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                            VILLAGE OF VERNON HILLS
                              ORDINANCE NO. 96-58
                                           ------
                          AN ORDINANCE GRANTING A NEW
                        CABLE COMMUNICATION FRANCHISE TO
                            CABLE TV FUND 15-A, LTD.


     WHEREAS, on July 15, 1980, the Vernon Hills Board of Trustees adopted
Vernon Hills Ordinance No. 335 granting a 15-year, non-exclusive franchise to
Centel Communications Company ("Centel") to construct, install, maintain and
operate a community antenna television system in the Village of Vernon Hills;
and

     WHEREAS, on September 26, 1989, the Board of Trustees adopted Vernon Hills
Resolution approving the transfer of the franchise granted pursuant to Ordinance
No. 335 from Centel to Cable TV Fund 15-A, Ltd. (d/b/a "Jones Intercable"); and

     WHEREAS, the franchise granted pursuant to Ordinance No. 335 was due to
expire on July 16, 1996; and

     WHEREAS, the Village extended the term of Jones Intercable's franchise to
September 30, 1996; and

     WHEREAS, Jones Intercable has requested that the Village renew the existing
franchise; and

     WHEREAS, as part of the renewal process, the Village and Jones lntercable
have jointly developed, agreed to, and accepted a new franchise agreement, the
terms, conditions, and provisions of which are set forth in this Ordinance and
in the exhibits attached hereto; and

     WHEREAS, pursuant to the Federal Cable Communications Policy Act of 1984,
as amended, 47 U.S.C. (S)(S) 521 et seq. (the "Cable Act") and Section 11-42-11
of the Illinois

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Municipal Code, 65 ILCS 5/11-42-11, the President and Board of Trustees are
authorized to license, franchise, and impose charges in connection with the
business of operating a cable communication system within the Village; and

     WHEREAS, the Mayor and Board of Trustees believe that it is appropriate and
necessary to enact this Ordinance comprehensively amending and superseding
Ordinance No. 335:

     NOW, THEREFORE, BE IT ORDAINED by the President and Board of Trustees of
the Village of Vernon Hills, Lake County and State of Illinois, as follows:

Section 1. Recitals. The foregoing recitals are incorporated herein as findings
-------------------
of the President and Board of Trustees.

Section 2. Short Title. This Ordinance shall be known and referred to as the
----------------------
Vernon Hills Cable Communication Ordinance.

Section 3. New Cable Franchise. Vernon Hills Ordinance No. 335, including all
------------------------------
amendments thereto, shall be, and it is hereby, comprehensively amended,
replaced, and superseded by this Ordinance to establish and create a new Vernon
Hills Cable Communication Franchise as follows:

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                            VILLAGE OF VERNON HILLS
                         CABLE COMMUNICATION FRANCHISE

PART 1: PURPOSES AND POLICIES

1-1: Purposes and Policies. The purposes and policies of this Franchise are to:

A.    Provide assurance that cable television and communication systems are
      responsive to the needs and interests of the Village and its residents;
      and

B.    Grant to Jones Intercable a franchise to permit the use of Village streets
      and other public ways for a cable communication system, but only to the
      extent and only in the manner provided in this Franchise; and
    
C.    Provide for the regulation by the Village of the erection, construction,
      reconstruction, installation, operation, maintenance, dismantling,
      testing, repair, and use of the cable communication system or cable system
      authorized pursuant to this Franchise, in, upon, along, across, above,
      over, or under, or in any other manner connected with, the streets and
      other public ways in the Village; and
    
D.    Provide for the payment by Jones Intercable of fees and other valuable
      consideration to the Village (1) in exchange for the privilege of having
      been granted the Franchise and the use permitted herein of Village streets
      and other public ways; and (2) to compensate the Village for the costs
      associated with such use and with the regulation and administration of the
      Franchise; and
    
E.    Provide for the development of a cable communication system as a means to
      improve communications between and among, and to otherwise serve the
      present and future needs of, the government, the citizens, the private and
      public institutions and organizations, and the commercial enterprises of
      the Village and surrounding communities; and
    
F.    Provide for remedies and prescribe penalties for violations of this
      Franchise.

                    PART II: DEFINITIONS AND INTERPRETATION

2-1:  Definitions.

A.    The following terms, phrases, words, and their derivations shall have the
      meanings hereafter ascribed to them.

1.    "Activation" of a Cable system or a Cable Communication System shall be
      ------------
      deemed to occur, unless otherwise provided herein, on the first date that
      trunk and feeder cable have been installed and constructed so as to be
      available to serve any potential

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      Subscriber at levels of equipment and service standards in compliance with
      the provisions of this Ordinance.

2.    "Authorized Agent" means any Person, department, board, commission, or
      ------------------
      agency that is delegated authority or designated by the Board of Trustees
      of the Village to act for the Village in matters related to cable
      communications. "Authorized Agent" shall include such Person, department,
      board, commission, or agency only when he, she, or it is acting within the
      scope of authority granted by the Board of Trustees.

3.    "Basic Service" means any level of service which includes the retrans-
      ---------------
      mission of local television signals.

4.    "Board" or "Board of Trustees" means the President and Board of Trustees 
       -----------------------------
      of the Village or their Authorized Agent.

5.    "Cable Communication System" or "Cable System" means all or any part of
      ----------------------------    --------------
      any facility operating by means of coaxial cable, optical fiber, or other
      transmission, and associated equipment, devices, and facilities, the
      primary function of which is to receive, through any means including
      without limitation coaxial cable, optical fiber, or satellite or microwave
      transmission, and to distribute the signals of one or more broadcast
      television or radio stations and of other sources of video, audio, voice,
      or data signals. Said facility, or any part thereof, also may be one that
      distributes to, from, or among Subscribers or other Persons such other
      video, audio, voice, or data signals as may originate within the Village
      or elsewhere. "Cable Communication System" and "Cable System" shall
      include, without limitation, (a) "cable system," as defined in Section
      522(6) of the Cable Act; (b) community antenna television system," as
      defined in Section 11-42-11 of the Illinois Municipal Code; and (c) any
      system that provides any "cable service," as defined in Section 522(5) of
      the Cable Act, or any "cable television service." as defined in Section 
      16-10(a)(1) of the Illinois Criminal Law and Procedure Code, as either of
      those statutes may be amended from time to time. The definition of "Cable
      Communication System" and "Cable System" shall not be deemed to
      circumscribe any valid authority of any governmental body, including the
      Village, to regulate the activities of telephone or telegraph companies,
      or the provision of any Service over the Cable System that is not a "cable
      service" as such term is defined in the Cable Act.

6.    "Cable Drop" means the cable or other wires extending from the attachment
       -----------
      pole to the subscriber receiving cable service, and that conducts the
      cable system signal from the attachment pole to the subscribers receiving
      or transmitting equipment. "Cable Drop" shall include the cable that is
      installed within the structure receiving the Cable Service and the
      transformer that matches the impedance of the cable to the input leads of
      the receiving equipment.

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7.    "Cable Ordinance" or "Ordinance" means Vernon Hills Ordinance No. ____,
       -------------------------------                              
      being the Vernon Hills Cable Communication Ordinance, including all
      exhibits, modifications, and amendments thereto.

8.    "Cable Service" Shall mean: (1) the one-way transmission to subscribers of
      ---------------
      video programming and (ii) subscriber interaction, if any, which is
      required for the selection of such video programming.

9.    "Cable Service Area" means all residential areas within the Village to be
      --------------------
      provided with access to cable service in accordance with the Franchisee's
      provision of service policies contained in this Franchise.

10.   "Channel" means a band of frequencies, in the electromagnetic spectrum, or
      ---------
      any other means of transmission (including, without limitation, optical
      fibers or any other now available or that may become available) capable of
      carrying a video signal, an audio signal, a voice signal, or a data
      signal.

11.   "Connection" means the attachment of the Cable Drop to the radio or
      ------------
      television receiver of a Subscriber, including the installation of a
      Converter where applicable and necessary.

12.   "Community Access Channel" means a Channel specifically designated,
      --------------------------
      intended, and reserved for noncommercial, origination programming on a
      first-come, first-served, nondiscriminatory basis, to provide the general
      public with maximum availability of low-cost access to television
      production, transmission, and communication capability.

13.   "Control" or "Controlling Interest" means actual working control in 
      ---------    ----------------------
      whatever manner exercised.
     

14.   "Converter" means an electronic device that converts, signals to a
      -----------
      frequency not susceptible to off-air interference, within the receiver of
      a Subscriber, and that, by an appropriate Channel selector, also permits a
      Subscriber to view or use all signals delivered in the Basic Service and
      all other Services delivered at designated converter dial locations for
      which the Subscriber pays a fee.

15.   "Extensive System Failure" means (a) the failure of any trunk or feeder
      --------------------------
      cable causing a service outage of 10 or more Subscribers in the same
      geographic area, or (b) the failure of modular equipment, satellite
      reception equipment, or other System functions that results in the
      interruption of Service throughout the Cable Service Area.

16.   "FCC" means the Federal Communications Commission as constituted by the
      -----
      Communications Act of 1934, or any successor agency created by the United
      States Congress.

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17.   "Franchise" means the nonexclusive right to make use of the Public Ways in
      -----------
      the Village, or within specified areas of the Village, for the purpose of
      constructing and operating a Cable Communication System, as granted to
      Franchisee pursuant to Vernon Hills Ordinance No. ___. "Franchise" does
      not include any license or permit required for the privilege of
      transacting and carrying on a business within the Village as may be
      required by Village ordinances and laws.

18.   "Franchisee" means Cable TV Fund, 15-A, Ltd. and any and all of its 
      ------------
      agents, employees, lawful successors, transferees, or assignees.

19.   "Franchise Fee" means the fee required to be paid by the Franchisee
      ---------------
      pursuant to Subsection 4-6A of this Franchise.

20.   "Gross Revenue" means all revenue, as determined in accordance with
       --------------
      generally accepted accounting principles, that is derived, directly or
      indirectly, by the Franchisee from or in connection with the provision of
      Cable Service including without limitation (a) the distribution of any
      Cable Service over the Cable System; (b) installation, reconnection, and
      similar fees; fees paid for Channels designated for commercial use; (c)
      Converter rentals and sales; (d) studio and other facility or equipment
      rentals; (e) advertising revenues. "Gross Revenue" shall not include any
      taxes imposed directly on any Subscriber or user by a state, local, or
      other governmental unit; bad debts; Franchise Fees; subscriber deposits;
      and programming fees paid by the Franchisee for non-broadcast program
      expenses.

21.   "Installation" means the process of installing a Cable Drop and completing
      --------------
      a Connection of the Cable System.

22.   "Person" means any natural person, or any association, firm, partnership,
      --------
      joint venture, corporation, or other legally recognized entity or
      organization, whether for-profit or not-for-profit, but excluding the
      Village.

23.   "Public Property" means any real property owned by any governmental unit,
      -----------------
      other than a Public Way.
     
24.   "Public Way" means, except where expressly limited by this Ordinance and,
      ------------
      in any event, only to the extent necessary to permit the installation and
      maintenance of a Cable System, the surface, the air space above the
      surface, and the area below the surface of any public street, highway,
      lane, path, alley, sidewalk, boulevard, drive, bridge, conduit, tunnel,
      park, parkway, waterway, utility easement (as defined in Section 541 of
      the Cable Act) or other public right-of-way now or hereafter held by the
      Village or dedicated for use by the Village, use by the general public. No
      reference in this Ordinance to "Public Way" shall be deemed to be a
      representation or guarantee by the Village that its title or interest in
      any property is sufficient to permit its use for such purpose, and this
      Ordinance shall, by the use of such term, be deemed

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      to grant only such rights to use property in the Village as the Village
      may have the right and power to grant in this Ordinance.

25.   "Resident" means any Person residing in the Village or as otherwise 
      ----------
      defined by applicable law.

26.   "Service" means any Cable Service, non-cable or any other service, whether
      ---------
      originated by the Franchisee or any other person.

27.   "Subscriber" means any Person who lawfully receives, or has legally
      ------------
      contracted for the right to receive, any Cable Service by means of or in
      connection with the Cable System, and does not future distribute said
      Cable Service.

28.   "Village" means the Village of Vernon Hills and its Board of Trustees.
      ---------
      Unless the Board of Trustees shall have designated an Authorized Agent to
      act for the Village, references in this Franchise to actions by the
      Village shall be construed to refer to actions by the Board of Trustees.

B.    Any word or term defined in the Cable Act but not defined in Subsection
      2.IA of this Franchise shall have the meaning set forth in the Cable Act.

2-2:  Interpretation.

A.    Word Use. When not inconsistent with the context, any word used in the
      present tense includes the future tense, any word used in plural includes
      the singular, and any word used in the singular includes the plural.
      "Shall" and "will" are always mandatory and not merely directory. "May" is
      permissive.

B.    Federal and State Law. This Franchise is adopted pursuant to the authority
      of the Village under the Cable Act and the Constitution and statutes of
      the State of Illinois. Where any provision of this Franchise conflicts
      with any provision of federal or State law, this Franchise shall control
      to the full extent permitted by law.
    
C.    Prior Drafts. In no event shall prior drafts of this Franchise, or any
      exhibits to this Franchise, if any, be used, considered, or relied upon in
      any way to interpret or construe any provision of this Franchise, or any
      exhibit to this Franchise.
    
D.    Headings. The headings contained in this Franchise are to facilitate
      reference only, do not form a part of this Franchise, and shall not be
      used, considered, or relied on in any way to interpret or construe any
      provision of this Franchise or any exhibit to this Franchise.

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<PAGE>
 
                  PART III: GRANT AND ACCEPTANCE OF FRANCHISE

3-1:  Grant of Franchise. Pursuant to and in strict accordance with the terms,
provisions, and conditions set forth in this Franchise, the Village hereby
grants to the Franchisee this nonexclusive Franchise to construct, install,
maintain and operate a Cable System in the Village and to use the Public Ways in
furtherance thereof; provided, however, that no such grant shall be effective
unless and until the Franchisee accepts terms and provision of this Franchise
pursuant to the requirements set forth in Section 3-2 of this Franchise.

3-2:  Acceptance of Franchise; Effective Date. In order to accept the Franchise
or to receive any of the rights, benefits, or interests to be granted hereby,
the Franchisee shall execute and file with the Village Clerk, no later than 60
days after this Franchise has been finally approved by the Village Board, a
Franchise Acceptance Agreement in form and substance the same or substantially
similar to Exhibit A, attached hereto and incorporated herein (the "Franchise
Acceptance Agreement"). For reference purposes and for all other purposes stated
herein, the date on which this Franchise takes effect pursuant to Section 4 of
this Franchise shall be deemed to be the "Effective Date" of this Franchise.

3-3:  Effect of Franchise Acceptance. By accepting the Franchise pursuant to
Section 3-2 of this Franchise, the Franchisee shall be deemed to have agreed to
be bound by ail of the terms, conditions, and provisions set forth in this
Franchise, and to strictly comply with each and every one of them.

3-4:  Licenses and Permits. Nothing in this Franchise shall take the place of or
supersede other license or permit that the Franchisee is required to obtain to
construct, install, maintain, and operate a Cable System in the Village.

3-5:  Franchise Term. The Franchise granted pursuant to this Ordinance shall be
effective for a period of fifteen (15) years from and after the Effective Date.

3-6:  Nonexclusivity of Grant. Village reserves the right to award additional
Franchises; so long as in the event another person uses the public rights-of-way
to construct, operate or maintain a Cable System, or otherwise uses the streets
for the delivery of any Service, the additional Franchise may not be on material
terms and conditions which are more favorable or less burdensome than those
applied to Franchisee, with respect to the following matters:  (1) the term of
any such authorization shall be no more than the term of this Franchise; (2) the
Franchise Fee assessed on any such other person shall be no less, as a percent
of the portion of the persons Gross Revenues that are attributable to its
provision of any Service, than the fee Franchisee pays under this Franchise; and
(3) the channels, support and facilities for public, educational and government
access channels provided by any such other person shall be no less than the
channels, support and facilities provided by the Franchisee.

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                         PART IV: FRANCHISE CONDITIONS

4-1:  Franchise Variance. Variance Initiated by Franchisee. Franchisee may make
applications for a Variance to this Franchise, to accommodate a significant
change in circumstances, to prevent unreasonable hardship to the Franchisee, or
to permit technical variations which will satisfy the purpose of this Franchise,
may be made by the Franchisee to the Village. The Village shall review the
application within fourteen (14) calendar days, or earliest meeting of the
Village Council, and shall issue a report of the findings of the Village and
shall act on a request within thirty (30) days. The Village is under no
obligation to grant a request for a Variance under this section, provided that
the Village's consent to a request for a variance shall not be unreasonably
withheld. Franchisee may appeal a final determination by the Village to a court
of competent jurisdiction.

4-2:  Performance Evaluation Meetings.

A.    Regular Evaluation Meetings. The Village and the Franchisee shall hold
      regular performance evaluation meetings within 30 days after the second
      anniversary date of the Effective Date. All such evaluation meetings shall
      be noticed in advanced and open to the public.
    
B.    Special Evaluation Meetings. Special evaluation meetings may be held at
      any time during the term of this Franchise on the written request of
      either the Village or the Franchisee.
    
C.    Elements of Evaluation. Topics that may be discussed at any regular or
      special evaluation meeting may include specifically, but without
      limitation, programming, Subscriber rate structures, Franchise Fees, free
      or discounted Service, penalties, application of new technologies, Cable
      System performance, Services provided, Subscriber and community
      complaints, privacy, modification to this Ordinance, judicial and FCC
      rulings, line extension policies, and the Franchisee or Village rules and
      regulations.
    
D.    Franchisee Cooperation. The Franchisee shall fully cooperate with the
      Village in all matters relating to any regular or special evaluation
      pursuant to this Section and shall, provide such reasonable information,
      data, and documents as the Village may reasonably request in connection
      with any such evaluation.


4-3:  Franchise Renewal.

A.    Renewal Request Requirements. The Franchisee may file a written request to
      renew the Franchise; provided, however, that unless the Village shall
      consent to some lesser notice, the Franchisee's renewal request shall be
      filed in accordance with federal law.

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      The Franchisee's renewal request shall include all data and information
      that the Franchisee considers pertinent in support of the request and the
      Franchisee's specific proposals, if any, for revision or modification of
      this Franchise.

B.    Franchise Renewal Standards. This Franchise may be renewed if:

      1.   the Franchisee has substantially complied with the material terms of
           the existing Franchise and with applicable laws;
    
      2.   the quality of the Franchisee's service has been reasonable in light
           of community needs;
    
      3.   the Franchisee has the financial, legal, and technical ability to
           provide the services, facilities, and equipment set forth in the
           Franchisee's proposal, and
    
      4.   Franchisee's proposal is reasonable to meet the future cable-related
           community needs and interests, taking into account the cost of
           meeting such needs and interests.

C.    Renewal Proceeding. In any renewal proceeding, the Franchisee shall be
      afforded adequate notice and the Franchisee and the Village, or its
      designee, shall be afforded fair opportunity for full participation,
      including the right to introduce evidence, to require the production of
      evidence, and to question witnesses. A transcript shall be made of any
      such proceeding.

      1.   A proceeding under this subsection shall be completed within twelve
           (12) months of its commencement, within which time the Village shall
           issue a written decision granting or denying the proposal for renewal
           based upon the record of such proceeding, and transmit a copy of such
           decision to the Franchisee. Such decision shall state the reasons
           therefor.
    
      2.   Any denial of a proposal for renewal shall be based on one or more
           adverse findings made with respect to the factors described in
           subsection B, pursuant to the record of the proceeding under this
           subsection. Village may not base a denial of renewal on a failure to
           substantially comply with the material terms of the Franchise under
           subsection B or on events considered under subsection B unless the
           Village has provided Franchisee with notice and the opportunity to
           cure, or in any case in which it is documented that the Village has
           waived its right to object, or Franchisee gives written notice of a
           failure or inability to cure and the Village fails to object within a
           reasonable time after receipt of such notice.
    
      3.   Franchisee is expressly reserved its rights of appeal under federal
           and state law. In addition to such rights, this Franchise shall
           remain in effect at all times

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           during which a renewal proceeding or appeal remains pending.
           Notwithstanding the provisions of subsections A through C of this
           Section, Franchisee may submit a proposal for the renewal of the
           Franchise, and Village may, after affording the public adequate
           notice and opportunity for comment, grant or deny such proposal at
           any time (including after proceedings pursuant to this Section have
           commenced). The denial of a renewal pursuant to this subsection shall
           not affect action on a renewal proposal that is submitted in
           accordance with subsections A through C.
  
      4.   Village may not, upon the expiration of this Franchise, or otherwise,
           acquire an ownership interest in the System, or require a sale of the
           System to any other person, unless Village or such other person
           acquires the ownership interest at not less than fair market value
           for the System as a going concern.
  
  
D.    Franchise Expiration; Temporary Extensions. If no request for renewal is
      filed pursuant to this Section, and in any case in which such a request is
      filed but denied or not yet granted, this Franchise shall expire according
      to its terms; provided, however, that the Village may extend the term of
      this Franchise in such increments as is reasonable while considering a
      franchise renewal request filed pursuant to this Section or while
      negotiating a new franchise with another Person.
  
E.    Village Rights on Expiration and Nonrenewal. If this Franchise expires
      according to its terms, or if the Village exercises its right not to renew
      the Franchise pursuant to Subsection 4-4 of this Franchise, then the
      Village shall have the option to require the Franchisee to remove all such
      assets from the Public Ways in the manner and within the times set forth
      in Subsection 4-5 of this Ordinance.


4-4:  Termination.

A.    Date of Termination. The termination of the Franchise granted pursuant to
      this Ordinance and all of the rights granted to the Franchisee pursuant
      hereto shall take place on the earlier of:
   
      1.   the revocation of the Franchise by action of the Village, as provided
           in Section 4-5 of this Ordinance;
   
      2.   the abandonment of the Cable System (for purposes of this section
           abandonment of the Cable System shall take place when the Franchisee
           fails to provide any Cable Service over the Cable System for a period
           greater than 7 days) in whole or material part, by the Franchisee
           without the express, prior written approval of the Village; or

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      3.   the expiration of the term of the Franchise, if not renewed pursuant
           to Section 4-3 of this Franchise.
   
B.    Rights Upon Termination. If, on the date that this Franchise terminates
      pursuant to Section 4-4 of this Ordinance, the Franchisee is in possession
      or control of the Franchise or the Cable System, then, as of that date:
      (1) the Franchisee shall have no right to operate or receive any
      revenues from the operation of the Cable System and shall cease all
      construction and operation activities in a prompt and workmanlike manner,
      except as provided in subsection C below, or as otherwise authorized or
      directed by the Village in order to maintain continuity of all services to
      all Subscribers; and (2) the Village shall have the right to order the
      removal, or to effect a transfer of the Cable System, as provided in
      Subsection 4-6 of this Ordinance.
   
C.    Mandatory Continuity of Service. In the event of purchase by the Village,
      or a change of the Franchisee, the current Franchisee shall continue to
      operate the Cable System and maintain continuity of service to all
      Subscribers for a period determined by the Village, in the Village's sole
      judgment and discretion; provided, however, that in no case shall such
      period exceed three (3) months. The Franchisee shall be entitled to
      receive any and all applicable revenue from such continued operation.

4-5:  Franchise Revocation.

A.    Grounds for Revocation. The Village may revoke this Franchise only after a
      declaration of intent to revoke and only if the Franchisee refuses,
      neglects or fails to (1) commence and complete construction of the Cable
      System pursuant to the terms and conditions of this Franchise; (2)
      Franchisee makes a material misrepresentation to Village of information
      required to be provided under the Franchise; (3) Franchisee willfully or
      persistently violates any material orders or rulings of any regulating
      body having jurisdiction over the Franchise; (4) Franchise willfully fails
      to acquire the insurance required by the Franchise; (5) Franchisee is
      adjudged insolvent or becomes unable or unwilling to pay its uncontested
      debts as they become due or is adjudged bankrupt or seeks relief under the
      bankruptcy code, or (b) Franchisee, materially violates the transfer
      provisions of Section 4-9.
   
B.    Revocation Procedures. If the Village determines that grounds for
      revocation exist or have existed, then the Village shall notify the
      Franchisee in writing of its intent to revoke and the lawful grounds
      therefore. If, within 90 days after such written notification, the
      Franchisee does not furnish evidence satisfactory to the Village that the
      grounds for revocation have been eliminated or that corrective action has
      been taken or is being actively and expeditiously pursued, or that the
      alleged grounds did not exist, or that the allege grounds were caused by a
      Force Majeure, then the Village shall call, notice, and conduct a public
      hearing to consider revocation of the Franchise. The Village shall give
      the Franchisee no fewer than 15 days written notice of the revocation
      hearing. Such hearing shall provide Franchisee with full due process
      rights

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      Any decision shall be in writing and shall be based upon written findings
      of fact. If the Village, after such hearing, finds that grounds for
      revocation exist, then the Village may thereon and in lieu of or in
      addition to any other rights or remedies available to it, revoke, by
      ordinance duly adopted, this Franchise.
    
C.    De Novo Review. In the event the Village orders termination of the
      Franchise, the Franchisee shall have the right to appeal the determination
      of the Village within thirty (30) days to any agency or court of competent
      jurisdiction for de Novo review. The Village's determination to terminate
                       -- ----
      this Franchise shall not be effective until final resolution of all
      appeals under this Section.

D.    No Election of Remedies. The revocation of this Franchise pursuant to this
      Section shall in no way affect any other rights the Village may have under
      this Franchise or any applicable law.

4-6:  Disposition After Termination.

Upon termination of this Franchise, the Village shall have the right to direct
the Franchisee to remove, at the Franchisee's sole cost and expense, all or any
portion of the Cable System from all Public Ways and other Public Property
within the Village, subject to the following terms and conditions:

      1.   This Subsection 4-5 shall not apply to buried cable, which shall not
           be removed.

      2.   In removing the Cable System, or any portion thereof, the Franchisee
           shall refill and compact, at its sole cost and expense, any resulting
           excavation and shall leave all Public Ways and other property in as
           good a condition as that prevailing immediately prior to the
           Franchisee's removal activities or excavation.

      3.   The Village shall have the right to inspect and approve the condition
           of all Public Ways and property affected by any of the Franchisee's
           removal activities.

      4.   The financial security, liability, indemnification, and insurance
           provisions of this Franchise shall remain in full force and effect
           until the Village has inspected and approved the completion of all of
           Franchisee's removal obligations required pursuant to this
           Subsection.

      5.   The Franchisee shall commence removal activities no later than 30
           days after the Franchisee receives the Village's removal order.

                                       13
<PAGE>
 
      6.   The Franchisee shall complete all removal activities no later than
           180 days after the date on which the Franchisee is required to
           commence removal activities pursuant to this Subsection 4-5 of this
           Franchise.

      7.   If the Franchisee fails to substantially complete such removal within
           180 days after the date on which the Franchisee is required to
           commence removal activities pursuant to this subsection, then, to the
           extent not inconsistent with applicable law, the Village shall have
           the right to: (a) declare all rights, title, and interest to the
           Cable System, and any portion thereof, to belong to the Village along
           with all rights of ownership including, without limitation, the right
           to operate the Cable System or to effect a transfer of the Cable
           System to another Person for operation; or (b) authorize another
           Person, including the Village, to remove the Cable System, or portion
           thereof as designated by the Village, at the Franchisee's sole cost
           and expense.

4-7:  Franchise Fee and Other Payments.

A.    Franchise Fee.

      1.  Amount of Fee.

          A.   In addition to all other fees and payments required pursuant to
               this Ordinance, the Franchisee shall pay to the Village a
               Franchise Fee in an amount equal to 5 percent of the Franchisee's
               annual Gross Revenues (the "Franchise Fee"). The Franchise Fee
               shall be in consideration of the privilege granted pursuant to
               this Ordinance, to the Franchisee, to use the valuable Public
               Ways and the expense of regulation and administration of the
               Franchise.

          B.   The Franchisee shall not be obligated to pay to the Village this
               Franchise Fee from the date of grant of a second Cable Television
               Franchise in the Village, until such time as the Village
               establishes a Village-owned and operated public, educational and
               governmental access studio in the Village, and ceases to use
               Franchisee's local origination studio in the Village. Under no
               circumstance, shall this period of time extend past May 31, 1997.

     2.   Time of Payment. The Franchisee shall pay Franchise Fees on a
          quarterly basis, before the fifteenth (15) day of the month following
          the end of the calendar quarter. If any Franchise Fee is not paid when
          due, interest shall be charged from the due date at the prime rate
          given by the First Chicago Bank to its most credit worthy borrowers of
          demand loans. If any subsequent inspection, audit, or recomputation
          conducted pursuant to Paragraph 4-6A(4) of this Franchise demonstrates
          to the satisfaction of the Village that the required


                                       14
<PAGE>
 
          Franchise Fee was either overpaid or underpaid, the next Franchise Fee
          due following the Village's notification to the Franchisee of approval
          of such inspection, audit, or recomputation shall be adjusted
          accordingly, either by being credited for the amount of the
          overpayment or by being increased in the amount of the underpayment.

     3.   Required Reports. The Franchisee shall include, with each quarterly
          Franchise Fee payment, a statement, verified by a representative of
          the Franchisee, clearly showing the Franchisee' Gross Revenues during
          said calendar quarter and the Franchise Fee due with respect to such
          Gross Revenues pursuant to Paragraph 4-6A(1) of this Franchise. The
          Franchisee shall also file, within 90 days after the last day of the
          Franchisee's fiscal year, an annual report prepared at Franchisee's
          sole cost and expense, by a certified public accountant, clearly
          showing the Franchisee's total Gross Revenues for said fiscal year and
          explaining and reconciling any differences between such report and the
          quarterly reports submitted to the Village by the Franchisee pursuant
          to the first sentence of this Paragraph.

     4.   Village Inspection and Audit. The Village shall have the right to
          inspect and audit the Franchisee's books and records upon reasonable
          request during normal business hours at the Franchisee's local office
          for a period of six months after receipt of the Franchise fee payment,
          after which payments shall be final. Based on any such inspection and
          audit, the Village shall have the right to recompute any Franchise Fee
          due. Whenever an independent auditor shall certify that the results of
          any such Village inspection, audit, or recomputation demonstrate that
          the Franchise Fee due in any fiscal year was underpaid by more than
          five (5) percent, the Franchisee shall reimburse the Village, in
          addition to paying the amount due and any interest or penalties due
          thereon, for the costs of such inspection, audit, or recomputations.

     5.   Acceptance by Village. The acceptance by the Village of any Franchise
          Fee payment shall not in any way be construed as an accord that the
          amount paid is in fact the correct amount, nor shall such acceptance
          of any payment be construed as a release of any claim the Village may
          have for further or additional sums payable under the provisions of
          this Ordinance. All Franchise Fee payments shall be subject to audit
          and recomputation by the Village in accordance with paragraphs 4-6A(4)
          of this Franchise.

     6.   Acknowledgment by the Franchisee. The Franchisee acknowledges as
          follows:

          The Franchise Fee shall be in addition to any and all taxes or other
          fees or charges that the Franchisee shall be required to pay to the
          Village or to any state or federal agency or authority, all of which
          shall be separate and distinct

                                       15
<PAGE>
 
          obligations of the Franchisee and its affiliates, except that any
          taxes, fees, or assessments of any kind imposed on a cable operator or
          cable subscriber, or both, solely because of their status as such, or
          any tax, fee or assessment which is unduly discriminatory against
          cable operators or cable subscribers, shall be considered as part of
          the franchise fee; and

     7.   Change in Franchise Fee. In the event that the maximum allowable
          Franchise Fee is increased by the FCC and Village desires an increase
          in its Franchise Fee payment, the Village shall provide the Franchisee
          with written notice of its desire to increase the fee, and the Village
          and Franchisee shall enter into good faith negotiations concerning an
          increase in the franchise fee payment. In the event another provider
          of video programming, including video dialtone, uses the Public 
          rights-of-way for purposes of constructing, operating and maintaining
          a facility for the distribution of Video programming, the Franchisee
          shall not be required to pay a franchise fee on the portion of its
          Gross Revenues derived from its provision of any service unless such
          other provider is also required to pay a franchise fee on the same
          portion of its gross revenues attributable to its provision of that
          service. The fee payable by the Franchisee, as a percentage of any
          portion of its Gross Revenues, shall not exceed the percentage payable
          by the other provider on the same portion of its Gross Revenue.

B.   Other Payments.

     1.   Acknowledgement by the Franchisee. The Franchisee acknowledges that
          all contributions, Services, equipment, facilities, support,
          resources, and other activities to be paid or supplied by the
          Franchisee pursuant to this Franchise are for the benefit of all
          Subscribers and the public at large. The Franchisee also acknowledges
          that said contributions, Services, equipment, facilities, support,
          resources, and other activities shall not be deemed to be a part of
          the Franchise Fee or chargeable against the Franchise Fee, except as
          federal law allows. The Franchise Fee shall take precedence over all
          other payments, contributions, services, equipment, facilities,
          support, resources, and other activities to be paid or supplied by the
          Franchisee.

     2.   Continuation of Service. In the event the Franchisee continues to
          operate all or any part of the Cable System after this Franchise
          expires, then the Franchisee shall continue to comply with all
          applicable provisions of this Franchise, including specifically, but
          without limitation, all Franchise Fee and other payment provisions
          throughout the period of such continued operation.

                                       16
<PAGE>
 
4-8: Liability, Indemnification, Insurance, and Performance Bond.

A.   Liability.

     1.   Franchisee. The Franchisee shall be responsible for any and all
          damage or loss to any real or personal property of the Village or of
          any Person, and for any injury to or death of any individual Person,
          or any officer, employee, or agent of the Village, arising out of or
          in connection with the Franchisee's construction, operation,
          maintenance, repair, or removal of the Cable System. The Franchisee
          shall, at its sole cost and expense, replace, repair, and restore all
          such property to its prior condition, and shall pay all legal damages
          in the event of any such injury to or death of any individual or any
          injury to property.

     2.   Village. Neither the Village nor its officers, employees, or agents
          shall be liable for any loss or damage to any real or personal
          property of any Person, or for any injury to or death of any
          individual Person, arising out of or in connection with the
          Franchisee's construction, operation, maintenance, repair, or removal
          of, or other action or event with respect to the Cable System, or the
          distribution of Cable Service over the Cable System.

     3.   Emergency and Other Actions.

          A.   The Village may, at any time in case of fire, disaster, or other
               emergency as determined by the Village in its reasonable
               discretion, cut or move any of the wires, cables, amplifiers,
               poles, appurtenances, or other parts of the Cable System as
               necessary to respond to the fire, disaster, or other emergency.
               If the Village takes any such emergency action, then the Village
               shall not be liable therefor to the Franchisee or any affiliate
               of the Franchisee. When practical in the Village's reasonable
               discretion, the Village shall consult with the Franchisee before
               the Village takes any such emergency action, and the Village
               shall give the Franchisee reasonable opportunity to perform such
               emergency work itself.

          B.   The Village shall consult with the Franchisee at least forty-five
               (45) days before undertaking any public work, public improvement,
               alteration of any, municipal structure, any change in the grade
               or line of any public way, or the elimination or discontinuation,
               and closing of any public way, that may result in the breaking
               through, movement, removal, alteration, or relocation of any part
               of the Cable System. The Franchisee shall be given the
               opportunity to perform such work pertaining to the cable system
               itself.

                                       17
<PAGE>
 
          C.   Neither the Village nor its officers, employees, or agents shall
               be liable to the Franchise or any affiliate of the Franchisee for
               any special, incidental, consequential, punitive, or other
               damages as a result of the exercise of any right of the Village
               pursuant to this Franchise, including without limitation the
               right of the Village to terminate this Franchise and to take any
               action subsequent thereto.

B.   Indemnification.

     1.   Hold Harmless. The Franchisee shall save, indemnify, and hold the
          Village and its corporate authorities, elected and appointed
          officials, officers, boards, commissions, legal counsel, employees,
          and agents harmless from any injury, claim, demand, suit, judgment,
          execution, liability, debt, damages, or penalty (the "Claims") arising
          out of, resulting from, or alleged to arise out of or result from the
          Franchisee's construction, operation, maintenance, repair, or removal
          of the Cable System, whether such acts or omissions are those of the
          Franchisee or its officers, employees, agents, or contractors, and
          whether any such act or omission is authorized, allowed, or prohibited
          by this Franchise.

     2.   Defense. The Franchisee shall pay all expenses incurred in defense of
          any claims. The Village must give the Franchisee timely written notice
          of the making of any claim or of the commencement of any action, suit
          or other proceeding for which coverage is requested pursuant to the
          indemnity provisions of this Section. In the event such claim arises,
          the Village or any other indemnified party shall tender the defense
          thereof to the Franchisee and the Franchisee shall have the right to
          defend, settle or compromise any claims arising hereunder and the
          Village shall cooperate fully therein.

C.   Insurance.

     1.   General Liability. The Franchisee shall carry and maintain,
          throughout the term of this Franchise, liability insurance insuring
          the Franchisee, the Village, and the Village's officers, boards,
          commissions, elected and appointed officials, agents, and employees
          with regard to any of the matters listed in Paragraphs 1 and 2 of
          Subsection 4-8B of this Franchise, and in the minimum amounts as
          follows:

          A.   $2,500,000 for bodily injury or death to each Person.

          B.   $2,000,000 for property damage resulting from any one accident.

          C.   $2,000,000 for all other types of liability.

                                       18
<PAGE>
 
     2.   Automobile. The Franchisee shall carry and maintain in its own name
          automobile liability insurance with a limit of $2,000,000 for each
          Person and $2,000,000 for each accident for property damage with
          respect to owned and non-owned automobiles for the operations of which
          the Franchisee is responsible.

     3.   Hazard. Because the Franchisee is authorized by this Franchise to
          undertake certain work within the Public Ways, the Franchisee's
          insurance shall cover comprehensive form, premises-operations,
          explosions and collapse hazard, underground hazard and products
          completed hazard, in the minimum amount of $3,000,000, or whatever
          limits are permitted by the State of Illinois for bodily injury and
          property damage combined.

     4.   Evidence of Insurance Policies. Within thirty (30) days of the filing
          of the Franchise Acceptance Agreement pursuant to Section 3-2 of this
          Franchise, the Franchisee shall furnish proof to the Village that the
          insurance policies required by this Subsection have been obtained,
          along with written evidence of payment of the required premiums, in
          the form of a certificate of insurance.

     5.   Maintenance of Insurance Policies. The insurance policies required by
          this Subsection shall be carried and maintained by the Franchisee
          throughout the term of this Franchise and such other period of time
          during which the Franchisee operates or is engaged in the removal of
          the Cable System as subject to Village inspection and approval. Each
          such insurance policy shall contain the following endorsement: "It is
          hereby understood and agreed that this policy may not be cancelled nor
          the intention not to renew be stated until 30 days after receipt by
          the Village of Vernon Hills, by registered mail, of a written notice
          addressed to the Village Administrator of such intent to cancel or not
          to renew."

     6.   No Limit of Liability. The legal liability of the Franchisee to the
          Village and any Person for any of the matters that are the subject of
          the insurance policies required by this Subsection shall not be
          limited by said insurance policies nor by the recovery of any amounts
          thereunder.

D.   Performance Bond

     The Franchisee shall maintain through the term of this Ordinance, a
     faithful performance bond running to the Village, with a good and
     sufficient surety to be approved by the Village, in the penal sum of
     $100,000 on the condition that the Village shall well and truly observe,
     fulfill and perform in connection with each provision, term and condition
     of this Ordinance, and that in case of any breach, the Village shall be
     entitled to recover from the principal and sureties on such bond that
     amount of any damages and all costs and attorney's fees incurred by the
     Village,

                                       19
<PAGE>
 
     proximately resulting from the failure of the Village to well and
     faithfully observe and perform under any and all of the provisions, terms
     and conditions which this Ordinance requires it to perform.


4-9: Sale, Transfer, and Similar Actions

A.   Village Approval Required. In the event of a change of control of
     Franchisee, the parties to the sale or transfer shall make a written
     request to the Village for its approval of the sale or transfer. The
     written request shall be accompanied by information required by FCC rules
     and shall be presented on a form as prescribed by FCC rules.

B.   In accordance with the Cable Act, the Village shall have 120 days from
     receipt of the information referred to in Subsection (a) above to act upon
     the request for approval. If the Village fails to render a final decision
     on the request within that time, the request shall be deem granted unless
     the Franchisee and the Village agree, in writing, to an extension of the
     time.

C.   During the review period described in Subsection (b) above, the Village may
     advise Franchisee that a public hearing is deemed necessary to evaluate any
     potential adverse effect of the sale or transfer upon Franchisee's
     subscribers. In such event, Franchisee shall receive written notice of the
     hearing, and of the opportunity to participate fully in it, as far in
     advance as possible, in no event less than fourteen (14) days before the
     start of the hearing.

D.   A decision of the Village upon a request pursuant to this Section shall be
     in writing and subject to review and appeal as provided for in the Cable
     Act.

E.   In reviewing a request for a sale or transfer pursuant to this Section, the
     Village may inquire into the technical, legal and financial qualifications
     of the prospective controlling party, and the Franchisee shall assist the
     Village in so inquiring. The Village shall not unreasonably withhold its
     approval. In no event shall a transfer or assignment of ownership or
     control be approved without the transferee or assignee assuming, in
     writing, the obligations of Franchisee under this Agreement.

F.   Notwithstanding anything to the contrary in this Agreement, no consent or
     approval by the Village shall be required for a transfer or assignment for
     any (1) assignment, pledge, lease, sublease, mortgage, hypothecation, or
     other transfer of all or any part of the Franchise, or any right or
     interest therein, for solely financing purposes, or (2) any assignment or
     transfer to any parent, affiliate, or subsidiary company of the Franchisee.

                                       20
<PAGE>
 
4-10: Foreclosure, Condemnation, and Receivership.

A.    Foreclosure. The Franchisee shall notify the Village immediately whenever
      the Franchisee becomes aware of (1) any foreclosure or other judicial sale
      of all of any part of the Cable System, or (2) the termination of any
      lease or mortgage covering all or any part of the Cable System. Said
      notification shall be treated as a notification of a Consent Action, as
      defined in Subsection 4-9 of this Franchise, and the terms, conditions,
      and provisions of Section 4-9 of this Franchise, including the
      requirement for Village approval, shall apply to any such Consent Action.

B.    Condemnation. If the Cable System, or any part thereof, is taken,
      appropriated, or condemned pursuant to law, and if any such taking,
      appropriation, or condemnation materially frustrates or impedes the
      ability of the Franchisee to comply with the terms, conditions, and
      provisions of this Franchise, then the Village may revoke the Franchise in
      accordance with the applicable provisions of this Franchise.

C.    Receivership.

      1.   Franchisee Notification. The Franchisee shall immediately notify the
           Village, in writing, if any of the following occur:

           A.   The Franchisee files a voluntary bankruptcy petition, a
                voluntary petition to reorganize its business, or a voluntary
                petition to effect a plan or other arrangement with creditors.

           B.   The Franchisee files an answer admitting the jurisdiction of the
                court and the material allegations of an involuntary petition
                filed pursuant to the Bankruptcy Code.

           C.   The Franchisee is adjudicated bankrupt, makes an assignment for
                the benefit of creditors, applies for or consents to the
                appointment of any receiver or trustee of all or any part of its
                property, including specifically, but without limitation, all or
                any part of the Cable System.

           D.   The Franchisee institutes dissolution or liquidation proceedings
                with respect to its business.

           E.   An order is entered (i) approving an involuntary petition to
                reorganize the business of the Franchisee, (ii) to effect a
                plan or other arrangement with creditors of the Franchisee, or
                (iii) appointing for the Franchisee a receiver or trustee of all
                or any part of the Franchisee's property, including
                specifically, but without limitation, all or any part of the
                Cable System.

                                       21
<PAGE>
 
          F.   A writ or warrant of attachment, execution, distraint, levy,
               possession, or any similar process is issued by any court against
               all or any part of the Franchisee's property, including
               specifically, but without limitation, all or any part of the
               Cable System.

     2.   Revocation and Exceptions. If any of the events set forth in Paragraph
          4-10(C)(1) of this Franchise are not dismissed, stayed, rescinded, or
          terminated, as the case may be, within 60 days after the issuance,
          making, or commencement thereof, and if the effect thereof is to
          materially frustrate or impede the ability of the Franchisee to comply
          with the terms, conditions, and provisions of this Franchise, as
          determined by the Village in its reasonable discretion, then the
          Village may revoke this Franchise, unless: (A) within 120 days after a
          receiver or trustee has been elected or appointed, the receiver or
          trustee of the Franchisee, or, within 120 days after the commencement
          thereof, the Franchisee itself as a debtor in possession in connection
          with any such reorganization or similar proceedings, shall have
          remedied any uncured failure to comply with any of the terms,
          conditions, and provisions of this Franchise; and (B) within said 120
          days, said receiver or trustee, or the Franchisee itself as debtor in
          possession, shall have executed an agreement, duly approved by the
          Village and the court having jurisdiction over the premises, whereby
          said receiver or trustee or the Franchisee, in said capacity, assumes
          all obligations and agrees to be bound fully by each and every one of
          the terms, conditions, and provisions of this Franchise.


                        PART V: CABLE SYSTEM OPERATIONS


5.1: Cable System Requirements.

A.   Channel Capacity. Franchisee will, by no later than forty-eight (48) months
     after the effective date of this Agreement, make available to all
     subscribers the option to receive eighty-five (85) channels.

B.   Franchisee will by no later than August 1, 1996, add two (2) new video
     programming products to the Cable System.

C.   Dedicated Access Channel:

     1.   Commencing no later than sixty (60) days after the effective date of
          this Agreement, the Franchisee shall dedicate at least one (1)
          Community Access Channel to the Village of Vernon Hills, to be used
          for the following purposes:

          a. Municipal Access

                                       22
<PAGE>
 
            b. Educational Access
            c. Public Access
            d. Local Origination Programming

      2.    At such time as the Franchisee increases channel capacity to eighty-
            five (85) channels, Franchisee shall make a second Community Access
            Channel available to the Village.

D.    Studio:

            1.    Facilities and Equipment: Franchisee shall make available an
                  ------------------------
                  access and local origination studio for use by Subscribers and
                  Village educational and governmental personnel for the
                  production of programming (PEG programming) to be shown on the
                  Community Access Channel, until such time as the Village
                  establishes a Village-owned and operated Studio, or in no
                  event later than May 31, 1997. Franchisee will provide in
                  addition to the equipment currently in place in the Vernon
                  Hills Studio, the new equipment specified on Exhibit A to this
                  Agreement. Franchisee agrees to maintain this equipment and
                  promptly repair and/or replace this equipment as needed during
                  such time as the studio continues to be used for PEG
                  production programming.

            2.    Hours of Operation and Production Assistance: During such time
                  --------------------------------------------
                  as the Subscribers, Village educational and governmental
                  personnel continue to use the Franchisee's Studio, as provided
                  for in paragraph 1 above, subject to change at the
                  Franchisee's sole discretion, Franchisee guarantees that the
                  access production studio will be available for use by access
                  users at the following times: Monday - Thursday: 10:00 a.m. -
                  4:00 p.m.; and 6:00 p.m. - 9:00 p.m.; and Saturdays 10:00 
                  a.m. - 2:00 p.m. Franchisee production personnel will be
                  available during these times to assist access producers.

E.    Access Programming. By no later than June 1, 1997, the Village shall be
      required to completely take over the production requirements for all PEG
      programming to be shown on Franchisee's Community Access Channels at no
      charge to Franchisee. As of the effective date of this Franchise, the
      Village brings tapes of governmental access programming to the
      Franchisee's access studio for showing on the Community Access Channel. As
      long as the Village continues this arrangement (or a change in this
      arrangement is initiated by the Franchisee) even after such time as the
      Village takes over the production requirements for all PEG programming,
      the Village will incur no additional costs for distributing PEG
      programming over the Franchisee's Community Access Channels.

                                       23
<PAGE>
 
F.    Provision of Cable Service

      1.   Mandatory Extension of Service. The Franchisee shall design and
           construct the Cable System to provide Cable Service to all
           residential areas within the Village, provided that all such
           permission as may be required from the owner of the property is
           reasonably available, and that service can be provided in accordance
           with the following requirements: in new housing districts, areas with
           occupancy densities of more than twenty-five (25) homes per mile
           which are contiguous to the system will be provided service as soon
           as it is technically feasible. For housing areas less than twenty-
           five (25) homes per mile, service will be provided on a cost-sharing
           basis with the Franchisee, as soon as it is technically and
           economically feasible. Further, Franchisee will be required to
           provide service to multi-dwelling units, so long as the owner of the
           facility consents to the following:

                A.   To Franchisee's providing of the service to units of the
                     facility;

                B.   To reasonable conditions and times for installation,
                     maintenance, and inspection of the system on the facility
                     premises;

                C.   To reasonable conditions promulgated by Franchisee to
                     protect Franchisee's equipment and to encourage widespread
                     use of the system; and

                D.   To not demand or accept payment from Franchisee for
                     permitting Franchisee to provide service to the facility
                     and to not discriminate in rental charges, or otherwise,
                     between tenants who receive Cable Service and those who do
                     not.

      2.   Joint Trench Agreements. Franchisee shall cooperate in the planning,
           locating and construction of its Cable System in utility joint
           trenches or common duct banks with other telecommunications
           providers. The Village will provide advance notice to any Franchisee
           when it plans to open a trench or when a utility or other Franchisee
           plans to open a trench. The Village will make every effort within its
           power to ensure that the open trench is available to the Franchisee.
           Provided that the Franchisee can enter such trench on reasonable
           terms, Franchisee will be obligated to enter any joint trench for
           which it has sufficient prior notice.

      3.   Service to Cuneo and Ranney Developments. Franchisee shall enter any
           open trench servicing these properties, at the soonest possible time,
           provided that Franchisee can gain entrance on reasonable terms. If
           Franchisee gains entrance to these trenches, Franchisee shall make
           every effort to provide cable television service to the homes in
           these developments at occupancy, however, barring any

                                       24
<PAGE>
 
           unforeseen circumstances, or occurrence beyond Franchisee's control,
           Franchisee shall guarantee service within sixty (60) days at the
           latest after occupancy and request for service.

      4.   Free Installation and Basic Service. Franchisee shall provide one
           Drop and Basic Service, at no charge, to all present and future
           governmental buildings in the Village, including without limitation,
           two drops for each school, Village Hall, Fire Department, Police
           Department and 911 Center.

      5.   Request for Cable Service and Connection. After service has been
           established by Activation of the trunk cables for any area, the
           Franchisee shall provide Cable Service and Connection to any Person
           requesting Cable Service within that area not later than 30 days
           after the date of the request.

      6.   Standard Installations: For standard installations, as defined by
           Federal Communication Commission rules, barring any unforeseen
           circumstances, Franchisee will complete these installations within
           seven (7) days of request for service.

E.    Maintenance. The Franchisee shall employ or have available to it, on a 
      full-time basis, a professional engineer or its equivalent, and a service
      and repair force of competent technicians.

F.    Emergency Requirements.

      1.   Emergency Override. The Franchisee shall provide a local "Emergency
           Alert System" that shall at a minimum, be capable of overriding all
           audio on all Channels of the Cable System. The "Emergency Alert
           System" shall be capable of being activated and utilized by any
           official designated by the Village. The control equipment necessary
           for the override function shall be provided and installed by the
           Franchisee without charge.

      2.   Emergency Power. At a minimum, the headed facility shall be equipped
           with standby generator. The Franchisee shall provide continuous and
           uninterrupted service and operation during any and all emergency
           conditions.

G.    Converter Locking Device. The Franchisee shall provide to all Subscribers,
      upon the Subscribers request a control locking device or a code that
      permits the Subscriber to prevent the viewing of a particular Service or
      Channel.

H.    Basic Service. The Cable System and Cable Service shall be maintained,
      constructed, and provided so that Subscribers with cable ready televisions
      receiving Basic Service can receive the Basic Service without using a
      Converter.

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<PAGE>
 
I.    Noninterference With Existing Reception. The Cable System shall be
      designed to operate, and shall be operated by the Franchisee, in such a
      manner as to avoid causing interference with reception of the off-the-air
      signals by non-Subscribers of the Franchisee.


                             PART VI: CONSTRUCTION

6-1:  Plans and Permits.

A.    Right to Review. Except for line extensions, the Village shall have the
      right to review the Franchisee's construction plans and specifications
      prior to the commencement of any new construction to assure compliance
      with the standards specified in this Franchise and to inspect all aspects
      of Cable System construction. The Village shall not, however, be required
      to review or approve such plans and specifications or to make such
      inspections and specifically disclaims such obligation. The Franchisee
      shall be solely responsible for taking all steps necessary to assure
      compliance with such standards and to ensure that the Cable System is
      installed in a safe manner and pursuant to the terms and conditions of
      this Ordinance.

B.    Construction Briefings and Progress Reports. Except for line extensions,
      before beginning new construction of or on any part of the Cable System,
      the Franchisee's chief engineer or designated individual shall meet with,
      the Village Administrator or designated individual to explain the
      Franchisee's construction plans and work program in detail. Similar
      briefings shall be held from time to time as deemed necessary by either
      the Village or the Franchisee until the Cable System is fully constructed
      in accordance with this Ordinance.

C.    "As-Built" Plans. The Franchisee shall, within 90 days after the Effective
      Date, furnish to the Village complete "as-built" plans of the Cable System
      and shall, thereafter, upon request, furnish to the Village amendments to
      such plans within 45 days.

D.    Construction Codes and Permits. The Franchisee shall obtain permits from
      the Village before commencing any new construction except as provided for
      in section 6-1:(A)&(B). of or within the Cable System, with specific
      permission being required for the opening or disturbance of any Public Way
      within the Village. The Franchisee shall also, before the commencement of
      construction of the Cable System, become a member of the J.U.L.I.E.
      system. Emergency locates shall be done immediately.

6-2:  General Construction Standard. All work involved in the construction,
operation, maintenance, repair, and removal of the Cable System, or any part
thereof, shall be performed in a workmanlike manner using materials of good and
durable quality. If, at any time, it is determined by the Village or any other
agency or authority of competent jurisdiction that any

                                       26
<PAGE>
 
part of the Cable System, including, without limitation, any means used to
distribute signals over or within the Cable System, is harmful to the health or
safety of any Person, then the Franchisee shall, at its sole cost and expense,
promptly correct all such conditions. Any contractor, subcontractor, or other
Person proposed to be employed for the installation, maintenance, relocation, or
repair of Cable System equipment or facilities shall be licensed in accordance
with applicable laws and shall be thoroughly experienced in the work for which
he or she is retained.

6-3:  Cable Drops.

A.    Standards.

      1.   Personnel. Only employees of the Franchisee or qualified independent
           contractors under the direct supervision and control of the
           Franchisee shall be used to Install cable and connect Subscriber
           facilities on a Subscriber's property. All such personnel shall be
           bonded and shall be covered by liability and property damage
           insurance in the amounts specified in Section 4-8 of this Ordinance.

      2.   Compliance with Applicable Law. Cable Drops shall be installed in
           compliance with the National Electric Code, as the same may be
           amended from time to time, and in compliance with all other
           applicable law.

      3.   Notice to Subscriber. Except in cases requiring emergency repair, or
           related to a specific Service problem, or installation of regular
           subscription Services at the Subscribers residence or business, the
           Franchisee shall give each Subscriber at least three days advance
           notice before attempting to perform any construction, reconstruction,
           or installation within the Subscriber's residence or business. Such
           notice shall be by door hanger or by mall.

6-4:  Construction On and In Public Ways. Unless expressly provided otherwise in
this Franchise, the Franchisee shall at all times comply with any and all rules
and regulations enacted or to be enacted by the Village with reference to
construction activity in Public Ways. All poles, wires, conduits, cables,
equipment, pipes, appurtenances, structures, and other facilities of the Cable
System shall be installed and located in compliance with all applicable Village
ordinances and the applicable provisions of this Franchise so as to cause
minimum interference with the rights and reasonable convenience of the general
public, all as determined by the Village in reasonable discretion. All such
facilities shall at all times be kept and maintained in a safe condition and in
good order and repair. The Franchisee shall at all times employ reasonable care
and shall install, maintain, and use commonly accepted methods and devices for
preventing failures and accidents that are likely to cause damage, injuries, or
nuisances to the general public. Suitable barricades, flags, lights, flares, or
other devices shall be used at such times and places as are required by
applicable ordinances and at such additional times and places as are required
for the safety of all members of the general

                                       27
<PAGE>
 
public, as determined by the Village in its sole and absolute discretion. Any
such facilities placed in any Public Way by the Franchisee shall be placed and
maintained in such a manner as not to interfere with the usual travel or other
existing or projected uses of such Public Way.

6-5:  Damage to Public or Private Property. The Franchisee shall arrange its
lines, cables, and other appurtenances on Public Ways, Public Property and
private property in such a manner prevent failures and accidents which are
likely to cause damage or injury to the Public Ways, Public Property, or Private
Property by any person. In the event of such damage, any public right-of-way,
public property or private property that is disturbed or damaged shall be
promptly repaired by Franchisee, at its sole expense.

6-6:  Excavation Work and Time Periods.

A.    Excavation Restricted. No excavation on or in any Public Way, Public
      Property, or private property in the Village permitted hereunder in
      connection with the installation of any Cable System facilities shall be
      made more than 24 hours immediately before installation of such
      facilities.

B.    Prior Notification. The Franchisee shall notify the Village Administrator
      at least 72 hours before any excavation on or in any Public Way, Public
      Property, or private property so that the Village Administrator will have
      the opportunity to inspect such excavation work.

C.    Excavations in Lawns and Parkways. All excavations in lawns or grassy
      parkways shall be promptly backfilled, tamped, and restored with sod in
      accordance with the applicable provisions of this Ordinance.

6-7:  Location of Cables. The principles set forth in Subsections A through D of
      this Section, in that order of priority, shall govern the location of the
      Franchisee's cables, wires, and other appurtenance.

A.    All of Franchisee's facilities except Cable Drops shall be located within
      existing public easements only, except only as provided in, and subject to
      the limitations established in, Section 6-8 of this Franchise.

B.    Wherever existing utility poles can physically accommodate, with or
      without modification, the Franchisee's cables, wires, or other
      appurtenances, or whenever existing utility conduits, ducts, vaults, or
      other existing utility facilities can physically accommodate the
      Franchisee's cables, wires, or other appurtenances, the Franchisee shall
      utilize such existing utility facilities and shall not construct or
      install any new, different, or additional facilities.

                                       28
<PAGE>
 
C.    For new installations, if either or both of the existing electric or
      telephone utility facilities are above ground at a particular location,
      then the Franchisee may install its facilities above ground.

D.    For new installations, if both the electric and telephone utilities are
      underground at a particular location, then the Franchisee shall install
      its facilities underground.

6-8:  Franchisee Use of Public Ways Not Exclusive. The right of the Franchisee
to use and occupy the Public Ways pursuant to this Franchise shall not be
exclusive. The Village reserves the right to grant the right to use of such
Public Ways to any Person in accordance with the terms and conditions of 
Section 3-6.

6-9:  Establishment of Easements and Dedications. The Franchisee shall have the
use of any easement or right-of-way dedicated for use by the Village, general
public or use compatible with the cable system operation, and this Franchise
shall be construed to authorize the construction of a cable system over such
public ways and through easements in accordance with Section 621(a)(2) of the
Cable Act, and to grant access to such easements and public way whether or not
such easements, and public way, whether or not such easements and public ways,
specifically contemplate or designate "Cable TV". The Village shall also include
this grant in future easements, licenses and public ways as they are created

6-10: Reservations of Public Way Rights. The following reservations in the use
of the Public Ways shall be complied with by the Franchisee notwithstanding the
grant to use Public Ways pursuant to this Franchise:

A.    Sewers, Public Ways, Water Mains, and Public Works. Nothing in this
      Franchise shall be construed to prevent the Village from constructing
      sewers in, or from grading, paving, repairing, or altering any Public Way,
      or laying down, repairing, or removing water mains or constructing or
      establishing any other public work. All such work shall be done, insofar
      as practicable in such manner as not to obstruct, injure, or prevent the
      free use and operation of the poles, wires, conduits, cables, equipment,
      pipes, appurtenances, or other facilities of the Franchisee. If any such
      property of the Franchisee shall interfere with the construction or repair
      of any Public Way or public improvement, whether it is the construction,
      repair, or removal of a sewer or water main or the construction, repair,
      or removal of a Public Way or any other public improvement, the Village
      shall give the Franchisee 30 days written notice, and such poles, wires,
      conduits, equipment, pipes, appurtenances, or other facilities of the
      Franchisee shall be relocated, removed, or replaced by the Franchisee in
      such a manner as shall be reasonably directed by the Village so that the
      same shall not interfere with the public work of the Village. Franchisee
      shall be reimbursed for such relocation, removal or replacement to the
      extent any utilities are reimbursed.

B.    Creation or Dedication of Public Way. No Public Way shall be used by the
      Franchisee if the Village, in its sole and absolute discretion, determines
      that such use

                                       29
<PAGE>
 
      is inconsistent with the terms, conditions, or provisions by which such
      Public Way was created or dedicated, or is then being used.

C.    Improvements or Changes on Public Way. If the Village shall make
      improvements or changes on all or any part of any Public Way, over, under,
      or along which any part of the Cable System has been installed, then and
      in every case the Franchisee shall, at its sole expense after 45 days
      written notice from the Village, alter, change, vacate, or remove from the
      Public Way any part of the Cable System necessary to conform with said
      Village improvements or changes. Franchise shall be reimbursed for such
      work to the extent any utilities are reimbursed.

D.    Construction and Use. All construction upon, over, or under or other use
      of Public Ways by the Franchisee shall comply with all applicable
      ordinances of the Village.

6-11: Public Way Vacation or Abandonment. If any Public Way or portion thereof
used by the Franchisee shall be vacated by the Village, or the use thereof
discontinued by the Village or the Franchisee, during the term of this
Franchise, then the Franchisee shall forthwith at its sole cost and expense
remove its facilities therefrom unless specifically permitted to continue to use
the same and, on the removal thereof, and restore, repair or reconstruct the
Public Way area where such removal has occurred to its original condition as
required by the Village. In the event of any failure, neglect, or refusal by the
Franchisee, after 30 days written notice from the Village to repair, improve, or
maintain such Public Way, the Village may, but shall be under no obligation to,
conduct such work, or cause it to be conducted, at cost and shall be reimbursed
by the Franchisee.

6-12: Movement or Removal. If it is necessary to move or remove temporarily any
of the Franchisee's poles, wires, conduits, cables, equipment, pipes,
appurtenances, or other facilities to move a large object, vehicle, building, or
other structure over the Public Ways of the Village, the Franchisee shall, upon
45 days written notice, move or remove such poles, wires, conduits, cables,
equipment, pipes, appurtenances, or other facilities. If requested by the
Village or other public body, such movement or removal shall be at the
Franchisee's sole cost and expense. Franchise shall be reimbursed for this work
to the extent any utility is reimbursed. If requested by a private Person, such
movement or removal shall be at said Person's sole cost and expense. Any service
interruption limitations of this Franchise shall not apply if such movement or
removal of the Franchisee's facilities results in reasonably temporary service
interruptions.

6-13: Village Right of Inspection. The Village shall have the right to inspect
and approve all construction. All construction shall comply with all Village,
State of Illinois, and federal laws, ordinances, rules, and regulations,
including specifically, but without limitation, State and national electrical
codes.

6-14: Trimming Trees. Franchisee shall have the prior right to cut or trim any
tree, shrub, or other vegetation in or on any Public Way except that the Village
shall have the right to

                                       30
<PAGE>
 
review any proposed tree trimming in the public way, prior to the Franchisee
performing such work. The Village does not have, however, the authority under
this provision to prevent the Franchisee from conducting such tree trimming not
in accordance with the Village review. This provision does not supersede any
rights the Village may have in this regard pursuant to its police powers. The
Franchisee may cut or trim trees, shrubs, or other vegetation on private
property as necessary with the express prior written consent and permission of
the owner of the property on which any such tree, shrub, or vegetation is
located. All such trimming shall be in accordance with standard horticultural
practices, and no trimming shall occur until the wires, cables, or other
fixtures have first been attached to the poles in order to ensure trimming to
the minimum extent necessary. All trimming debris shall be removed from the work
area on a reasonable basis.

6-15: Restoration.

A.    Franchisee Obligation. If the Franchisee destroys, damages, or disturbs
      any Public Way, Public Property, or private property in the Village, or
      any improvement on any of them, then the Franchisee shall, at its sole
      cost and expense and in a manner approved in advance by the Village or the
      affected property owner, as the case may be, promptly repair, replace, and
      restore such Public Way, Public Property, private property, or improvement
      in as good a condition as existed before the destruction, damage, or
      disturbance took place. If it becomes practically impossible to repair,
      replace, or restore any such Public Way, Public Property, private
      property, or improvement, then the Franchisee shall cause the Village or
      the owner of the property, as the case may be, to be justly compensated.

B.    Continuing Responsibility. If the destruction, damage, or disturbance of
      any Public Way, Public Property, private property, or improvement located
      thereon is not immediately discovered; or if any subsequent restoration
      effort does not comply with the standards set forth in this Ordinance, the
      Franchisee shall have a continuing responsibility to perform or re-perform
      all necessary restoration work.

C.    Failure, Neglect, or Refusal to Repair. If, after 30 days written notice
      from the Village, the Franchisee fails, neglects, or refuses to repair any
      destroyed, damaged, or disturbed Public Way, Public Property, private
      property, or any improvement located thereon, then the Village may, but
      shall be under no obligation to, do such work, or cause it to be done, at
      cost, and shall be paid by the Franchisee in the time and manner as
      directed by the Village. The Village may recover the costs of any such
      Village work by court action, or otherwise.

6-16: Time for Notice. In the event of an emergency involving life or property,
as determined by the Village in its reasonable the Village may reduce or
eliminate the notice requirements set forth in Part VI of this Franchise, and
otherwise take all necessary action to protect the public health, safety and
welfare.

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<PAGE>
 
6-17: Pedestals and Vaults. For all installations or reinstallations Franchisee
shall cause all pedestals and vaults to be maintained in a vertical position
with no material leaning or listing. Franchisee shall use best efforts to ensure
that all existing pedestals and vaults in the Village are also maintained in a
vertical position, with no material leaning or listing.

                      PART VII: OPERATION AND MAINTENANCE

7-1:  Ownership Restrictions; Books and Records.

A.    Ownership Restrictions Governed by Cable Act. To the extent applicable,
      Section 533 of the Cable Act, and any FCC regulations promulgated
      thereunder, shall govern and restrict ownership of this Franchise.

B.    Ownership Records. The Franchisee shall (1) within 30 days after the
      Effective Date, and (2) within 30 days after the change of ownership of 5
      percent or more of any class or series of the outstanding voting stock or
      equivalent ownership interest of the Franchisee, furnish the Village with
      a list, showing the names and addresses of Persons owning 5 percent or
      more of any class or series of the outstanding voting stock or equivalent
      ownership interest of the Franchisee, together with a roster of the
      Franchisee's officers and directors (or equivalent managerial personnel)
      and their addresses.

C.    Financial Records. The Franchisee shall maintain books and records of its
      operations within and related to the Village and the Cable System in
      sufficient detail to show Gross Revenue, by service category, consistent
      with generally accepted accounting principles. The Franchisee shall,
      annually within 90 days after the close of the Franchisee's fiscal year,
      prepare in accordance with generally accepted accounting principles, and
      submit to the Village, a statement of Gross Revenues covering the
      Franchisee's operations in and relating to the Village and the Cable
      System. Said books and records shall be retained during the entire term of
      this Franchise.

D.    Operating Records. The Franchisee shall maintain reasonable records
      pertaining to the operation of the Cable System, Cable System performance,
      Cable System complaints, Cable System testing, Cable System use, Cable
      System programming, and any other records specifically required to be
      maintained by this Ordinance. Unless otherwise required by this Franchise,
      all such records shall be retained during the entire term of this
      Franchise. Upon a request for confidentiality by the Franchisee, Franchise
      information obtained by the Village pursuant to this shall be made
      available only to persons needing access to the materials in order to
      perform their responsibilities on behalf of or for the Village, and as to
      all other persons, shall to the extent permitted by laws, be treated as
      confidential. Franchisee also maintain the right to require that the
      Village execute a confidentiality and/or non-appropriation agreement prior
      to gaining access to any materials under this Franchise.

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<PAGE>
 
E.   Village Access to Records. The Village shall have the right to inspect and
     audit any or all of such books and records at any time during normal
     business hours upon reasonable request. Upon a request for confidentiality
     by the Franchisee, Franchise information obtained by the Village pursuant
     to this shall be made available only to persons needing access to the
     materials in order to perform their responsibilities on behalf of or for
     the Village, and, as to all other persons, shall to the extent permitted by
     law, be treated as confidential. Franchisee also maintain the right to
     require that the Village execute a confidentiality and/or non-appropriation
     agreement prior to gaining access to any material under this Franchise.

F.   Franchisee Forms, Policies, Rules, and Similar Documents. Copies of the
     Franchisee's (1) schedule of charges, (2) application forms for Subscriber
     services, (3) policies regarding the processing of Subscriber complaints,
     (4) delinquent Subscriber disconnect and reconnect procedures, (5) Cable
     System rules and regulations, and (6) all other terms and conditions
     adopted as the Franchisee's policy in connection with its Subscribers,
     shall be filed with the Village and shall be made available for inspection
     by the public at the Franchisee's local office during normal business
     hours.

7-2: Reports and Documents. The Franchisee shall submit to the Village a copy
of the annual performance tests report required by the FCC within 5 days after
such report is submitted to the FCC. Upon request, the Franchisee shall also
submit to the Village copies of all other correspondence, petitions, reports,
applications, and other documents filed by the Franchisee with the FCC, the
Securities and Exchange Commission, or any other federal or state regulatory
commission or agency having jurisdiction with respect to matters affecting the
Cable System, or received by the Franchisee from any such commission or agency,
within 5 days after any such request.

7-3: Annual Reports. On each annual anniversary of the Effective Date during
the term of this Franchise, the Franchisee shall file with the Village, at the
Franchisee's sole cost and expense, (A) financial statements certified by the
Franchisee, consisting of a balance sheet, income statement, and statement of
any changes in the financial position of the Franchisee as of the end of each
calendar year; and (B) a current copy of the Franchisee's Subscriber service
contract if any, and, (C) the Franchisee's complaint procedures.

7-4: Audits. The Village shall have the right to arrange for and conduct an
audit of the Franchisee, and shall have the right to copy the books and records
of the Franchisee; provided, however, that the Village shall not conduct more
than one such audit during each calendar year. The Village shall give the
Franchisee 10 days written notice of the Village's audit request, the
description and purpose of the audit, and a description, to the best of the
Village's ability, of the books, records, and documents that the Village desires
to review. In the event that said audit discloses an underpayment in the
Franchise Fee by an amount in excess of 10 percent of the applicable Franchise
Fee, then the Franchisee shall pay the full cost of such audit.

                                       33
<PAGE>
 
7-6: Subscriber Practices.

A.   Initial Installation. The Franchisee shall fill all requests for standard
     installation of Cable System Service within seven (7) days after the date
     of any such request. The Franchisee shall keep a record of all such
     requests at all times during the term of this Franchise.

B.   Disconnection and Reconnection. Unless the Subscriber agrees otherwise,
     said disconnection shall be made as soon as practicable, and in no case
     later than 30 days after the Subscribers written request to the Franchisee.
     If a Subscriber fails to pay the properly due monthly subscription fee, or
     any other property due fee or charge, then the Franchisee may disconnect
     the Subscribers Service, provided that such disconnection shall not take
     place until 20 days after delivery to such Subscriber of a written notice
     of the intent to disconnect. Such notice shall not be sent until at least
     30 days after the due date of the delinquent fees or charges. The
     Franchisee shall not disconnect service to a Subscriber so long as the
     Subscriber pays all amounts due before the later to occur of either of the
     foregoing dates. After disconnection, upon payment in full of the
     delinquent fee or charge and the payment of a reconnection charge, if any,
     the Franchisee shall promptly reinstate and reconnect the Subscribers
     Service. The Franchise maintains the right not to reconnect in the event of
     subscriber fraud or deceit.

C.   Refunds. Refunds to Subscribers shall be made or determined in the
     following manner

     1.   If the Franchisee fails, upon request of a Subscriber, to provide any
          Cable Service then being offered, then the Franchisee shall promptly
          refund all deposits or advance charges paid for such Cable Service by
          said Subscriber. This provision does not alter the Franchisee's
          responsibility to Subscribers under any separate contractual agreement
          or relieve the Franchisee of any other liability or obligation.

     2.   If a Subscriber terminates any Cable Service prior to the end of a
          prepaid period, then the Franchisee shall refund to the Subscriber a
          proportionate portion of any prepaid Subscriber Cable Service Fee,
          using the number of days, based on a 365-day year, as a basis. The
          Franchisee shall make such refund within 30 days after disconnection
          of the terminated Cable Service.

D.   Advance Payments. Except as expressly otherwise approved by the Village, no
     Cable Service shall be offered that requires payment more than one month in
     advance; provided, however, that the Franchisee may offer longer advance
     payment programs as an option in connection with any Cable Service.

                                       34
<PAGE>
 
7-7:  Service and Subscriber Contracts and Information.

A.    Provision of Information to Subscribers. The Franchisee shall, prior to or
      at the time of installation of any Cable Service, provide the Subscriber,
      at a minimum, with, (1) a description of all Services offered, (2)
      instructions on the use of the Cable System, (3) billing and collection
      practices, and (4) Subscriber complaint and service procedures.

B.    Statement. All Subscriber contracts shall contain the following statement:
      "The Franchisee shall not, as to rates, charges, service facilities,
      rules, regulations, or in any other respect, make or grant any preference
      or advantage to any Person, nor subject any Person to any prejudice,
      disadvantage, or discrimination. The Franchisee is not prohibited,
      however, from establishing special contracts for nonprofit organizations,
      employees of the Franchisee residing in the Village, or discounts
      available to all persons for promotional campaigns"

C.    Franchisee Authority. The Franchisee shall have the authority to
      promulgate such rules, regulations, terms, and conditions governing the
      conduct of its business as shall be reasonably necessary to enable the
      Franchisee to exercise its rights and to perform its obligations under
      this Franchise and to ensure uninterrupted Service to each and all of its
      Subscribers; provided, however, that no such rules, regulations, terms, or
      conditions shall be in conflict with the any of the terms, conditions, or
      provisions of this Franchise, or with any ordinances of the Village or the
      laws of the State of Illinois or the United States.

D.    Items to be Provided. If a Subscriber contract is utilized, then all items
      required to be provided pursuant to this Section shall be provided to each
      new Subscriber at the time a contract is entered into or at the time any
      Service begins, whichever is earlier. All items required to be provided
      pursuant to this Section shall be provided to all existing Subscribers not
      less than once each year.

7-8:  Complaints and Service Calls.

A.    Notice of Procedures. The Franchisee shall furnish each Subscriber, at the
      time Cable Service is installed, written instructions that clearly set
      forth procedures for registering a complaint, placing a service call,
      requesting a billing adjustment, or otherwise obtaining information or
      assistance from the Franchisee. Said instructions shall include the
      telephone number described in Subsection B of this Section.

B.    Telephone Number. The Franchisee shall have a publicly listed, toll free
      telephone number, operated to efficiently receive Subscriber complaints
      and requests for repairs or Service, 24 hours-a-day, 7 days-a-week. Said
      telephone extension shall be manually operated during all regular business
      hours to personally answer all incoming calls in accordance with federal
      requirements. At all other times the extension shall be operated by an
      answering service or answering machine designed to answer all

                                       35
<PAGE>
 
     incoming calls in accordance with federal requirements. The telephone
     number shall be made available no later than the Effective Date.

C.   Service Interruption. The Franchisee shall prevent Service interruptions,
     render efficient Service, and make repairs promptly. The Franchisee shall
     not interrupt Cable Service after 7:00 a.m. and before 1:00 a.m., except
     for good cause and for the shortest time possible and, except in emergency
     situations, only after cablecasting notice of such Service interruption at
     least 24 hours in advance of the interruption if practicable. Service may
     be interrupted between 1:00 a.m. and 7:00 a.m. for routine testing,
     maintenance, and repair on any day except Saturdays, Sundays, and legal
     holidays, but only after notice of such interruption shall be cablecast at
     least 24 hours in advance of the interruption. The Franchise shall maintain
     a written log for all planned and unplanned Service interruptions.

D.   Franchisee Response; Rebates Required. The Franchisee shall maintain a
     repair force of technicians that shall respond to Subscriber complaints or
     requests for Service within 24 hours after receipt of the complaint or the
     request. All repairs necessary to correct a malfunction of the System shall
     be made as soon as possible, the Franchisee shall give a rebate to any
     affected Subscriber equal to a pro rata share of the Subscriber's monthly
     bill for each day or fraction thereof in excess of the repair time limit
     during which the malfunction goes uncorrected.

E.   Bill Payment Locations. Bill payment locations will be open at least during
     normal business hours, and at least four (4) hours during the week shall be
     during the evening or Saturday. Franchisee will make reasonable efforts to
     assure that bill payment locations will be conveniently located.

F.   Identification. During construction or repair, all employees, contractors,
     and subcontractors of the Franchisee shall carry a photo identification
     card at all times.

G.   Service Records. The Franchisee shall keep a record of all written
     complaints and service calls received. Said record shall include copies of
     all written complaints and service calls and complete reports concerning
     all written complaints and service calls showing when said call was
     received, the time of disposition, the service technician employed, and the
     nature of the problem. The Franchisee shall also maintain a record of the
     nature, time, duration, and probable cause of all Cable System failures
     reported to or discovered by the Franchisee. Said records, which may be
     combined by the Franchisee, shall be available for public inspection at the
     Franchisee's local office during normal business hours. A summary of said
     records shall be prepared by the Franchisee and submitted to the Village on
     request. All records required to be maintained under this subsection shall
     be maintained for a period of at least three years.

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<PAGE>
 
7-9:  Safety.

A.    Standard of Care. The Franchisee shall at all times utilize the standard
      of care attendant to the risks involved and shall install and maintain in
      use commonly accepted methods and devices for preventing failures and
      accidents that are likely to cause damage, injury, or nuisance to the
      public or to employees of the Franchisee.

B.    Equipment Installation and Maintenance. All Cable System installations
      shall be made so as not to impair the fire integrity of any building or
      structure. The Franchisee shall install and maintain its wires, cables,
      fixtures, and other equipment in accordance with the requirements of all
      applicable codes, and in such manner that they will not interfere with any
      installations of the Village or any public utility. All lines, equipment,
      and connections in, over, under, and upon the Public Ways, Public
      Property, and private property within the Village, wherever situated or
      located, shall at all times be kept and maintained in a safe and suitable
      condition and in good order and repair.

7-10: Motor Vehicle Operation. All operators of vehicles under the Franchisee's
control shall have, at the time of their employment, and throughout the term of
their employment, a valid drivers license issued by the State of Illinois.

7-11: Tests and Performance Monitoring. All Cable System testing procedures
shall be in accordance with the most recent edition of "Standards of Good
Engineering Practices for Measurements on Cable Television System," published by
the National Cable Television Association, or such other generally accepted
industry procedures. Properly calibrated, state-of-the-art equipment shall be
used in all testing.


             PART VIII: RIGHTS OF INDIVIDUALS PROTECTED 

8-1: Employment Requirement; No Discrimination.

A.   Equal Employment Opportunity; Discrimination Governed by Cable Act. To the
     extent applicable, Section 554 of the Cable Act, and the federal
     regulations promulgated thereunder, shall govern the employment practices
     of the Franchisee.

B.   Equal Employment Opportunity; Discrimination Where Cable Act Not
     Applicable. To the extent Section 554 of the Cable Act is repealed,
     modified, or otherwise not applicable, the Franchisee shall conform to
     applicable federal, State of Illinois, and Village laws, ordinances,
     resolutions, rules, and regulations.

                                       37
<PAGE>
 
8-2:  No Discrimination. The Franchisee shall not deny any Service, deny access,
or otherwise discriminate against Subscribers or other Persons on the basis of
age, sex, race, color, creed, national origin, or on any other basis prohibited
by law. The Franchisee shall comply at all times with all applicable federal,
State of Illinois, and Village laws, and all executive and administrative
regulations, rules, and orders, and any provisions of this Franchise, relating
to nondiscrimination. The Franchisee shall not deny any Service or access to any
individual or group of potential residential Subscribers on the basis of income.

8-3:  Subscriber Privacy. The Franchisee shall comply at all times with all
applicable federal rules, and orders, and any provisions of this Franchise
relating to the protection of privacy of any Subscriber.

8-4:  Permission of Property Owner Required. To the extent that the Cable Act,
the Illinois Municipal Code, or this Franchise allow the Franchisee to place its
equipment within easements where utility equipment exists without the permission
of this applicable property owner then the Franchisee may place its equipment in
such easements without such permission provided that such placement is in
accordance with the provisions of this Franchise. If the Franchisee desires to
place its equipment in a location on private property where no utility equipment
exists, then the Franchisee shall secure a written authorization from the
applicable property owner, its authorized agent, or a duly elected or appointed
representative of the property involved.

                          PART IX: GENERAL PROVISIONS

9-1:  Work Performed by Others.

A.    Written Notice. Upon request the Franchisee shall give written notice to
      the Village specifying the name and address of any Person other than the
      Franchisee who perform any obligations of the Franchisee pursuant to this
      Franchise; provided, however, that all provisions of this Franchise shall
      remain the responsibility of the Franchisee.

B.    Additional Workers. All provisions of this Franchise shall apply to any
      contractor, subcontractor, or other Person performing any work or other
      activity required pursuant to this Franchise.

9-2:  Release.

A.    No Extraneous Inducements. The Franchisee acknowledges that it has not
      been induced to accept this Franchise by any promise, verbal or written,
      by or on behalf of the Village or by any third Person regarding any term
      or condition of this Franchise not otherwise expressed herein. The
      Franchisee shall further be deemed to warrant that no promise or
      inducement, oral or written, has been made to any Village employee or
      official regarding receipt of this Franchise, other than as contained in
      this Franchise.

                                       38
<PAGE>
 
B.   Statute of Limitations. Any claim or legal action arising from or in
     connections with any failures in the operation or the performance or non-
     performance of any obligation under this Agreement including payment of any
     amounts due must be brought within two (2) years after the case of action
     accrues.

9-3: Compliance With Law. The Franchisee shall, at all times during the term of
this Franchise, comply with all applicable federal, State of Illinois and local
laws, rules, and regulations, regardless of whether such law, rule, or
regulation is expressly referenced in this Franchise.

9-4: Subsequent Action by Federal, State, or Local Authorities.

A.   Subsequent Law, Agreement, or Regulation. If any subsequent law, ordinance,
     regulation, controlling judicial review, or decision shall require or
     permit the Franchisee to perform any act or shall prohibit the Franchisee
     from performing any act such that the Franchisee may not be in compliance
     with the terms and conditions of this Franchise, then, as soon as possible
     after knowledge thereof, the Franchisee shall so notify the Village. If the
     Village determines, in agreement with the Franchisee that a material
     provision of this Franchise is affected by such changed or new law,
     ordinance, or regulation, then the Village and the Franchisee shall enter
     into good faith negotiations to modify this Franchise to conform with such
     changed requirements.

B.   Change in Federal or State Laws or Regulations. If any federal or State of
     Illinois law or regulation, including without limitation the Cable Act, is,
     at any time after the Effective Date, changed, modified, interpreted in a
     final and nonreviewable decision by a court of competent jurisdiction or
     appropriate administrative agency, amended, repealed, or invalidated so as
     to allow for greater regulation by the Village of the Franchisee or a Cable
     Communication System, or so as to permit greater benefits to the Village,
     the Franchisee and the Village shall enter into good faith negotiations to
     modify this Franchise.

9-5: Nonenforcement by Village. The Franchisee shall not be excused from
     complying with any of the terms and conditions of this Franchise by any
     failure of the Village, on any one or more occasions, to insist on the
     Franchisee's performance of, or to seek the Franchisee's compliance with,
     any one or more of said terms or conditions except as may be permitted by
     federal law.

9-6: Village Right to Delegate Authority and Functions. The Village shall have
     the right to delegate any or all of its authority or rights under this
     Franchise to any Person, department, board, commission, or agency within or
     outside the Village or to designate any Person, department, board,
     commission, or agency within or outside the Village to act on its behalf
     under this Franchise; provided, however, that no such delegation or
     designation shall be effective to bind the Village, or for any other
     purpose, unless evidenced by an ordinance or resolution duly adopted by the
     President and Board of

                                       39
<PAGE>
 
     Trustees of the Village and provided further that no such delegation or
     designation shall be effective to authorize any authority or action beyond
     those expressed in said ordinance or resolution. When and to the extent so
     delegated or designated, said Person, department, board, commission, or
     agency shall be deemed to be an Authorized Agent of the Village or its
     Board of Trustees as this term is used in this Franchise.

9-7: Unauthorized Reception and Reselling Prohibited.

A.   Unauthorized Reception and Reselling Where Cable Act Applicable. To the
     extent applicable, the Cable Act shall govern the prohibitions against and
     penalties for unauthorized reception and reselling of Cable Service.

B.   Unauthorized Reception and Reselling Where Cable Act Not Applicable. To the
     extent the Cable Act is modified, repealed, or otherwise do not apply, the
     following standards shall govern the unauthorized receipt or reselling of
     Cable Service:

     1.   Unauthorized Connection. No Person shall make any unauthorized
          connection, whether physically, electrically, acoustically,
          inductively, or otherwise, with any part of the Cable System existing
          in the Village for the purpose of enabling said Person or others to
          use or receive television signals, radio signals, pictures, programs,
          sounds, or any other information or intelligence transmitted over the
          Cable System without payment to the Franchisee.

     2.   Tampering, Removal, or Injury. Except as otherwise provided in this
          Franchise, no Person shall, without the consent of the Franchisee,
          willfully tamper with, remove, or injure any cable, wires, or other
          equipment used for the distribution of television signals, radio
          signals, pictures, programs, sounds, or any other information or
          intelligence transmitted over the Cable System.

     3.   Unauthorized Use or Receipt. The existence of any connection, wire,
          conduct or, or other device whatsoever that enables any Person to use
          or receive the cable television service without such use or receipt
          being specifically authorized by, or compensation paid to, the
          Franchisee may be considered as evidence of intent to violate this
          Section.

     4.   Reselling. No Person in the Cable Service Area receiving any Cable
          Service, program, or signal transmitted over the Cable System shall
          resell such Cable Service, program, or signal without the express
          written consent of the Franchisee and the Village.

9-8: Time Essence of Agreement. Except as provided in Section 9-10 of this
Franchise, whenever this Franchise sets forth any time for any act to be
performed by the Village or the Franchisee, said time shall be deemed to be of
the essence.

                                       40
<PAGE>
 
9-9:  Force Majeure. Whenever a period of time is provided for in this
Franchise for either the Village or the Franchisee to do or perform any act or
obligation, neither party shall be liable for any delays or inability to perform
due to causes beyond the control of said party such as war, insurrection,
rebellion, strike, lockout, unavoidable casualty or damage to personnel,
materials or equipment, fire, flood, storm, earthquake, tornado, or any act of
God; provided, however, that said time period shall be extended for only the
actual amount of time said party is so delayed.

9-10: Severability. If any section, subsection, sentence, clause, phrase, or
other portion or provision of this Franchise, or its application to any Person,
is for any reason declared invalid, in whole or in part, by any court, agency,
commission, legislative body, or other authority of competent jurisdiction, said
decision shall not affect the validity of the remaining portions hereof.

9-11: Most Favored Nations Clause. Franchisee will make available in the Village
any additional cable television channel capacity which Franchisee or its
affiliates are required to provide to the Villages of Mundelein or Libertyville
as part of a renewal franchise with either community for so long as the
Franchisee or its affiliate remains the franchised cable television operator in
the Village of Vernon Hills and in said Villages. If an additional Franchisee
activates a Cable Communications System or Cable System in the Village of Vernon
Hills, then the requirements of this section shall terminate completely.

9-12: Franchisee Acknowledgement The Franchisee acknowledges that: (A) it has
carefully read the terms, conditions, and provisions of this Franchise; (B) it
unequivacally accepts the obligations imposed by said terms, conditions, and
provisions; (C) it agrees to accept unequivocally the validity of said terms,
conditions, and provisions; (D) it unequivocally agrees to abide by said terms,
conditions, and provisions.

Section 4. Effective Date.

A.    This Franchise shall be in full force and effect only on, and not before,
      the Passage and approval, of Vernon Hills Ordinance No.96-58

B.    This Franchise granted pursuant to Vernon Hills Ordinance No. shall be of
      no force or effect and shall be rendered null and void in the event that
      the Franchise does not file with the Village Clerk (1) the Franchise
      Acceptance Agreement required pursuant to Section 3-2 of this Franchise,
      and the certificates of insurance required pursuant to Paragraph 4-8 C(l)
      of this Franchise, within 60 days after the date of final passage of this
      Ordinance by the Village Board of Trustees.

                                       41
<PAGE>
 
Passed this 17 day of September 1996

AYES:  4-Cashman, Emery, Hebda, Koch

NAYS:  O-None

ABSENT:  2-Henley, Hook

APPROVED this 17  day of September 1996

                                    
                                          /s/[SIGNATURE ILLEGIBLE]
                                          -----------------------------
                                          Village President



ATTEST:


/s/[SIGNATURE ILLEGIBLE]
------------------------------
Village Clerk

                                       42
<PAGE>
 
                                   EXHIBIT A
                         VILLAGE OF VERNON HILLS
                      CABLE FRANCHISE ACCEPTANCE AGREEMENT


          Pursuant to Section 3-2 of the Village of Vernon Hills Ordinance
dated, Sept. 17, 1996 the undersigned hereby acknowledge that they have read and
understand all of the provisions of this Franchise, do hereby acknowledge the
validity of each of the conditions and provisions of this Franchise and do
hereby unconditionally consent to and agree to accept and be bound by all of the
terms, conditions, and limitations of this Franchise.




Accepted this 18th day of November 1996
             


                               CABLE TV FUND 15-A, LTD. 
                               (d/b/a Jones Intercable, Inc.)
                         By:   Its General Partner
                               Jones Intercable


                         By: /s/ Michael Lovett
                            --------------------------------------
                         Name:   Michael Lovett
                         Title: Vice President/Operations



ATTEST:
By:  /s/ Nancy L. Mann
     -------------------------
Name:  Nancy L. Mann
     -------------------------
Its:  Assistant Secretary
     -------------------------

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