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upgrade design provided that the same technical benefits in reliability and picture quality are <br /> attained. The Cable System shall be capable of supporting video, audio and Cable Internet Service <br /> (to the extent the latter is considered a Cable Service pursuant to applicable law). Upon completion <br /> of the upgrade, the Cable System shall be capable of delivering two hundred (200) Channels of <br /> video programming services to Subscribers, provided that the Grantee reserves the right to use the <br /> bandwidth in the future for other uses based on market factors. <br /> When Grantee has completed the Cable System upgrade throughout the City, Grantee shall <br /> send written notice to the City. The City shall have ninety(90) days from receipt of such notice to <br /> verify the records kept by the Grantee regarding the completion of the Cable System bandwidth <br /> expansion, and to complete such technical inspections as may be reasonably necessary to verify that <br /> the other components of the upgrade are complete(including,but not limited to,construction of the <br /> Institutional Network, if applicable). The City may require the Grantee to provide additional facts <br /> and information, in its reasonably exercised discretion, necessary to verify the completion of the <br /> upgrade. Upon its completion of this review and inspection, the City shall notify the Grantee in <br /> writing of the City's position concerning the completion of the upgrade. <br /> (B) Term Extension. Grantee shall receive a two (2) year term extension if the Cable <br /> System upgrade is timely completed within eighteen(18)months of the Effective Date,or a one(1) <br /> year term extension if the Cable System upgrade is completed within twenty-four (24) months of <br /> the Effective Date. The City shall grant the term extension contingent upon its verification of the <br /> upgrade completion as provided above. <br /> (C) Initial Term Reduction. If Grantee does not complete the upgrade of the Cable <br /> System specified herein within thirty-six (36)months of the Effective Date, then the initial ten(10) <br /> year term may be reduced, at the discretion of the City, by up to two (2) years. The City shall <br /> provide Grantee with written notice of its decision regarding an initial term reduction,if applicable. <br /> (D) Equipment must be installed so that all closed captioned programming received by <br /> the Cable System shall include the closed caption signal so long as the closed caption signal is <br /> provided consistent with FCC standards. Equipment must be installed so that all signals received in <br /> stereo are retransmitted in stereo. <br /> (E) Grantee shall submit to the City each phase of its Cable System upgrade design, as <br /> completed, and before construction begins on each phase, in accordance with the City's permitting <br /> process. If Grantee claims any portion of the information required is a business or trade secret or <br /> proprietary information and wishes to protect such information against disclosure, then Grantee <br /> may invoke the procedures provided for under subsection 7.2 Confidentiality of this Franchise. <br /> (F) Grantee and the City shall meet, at the City's request, to discuss the progress of the <br /> upgrade design plan and construction. <br /> (G) Grantee's construction decisions shall be based solely upon legitimate engineering <br /> decisions and shall not take into consideration the income level of any particular community within <br /> the Franchise Area. <br /> Page 43 of 58 <br />