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4. COMPENSATION TO CITY Company shall pay the City the greater of the revenue share generated from the Advertising Inventory or the minimum annual guarantee ("MAG"). The Revenue Share is defined as 25% of the Gross Advertising Revenue. Gross Advertising Revenue shall be defined as gross advertising revenue received from the sale of the Advertising Inventory without any deductions. The MAG shall be calculated as $60 per ad shelter or kiosk per month ($720 per year). MAG payments shall be adjusted on a quarterly basis based on the number of bus stops with ad shelters or kiosks that are operational in such quarter. MAG payments and a forecast of revenue and payments based on the current number of bus shelters and kiosks is provided in Exhibit B, attached hereto and incorporated by reference. If, at any time during the Term, Company and City agree to add additional bus stops or bus shelters after the Effective Date, the MAG payment shall be increased for each additional ad shelter or kiosk by $60 per ad shelter or kiosk per month ($720 per year). The MAG shall be increased annually at the end of each 12-month period from the effective date of this Agreement by a percentage equal to the percentage change in the Consumer Price Index (CPI) statistics for all Urban Consumers for the Los Angeles -Long Beach -Anaheim area, as published by the United States Bureau of Labor (CUURS49ASA0). The percentage change shall be determined with reference to the year over year percentage change in CPI for the prior 12-month period ending in December. After the Effective Date and with prior written approval from the City, Company may install up to ten (10) Company owned kiosks ("Company Owned Kiosks") at approved locations to generate additional income at the beginning of the Term. Company Owned Kiosks shall adhere to the City's design guidelines as provided in Exhibit A and be painted black by the Company at Company's own expense. The Parties acknowledge that, at a later date, the City, at its sole discretion, may replace the Company Owned Kiosks with City owned kiosks. All Company Owned Kiosks shall be excluded from the MAG calculation until replaced with City owned kiosks. All revenue generated by the Company Owned Kiosks shall be included in the Revenue Share calculations. Company shall not derive revenue from any other sources other than advertising ("Ancillary Revenue") without prior approval from the City Council. 5. PAYMENTS MAG payments shall commence the first full calendar month after the Effective Date of the contract. On a quarterly basis, Company shall pay the greater of the Revenue Share amount or the MAG amount within thirty (30) days of the end of each calendar quarter (the "Revenue Payment"). The Quarterly Maintenance Services Cost, as defined in Exhibit A, shall be subtracted from the quarterly Revenue Payment. If the difference is positive, such amount shall be paid to the City. In the event the difference is negative: a. The negative balance shall be carried forward for up to three (3) years and offset by the MAG or the Revenue Share. b. At the end of the 4th year, any remaining negative balance shall be waived. c. After the 4th year, any negative balance for the rest of the Term shall be waived. Page 3 of 27