
Section 13.     Performance Security..............................  31
                (a)   Security Provided...........................  31
                      (1)   Security Fund.........................  32
                      (2)   Performance Bond......................  32
                      (3)   Construction Performance Band.........  32
                      (4)   Use of Funds..........................  33
                      (5)   Notification..........................  33
                      (6)   Inadequate Fund Balance...............  33
                      (7)   Replenishment.........................  33
                      (8)   Disposition...........................  34
                      (9)   Failure to Provide or Maintain
                              Security............................  34

Section 14.     Remedies..........................................  34
                (a)   Availability of Remedies....................  34
                      (1)   Remedies Cumulative...................  34
                      (2)   Remedies Nonexclusive.................  34
                      (3)   Relation to Insurance and Indemnity
                              Requirements........................  34
                (b)   Liquidated Damages..........................  34
                (c)   Revocation..................................  35
                (d)   Procedure...................................  35
                      (1)   Notice................................  35
                      (2)   Review................................  35
                      (3)   Time for Exercise of Certain
                              Remedies............................  36
                      (4)   Payment of Limited Damages............  36
                      (5)   No Waiver.............................  36
                            a. General............................  36
                            b. Waiver Not Implied.................  36
                      (6)   No Recourse...........................  37

Section 15.     Effect of Termination; Continuity of Service......  37
                (a)   When Terminated.............................  37
                (b)   Removal of System Upon Termination..........  37
                (c)   Continuity of Service.......................  37
                (d)   Duty to Assure Continuity of Service........  37
                (e)   Failure to Operate..........................  37
                      (1)   Effect of Failure.....................  37
                      (2)   Injunctive Relief Shall Be Granted....  38
                (f)   Option to Purchase..........................  38
                      (1)   When Exercisable......................  38
                      (2)   How Exercisable.......................  38
                      (3)   Purchase Price Upon Expiration........  38
                      (4)   Purchase Price on Termination
                              for Cause...........................  38
</TABLE> 

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<TABLE> 
<S>             <C>                                               <C> 
Section 16.     Other Provisions..................................  39
                (a)   Severability................................  39
                (b)   Effect of Change in Law.....................  39
                (c)   Notices.....................................  39
                (d)   Governing Law...............................  40
                (e)   Time of Essence.............................  40
                (f)   Force Majeure...............................  40
                (g)   Public Emergency............................  40
                (h)   Construction................................  40
                (j)   Compliance with Laws........................  41

APPENDIX A      CUSTOMER SERVICE STANDARDS........................  42

Section 1.      Local Office and Telephone Service................  42
                (a)   Local office................................  42
                (b)   Telephone Service...........................  42
                (c)   Courtesy....................................  42
Section 2.      Respond to Service Calls and Other Inquiries......  42
                (a)   Service Calls - Outages.....................  42
                (b)   Service Calls - Other.......................  42
                (c)   Appointments................................  43
                (d)   Response to Inquiries.......................  43
                (e)   Installation Requests.......................  43
                (f)   Performance Standards.......................  43
                (g)   No Repair Charge............................  44
                (h)   Subscriber Remedies.........................  44
                (i)   Converter Return............................  44

Section 3.      Information to Subscribers........................  44
                (a)   General Information.........................  44
                (b)   Annual Privacy Notice.......................  44
                (c)   Changes in Policy...........................  45
                (d)   Copies......................................  45
                (e)   Promotional Materials.......................  45
                (f)   Subscriber Remedy...........................  45

Section 4.      Disconnection/Downgrade...........................  45
                (a)   Subscriber's Right to Disconnect............  45
                (b)   No Disconnect Charge........................  45
                (c)   Reconnection................................  46
                (a)   Involuntary Subscriber Disconnection........  46
                (e)   Improper Disconnection......................  46
                (f)   Subscriber Remedy...........................  46

Section 5.      Complaint Procedures..............................  46
                (a)   Simple Procedure to be Adopted..............  46
                (b)   Response to Complaint.......................  46
                (c)   Notice to Complainant.......................  46

Section 6.      Billing Practices and Customer Charges............  47
                (a)   Itemized Bills..............................  47
                (b)   Unsolicited Goods or Service................  47
                (c)   Deposits....................................  47
                (d)   Late Fees and Administrative Charges........  47
</TABLE> 
                    

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<S>             <C>                                               <C> 
Section 7.      Refunds...........................................  47
                (a)   Refunds for Outages.........................  47
                (b)   Termination During Pre-Paid Period..........  48
                (c)   Refunds/Timing..............................  48
                (d)   Privacy.  Operator Must Protect Privacy.....  48
                (e)   No Penalties for Exercise of Privacy
                        Rights....................................  48
</TABLE> 

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                      CABLE TELEVISION FRANCHISE AGREEMENT


     This Cable Television Franchise Agreement is made and entered into as of
the 1st day of January, 1997 by and between the City of Manitowoc, Wisconsin, a
municipal corporation ("City") and Cable TV Joint Fund 11, a Colorado joint
venture ("Franchisee") .

     WHEREAS, Franchisee has asked the City to renew the Franchise it holds to
provide cable service to the City; and

     WHEREAS, the City has conducted meetings, conducted a survey and performed
other studies to assess subscriber satisfaction with Franchisee; to identify the
future cable-related needs and interests of the community, and to consider the
financial, technical and legal qualifications of the Franchisee; and

     WHEREAS, the City has determined that it is in the public interest to renew
the Franchise held by Franchisee, subject to certain terms and conditions,
including that the proposed franchise is nonexclusive and that the Franchisee
complies with applicable state and federal law and regulations; and

     WHEREAS,  Franchisee has concluded that the terms and conditions under
which the City is willing to renew the Franchise are reasonable to meet the
future cable-related needs and interests of the community, and it desires to
have its franchise renewed subject to those terms and conditions; and has
represented that it has the required financial, legal and technical ability to
satisfy all the requirements of the Franchise, as well as all applicable laws
and regulations; and

     WHEREAS, the City has authority under federal law and under state law,
including Wis. Stat. (S)66.082 to grant a cable television franchise; and

     WHEREAS, the City is willing to grant a cable television Franchise to the
Franchisee, subject to the terms and conditions set forth herein and Franchisee
accepts the cable television Franchise, subject to those terms and conditions;

     NOW, THEREFORE, the parties hereto agree as follows:

     Section 1.  Definitions.  For purposes of this Agreement, the following
     ---------   -----------
terms, phrases, words and abbreviations shall have the meanings as provided in
this Section. Terms not defined in this section shall have the same meaning as
in Chapter 27 of the Municipal Code, and if not defined there, the same meaning
as in the Cable Act or in FCC regulations, and if not defined there, shall have
their ordinary and common meaning. Where not inconsistent with the context,
words used in the present tense include the future tense, words in the plural
number include the

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singular number, and words in the singular number include the plural number.

     (a) "Affiliate" means a person which owns or controls, is owned or
controlled by, or is under common ownership or control with the Franchisee.

     (b) "Basic Service"  means any cable service tier which includes the
retransmission of local television broadcast signals.

     (c) "Cable Act" means the Cable Communications Policy Act of 1984,
47 (S)(S)521 et seq., as amended.
                 ------
     (d) "Cable Ordinance" shall mean Chapter 27 of the City of Manitowoc
Municipal Code, as it may be amended.

     (e) "Cable service" means (1) the one-way transmission to Subscribers of
video programming or other programming service, and (2) Subscriber interaction,
if any, which is required for the selection or use of such video programming or
other programming service.

     (f) "Cable System" or "System" means the facility consisting of a set of
closed transmission paths and associated signal generation, reception, and
control equipment or other communications equipment that is used by the
Franchisee to provide Cable Service. The term includes the Cable System as a
whole, or any part of the Cable System, including but not limited to any
electronic devices, poles, guys, converters, remote controls, wires and other
appliances and property necessary or appurtenant to the operation of the Cable
System.

     (g) "City" shall mean the City of Manitowoc, Wisconsin, a municipal
corporation.

     (h) "FCC" means Federal Communications Commission, or successor
governmental entity thereto.

     (i) "Franchise" means the right granted by the City through this Franchise
Agreement to the Franchisee, subject to the provisions of the Cable Ordinance,
to construct, maintain and operate a cable system under, on and over Streets,
within the Franchise area for the purposes set forth herein. The term does not
include any license or permit that may be required by applicable laws or
regulations for the privilege of transacting and carrying on a business within
the City, for disturbing the street, for using municipally-owned poles or
conduits, or for engaging in any other activity related to the construction,
operation or repair of the cable system, such as tree-trimming.

     (j) "Franchise Area" shall mean the corporate boundaries of the City, as
altered from time to time.

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     (k) "Franchisee" shall mean cable TV Joint Fund 11, a Colorado joint
venture.

     (1) "Franchise Agreement" or "Agreement" means this contract and any
amendments, exhibits or appendices hereto.

     (m) "Gross Revenues" shall mean all cash, credits, property of any kind or
nature or other consideration derived directly or indirectly from or
attributable to the operation of the Cable System to provide Cable Services.
The term includes all revenues derived by the Franchisee, its subsidiaries, or
any other person, firm, partnership or corporation in which the Franchisee has a
financial interest or which has a financial interest in the Franchisee arising
from or attributable to operation of the Cable System.  The term includes but
is not limited to:

     (1) Revenue from all charges for entertainment and nonentertainment
services provided to Subscribers or others, including late fees, downgrading
charges and all similar charges;

     (2) Revenue from advertising of any kind;

     (3) Revenue from all charges for leased access or use of studios or other
facilities;

     (4) Revenue from all charges for the installation, connection and
reinstatement of equipment;

     (5) Revenue from the sale, exchange or cablecast of any programming for any
use;

     (6) Revenue from the sale or use of any Subscriber of the cable
Franchisee's Subscriber list;

     (7) Revenue from home shopping channels; or

     (8) Any other revenues derived directly or indirectly from operation of the
cable System to provide Cable Services.

     Gross revenues shall include the value at retail price levels of any goods,
services or other renumeration in nonmonetary form received by the Franchisee or
related parties described above in consideration of the performance of any
advertising or other service on the Cable System, but shall not include
uncollected billings. Gross Revenues shall not include (i) any taxes on services
furnished by Franchisee which are imposed upon any subscriber or user (as
opposed to Franchisee) by the State, County, City or other government unit and
which the Franchisee is required to collect; (ii) programming revenues of any
Affiliate of Franchisee whose programming is carried on the System where such
revenues are paid to said Affiliate by the Franchisee and recovered by the
Franchisee through charges to subscribers that are included

                                      -3-
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in Gross Revenues; and (iii) revenues of any Affiliate from the sale of
merchandise, including subscriptions to periodicals, as a result of or due to
advertising on the System, so long as reasonable and customary advertising
revenues or home shopping revenues are imputed to the Franchisee and included in
Gross Revenues.

     (n) "Laws and Regulations" shall mean state, local or federal ordinances,
resolutions, codes, regulations and all other legislative and administrative
actions as the same may exist or be hereafter amended.

     (o) "Person" means an individual, partnership, association, joint stock
company, trust, corporation, or governmental entity.

     (p) "Street" shall mean the surface of, and the space above and below, any
public street, highway, freeway, bridge, land path, alley, court, boulevard,
sidewalk, parkway, way, lane, public way, drive, circle, or other public right-
of-way, including but not limited to, public easement, dedicated strip, or
public rights-of-way now or hereafter held by the City and dedicated for
compatible uses that, consistent with the terms, conditions and provisions
pursuant to which the same was created or dedicated, properly may be used by
Franchisee for the purpose of operating its cable System.

     (q) "Subscriber" means a person or user of the cable System who lawfully
receives Cable Services or other service from the Franchisee.

     Section 2.  Grant of Franchise.
     ---------   ------------------

     (a) Grant of Authority.  Subject to the terms and conditions of this
         ------------------
Agreement, and the provisions of the Cable Ordinance, Franchisee is given a
nonexclusive franchise to construct, operate and repair in, upon, along, across,
above, and over Streets in the City, a Cable System for the purpose of providing
Cable Service. No privilege or power of eminent domain is bestowed by this
grant. This Agreement does not confer rights other than as expressly provided
herein.

     (b) Franchise Area.  This Franchise is issued for the entire present
         --------------
territorial limits of the City as altered from time to time .

     (c)  Provision of Service.    The Franchisee's Cable System shall pass all
          --------------------
residences now located or hereafter constructed in the Franchise Area as it
exists on the date of execution of this cable Television Franchise Agreement
provided there are at least twenty  (20) residential units per mile or prorated
part thereof from any existing point on the cable system.   During the term of
the Franchise, and subject to the density requirement specified in

                                      -4-
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this section, the Franchisee shall provide cable services to any business or
residence upon request, in accordance with the terms and conditions of the
Franchise and applicable laws and regulations on the same basis and subject to
the same charges it makes to existing cable Subscribers. In the case of areas
annexed to the City during the term of this Agreement, cable services shall be
extended to pass all newly annexed residences within One hundred twenty (120)
days following the effective date of annexation, for any such residences where
there are at least twenty (20) residential units per mile or prorated part
thereof from any existing point on the cable system. Customers in such newly
annexed areas shall not be required to share in the costs associated with
extension of service except as provided in Section 5(b) (5). In newly annexed
areas not meeting the twenty (20) units per mile requirement, the Franchisee
shall provide, upon the request of any potential subscriber or subscribers
desiring service, an estimate of the costs required to extend service to said
subscriber or subscribers. The Franchisee shall then extend services upon the
request of said potential subscribers and receipt of payment of the estimated
amount or other assurance of payment of the estimated amount as may be
satisfactory to the Franchisee. The amount paid by any subscribers or potential
subscribers for this early extension shall be nonrefundable, and, in the event
the area subsequently reaches the density required for mandatory extension, such
payments shall be treated as consideration for early extension. The Franchisee,
may, at its option, extend service to any newly annexed area even when not
required to do so hereunder.

     (d)  Police Powers.  All rights and privileges granted herein are subject
          -------------
to the police powers of the City and its rights under applicable laws and
regulations to regulate the Franchisee and the construction, operation, or
maintenance of its cable System, including but not limited to, the right to
adopt and enforce additional ordinances and regulations as the City shall find
necessary in the exercise of its police powers; the right to adopt and enforce
applicable zoning, building and permitting and safety codes; and any right the
City has to adopt and enforce laws and regulations including cable television
consumer protection laws and service standards pursuant to the Cable Act.

     (e)  Acceptance By Franchisee.  By accepting the Franchise, Franchisee: 
          ------------------------
(1) acknowledges and accepts the City's legal right to issue and enforce the
Franchise; (2) accepts and agrees to comply with each and every provision of
this Franchise Agreement and applicable laws and regulations to which its
franchise is subject; and (3) agrees that the Franchise was granted pursuant to
processes and procedures consistent with applicable law and agrees it will not
raise any claim challenging the enforceability of any provision of the Cable
ordinance, as it existed on the effective date of this franchise or the
Franchise Agreement, whether based on any state or federal constitutional
grounds or otherwise.

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     (f)  Grant Not Exclusive.  The parties hereto agree and acknowledge that
          -------------------
the Franchise granted by the City in this agreement  is  nonexclusive    The
City may grant additional franchises to other providers of Cable services or
other services that may be provided over a Cable System.  In addition, the
parties hereto specifically acknowledge that the City itself has considered
installing and operating a municipally owned cable television system in the City
of Manitowoc.

     (g)  Exclusive Service and Certain Ownership Prohibited.
          --------------------------------------------------

          (1)  No Exclusive Service. The Franchisee may not demand the exclusive
               --------------------
right to serve a person or location as a condition of extending service.

          (2)  Other System Ownership Prohibited.  The Franchisee is prohibited
               ---------------------------------
from controlling or having any ownership interest in any other cable system in
the City during the term of this Franchise .

     (h)  Familiarity with Franchise Agreement.  The City and Franchisee hereby
          ------------------------------------
acknowledge that they have participated in the negotiation and drafting of this
Franchise Agreement and that accordingly no court construing this agreement
shall construe it more stringently against one party than against the other.

     Section 3.  Franchise Term.  This Franchise Agreement shall take effect at
     ---------   --------------
12:01 A.M. on January 1, 1997, immediately upon expiration of the existing Cable
Television Franchise. This Franchise Agreement shall expire at 12:00 midnight on
December 31, 2001 unless it is earlier terminated by revocation, cancellation or
otherwise as provided for herein, or is declared void. The Franchisee shall
continue to be bound by the terms of the existing cable television franchise
until the expiration of that franchise.

     Section 4.  Franchise Fee.
     ---------   -------------

     (a)  Fee.   As compensation for use of the Streets,  the Franchisee shall
          ---
pay to the City an annual amount equal to five (5%) of Gross Revenues as defined
herein, the records with respect to which shall be maintained separately from
records for franchises issued by other communities.

     (b)  Not a Tax or In Lieu of Any Other Tax or Fee.  The Franchise Fee is 
          --------------------------------------------
not a tax, and is in addition to any and all other tax liabilities, special
assessments, permit fees or other fees, charges or taxes, except to the extent
such fees, taxes or assessments must be treated as a Franchisee Fee under
Section 622 of the Cable Act, 47 U.S.C. (S)542.

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      (c)  Payments.  Payments of the Franchisee Fee shall be computed and paid
           --------
quarterly and shall be due and payable no later than forty five (45) days after
the end of each quarter. Payment shall be due on or before February 15, 1997 for
all unpaid franchise fees under the predecessor franchise, and extensions
thereof, computed through December 31, 1996. Payments thereafter shall be for
each calendar quarter.

      (d)  Documentation.  Each payment shall be accompanied by a report,
           -------------
certified under oath by an officer of the Franchisee, showing the basis for the
computation and such other relevant facts as the City may require. The report
shall show as a line item every source and the amount of Gross Revenue of the
Franchisee, and its Affiliates to the extent the Affiliates derive revenue from
the Cable System.

      (e)  Audit.  At any time, upon reasonable notice, the City may audit all
           -----
records of the Franchisee, its Affiliates, or any other entity that constitutes
a cable operator of the Cable System, as the City deems necessary or appropriate
to determine whether the payments have been made accurately and completely. If
it is determined that the Franchisee has not paid the full Franchise Fee owed,
and the amount owed is $250 or more, the cost incurred in conducting any audit
and other costs incidental to the enforcement of the Franchisee Fee provisions
shall be recoverable from the Security Fund. Any such cost shall not be
considered part of the Franchise Fee, but a cost of enforcing the Franchisee
under 47 U.S.C. (S)542 (g) (2) (D).

      (f)  No Accord or Satisfaction.  The acceptance of any payment shall not
           -------------------------
be construed as an accord that the payment is in fact that correct amount, nor
shall such acceptance of payment be construed as a release or satisfaction of
any claim the City may have for further or additional sums payable under the
provision of this Franchise.

      Section 5.  Use of Public and Private Property.
      ---------   ----------------------------------

      (a)  Public Right of Way Installation.
           --------------------------------

           (1)  Generally.  The Franchisee's Cable System shall only be
                ---------
installed on existing pole facilities that Franchisee may use under a valid pole
attachment agreement or order of the City, on the property of a Subscriber, in
compatible easements that Franchisee is entitled to use, under or over the
Streets of the City or on the property of the Franchisee. Installation of new
poles in the Streets is forbidden without the prior written consent of the City.

           (2)  No Vested Rights Created.  A Franchisee's placement of its Cable
                ------------------------
System pursuant to its Franchise shall not be deemed to give that Franchisee a
property or other interest in any

                                      -7-
<PAGE>
 
particular location within the Streets, or a preference over any other entity
authorized to use such property.  The City reserves the right in its reasonable
discretion to designate where a Cable System is to be placed within the Streets.

          (3)  Underground and Aerial Construction.  In all areas of the City
               -----------------------------------
where the cable or wire distribution facilities of the local exchange carrier
and the electric company are installed, or are to be installed, underground the
Franchisee shall install its Cable System underground. Without limitation, where
telephone and electric distribution drops are required to be located
underground, cable drops shall be underground.

     In all areas of the City where the distribution lines of the local exchange
carrier and the electric utility were aerially placed at the time of
construction of the cable system, if such lines are subsequently relocated
underground, the Franchisee shall, at that same time, relocate its Cable System
underground, provided that, if the subscriber requests it, and if consistent
with applicable laws and regulations, the Franchisee need not relocate drops to
the home underground.

     (b)  Subscriber Property Installation. 
          --------------------------------

          (1)  Permission Required. No cable, line, wire, amplifier, converter
               -------------------
or other piece of equipment owned or controlled by the Franchisee shall be
installed on private property by the Franchisee without first securing the
permission of the owner or tenant in possession of such property or the written
permission of the holder of any easement for utility lines or similar purposes,
except as expressly authorized by federal law. Except in emergency situations,
the Franchisee may not enter onto private property for the purpose of
installing, repairing or replacing equipment without giving advance notice, and
may not enter into a home or multiple dwelling unit for those purposes without
an appointment with the occupant of the property. The provisions of this
subsection represent permission requirements by the City. These requirements are
not meant in any way to replace any property rights of owners or occupants to
restrict access to their own property.

          (2)  Subscriber Right to Install.  A subscriber may install its own
               ---------------------------
internal wiring, or contract to have wiring installed, and the Franchisee must
use that wire unless the installation does not meet applicable FCC standards or
applicable safety codes.

          (3)  Consultation with Subscriber.  The Franchisee shall consult with
               ----------------------------
the Subscriber and the landowner with regard to point of entry of the drop
connection to the structure and shall consult with the Subscriber or landowner
before such point of entry is made. It shall follow any instructions received
unless it is not

                                      -8-
<PAGE>
 
possible to do so in accordance with applicable safety codes.

          (4)  Consultation on Internal Wiring.  The Franchisee shall likewise
               -------------------------------
consult with the Subscriber and landowner and follow the instructions received
with respect to internal wiring installed by the Franchisee. In any event,
internal cable runs shall be made as unobtrusively as possible.

          (5)  Terms of Extension of Service.  The Franchisee shall extend
               -----------------------------
service upon request without charging any fee beyond then-prevailing
installation charges except that:

          a.   In cases where service has been extended on the street past a
residence or business, but the drop from the nearest point on the Cable System
from which service could be provided to the home exceeds 150 feet, the
Franchisee may require the Subscriber to pay the difference between the cost of
labor and materials required to install a 150 foot drop to that home and the
actual cost of labor and materials required to install the drop to that home.

          b.   Where drop connections could be aerial, the Franchisee shall
place the drops underground at the Subscriber's request, if the Subscriber
agrees to pay the actual difference in labor and materials between the cost of
installing an underground drop instead of an aerial drop.

     (c)  No Hindrance to Public Works.  Without limiting the City's rights
          ----------------------------
under any other provision herein, it is specifically agreed that the rights and
privileges granted hereby shall not be in preference or hindrance to the right
of the City, or other authority having jurisdiction, to change or alter the
grade, to sell or vacate any Street or other Public Property; to construct,
operate or maintain or move any building, line, pipe, conduit, ditch, sewer,
playground or other public improvement, work, utility, structure, system or
facility; or to protect public health and safety and property.

     (d)  Relocation of Facilities.  Without limiting the rights of the City or
          ------------------------
the rights of others under Section (a) and (b), the following rules shall
govern:

          (1)  For Government.  The Franchisee shall remove, relay and relocate
               --------------
its Cable System at its own expense whenever the City or any authorized
governmental body, including Manitowoc Public Utilities so requires, including
for reasons of traffic conditions; public health and safety and protection of
property; or because the City or authorized governmental body elects to change
or alter the grade, or sell or vacate any Street or Public Property; to
construct, operate, repair or move any building, line, wire, cable, pipe,
conduit, ditch, sewer, playground or other public improvement, work, utility,
structure, system or facility; which

                                      -9-
<PAGE>
 
change, alteration, sale, vacation, movement, construction, operation or repair
will be aided by removal, relaying or relocation of the Franchisee's cable
System. The Franchisee shall be given written notice requesting the removal,
relaying or relocation of its cable System as soon as practicable, but at least
twenty (20) days in advance of the date removal, relaying or relocation of the
cable System must be completed.

          (2)  For Other Users of Rights of Way.  If any removal, relaying or
               ---------------------------------
relocation is required to accommodate the movement, construction, operation or
repair of the facilities of another person that is authorized to occupy the
streets, Franchisee shall remove, relocate or relay its cable system within
twenty (20) days after receiving written notice from such person that such
removal, relocation or relaying is required. The reasonable cost of Franchisee
compliance with respect to any such request shall borne by the person requesting
such compliance and the Franchisee may require payment in advance.

          (3)  For Third Parties.  The Franchisee shall, upon the request of any
               -----------------
Person holding a building moving permit issued by the City, temporarily raise,
lower, relay, relocate or remove its wires, cables and other facilities to
accommodate the moving of the building. The reasonable cost of such temporary
raising or lowering, relaying, relocation or removal of the Franchisee's
facilities shall be paid by the Person requesting the same, and the Franchisee
shall have the authority to establish the reasonable cost of such changes and
require such payment in advance. The Franchisee shall temporarily move its
System as required under this Section if required payments are made and the
Franchisee is given at least seven (7) days advance written notice to arrange
for such temporary changes.

          (4)  Removal or Relocation in Event of Emergency.  In event of
               -------------------------------------------
emergency, or where Franchisee's Cable System creates or is contributing to an
imminent danger to health, safety or property, City may remove, relocate or
relay that Cable System without prior notice. Any costs related to such activity
shall be borne by Franchisee.

     (e)  Duty to Protect Public and Private Property.
          -------------------------------------------

          (1)  Generally.  Franchisee shall construct, operate and maintain its
               ---------
System with due care for the safety and integrity of persons and property, and
shall use appropriate safety devices, warning signs, barricades and lights to
prevent harm to persons or property. It is the duty of Franchisee to protect, at
its expense, public and private property from damage caused by the construction,
operation and repair of its cable System, and to promptly repair damage caused
by the construction, operation and repair of its cable System. Unaesthetic or
poor workmanship shall be considered "damage". Property damaged shall be
repaired to a condition at

                                      -10-
<PAGE>
 
least as good as existed before the damage occurred within ten (10) days of the
damage. The Franchisee shall at all times comply with the requirements of 
47 U.S.C. 541(a) (2) (A) - (C) .

          (2)  Duty to Notify.  The Franchisee shall notify any person whose
               --------------
property is damaged by the Franchisee within four (4) hours of the time the
damage is discovered. If the Franchisee is unable to make personal contact
within four (4) hours, the Franchisee may provide notice by placing a door
hanger on the property. At a minimum, this section requires the Franchisee to
place a prominent notice in a prominent place on the damaged property, and to
make diligent efforts to contact the property owner or resident by phone or in
person.

     (f)  Failure to Move, Replace or Restore.  If the Franchisee fails to
          -----------------------------------
remove, relay or relocate its Cable System as required or within the time period
specified in section 5 (d); or if the Franchisee fails to restore, repair or
replace Public Streets or Public Property as required and within the time period
specified in Section 5 (e); the City may perform the work or hire someone to
perform the work, and the Franchisee shall compensate the City for all
reasonable expenses it incurs. In the event the Franchisee fails to restore,
replace or repair private property as required and within the time period
specified by Section S (e), the owner may perform the work itself or hire
someone to perform the work, and the Franchisee shall compensate the owner for
all reasonable expenses incurred. If the Franchisee fails to protect or restore
Streets or public property as required by the Franchise, the City may do so, and
the Franchisee shall compensate the City for all reasonable expenses incurred
thereby. The Franchisee shall pay expenses incurred by the City or property
owner within thirty (30) days of receipt of an itemized account of such
expenses.

     (g)  Contractors.  All Franchisee's contractors or subcontractors shall be
          -----------
properly qualified and licensed, and each contractor or subcontractor shall have
the same obligations with respect to its work as Franchisee would have under its
Franchise and applicable laws and regulations if the work were performed by the
Franchisee. The Franchisee shall be responsible for training and testing, if
necessary, the knowledge of all contractors and subcontractors (including
installers). The Franchisee is also responsible for ensuring that the work of
its contractors and subcontractors is performed consistent with its Franchise
and applicable laws and regulations, shall be fully responsible for all acts or
omissions of its contractors or subcontractors and shall be responsible for
supervising and promptly correcting acts or omissions by any of its contractors
or subcontractors.

     (h)  Identification.  The Franchisee shall ensure that all of its vehicles,
          --------------
employees, agents and contractors are clearly identified to the general public
as being associated with the Franchisee. Any employee, agent or contractor of
the Franchisee

                                      -11-
<PAGE>
 
must present a picture identification before entering a Subscriber's home.

      (j)  Excavation.  All excavation shall be performed so as to create the
           ----------
least convenience to public, and in accordance with permits issued by the City.
The City shall have the right to supervise all excavation.

      (j)  Tree Trimming.  The Franchisee shall be responsible for the trimming
           -------------
of any trees required by the location of its wires. The Franchisee shall not,
however, remove any tree or trim any portion, either above, at or below ground
level, of any tree within any street, highway or other public right-of-way
without the prior consent of the City's Parks and Recreation Department. The
City shall have the right at its option to do the trimming requested by the
Franchisee at the cost of the Franchisee, or to require the Franchisee to do
the same. Regardless of who performs the work requested by the Franchisee, the
Franchisee shall be responsible for and shall defend and hold the City harmless
for any and all damages done to any tree as a result of any trimming, or to the
land surrounding any tree, whether such tree is trimmed or removed. The
requirements herein shall be in addition to any consents the Franchisee is
required to obtain under the Wisconsin Statutes or any other authority.

      Section 6.  Technical and Construction Requirements.
      ----------   --------------------------------------

      (a)  Generally.  The construction, operation and repair of Franchisee's
           ----------
Cable System shall be performed in a safe, thorough and reliable manner using
equipment of good and durable quality. The construction, operation and repair of
the Cable System shall be performed by experienced personnel familiar with their
responsibilities under this Franchise, applicable laws, construction standards
and safety codes. The Franchisee shall at all times have sufficient, trained
personnel on site in the Franchise Area to satiety all its obligations under
this Franchise (including under the Customer Service Standards set forth in
Appendix A hereto) and applicable laws and regulations. In addition to all other
obligations, Franchisee must repair or cure as soon as possible any defect with
its System where such defect presents a hazard or danger to the public or
Subscribers.

      (b)  Codes and Industry Standards.  Franchisee shall construct, operate
           -----------------------------
and maintain its system in accordance with all applicable laws and regulations,
including but not limited to, federal, state and local building, zoning and
other land use, and safety laws, codes and regulations now in effect or
hereafter adopted. Without limiting the foregoing, the City, after consultation
with the Franchisee, may direct the Franchisee to follow standards for
construction, operation or repair of the Cable System as required to ensure that
work continues to be performed in an orderly and workmanlike manner, or to
reflect changes in

                                      -12-
<PAGE>
 
standards which may occur over the term of a Franchise. In any event, the
construction, operation and repair of the Franchisee's Cable System shall at all
times be in accordance with the requirements of the:

      (1)  National Electrical Code;
      (2)  National Electrical Safety Code
      (3)  Rules and Regulations of the Federal Communication Commission, Parts
           76 and 78.
      (4)  Obstruction Marking and Lighting, AC 70/7460-IE-Federal Aviation
           Administration.
      (5)  OSHA Safety and Health Standards.
      (6)  NCTA Standards of Good Engineering Practices, NCTA 008-0477 EIA
           Standard RS-222C "Structural Standards for Steel Towers and Antenna
           Supporting Structures."

      (c)  Technical Standards.  The Franchisee shall strive to attain the best
           --------------------
possible technical performance for the system. At a minimum, throughout the term
of the franchise, the cable System shall meet or exceed the technical standards
set forth in 47 C.F.R. (S)76.601 or other applicable federal regulations and
under applicable state or local law, as the same may be amended from time to
time. The City may enforce those standards consistent with applicable law. In
addition, the City may regulate technical standards for the Cable System to the
extent it may do so consistent with federal and state law or regulation,
provided, however, that nothing in this subsection (c) nor any act of compliance
by Franchisee shall be deemed a waiver of any objection that Franchisee may make
to any action by the City asserting regulatory authority over technical
standards or the enforcement of such standards in contravention of federal law.

      (d)  Maintenance Policies.
           ---------------------

          (1)  Subject to other provisions of this Section 6 (d) , the
Franchisee shall promulgate and adhere to a preventive maintenance policy
directed toward maximizing the reliability (mean-time-between malfunctions) and
maintainability (mean-time-to-repair) of the Cable System.

          (2)  The Franchisee shall perform scheduled maintenance so as to
minimize the extent of any interruption of service and so that such interruption
occurs, if possible. at the time of lowest television use. Except in emergency
situations, service may only be interrupted after a minimum of forty-eight (48)
hours advance notice to Subscribers and the City of the anticipated service
interruption, provided. however, that planned maintenance which is not expected
to require more than two hours interruption of service and which occurs between
the hours of midnight and 6:00 a.m. shall not require such notice, except to
institutional users (including schools) , which must receive at least oral
notice the last business day before the planned interruption. The institutional
users may

                                      -13-
<PAGE>
 
designate a person or office to receive notice.

          (3)  In the course of maintaining its Cable System, the Franchisee
shall use replacement components of good and durable quality, with
characteristics better than or equal to the replaced equipment and that at least
satisfy all federal, state and local requirements.

          (4)  The Franchisee shall identify and provide the telephone number
for a senior employee or employees whom the City can contact whenever the
business office is closed.

          (5)  The City shall have the right to inspect the Cable System and
Franchisee's equipment used in the construction, operation or maintenance of
that System at any time upon reasonable notice.

     (e)  Picture Quality.  The cable System shall deliver to the Subscriber's
          ----------------
terminal a signal that is capable of producing a black-and-white or colored
picture without visual material degradation.

     (f)  Interference with Reception.  The Cable System shall transmit or
          ----------------------------
distribute signals without causing objectionable cross-modulation in the cables
or interfacing with other electrical or electronic networks or with the
reception of other television or radio receivers in the area not connected to
the network.

     (g)  Inspection.  The City shall have the right to inspect the Cable System
          -----------
and Franchisee's equipment used in the construction, operation or maintenance of
that System at any time upon reasonable notice.

     (h)  Submission of Plans for System Upgrade.  If, during the Franchise
          ---------------------------------------
term, the Franchisee upgrades its Cable System, or changes out any component
across the Cable System, it shall submit a plan to the City for its review at
least 90 days before the upgrade or change-out is to commence. The plan, at a
minimum shall describe:

          (1)  The nature of the upgrade or change-out; the expected duration of
the work; why it is being done and the alternatives considered; the manner of
performance of the work, including any back-up or contingency plans, the
potentially beneficial and negative effects of the upgrade or change-out on the
City, the public, and subscribers; the steps taken to minimize public and
subscriber inconvenience; the effect of the upgrade or change-out on the
services offered or which can be offered by the Franchisee; whether the upgrade
or change-out may affect the way in which subscribers can use consumer
electronic equipment, and whether it will require subscribers to use additional
or replacement equipment.

                                      -14-
<PAGE>
 
          (2)  A plan for notifying subscribers of the upgrade or change-out
that at a minimum satisfies the requirements of applicable laws and regulations
and the Customer Service Standards set forth in Appendix A herein;

          (3)  A precise description of the changes that will be made to the
Cable System, including a description of the equipment that will be installed
and replaced;

          (4)  A timetable for the upgrade or change-out, showing the date the
project is to commence, the date it is scheduled to end, and the work that will
be completed at six-month intervals over the project term;

          (5)  A map showing the portions of the Cable System that will be
affected, if less than the entire Cable System will be affected; and

          (6)  For a system upgrade, design maps and tree trunk maps for the
upgrade.

     (i)  Completion of Plans for Upgrade or Change-out.  The Franchisee shall
          ---------------------------------------------
follow the plan submitted to the City, except as it may be amended in response
to any comments by the City, and except for such minor variations as may be
typical to avoid violation of applicable laws and regulations. Upon completion
of the upgrade or change-out, the City reserves the right to require the
Franchisee to commission an independent engineering study to determine whether
the Cable System operates in accordance with the plan and applicable technical
standards. Such right may be invoked only after the City identifies a specific
technical problem and the problem persists after the Franchisee has been given
an opportunity to cure under Section 14 (d) . However, nothing in this
subsection (i) nor any act of compliance by Franchisee shall be deemed a waiver
of any objection that Franchisee may make to any action by the City asserting
regulatory authority over technical standards or the enforcement of such
standards in contravention of federal law.

     (j)  Location of Physical Facilities.
          --------------------------------

          (1)  Franchisee's System.  The Franchisee shall furnish to the City a
               --------------------
map describing the location of all of the physical elements comprising the Cable
System, including, but not limited to, antennae or other electromagnetic wave
receivers, head-end and sub-head-end, trunk and feeder cable runs, studio and
business office. All such elements and facilities within the Franchise Area
shall be delineated on a street map of the City. The map shall be updated
whenever portions of the Cable System are relocated. Upon request, the
Franchisee promptly shall locate any of its facilities for the City, any person
authorized to occupy the streets, or any other person.

                                      -15-
<PAGE>
 
          (2)  No Guarantee of Accuracy of Maps.  The City does not guarantee
               ---------------------------------
the accuracy of any maps showing the horizontal or vertical location of existing
structures. In Public Streets, where necessary, the location shall be verified
by excavation.

     Section 7.  Rates and Customer Service.
     ---------   ---------------------------

     (a)  Rates.  The City may regulate all rates and charges except to the
          -----
extent prohibited by applicable state or federal law. In the exercise of its
rights hereunder, the City may, by ordinance, regulation or any other matter
consistent with applicable law, adopt rules prescribing the manner in which the
Franchisee rates may be submitted and reviewed, approved, disapproved or
established. By way of illustration, the City may regulate required notice to be
given to subscribers prior to any change in rates or services, and may determine
how refunds are to be made for any amounts collected in excess of reasonable
rates approved by the city or any other regulatory authority.

     (b)  Notice Requirements.
          -------------------

          (1)  Prior Notice Required.  At least forty-five (45) days prior to
               ----------------------
implementing changes in rate or charge levels, service terms or conditions,
channel assignments or services, Franchisee shall provide the City with written
notice describing any such changes it plans to make and the proposed effective
date for the changes. At least thirty (30) days prior to implementing any
changes in rate or charge levels, service terms and conditions, or services, the
Franchisee must provide each notice to every affected subscriber, describing the
changes it plans to make and the proposed effective dates for the changes. All
notices of any such changes shall be clear and complete.

          (2)  Explanation of Changes.  Before it alters services, or service
               ----------------------
terms and conditions, Franchisee must provide a reasonably simply and clear
written notice explaining the substance and full effect of the alteration,
including the effect on rates and service options and the effect of the change
on the use of other consumer electronic equipment. Such written notice shall be
provided to the City at least forty-five (45) days, and to subscribers at least
thirty (30) days, before the change.

          (3)  Effect of Changes without Notice.  Any change made without the
               ---------------------------------
notice required under this Section 7 shall be of no force or effect, and
Franchisee shall be obligated to refund any increased amount collected without
the requisite notice, and to restore service to the prior existing status, at
least until the required notice is provided. This Section 7(b) (3) shall not be
interpreted to limit the City's rights to regulate rates under Section 7 (a) ,
or to limit the availability of remedies under applicable laws or regulations or
to limit rights under the customer service standards set forth in Appendix A.

                                      -16-
<PAGE>
 
      (c)  Customer Service.  The Franchisee must provide service adequate to
           ----------------
meet the reasonable needs of its Subscribers throughout the term of the
Franchise. At a minimum, the Franchisee must comply with the requirements of the
Initial Customer Service standards set forth in Appendix A herein, and to the
extent they are stricter or address issues not addressed by the initial customer
Service standards, the Franchisee must comply with federal, state and local
standards established under applicable laws and regulations, including pursuant
to 47 U.S.C. (S)552(b).

      Section 8.  System Facilities, Equipment and Services.
      ----------  ------------------------------------------

      (a)  Cable System Design.  The Franchisee shall maintain and operate the
           -------------------
existing 400 mHz, 52 channel system in good condition as required by this
Franchise Agreement.

      (b)  System Facilities and Equipment.  The Franchisee's Cable System
           -------------------------------
shall, at all time during the Franchise term, include facilities and equipment
so that its performance meets or exceeds the following minimum requirements:

           (1)  High Quality Equipment.  The Franchisee shall use equipment
                ----------------------
generally used in high-quality, reliable, modern systems of similar design,
including but not limited to modulators, antennae, amplifiers. and other
electronics which permit and are capable of passing through the signals received
at the headend with minimal alteration or deterioration.

           (2)  Engineered and Activated Capacity.  Prior to any System rebuild,
                ---------------------------------
the Franchisee shall continue to maintain all equipment required to transmit at
least 52 channels downstream in full configuration. The City may modify this
minimum channel capacity requirement in the event of a System rebuild.

           (3)  Non-duplication Limitation.  The Franchisee shall use its best
                --------------------------
efforts to obtain and operate equipment, including timers, signal detection
equipment or a combination thereof, so that only duplicated programming which
the Franchisee is prohibited from carrying is eliminated from programming
services carried on the System.

           (4)  Parental Control Device.  The Franchisee shall provide parental
                -----------------------
control devices to subscribers upon request which permit a subscriber to block
out particular channels for particular periods. In addition, the Franchisee
shall, upon request by a Subscriber install devices:

                a.  so that access to Pay-Per-View programming be restricted
                through the use of an assigned confidential "personal
                identification number," or by other equally effective means; and

                                      -17-
<PAGE>
 
                b.  so that the sound and video portion of any scrambled channel
                that carries programming can be blocked out.

           (5)  Subscriber Equipment.  The Franchisee shall make available to
                --------------------
every subscriber regardless of the level of service taken, converters that
accept universal wireless remote controls.

     The Franchisee may not prohibit, as a condition of service, the rental or
purchase of any equipment from an entity other than the Franchisee, provided,
however, that nothing herein shall be construed as authorizing a customer to use
such equipment in order to receive services that the customer is not otherwise
allowed to receive from the Franchisee.

           (6)  Stereo  Capability.  The Cable System shall retransmit to
                ------------------
subscribers stereo signals from all programming services which are received in
stereo, whether from broadcast or satellite. scrambled signals may use the FM
band.

           (7)  Emergency Alert.  The Franchisee shall provide an Emergency
                ---------------
Alert System which permits the City to override the video and audio portions of
all signals on all channels and which allows the City to: 

           access and activate the audio Emergency Alert System by using a 
touch-tone telephone with a special security code, and

           play back a recorded audio message using the methods specified above
over the Emergency Alert System.

     The Franchisee's obligations under this section include the obligation to
provide the character generator and any and all other facilities and equipment
for the cable System to insure that the Emergency Alert System functions
properly. The Franchisee shall cooperate with the City to develop a plan for the
regular testing of the Emergency Alert System.

           (8)  Standby Power.  The Franchisee shall have and maintain in good
                -------------
operating condition a standby power generation system capable of providing power
to the Cable System for a minimum of three hours in the event of an electrical
outage, including but not limited to back-up power supplies at the head-end
capable of providing power to the System for a minimum of three hours in the
event of an electrical outage. The obligation to provide back-up power supplies
requires the Franchisee to provide and install equipment that will:

           a.  cut-in automatically upon failure of commercial utility AC power;

                                      -18-
<PAGE>
 
          b.   revert automatically to commercial power when it
          is restored; and

          c.   prevent the standby power source from powering a "dead" utility
          line.

          (c)  Public, Educational and Governmental Use.
               ----------------------------------------

               (1)  Channel Capacity.  The Franchisee shall set aside four (4)
                    ----------------
channels for general public,  educational and governmental use:

          one channel shall be for use by the city including the Manitowoc
     Public Library;

          one channel shall be set aside for Manitowoc Public Schools;

          one channel set aside for Manitowoc parochial schools; and

          one channel shall be set aside from Lakeshore Technical college and
     public access.

     The City shall have the right to require one (1) additional public,
educational and governmental use channel at any time during the term of the
Franchise.

     The Franchisee shall develop rules and procedures for the use of the
channel capacity required above.   The Franchisee shall be permitted to use such
channel capacity for the provision of other services in accordance with
regulations established by the City if such  channel  capacity  is  not  being
used  for  the  purposes designated,  for  such period of  time  as  permitted
by  such regulations.

     (2)  Institutional Network.   Throughout the term of the Franchise  the
          ---------------------
Franchisee  shall  operate  and  maintain  an Institutional  Network  (I-Net)
for  public,  educational  and governmental use, with no charge to the users for
the capacity, facilities or other support provided by Franchisee (except as
specifically indicated below). The I-Net shall be fully functional and, subject
to any additional expansion or upgrade that may be ordered as part of a system
rebuild, must have at least the following characteristics:

     (a)  It must connect all public and parochial schools, and the 
          following buildings. A drop and at least one outlet must be 
          provided and maintained by Franchisee at each location. The I-Net 
          locations may, at their own expense, install additional drops.



                                      -19-
<PAGE>
 
          1.  City Hall
          2.  The Safety Building (Fire and Police)
          3.  Manitowoc Public Library
          4.  University of Wisconsin Center
          5.  Riverview School
          6.  Manitowoc Cooperative Offices
          7.  Holy Family Memorial Medical Center
          8.  Municipal Field

          Additionally, the Franchisee shall continue to provide a microwave
          link with Lakeshore Technical College.  As it exists upon the signing
          of this Agreement, the link consists of two, one-way microwave
          transmissions.

     (b)  The I-Net must provide at least the functionality and capabilities
          that would be provided by a well-built and designed mid-split Cable
          System with 174-300 MHz available for PEG use downstream from the
          headend, and 5-116 MHz available for PEG use upstream to the headend.
          At least six (6) channels must be activated upstream and seven (7)
          downstream initially. Franchisee must activate additional capacity
          within the upstream and downstream bandwidths set forth above as
          directed by the City within 120 days of a written request from an
          institutional user. (An "institutional user" is any entity that
          controls an I-Net location). The Franchisee may require that user to
          bear responsibility for the cost of the modulators, demodulators and
          processors required to activate the additional capacity.

     (c)  The I-Net must be able to send and receive signals to and from other
          I-Net locations, to receive PEG channels carried on the residential
          customer network, and to send signals onto those PEG channels via the
          I-NET.

     (d)  I-Net users can use the I-Net for transmission of voice video or data
          services.

          (3)  Drops to Public Buildings.  The Franchisee shall install at no
               -------------------------
charge one (1) activated outlet and the wiring from the drop to the outlets
required for the receipt of all cable system channels, including Institutional
Network channels, in each school, public library and administrative office of
the City located within 300 feet of the Cable System. If such additional
locations are not located within three hundred (300) feet of any point on the
existing Cable System at the time, the Franchisee may require the City to pay
the additional costs of connection. The Franchisee shall provide cable service
free of charge to the buildings referred to in this Section, except for any
premium or pay per view services.



                                      -20-
<PAGE>
 
     In addition to the public buildings presently served by the Cable System,
and the public buildings described above entitled to receive service, the City
may also designate up to ten (10) additional public sites to be served. The
Franchisee shall provide service to such sites under the same terms and
conditions as for the sites designated in the first paragraph of this 
subsection (3).

     The Franchisee may request a delay in the installation of any outlet
required under this section, which may or may not be granted by the City in its
sole discretion.

     (4)  Support of PEG and Local Origination Programming.  The Franchisee
          ------------------------------------------------
shall continue to maintain the current level and availability of equipment,
studio access, staff support and facilities used for PEG and local origination
programming. In addition to this requirement, the Franchisee agrees to spend a
minimum of $50,000 over the life of the Franchise for local origination or
access equipment. The Franchisee shall produce and broadcast an average of five
(5) hours per week of local origination programming and, with repeat programming
or programming obtained from other sources, broadcast an average of fifteen (15)
hours per week of local programming.

     (d)  Leased Use.    The Franchisee shall provide commercial use (hereafter,
          ----------
"leased") channels as required under the Cable Act.

     (e)  Subscriber Services.
          -------------------

          (1)  Basic Services. The Franchisee shall, until this requirement may
               -------------- 
be modified by the City as part of any System rebuild, provide a minimum of 46
channels of basic and expanded basic service, including the four channels
designated for general public, educational and governmental use under (c) .

          (2)  Categories of Services.   In addition to providing other services
               ----------------------
required by this Franchise Agreement, the Franchisee agrees to provide the
following broad categories of video programming or other services:

          a.   Local commercial and public broadcast programming, if the
Franchisee is legally authorized to carry such programming,

          b.   Milwaukee commercial broadcast programming, if the Franchisee is
legally authorized to carry such programming,

          c.   Full-time non-broadcast arts/cultural programming,

          d.   Full-time non-broadcast educational and informational
programming,

          e.   Full time non-broadcast children's programming,

                                      -21-
<PAGE>
 
          f.   Full time non-broadcast sports programming,

          g.   Locally originated programming,

          h.   FM audio programming

          i.   programming which satisfies ascertained needs and interests of
the citizens of the City.

          (3)  Satisfaction of Requirements.
               ----------------------------

          a.   Nothing in this subsection (e) shall be read to require the
Franchisee to carry more commercial or non-commercial broadcast programming than
it is required to carry under the Cable Television Consumer Protection and
Competition Act of 1992.

     Section 9.  Nondiscrimination.
     ---------   -----------------

     (a)  No Discrimination in Service or Rates. The Franchisee shall not refuse
          -------------------------------------
to provide service or access, or otherwise discriminate against subscribers,
programmers or other persons. Without limiting the foregoing;

          (1)  No Discrimination in Service.   The Franchisee may not deny
               ----------------------------
service, delay providing service, impose additional requirements or security
or otherwise discriminate against persons in violation of state, federal or
local law or regulations;

          (2)  No Discrimination for Enforcement of Rights.  The Franchisee may
               -------------------------------------------
not discriminate among persons or take any retaliatory action against a person
because of that person's exercise of any right it may have under federal, state
or local law, nor may the Franchisee require a person to waive such rights as a
condition of receiving service;

          (3)  No Redlining.  The Franchisee may not refuse to provide service
               ------------
to or levy different rates and charges on any group of potential residential
cable subscribers because of the income of the residents of the local area in
which such group resides;

          (4)  No Rate Discrimination.   Except to the extent the City may not
               ----------------------
enforce such a requirement, the Franchisee is prohibited from discriminating in
its rates or charges or from granting undue preferences to any subscriber,
potential subscriber, or group of subscribers or potential subscribers;
provided, however, the Franchisee may offer temporary, bona fide, promotional
discounts in order to attract or maintain subscribers, provided that such
discounts are offered on a nondiscriminatory basis to similar classes of
subscribers throughout the City. Notwithstanding the foregoing, the Franchisee
may offer discounts for the elderly, the handicapped or the economically
disadvantaged, if such discounts are offered and applied in a uniform and

                                      -22-
<PAGE>
 
consistent manner.

     (b)  Equal Employment Opportunity.     The Franchisee must
          ----------------------------
comply with all applicable state,  federal and local laws and regulations
regarding equal employment opportunity.

     Section 10.  Records.
     ----------   ------- 

     (a)  Maintenance and Access. The Franchisee shall collect and maintain
          ----------------------
complete and accurate books of account and records of its business and
operations and all other records required by this Franchise, and shall allow the
City to inspect and copy all such records whether held or created by it, or held
or created by another person on its behalf, including but not limited to
accounting, financial, planning, engineering, statistical, survey, Subscriber
and service records relating to the Cable System, or recording information
relating to the Cable System upon reasonable notice and during normal business
hours. The disclosure of such information by Franchisee to City shall be based
upon the City's need to have such information in order to ensure compliance with
the terms of this Franchise Agreement or Chapter 27 of the Manitowoc Municipal
Code. The Franchisee shall be required to identify any records requested by the
City which Franchisee asserts are exempt from disclosure because such records
are not needed to ensure such compliance.

     (b)  Location.  The records set forth above shall be made available to the
          --------
City at the business office serving the City which shall be located within the
City.

     (c)  Court and Agency Reports and Filings.  The Franchisee shall submit to
          ------------------------------------
the City copies of all pleadings, applications, reports, communications and
documents of any kind submitted to; copies of all decisions, correspondence and
orders received from; and any suits, liens, notices of foreclosure or secured
interests filed with; any Federal, state or Local courts, regulatory agencies or
other government bodies relating to the operation of management of the Cable
System.  Documents shall be mailed by first class mail, postage prepaid, to the
City at the same time they are submitted to said courts, agencies or other
bodies, or, in the case of documents received, within five (5) days of receipt.
The Franchisee must ensure that this provision is complied with regardless of
whether filings are made by it, or on its behalf, or whether material is
received by it or on its behalf.

     (d)  Records Maintained.  The Franchisee shall maintain the following
          ------------------
records for a period of at least five (5) years in a form acceptable to the
City:
          (1)  Complaints.    The Franchisee shall record and
               ----------
maintain records of all complaints received, including but not limited to
complaints requiring service calls, and written



                                      -23-
<PAGE>
 
complaints concerning billing, prices, employee courtesy, programming, safety,
operational policies, outages, signal quality and service disruptions. Records
of verbal complaints, as opposed to written complaints, need only be kept for
one year.

          (2)  Outage Records.  Records of outages, indicating date, duration,
               -------------- 
action taken, area and the estimated number of subscribers affected, type of 
outage and cause.

          (3)  Service Call Records.  Records of service calls for repair and
               --------------------
maintenance,  indicating date and time service was requested, date of
acknowledgment and date and time service was scheduled (if it was scheduled),
the date and time service was provided (and if different) the date and time the
problem was solved.

          (4)  Installation/Connection/Extension Records.  Records of
               -----------------------------------------
installation/reconnection and requests for service extension, indicating date of
request, date of acknowledgment, and date and time service was provided.

          (5)  Maps. Maps showing the location of the Cable system and as-built
               ----
maps.

          (6)  Technical Tests.   Records of all technical and quality control
               ---------------
tests performed by the Franchisee, whether on its own initiative or pursuant to
the requirements of this Franchise or applicable laws or regulations.

          (7)  Financial Records. Records showing all expenses (as necessary to
               -----------------
determine compliance with the terms of this agreement) and all revenues
associated with the Cable System,  including records of any revenues upon which
a franchisee fee could be levied.

          (8)  Capital Additions and Retirements.  Records of any capital
               ---------------------------------
additions to and retirements from the Cable System, and of any contributions to
construction made by Subscribers.

     (e)  Monthly Reports. If requested, the Franchisee shall provide the
          ---------------
following current reports on the fifteenth day of each month, in a form
acceptable to the City.

          (1)  Service Calls.   A report showing the number of service calls
               -------------
received during the prior month,  broken down, separately, by the type of
complaint; the cause of the problem; and the length of time it took to resolve
the complaint; and showing the percentage of service calls compared to the
number of basic Subscribers.

          (2)  Outages. A report showing the number of outages for the prior
               -------
month, and identifying separately each planned outage,

                                      -24-
<PAGE>
 
the purpose of the outage, the time it occurred, its duration, and the estimated
area and number at Subscribers affected; and each unplanned outage, its cause,
the time it occurred, its estimated duration and the estimated area and the
number of Subscribers affected; and the total hours of outages as a percentage
of total hours of cable System operation.

          (3)  Subscriber Information.  The number of Subscribers added for each
               ----------------------
tier and for each premium service; and the number of Subscribers disconnected
for each tier and for each premium service.

          (4)  Customer Service Statistics. Statistical data showing information
               ---------------------------
required to assess the Franchisee's compliance with the requirements of any
applicable customer service standards.

     (f)  Annual Reports.  Within ninety (90) days after the close of
          --------------
Franchisee's fiscal year,  the Franchisee shall submit a written annual report,
in a form approved by the City, including, but not limited to, the following
information:

          (1)  Summary of Activities.   A summary of the previous year's
               ---------------------
activities in the development of its Cable System in the city, including, but
not limited to, a description of all additions, deletions, improvements to
and extensions of the Cable System during the reporting year and the capital
cost associated with each such extension; services initiated or discontinued;
number of subscribers (including gains and losses); homes passed; and miles of
cable distribution plant in service. The summary shall also include a comparison
of any construction, including system upgrades, actually completed during the
year with any projections previously provided to the City, as well as a
description of rate and charge increases and/or decreases for the year.

          (2)  Financial Statement.  A financial statement of the Franchisee
               -------------------
certified by an officer of the Franchisee showing as separate line items every
source and the amount of gross revenue of the Franchisee for the calendar year,
including revenue for the entire area served by the cable system which serves
the City of Manitowoc, a breakdown of such revenues pertaining to the City of
Manitowoc only, and the method used to break out city of Manitowoc only
information.  The statement shall include notes that compare the current year
with the prior year.

          (3)  Maps. A detailed copy of updated maps depicting the location of
               ----
all cable plant, showing areas served and locations of all trunk lines and
feeder lines in the City.  The Franchisee need not produce as-built maps to
comply with this section, if it produces other maps that show accurately the
location of its facilities.


                                      -25-
<PAGE>
 
      (g) Format.   In the event any records described in this Section contain
          -------
information pertaining to the Cable System for the City of Manitowoc and a
larger group of systems of which the Manitowoc Cable System is a part, the
Franchisee shall, except as the City otherwise agrees, separately delineate the
information relating to the City of Manitowoc Cable System from information
relating to other related Cable systems.

      (h) Responses to Questions.  Franchisee and its Affiliates, and any other
          ----------------------
entity that  constitutes  a cable operator of Franchisee's Cable System which is
in control or possession of information respecting the Cable System, shall
respond to inquiries from the City concerning the construction, operation,
installation or maintenance of the Cable System; plans for its expansion; Cable
System revenues; and the Franchisee, Affiliate, or cable operator's financial or
legal status,  including requests for   financial information.   The City also
reserves the right to require the submission of such other reasonable reports as
it deems necessary to review Franchise compliance with terms of the Franchise
and Franchisee agrees  to provide such reports.   The information requested
shall be provided within 30 days of request.  Requests for extensions of time to
respond shall not be unreasonably denied. The disclosure of such information by
Franchisee to City shall be based upon the City's need to have such information
in order to ensure compliance with the terms of this Franchise Agreement or
Chapter 27 of the Manitowoc Municipal Code.  The Franchisee shall be required to
identify any records requested by the City which Franchisee asserts are exempt
from disclosure because such records are not needed to ensure such compliance.

      (i) Maintenance of Records by Others.   This Section 10 reaches documents
          --------------------------------
relating to the Cable System for the City, and documents that relate to a larger
group or groups of systems, of which the Cable System is a part.  Such records
are deemed to be maintained on the Franchisee's behalf for purposes of this
Section.

     Section 11.  Transfers.
     ----------   ---------

      (a)  Franchisee Ownership.   Except as otherwise provided in this
           --------------------
Franchise or applicable laws and regulations, the Franchisee shall at all times
during the term of the Franchise and any extensions thereto or renewals thereof,
be the full and complete owner of, or have complete possessory rights to, all
facilities and property, real and personal, of the Cable System.

      (b) Transactions Involving Facilities.  The Franchisee shall not enter
          ---------------------------------
into any transaction concerning the ownership of the facilities and property,
real or personal, of the Cable System or any portion thereof, unless
consummation of such transaction is subject to any required approval by the City
hereunder.  Any approval may be conditioned as required to protect the rights
of the City or the public interest.

                                      -26-
<PAGE>
 
     (c) Limitation.   The restrictions on transfer of ownership of the
         -----------
facilities and property of the cable system shall not apply to disposition of
worn-out or obsolete facilities or personal property  in  the  normal  course
of  constructing,  operating, maintaining and repairing the system, provided
such facilities and property are removed and replaced with facilities and
property that at least perform the same functions,  with at least the same
reliability and quality as the facilities and property being disposed of.

      (d) Other Transfers.  The Franchise may not be assigned or transferred, in
          ----------------
whole or part, or leased or sublet, mortgaged or pledged in trust by any means,
without prior written notice to the City, in accordance with Section 11(f), and
the prior written approval of the City upon its good faith determination that
the transaction proposed by the Franchisee will not be adverse to the interests
of the City under the Franchise or otherwise contrary to the public interest.
Any approval may be conditioned as required to protect the rights of the City or
the public interest.

      (e) What Constitutes A Transfer.  A change of control or ownership of
          ----------------------------
Franchisee or Affiliate that is involved in the operation or management of the
Cable System shall be considered a transfer of the Franchise.  The term
"control" includes actual working control in whatever manner exercised.  A
transfer shall be deemed to have occurred whenever one entity or a group acting
in concert acquire, directly or indirectly, a twenty (20%) percent or greater
ownership interest in the Franchisee.  A transfer shall also be presumed to have
occurred in the case of a partnership, if a general partner is changed,
eliminated or added.

      (f) Notice of Transfer.  The Franchisee and the proposed transferee
          -------------------
jointly must notify the City in writing of any sale or transfer subject to
approval under this Section 11.  At the time the notice is submitted, the
Franchisee and proposed transferee shall complete any application provided by
the City requesting approval of the transfer and shall submit information
required under applicable  laws and regulations,  including information
requested by the City relating to the matters for consideration set forth in 
(g).  The Franchisee and transferee must cooperate to provide documents and
respond to requests for information by the City regarding the proposed
transaction and its potential effects.  The notice and information required
must be provided at least one hundred twenty (120) days before the proposed
transaction is scheduled to close.

      (g) Matters for Consideration.   In determining whether a proposed
          --------------------------
transaction is adverse to the interests of the City under the Franchise or
otherwise contrary to the public interest, the City  may  examine  the
financial,  technical,  legal  or  other qualifications of the transferee,
whether the transferee agrees to accept and to be bound by related amendments,
ordinances,  and

                                      -27-
<PAGE>
 
resolutions then lawfully in effect; whether the transferee agrees to accept and
be bound by each and every term of the Franchise; whether the transferee agrees
to accept and to be bound by related amendments, ordinances and resolutions then
lawfully in effect; whether the transferee agrees to assume all liability and
responsibility for acts and omissions of Franchisee, known and unknown, and to
correct any defects in performance; whether the transferee agrees that the
transfer will not allow it to exercise any rights which could not have been
exercised by the transferor, had it continued to hold the Franchise; the effect
of the transaction on the terms, conditions and quality of the services provided
to Subscribers; the effect of the transaction on any rights of the City or
Subscribers under applicable law; the effect of the transfer on competition for
the provision of cable services or other communications services within the
Franchise Area; and any other matter which the City is legally entitled or
required to consider.

     (h) Prohibited Transfers.   Notwithstanding anything herein to the
         ---------------------
contrary, the City reserves the right to prohibit any requested transfer in
circumstances in which the City determines that the acquisition of the cable
system by the transferee may eliminate or reduce competition in the delivery of
cable service in the City of Manitowoc.

     (i)  Securing Debt.   Notwithstanding the foregoing, pledges in trust or
          --------------
mortgages of the assets of the system to secure the construction, operation or
repair of the Cable System may be made without the City's prior consent; except
that no such arrangement may be made which would in any respect under any
condition prevent the Franchisee or any successor from complying with the
Franchise and applicable laws and regulations, nor may any such arrangement
permit a third party to succeed to the interest of Franchisee, or to own or
control the Cable System without the prior consent of the City.

     (j)  Public Hearing; Time for Consideration.   Deliberations on a request
          ---------------------------------------
for assignment or transfer of the Franchise shall include a notice and a hearing
affording the public opportunity for full participation.  Unless the parties
agree to some other date, the City must adopt a Resolution denying, approving or
approving a transaction proposed subject to conditions within one hundred twenty
(120) days of the date the Franchisee and transferee submit all the information
reasonably required to be submitted by Section 11 (f).  If the City does not so
act, the request for approval of the transaction shall be deemed granted.

      (k) Concurrence in Approval.   At such time as the City may approve a
          ------------------------
proposed assignment or transfer of the Franchise, such approval shall be
contingent upon the concurrence of the Federal or State regulatory agencies
having jurisdiction, if such concurrence is then required by law.

                                      -28-
<PAGE>
 
      (l) Effect of Unlawful Transfer.  Any transaction requiring prior approval
          ----------------------------
that is made in violation of this section shall make the Franchise subject to
termination by the City.

      (m) Costs.    To the extent permitted by federal law, the City as a
          ------
condition of approval of a transaction, may require the transferee to bear the
City's reasonable costs associated with the review of any transfer request.

     Section 12.    Indemnification and Insurance.
     -----------    ------------------------------

      (a) Indemnification.  The Franchisee shall protect, defend, indemnify and
          ----------------
hold free and harmless the City and its officers, employees, committees, boards,
commissions and other governmental subunits, advisors and agents, from and
against any and all liability, losses, penalties, damages, settlements, costs,
charges, professional fees or other expenses or liabilities of every kind and
character arising out of or relating to any and all claims, liens, demands,
obligations, actions, proceedings or causes of action of every kind and
character (referred to collectively below as "claims") in connection with or
arising directly or indirectly out of the issuance and administration of the
Franchise, or the Franchisee's enjoyment or exercise of the same. By way of
illustration and not limitation, this would include claims arising out of acts
or omissions in constructing, operating or repairing the Cable System by the
Franchisee or any entity for whose acts or omissions the Franchisee may be
liable, without regard to whether the act or omission giving rise to the
indemnity was required, allowed, or prohibited by the Franchise or applicable
law, and claims of injury to persons or damage to property occasioned by reason
of any conduct undertaken pursuant to the Franchise. Without limiting the
generality of the foregoing, any and all such claims relating to personal
injury, death, damage to property, defects in material or workmanship, actual or
alleged infringement of any patent, trademark, copyright (or application for any
thereof) or of any other tangible or intangible personal or property right, or
any actual or alleged violation of any applicable statute, ordinance,
administrative order, rule or regulation, or decree of any court, shall be
included in this indemnity. The Franchisee shall investigate, handle, respond
to, provide defense for and defend any such claims, etc., at its sole expense
and shall bear all other costs and expenses related thereto, even if the
Franchisee believes the claim is groundless, false or fraudulent. Provided,
further, that the duty to indemnify includes, but is not limited to, the duty to
pay the reasonable expenses incurred by the City, its officers, agents and
employees, in defending themselves, including but not limited to all out-of-
pocket expenses, and, if Franchisee or the City determines that the interests of
the Franchisee and the City conflict, attorneys fees for outside counsel, and
the reasonable value of any services rendered by the City's attorney or any
legal assistants, or by any employees of the City in defending the matter.

                                      -29-
<PAGE>
 
     (b)  Insurance.
          ----------

          (1) Insurance Required.   The Franchisee shall purchase and maintain
              -------------------
during the full term of the Franchise and any extensions and renewals thereof,
such insurance as will protect it and the City from any claims which may arise
directly or indirectly or result from the issuance of the Franchise or the
enjoyment or exercise of the same, including, by way of illustration and not
limitation, claims that may result from the construction, operation or repair of
the Cable System, whether such construction, operation or repair is performed by
the Franchisee or by anyone for whose acts the Franchisee may be liable.   The
insurance shall, at a minimum, include the following:

      a.   Workers compensation, including liability benefits and any other
           legally required employee benefits, shall be supplied in statutory
           amounts.

      b.  General Liability Insurance, including Motor Vehicle, shall be
          supplied in the following amounts:

          Personal injury or death:    $1,000,000 per person
          Property damage:                500,000 per occurrence
          Umbrella liability:           5,000,000

          Cablecaster's liability:      1,000,000 per occurrence


      The umbrella liability shall include coverage of worker's compensation,
commercial or comprehensive general liability, coverage for claims arising under
the laws of copyright, defamation, invasion of privacy, obscenity and other,
similar laws relating to the production, publication and retransmission of
information.

     (2) Endorsements in Favor of Municipalities.
         ----------------------------------------

     a.  The City shall be named as an additional insured on all policies
maintained pursuant to the Franchise, except Worker's Compensation Insurance;

     b.  The Franchisee's liability insurance policies shall include an
endorsement that recognizes that insurance policies cover the Franchisee's duty
to indemnify in accordance with Section 12(a) of this Agreement.

      c.  The Franchisee's insurance policies shall contain an endorsement
stating:

     It is understood and agreed that this policy may not be cancelled nor the
amount of coverage reduced, nor the coverages materially modified in a manner
that decreases coverages until 30

                                      -30-
<PAGE>
 
days after receipt by each of the Clerk of the City of Manitowoc, by certified
mail, of a written notice of intent to cancel, reduce or modify the coverage.

     (3)  Evidence of Insurance.  The Franchisee shall furnish to the City
          ----------------------
certificates of insurance acceptable to the City which shall show that the
policies include all the coverages and the endorsements specified above.  The
certificates shall be provided within 30 days of the date this Agreement is
signed, and new certificates shall be provided annually on December 31 of each
year, or any time the insurance carrier or policies are changed. Failure to
maintain insurance as required herein, or to furnish certificates of insurance
shall constitute a material and substantial violation of this Agreement. In the
event of any dispute regarding Franchisee's insurance coverage the Franchisee
shall provide the City complete copies of the insurance policies (including any
riders or addenda thereto).

      (4) Approval.  All insurance coverage shall be subject to approval of the
          ---------
City as to the issuing Company and the form of the policies and certificates of
insurance, which approval will not be unreasonably withheld.

      (5) Other Policies.  The Franchisee, in addition to all other insurance
          ---------------
requirements herein, shall procure and maintain insurance in the type and amount
as may be required in any license, permit, or agreement obtained in connection
with the construction, operation or repair of its Cable System and which is
necessary to complete any construction, operation or repair (e.g., Highway
Permit, Railroad Crossing Agreement, Corps of Engineer Permit) regardless of who
secured the license, permit or agreement.

      (6) Additional Insurance.  The City may require the franchisee to
          ---------------------
provide additional coverages or increase the insurance amounts from time to time
as it deems appropriate to reflect inflation and increased risks to the City.

      Section 13.  Performance Security.
      ----------  ---------------------

      (a) Security Provided.  To secure the faithful performance of all 
          ------------------
Franchise Agreement obligations, compliance with all orders, permits and
directions of any agency of the City having jurisdiction over its acts or
defaults under the franchise, the payment by the Franchisee of any claims,
liens, fees, forfeitures, payments, assessments or taxes due the City under this
Franchise Agreement or otherwise, or which arise by reason of the construction,
operation, maintenance or repair of the Cable System and the payment of any
damages, penalties, fees and costs incurred by the City with respect to the
same, including reasonable legal expenses incurred in successfully enforcing the
Franchise Agreement, the Franchisee shall provide the City with the following
security:

                                      -31-
<PAGE>
 
          (1) Security Fund.   On or before January 1, 1997 the Franchisee shall
              --------------
deposit with the City the sum of $10,000.00.  The City shall deposit these funds
in an interest bearing account (the "security fund") payable in whole or in
part, to the City upon demand.  Interest on the security fund as accrued, shall
become a part of the security fund.

          (2) Performance Bond. On or before January 1, 1997, the Franchisee
              -----------------
shall post with the City a Performance Bond in the amount of $100,000.00.    The
form of Performance Bond shall be subject to approval as to content and form by
the City Attorney. Among other provisions, the Performance Bond must provide:

          a.  That the City may recover on the Performance Bond upon the City's
certification that the Franchisee is in substantial default of the Agreement and
the amounts recoverable under the Performance Bond shall be recoverable jointly
and severally from the Franchisee and the surety;

          b.  That the total amount of the Performance Bond shall be forfeited
in favor of the City in the event the Franchisee abandons the cable system at
any time during the term of the franchise or any extension thereto; or the
Franchisee attempts to transfer or transfers the Franchise without the prior
express written consent of the City.

          c.  Any performance Bond submitted hereunder shall contain the
following endorsement:

          "This Performance Bond may not be cancelled, allowed to lapse or the
          amount thereof reduced until at least thirty (30) days after receipt
          by the City of Manitowoc City Clerk, by certified mail, of a written
          notice from the issuer of the Performance Bond of its intent to cancel
          the Performance Bond, to allow it to lapse or to reduce the amount of
          the performance Bond."

A Letter of Credit may be substituted for the Performance Bond upon mutual
agreement of the parties.

          (3) Construction Performance Bond.   In the event the Cable System is
              ------------------------------
further upgraded, removed, relocated or otherwise undergoes any reconfiguration
or other change involving work costing more than $100,000, the City may require
the Franchisee to provide a performance bond in a form and with a Company
acceptable to the City to secure the faithful performance of such work, and to
protect the City from any damages or expense arising out of the work, or the
breach of any promise to perform it.  The performance bond shall be in an amount
equal to ten percent (10%) of the estimated total cost of the work, and in a
form satisfactory to the

                                      -32-
<PAGE>
 
City.  Any performance bond required under this Section shall contain the
following endorsement:

     "This bond may not be cancelled, or allowed to lapse, or the amount of the
     bond reduced until 30 days after receipt by each of the respective Clerks
     of the City of Manitowoc, by certified mail, of a written notice from the
     issuer of the bond of its intent to cancel the bond, to allow it to lapse,
     or to reduce the amount of the bond."

      Failure to maintain the performance bonds required herein shall constitute
a material and substantial violation of this Agreement .

          (4) Use of Funds.   If the Franchisee fails to make timely payment to
              -------------
the City or its designee or designees of any amount due as a result of this
Franchise; or fails to make timely payment to the City or its designee of any
liquidated damages or penalties due under this Agreement or applicable law; or
fails to make timely payment to the City of any taxes due; or fails to
compensate the City within twenty (20) days of written notification that such
compensation is due, for any damages, costs or expense the City suffers or
incurs by reason of any act or omission of the Franchisee in connection with
this Agreement or applicable law or regulations, or the enforcement of the same;
or fails, after twenty (20) days notice to comply with any provision of this
Agreement or applicable law or regulations which the City reasonably determines
can be remedied by an expenditure of the security; the City may withdraw the
amount thereof, with interest and any penalties, and without further notice to
Franchisee, from the Security Fund and from the surety under any Performance
Bond.

          (5) Notification.  within three (3) days of withdrawal from the
              -------------
Security Fund the City shall mail written notification of the amount, date and
purpose of such withdrawal to the Franchisee.

          (6) Inadequate Fund Balance.   If at the time of withdrawal from the
              ------------------------
Security Fund by the City,  the amounts available are insufficient to provide
the total payment toward which the withdrawal is directed, the balance of such
payment shall continue as an obligation of the Franchisee to the City, until
paid.

          (7) Replenishment. No later than thirty (30) days after mailing of
              --------------
notification the Franchisee by certified mail, return receipt requested, of a
withdrawal pursuant to (5) above, the Franchisee shall deliver to the City for
deposit in the Security Fund an amount equal to the amount so withdrawn.
Failure to make timely delivery of such amount to the City shall constitute a
material and substantial violation of this Agreement.


                                      -33-
<PAGE>
 
          (8)  Disposition.  Upon termination of the Franchise under conditions
               -----------
other than those stipulating forfeiture of the Security Fund, the balance then
remaining in the Security Fund shall be withdrawn by the City and paid to the
Franchisee within ninety (90) days of such termination, provided that there is
then no outstanding default on the part of the Franchisee.

          (9) Failure to Provide or Maintain Security.   Failure to provide or
              ---------------------------------------
maintain the security required under this Section shall constitute a material
and substantial violation of this Agreement.

     Section 14.  Remedies.
     -----------  ---------

     (a)  Availability of Remedies.
          -------------------------

          (1)  Remedies Cumulative.  All remedies under the Cable Ordinance and
               --------------------
this Agreement are cumulative unless otherwise expressly stated.  The exercise
of one remedy shall not foreclose use of another, nor shall the exercise of a
remedy or the payment of liquidated damages or penalties relieve the Franchisee
of its obligations to comply with its Franchise.  Remedies may be used singly or
in combination; in addition, the City may exercise any rights it has at law or
at equity.

          (2)  Remedies Nonexclusive.  The remedies provided for in this
               ----------------------
Franchise Agreement are nonexclusive. Except as specifically limited herein,
each party shall have any and all remedies available at law or in equity.

          (3)  Relation to Insurance and Indemnity Requirements.  Recovery by
               -------------------------------------------------
the City of any amounts under the performance bonds, insurance, or Security Fund
required hereunder does not limit the Franchise's duty to indemnify the City in
any way; nor shall recovery of any amounts under the performance bonds,
indemnity, insurance or Security Fund relieve the Franchisee of its obligations
under the Franchise, limit the amounts owed to the City, or in any respect
prevent the City from exercising any other right or remedy it may have.

     (b)  Liquidated Damages.  Because Franchisee's failure to comply with
          -------------------
provisions of its Franchise will result in injury to the City, and because it
will be difficult to estimate the extent of such injury, the City and Franchisee
agree to the following liquidated damages for the following violations, which
represent both parties' best estimate of the damages resulting from the
specified injury.

          (1)  For transferring the Franchise without approval; $2,000/day for
each violation for each day the violation continues;

                                     -34-
<PAGE>
 
          (2)  For all other violations which actual damages may not be
ascertainable, $200/day for each violation for each day each violation
continues.

     (c)  Revocation.  In addition to all other rights and powers of the City by
          -----------
virtue of this Agreement, the City may revoke the Franchise and all rights and
privileges of the Franchisee thereunder in the event the Franchisee:

          (1)  violates any material provisions of its Franchise, applicable law
and regulations governing the construction, operation or maintenance of its
Cable System, or any rule, order or determination of the City made pursuant
thereto;

          (2)  attempts to evade any material provision of its Franchise or
applicable laws or regulations or practices any fraud or deceit or attempts to
defraud or deceive its customers or the City;

          (3)  becomes unable or unwilling to pay its debts, or comply with any
material term of this Franchise.

          (4)  provides false or misleading information, in the course of
obtaining this Franchise, any modification or transfer of the Franchise, or any
rate increase; or

          (5)  abandons its Franchise.  The Franchisee shall be deemed to have
abandoned its Franchise if it willfully refuses to operate the Cable System as
required by its Franchise, when there is no event beyond Franchisee's control
that prevents the operation of the Cable System, and where operation would not
endanger the health or safety of the public or property.

     (d)  Procedure.
          ----------

          (1)  Notice.  Before the City invokes remedies under (b) or (c), the
               -------
Franchisee must be given notice and an opportunity to request a hearing. The
City shall comply with this request by sending the Franchisee a written
Violation Notice, briefly describing the nature of the violation.


          (2)  Review.  Within twenty (20) days after mailing of a Violation
               -------
Notice pursuant to Section (d) (1) above, the Franchisee must cure the
violation, or request a hearing before the City, or its designee (i) to contest
the violation; or (ii) if the violation cannot be cured within ten (10) days
even with the exercise of due diligence, to propose a plan and alternative
schedule for curing the violation. To cure, a Franchisee must deposit with the
City all liquidated damages and other amounts that may be owed. If the
Franchisee contests the violation in whole or in part, its request for a hearing
(i) must fully explain why it believes it is not in violation; and (ii) attach
the documents, if any, which it believes

                                     -35-
<PAGE>
 
support its claim. If the Franchisee proposes a plan and alternative schedule
for compliance, its proposal must (i) describe what the Franchisee will do to
cure the default and by what date, (ii) explain why the default could not be
cured in twenty (20) days; and (iii) provide all documents that it believes
support its claim that an alternative schedule is required and the plan and
schedule it proposes are reasonable. Upon receiving a request, the City shall
schedule a hearing at which the Franchisee must be given the opportunity to
appear. The pendency of hearing shall suspend payment but not the accrual of any
liquidated damages, imposition of any penalties or revocation.

          (3)  Time for Exercise of Certain Remedies.  The City may take action
               --------------------------------------
to revoke the Franchise or collect damages if the City finds that a violation
has occurred and is not excused (the "Determination of Default"). This
Determination may be made at any time twenty (20) days after the Notice of
Violation is issued if no hearing is requested, or any time after the conclusion
of a hearing if one is requested. However, the City may not revoke the Franchise
under Section 14 (c), or collect damages if it determines (i) that the
Franchisee has cured the violation; or (ii) that the Franchisee has proposed a
reasonable plan and alternative schedule for curing a violation that could not
have been cured within twenty (20) days even with the exercise of due diligence.
The City shall mail a notice to the Franchisee if it revokes the Franchise or
claims damages, describing the action taken by the city, and specifying the date
upon which the revocation shall be effective.

          (4)  Payment of Liquidated Damages.  The Franchisee shall pay the full
               ------------------------------
amount of any claimed liquidated damages to the City within ten (10) days after
mailing of a Violation Notice pursuant to this section 14(d) (1) above, or, if a
hearing is requested, after completion of the hearing, if the City determines
the Franchise has been violated.

          (5)  No Waiver.
               ----------

               a.   General.  The failure of the city, upon one or more 
                    --------
occasions, to exercise any right or to require compliance or performance under
this Agreement, or any other applicable law, ordinance or regulation shall not
be deemed to constitute a waiver of any right or a waiver or performance, unless
(and only to the extent that) a waiver has been expressly provided for in
writing.

               b.   Waiver Not Implied.  Waiver of a breach of this Agreement,
                    -------------------
or applicable law, ordinance or regulation, is not a waiver of any breach,
whether similar or different from that waived. Neither the granting of this
Franchise nor any provision herein shall constitute a waiver or bar to the
exercise of any governmental right or power of the city, including without
limitation the right of eminent domain.

                                     -36-
<PAGE>
 
          (6)  No Recourse.  The Franchisee shall have no recourse whatsoever
               ------------
against the City for any loss, cost, expense or damage arising out of any
provision or requirement of its Franchise because of its enforcement or non-
enforcement, and without regard to whether the act or omission giving rise to
the loss, cost, expense or damage was required or not required by the Franchise;
provided, however, that nothing herein shall preclude Franchise from seeking any
injunctive relief available to Franchisee.

     Section 15.  Effect of Termination; Continuity of Service.
     -----------  ---------------------------------------------

     (a)  When Terminated.  The Franchisee's Franchise terminates as provided in
          ----------------
Section 3.

     (b)  Removal of System Upon Termination.  Within twelve (12) months of the
          -----------------------------------
termination of the Franchise, the Franchisee shall remove its Cable System from
all Streets and property occupied pursuant to this Franchise, unless the City
notifies the Franchisee that it intends to exercise its purchase option under
this Section 15(f). At the option of the City, any portions of the Cable System
that are not removed within that twelve (12)-month period shall become the
property of the City. Franchisee shall not abandon its cable system or any
portion thereof at any time without the City's prior written consent.

     (c)  Continuity of Service.  It is the right of all subscribers in the
          ----------------------
Franchisee's Franchise Area to receive all available services from the
Franchisee as long as their financial and other obligations to the Franchisee
are satisfied.

     (d)  Duty to Assure Continuity of Service.  The Franchisee shall ensure
          -------------------------------------
that all subscribers receive continuous uninterrupted service in accordance with
this Section 15. At the City's request, the Franchisee shall operate its system
for a temporary period (the "Transition Period") following the termination, sale
or transfer of its Franchise as necessary to maintain service to subscribers;
and shall cooperate with the City to assure an orderly transition from it to
another Franchisee or cable operator. The Transition Period shall be no longer
than the reasonable period required to select under another Franchisee or
operator and build a replacement system, if necessary, and shall not be longer
than six (6) months, unless extended by the City for good cause. During the
Transition Period, the Franchisee will continue to be obligated to comply with
the terms and conditions of this Agreement and applicable laws and regulations.

     (e)  Failure to Operate.
          -------------------

          (1)  Effect of Failure.  If the Franchisee abandons its system during
               ------------------
the Franchise term, or fails to operate its system in accordance with this
Section 15 during any Transition Period, the City, at its option, may operate
the Cable System or designate

                                     -37-
<PAGE>
 
another entity to operate the Cable System temporarily until the Franchisee
restores service under conditions acceptable to the City or until the Franchise
is revoked and a new Franchisee or operator selected by the City is providing
service; or obtain an injunction requiring the Franchisee to continue
operations. If the City is required to operate or designate another entity to
operate the Cable System, the Franchisee shall reimburse the City or its
designee for all reasonable costs and damages incurred that are in excess of the
revenues from the Cable System.

          (2)  Injunctive Relief Shall Be Granted.  The parties agree that the
               -----------------------------------
City is entitled to injunctive relief under this Section 15 if;

          (a)  Franchisee fails to provide Cable Service in accordance with this
Franchise over a substantial portion of the Franchise Area for 96 consecutive
hours, unless the City authorizes a longer interruption of service; or

          (b)  Franchisee, for any period, willfully and without cause refuses
to provide Cable Service in accordance with this Franchise over a substantial
portion of the Franchise Area.

     (f)  Option to Purchase.
          -------------------

          (1)  When Exercisable.  In the event the Franchise is cancelled,
               -----------------
revoked or not renewed, the City shall have the option to purchase the cable
system.

          (2)  How Exercisable.  If the City intends to exercise the purchase
               ----------------
option, it must so notify the Franchisee in writing no later than sixty (60)
days after the cancellation, revocation or nonrenewal of the Franchise. If the
City notifies the Franchisee it intends to exercise this option, the parties
shall promptly enter into negotiations to establish terms and conditions of the
sale consistent with general industry practices, except that the price for the
Cable System shall be determined in accordance with Section 15(f)(3) and (4).

          (3)  Purchase Price Upon Expiration.  In the event of purchase by the
               -------------------------------
City at the end of the franchise term provided for in Section 3, the purchase
price shall be the fair market value, determined on the basis of the cable
system valued as a going concern, but with no value allocated to the Franchise
itself.

          (4)  Purchase Price on Termination for Cause.  In the event of
               ----------------------------------------
purchase by the City upon revocation for cause, cancellation of the Franchise or
if the Franchise is voided, the purchase price shall be an "equitable price" as
that term is used in Section 627(b) of the Cable Act, 47 U.S.C. (S)547(b).

                                     -38-
<PAGE>
 
     Section 16.  Other Provisions.
     -----------  -----------------

     (a)  Severability.  In the event that a court or agency of competent
          -------------
jurisdiction declares that any nonmaterial provision of this Agreement is void
or otherwise unenforceable according to its terms, said provision shall be
considered a separate, distinct and independent part of this Agreement, and such
holding shall not affect the validity and enforceability of all other provisions
hereof.

     In the event that a court or agency of competent jurisdiction declares that
any material provision of the Franchise is void or otherwise unenforceable
according to its terms, the parties shall meet and attempt, in good faith to
negotiate revisions to the Agreement to restore the relative burdens and
benefits contemplated by this Agreement. As a matter of illustration, and not of
limitation, the provisions of Section 2, Grant of Franchise, Section 4,
Franchise Fee, Section 9, System Facilities, Equipment and Services, Section 13,
Indemnification and Insurance, Section 14, Performance Security and Section 15,
Effect of Termination; Continuity of Service are material, and the City would
not have entered into this Agreement unless it contained each and every one of
those sections.

     (b)  Effect of Change in Law.  In the event state or federal laws or
          ------------------------
regulations preempt a provision or limit the enforceability of a provision,
then, the provision shall be read to be preempted, but only to the extent and
for the time, required by law. In the event such or federal law, rule or
regulation is subsequently repealed, rescinded, amended or otherwise changed, so
that the provision hereof which has been preempted is no longer preempted, said
provision shall thereupon return to full force and effect and shall thereafter
be binding on the parties hereto, without the requirement of further action on
the part of the City.

     (c)  Notices.  Each notice under this Agreement shall be mailed First
          --------
Class, Postage Prepaid to the addresses below. Each party may change its
designee by providing written notice to the other party, but each party may only
designate one entity to receive notice.

     Notices to the Franchisee shall be mailed to:

                    Cable TV Joint Fund 11
                    Attn:  General Manager
                    Jones Intercable
                    1614 Washington Street
                    Manitowoc, WI  54220

                                     -39-
<PAGE>
 
                    With a copy to:
                    ---------------

                    Jones Intercable
                    Attn:  Legal Dept.
                    9697 E. Mineral Avenue
                    Englewood, CO  80112


     Notices to the City shall be mailed to:

                    City Clerk Jennifer Hudon
                    817 Franklin Street, P.O. Box 1597
                    Manitowoc, WI  54221-1597


     (d)  Governing Law.  This Franchise Agreement shall be governed in all
          --------------
respects by the law of the State of Wisconsin, except as preempted now or
hereafter by federal law.

     (e)  Time of Essence.  In determining whether the Franchisee has
          ----------------
substantially complied with Franchise, the parties agree that time is of essence
to the Agreement. As a result, the Franchisee's failure to complete
construction, extend service, seek approval of transfers or provide information
in a timely manner may constitute substantial breaches. The maintenance of
records and provision of reports in accordance with the Franchise is also of
essence to the Agreement.

     (f)  Force Majeure.  The Franchisee shall not be deemed in default or non-
          --------------
compliance with provisions of its Franchise where performance was rendered
impossible by war or riots, civil disturbance, hurricanes, floods or other
natural catastrophes or similar events beyond Franchisee's control, and the
Franchise shall not be revoked or a Franchisee penalized for such non-
compliance, provided the Franchisee takes immediate and diligent steps to bring
itself back into compliance and to comply as soon as possible under the
circumstances with its Franchise without unduly endangering the health, safety
and integrity of Franchisee's employees or property, or the health, safety and
integrity of the public, or public Streets, Public Property or private property.

     (g)  Public Emergency.  In the event of a major public emergency or
          -----------------
disaster as determined by the City, the Franchisee immediately shall make the
Cable System, available for use by the city or other Civil Defense or
governmental agency designated by the City to operate the system for the term of
such emergency or disaster for the emergency purposes.

     (h)  Construction.  The provisions of this Agreement will be liberally
          -------------
construed in order to promote the public interest.

                                     -40-
<PAGE>
 
     (i)  Compliance with Laws.  Notwithstanding any other provision of this
          ---------------------
Franchise Agreement to the contrary, the Franchisee shall at all times comply
with all laws and regulations of the City of Manitowoc, State of Wisconsin and
the federal government or any administrative agencies of any of them, provided,
however, that if any such local, state or federal law or regulation shall
require the Franchisee to perform any service, or shall permit the Franchisee to
perform any service, or shall prohibit the Franchisee from performing any
service, in conflict with the terms of this Franchise Agreement or any law or
ordinance of the City, then as soon as possible following knowledge thereof, the
Franchisee shall notify the City of the point of conflict believed to exist
between such regulation or law and the laws or regulations of the City of this
Franchise Agreement.

                                     -41-
<PAGE>
 
                                   APPENDIX A

                           CUSTOMER SERVICE STANDARDS


     Section 1.  Local Office and Telephone Service.
                 ----------------------------------

          (a)  Local Office.  Franchisee shall maintain at least one business
               ------------
office in the City. The office must be open for walk-in traffic at least 9 hours
per day Monday through Friday (except legal and company holidays) and 4 hours on
Saturday for purposes of conducting all normal business activity, including
receiving payment of bills, scheduling appointments, receiving returned
converters and other equipment, receiving complaints and the like.

          (b)  Telephone Service.  1. Local, toll-free telephone lines must be
               -----------------
staffed by customer service representatives at least 9 hours per day Monday
through Friday (except legal and company holidays) and at least 4 hours on
Saturday to answer customer inquiries and to schedule service or repair calls.
When the telephone lines are not staffed (i.e., after designated telephone
hours), a telephone answering service or answering device shall be used to
provide at least emergency referral service, including to respond to outages, 24
hours a day, seven days per week. Telephone response time shall equal or exceed
FCC Customer Service Standards in effect on the date of execution of this
Franchise Agreement.

          (c)  Courtesy.  Employees must be well-trained to respond courteously
               --------
to all inquiries and complaints, and Franchisee must maintain a program for
monitoring employee courtesy and responsiveness.

     Section 2.  Respond to Service Calls and Other Inquiries.
                 --------------------------------------------

          (a)  Service Calls - Outages.  Franchisee shall respond to service
               -----------------------
calls at least 9 hours per day Monday through Friday (except legal and company
holidays) and at least 9 hours on Saturday. Franchisee shall respond to and take
steps to resolve complaints about outages (meaning the loss of any channel or
the sound on any channel) immediately, seven days per week, regardless of the
number of subscribers involved. Franchisee shall respond to and take steps to
resolve complaints about degraded service within 24 hours of the time the
complaint is received. However, nothing in this paragraph shall prohibit the
Franchisee from scheduling handling of a repair request later if the subscriber
desires a different schedule, but the Franchisee's records must clearly identify
cases where the subscriber requested a delay in repair service.

          (b)  Service Calls - Other.  The Franchise must take steps to resolve
               ---------------------
all other service calls (other than installations) within 36 hours of receipt of
the injury or complaint.

                                     -42-
<PAGE>
 
          (c)  Appointments.  Franchisee shall offer either a specific
               -------------
appointment time, or designated blocks of time, as its election. If the
Franchisee designates blocks of time, Franchisee shall give the subscriber the
option of selecting a predesignated block of time for service appointments,
Monday through Friday within the deadlines set forth herein, or at the
customer's election, on Saturday. In the event that the available blocks of time
within the deadlines are not convenient for the subscriber, the parties shall
agree upon a mutually acceptable block of time at a later date, but the
Franchisee must offer the subscriber at least three appointment blocks for the
following week.

     The blocks initially shall be AM (8:00 a.m. to 12:00 a.m.), or afternoon
(1:00 p.m. to 5:00 p.m.) and evening (5 p.m. to 6:00 p.m.). If, at any time an
                                                ---------
installer or technician is running late, an attempt to contact the subscriber
will be made prior to the time of the appointment and the appointment
immediately rescheduled to the subscriber's satisfaction, but rescheduling does
not excuse the Franchisee's failure to comply with these Customer Service
Standards.

          (d)  Response to Inquiries.  Franchisee shall initially respond to all
               ----------------------
other inquiries (including billing inquiries), and to all other complaints,
within five business days of the receipt of the inquiry or complaint.

          (e)  Installation Requests.  Franchisee must respond to request for
               ----------------------
installation, reconnection, transfer or service upgrades (referred to
collectively below as an "installation" request) in accordance with the
following schedule:

          1.   Where the installation requires the Franchisee to activate or
authorize an already existing drop which can be activated or authorized
remotely, the Franchisee must complete the installation within five (5) days of
receipt of the request.

          2.   Where the installation requires the Franchisee to install a
standard drop, or in the cases of an existing drop that cannot be activated or
authorized remotely, the Franchisee must complete the installation within five
(5) days of the receipt of the request.

          3.   Where the installation requires the Franchisee to install a non-
standard drop, the Franchisee must complete the installation within ten (10)
days of receipt of the request.

          4.   Where the installation requires the Franchisee to extend its
Cable System, the Franchisee must complete the installation within thirty (30)
days of receipt of the request.

          (f)  Performance Standards.  Franchisee shall respond in time
               ----------------------
specified in this Section in ninety-seven percent (97%) of the

                                     -43-
<PAGE>
 
cases, measured on an monthly basis.

          (g)  No Repair Charge.  Franchisee shall not levy a charge for repair
               -----------------
or maintenance, except in cases of subscriber negligence, or abuse of
Franchisee's equipment.

          (h)  Subscriber Remedies.  A subscriber adversely affected by the
               --------------------
Franchisee's failure to comply with the requirements of this Section shall be
entitled to one month's free basic service, or other comparable remedy
acceptable to the subscriber and Franchisee.

          (i)  Converter Return.  In addition to providing for converter and
               -----------------
other equipment return at the local business office Monday through Friday, the
Franchisee shall arrange for either or both Saturday return or pick-up of
converter and other equipment.

     (3)  Information to Subscribers.
          ---------------------------

          (a)  General Information.
               --------------------

          1.   Franchisee must provide to each subscriber prior to installation
of service, reconnection, or upon request information regarding at least the
following: subscriber privacy rights; how to use the cable service; general
services offered by Franchisee (such as maintenance service); billing procedure;
how to use the converter; and theft of service law.

          2.   In addition to this information, the following information shall
also be provided at the time of installation, reconnection, upon request, and to
all subscribers annually: cable system's office hours and local phone number
(including, if different, the after-hour number); name or title of Franchisee's
employee responsible for resolving complaints; the name and the telephone number
of the entity responsible for administering the franchise, along with a
statement that the entity can be called to register a complaint if the
subscriber is dissatisfied with the actions taken by the Franchisee, a listing
of all the channels offered on the system and the price of all services and
equipment being offered by the Cable System; the Franchise's obligations and
procedure far scheduling a service call; a notice regarding the availability of
parental control devices; the amount of any deposit required by Franchisee and
when and in what manner the deposit will be refunded; a description of the
circumstances under which the subscriber is entitled to a refund or a rebate,
and how the refund or rebate can be obtained; and the Franchisee's policy and
procedures for handling complaints and inquiries, and specifically describing
procedures for receiving and handling complaints about employee rudeness or non-
responsiveness.

          (b)  Annual Privacy Notice.  On an annual basis the Franchisee shall
               ----------------------
mail to each subscriber notice. of the subscriber

                                     -44-
<PAGE>
 
privacy rights as required by federal law.

          (c)  Changes in Policy.  The Franchisee shall promptly notify
               ------------------
subscribers of any changes in billing policies, complaint policies or any other
policy affecting them.

          (d)  Copies.  A copy of the notices provided to all subscribers
               -------
hereunder shall be provided to the City.

          (e)  Promotional Materials.  All promotional materials regarding
               ----------------------
residential cable services to subscribers and the general public, where price
information is listed in any manner, shall clearly and accurately disclose price
terms. In the case of pay-per-view or pay-per-event programming, all promotional
materials must clearly and accurately disclose price terms and in the case of
telephone orders, Franchisee shall take appropriate steps to ensure that
Franchisee customer service representatives clearly and accurately disclose
price terms to potential customers in advance of taking the order. The
Franchisee shall maintain a public file containing all promotional material.

          (f)  Subscriber Remedy.  A subscriber adversely affected by the
               ------------------
Franchise's failure to comply with the requirements of this (3) shall be
entitled to one month's free basic service, or other comparable remedy
acceptable to the Subscriber and Franchisee.

     Section 4.  Disconnection/Downgrade.
                 ------------------------

          (a)  Subscriber's Right to Disconnect.  A subscriber may terminate or
               ---------------------------------
downgrade service at any time. Franchisee shall promptly disconnect or downgrade
the services of any subscriber who shall request. No period of notice prior to
voluntary termination or downgrade of service by a subscriber may be required.
No charge may be imposed by Franchisee for a cable service delivered after the
date of the request for disconnection or downgrade of that service. However,
Franchisee may continue to levy a pro-rate equipment charge on any equipment the
subscriber is required to return to Franchisee, if the equipment is not returned
within three business days after the date of disconnect request.

          (b)  No Disconnect Charge.  Except as federal law may otherwise
               ---------------------
provide, no charge may be imposed for any disconnection or downgrade, except
that a reasonable downgrade charge may be imposed where a promotion requires a
subscriber to take a service for a set and limited period of time in order to
qualify for the promotion. In such cases, in addition to satisfying any
requirements of Section 3, the Subscriber shall be notified in writing before
the service is installed (1) that a downgrade charge will result if a subscriber
downgrades before the end of a designated period, and (2) the amount of the
downgrade charge. The notice can be provided in the Franchisee's promotional
materials,

                                     -45-
<PAGE>
 
provided that it is clearly and prominently displayed.

          (c)  Reconnection.  After disconnection, upon payment by the
               -------------
subscriber in full of all proper fees or charges, including the payment of the
reconnection charge, if any, Franchisee shall promptly reinstate service.
However, if the subscriber is disconnected under (4)(d), Franchisee may refuse
to reconnect unless it receives adequate assurance that the subscriber will not
engage in the practices which lea to disconnection. Except as federal law may
otherwise provide, reconnection charges cannot be higher than the lowest
nondiscounted standard installation charge which would be collected at the time
of reconnection from similarly situated new subscribers.

          (d)  Involuntary Subscriber Disconnection.  Franchisee may disconnect
               -------------------------------------
a subscriber if a customer fails to pay amounts owed and for other reasonable
cause. A disconnected customer may appeal any disconnection to the City's Cable
Television Commission.

          (e)  Improper Disconnection.  No charge may be made for reconnection
               -----------------------
where a subscriber is improperly disconnected by Franchisee.

          (f)  Subscriber Remedy.  A subscriber adversely affected by the
               ------------------
Franchisee's failure to comply with the requirements of this Section shall be
entitled to one month's free basic service, or other comparable remedy
acceptable to the subscriber and Franchisee.

     Section 5.  Complaint Procedures.  Franchisee shall establish a clear
     ----------  ---------------------
procedure for resolving complaints, involving at least the following:

          (a)  Simple Procedure to be Adopted.  A simple procedure for making
               -------------------------------
complaints orally or in writing, and identification of a person responsible for
handling complaints which are not being resolved by a customer service
representative.

          (b)  Response to Complaint.  A requirement that the Franchisee must
               ----------------------
provide its initial response to a complaint within five days of its receipt and
a final written response to any unresolved complaint (other than a complaint
about the carriage or lack of carriage of a particular programming service or
about the content of a programming service or about the level of any unregulated
rate) within 30 days after the complaint is made.

          (c)  Notice to Complainant.  A requirement that the Franchisee must
               ----------------------
notify any complainant, that if the complaint is not resolved to the
complainant's satisfaction, the matter may be referred to the entity responsible
for administering the franchise or to the City for resolution; and a requirement
that the complainant be told how to contact those government offices.

                                     -46-
<PAGE>
 
     Section 6.  Billing Practices and Customer Charges.
                 ---------------------------------------

          (a)  Itemized  Bills.  Every Franchisee bill to subscribers must
               ----------------
itemize each category service and state clearly the charge therefore.

          (b)  Unsolicited Goods or Service.  The prohibition on negative option
               -----------------------------
sales under Wisconsin law and under 47 U.S.C. (S)543(f) is specifically
incorporated herein, which prohibition shall be interpreted in the same manner
that prohibition is interpreted under applicable state and federal law.

          (c)  Deposits.  Franchisee may require a reasonable, non-
               ---------
discriminatory deposit on equipment provided to subscribers as follows: if the
subscriber returns the equipment, Franchisee must return the deposit, but less
any amount which Franchisee can demonstrate should be deducted for damage to
that equipment.

     The deposit shall be returned to the subscriber within the next billing
cycle of the date the equipment is returned.

          (d)  Late Fees and Administrative Charges.  The Franchisee may charge
               -------------------------------------
either a reasonable collection fee or administrative charge for late bills which
are at least 30 days past due. The parties agree that the current fee of $5.00
is reasonable. Should the Franchisee be forced to take court action or use the
services of a collection agency to collect a delinquent bill, the Franchisee is
not prohibited from collecting its out of pocket collection expenses.

     Section 7.  Refunds.
                 --------

          (a)  Refunds for Outages.  For any period where the Franchisee's
               --------------------
service is interrupted or substantially impaired for one hour or more during the
period 7 PM to 11 PM or for more than four hours in any twenty-four hour period,
Franchisee on request shall credit against the Subscriber's next bill an amount
equal to 1/30 of the monthly charge for any service or service tier affected
(and shall be a direct refund to any Subscriber that terminates service before
all credits owed are applied). The charge for any per-program selection which
materially affected by the outage would be refunded. The purpose of requiring a
request is merely to allow the Franchisee to identify affected Subscribers.
Therefore, upon complaint by a subscriber that a service was out or impaired it
shall be the responsibility of the Franchisee to provide a refund unless it can
show that the degradation or outage was of insufficient length to require a
refund. Further, in cases where the Franchisee can reasonably identify the
households affected by an outage, and the outage occurs between the hours of
6:00 a.m. and midnight, it shall automatically credit a refund amount owed.

                                     -47-
<PAGE>
 
          (b)  Termination During Pre-Paid Period.     If any subscriber
               -----------------------------------
terminates service prior to the end of a pre-paid period, a pro rata portion of
any pre-paid service fee, using the actual number of days in the month as a
basis, shall be refunded to the subscriber.

          (a) Refunds/Timing.   All refunds or credits shall be made promptly,
              ---------------
but not later than the next billing cycle following the date of the request
which gives rise to the refund or, in the case of a refund upon termination, the
return of any equipment belonging to the Franchisee.

             (d)  Privacy.     Operator  Must  Protect Privacy.  Franchisee 
                  --------     --------------------------------
shall at all times comply with the privacy provisions of the cable Act and
applicable state law.

             (e)  No Penalties for Exercise of Privacy Rights.    No
                  --------------------------------------------
penalties or extra charges may be invoked for a subscriber's failure to grant
exceptions to the privacy provisions of the Cable Act.

     Dated this 21st day of November, 1996.

CABLE TV JOINT FUND 11,                   CITY OF MANITOWOC
a Colorado joint venture

By:  Cable TV Joint Fund 11-A, Ltd. 
     Cable TV Joint Fund 11-B, Ltd.
     Cable TV Joint Fund 11-C, Ltd.       By: /s/ Kevin M. Crawford       
     Cable TV Joint Fund 11-D, Ltd.           ----------------------
     All Colorado limited partners            Kevin M. Crawford 
     comprising the joint venture

By:  Jones Intercable, Inc., a            Attest:
     Colorado corporation as general
     partner of the limited
     partnerships                         /s/ Jennifer Hudon
                                          --------------------------  
                                          Jennifer Hudon
By: /s/ Ruth E. Warren                    City Clerk
   ---------------------------------
    Ruth E. Warren       
    Group Vice President/Operations

                                     -48-