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Supplemental Agreement March 16, 2001 Page Two 3. The cost recovery and non-itemization on Subscriber bills of the One Million Dollar ($1,000,000) capital grant provided pursuant to Exhibit B, Section 5 of the Franchise Agreement. EG Access Channel Location The three (3) analog EG Access Channels provided pursuant to Exhibit B, Paragraph 1 of the Franchise Agreement shall be carried on the Basic Cable Service Tier (as defined by Federal law) and shall be dedicated for EG Access use for the term of the Franchise Agreement. For the entire term of the Franchise Agreement, the three (3) analog EG Access Channels shall be located on Channels 28, 29 and 30 of the AT&T Cable System serving the Cities of Dublin, Livermore, Pleasanton and San Ramon. If at any time subsequent to the effective date of the Franchise Agreement, there is a conflict between the EG Access Channel locations and any future Federal Communications Commission ("FCC") "must carry" obligations, FCC retransmission consent requirements, or for technical reasons beyond AT&T's reasonable control, AT&T reserves the right to relocate said Channels. Any relocation shall be in accordance with the terms contained in the Franchise Agreement. In the event that AT&T is required to fulfill its "must carry" obligations with respect to one or more stations, AT&T shall not agree, pursuant to 47 CFR 76.57(c), to locate the station or stations on Channels 28, 29, Or 30, unless otherwise required by federal law. Fiber Optic Link Cost Recovery Any and all costs incurred directly or indirectly by AT&T with respect to the fiber optic communications links provided pursuant to Exhibit B, Paragraph 3 of the Franchise Agreement may be recovered by AT&T only to the extent, and in the manner provided, herein. AT&T agrees that it shall not separately itemize on Subscriber invoices any costs associated with the fiber optic communications links. Any recovery by AT&T of costs associated with providing these links through a rate that is regulated by the Cities shall be done in a manner consistent with law and regulation and shall be amortized over the life of the Franchise Agreement.