Southern MultiMedia Communications, Inc. - Page 6




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               As of December 31, 1985, neither the franchise agreements              
          nor any other contracts specifically required Wometco during the            
          years 1989 through 1991 to rebuild the six systems.                         
               In addition to the requirements already set forth, Wometco's           
          franchise agreements generally contained line-extension                     
          provisions specifying conditions under which Wometco was required           
          to build new cable lines to serve additional residents of a                 
          community.  In the cable television industry, such improvements             
          typically are referred to as “line extensions”.                             
               Generally, the line-extension provisions provided that if              
          requests for new cable service were received from at least five             
          residents who resided within 660 feet of existing cable lines,              
          Wometco would be required to build a line extension and extend              
          service at no cost to those residents.                                      
               In 1990, also with regard to Wometco's six cable television            
          systems that were rebuilt from 1989 through 1991, Wometco spent             
          an additional $6 million to extend the cable lines of the six               
          systems to provide cable television service to additional                   
          customers.  As of December 31, 1985, Wometco was not by contract            
          or otherwise specifically required to build these particular line           
          extensions.                                                                 
               Wometco's franchise agreements reflected various specific              
          requirements relating to surety bonds, franchise fees, insurance            
          coverage, and other matters.                                                






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Last modified: May 25, 2011