UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC. 20549
Form 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 28, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 1-6383
MEDIA GENERAL, INC.
(Exact name of registrant as specified in its charter)
Commonwealth of Virginia 54-0850433
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
333 E. Franklin St., Richmond, VA 23219
(Address of principal executive offices) (Zip Code)
(804) 649-6000
(Registrant's telephone number, including area code)
333 E. Grace St., Richmond, VA 23219
(Former name, former address and former fiscal year,
if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of August 2, 1998.
Class A Common shares: 26,209,416
Class B Common shares: 556,574
<PAGE>
MEDIA GENERAL, INC.
TABLE OF CONTENTS
FORM 10-Q REPORT
JUNE 28, 1998
Page
Part I. Financial Information
Item 1. Financial Statements
Consolidated Condensed Balance Sheets - June 28, 1998,
and December 28, 1997 1
Consolidated Condensed Statements of Operations -
Second quarter and six months ended June 28, 1998, and
June 29, 1997 3
Consolidated Condensed Statements of Cash Flows - Six
months ended June 28, 1998, and June 29, 1997 4
Notes to Consolidated Condensed Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 7
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 6. Exhibits and Reports on Form 8-K 14
(a) Exhibits
(b) Reports on Form 8-K
Signatures 15
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
MEDIA GENERAL, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
(000's except shares)
June 28, December 28,
1998 1997
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 4,778 $ 3,504
Accounts receivable - net 101,505 109,287
Inventories 17,636 17,594
Other 27,051 32,268
------------ ------------
Total current assets 150,970 162,653
------------ ------------
Investments in unconsolidated affiliates 136,519 132,209
Other assets 33,258 28,519
Property, plant and equipment - net 495,162 504,906
Excess of cost over fair value of net
identifiable assets of acquired
businesses - net 636,417 572,458
FCC licenses and other intangibles - net 410,753 413,456
------------ ------------
$ 1,863,079 $ 1,814,201
============ ============
See accompanying notes.
1
<PAGE>
MEDIA GENERAL, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
(000's except shares)
June 28, December 28,
1998 1997
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 31,294 $ 31,599
Accrued expenses and other liabilities 97,865 98,190
Income taxes payable 9,199 1,422
------------ ------------
Total current liabilities 138,358 131,211
------------ ------------
Long-term debt 912,434 900,140
Deferred income taxes 247,184 249,649
Other liabilities and deferred credits 118,951 114,975
Stockholders' equity:
Preferred stock ($5 cumulative convertible),
par value $5 per share:
Authorized 5,000,000 shares;
none outstanding
Common stock, par value $5 per share:
Class A, authorized 75,000,000 shares;
issued 26,172,247 and 26,172,424 shares 130,861 130,862
Class B, authorized 600,000 shares; issued
556,574 shares 2,783 2,783
Additional paid-in capital 17,327 16,733
Unearned compensation (1,575) (2,100)
Retained earnings 296,756 269,948
------------ ------------
Total stockholders' equity 446,152 418,226
------------ ------------
$ 1,863,079 $ 1,814,201
============ ============
See accompanying notes.
2
<PAGE>
MEDIA GENERAL, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(000's except for per share data)
<TABLE>
<CAPTION>
Second Quarter Ended Six Months Ended
--------------------- --------------------
June 28, June 29, June 28, June 29,
1998 1997 1998 1997
--------- --------- --------- ---------
<S> <C>
Revenues $ 251,162 $ 229,426 $ 485,843 $ 445,571
--------- --------- --------- ---------
Operating costs:
Production costs 121,233 113,305 238,722 225,300
Selling, distribution and
administrative 60,699 58,150 118,886 114,177
Depreciation and amortization 25,192 23,646 51,475 46,967
--------- --------- --------- ---------
Total operating costs 207,124 195,101 409,083 386,444
--------- --------- --------- ---------
Operating income 44,038 34,325 76,760 59,127
--------- --------- --------- ---------
Other income (expense):
Interest expense (16,453) (17,461) (33,852) (33,075)
Investment income -
unconsolidated affiliates:
Southeast Paper Manufacturing Co. 3,691 1,886 7,459 3,024
Denver Newspapers, Inc.:
Equity in net income 867 2,184 1,483 3,748
Preferred stock income 1,534 1,502 3,068 3,004
Other, net (433) 1,308 (950) 1,989
--------- --------- --------- ---------
Total other expense (10,794) (10,581) (22,792) (21,310)
--------- --------- --------- ---------
Income before income taxes and
extraordinary item 33,244 23,744 53,968 37,817
Income taxes 11,703 9,854 19,682 15,694
--------- --------- --------- ---------
Income before extraordinary item 21,541 13,890 34,286 22,123
Extraordinary item from early
redemption of debt (net of income
tax of $38,613) --- --- --- (63,000)
-------- --------- --------- ---------
Net income (loss) $ 21,541 $ 13,890 $ 34,286 $ (40,877)
========= ========= ========= =========
Earnings (loss) per common share
and equivalent:
Income before extraordinary item $ 0.81 $ 0.53 $ 1.29 $ 0.84
Extraordinary item --- --- --- (2.39)
--------- --------- --------- ---------
Net income (loss) $ 0.81 $ 0.53 $ 1.29 $ (1.55)
========= ========= ========= =========
Earnings (loss) per common share
and equivalent - assuming dilution:
Income before extraordinary item $ 0.80 $ 0.52 $ 1.27 $ 0.83
Extraordinary item --- --- --- (2.37)
--------- --------- --------- ---------
Net income (loss) $ 0.80 $ 0.52 $ 1.27 $ (1.54)
========= ========= ========= =========
Dividends paid per common share $ 0.14 $ 0.13 $ 0.28 $ 0.26
========= ========= ========= =========
</TABLE>
See accompanying notes.
3
<PAGE>
MEDIA GENERAL, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(000's)
Six Months Ended
----------------------------
June 28, June 29,
1998 1997
------------ --------
Operating activities:
Net income (loss) $ 34,286 $ (40,877)
Adjustments to reconcile net income (loss):
Extraordinary item --- 63,000
Depreciation and amortization 51,475 46,967
Deferred income taxes (4,956) (1,315)
Investment income -- unconsolidated
affiliates, net of distributions (4,310) (9,776)
Change in assets and liabilities:
Accounts receivable and inventories 9,219 (94)
Other (874) 4,833
------------ ------------
Net cash provided by operating activities 84,840 62,738
------------ ------------
Investing activities:
Capital expenditures (22,885) (21,572)
Purchase of businesses (1997-net of
$476 million of debt assumed) (92,656) (277,326)
Sale of businesses 23,645 139,564
Other, net 1,863 308
------------ ------------
Net cash used by investing activities (90,033) (159,026)
------------ ------------
Financing activities:
Increase in debt 248,000 963,000
Payment of debt (236,152) (775,000)
Premiums and costs related to early
redemption of Park debt --- (84,703)
Dividends paid (7,478) (6,920)
Other, net 2,097 527
------------ ------------
Net cash provided by financing activities 6,467 96,904
------------ ------------
Net increase in cash and cash equivalents 1,274 616
Cash and cash equivalents at beginning of year 3,504 4,471
------------ ------------
Cash and cash equivalents at end of period $ 4,778 $ 5,087
============ ============
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest (net of amount capitalized) $ 33,970 $ 26,455
Income taxes $ 21,493 $ 7,008
See accompanying notes.
4
<PAGE>
MEDIA GENERAL, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. The accompanying unaudited consolidated condensed financial
statements have been prepared in accordance with generally accepted accounting
principles for interim financial reporting, and with applicable quarterly
reporting regulations of the Securities and Exchange Commission. They do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements and, accordingly, should
be read in conjunction with the consolidated financial statements and related
footnotes included in the Company's Annual Report on Form 10-K for the year
ended December 28, 1997.
In the opinion of management, all adjustments (consisting of normal
recurring adjustments) considered necessary for a fair presentation of interim
financial information have been included. Certain items in 1997 have been
reclassified to conform with the current year's presentation. The
reclassifications have no effect on net income as previously reported. The
results of operations for interim periods are not necessarily indicative of the
results that may be expected for the full fiscal year.
In June 1998, the Financial Accounting Standards Board issued
Statement No. 133, Accounting for Derivative Instruments and Hedging Activities,
which is effective for fiscal years beginning after June 15, 1999. When adopted,
all derivatives will be recognized on the balance sheet at fair value.
Derivatives that are not hedges must be adjusted to fair value through income.
If a derivative is a hedge, depending upon the nature of the hedge, a change in
its fair value will either be offset against the change in the fair value of the
hedged assets, liabilities, or firm commitments through earnings, or recognized
in other comprehensive income until the hedged item is recognized in earnings.
The ineffective portion of the hedge's change in fair value will be immediately
recognized in earnings.
The Company has not yet determined what the effect of Statement No.
133 will be on its results of operations and financial position. The Company
will adopt Statement No. 130, Reporting Comprehensive Income, concurrent with
the adoption of Statement 133.
2. On January 2, 1998, Media General, Inc. acquired, for approximately
$93 million, the assets of the Bristol Herald Courier, a daily newspaper in
southwestern Virginia, and two affiliated weekly newspapers. The transaction was
accounted for as a purchase and Bristol's results of operations are included in
the Company's results since the date of acquisition. The purchase price has been
allocated to the assets acquired based on a preliminary appraisal of estimated
fair values. Such estimated values may change as the appraisals are finalized
and more facts become known.
On June 2, 1998, the Company completed the sale of its Kentucky
newspaper properties for approximately $24 million. Effective July 1, 1998, the
Company acquired the assets of the Hickory Daily Record in northwestern, North
Carolina for approximately $40 million. The transaction will be treated as a
purchase and Hickory's results of operations will be included in those of the
Company, beginning with the purchase date in the third quarter.
3. Inventories are principally raw materials.
5
<PAGE>
4. The following table sets forth the computation of basic and diluted
earnings per share:
<TABLE>
<CAPTION>
Quarter Ended June 28, 1998 Quarter Ended June 29, 1997
-------------------------------------- -----------------------------------
Income Shares Per Share Income Shares Per Share
(In thousands, except per share amounts) (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
----------- ------------- --------- ----------- ------------- ---------
<S> <C>
Basic EPS
Income available to common stock-
holders before extraordinary item $ 21,541 26,578 $ 0.81 $ 13,890 26,328 $ 0.53
========= =========
Effect of dilutive securities
Stock options 268 139
Restricted stock and other (5) 87 (11) 159
------------------------ ---------------------
Diluted EPS
Income available to common stock-
holders + assumed conversions$ $ 21,536 26,933 $ 0.80 $ 13,879 26,626 $ 0.52
====================================== ==================================
<CAPTION>
Six Months Ended June 28, 1998 Six Months Ended June 29, 1997
-------------------------------------- -----------------------------------
Income Shares Per Share Income Shares Per Share
(In thousands, except per share amounts) (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
----------- ------------- --------- ----------- ------------- ---------
Basic EPS
Income available to common stock-
holders before extraordinary item $ 34,286 26,541 $ 1.29 $ 22,123 26,323 $ 0.84
========= =========
Effect of dilutive securities
Stock options 262 139
Restricted stock and other (9) 83 (22) 156
------------------------ ---------------------
Diluted EPS
Income available to common stock-
holders + assumed conversions $ 34,277 26,886 $ 1.27 $ 22,101 26,618 $ 0.83
====================================== ==================================
</TABLE>
6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
OVERVIEW
Media General is an independent, publicly owned communications company situated
primarily in the Southeast with interests in newspapers, broadcast and cable
television, recycled newsprint production, and diversified information services.
The Company's fiscal year ends on the last Sunday in December.
Media General, Inc.
Business Segment Information
(Unaudited)
(000's)
Quarters Ended Six Months Ended
--------------------- ---------------------
June 28, June 29, June 28, June 29,
1998 1997 1998 1997
--------- --------- --------- ---------
Revenues:
Publishing $ 132,424 $ 120,945 $ 258,216 $ 236,702
Broadcast Television 47,233 41,030 84,760 76,969
Cable Television 39,643 39,218 78,290 77,320
Newsprint 31,862 28,233 64,577 54,580
--------- --------- --------- ---------
Total revenues $ 251,162 $ 229,426 $ 485,843 $ 445,571
========= ========= ========= =========
Operating income (loss):
Publishing $ 26,873 $ 21,617 $ 49,161 $ 40,368
Broadcast Television 7,113 7,323 7,935 10,470
Cable Television 7,126 7,925 13,855 15,160
Newsprint 2,926 (2,540) 5,809 (6,871)
--------- --------- --------- ---------
Total operating income $ 44,038 $ 34,325 $ 76,760 $ 59,127
========= ========= ========= =========
Operating cash flow:
Publishing $ 36,827 $ 31,339 $ 69,158 $ 59,249
Broadcast Television 14,312 13,072 22,824 22,226
Cable Television 13,420 14,415 26,951 28,168
Newsprint 4,671 (855) 9,302 (3,549)
--------- --------- --------- ---------
Total operating
cash flow $ 69,230 $ 57,971 $ 128,235 $106,094
========= ========= ========= =========
ACQUISITIONS AND DISPOSITIONS
In January 1998 the Company acquired the Bristol Herald Courier, a daily
newspaper in southwestern Virginia, and two affiliated weekly newspapers. In
June 1998 the Company sold its Kentucky newspaper properties acquired in 1997
with the purchase of Park Acquisitions, Inc. Subsequent to the end of the second
quarter, the Company purchased The Hickory Daily Record located in northwestern
North Carolina. See Note 2 of this Form 10-Q for further details about these
transactions.
7
<PAGE>
CONSOLIDATED OPERATING RESULTS
(In thousands, except per share data)
<TABLE>
<CAPTION>
Second Quarter Ended Six Months Ended
---------------------------- ---------------------------
June 28, June 29, June 28, June 29,
1998 1997 Change 1998 1997 Change
-------- ------- ------- -------- -------- ------
<S> <C>
Revenues $251,162 $229,426 9 % $485,843 $445,571 9 %
Net Income (Loss) 21,541 13,890 55 34,286 (40,877)* ---
Earnings (Loss)
Per Share 0.81 0.53 53 1.29 (1.55)* ---
Earnings (Loss)
Per Share -
Assuming Dilution 0.80 0.52 54 1.27 (1.54)* ---
</TABLE>
* Includes extraordinary charge from early redemption of debt ($63 million net
of a tax benefit of $38.6 million; $2.39 per share or $2.37 per share-assuming
dilution)
SEGMENT OPERATING RESULTS
The following discussion of segment operating results is primarily focused on
the year-over-year comparative performance of the Company. Each segment's
operating results include operating cash flow information in addition to
revenues, operating expenses and operating income. Operating cash flow amounts
presented with business segment information represent operating income plus
depreciation and amortization of intangible assets. Such cash flow amounts vary
from net cash provided by operating activities, as presented in the Consolidated
Statements of Cash Flows, because cash payments for interest and taxes are not
reflected, nor are the cash flow effects of non-operating items or changes in
certain operations-related balance sheet accounts. The Company believes the
presentation of operating cash flow amounts is important for several reasons.
First, fluctuations in depreciation and amortization from year to year are not
necessarily indicative of the underlying performance of a company. Second, the
year-over-year change in operating cash flow can be a useful measure of
performance and present a meaningful indicator of results that may occur in
future periods. Finally, acquisition values of communications and media
businesses are often based on multiples of operating cash flow.
PUBLISHING
(In thousands)
<TABLE>
<CAPTION>
Second Quarter Ended Six Months Ended
---------------------------- ---------------------------
June 28, June 29, June 28, June 29,
1998 1997 Change 1998 1997 Change
-------- ------- ------- -------- ------- ------
<S> <C>
Revenues $132,424 $120,945 9 % $258,216 $236,702 9 %
Operating Expenses 105,551 99,328 6 209,055 196,334 6
Operating Income 26,873 21,617 24 49,161 40,368 22
Depreciation &
Amortization 9,954 9,722 2 19,997 18,881 6
Operating Cash Flow 36,827 31,339 18 69,158 59,249 17
</TABLE>
Publishing revenues improved $11.5 million and $21.5 million (both 9%) for the
quarter and six month periods ended June 28, 1998, from the comparable 1997
periods. At the Company's metropolitan newspaper group, which includes its three
largest daily newspapers, revenues rose $6.3 million and $10.5 million in the
second quarter and first six months of this year as a result of expanded linage
(up 6.3% and 5%, respectively) and higher advertising rates (up 2.8% and 2.7%,
respectively). These quarterly and year-to-date increases were principally the
result of strong performances in classified advertising (led by the employment
and automotive categories) and retail advertising. The Company's recently
acquired Bristol Herald Courier (Bristol) also generated $4.2 million and $7.8
million in revenues during the second quarter and first six months of 1998. The
remaining $1 million and $3 million increases in Publishing revenues were
generated from the Company's other daily and weekly community newspapers,
primarily due to strong classified advertising revenues.
8
<PAGE>
Publishing operating expense increased $6.2 million and $12.7 million in the
second quarter and first half of 1998, approximately one-third and one-half of
which were related to acquisitions (principally Bristol). Excluding
acquisitions, these increases were primarily attributable to a $1.6 million and
a $4.1 million increase in newsprint expense from the comparable year-ago
quarter and first six months due to increased newsprint prices. Additionally,
bad debt expense and advertising and promotion costs were up moderately over the
equivalent prior-year periods.
Operating income for Publishing rose $5.3 million and $8.8 million (24% and 22%)
in the second quarter and first half of 1998 from the prior-year periods. The
increases were principally due to the combination of robust advertising revenues
and the acquisition of Bristol, partially offset by increased newsprint expense.
BROADCAST TELEVISION
(In thousands)
<TABLE>
<CAPTION>
Second Quarter Ended Six Months Ended
---------------------------- ---------------------------
June 28, June 29, June 28, June 29,
1998 1997 Change 1998 1997 Change
-------- ------- ------- -------- ------- ------
<S> <C>
Revenues $ 47,233 $41,030 15 % $ 84,760 $76,969 10 %
Operating Expenses 40,120 33,707 19 76,825 66,499 16
Operating Income 7,113 7,323 (3) 7,935 10,470 (24)
Depreciation &
Amortization 7,199 5,749 25 14,889 11,756 27
Operating Cash Flow 14,312 13,072 9 22,824 22,226 3
</TABLE>
Broadcast revenues increased $6.2 and $7.8 million (15% and 10%) in the second
quarter and first half of 1998. These increases were due to strong local
advertising (led by the automotive and fast food categories) as well as solid
political advertising revenues, resulting from primaries for upcoming elections
combined with local and national issue-oriented advertising. In addition, PCS,
the Company's provider of equipment and studio design services, generated strong
second quarter revenues, reflecting increased orders from broadcasting groups to
upgrade their existing facilities.
Operating expenses in the Broadcast Segment increased $6.4 million and $10.3
million in the second quarter and first half of 1998. Programming costs were up
33% and employee compensation and benefits expense rose 12%, both for the
quarter and first six months of the year. The higher expense levels in 1998's
first half were expected as steps were initiated in 1997 to invigorate the
performance at the recently acquired stations. These steps included upgrading
programming and equipment and fully staffing and competitively compensating
personnel in conjunction with the repositioning and relaunching of these
stations. May rating books indicated increased audience share at nine of the
Company's fourteen stations, reflecting the positive results achieved from these
efforts. Depreciation and amortization expense also rose $1.5 million and $3.1
million in the second quarter and first half of 1998.
9
<PAGE>
Broadcast operating income decreased $.2 million and $2.5 million in the second
quarter and first six months of 1998. The decline was attributable to increased
expenditures at the recently acquired stations to enhance their performance and
to position them to compete more effectively in their markets, which more than
offset improved quarterly and year-to-date revenues.
CABLE TELEVISION
(In thousands)
<TABLE>
<CAPTION>
Second Quarter Ended Six Months Ended
---------------------------- ---------------------------
June 28, June 29, June 28, June 29,
1998 1997 Change 1998 1997 Change
-------- ------- ------- -------- ------- ------
<S> <C>
Revenues $ 39,643 $39,218 1 % $ 78,290 $77,320 1 %
Operating Expenses 32,517 31,293 4 64,435 62,160 4
Operating Income 7,126 7,925 (10) 13,855 15,160 (9)
Depreciation &
Amortization 6,294 6,490 (3) 13,096 13,008 1
Operating Cash Flow 13,420 14,415 (7) 26,951 28,168 (4)
</TABLE>
In June, the Company renewed its cable franchise agreement with Fairfax County
for a 15-year term. As part of this agreement, the Company agreed not to raise
subscriber rates for a period of one year. The long-term benefits of this
agreement override the short-term impact on the Company.
Revenues at the Company's Cable Television Segment rose $.4 million and $1
million in the second quarter and first half of 1998. These increases were
primarily attributable to the Company's Fairfax County, Virginia, cable system
(Fairfax Cable), as a result of a 4.4% increase in the number of subscribers (to
approximately 240,000 at June 28, 1998), together with a combined average
increase of 2.4% in basic and expanded subscriber rates for both the quarter and
year to date.
Cable operating expenses rose $1.2 million and $2.3 million during the second
quarter and first half of 1998 from the comparable prior-year periods. These
increases were primarily attributable to rises of $1.1 million and $2 million in
programming costs for the second quarter and first six months of the year due to
higher programming rates and the expansion of the subscriber base at Fairfax
Cable.
Cable operating income decreased $.8 million and $1.3 million in the second
quarter and first half of 1998 from the year-earlier periods. These decreases
reflected increased programming costs at Fairfax Cable due to higher contractual
rates, partially offset by increased revenue due to its expanding subscriber
base.
NEWSPRINT
(In thousands)
<TABLE>
<CAPTION>
Second Quarter Ended Six Months Ended
---------------------------- ---------------------------
June 28, June 29, June 28, June 29,
1998 1997 Change 1998 1997 Change
-------- ------- ------- -------- ------- ------
<S> <C>
Revenues $ 31,862 $28,233 13 % $ 64,577 $54,580 18 %
Operating Expenses 28,936 30,773 (6) 58,768 61,451 (4)
Operating Income (Loss) 2,926 (2,540) --- 5,809 (6,871) ---
Depreciation &
Amortization 1,745 1,685 4 3,493 3,322 5
Operating Cash Flow 4,671 (855) --- 9,302 (3,549) ---
</TABLE>
10
<PAGE>
Newsprint Segment revenues increased $3.6 million and $10 million (13% and 18%)
in the second quarter and first half of 1998, reflecting the results of the
Company's Garden State Paper (Garden State) newsprint mill, located in Garfield,
New Jersey. These increases resulted from a 7.1% and 10.7% increase in the
average realized selling price per ton for the quarterly and year-to-date
periods ended June 28, 1998, combined with a 5.8% and a 7.6% increase in tons
sold. Newsprint selling prices have gradually increased over the past year, such
that the average realized price has risen from $471 per ton in the first half of
1997 to $521 per ton in the comparable period of 1998.
Newsprint Segment operating expense dropped $1.8 million and $2.7 million in the
quarterly and year-to-date periods of 1998 from the comparable 1997 amounts.
These declines were principally the result of a $.8 million and a $1.5 million
decrease in chemical expense in the second quarter and first half of the year
due to deinking process improvements, combined with a $.6 million and a $.9
million reduction in maintenance and repair expense, the result of a more
efficient production process. Additionally, energy costs declined $.2 million
and $1.2 million in the quarterly and year-to-date periods due to an
extraordinarily mild winter combined with a shift to purchasing gas in the
competitively-priced open market. These decreases were slightly offset by a rise
in recovered newspaper (ONP) expense, due primarily to increased volume.
Newsprint operating income rose $5.5 million and $12.7 million, from a $2.6
million and a $6.9 million loss in the second quarter and first half of 1997, to
income of $2.9 million and $5.8 million in the comparable 1998 periods. The
increase resulted primarily from a $34 and a $50 increase in average realized
selling price per ton for the current quarter and year-to-date period. In
addition, improved production efficiency at Garden State and a mild 1998 winter
also contributed to the overall operating profit improvement.
UNCONSOLIDATED AFFILIATES
The Company's investment income from unconsolidated affiliates increased $.5
million and $2.2 million in the second quarter and first half of 1998 from the
comparable periods of 1997. The Company's share of the operating results of its
Southeast Paper Manufacturing Company (SEPCO) newsprint affiliate increased $1.8
million from the second quarter of 1997 and $4.4 million from the first half of
1997. SEPCO's revenues increased 6.4% and 9.7% in the second quarter and first
half of 1998 as a result of a 6.7% and a 10.8% rise in the average realized
selling price, which more than offset the effects of a 1.1% and a 1.7% decrease
in tons sold. Income earned from the Company's Denver Newspapers, Inc. (DNI),
affiliate decreased $1.3 million and $ 2.2 million in the second quarter and
first six months of 1998 from the comparable periods of 1997. The decreases were
attributable to increased operating expenses, primarily newsprint and
advertising costs, which were only partially offset by strong advertising
revenue growth.
INTEREST EXPENSE
Interest expense of $16.5 million and $33.9 million represented a $1 million
decrease and a $.8 million increase from the second quarter and year-to-date
periods of 1998 over the comparable year-earlier periods. The quarterly decrease
was due to an $88.6 million decline in average debt outstanding, partially
offset by a slight increase, from the comparable year-ago period, in the
Company's average effective borrowing rate to 6.8%. The year-to-date increase
resulted from a slight rise, over the equivalent year-earlier period, in the
Company's average effective borrowing rate to approximately 7%, partially offset
by a $24 million decrease in average debt outstanding.
11
<PAGE>
NON-OPERATING ITEMS
Other, net, declined from income of $1.3 million and $2 million in the second
quarter and first half of 1997 to an expense of $.4 million and $1 million in
the comparable periods of 1998. These declines were primarily attributable to a
reduction in interest income.
INCOME TAXES
The Company's effective tax rate was 35.2% and 36.5% in the second quarter and
first six months of 1998, down from 41.5% (excluding the extraordinary item) in
the previous year's comparable periods. The decline was principally a result of
a higher level of deferred tax credits on intangible assets and the favorable
settlement of a state tax examination. Income tax expense rose $1.8 million and
$4 million from the second quarter and first six months of last year due to
pretax earnings increases.
NET INCOME (LOSS)
Net income for 1998's second quarter was $21.5 million ($0.81 per share, or
$0.80 per share - assuming dilution) compared to $13.9 million in the equivalent
prior-year period. Year-to-date 1998 net income was $34.3 million ($1.29 per
share, or $1.27 per share - assuming dilution) compared to a $40.9 million loss
in 1997, the result of a $63 million extraordinary charge, net of a tax benefit
of $38.6 million, ($2.39 per share, or $2.37 per share - assuming dilution)
related to the early redemption of Park's high coupon debt in February 1997.
Excluding this extraordinary item, net income rose $12.2 million, 55% above the
year-ago period. Newsprint produced a positive turnaround in operating profits
of $5.5 million and $12.7 million in the second quarter and first half of this
year, while Publishing posted increases of 24% and 22% in operating profits.
These improved performances more than offset declines in Broadcast and Cable
Television operating income.
LIQUIDITY AND CAPITAL RESOURCES
Funds generated by operating activities during the first half of 1998 totaled
$84.8 million, up $22.1 million from the comparable period of 1997. The increase
was due to a combination of factors, including: an additional $9.3 million of
funds generated in the current year as a result of accounts receivable
collections and inventory reductions, a $5 million distribution from SEPCO and a
$12.2 million increase in net income (excluding the extraordinary item). Funds
generated from operating activities, coupled with funds provided by financing
activities, supplied the $93 million used for the acquisition of Bristol, the
$22.9 million for capital expenditures and the $7.5 million used for the payment
of dividends to stockholders.
Total debt outstanding at June 28, 1998, was $912.4 million, down $27.8 million
from the year-ago level of $940.2 million, but up from the December 28, 1997
level of $900.1 million. This $12.3 million increase from year end was directly
attributable to the $90 million in borrowings for the Bristol acquisition in
early 1998, most of which has already been repaid with funds generated from
operations along with proceeds from the sale of the Company's Kentucky newspaper
operations. The Company's unused credit lines available from its committed
revolving credit facility were $360 million at June 28, 1998.
The Company has interest rate swaps totaling $800 million with maturities
ranging from less than one year to six years. These swap agreements effectively
convert variable rate debt to fixed rate debt at interest rates approximating
6.7% at June 28, 1998.
12
<PAGE>
The Company anticipates that internally generated funds provided by operations
during 1998, together with existing credit facilities, will be more than
adequate to finance other possible acquisitions, projected capital expenditures,
dividends to stockholders, and working capital needs.
OUTLOOK
The Company expects to build on the strong profits and cash flows produced
during the first half of 1998 throughout the remainder of the year. The
Publishing Segment anticipates goods results due in large part to robust
advertising revenues. The Newsprint Segment is expected to continue its
year-over-year profit growth despite the recent leveling-off of newsprint
selling prices. The repositioning efforts undertaken at the broadcast television
stations, which recently resulted in generally stronger May audience ratings,
are also expected to generate improved broadcast profits. Together, these
factors are expected to produce higher year-over-year net income for the
Company.
13
<PAGE>
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
The Annual Meeting of Media General, Inc., was held on May 15, 1998, for
the purpose of electing a board of directors.
Each nominee for director was elected by the following vote:
Class A Class A
Shares Voted Shares Voted
Class A Directors "FOR" "WITHHELD"
- ----------------- ----- ----------
Charles A. Davis 18,612,153 482,172
Robert V. Hatcher, Jr. 18,630,445 463,883
John G. Medlin, Jr. 18,636,948 457,380
Class B Class B
Shares Voted Shares Voted
Class B Directors "FOR" "WITHHELD"
- ----------------- ----- ----------
Robert B. Black 541,552 ---
J. Stewart Bryan III 541,552 ---
Marshall N. Morton 541,552 ---
Roger H. Mudd 541,552 ---
Wyndham Robertson 541,552 ---
Henry L. Valentine, II 541,552 ---
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.1 Franchise Agreement, dated June 1, 1998, between Fairfax County,
Virginia, and Media General Cable of Fairfax County, Inc.
27.1 Financial Data Schedule for the period ended June 28, 1998.
27.2 Restated Financial Data Schedule for the period ended June 29, 1997.
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the quarter ended
June 28, 1998.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MEDIA GENERAL, INC.
DATE: August 11, 1998 /s/ J. Stewart Bryan III
-----------------------
J. Stewart Bryan III, Chairman,
President and
Chief Executive Officer
DATE: August 11, 1998 /s/ Marshall N. Morton
----------------------
Marshall N. Morton
Senior Vice President and Chief
Financial Officer
15
Page 1
A CABLE FRANCHISE AGREEMENT
BETWEEN FAIRFAX COUNTY, VIRGINIA
AND MEDIA GENERAL CABLE OF FAIRFAX COUNTY, INC.
Approved by the Fairfax County Board of Supervisors on May 11, 1998
<PAGE>
Page 1
CABLE FRANCHISE AGREEMENT
FAIRFAX COUNTY, VIRGINIA
PAGE
1 DEFINITIONS...............................................................9
(a) Affiliate........................................................9
(b) Basic Cable Service..............................................9
(c) Board............................................................9
(d) Cable Act........................................................9
(e) Cable Ordinance..................................................9
(f) Cable Service...................................................10
(g) Cable System....................................................10
(h) Communications Administrator....................................10
(i) Channel.........................................................10
(j) County..........................................................11
(k) Demarcation Point...............................................11
(l) Educational Access Channel or Educational Channel...............11
(m) Equitable Price.................................................11
(n) Fair Market Value...............................................11
(o) Federal Communications Commission or FCC........................12
(p) Franchise.......................................................12
(q) Franchise Agreement or Agreement................................12
(r) Franchise Area..................................................12
(s) Franchise Fee...................................................12
(t) Governmental Access Channel or Governmental Channel.............12
(u) Grantee.........................................................12
(v) Grantee's Cable System..........................................12
(w) Gross Revenues..................................................12
(x) Home Subscriber Network or HSN..................................14
(y) Institutional Network or I-Net..................................14
<PAGE>
Page 2
(z) Leased Access Channel or Commercial Access Channel..............14
(aa) Net Income......................................................14
(bb) Normal Operating Conditions.....................................15
(cc) Department of Consumer Affairs..................................15
(dd) PEG.............................................................15
(ee) Person..........................................................15
(ff) Public Access Channel...........................................15
(gg) Prior Franchises................................................16
(hh) Public Rights-of-Way............................................16
(ii) Rate Regulated Services.........................................16
(jj) Security Deposit................................................16
(kk) Service Tier....................................................16
(ll) Subscriber......................................................17
(mm) System Upgrade..................................................17
(nn) User............................................................17
(oo) Video Programming...............................................17
2 GRANT OF AUTHORITY; LIMITS AND RESERVATIONS..............................17
(a) Grant of Authority..............................................17
(b) Area Served.....................................................18
(c) Term............................................................18
(d) Grant Not Exclusive.............................................19
(e) Franchise Agreement Subject to Other Laws.......................19
(f) Franchise Agreement Subject to Exercise of Police Powers........19
(g) Material Alteration.............................................20
(h) Approval and Effective Date.....................................20
(i) Effect of Acceptance............................................20
(j) Claims Related to Prior Franchises..............................21
(k) No Waiver.......................................................22
(l) Amendment of Franchise Agreement................................23
3 TRANSFERS................................................................23
<PAGE>
Page 3
(a) County Approval Required........................................23
(b) Subsequent Approvals............................................24
(c) Approval Does Not Constitute Waiver.............................24
(d) Definitions.....................................................24
(e) Notification of Certain Transactions............................25
4 PROVISION OF CABLE SERVICE...............................................25
(a) Availability of Cable Service...................................25
(b) Line Extension Requirements.....................................26
(c) Continuity of Service...........................................26
5 CONSTRUCTION AND MAINTENANCE.............................................28
(a) Construction Schedule...........................................28
(b) Construction Standards..........................................29
(c) System Tests and Inspections....................................39
(d) Publicizing Proposed Construction Work..........................41
(e) System Maintenance..............................................42
6 SYSTEM FACILITIES, EQUIPMENT AND SERVICES................................42
(a) System Characteristics..........................................42
(b) Current System..................................................46
(c) Integration of Advancements in Technology.......................47
(d) System Upgrade..................................................47
(e) System Design Submission Process................................48
(f) HSN Upgrade Schedule............................................49
(g) Periodic Progress Reporting.....................................49
(h) Leased Access Channels..........................................50
(i) Interconnection.................................................50
(j) Emergency Alert System..........................................51
(k) Uses of System..................................................52
(l) Home Wiring.....................................................52
(m) Antenna Towers..................................................52
(n) Periodic Performance Evaluation.................................53
<PAGE>
Page 4
(o) Tenth-Year Anniversary Review...................................53
7 CHANNELS AND FACILITIES FOR PUBLIC, EDUCATIONAL AND GOVERNMENTAL USE.....57
(a) Access Channels.................................................57
(b) Access Channel Assignment.......................................59
(c) Capital Grants for Access Facilities............................60
(d) Return Feed From Facilities.....................................61
(e) Use of PEG Channels, Facilities and Equipment...................62
(f) Cable Drops and Outlets for Government Facilities...............64
(g) Backup Facilities and Equipment.................................65
(h) Editorial Control...............................................66
(i) Payments by Grantee to PEG Users................................66
(j) Carriage of PEG Programming.....................................67
(k) Institutional Network...........................................67
(l) Costs and Payments Not Franchise Fees...........................68
8 FRANCHISE FEE............................................................68
(a) Payment to County...............................................68
(b) Supporting Information..........................................68
(c) Late Payments...................................................68
(d) Audit...........................................................68
(e) No Limitation on Taxing Authority...............................70
(f) No Accord and Satisfaction......................................71
(g) Acceptance Fee..................................................71
9 REPORTS AND RECORDS......................................................71
(a) Books and Records...............................................71
(b) Communication with Regulatory Agencies..........................72
(c) Annual Report...................................................73
(d) Quarterly Report................................................75
(e) Special Reports.................................................76
(f) Additional Information..........................................77
(g) Records Required................................................77
<PAGE>
Page 5
(h) Waiver of Reporting Requirements................................78
10 INSURANCE, SURETY, AND INDEMNIFICATION...................................78
(a) Insurance Required..............................................78
(b) Endorsements....................................................79
(c) Qualifications of Insurers......................................79
(d) Policies Available for Review...................................79
(e) Additional Insureds; Prior Notice of Policy Modification........80
(f) Indemnification.................................................80
(g) No Limit of Liability...........................................82
(h) County to Assume No Liability...................................82
11 PERFORMANCE GUARANTEES AND REMEDIES......................................83
(a) Performance Bond................................................83
(b) Security Deposit................................................85
(c) Rights Cumulative...............................................86
(d) Remedies........................................................86
(e) Liquidated Damages..............................................87
(f) Shortening, Revocation, or Termination of Franchise.............90
(g) Condemnation....................................................93
12 MISCELLANEOUS PROVISIONS.................................................93
(a) Binding Acceptance..............................................93
(b) Severability....................................................93
(c) Preemption......................................................93
(d) Equal Treatment.................................................94
(e) Compliance With Applicable Laws.................................94
(f) Force Majeure...................................................94
(g) Governing Law...................................................95
(h) Notices.........................................................95
(i) Time of Essence.................................................95
(j) Captions and Headings...........................................95
(k) No Oral Modifications...........................................96
<PAGE>
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(l) Rights and Remedies.............................................96
(m) Obligations to Continue Throughout Term.........................98
(n) Cooperation in Obtaining and Implementing Grants................98
(o) Prohibition Against Discrimination..............................98
(p) Connections to the Cable System; Use of Antennas................98
(q) Police Powers of the County.....................................99
(r) Grantee Bears Its Own Costs.....................................99
(s) County Bears Its Own Costs......................................99
(t) Rights of Third Parties.........................................99
(u) Appendices......................................................99
(v) Entire Agreement...............................................100
APPENDIX 1: LINE EXTENSION POLICY...........................................1
APPENDIX 2: I-NET APPENDIX..................................................1
APPENDIX 3: PEG ORIGINATION SITE APPENDIX...................................1
APPENDIX 4: I-NET SITE APPENDIX.............................................1
APPENDIX 5: SECURITY DEPOSIT APPENDIX......................................1
APPENDIX 6: SECURITY AGREEMENT..............................................1
APPENDIX 7: GUARANTEE OF PERFORMANCE........................................1
APPENDIX 8: ACCEPTANCE OF FRANCHISE BY THE GRANTEE..........................1
<PAGE>
Page 7
CABLE TELEVISION FRANCHISE AGREEMENT
BETWEEN FAIRFAX COUNTY, VIRGINIA
AND MEDIA GENERAL CABLE OF FAIRFAX COUNTY, INC.
THIS CABLE FRANCHISE AGREEMENT (the "Franchise Agreement") is entered
into by and between Fairfax County, Virginia ("County"), and Media General Cable
of Fairfax County, Inc., a Virginia Corporation ("Media General") as of June 1,
1998 (the "Effective Date").
WHEREAS, Media General has asked the County to renew Media General's
nonexclusive Franchises (the "Prior Franchises") to own, construct, reconstruct,
install, maintain, operate, dismantle, test, upgrade, repair, use, and remove a
Cable System (as hereinafter defined) in the County; and
WHEREAS, the construction, installation, reconstruction, maintenance,
operation, dismantling, testing, upgrade, repair, use, and removal of such a
system involves the occupation of and placement of private commercial facilities
along, under, over, above, through or across the Public Rights-of-Way or public
land within the County; and
WHEREAS, the County has reviewed Media General's performance under the
Prior Franchises and the quality of service during the term of the Prior
Franchises, has identified the future cable-related needs and interests of the
County and its citizens, has considered the financial, technical and legal
qualifications of Media General, has determined whether Media General's plans
for constructing, operating and maintaining its Cable System are adequate, and
has determined that the foregoing meet the requirements of 47 U.S.C. ss. 546 in
a full public proceeding affording due process to all parties; and
<PAGE>
Page 8
WHEREAS, the County has relied on Media General's representations
contained in this Franchise Agreement and has considered the information that
Media General has presented to it; and
WHEREAS, based on Media General's representations in this Franchise
Agreement, the Board has determined that, subject to the terms and conditions
set forth herein and the provisions of Chapter 9 of the Code of the County of
Fairfax, known as the Fairfax County Cable Communications Ordinance (the "Cable
Ordinance" or "Ordinance"), the grant of a new nonexclusive Franchise to Media
General, to supersede the Prior Franchises, is consistent with the public
interest; and
WHEREAS, the County and Media General have reached agreement on the
terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the County's grant of a new
Franchise to Media General; Media General's promise to provide Cable Service to
residents of the County pursuant to and consistent with the Cable Ordinance; the
terms and conditions set forth herein, the promises and undertakings herein, and
other good and valuable consideration, the receipt and the adequacy of which are
hereby acknowledged;
THE SIGNATORIES DO HEREBY AGREE AS FOLLOWS:
<PAGE>
Page 9
1 DEFINITIONS.
When not inconsistent with the context, words used in the present tense
include the future tense; words in the plural number include the singular
number, and words in the singular number include the plural number; and the
masculine gender includes the feminine gender. The words "shall" and "will" are
mandatory, and "may" is permissive. Unless otherwise expressly stated, words not
defined herein or in the Cable Ordinance shall be given the meaning set forth in
Va. Code ss. 15.2-2108 or, if not in conflict, Title 47 of the United States
Code, as amended, and if not defined therein, their common and ordinary meaning.
(a) Affiliate: Any Person who owns or controls, is owned or controlled
by, or is under common ownership or control with the Grantee.
(b) Basic Cable Service: The HSN service tier which includes the
following: at least (i) all domestic television broadcast signals carried in
fulfillment of the requirements of 47 U.S.C. ss.ss. 534 and 535 (except any
signal secondarily transmitted by satellite carrier beyond the local service
area of such station, regardless of how such signal is ultimately received by
the Grantee's Cable System); (ii) any public, educational, and governmental
access programming required by the Franchise Agreement to be provided to
Subscribers as basic service; and (iii) any additional video programming signals
or service added to basic service by the Grantee.
(c) Board: The Board of Supervisors of the County of Fairfax, Virginia.
(d) Cable Act: Title VI of the Communications Act of 1934 (47
U.S.C.ss.521, et seq.) and any amendments thereto.
(e) Cable Ordinance: Chapter 9 of the Code of the County of Fairfax.
<PAGE>
Page 10
(f) Cable Service: (A) the one-way transmission to subscribers of (i)
video programming, or (ii) other programming service, and (B) subscriber
interaction, if any, which is required for the selection or use of such video
programming or other programming service.
(g) Cable System: A facility, consisting of a set of closed
transmission paths and associated signal generation, reception, and control
equipment that is designed to provide cable service which includes video
programming and which is provided to multiple subscribers within a community,
but such term does not include (A) a facility that serves only to retransmit the
television signals of one or more television broadcast stations; (B) a facility
that serves subscribers without using any public right-of-way; (C) a facility of
a common carrier which is subject, in whole or in part, to the provisions of
Title II of the Communications Act of 1934, except that such facility shall be
considered a cable system (other than for purposes of 47 U.S.C. ss. 541(c)) to
the extent such facility is used in the transmission of video programming
directly to subscribers, unless the extent of such use is solely to provide
interactive on-demand services; (D) an open video system that complies with 47
U.S.C. ss. 573; or (E) any facilities of any electric utility used solely for
operating its electric utility system.
(h) Communications Administrator: The present or succeeding employee of
Fairfax County designated as the Cable Television Administrator or as the
Communications Administrator who shall have the duties prescribed in the Cable
Ordinance and as otherwise prescribed by the Board.
(i) Channel: A portion of the electromagnetic frequency spectrum that
is used in Grantee's Cable System and that is capable of delivering a video
signal as that term is defined by the FCC as of the Effective Date of this
Agreement.
<PAGE>
Page 11
(j) County: The County of Fairfax, Virginia.
(k) Demarcation Point: For purposes of the HSN, a Demarcation Point for
cable drops in existence as of the Effective Date shall be the point of
interconnection of Grantee's Cable System with customer-provided equipment or
wiring as of the Effective Date; for cable drops installed after the Effective
Date, it shall be a point agreed upon by the Grantee and the County up to twelve
inches inside the building wall and consistent with Grantee's direction of
approach to the building, consistent with the FCC's rules as of the Effective
Date of this Agreement or as later amended. For purposes of the I-Net, a
Demarcation Point shall have the meaning given that term in Appendix 2. For
purposes of PEG upstream feeds, a Demarcation Point shall be the point at which
the equipment owned by the PEG origination site operator interconnects with
Grantee's wiring and electronics.
(l) Educational Access Channel or Educational Channel: Any Channel
required by this Franchise Agreement to be provided by Grantee to the County on
the HSN for educational use.
(m) Equitable Price: Fair Market Value adjusted downward for the harm
to the County or Subscribers, if any, resulting from the Grantee's breach of
this Agreement or violation of the Cable Ordinance which resulted in the
revocation of the Franchise, and as further adjusted to account for any other
equitable factors that may be considered consistent with 47 U.S.C. ss. 547.
(n) Fair Market Value: The price which property will bring when it is
offered for sale by one who desires, but is not obligated, to sell it, and is
bought by one who is under no necessity of having it.
<PAGE>
Page 12
(o) Federal Communications Commission or FCC: That Federal agency as
presently constituted by the Communications Act of 1934, as amended, its
designee, or any successor agency.
(p) Franchise: The franchises granted pursuant to this Agreement.
(q) Franchise Agreement or Agreement: This contract and any amendments,
exhibits or appendices hereto.
(r) Franchise Area: The North and South County Franchise areas, as
defined in Section 9-7-1 of the Cable Ordinance, and any area added thereto
during the term of the Franchise that is served by the Grantee as of the
Effective Date of this Agreement or which the Grantee agrees to serve.
(s) Franchise Fee: This term shall have the meaning given to it in
Section 8(a) herein.
(t) Governmental Access Channel or Governmental Channel: Any Channel
required by this Franchise Agreement to be provided by Grantee to County on the
HSN and set aside by the Grantee for government use.
(u) Grantee: Media General Cable of Fairfax County, Inc., a Virginia
corporation, and its lawful and authorized successors, assigns, and transferees.
(v) Grantee's Cable System: The Cable System of the Grantee in the
County, which shall be subject to either the Prior Franchises or the Franchise,
as the context requires.
(w) Gross Revenues: Any and all cash, credits, property or
consideration of any kind or nature that constitute revenue in accordance with
Generally Accepted Accounting Principles and that arise from, are attributable
to, or are in any way derived directly or indirectly by the Grantee or its
<PAGE>
Page 13
Affiliates, or by any other entity that is a cable operator of Grantee's Cable
System, from the operation of the Grantee's Cable System to provide Cable
Services, except as hereinafter specifically excluded. Consistent with the
foregoing, the following, without limitation, shall be included in Gross
Revenues to the extent derived from the operation of the Grantee's Cable System
to provide Cable Services in the County: monthly fees collected from Subscribers
for any basic, optional, premium, per-channel, per-program service, or cable
programming service; installation, disconnection, reconnection, and
change-in-service fees; fees, payments, or other consideration received from
programmers for carriage of programming on Grantee's Cable System; revenues from
rentals or sales of converters or other equipment; studio rental; fees from
third party unaffiliated programmers for leased access programming; production
equipment, rental fees and personnel fees; advertising revenues (except as
otherwise provided hereinafter); revenues from the sale or carriage of other
Cable Services; and revenues from home shopping and bank-at-home channels. Gross
revenues shall not include any taxes on services furnished by a Grantee which
are imposed directly on any Subscriber or User by the Commonwealth of Virginia,
the County, or other governmental unit and which are collected by the Grantee on
behalf of said governmental unit. A Franchise fee is not such a tax. Gross
Revenues shall not include (i) any consideration paid by the County to the
Grantee for the Institutional Network as set forth in Appendix 2 hereto, or any
expense reimbursement paid by the County or its agents, or by PEG users, to the
Grantee; (ii) any compensation awarded to Grantee based on the County's
condemnation of property of Grantee; (iii) any uncollected receipts (i.e., "bad
debt"), provided, however, that all or any part of any such actual bad debt that
is written off but subsequently collected shall be included in Gross Revenues in
the period collected; (iv) revenues from program guides; (v) revenues from tower
<PAGE>
Page 14
leases. With respect to advertising revenues derived from the operation of the
Grantee's Cable System to provide Cable Services, the term Gross Revenues shall
include thirty-five percent of the revenues paid by an advertiser to any
Affiliate of Grantee; provided, however, that any amounts includable as Gross
Revenues that are received by an Affiliate or any other entity that is a cable
operator of Grantee's Cable System shall not be counted as Gross Revenues to the
extent that such amounts are also received directly by the Grantee, to ensure
that no such revenue is counted twice.
(x) Home Subscriber Network or HSN: The broadband communications
network of Grantee's Cable System serving residential Subscribers in the
Franchise Area. The HSN shall include all facilities and equipment provided by
Grantee that are designed to provide Cable Service to residential Subscribers,
including, but not limited to, converters and other terminal equipment.
(y) Institutional Network or I-Net: An institutional network
constructed for the County's use which is not generally available to Subscribers
and which is more specifically described in Section 7 herein.
(z) Leased Access Channel or Commercial Access Channel: Any Channel on
the Grantee's Cable System designated or dedicated for use by a Person
unaffiliated with the Grantee pursuant to 47 U.S.C. ss. 532.
(aa) Net Income: The amount remaining after deducting from gross
revenues all of the actual, direct and indirect, expenses associated with
operating the Grantee's Cable System, including the Franchise Fee, interest,
depreciation and all taxes, all as determined in accordance with Generally
Accepted Accounting Principles.
<PAGE>
Page 15
(bb) Normal Operating Conditions: Those conditions that are within the
control of the Grantee. Conditions that are not within the control of the
Grantee include, but are not limited to, natural disasters, civil disturbances,
power outages, telephone network outages, weather or traffic conditions
impairing construction or normal operation activities, vandalism, accidents for
which Grantee is not primarily responsible, sabotage, and the action or inaction
of any governmental unit. Consistent with the foregoing, conditions that are
within the control of Grantee include, but are not limited to, special
promotions, pay-per-view events, rate increases, regular or reasonably
anticipatable peak or seasonal demand periods, and maintenance or upgrade of
Grantee's Cable System.
(cc) Department of Consumer Affairs: The Fairfax County Department of
Telecommunications and Consumer Services or any successor agency that is
designated by the Board to perform the functions of that Department.
(dd) PEG: Public, educational, and governmental.
(ee) Person: An individual, partnership, association, joint stock
company, organization, corporation, or any lawful successor thereto or
transferee thereof, but such term does not include the County.
(ff) Public Access Channel: Any Channel required by this Franchise
Agreement to be provided by Grantee to County on the HSN and set aside by the
Grantee for use by the general public who are residents of the Franchise Area,
including groups and individuals, and which is available for such use on a
non-discriminatory basis.
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Page 16
(gg) Prior Franchises: The cable television franchises for the North
and South County areas as defined in the Cable Ordinance accepted by Media
General Cable of Fairfax County, Inc., on September 30, 1982.
(hh) Public Rights-of-Way: The surface, the air space above the
surface, and area below the surface of any public street, highway, lane, path,
alley, sidewalk, boulevard, drive, concourse, bridge, tunnel, park, parkway,
waterway, dock, bulkhead, wharf, pier, public water or public easements, or
other public way within the County, which consistent with the purposes for which
it was dedicated, may be used for the purpose of installing and maintaining a
Cable System.
(ii) Rate Regulated Services: All services subject to rate regulation
by the County pursuant to applicable law, including Basic Cable Service, all
equipment provided by Grantee to a Subscriber's home which is used to receive
Basic Cable Service, regardless of whether such equipment is used to receive
other regulated or unregulated services, and the installation of all equipment
which is used to receive Basic Cable Service. Such equipment shall include, but
is not limited to: (i) converter boxes; (ii) remote control units; and (iii)
connections for additional television receivers.
(jj) Security Deposit: The funds deposited by Media General pursuant to
Section 11 (b) of this Agreement.
(kk) Service Tier: A category of Cable Service or other services
provided by the Grantee's Cable System consisting of one or more video
programming services that are offered as a package and for which a separate rate
is charged by the Grantee.
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Page 17
(ll) Subscriber : Any member of the general public who contracts with
Grantee to receive or otherwise lawfully receives (except for resale) Grantee's
Basic Service and/or any one or more of such other Cable Services as may be
provided on the HSN.
(mm) System Upgrade: A major improvement or enhancement in the
technology or service capabilities made by the Grantee to Grantee's Cable
System, as more fully described in Section 6 herein.
(nn) User: A Person or organization using a PEG Channel or equipment
and facilities for purposes of producing or transmitting material, as contrasted
with the receipt thereof in the capacity of a Subscriber.
(oo) Video Programming: Programming provided by, or generally
considered comparable to programming provided by, a television broadcast
station.
2 GRANT OF AUTHORITY; LIMITS AND RESERVATIONS
(a) Grant of Authority. Subject to the terms and conditions of this
Agreement and the Cable Ordinance, the County hereby grants the Grantee the
right to own, install, construct, reconstruct, operate, maintain, dismantle,
test, upgrade, repair, use and remove a Cable System along, under, over, above,
through or across or in any manner connected with the Public Rights-of-Way or
public land within the Franchise Area, for the sole purpose of providing Cable
Service. This Franchise shall grant no authority for the Grantee to use the
County's Public Rights-of-Way or public land for any purposes other than the
provision of Cable Service, except to the extent other services may be provided
pursuant to Section 7 herein or as hereinafter expressly provided. The
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consideration provided by Grantee under this Agreement shall be the only
consideration due or required from the Grantee to the County for the right to
use and occupy the Public Rights-of-Way and public land. No reference herein to
a Public Right-of-Way shall be deemed to be a representation or guarantee by the
County that its interest or other right to control the use of such property is
sufficient to permit the Grantee's use for specific purposes, and the Grantee
shall be deemed to gain only those rights to use that are within the County's
power to convey. No privilege or power of eminent domain is bestowed by this
grant or by this Agreement. This Agreement does not confer any rights other than
as expressly provided herein or as implied under federal, state or local law.
(b) Area Served.
(1) The Franchise is granted for the Franchise Area defined
herein.
(2) The Grantee shall build Grantee's Cable System so that it is
able to provide service to all Subscribers and potential Subscribers passed by
the Grantee's Cable System as of the Effective Date of this Agreement and to
other areas in accordance with the line extension policy attached hereto as
Appendix 1 (the "Line Extension Policy"). It must build Grantee's Cable System
so that it can extend service to all residents geographically located within the
Franchise Area, including residents located in areas which may be added to the
County's jurisdiction in the future subject to the Line Extension Policy, in
accordance with the provisions of this Agreement, unless this requirement is
waived in writing by the County.
(c) Term. The Franchise and this Franchise Agreement shall extend for
a term of fifteen years, commencing on the date accepted below by the Grantee,
unless the Franchise is earlier revoked or its term shortened as provided herein
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or in the Cable Ordinance, or unless the Franchise is renewed or extended by
mutual agreement, including but not limited to an extension pursuant to Section
6 (o) herein.
(d) Grant Not Exclusive. The Franchise and the right it grants to use
and occupy the Public Rights-of-Way and public land shall not be exclusive. The
County reserves the right to grant other franchises, as consistent with state
and federal law, for other uses of the Public Rights-of-Way and public land, or
any portions thereof, to any Person, or to make any such use itself, at any time
during the term of this Franchise Agreement, with or without a franchise, but in
no event inconsistent with the rights granted herein.
(e) Franchise Agreement Subject to Other Laws. This Franchise Agreement
is subject to and shall be governed by all applicable provisions of federal,
state, and local law.
(f) Franchise Agreement Subject to Exercise of Police Powers. All
rights and privileges granted herein are subject to the exercise of the police
powers of the County and its rights under applicable laws and regulations to
reasonably exercise its police powers to their full extent and to regulate the
Grantee and the construction, operation and maintenance of the Grantee's Cable
System, including, but not limited to, the right to adopt and enforce additional
ordinances and regulations as the County shall find necessary in the exercise of
its police powers, the right to adopt and enforce applicable zoning, building,
permitting and safety ordinances and regulations, the right to adopt and enforce
ordinances and regulations relating to equal employment opportunities, and the
right to adopt and enforce ordinances and regulations containing Public
Rights-of-Way, telecommunications, utility and cable television consumer
protection and service standards and rate regulation provisions.
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(g) Material Alteration. Notwithstanding Section 2(i)(1) or 2(i)(4)
herein, if the Grantee's rights, benefits, obligations or duties specified in
this Agreement are materially altered as the result of changes in County
ordinances that are incorporated by reference or otherwise, then this Agreement
shall be promptly amended so that the rights, benefits, obligations and duties
of Grantee set forth in this Agreement as of the Effective Date are preserved or
restored to the maximum extent possible, with such amendment to be effective as
of the date of the material alteration. In the event that the parties are unable
to agree upon an amendment, the scope of any amendment shall be determined by a
court of competent jurisdiction.
(h) Approval and Effective Date. Subject to the conditions set forth in
Paragraph 2 of Section A of Appendix H to the Fairfax County Code, this
Franchise Agreement shall become effective on June 1, 1998.
(i) Effect of Acceptance. By accepting the Franchise and executing this
Franchise Agreement, the Grantee:
(1) accepts and agrees to comply with the Fairfax County Code,
including each provision of the Cable Ordinance and this Agreement, and waives
its claim or right to claim as is required by Fairfax County Code ss. 9-9-8;
(2) acknowledges and accepts the County's legal right to grant
the Franchise, to enter into this Franchise Agreement, and to enact and enforce
ordinances and regulations related to the Franchise;
(3) agrees that the Franchise was granted pursuant to processes
and procedures consistent with applicable law; and
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(4) agrees that the County retains the absolute right to
terminate this Agreement for any material violation by the Grantee of any
substantive provision of Chapter 9 of the Code of the County of Fairfax or any
term or condition hereof, which violation has not (i) been substantially
corrected by Grantee within sixty days of receiving written notice from the
County of such violation, or (ii) in the case of a violation which reasonably
requires more than sixty days to correct, Grantee has undertaken substantive
corrective action within sixty days of receiving written notice from the County
of such violation and subsequently completes any necessary corrective action in
a timely manner.
(j) Claims Related to Prior Franchises.
(1) The Grantee shall remain liable for payments of all franchise
fees owed to the County, and operating grants owed to the County and other
parties, under the Prior Franchises that are accrued but unpaid prior to the
Effective Date. The grant of the Franchise shall have no effect on the Grantee's
duty under the Prior Franchises to indemnify or insure the County against acts
and omissions occurring during the period that the Prior Franchises were in
effect; to return any overcharges that are determined to be due to Subscribers
for the period that the Prior Franchises were in effect; and to correct any
construction violations for which (i) written notice identifying the nature and
location of the violation with sufficient specificity to allow the Grantee to
correct the violation has been given to Grantee prior to the Effective Date of
this Agreement and (ii) the violation has not been cured by the Effective Date
of this Agreement.
(2) Except as provided in paragraph (1) above or in Section
7(k)(3) herein, as of the Effective Date of this Franchise Agreement, the Prior
Franchises are
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superseded and are of no further force and effect, and the County and the
Grantee mutually release each other from any claims each had, has or may have
against the other under the Prior Franchises.
(k) No Waiver.
(1) The failure of the County on one or more occasions to
exercise a right or to require compliance or performance under this Franchise
Agreement, the Cable Ordinance or any other applicable law shall not be deemed
to constitute a waiver of such right or a waiver of compliance or performance by
the County, nor to excuse the Grantee from complying or performing, unless such
right or such compliance or performance has been specifically waived in writing
by the Communications Administrator or designee.
(2) The failure of the Grantee on one or more occasions to
exercise a right or to require compliance or performance under this Franchise
Agreement, the Cable Ordinance or any other applicable law shall not be deemed
to constitute a waiver of such right or a waiver of compliance or performance by
the Grantee, nor to excuse the County from complying or performing, unless such
right or such compliance or performance has been specifically waived in writing
by the Grantee.
(3) No waiver by the County of any breach or violation of any
provision of this Franchise Agreement or the Cable Ordinance shall be deemed to
be a waiver or a continuing waiver by the County of any subsequent breach or
violation of the same or any other provision. Neither the granting of the
Franchise, nor any provision herein, nor any action by the County hereunder
shall constitute a waiver of or a bar to the exercise of any police right or
power of the County, including without limitation, the right of eminent domain.
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(4) No waiver by the Grantee of any breach or violation of any
provision of this Franchise shall be deemed to be a waiver or a continuing
waiver by the Grantee of any subsequent breach or violation of the same or any
other provision. By its execution of this Franchise Agreement, the Grantee does
not waive any rights it may have under federal or state law, in the event that
the County grants a franchise or other authorization to any other multichannel
video programming provider after the Effective Date, as the result of a grant of
such franchise or other authorization.
(l) Amendment of Franchise Agreement. This Agreement may only be amended
by mutual written consent of the County and the Grantee, including
but not limited to such consent and/or court order pursuant to
Section 2(g) or 6(o) hereof.
3 TRANSFERS
(a) County Approval Required.
(1) A Franchise shall be a privilege that is held in the public
trust, and personal to the Grantee. The Grantee's obligations under this
Agreement involve personal services whose performance involves personal credit,
trust and confidence in the Grantee.
(2) No Transfer (as hereinafter defined) of the Franchise, the
Grantee or the Grantee's Cable System, or control over the same (including, but
not limited to, Transfer by forced or voluntary sale, merger, consolidation,
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receivership, or any other means) shall occur unless the requirements of ss.
9-5-13 of the Cable Ordinance are satisfied. Any Transfer which does not comport
with the requirements of ss. 9-5-13 of the Cable Ordinance shall be deemed to
impair the County's assurance of due performance.
(b) Subsequent Approvals. The approval of a Transfer in one instance
shall not render unnecessary approval of any subsequent Transfer.
(c) Approval Does Not Constitute Waiver. Approval by the County of a
Transfer does not constitute a waiver or release of the rights of either the
Grantee or the County under this Agreement or the Cable Ordinance, whether
arising before or after the date of the Transfer, nor does such approval
constitute a waiver or release of the rights of the County and the public in and
to the Public Rights-of-Way or public land, or a release of any police powers.
(d) Definitions.
(1) Transfer: Any transaction in which: (A) any ownership or
other right, title, or interest in the Grantee, Grantee's Cable System, or any
Person that is a cable operator of Grantee's Cable System, that would be
cognizable pursuant to 47 C.F.R. ss. 73.3555 (Notes 1, 2, and 3) is transferred,
sold, assigned, directly or indirectly; or (B) there is any change or
acquisition of control of the Grantee that would be cognizable pursuant to 47
C.F.R. ss. 73.3555 (Notes 1, 2, and 3); or (C) the rights and/or obligations
held by the Grantee under its Franchise are transferred, directly or indirectly,
to another party (provided that nothing herein shall be construed to restrict
Grantee from entering into any contracts with third parties for management,
construction or other services related to Grantee's Cable System as long as such
contracts do not result in a change of control as defined in 47 C.F.R. ss.
73.3555 (Notes 1, 2, and 3)); or (D) any change or substitution occurs in the
managing general partners of the Grantee, where applicable.
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(2) "Control" for purposes of this definition is not limited to
majority stock ownership, but includes actual working control in whatever manner
exercised as determined by the rules and policies of the FCC.
(3) Notwithstanding the foregoing, no Transfer of control shall
be deemed to have occurred as long as the D. Tennant Bryan Media Trust retains
control of the Grantee as determined by FCC rules and policies as interpreted by
the FCC.
(e) Notification of Certain Transactions . Grantee will notify the
County if at any time there is a mortgage or security interest granted on
substantially all of the assets of Grantee's Cable System, and will provide the
County with copies of all loan documents with respect to such transaction as
soon as such documents become publicly available and, if such documents do not
become publicly available within ten business days after loan closing, will make
such documents available for inspection pursuant to Section 9(a)(1) herein
within ten business days after loan closing.
4 PROVISION OF CABLE SERVICE
(a) Availability of Cable Service. The Grantee shall make Cable Service
available on the HSN in accordance with the terms of this Franchise Agreement to
all residences, businesses and other structures within the Franchise Area,
including multiple dwelling unit buildings, whose owners or occupants request
Cable Service, except for multiple dwelling unit buildings and other locations
to which the Grantee cannot legally obtain access; provided, however, that
Grantee may refuse to provide Cable Service (i) when it is unable pursuant to
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normal industry practice to obtain necessary programming, real property or other
access rights, or (ii) when its prior service, payment, or theft of service
history with a Person has been unfavorable, or (iii) pursuant to a written
waiver by the Communications Administrator or designee.
(b) Line Extension Requirements. Service drops to residential
Subscribers shall be governed by the Line Extension Policy attached hereto as
Appendix 1. The line extension policy for commercial properties is based on
published commercial rates for construction and installation costs.
(c) Continuity of Service.
(1) It is the right of all Subscribers in the Franchise Area to
receive all available Cable Services they request from the Grantee as long as
their financial and other obligations to the Grantee are satisfied; provided,
however, that Grantee may refuse to provide Cable Service when (i) it is unable
pursuant to normal industry practice to obtain necessary programming, real
property or access rights, (ii) when its prior service, payment, or theft of
service history with a Person has been unfavorable, or (iii) pursuant to written
waiver by the Communications Administrator or designee.
(2) The Grantee shall operate Grantee's Cable System pursuant to
this Franchise without interruption, except as otherwise provided in this
Franchise Agreement. Following the expiration or revocation of its Franchise,
the Grantee shall, at the County's request, as trustee for its successor in
interest, operate Grantee's Cable System for a temporary period (the "Transition
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Period") as necessary to maintain service to Subscribers, and shall cooperate
with the County to assure an orderly transition from it to the County or another
franchise holder.
(3) During the Transition Period, the Grantee shall not sell any
of Grantee's Cable System assets, nor make any physical, material,
administrative or operational change that would tend to degrade the quality of
service to Subscribers, decrease Gross Revenues, or materially increase expenses
without the express permission, in writing, of the County or its assigns.
(4) The County may seek legal and/or equitable relief to enforce
the provisions of this Section.
(5) The Transition Period shall be no longer than the reasonable
period required to arrange for an orderly transfer of cable service to the
County or to another franchise holder, unless mutually agreed to by the Grantee
and the County. During the Transition Period, the Grantee and the County will
continue to be obligated to comply with the terms and conditions of this
Agreement and applicable laws and regulations.
(6) For its management services during the Transition Period, the
Grantee shall be entitled to receive as compensation the Net Income generated
during the Transition Period.
(7) If the Grantee abandons Grantee's Cable System during the
Franchise term, or fails to operate Grantee's Cable System in accordance with
the terms of this Agreement during any Transition Period, the County, at its
option, may operate Grantee's Cable System, designate another entity to operate
Grantee's Cable System temporarily until the Grantee restores service under
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conditions acceptable to the County or until the Franchise is revoked and a new
grantee selected by the County is providing service, or obtain an injunction
requiring the Grantee to continue operations.
(8) The County shall be entitled to injunctive relief under the
preceding paragraph if:
(A) The Grantee fails to provide Cable Service in accordance
with this Franchise Agreement or the Cable Ordinance for a portion of the
Franchise affecting over ten percent of the County's subscribers for one week,
unless the County authorizes a longer interruption of service or the failure is
due to force majeure as characterized in Section 12 herein; or
(B) The Grantee, for any period, willfully and without
cause refuses to provide Cable Service in accordance with this Franchise
Agreement and the Cable Ordinance for a portion of the Franchise Area affecting
over ten percent of the County's residents.
5 CONSTRUCTION AND MAINTENANCE
(a) Construction Schedule
(1) The Grantee shall construct and activate Grantee's Cable
System in accordance with the requirements of the Fairfax County Code and the
specifications contained in this Agreement.
(2) The Grantee agrees that it will make no charge or claim
whatsoever to the County, for hindrance or delay of the work, from any cause
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during the progress of the same, but this limitation shall not prevent the
Grantee from making a charge or claim asserting that the County has unreasonably
withheld any permit required for the construction or activation of Grantee's
Cable System.
(b) Construction Standards.
(1) The construction, operation, maintenance, and repair of
Grantee's Cable System shall be substantially in accordance in all material
respects with all applicable sections of the following standards and
regulations, to the extent that such standards and regulations remain in effect
and are applicable to Grantee's Cable System or to the construction, operation,
maintenance and repair of a Cable System: the Occupational Safety and Health Act
of 1970, as amended; the most current edition of the National Electrical Safety
Code and National Electrical Code; Obstruction Marking and Lighting, AC 70/7460
i.e., Federal Aviation Administration; Construction, Marking and Lighting of
Antenna Structures, Federal Communications Commission Rules Part 17; AT&T Manual
of Construction Procedures (Blue Book); the Virginia Uniform Statewide Building
Code; conditions embodied in Virginia Department of Transportation permits;
County-mandated Department of Environmental Management permits and procedures;
the National Cable Television Association Standards of Good Engineering
Practices; Grantee's Construction Procedures Manual; any common shared easement
or joint trenching arrangements to which the Grantee is a party; and other
applicable federal, state, or local laws and regulations that may apply to the
operation, construction, maintenance, or repair of a Cable System, including,
without limitation, local zoning and construction codes and laws and accepted
industry practices, all as hereafter may be amended or adopted. In the event of
a conflict among codes and standards, accepted cable industry practices shall
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control (except insofar as such practices, if followed, would result in a Cable
System that could not meet express requirements of federal, state or local law,
or in instances in which such practices are expressly preempted by other
standards). Consistent with the foregoing, the County may ensure that work
continues to be performed in an orderly and workmanlike manner, reflecting any
changes that may occur over the Franchise term.
(2) In the event of any deregulation of technical or other
standards for construction, installation, operation or maintenance of Grantee's
Cable System, such standards or regulations shall be suspended. To the extent
permitted by applicable law, the County reserves the right to adopt and impose
such standards as it may deem necessary or appropriate, after notice to Grantee
and opportunity for Grantee to participate.
(3) All wires, cable lines, and other transmission lines,
equipment, and structures shall be installed and located consistent with cable
industry practices, and where feasible without additional cost to Grantee, in
such a manner as to cause minimum interference with the rights and convenience
of property owners (including the County) and users of the Public Rights-of-Way
and other public property. The County may from time to time issue reasonable
rules and regulations, after notice to Grantee and opportunity for Grantee to
participate, concerning the construction, operation and repair of Grantee's
Cable System as appropriate to ensure compliance with this Section.
(4) Without limiting the foregoing, antennae and their supporting
structures (towers) shall be designed in accordance with the Virginia Uniform
Statewide Building Code as amended, and shall be painted, lighted, erected, and
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maintained in accordance with all applicable rules and regulations of the
Federal Aviation Administration and all other applicable state or local laws,
codes, and regulations, all as hereafter may be amended or adopted.
(5) Without limiting the foregoing, all of the Grantee's plant
and equipment, including, but not limited to, the antennae site, headend and
distribution system, towers, house connections, structures, poles, wires, cable,
coaxial cable, fiber optic cable, fixtures, and apparatuses shall be installed,
located, erected, constructed, reconstructed, replaced, removed, repaired,
maintained, and operated in accordance with good engineering practices,
performed by experienced and properly trained maintenance and construction
personnel.
(6) The Grantee shall maintain all wires, conduits, cables, and
other real and personal property and facilities comprising Grantee's Cable
System in good condition, order and repair. Consistent with subsection (1)
above, all safety practices required by law shall be used during
construction, maintenance, and repair of Grantee's Cable System. The Grantee
shall at all times employ ordinary care and shall install and maintain in
use commonly accepted methods and devices for preventing failures and
accidents.
(7) No construction, upgrade, rebuild, reconstruction,
maintenance, or relocation of Grantee's Cable System, or any part thereof,
within any Public Rights-of-Way or public land shall be commenced unless permits
have been obtained from proper officials, except that in case of emergency, the
Grantee may carry out such work to the extent necessary pending the issuance of
such permits, as long as the Grantee acts to secure such permits as soon as
possible. The County shall pay the County fees associated with such permits.
(8) Prior to commencing any (i) significant alteration of the
cable plant, (ii) other work that would require a construction permit, or (iii)
any work on other public property, the Grantee shall provide the County with 24
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hours' prior notice of such work, when possible, so that the County may perform
appropriate inspections to ascertain compliance with applicable construction
codes and standards. If 24 hours' prior notice cannot be furnished, the Grantee
shall provide the County with the maximum amount of notice feasible under the
circumstances. If prior notice cannot be provided before commencing such work in
the Public Rights-of-Way or other public property, the Grantee shall notify the
County as soon as possible thereafter. For purposes of this provision, notice
shall where appropriate include the tax map location of the work proposed or
performed, and the date such work will begin.
(9) Except in emergency situations, neither the Grantee nor any
other Person acting as agent for Grantee shall open or otherwise disturb or
damage any street, sidewalk, driveway, Public Rights-of-Way or public land,
public property or private property for any purpose whatsoever without obtaining
required authorization to do so, and shall, at its own cost and expense,
restore, repair and replace any property disturbed, damaged or in any way
injured by or on account of its activities substantially to its condition
immediately prior to the disturbance, damage or injury (including appropriate
landscape restoration); provided, however, that with respect to landscape
restoration efforts, Grantee shall not be responsible for the maintenance and
watering thereof, and Grantee shall not be required to resod lawns where
reseeding would, within a reasonable period of time, restore the lawn
substantially to its condition immediately prior to the disturbance. Grantee
shall not be required to repave all or a substantial portion of a driveway if
patching would be consistent with normal road repair requirements. Under Normal
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Operating Conditions, such repair or restoration shall be completed at the later
of thirty days from the date the damage is incurred or thirty days from when the
work causing such damage is completed. Any restoration of private property by
Grantee shall be done in accordance with Grantee's contractual obligation to
affected landowners. The Grantee shall guarantee such restoration (other than
landscaping restoration) for at least one year against defective materials and
workmanship. In the event of a failure by the Grantee to complete any work
required for the protection or restoration of the Public Rights-of-Way, public
land, or any other property as required by this subsection , within the time
specified in this Franchise Agreement, the County, following adequate written
notice and a reasonable opportunity to cure, may cause such work to be done, and
the County shall submit an itemized list of such costs to Grantee as well as any
materials reasonably requested by Grantee to verify such costs. Following the
Grantee's receipt of such itemized list and supporting materials, the Grantee
shall reimburse the County the cost thereof within thirty days, or the County
may recover such costs through the performance bond provided by Grantee.
(10) The Grantee agrees to submit disputes or disagreements
between itself and a Subscriber to the County's Department of Consumer Affairs,
or to such other similar service as may, from time to time, be offered by the
County, for mediation and, to the extent permitted by law, for independent
arbitration pursuant to the Virginia Uniform Arbitration Act.
(11) The Grantee shall cooperate with all gas, electric,
telephone, water, sewer and other utilities in the placement of facilities,
equipment, or fixtures, to minimize the costs and disruption caused by any
construction activities.
(12) The Grantee shall seek to shore up, sling, support, protect
and make good, as directed, all water pipes, gas pipes, service pipes, sewers
and sewer connections, conduits, ducts, manholes, drains, vaults, buildings,
tracks or other structures, or sub-structures of public utility companies, and
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all service lines and structures, including sub-structures of private abutting
owners, that are located within the lines of Grantee's Cable System construction
that may be liable to disturbance or injury during the progress of the
construction. All necessary supports and all labor and material necessary to
reconnect and restore all such structures that become disturbed or damaged to
substantially their original condition shall be provided by the Grantee at its
own cost and expense.
(13) If the County becomes aware of any relocation projects that
may require the Grantee to protect, support, temporarily disconnect, relocate,
or remove any of Grantee's property, then the County shall promptly notify the
Grantee of the extent and likelihood of any such projects. Upon reasonable
notice in accordance with the preceding sentence (except in the case of
emergency repairs), the Grantee shall, by a time specified by the County,
protect, support, temporarily disconnect, relocate, or remove any of its
property when reasonably required by the County by reason of traffic conditions;
public safety; Public Rights-of-Way or public land construction; Public
Rights-of-Way or public land maintenance or repair (including resurfacing or
widening); change of Public Rights-of-Way or public land grade; construction,
installation or repair of sewers, drains, water pipes, power lines, signal
lines, tracks, or any other type of government-owned communications system,
public work or improvement or any government-owned utility. Grantee shall be
entitled to reimbursement of its costs and expenses.
(14) If the Grantee abandons any portion of Grantee's Cable
System located in Public Rights-of-Way or on public land (i.e., permanently
deactivates and leaves it in place), the County may require that such plant be
removed at the Grantee's expense, at any time (i) if necessary, to make room for
other facilities or (ii) if required by sound engineering practices, or (iii) to
remove potential safety hazards. If Grantee requests to leave such an
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underground portion of Grantee's Cable System in place, the County shall grant
such request upon a showing by the Grantee that its existing arrangements are
safe and consistent with accepted underground utility practices as well as any
other obligations it may have (such as pole attachment agreements).
(15) If any Person that is authorized to place facilities in the
Public Rights-of-Way or on public land requests the Grantee to remove, relocate,
protect, support, or temporarily disconnect its facilities to accommodate the
construction, operation or repair of the facilities of such other Person at any
time during the term of the Agreement, then the Grantee shall, upon request and
reasonable notice from such party and consistent with applicable law, remove,
relocate, protect, or alter the Grantee's Cable System, or any part thereof, and
such Person shall reimburse the Grantee for the Grantee's costs and expenses;
provided, however, that Grantee may require such payment in advance when its
prior payment history with the requesting Person has been unfavorable.
(16) In the event of an emergency, or where the Grantee's Cable
System creates or is contributing to an imminent danger to health, safety, or
property, or an unauthorized use of property, the Grantee shall remove or
relocate any or all parts of Grantee's Cable System at the request of the
County. If the Grantee fails to comply with the County's request, the County may
remove or relocate any or all parts of the Grantee's Cable System upon
reasonable notice to Grantee. If Grantee's compliance with the County's request
pursuant to this subsection results in the breach of any of Grantee's
obligations under this Agreement, and Grantee has so notified the County before
complying with the County's request, Grantee shall not be liable for its failure
to satisfy such obligations.
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(17) The Grantee shall, on the request of any Person holding a
valid building moving permit issued by the County, or on request of the County,
temporarily raise or lower its wires to permit the moving of buildings. The
expense of such temporary removal or raising or lowering of wires shall be paid
by the Person requesting the same, and the Grantee shall have the authority to
require such payment in advance, except in the case where the requesting person
is the County, in which case the Grantee will invoice the County, and the County
will pay, following completion of work. The Grantee shall be given reasonable
advance notice in writing to arrange for such temporary wire changes.
(18) The Grantee shall have the authority to trim trees and
shrubs, at its own expense, so as to prevent the branches of such trees or
shrubs from coming in contact with the facilities, wires and cables of the
Grantee.
(19) The Grantee shall use, with the owner's permission, existing
poles, conduits and other facilities whenever feasible and consistent with the
design of Grantee's Cable System. The Grantee may not erect or emplace poles,
conduits, or other facilities in Public Rights-of-Way or on public land without
obtaining appropriate permits. Any permits from the County shall not be
unreasonably withheld and shall be free of charge to the Grantee.
(20) Grantee's Cable System's cable and facilities may be
constructed overhead where poles now exist and electric or telephone lines or
both are now overhead, but where no overhead poles exist all cables and
facilities, excluding passive or active electronics of Grantee's Cable System
that may be housed in low-profile, above-ground pedestals, shall be constructed
underground. Whenever and wherever a property owner causes or requests electric
lines and telephone lines to be moved from overhead to underground placement,
all Grantee's Cable System cables shall likewise be moved underground and the
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cost of movement of its cable shall be paid for by the requesting party.
Whenever and wherever the County causes or requests electric lines and telephone
lines to be moved from overhead to underground placement, all Grantee's Cable
System cables shall likewise be moved underground, and the County shall pay for
the cost of movement of such cable. Except as federal law may otherwise require,
in any area where the Grantee would be entitled to install a drop above-ground,
the Grantee shall provide a homeowner with the option of having the drop
installed underground, and may charge the homeowner the difference between the
actual cost of the above-ground installation and the actual cost of the
underground installation. Notwithstanding the foregoing, all underground new or
replacement wiring installed after the Effective Date of this Agreement on
County public land not part of the Public Rights-of-Way must be located in
conduit composed of concrete or in PVC pipe or polyethylene pipe, or may be
directly buried if enclosed in armored cable. New buried cable and facilities
shall be capable of location using locating devices commonly available at the
time of installation.
(21) The Grantee shall make available to other users of the
Public Rights-of-Way and public land at a reasonable, non-discriminatory rental
rate any of its excess conduits, so long as such conduits are in excess of any
current or any future projected needs of operation of Grantee or its affiliates.
(22) The Grantee shall be a member of the regional notification
center for subsurface installations, which shall field mark the locations of its
underground facilities upon request.
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(23) Prior to erection or placement of any towers, poles, or
conduits, the Grantee shall first submit to the County a description of
Grantee's Cable System facilities proposed to be erected or installed as set
forth in Section 6(e) of this Agreement, indicating the proposed location of
such facilities.
(24) Any contractor or subcontractor used for work or
construction, installation, operation, maintenance, or repair of Grantee's Cable
System equipment must be properly licensed under the laws of the Commonwealth of
Virginia and all local ordinances, where applicable, and each contractor or
subcontractor shall have the same obligations with respect to its work as the
Grantee would have if the work were performed by the Grantee. The Grantee shall
seek to employ contractors, subcontractors and employees to perform work for it
who are trained and experienced. The Grantee shall be responsible for ensuring
that the work of contractors and subcontractors is performed consistent with the
Franchise and applicable laws, regulations, policies and procedures, shall be
fully responsible for all acts or omissions of contractors or subcontractors and
shall be responsible for promptly correcting acts or omissions by any contractor
or subcontractor.
(25) The County does not guarantee the accuracy of any maps
showing the horizontal or vertical location of existing substructures.
(26) Prior to the beginning of any construction under the
Franchise, but in any case within six months after the Effective Date of this
Agreement, the Grantee shall update its Construction Procedures Manual (the
"Manual"), addressing matters including but not limited to changes in technology
and construction, maintenance procedures, and acceptance practices and
procedures for cutover to any new portions of Grantee's Cable System. The
updated Manual shall include, without limitation, procedures for building aerial
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and underground plant and the acceptance criteria for the HSN and the I-Net
proposal. The Grantee shall provide the County with a copy of the updated Manual
forty-five days before beginning construction. Grantee shall also provide the
County with a current copy of the Manual at execution of this Agreement and
shall provide the County with copies of any updates as such updates are added to
the Manual.
(27) Except for emergency maintenance or repairs, the Grantee
shall provide reasonable notice to residents in any construction area prior to
first entering onto their property to perform any work in conjunction with
system construction or rebuild, and shall provide reasonable notice to affected
residents in advance of any work which will involve excavation, or replacement
of poles. The Grantee shall provide affected residents with a local name and
phone number they can call to discuss the Grantee's actions.
(c) System Tests and Inspections.
(1) The Grantee shall perform all tests necessary to demonstrate
compliance with the requirements of the Franchise, and to ensure that the HSN
system components are operating as expected. All tests shall be conducted in
accordance with federal rules and any relevant edition of the National Cable
Television Association's "Recommended Practices for Measurements on Cable
Television Systems," or if no relevant edition exists, such other appropriate
manual as the Grantee may propose and the County approve. In the event that the
FCC's technical performance standards are repealed or are no longer applicable
to the Grantee's Cable System, such standards shall remain in force and effect
until the Communications Administrator or his designee and the Grantee agree to
new standards.
(2) The Grantee shall conduct tests as follows:
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(A) proof of performance tests on each newly constructed or
rebuilt segment prior to Subscriber connection or activation, but not later than
ninety days after any newly constructed or substantially rebuilt segment is made
available for service to Subscribers;
(B) proof of performance tests on the Grantee's Cable System
at least once every six months or as required by FCC rules, whichever is more
often, except as federal law otherwise limits the Grantee's obligation; and
(C) special proof of performance tests of Grantee's Cable
System or a segment thereof when Subscriber or User complaints indicate tests
are warranted.
(3) The County may make independent performance tests of
Grantee's Cable System, but shall not alter the operation of Grantee's Cable
System without the Grantee's approval. The Grantee shall cooperate with the
County in conducting such tests. Such independent tests shall be at the County's
expense.
(4) The County shall have the right to witness and/or review all
tests on newly constructed or rebuilt segments of Grantee's Cable System. The
Grantee shall provide the County with at least two business days' notice of, and
opportunity to observe, any tests performed on Grantee's Cable System, except in
emergency situations.
(5) Tests shall be supervised by the Grantee's engineer, who
shall sign all records of tests provided to the County.
(6) The County may conduct inspections of construction areas and
Subscriber installations, including but not limited to inspections to assess
compliance with the Grantee's construction and installation requirements. The
County shall notify the Grantee of any violations found during the course of
inspections, identifying the locations with particularity and stating the
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specific nature of the violation. The Grantee must bring violations as specified
in the notice that are within Grantee's control into compliance as follows: (i)
safety violations must be made safe within forty-eight hours of receiving notice
of the violation; (ii) Virginia Department of Transportation violations must be
brought into compliance within five days of receiving notice of the violation;
and all other violations must be brought into compliance within thirty days of
receiving notice of the violation. After the specified time period, the Grantee
must submit a report to the County describing the steps it has taken to bring
itself into compliance. Inspection does not relieve the Grantee of its
obligation to build in compliance with all provisions of the Franchise.
(7) A written report of test results under Section 5(c)(2) shall
be filed with the County within seven days of each test. Such reports shall, at
a minimum, contain the information specified in the Fairfax County Code.
(8) If any test under Section 5(c)(2) indicates that any part or
component of Grantee's Cable System distribution network fails to meet
applicable requirements, the Grantee, without requirement of additional notice
or request from County, shall take corrective action, retest, advise the County
of the action taken and results achieved, and supply the County with copies of
the results within thirty days from the date corrective action was completed.
(d) Publicizing Proposed Construction Work. The Grantee shall notify
the general public prior to commencing any proposed construction that will
significantly disturb or disrupt public property or Public Rights-of-Way or
public land or have the potential to present a danger or affect the safety of
the public generally. Where possible, the Grantee shall publicize proposed
construction work at least one week prior to commencement of that work by
notifying those residents and others in the immediate vicinity of where work is
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to be done and most likely to be affected by the work in at least one of the
following ways: by telephone, in person, by mail, by distribution of door
hangers or flyers to residences, by publication in local newspapers, or in any
other manner reasonably calculated to provide adequate notice. Notice to
affected Persons must include the name and local telephone number of a Grantee
representative who is qualified to answer questions concerning proposed
construction. In addition, before entering onto any Person's property for
proposed construction work in connection with the rebuild for the System Upgrade
of Grantee's Cable System, the Grantee shall contact the property owner or (in
the case of residential property) the resident at least two days in advance,
when possible.
(e) System Maintenance. The Grantee shall, when practicable, schedule
and conduct maintenance on Grantee's Cable System so that interruption of
service is minimized and occurs during periods of minimum Subscriber use of
Grantee's Cable System. The Grantee shall provide reasonable prior notice to
Subscribers and the County before interrupting service for planned maintenance
or construction, except where such interruption is expected to be one hour or
less in duration. Such notice shall be provided by methods reasonably calculated
to give Subscribers actual notice of the planned interruption.
6 SYSTEM FACILITIES, EQUIPMENT AND SERVICES
(a) System Characteristics. The HSN generally shall have at least the
following characteristics:
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(1) modern design when built, utilizing an architecture that will
permit additional improvements necessary for high quality and reliable service
throughout the Franchise term;
(2) protection against outages due to power failures, so that
back-up power is available at a minimum for at least 24 hours at each headend,
four hours at each hub, and conforming to industry standards, but in no event
rated for less than two hours, at each power supply site;
(3) facilities and equipment of good and durable quality,
generally used in high-quality, reliable, systems of similar design;
(4) a system that conforms to or exceeds all applicable FCC
technical performance standards, as amended from time to time, and any other
technical performance standards lawfully established by the County, and that
substantially conforms in all material respects to applicable sections of the
following standards and regulations to the extent such standards and regulations
remain in effect and are consistent with accepted cable industry procedures for
(i) technical standards applicable to Cable Systems or (ii) guidelines for
physical plant construction and maintenance applicable to Cable Systems:
(A) Occupational Safety and Health Administration (OSHA)
Safety and Health Standards;
(B) National Electrical Code;
(C) National Electrical Safety Code (NESC);
(D) National Cable Television Association Standards of Good
Engineering Practices.
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(E) Obstruction Marking and Lighting, AC 70/7460 i.e.,
Federal Aviation Administration;
(F) Constructing, Marking and Lighting of Antenna
Structures, Federal Communications Commission Rules, Part 17;
(G) AT&T Manual of Construction Procedures (Blue Book);
(H) County and State Utility Construction Requirements;
(I) the Virginia Uniform Statewide Building Code;
(J) Virginia Department of Transportation rules and
regulations;
(K) any common shared easement or joint trenching
arrangements to which the Grantee is a party; and
(L) the Grantee's Construction Procedures Manual.
(5) facilities and equipment sufficient to cure violations of FCC
technical standards and to ensure that Grantee's Cable System remains in
compliance with the standards specified in paragraph (4);
(6) such facilities and equipment as necessary to maintain,
operate, and evaluate Grantee's Cable System to comply with FCC technical
standards, as such standards may be amended from time to time;
(7) status monitoring capability in new equipment obtained after
the Effective Date to monitor the cable system's performance, including signal
level and distortion parameters, and, among other things, alert the Grantee when
and where back-up power supplies are being used, which capability shall be
activated and used on or before the completion of the System Upgrade as
specified in subsections 6(d) and 6(f), provided that, if the Grantee can
demonstrate
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that such activation or use would be technically or economically infeasible, the
County will waive the requirement of such activation or use until it is
technically and economically feasible;
(8) all facilities and equipment designed to be capable of
continuous twenty-four hour daily operation in accordance with FCC standards
except as caused by a force majeure condition;
(9) all facilities and equipment designed, built and operated in
such a manner as to comply with all applicable FCC requirements regarding (i)
consumer electronic equipment and (ii) interference with the reception of
off-the-air signals by a subscriber;
(10) all facilities and equipment designed, built and operated in
such a manner as to protect the safety of Grantee's Cable System workers and the
public;
(11) sufficient trucks, tools, testing equipment, monitoring
devices and other equipment and facilities and trained and skilled personnel
required to enable the Grantee to substantially comply with applicable law,
including applicable customer service requirements and including requirements
for responding to system outages;
(12) all facilities and equipment required to properly test the
system and conduct an ongoing and active program of preventive maintenance and
quality control and to be able to quickly respond to customer complaints and
resolve system problems;
(13) design capable of interconnecting with other broadband
communications networks (including but not limited to wireless systems) as set
forth in Section 6(i) of this Agreement;
(14) antenna supporting structures (towers) designed in
accordance with the Virginia Uniform Statewide Building Code, as amended,
painted, lighted, erected and maintained in accordance with all applicable rules
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and regulations of the Federal Aviation Administration, the Federal
Communications Commission, and all other applicable codes and regulations;
(15) facilities and equipment at the headend allowing the Grantee
to transmit or cablecast signals in substantially the form received, without
substantial alteration or deterioration. For example, the headend should include
equipment that will transmit color video signals received at the headend in
color, stereo audio signals received at the headend in stereo, and a signal
received with a secondary audio track with both audio tracks. Similarly, all
closed-captioned programming retransmitted on the HSN shall include the
closed-captioned signal in a manner that renders that signal available to
Subscriber equipment used to decode the captioning;
(16) Grantee shall provide adequate security provisions in its
Subscriber site equipment to permit parental control over the use of Grantee's
Cable Service. Such a system will at a minimum offer as an option that a Person
ordering programming must provide a personal identification number provided by
the Grantee only to a Subscriber. Provided, however, that the Grantee shall bear
no responsibility for the exercise of parental controls and shall incur no
liability for any Subscriber's or viewer's exercise or failure to exercise such
controls.
(b) Current System. The Grantee is authorized and required to operate
Grantee's Cable System as it exists on the date hereof, including without
limitation the existing Institutional Network, and to provide service
substantially equivalent to its existing service, within its Franchise Area as
of the Effective Date of this Agreement, until such time as the HSN and
Institutional Network are upgraded, as provided herein.
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(c) Integration of Advancements in Technology. During the franchise
term, the Grantee shall maintain and improve its existing facilities in
accordance with accepted cable industry practices.
(d) System Upgrade. The Grantee shall complete a System Upgrade in
accordance with the schedule set forth in subsection 6(f) providing at least
the following characteristics:
(1) no microwave links in the distribution system from the
headend, except as a backup to wireline systems;
(2) replacement of the current AML microwave link with fiber, in
order to achieve reliable downstream transmission and a two-way system with
acceptable noise and distortion properties;
(3) redundant routing between each hub site and headend of the
upgraded Grantee's Cable System;
(4) segmentation of the system so that sufficient capacity is
available for interactive services;
(5) Hybrid fiber-coaxial ("HFC") architecture, with fiber-optic
cable at least to the feeder, so that no more than an average of 2,000 homes
passed per dual coaxial cable are served from any fiber node (except that if
Grantee uses single cable in any locations, there shall be no more than an
average of 1,000 homes passed per fiber node), and with the return path
activated on both cables where dual cables are used;
(6) designed and built to no more than ten coaxial amplifiers
(excluding any such amplifier that serves only a single subscriber) per coaxial
cable in each cascade from the node;
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(7) a capacity rating of at least 550 MHz for all active
components obtained on or after the Effective Date of this Agreement and at
least 450 MHz for active components obtained prior to the Effective Date of this
Agreement, and a rating of at least 750 MHz for all passive components obtained
on or after the Effective Date;
(8) computer-controlled audio leveling equipment, capable of
sampling and controlling the entire audio frequency spectrum for each channel
and of sampling over time, provided that Grantee reserves the right to
discontinue use of this equipment if such equipment adversely affects the
operation of Grantee's Cable System.
(e) System Design Submission Process. At least two weeks prior to the
date construction of any upgrade of a segment of Grantee's Cable System is
scheduled to commence, the Grantee shall submit to the County a system design
and construction plan for that segment, which shall be subject to change and
include at least the following elements:
(1) Design type, trunk and feeder design, and location of hubs,
nodes, and amplifiers;
(2) Distribution system equipment to be used;
(3) Locations and design types for standby power.
The system design will be shown on construction-scale maps.
To the extent that the Grantee revises its plan prior to construction, the
Grantee shall submit a revised plan. The Grantee's submission of such plans and
maps shall not operate to waive any rights of Grantee, and neither the County's
receipt of such plans and maps and comments thereon, nor any comments it
provides to the Grantee, shall operate to waive any rights of the County.
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(f) HSN Upgrade Schedule
(1) Subject to the conditions set forth in Section 6(g)(2)
herein, the Grantee shall begin construction of the HSN System Upgrade within
one year after the Effective Date of the Franchise Agreement, and shall complete
construction within forty-eight months after the Effective Date of the Franchise
Agreement, in order to minimize disruption of any Public Rights-of-Way or public
land. The Grantee's construction of the HSN and the I-Net shall proceed together
as described in Appendix 2, and the Grantee and the County shall coordinate
planning for I-Net construction pursuant to Appendix 2 hereto.
(2) The Grantee's construction plan and System Upgrade shall be
developed without regard to income level of any portions of the Franchise Area.
(3) All construction shall be performed in accordance with
applicable provisions of the Cable Ordinance and this Agreement, except where
specifically waived in writing by the Communications Administrator or his
designee.
(g) Periodic Progress Reporting.
(1) Following the commencement of construction of the System
Upgrade or any similar major construction, every three months until the
construction is completed, the Grantee shall meet with the County and provide an
update on the progress of the System Upgrade according to the Grantee's
then-current general plan, unless the County waives such meeting. Upon request,
the Grantee shall provide detailed written reports to the County on the
Grantee's progress in construction.
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(2) Delays in the System Upgrade. The Grantee shall not be
excused from the timely performance of its obligation to begin and complete any
System Upgrade within the times specified herein, except for the following
occurrences:
(A) Any "force majeure" situation, as described in Section
12 herein;
(B) Failure or delay by the County, VDOT or any governmental
instrumentality, agency or any utility to issue any permits or permission upon a
timely request submitted by the Grantee or its contractor representative and
tender (except as to a County permit) of any required permit fee;
(C) Delays beyond the control of the Grantee that the
Grantee could not reasonably have anticipated regarding the availability,
shipment and arrival of necessary equipment, cables, electronics or hardware,
protracted underground excavation, easement availability, or any other valid
factor fully explained and reasonably justified in writing to the Communications
Administrator or his designee.
(h) Leased Access Channels. The Grantee shall provide leased access
channels as required by federal law.
(i) Interconnection.
(1) The Grantee shall design Grantee's Cable System so that it is
capable of interconnecting with other broadband communications networks
(including but not limited to wireless systems) at suitable locations as
determined by the Grantee. Interconnection capabilities shall be provided for
the exchange of all PEG signals designated in Section 7 herein carried on the
HSN. Interconnection of systems may be made by direct cable connection,
microwave link, satellite or other appropriate methods.
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(2) At the request of the Communications Administrator, the
Grantee shall, to the extent permitted by applicable law and its contractual
obligations to third parties, use every reasonable effort to negotiate an
interconnection agreement with any other franchised Cable System in Fairfax
County for the PEG channels on the HSN. Grantee will continue to interconnect
with the Cable System in the Reston franchise area.
(3) Grantee will continue to interconnect the I-Net with the
institutional network of the franchised Cable System in the Reston franchise
area as long as there is such a Reston institutional network. Any County I-Net
connections to other broadband networks will be the County's sole responsibility
and done at the County's expense, but the Grantee will assist in any such effort
as reasonably requested.
(4) The Grantee shall notify the County prior to any
interconnection of Grantee's Cable System with other broadband communications
networks.
(5) The Grantee shall in good faith cooperate with the County in
implementing interconnection of PEG Cable Service with communications systems
beyond the boundaries of the County.
(j) Emergency Alert System.
(1) The Grantee shall install and thereafter maintain for use by
the County an Emergency Alert System ("EAS").
(2) This EAS shall at all times be operated in compliance with
FCC requirements. Subject to the foregoing, the EAS shall be remotely activated
by telephone and shall allow a representative of the County to override the
audio and video on all channels on the Grantee's Cable System that may lawfully
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be overridden (subject to any contractual or other rights of local broadcasters)
without the assistance of the Grantee, for emergency broadcasts from a location
designated by the County in the event of a civil emergency or for reasonable
tests.
(3) The County will provide reasonable notice to the Grantee
prior to any test use of the EAS. The Grantee shall cooperate with the County in
any such test to the maximum extent feasible.
(k) Uses of System. Grantee will notify the County of all active uses
of the Grantee's Cable System as promptly as possible after the institution of
such uses.
(l) Home Wiring. Grantee shall comply with all applicable FCC
requirements, including any notice requirements, with respect to home wiring.
Prior to a customer's termination of Cable Service, the Grantee will not
restrict the ability of a Subscriber to remove, replace, rearrange or maintain
any cable wiring located within the interior space of the Subscriber's dwelling
unit, so long as such actions are consistent with FCC standards. The Grantee may
require a reasonable indemnity and release of liability in favor of the Grantee
from a Subscriber for wiring that is installed by such Subscriber.
(m) Antenna Towers
(1) The Grantee may continue to maintain, repair and use antennas
and antenna towers at certain sites belonging to the County, pursuant to the
terms of the agreements under which the Grantee leases such sites from the
County, including any payments to the County and any extensions of the lease
term specified in such agreements, as long as the Grantee continues to use such
sites for delivery of Cable Service, including the normal or backup microwave
distribution of programming to hubs and/or mobile radio used by the Grantee's
employees or subcontractors on business related to Grantee's Cable System. Such
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existing leases for such towers shall be extended through the term of this
Agreement. Compensation received by the County for such antenna leases shall not
be considered a franchise fee.
(2) To the extent that the Grantee uses such antenna towers on
County sites for commercial purposes not directly related to Grantee's Cable
System or the provision of Cable Service, such towers and the Grantee's use and
occupancy of such towers shall be subject to all County policies, laws and
regulations in effect from time to time relating to such towers, including any
compensation and collocation requirements; provided, however, that the County
shall not be due any compensation with respect to existing tenants of the
Grantee on antenna towers on County sites as of the Effective Date, and provided
further that any collocation requirements shall not interfere with the rights of
such existing tenants.
(n) Periodic Performance Evaluation. The County may schedule periodic
review sessions to evaluate the performance of the Grantee. The Grantee shall
cooperate with the County in any such evaluation to the maximum extent feasible.
(o) Tenth-Year Anniversary Review.
(1) The provisions of this Section 6(o) shall not apply if, at
the time of the review as specified in Section 6(o)(3) or at any time subsequent
to such review, the Grantee is subject to effective competition as defined in 47
U.S.C. ss. 543(l).
(2) As used in this Section 6(o), the term Economically and
Technically Feasible and Viable shall mean Cable Services capable of being
provided: (i) through technology which has been demonstrated in actual
applications (not simply through tests or experiments) to operate in a workable
manner; and (ii) in a manner which has a reasonable likelihood of generating
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acceptable returns on investment for the Grantee's Cable System over the
remaining term of the Franchise that are at a rate that is in no event less than
the overall rate of return then earned by Grantee's Cable System.
(3) To the extent authorized pursuant to this Section 6(o), the
County may conduct a service review (the "Review") that shall commence not
earlier than the 10th anniversary of the Effective Date of this Franchise
Agreement. The sole purpose of such Review shall be to ascertain whether the
Cable Services offered by Grantee or proposed to be offered by Grantee during
the remaining term of the Franchise conform with Cable Services generally
available on Cable Systems in communities substantially similar to the County.
(4) The Review conducted by the County pursuant to this section
shall be confined solely to a review of the Cable Services generally available
in substantially similar communities on the home subscriber network of the Cable
Systems of such communities. Based upon the County's evaluation of cable related
needs and interests of Fairfax County residents and the County's assessment that
it is Economically and Technically Feasible and Viable for the Grantee to
satisfy such needs and interests, the County shall issue a determination
specifying with particularity (i) the Cable Services that Grantee is not then
providing or has not proposed to provide within a reasonable time frame, and
(ii) the basis for the County's determination that it is Economically and
Technically Feasible and Viable for the Grantee to provide the Cable Services
specified. Grantee shall reasonably cooperate with the County in conducting the
Review.
(5) Upon receipt of the County's written report of its initial
determinations, Grantee shall submit a response within 120 days. Such response
shall identify which Cable Services specified in the County's initial review
report are Economically and Technically Feasible and Viable for Grantee to
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provide, including any changes in technology that Grantee deems necessary to
support such Cable Services and any plans or timetables for the implementation
of any such Cable Services. Such response shall further identify any Cable
Services specified in the County's report that Grantee determines are not
Economically and Technically Feasible and Viable for Grantee to provide.
(6) To the extent that Grantee and County are in agreement with
respect to all of the Cable Services specified in the County's report on its
initial determinations, the Grantee and County shall amend this Franchise
Agreement as required to reflect the provision of such Cable Services.
(7) If, after receiving Grantee's response, the County determines
to seek amendment to the Franchise to encompass one or more Cable Services that
Grantee determines are not Economically and Technically Feasible and Viable for
Grantee to provide, the County shall commence an administrative proceeding to
determine whether the Cable Services which the County desires the Grantee to
provide, but the Grantee is not willing to provide as requested, are in fact
necessary to meet the cable-related needs and interests of the County's
residents and are Economically and Technically Feasible and Viable for the
Grantee to provide.
(8) Any such proceeding shall be public, shall be conducted upon
adequate notice to Grantee, and the Grantee and the County shall be afforded
fair opportunity for full participation, including the right to introduce
evidence (including evidence related to issues of cable-related needs and
interests of the County's resident and whether the Cable Services requested are
Economically and Technically Feasible and Viable), to require the production of
evidence, and to question witnesses. A transcript shall be made of the
proceeding.
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(9) At the completion of the proceeding, the County shall issue a
written order (the "Review Assessment Order") specifying each additional Cable
Service that the County deems appropriate to meet the cable related needs and
interests of Fairfax County residents, (ii) the reasons why the provision of
each Cable Service specified in (i) is Economically and Technically Feasible and
Viable, and (iii) the extent to which each such Cable Services is being provided
by any other multi-channel video programming distributor then serving
subscribers in the County. Such written order shall be based upon the record of
the administrative proceeding and shall state the reasons for its decision.
(10) Upon receipt of the County's Review Assessment Order,
Grantee shall have the following options: (i) Grantee may agree to comply with
the Review Assessment Order, in which event the parties shall amend this
Franchise Agreement accordingly; (ii) Grantee may accept such Review Assessment
Order under protest and seek relief from all or any part of such Review
Assessment Order pursuant to 47 U.S.C. ss. 545(b), and in that event, any
timetables or construction schedules specified in the Review Assessment Order
shall be deemed tolled until the issuance of a determination on the merits of a
petition filed by Grantee pursuant to Section 545(b) by the Court of original
jurisdiction and any appeals taken therefrom; or (iii) if, after the passage of
120 days after its receipt of the Review Assessment Order, Grantee has not
exercised either option (i) or (ii) above, then the County may notify the
Grantee that the County wishes to commence proceedings to renew the Franchise,
and such action shall be deemed to be a request by the Grantee to commence
renewal proceedings pursuant to 47 U.S.C. ss. 546, in which event the Franchise
term will be deemed to expire 36 months from the date of such notice.
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(11) If Grantee accepts the Review Assessment Order or otherwise
agrees to provide additional Cable Services, the term of this Franchise
Agreement shall be extended for such additional period of years (commencing with
the normal expiration date of this Franchise Agreement) as the parties shall
mutually agree, but in no event less than five years.
7 CHANNELS AND FACILITIES FOR PUBLIC, EDUCATIONAL AND GOVERNMENTAL USE
(a) Access Channels
(1) Grantee will provide the County with up to eighteen PEG
channels in the aggregate, though Grantee reserves the right to utilize for its
own purposes any portion of such channels not utilized for PEG purposes.
(2) The Grantee shall make available to all Subscribers residing
within Fairfax County in those areas where Grantee has authority to provide
service at least the following video Channels for public, educational and
governmental use, which Channels shall be in addition to any capacity provided
on the Institutional Network pursuant to Section 7(k):
(A) Public access: 4
(B) Fairfax County Public Schools: 3
(C) George Mason University: 1
(D) Northern Virginia Community College: 1
(E) University of Virginia and/or Virginia Polytechnic
Institute: 1
(F) Shared channel for institutions of higher education: 1
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(G) County governmental access: 3 County governmental access
channels shall be allocated to specific uses or agencies by the County.
(H) Reserved for educational and/or governmental access use as
allocated by County: 4. The County shall not implement its use of three of these
four Channels until the County has switched over the Fairfax Training Network to
the I-Net as provided in Appendix 2.
(3) The Grantee shall have an obligation to provide playback,
training, outreach, administrative support and production assistance to public
access Users, which obligation shall be discharged so long as (A) a valid and
binding contract is maintained for the provision of such services with the
Fairfax Cable Access Corporation, (B) a valid and binding contract for the
provision of such services is maintained with some other public access
management corporation, (C) rights over such public access management are
undertaken pursuant to the provisions of Section 7(a)(4) and the Grantee
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provides the Public Access Grant (as hereinafter defined), together with any
interest the Grantee may have or obtain in any existing assets of the public
access management corporation that were purchased with funds provided by the
Public Access Grant, to such management organization or to the County pursuant
to Section 7(i)(1) herein, or (D) any other means, in the sole discretion of the
County, that fulfills this obligation.
(4) If the County, in its sole discretion, finds unsatisfactory a
contract for access services entered into pursuant to the preceding subsection
(3), or the performance under such a contract, then the County may, in its sole
discretion, undertake such management itself and the Grantee's obligations
pursuant to Section 7(a)(3) shall be entirely discharged by providing the Public
Access Grant, together with any interest the Grantee may have or obtain in any
existing assets of the public access management corporation that were purchased
with funds provided by the Public Access Grant, directly to the County, which
may in turn reassign such Public Access Grant such assets, and any other assets
that the County may otherwise acquire from any such public access management
corporation, to any third-party manager at the County's discretion.
(5) Except as provided in Section 7(e)(3), each PEG Channel shall
be transmitted on the HSN in standard 6 MHz, unscrambled NTSC format so that
every Subscriber can receive and display the PEG signals using the same
converters and signal equipment that is used for other Basic Service Channels.
(6) If the Grantee makes changes to Grantee's Cable System that
require improvements to access facilities and equipment, Grantee shall provide
any necessary additional headend and distribution facilities or equipment within
thirty days so that PEG facilities and equipment may be used as intended with
respect to the up to eighteen PEG channels specified in Section 7(a)(2) and any
channels reserved by PEG Users pursuant to Section 7(e)(3), including, among
other things, so that live and taped programming can be cablecast efficiently to
Subscribers.
(b) Access Channel Assignment
(1) Each PEG Channel shall be delivered over the HSN with
transmission quality the same as or better than the transmission quality of any
other Channel on Basic Cable Service.
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(2) The Grantee shall not arbitrarily or capriciously change
access channel assignments, and the Grantee shall seek to minimize the number of
such changes; provided, however, that the Grantee may change access channel
assignments as it deems appropriate so long as (i) the Grantee gives the access
channel programmer ninety days' notice of such change, and (ii) the Grantee
provides, free of charge, public announcements of such changes that shall
include (A) to the extent Grantee has advertising availability, advertising such
PEG channel changes on advertising inserts on local channels carrying
non-satellite programming for up to two minutes per day in prime time on such
local channels for the thirty days prior to such change, and (B) providing
prominent notice of such changes in at least two issues of Grantee's monthly
cable guide magazine prior to such change.
(c) Capital Grants for Access Facilities
(1) The Grantee shall provide capital grants in amounts in the
aggregate totaling 3% for each quarter of the amount that results from
subtracting from Gross Revenues for that quarter the Franchise Fees paid to the
County for that quarter (collectively, the "Total Grants").
(2) The Total Grants shall be paid to the County on a quarterly
basis with such payments being made no later than thirty days following the end
of each quarter.
(3) If the Grantee and the County disagree at any time as to the
amounts due under this subsection (c), the Grantee shall continue paying the
specified grants in the amounts paid in the last undisputed payment during the
period of any such dispute, provided, however, that the County shall return any
such amounts paid to the County that are later determined to be in excess of the
correct amounts.
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(d) Return Feed From Facilities
(1) The Grantee shall provide without charge transmission by
means of dedicated, fully fiber optic links between the headend and the PEG
access origination sites specified in Appendix 3 (the "PEG Origination Site
Appendix") so that signals can be generated at these sites and routed onto an
appropriate access channel. Such upstream transmission shall be in addition to
any required capacity on the HSN and shall not be part of the I-Net specified in
Section 7(k), although the fiber links may at the Grantee's option be emplaced
together with those carrying the I-Net. Such upstream transmission provided by
the Grantee shall include all equipment necessary for amplification, optical
conversion, receiving, transmitting, switching, and headend processing of
upstream PEG signals from the studio at each PEG origination site, and all such
equipment, including but not limited to the fiber electronics at the PEG studio,
shall be installed, repaired, and maintained in good working order by the
Grantee on Grantee's side of the Demarcation Point, provided, however, that the
Grantee shall not be responsible for the cost of repairing any damage caused by
the operator of the PEG studio or its agents or invitees, and that the Grantee's
obligation with respect to such upstream transmission shall be dependent on the
operator of the PEG origination site's providing Grantee, without charge, with
such space, electrical power supply, access, and other facilities and
cooperation as shall be necessary to allow the Grantee to fulfill its duties
under this Agreement with respect to such upstream transmission. The dedicated
channels may be multiplexed into backbone fiber rings at the hub or node nearest
to the origination site for return to the headend. The initial operation dates
of the dedicated fiber optic links will be determined by Grantee based on where
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each site is located in Grantee's construction plan, but in any case shall be no
later than the completion date stated in Section 6(f).
(2) Grantee must provide equipment with baseband video and
balanced stereo inputs at each PEG origination studio and a means by which the
channel manager at the PEG origination studio may remotely route signals from
that studio onto the correct HSN PEG Channels.
(3) The Grantee shall transmit the upstream feeds from the
Demarcation Point to the headend in such a manner as to comply with FCC
technical standards and with applicable EIA RS-250B performance standards for
medium-haul video.
(e) Use of PEG Channels, Facilities and Equipment
(1) The County, or the entity that manages a PEG Channel, shall
be able to establish and enforce rules and procedures for use of the PEG
Channels pursuant to Section 611(d) of the Cable Act, 47 U.S.C. ss. 531(d). The
County shall resolve any disputes among PEG users regarding allocation of PEG
Channels.
(2) The Grantee will provide headend and distribution facilities
for downstream transmission of the PEG Channels on the HSN, with respect to the
up to eighteen PEG channels specified in Section 7(a), at no charge to the
County or other PEG access programmers.
(3) If capacity dedicated for PEG use pursuant to Section 7(a) of
this Agreement is subdivided or compressed resulting in multiple transmission
paths, the Grantee may retain for its own use: (i) 100% of the additional
capacity on Channels dedicated to public access use prior to such subdivision or
compression; (ii) 50% of the additional capacity on Channels dedicated to
educational or governmental access use prior to such subdivision or compression;
provided, however, that any additional capacity reserved for use by educational
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and governmental PEG Users pursuant to this subsection that is not activated by
such entities within twelve months of the date on which the Grantee notifies the
County of such subdivision or compression may be used by Grantee until twelve
months after notice from the County or such educational Users of intent to
activate such reserved capacity, provided, however, that such notice shall be
effective only if the County or such educational Users subsequently actually use
such capacity. For purposes this subsection, the capacity dedicated to a PEG
channel prior to such subdivision or compression refers to a 6 MHz channel.
(4) The County or its licensees, assigns, or agents shall not
transmit on public, educational or governmental access channels commercial
programming or commercial advertisements to the extent that they would
constitute competition with the Grantee for such commercial programming or
commercial advertisements, subject to the following:
(A) For purposes of this subsection, "commercial programming
or commercial advertisements" shall mean programming or advertisements for which
the County receives payment from a third party (a party other than the County or
the Grantee), but shall not include announcements indicating that programming is
underwritten by a commercial entity, such as the underwriting announcements
typically displayed by the Public Broadcasting System.
(B) For purposes of this subsection, "the County" shall be
deemed to include the Fairfax County Public Schools.
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(f) Cable Drops and Outlets for Government Facilities.
(1) The Grantee will provide the following, at no charge, at each
fire station, public school, police station, public library, and such buildings
used for public purposes as may be designated by the County; provided, however,
that if it is necessary to extend a Grantee's trunk or feeder lines more than
three hundred feet solely to provide service to any such school or public
building, the County shall have the option of paying the Grantee's direct costs
for such extension in excess of three hundred feet itself, or of releasing the
Grantee from or postponing the Grantee's obligation to provide service to such
building:
(A) the first service drop of the HSN, for each such site
where a drop is not already installed;
(B) one HSN Subscriber converter per site, provided that the
Grantee and the entity operating the site shall each pay half of the actual cost
of all new digital converters that replace any converters existing at such site
on the Effective Date, such replacement to occur when the Grantee first begins
to transmit a regularly scheduled channel on either the Basic Service or a cable
programming service tier in a form other than 6 MHz NTSC; and
(C) Basic Service and Cable Programming Service.
(2) Grantee shall deliver all HSN signals to each such HSN drop
in buildings to which service is provided on the Effective Date at the same
power level provided there on the Effective Date or better. Grantee shall
deliver all HSN signals to each such HSN drop in buildings to which service is
provided after the Effective Date at 15 dBmV or better, measured at the
Demarcation Point, for each building at which the County advises the Grantee it
will use two or more converters.
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(3) The County shall be responsible for the cost of any "terminal
equipment," including TV monitors, VCRs, and/or computers.
(4) The cost of inside wiring, additional drops or outlets and
additional converters requested by the County within these specified facilities,
including those drops or outlets in excess of those currently installed, are the
responsibility of the County. If the County requests the Grantee to provide such
services or equipment, the County will pay the Grantee for those costs in
accordance with the cable cost of service standards established by the FCC as
such standards are in effect as of the Effective Date.
(5) If the County makes a request to the Grantee in writing, the
Grantee shall rewire buildings, move drops or entrance links, and make other
changes to installations of inside wiring. The County will be responsible for
the cost of all such work, and the County will pay the Grantee for these costs
in accordance with the cable cost of service standards established by the FCC as
such standards are in effect as of the Effective Date, subject to any applicable
Universal Service discount.
(6) Subject to the limitations set forth in this subsection 7(f),
whenever necessary, or dictated by changes in the Grantee's technology, the
Grantee shall upgrade all equipment provided at Grantee's expense pursuant to
this subsection 7(f), in order to ensure that the County can continue to receive
the services offered by the Grantee to the County pursuant to this Franchise
Agreement.
(g) Backup Facilities and Equipment. Grantee shall design, build, and
maintain PEG upstream feeds so that such feeds function as reliably as Grantee's
Cable System as a whole, and are no more likely to fail than is Grantee's Cable
System to fail as a whole.
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(h) Editorial Control. Except as expressly permitted by federal law,
the Grantee shall not exercise any editorial control over the content of
programming on the Public, Educational and Governmental Access Channels (except
for such programming as the Grantee may cablecast on such Channels).
(i) Payments by Grantee to PEG Users.
(1) The Grantee shall provide payments to PEG Users, that shall
be subtracted from the amount otherwise payable to the County by the Grantee in
accordance with Section 7(c) and Section 8(a), in amounts in the aggregate
totaling 0.96% for each quarter of the amount that results from subtracting from
Gross Revenues for that quarter the Franchise Fees paid to the County for that
quarter ("Gross Revenues Less Franchise Fees") of which 0.8% shall be provided
for public access as set forth in Section 7(a)(3) and (4) (the "Public Access
Grant") and 0.16% of which shall be for higher education uses ("Higher Education
Grants") The grants provided herein shall be in partial satisfaction of the
amounts otherwise payable to the County in accordance with Section 7(c) and
Section 8(a).
(2) The Public Access Grant and the Higher Education Grants shall
be paid on a quarterly basis with such payments being made no later than thirty
days following the end of each quarter, as follows:
(A) Paid to George Mason University: 0.08 percent of Gross
Revenues Less Franchise Fees;
(B) Paid to Northern Virginia Community College: 0.08
percent of Gross Revenues Less Franchise Fees;
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(C) Paid as set forth in Section 7(a)(3) and (4): 0.8
percent of Gross Revenues Less Franchise Fees.
(j) Carriage of PEG Programming. All PEG programming shall be carried
on the Grantee's Basic Service tier, except as otherwise agreed upon.
(k) Institutional Network
(1) The Grantee shall construct the I-Net System Upgrade to be
paid for by the County, linking public, educational and governmental
facilities in the County (the "Institutional Network" or "Network" or "I-Net"),
in accordance with the conditions set forth in Appendix 2 and this Franchise
Agreement.
(2) The Grantee shall assist the County in the County's migration
of the Fairfax Training Network ("FTN") as part of the I-Net System Upgrade as
reflected in Appendix 2.
(3) The Grantee shall continue to maintain and operate the
existing Institutional Network and the FTN as they exist as of the Effective
Date of this Agreement, pursuant to the terms of the Prior Franchises and the
parties' prior correspondence regarding the FTN (Letter from Thomas G. Robinson
to Thomas Waldrop dated April 14, 1988; Letter from Thomas E. Waldrop to Thomas
G. Robinson dated April 21, 1988), until the County switches all its current
institutional network and FTN operations to the I-Net pursuant to Appendix 2.
The County shall switch such operations to the I-Net pursuant to Appendix 2 by
two years after the completion of construction of the I-Net System Upgrade.
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After the County has switched such operations, the Grantee shall not use the
former I-Net except as authorized by this Agreement or pursuant to applicable
law.
(l) Costs and Payments Not Franchise Fees. Grantee waives any claims
that any costs to the Grantee associated with the provision of support for PEG
access (including the I-Net) pursuant to this Franchise Agreement, including but
not limited to the Total Grants, constitute franchise fee payments within the
meaning of 47 U.S.C. ss. 542.
8 FRANCHISE FEE
(a) Payment to County. Each year during the Franchise term, as
compensation for use of Public Rights-of-Way and public land, the Grantee shall
pay to the County, on a quarterly basis, a Franchise Fee of five percent of
Gross Revenues. Such payments shall be made no later than thirty days following
the end of each quarter.
(b) Supporting Information. Each Franchise Fee payment shall be
submitted with supporting detail and a statement certified by the Grantee's
chief financial officer or an independent certified public accountant,
reflecting the total amount of monthly Gross Revenues for the payment period.
The County shall have the right to reasonably require further supporting
information.
(c) Late Payments. In the event any Franchise Fee payment due and owing
is not made on or before the required date, the Grantee shall pay any applicable
penalties and interest charges computed from such due date, as provided for in
the Cable Ordinance.
(d) Audit.
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(1) The County shall have the right to inspect books and records
and to audit and recompute any amounts determined to be payable under this
Agreement, whether the records are held by the Grantee, an Affiliate, or any
other agent of Grantee.
(2) The Grantee shall be responsible for making available to the
County all records necessary to confirm the accurate payment of Franchise fees,
without regard to by whom they are held. Such records shall be made available
pursuant to the requirements of Sections 9(a) and 9(g) herein. The Grantee shall
maintain such records in accordance with its normal record retention policy,
which the Grantee shall provide to the County upon execution of this Agreement
and shall update whenever Grantee changes that policy over the course of the
Franchise term.
(3) The County's audit expenses shall be borne by the County
unless the audit discloses an underpayment of more than three percent of any
quarterly payment, in which case the County's out-of-pocket costs of the audit
shall be borne by the Grantee as a cost incidental to the enforcement of the
Franchise. Any additional undisputed amounts due to the County as a result of
the audit shall be paid within thirty days following written notice to the
Grantee by the County of the underpayment, which notice shall include a copy of
the audit report. If recomputation results in additional revenue to be paid to
the County, interest will be due pursuant to Section 8(c).
(4) The County shall have three years from the time the Grantee
delivers a Franchise Fee payment to question that payment, and if the County
fails to question the payment within that time period, the County shall be
barred from questioning it after that time period. If the County gives written
notice to the Grantee within that three-year period, the three-year period shall
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be tolled for one year to allow the County to conduct an audit. Any legal action
by either party relating to a Franchise Fee payment will toll the remaining
term, if any, of the three-year time period and the one-year audit period with
respect to that payment.
(e) No Limitation on Taxing Authority.
(1) Nothing in this Agreement shall be construed to limit any
authority of the County to impose any tax, fee, or assessment of general
applicability.
(2) The Franchise Fee payments required by this section shall be
in addition to any and all taxes of a general nature or other fees or charges
which the Grantee shall be required to pay to the County or to any state or
federal agency or authority, as required herein or by law, all of which shall be
separate and distinct obligations of the Grantee. The Grantee shall not have or
make any claim for any deduction or other credit of all or any part of the
amount of said Franchise Fee payments from or against any of said County taxes
or other fees or charges which the Grantee is required to pay to the County,
except as required by law or provided for in this Franchise Agreement. The
Grantee shall not apply nor seek to apply all or any part of the amount of said
Franchise Fee payments as a deduction or other credit from or against any of
said County taxes or other fees or charges, each of which shall be deemed to be
separate and distinct obligations of Grantee. Nor shall the Grantee apply or
seek to apply all or any part of the amount of any of said taxes or other fees
or charges as a deduction or other credit from or against any of its Franchise
obligations, each of which shall be deemed to be separate and distinct
obligations of the Grantee. Notwithstanding the above provisions of this
paragraph, however, the Grantee shall have the right to a credit, in the amount
of its Franchise Fee and Total Grants payments under this Agreement, against any
general utility tax on Cable Services that may be imposed by the County, to the
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extent such a tax is applicable to the Grantee or its subscribers. The Grantee
may designate Franchise Fee(s) as a separate item in any bill to a Subscriber of
the Grantee's Cable System, but shall not designate or characterize it as a tax.
(f) No Accord and Satisfaction. The acceptance of any payment required
hereunder by the County shall not be construed as an acknowledgment or an accord
and satisfaction that the amount paid is the correct amount due, nor shall such
acceptance of payment be construed as a release or waiver of any claim which the
County may have for additional sums due and payable. However, the County's
acceptance of full payment of the amount determined to be due by the County
through an audit shall be construed as an accord and satisfaction.
(g) Acceptance Fee. As additional consideration supporting this
Agreement, the Grantee shall pay to the County, at the time of tendering this
Agreement, an acceptance fee of seventy-five thousand dollars ($75,000) for each
of the North and South County franchises for a total payment of $150,000.
9 REPORTS AND RECORDS
(a) Books and Records.
(1) Subject to applicable law, the County shall have the right to
inspect and copy at any time during normal business hours at the Grantee's
office, or at another mutually agreed location, all books and records, including
all documents in whatever form maintained, including electronic media ("books
and records") to the extent that such books and records relate to Grantee's
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Cable System or to the Grantee's provision of Cable Service. The County shall
take reasonable steps to protect the proprietary and confidential nature of any
such documents to the extent they are designated as such by the Grantee. The
County shall have the right to copy any such books and records, except to the
extent that such books and records are proprietary and/or confidential pursuant
to the Virginia Uniform Trade Secrets Act or other applicable law.
(2) The Grantee shall keep complete and accurate books of account
and records of its business and operations under and in connection with this
Franchise Agreement.
(b) Communication with Regulatory Agencies
(1) The Grantee shall file with the County a copy of certain
communications with regulatory agencies, as follows:
(A) any document (other than routine, publicly available
agency mailings or publications) the Grantee files with or receives from the
FCC, the Securities and Exchange Commission, or the Virginia State Corporation
Commission, or any successor agency of any of these agencies, within five (5)
working days of such filing or receipt;
(B) any document the Grantee files with or receives from
other agencies, upon the County's request;
(C) any document that any parent of the Grantee files with
or receives from any agency that directly and materially relates to the
Grantee's Cable System and/or the provision of Cable Services under this
Agreement, within five (5) working days of such filing or receipt.
(2) For purposes of this subsection 9(b), documents filed by the
Grantee or a parent shall include all documents filed by or on behalf of the
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Grantee or its parent, but shall not include documents filed by trade
associations to which the Grantee or its parent may belong unless the Grantee or
a parent has authorized the use of its name by such trade association among the
filing parties and its name is used.
(3) To the extent that such documents contain, to the
satisfaction of the Communications Administrator, the information required by
other reports hereunder, the Communications Administrator may suspend the
requirement to file such other reports with the County so as to avoid
duplication and the administrative costs attendant thereto.
(c) Annual Report. Unless this requirement is waived in whole or in
part by the County, no later than April 30th of each year during the term of
this Agreement, the Grantee shall submit a written report to the County, in a
form reasonably satisfactory to the County, which shall include:
(1) a summary of the previous calendar year's activities in
development of Grantee's Cable System, including but not limited to descriptions
of services begun or dropped;
(2) a summary of complaints, identifying both the number and
nature of the complaints received and an explanation of their dispositions, as
such records are kept by the Grantee. Where the Grantee has identified recurrent
Cable System problems, the nature of any such problems and the corrective
measures taken or to be taken shall be identified;
(3) A copy of the Grantee's rules, regulations and policies
available to Subscribers of Grantee's Cable System, including but not limited to
(A) all Subscriber rates, fees and charges; (B) copies of the Grantee's contract
or application forms for Cable Services; and (C) a detailed summary of the
Grantee's policies concerning (i) the processing of Subscriber complaints; (ii)
delinquent Subscriber disconnect and reconnect procedures; (iii) A/B switches;
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(iv) Subscriber privacy and (v) any other terms and conditions adopted by the
Grantee in connection with the provision of Cable Service to Subscribers;
(4) An annual financial report for the previous calendar year,
certified by an independent certified public accountant, including a year-end
balance sheet; an income statement showing Subscriber revenue and every material
category of non-Subscriber revenue, operating expenses by category, depreciation
expenses, interest expenses, and taxes paid, and a statement of sources and
applications of funds;
(5) A current statement of costs of construction by component
categories;
(6) A projected income statement, balance sheet, statement of
sources and applications of funds and statement of projected construction for
the next two years;
(7) A reconciliation between previously projected construction
and/or financial estimates, as the case may be, and actual results;
(8) A list of Persons, including all entities controlling such
Persons, holding three percent or more of the voting stock or interests of
Grantee, or its parents, or Grantee's subsidiaries, if any;
(9) A list of officers and members of the Board of Directors of
Grantee and its parents and Grantee's subsidiaries, if any, or similar officers
if the Grantee is not a corporation;
(10) A copy of its annual report and those of its parents and
Grantee's subsidiaries, if any; and
(11) At least annually, a detailed copy of updated maps for the
I-Net depicting the location of all cable plant, showing areas served and
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locations of all fiber lines, trunk lines and feeder lines in the County, and
including changes in all such items for the period covered by the report.
(d) Quarterly Report. Unless this requirement is waived in whole or in
part by the County, no later than thirty days after the end of each calendar
quarter during the term of this Agreement, the Grantee shall submit a written
report to the County, in a form reasonably satisfactory to the County, which
shall include:
(1) A report showing the number of service calls received by type
during that quarter, including any property damage to the extent such
information is available to the Grantee, and any line extension requests
received during that quarter, as such records are kept by the Grantee.
(2) A report showing the number of outages for that quarter, and
identifying separately each planned outage of one or more nodes for more than
one hour at a time, the time it occurred, its duration, and the tax map area
and, when available to the Grantee, number of homes affected; and, when the
Grantee can reasonably determine that at least 500 homes were affected, each
unplanned outage affecting more than 500 homes for more than one hour, the time
it occurred, the reason for the disruption and its causes, its estimated
duration and the tax map area and, when available to the Grantee, the number of
homes affected.
(3) A report showing the Grantee's performance with respect to
all applicable customer service standards. The Grantee shall keep such records
as are reasonably required to enable the County to determine whether the Grantee
is substantially complying with all such customer service standards, and shall
maintain adequate procedures to demonstrate such substantial compliance.
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(e) Special Reports. Unless this requirement is waived in whole or in
part by the County, the Grantee shall deliver the following special reports to
the County:
(1) The Grantee shall submit monthly construction reports and
weekly status reports to the County after the Effective Date for any
construction undertaken during the term of the Franchise until such construction
is complete, including any rebuild that may be specified in the Franchise
Agreement. Upon completion of the System Upgrade, the Grantee shall provide the
County free of charge with remote, read-only access to the Grantee's as-built
system design maps (which the County may print by section, but not in their
entirety), including any physical connections and software necessary to provide
such access, subject to the County's signing any requisite software license
agreement.
(2) The Grantee must submit a copy and full explanation of any
notice of deficiency, forfeiture, or other document relating to the Grantee
issued by any state or federal agency if such notice or other document would
require Securities and Exchange Commission Form 8(k) disclosure or would require
footnote disclosure in the annual financial statements of the Grantee or a
parent. This material shall be submitted in accordance with the deadlines
specified in Section 9(b)(1) herein.
(3) The Grantee must submit a copy and brief explanation of any
request for protection under bankruptcy laws, or any judgment related to a
declaration of bankruptcy by the Grantee or by any partnership or corporation
that owns or controls the Grantee directly or indirectly. This material shall be
submitted in accordance with the deadlines specified in Section 9(b)(1) herein.
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(4) The Grantee shall summarize the results of any annual opinion
surveys it conducts in its annual report, or, if the Grantee considers such
results to be proprietary, shall make such results available at its offices for
the County's review. At the County's request, the Grantee will include questions
submitted by the County in the Grantee's surveys, provided that such questions
would be likely to lead to statistically reliable results and can be included at
a reasonable cost.
(f) Additional Information. The County may, upon reasonable written
notice, require such additional information with respect to the reports to be
submitted pursuant to this Section as may be reasonably necessary for the
performance of any of the Communications Administrator's or any other County
official's duties.
(g) Records Required.
(1) The Grantee shall maintain, in accordance with its normal
record retention policies, those records required to support the reports
required by Sections 9(c)through 9(e) hereof, including but not limited to:
(A) Records of all complaints. The term "complaints" as used
herein and throughout this Agreement refers to complaints recorded through
Grantee's normal procedures about any aspect of Grantee's Cable System or the
Grantee's operations, including, without limitation, complaints about employee
courtesy. Complaints recorded may not be limited to complaints requiring an
employee service call.
(B) A full and complete set of plans, records, and "as
built" maps showing the exact location of all equipment of Grantee's Cable
System installed or in use in the County, exclusive of Subscriber service drops.
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(C) Records of outages, indicating date, duration, tax map
area, and the estimated number of homes affected, type of outage, and cause.
(D) Records of service calls for repair and maintenance
indicating the date and time service was required, the date and time service was
scheduled (if it was scheduled), and the date and time service was provided.
(E) Records of installation/reconnection and requests for
service extension, indicating date of request, and the date and time service was
extended.
(2) All information, books and records that must be compiled,
produced and/or maintained under this Agreement shall be retained, in any
reasonable form, in accordance with the Grantee's normal record retention
policies or as otherwise required by applicable law.
(h) Waiver of Reporting Requirements. The Communications Administrator
or his designee may, at the sole discretion of the Administrator or the
Administrator's designee, waive in writing the requirement of any particular
report specified in this Section 9.
10 INSURANCE, SURETY, AND INDEMNIFICATION
(a) Insurance Required.
(1) The Grantee shall maintain, and by its acceptance of the
Franchise specifically agrees that it will maintain, throughout the entire
length of the Franchise period, at least the following liability insurance
coverage insuring the County and the Grantee: (i) commercial general liability
insurance with respect to the construction, operation, and maintenance of
Grantee's Cable System, and the conduct of the Grantee's business in the County,
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in the minimum amounts of $2,000,000 per occurrence; $2,000,000 aggregate for
each occurrence; and (ii) copyright infringement insurance in the minimum amount
of $2,000,000 for copyright infringement occasioned by the operation of
Grantee's Cable System.
(2) Such commercial general liability insurance must include
coverage for all of the following: comprehensive form, premises-operations,
explosion and collapse hazard, underground hazard, products/completed operations
hazard, contractual insurance, broad form property damage, and personal injury.
(3) The County may review these amounts and shall have the right
to require reasonable adjustments to them consistent with the public interest.
(4) The Grantee shall be solely responsible for the payment of
premiums due for each policy of insurance required pursuant to this Agreement
and the Cable Ordinance.
(b) Endorsements. All insurance policies and certificates maintained
pursuant to this Agreement shall contain the following endorsement:
It is hereby understood and agreed that this insurance coverage may
not be canceled by the insurance company nor the intention not to
renew be stated by the insurance company until at least 30 days after
receipt by the County Communications Administrator, by registered
mail, of a written notice of such intention to cancel or not to renew.
(c) Qualifications of Insurers. All insurance policies shall be with
insurers qualified to do business in the Commonwealth of Virginia, with an A-1
or better rating of insurance by Best's Key Rating Guide, Property/Casualty
Edition.
(d) Policies Available for Review.
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All insurance policies shall be available for review by the
County, and the Grantee shall submit to the County certificates of insurance for
each policy required herein.
(e) Additional Insureds; Prior Notice of Policy Modification.
All commercial general liability insurance policies shall name
the County, its elected and appointed officials, officers, boards, commissions,
commissioners, agents, and employees as additional insureds.
(f) Indemnification.
(1) The Grantee shall, at its sole cost and expense, indemnify,
hold harmless, and defend the County, its elected and appointed officials,
officers, boards, commissions, commissioners, agents, and employees, against any
and all claims, suits, causes of action, proceedings, and judgments for damages
or equitable relief arising out of the construction, maintenance, or operation
of Grantee's Cable System (to the extent that Grantee has operation or
maintenance responsibilities pursuant to this Agreement or applicable law);
copyright infringements or a failure by the Grantee to secure consents from the
owners, authorized distributors, or franchisees of programs to be delivered by
Grantee's Cable System (other than PEG content or I-Net content); the conduct of
the Grantee's business in the County; or in any way arising out of the Grantee's
enjoyment or exercise of the Franchise, unless such specific act or omission has
been authorized by the County or is the result of any act or omission by the
County or its elected and appointed officers, boards, commissions,
commissioners, agents, or employees which results in personal injury or property
damage. A general statement of authorization pursuant to the Cable Ordinance or
this Agreement shall not be construed to be such an authorization.
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(2) Specifically, the Grantee shall fully indemnify, defend, and
hold harmless the County, and in its capacity as such, the elected and appointed
officials, officers, agents, commissions, commissioners, boards and employees
thereof, from and against any and all claims, suits, actions, liability, and
judgments, whether for damages or otherwise, subject to 47 U.S.C. ss. 558,
arising out of or alleged to arise out of the installation, construction,
operation, or maintenance of Grantee's Cable System, including but not limited
to any claim against the Grantee for invasion of the right of privacy,
defamation of any Person, firm or corporation, or the violation or infringement
of any copyright, trade mark, trade name, service mark, or patent, or of any
other right of any Person, firm, or corporation. This indemnity does not apply
to programming carried on any Channel set aside for PEG use, or Channels leased
pursuant to 47 U.S.C. ss. 532, or any content on the I-Net, or to operations of
the PEG Channels or the I-Net to the extent such operations are carried out by a
person other than the Grantee or its agents.
(3) In the event that Grantee fails, after notice, to undertake
the County's defense of any claims brought pursuant to subsections 0 and 0
above, Grantee's indemnification shall include, but is not limited to, the
County's reasonable attorneys' fees incurred in defending against any such
action, claim, suit, or proceeding, any interest charges arising from any
action, claim, suit or proceeding arising under this Agreement or the Cable
Ordinance, the County's out-of-pocket expenses, and the reasonable value of any
services rendered by the County Attorney, or County staff or employees.
(4) In addition to the other insurance policies required by this
Agreement, the Grantee shall obtain and keep in force and effect during the
entire term of this Agreement, or any extension hereof, commercial general
liability insurance coverage (owner's protection policy) in a minimum amount of
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two million dollars covering bodily injury and property damage, subject to
exclusions, for the benefit of the County, its elected officials, boards,
commissions, commissioners, agents, employees, and officers. The Grantee has or
shall deliver to the County on or before the date of execution of this Agreement
an indemnification insurance policy duly executed by the officers or authorized
representatives of a responsible and non-assessable insurance company,
evidencing this coverage for the benefit of the County, its elected officials,
agents, boards, commissions, commissioners, employees, and officers, which
policy of insurance shall provide for at least 30 days' prior written notice to
the County of the insurer's intention to cancel or not to renew said policy.
(g) No Limit of Liability. Neither the provisions of this Section
nor any damages recovered by the County shall be construed to limit the
liability of the Grantee or its subcontractors for damages under the Franchise
Agreement or the Cable Ordinance or to excuse the faithful performance of
obligations required by this Franchise Agreement, except to the extent that any
monetary damages suffered by the County have been satisfied by a financial
recovery under this section or other provisions of this Franchise Agreement or
the Cable Ordinance.
(h) County to Assume No Liability. The County shall at no time be
liable for any injury or damage occurring to any Person or property from any
acts or omissions of Grantee in the construction, maintenance, use, operation or
condition of Grantee's Cable System, to the extent that Grantee has
responsibilities for such maintenance, use, operation or condition pursuant to
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this Agreement or applicable law. It is a condition of this Agreement that the
County shall not and does not by reason of this Agreement assume any liability
whatsoever of the Grantee for injury to Persons or damage to property.
11 PERFORMANCE GUARANTEES AND REMEDIES
(a) Performance Bond.
(1) Grantee shall obtain and maintain during the entire term of
the Franchise, and any renewal or extensions thereof, except as provided in
Section 11(a)(4) below, a non-cancelable performance bond in the County's favor
in the amount of $500,000, to ensure the Grantee's faithful performance of its
obligations.
(2) The performance bond shall provide the following conditions:
(A) There shall be recoverable by the County from the
principal and surety, any and all fines and penalties due to the County and any
and all damages, losses, costs, and expenses suffered or incurred by the County
resulting from the failure of the Grantee to faithfully comply with the material
provisions of this Agreement, the Cable Ordinance, and other applicable law, to
comply with all orders, permits and directives of any County agency or body
having jurisdiction over its acts or defaults, to pay fees, penalties or
liquidated damages due to the County, or to pay any claims, taxes or liens due
the County. Such losses, costs and expenses shall include but not be limited to
reasonable attorney's fees and other associated expenses.
(B) The total amount of the performance bond required by
this Agreement shall be forfeited in favor of the County in the event:
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(i) the Grantee abandons Grantee's Cable
System at any time during the term of
its Franchise or any extension thereto;
or
(ii) the Grantee carries out a Transfer
without the express written consent of
the County as provided in Section 3
of this Agreement.
(3) The performance bond shall be issued by a surety with an A-1
or better rating of insurance in Best's Key Rating Guide, Property/Casualty
Edition; shall be in a form satisfactory to the County Attorney; shall be
subject to the approval of the County; and shall contain the following
endorsement:
This bond may not be canceled or allowed to lapse, until at least thirty
days after receipt by the County, by certified mail, return receipt
requested, of a written notice from the issuer of the bond of intent to
cancel or not to renew.
(4) Reduction of Bond. The County may approve a reduction in the
amount of the bond upon written application by the Grantee, which approval shall
not be unreasonably withheld. The amount of the bond may be reduced to
$250,000.00 when the HSN System Upgrade has been extended to more than fifty
percent of the occupied dwelling units within the area where service is
available on the Effective Date of this Agreement, as certified by the Grantee
to the County, and may be further reduced to the sum of $50,000.00 when the HSN
System Upgrade has been extended to more than ninety percent of the occupied
dwelling units within that area, as certified by the Grantee to the County.
Reductions granted or denied upon application by the Grantee shall be without
prejudice to the Grantee's subsequent applications or to the County's right to
require the full bond at any time thereafter.
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(5) Right to Require Additional or Other Bonds. The County shall
have the right, at any time that it reasonably deems itself insecure, to require
that any bond be replaced by such other bond as the County may reasonably
require, notwithstanding the fact that the County may have indicated its
acceptance or approval of any bond(s) submitted with this Agreement.
(b) Security Deposit.
(1) In addition to the performance bond, the Grantee shall
deposit with a third party agent ("Third Party Agent") a security deposit in the
amount of $50,000 (the "Security Deposit"), pursuant to a Security Deposit
Agreement attached hereto as Appendix 5. This Security Deposit Agreement shall
include inter alia the following terms and conditions:
(A) If the County notifies the Grantee of any amounts due to
the County pursuant to this Agreement or applicable law, and the Grantee does
not make such payment within ten business days, the County may withdraw the
amount in question, with any applicable interest and penalties, from the
Security Deposit by notice to the Grantee and the Third Party Agent specifying
the amount and purpose of such withdrawal, and the Third Party Agent shall pay
such amount to the County; provided, however, that if the Grantee files a legal
action disputing the County's claim, the ten-business-day notice period shall be
tolled as to that claim until the claim is resolved by order of the trial court.
(B) If at the time of a withdrawal from the Security Deposit
by the County, the amount available with the Third Party Agent is insufficient
to provide the total payment of the claim asserted in the County's notice of
withdrawal, the balance of such claim shall not be discharged or waived, but the
County may continue to assert the same as an obligation of the Grantee to the
County.
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(C) No later than thirty days after mailing of notification
to the Grantee by certified mail, return receipt requested, of a withdrawal
under the Security Deposit, the Grantee shall restore the amount of the Security
Deposit to $50,000.
(D) Upon termination of the Franchise, any balance then
remaining in the Security Deposit shall be returned to the Grantee by the Third
Party Agent within ninety days of such termination, provided that there is then
no outstanding default on the part of the Grantee.
(E) Any interest accruing to the Security Deposit while it
is being held by the Third Party Agent shall be for the benefit of the Grantee,
and shall be paid by the Third Party Agent to the Grantee on a regular basis,
and any amount in excess of $50,000 may be withdrawn by the Grantee.
(c) Rights Cumulative. The rights reserved to the County in this
Section are in addition to all other rights of the County, whether reserved
herein or authorized by applicable law, and no action, proceeding or exercise of
a right with respect to a performance bond or the Security Deposit shall affect
any other right the County may have. Neither the making of the Security Deposit,
nor the receipt of any damages recovered by the County thereunder, shall be
construed to excuse the faithful performance by the Grantee or limit the
liability of the Grantee under the terms of its Franchise for damages, either to
the full amount of the Security Deposit or otherwise; provided, however, that
the amount of any damages recovered by the County through the Security Deposit
shall be offset against any damages otherwise recoverable by the County.
(d) Remedies. In addition to any other remedies available at law
or equity, the County may revoke the Franchise for a material violation as set
forth in Section 12(1)(2) of this Agreement pursuant to the procedures specified
in this Agreement.
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(e) Liquidated Damages. Because the Grantee's failure to comply with
provisions of the Franchise and this Franchise Agreement will result in injury
to the County, and because it will be difficult to estimate the extent of such
injury, the County and the Grantee agree to the following liquidated damages to
be effective during the term of the Franchise for the following violations of
the Franchise and of this Agreement, which represent both parties' best estimate
of the damages resulting from the specified violation. Such damages shall not be
a substitute for actual performance by the Grantee of a financial payment, but
shall be in addition to any such actual performance. The Communications
Administrator, or designee, shall have the authority to waive or reduce the
liquidated damage amounts herein for good cause. Cure periods listed below shall
begin to run at the time the Grantee is notified in writing of a violation by
the County, unless otherwise specified below.
(1) For failure to comply with the design submission process
specified in Section 6(e): $400/day for each violation for each day the
violation continues after a seven-day cure period;
(2) For failure by the Grantee to substantially comply with the
upgrade schedule specified in Section 6(f): $2,000/day for each violation for
each day the violation continues after a thirty-day cure period, if the Grantee
has not undertaken substantial corrective action to cure the violation within
that thirty-day period;
(3) For a Transfer without approval as specified in Section 3:
$2,000/day for each violation for each day the violation continues;
(4) For failure to substantially comply with requirements for
public, educational and governmental use of the System pursuant to Sections
7(a)(1), (2), or (6), 7(b), 7(d), 7(e)(2), 7(f), 7(g) or 7(h): $1,000/day for
each violation for each day the violation
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continues after a fourteen-day cure period, if the Grantee has not undertaken
substantial corrective action to cure the violation within that fourteen-day
period;
(5) For failure to provide to the County information, reports, or
filings lawfully required under the Franchise Agreement or applicable law or by
the County: $200/day for each violation for each day the violation continues
after a thirty-day cure period, which shall begin to run on the due date of any
regularly scheduled report and on the date of a deadline reasonably set by the
County for any report or information request not regularly scheduled, unless the
Grantee shows that it was not in fact aware of the requirement in question, in
which case the thirty-day cure period shall begin to run upon written notice of
such requirement by the County to the Grantee;
(6) Customer Service Standards:
(A) For each day during which the County determines that the
Grantee has violated each of the following types of customer service standards
according to the terms in which such standards are established in governing law
or regulations: $200 per violation:
(i) failure to maintain office hours;
(ii) failure to keep an appointment with a subscriber,
or to offer a subscriber the prescribed
compensation for a missed or late appointment,
provided that in this case the liquidated
damages shall be offset by the amount directly
refunded to the subscriber by the Grantee for
such appointment;
(iii) failure to extend service to a subscriber;
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(iv) failure to arrange for converter transportation
for a mobility-limited subscriber;
(v) failure to acknowledge a service request in
timely fashion;
(vi) failure to complete repairs or maintenance;
(vii) failure to provide required information to a
subscriber or to the County;
(viii) failure to disclose price terms to a subscriber;
(ix) failure to maintain the public file;
(x) improper charge of a late fee to a subscriber;
(xi) failure to respond to a subscriber complaint in
timely fashion.
(B) A separate violation under subsection (A) shall be
deemed to occur whenever the County reasonably determines that one of the above
separately enumerated transgressions has occurred on one day. Thus, for example,
if the Grantee fails to extend service to one subscriber for two days pursuant
to governing law or regulation, there would be two violations; if the Grantee
fails to keep an appointment pursuant to governing law or regulation with one
subscriber on one day and on that same day, independent of the missed
appointment, the Grantee fails to disclose price terms to that same subscriber,
then there would be two violations. However, the Grantee shall not be charged
with multiple violations for a single act or event affecting a single subscriber
or for a single act or event affecting multiple subscribers on the same day.
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(C) Each violation under subsection 11(e)(6)(A), except for
violations under subsections 11(e)(6)(A)(i) and 11(e)(6)(A)(ix), shall be
subject to a ten-day cure period which shall begin to run upon notice by the
County to the Grantee of such a violation. Grantee shall be deemed to cure such
a violation if it provides appropriate compensation, as agreed to by the County
and the Grantee, to all affected Subscribers as to which the County has given
such notice.
(D) For failure to meet customer service standards with
regard to telephone answering time, time to transfer a call to a customer
service representative, or excessive busy signals: if such standards are not met
according to the terms in which such standards are established in governing law
or regulations in any quarter, $200 for each day during that quarter on which
such standards were not met;
(7) For failure to pay any Franchise fees pursuant to Section 8
or Total Grants pursuant to Section 7(c) : $100 per day after a seven-day cure
period;
(8) For failure to file, obtain or maintain the required
performance bond pursuant to Section 11(a) in a timely fashion: $200 per day;
(9) For failure to bring into compliance any violation of
construction standards within the appropriate time periods as specified in
Section 5(c)(6) of this Agreement: $200 per violation; and
(10)For violation of technical standards established by the FCC
or other lawful authority: $100 per day for each day the violation continues
after a thirty-day cure period after the County gives the Grantee notice of such
violation.
(f) Shortening, Revocation, or Termination of Franchise
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(1) Upon completion of the term of any Franchise granted under
this Agreement, if a new, extended, or renewed Franchise is not granted to the
Grantee by the County, the Grantee's right to occupy the Public Rights-of-Way
and public land shall terminate, subject to applicable federal law.
(2) The County shall have the right to revoke the Franchise, or
to shorten the term of the Franchise to a term not less than thirty-six months
from the date Grantee receives written notice from the County of the County's
decision to act pursuant to Section 11(f)(3) herein concerning the County's
shortening action, for the Grantee's material violation of this Agreement
pursuant to Section 12(1)(2).
(3) To invoke the remedies of Section 11(f)(2), the County shall
give the Grantee written notice of the default in its performance. If within
sixty calendar days following such written notice from the County to the
Grantee, or such other period as this Franchise Agreement shall require or the
Grantee and the County shall agree, the Grantee has not taken corrective action
to the reasonable satisfaction of the County, the County may give written notice
to the Grantee of its intent to revoke or shorten the term of the Franchise,
stating its reasons; provided that no opportunity to cure shall be provided
where the Grantee is shown to have defrauded or attempted to defraud the County
or its Subscribers in connection with this Agreement or Cable Service in any way
that has a material adverse effect on Grantee's provision of Cable Services
pursuant to this Agreement.
(4) Prior to shortening the term of or revoking the Franchise,
the County shall hold a public hearing, after providing thirty days' written
notice to the Grantee, specifying its reasons for shortening or revoking the
Franchise, at which time the Grantee and the public shall be given an
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opportunity to be heard. Following the public hearing, the County may determine
whether to shorten the Franchise term or to revoke the Franchise based on the
information presented at the hearing, and other information of record, or, where
applicable, grant additional time to the Grantee to effect any cure. If the
County determines to shorten the term of or revoke the Franchise, it shall adopt
an ordinance that shortens the term of or revokes the Franchise and sets forth
the reasons for its decision. A copy of such ordinance shall be transmitted to
the Grantee.
(5) If the County revokes the Franchise, or if for any other
reason the Grantee terminates the Franchise, the following procedures and rights
are effective:
(A) The County may require the former Grantee to remove its
facilities and equipment located in the Public Rights-of-Way or on public land
at the former Grantee's expense and to restore such affected sites as required
in Section 5(b)(9) or permit the former Grantee to abandon such facilities in
place, subject to the provisions of Section 5(b)(14). If the former Grantee
fails to remove its facilities within a reasonable period of time after the
County orders it to do so, and such removal is necessary to make room for other
facilities or to remove potential safety hazards as required by sound
engineering practices, then the County may have the removal performed at the
former Grantee's and/or surety's expense.
(B) The County may require the former Grantee to continue
operating Grantee's Cable System as specified in Section 4(c).
(C) In the event of revocation, the County, in accordance
with state law, may acquire ownership of or effect a transfer of Grantee's Cable
System at an Equitable Price.
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(g) Condemnation. This Franchise Agreement shall not limit any
authority of the County in accordance with state law to condemn, in whole or in
part, the Franchise and/or any other property of the Grantee, provided that the
Grantee shall receive whatever condemnation award the Grantee would normally be
entitled to recover as a matter of state law. Partial condemnation of the
Grantee's Franchise or property shall not terminate this Agreement except in
accordance with the terms of this Agreement.
12 MISCELLANEOUS PROVISIONS
(a) Binding Acceptance. This Agreement shall bind and benefit the
parties hereto and their respective heirs, beneficiaries, administrators,
executors, receivers, trustees, successors and assigns.
(b) Severability. If any term, condition, or provision of this
Agreement shall, to any extent, be held to be invalid or unenforceable, the
remainder hereof shall be valid in all other respects and continue to be
effective. If the terms of this Agreement are materially altered due to changes
in governing law, then the parties shall negotiate in good faith to reconstitute
this Agreement in a form that, to the maximum extent possible, is consistent
with the original intent of Grantee and the County and preserves the benefits
bargained for by each party.
(c) Preemption. In the event that federal or state laws, rules or
regulations preempt a provision or limit the enforceability of a provision of
this Agreement, then the provision shall be read to be preempted to the extent
and for the time, but only to the extent and for the time, required by law. In
the event that any provision of this Agreement is preempted or enforcement
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limited by any such provision of federal or state law, then the parties shall
negotiate in good faith to reconstitute this Agreement in a form that, to the
maximum extent possible, is consistent with the original intent of the Grantee
and the County and preserves the benefits bargained for by each party. Finally,
in the event such federal or state law, rule or regulation is subsequently
repealed, rescinded, amended or otherwise changed so that the provision hereof
that had been preempted is no longer preempted, such provision shall return to
full force and effect, and shall thereafter be binding on the parties hereto,
without the requirement of further action on the part of the County.
(d) Equal Treatment. The County shall comply with all state and federal
laws regarding equal treatment of the Grantee and other entities.
(e) Compliance With Applicable Laws. The Grantee shall, at all times
during the term of this Franchise Agreement, including any extensions thereof,
substantially comply with all applicable and material federal, state, and local
laws and regulations.
(f) Force Majeure. Notwithstanding any other provision of this
Agreement, the Grantee shall not be liable for delay in performance of, or
failure to perform, in whole or in part, its obligations pursuant to this
Agreement due, directly or indirectly, to severe or unusual weather conditions,
strike, labor disturbance, lockout, war or act of war (whether an actual
declaration of war is made or not), insurrection, riot, act of public enemy,
action or inaction of any government instrumentality or public utility including
condemnation, accidents for which Grantee is not primarily responsible, fire,
flood or other act of God, sabotage or other events to the extent that such
causes or other events are beyond the reasonable control of the Grantee. In the
event that any such delay in performance or failure to perform affects only part
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of the Grantee's capacity to perform, the Grantee shall perform to the maximum
extent it is able to perform and shall take all reasonable steps within its
power to correct such cause(s) in as expeditious a manner as possible.
(g) Governing Law. This Franchise Agreement shall be governed in all
respects by the law of the Commonwealth of Virginia.
(h) Notices. Unless otherwise provided by applicable law or this
Agreement, all notices or other written communications required to be given to
the County under any provision of this Agreement or the Fairfax County Code
shall be deemed served when regularly mailed, postage prepaid or delivered by
hand in writing to the Communications Administrator. All notices or written
communications required to be given to the Grantee under any provision of this
Agreement or the Fairfax County Code shall be deemed served when regularly
mailed, postage prepaid or delivered by hand in writing to the Grantee at the
Grantee's last known address, to the attention of its President, with a copy to
George L. Mahoney, Esquire, Media General, Inc., 333 East Grace Street,
Richmond, VA 23219, or to such other Persons or addresses as Grantee may
subsequently specify by notice.
(i) Time of Essence. In determining whether a party has substantially
complied with this Franchise Agreement, the parties agree that time is of the
essence.
(j) Captions and Headings. The captions and headings of sections set
forth herein are intended solely to facilitate reading and reference to the
sections and provisions of this Franchise Agreement. Such captions shall not
affect the meaning or interpretation of this Agreement.
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(k) No Oral Modifications. This Franchise Agreement shall not be
changed, modified or amended, in whole or in part, unless an appropriate written
instrument is executed by the County and the Grantee.
(l) Rights and Remedies.
(1) The rights and remedies reserved to both parties herein are
cumulative and shall be in addition to all other rights and remedies which
either party may have with respect to the subject matter of this Agreement,
whether reserved herein or authorized by applicable law.
(2) The following violations by the Grantee of this Agreement are
material for purposes of Section 11(f)(2):
(A) Transfer without approval pursuant to Section 3, or
failure to notify pursuant to Section 3(e);
(B) repeated or flagrant failure to satisfy line extension
requirements pursuant to Section 4(b);
(C) substantial failure to provide Cable Service as
specified in Section 4(c)(8)(A);
(D) repeated or flagrant failure to satisfy construction
standards pursuant to Section 5;
(E) substantial failure to meet system or institutional
network upgrade schedule pursuant to Section 6(f) or the schedule for I-Net
construction, if applicable, as specified in Appendix 2;
(F) repeated or flagrant failure to meet FCC technical
standards;
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(G) failure to maintain the Emergency Alert System pursuant
to Section 6(j) in the event of an emergency;
(H) substantial failure to provide Total Grants pursuant to
Section 7(c);
(I) substantial failure to provide PEG facilities or
equipment pursuant to Section 7(a);
(J) substantial failure to provide PEG facilities or
equipment pursuant to Section 7(d);
(K) substantial failure to provide PEG facilities or
equipment pursuant to Section 7(f);
(L) if applicable, substantial failure to provide I-Net
facilities or equipment pursuant to Section 7(k) ;
(M) substantial failure to pay Franchise fees pursuant to
Section 8;
(N) repeated or flagrant failure to meet reports and records
requirements in a timely manner pursuant to Section 9;
(O) substantial failure to satisfy insurance requirements
pursuant to Section 10(a);
(P) substantial failure to maintain a bond or Security
Deposit pursuant to Section 11;
(Q) repeated or flagrant violation of consumer protection
requirements pursuant to applicable law;
(R) repeated or flagrant violation of Subscriber privacy
requirements pursuant to 47 U.S.C. ss. 551 or other applicable law;
<PAGE>
Page 98
(S) repeated or flagrant discrimination among Subscribers in
violation of applicable law.
(m) Obligations to Continue Throughout Term. Unless specifically
designated otherwise, all of the Grantee's obligations under this Agreement and
the Franchise shall continue throughout the entire term specified in Section
2(c)or any extension hereof.
(n) Cooperation in Obtaining and Implementing Grants. The Grantee and
the County agree to cooperate fully with each other in applying for or
implementing any federal or state grants or other funds to be applied to the
Grantee's Cable System.
(o) Prohibition Against Discrimination. The Grantee shall adhere to the
Equal Employment Opportunity regulations of the FCC and to all federal, state
and local laws, and executive orders pertaining to discrimination, equal
employment opportunity and affirmative action that are applicable to the
Grantee.
(p) Connections to the Cable System; Use of Antennas.
(1) To the extent consistent with federal law, Subscribers shall
have the right to attach devices to the Grantee's Cable System to allow them to
transmit signals or service to video cassette recorders, receivers and other
terminal equipment, and to use their own remote control devices and converters,
and other similar equipment, so long as such devices do not interfere with the
operation of Grantee's Cable System, or the reception of any cable Subscriber,
nor serve to circumvent the Grantee's security procedures, nor for any purpose
to obtain services illegally. The Grantee shall provide information to consumers
which will allow them to adjust such devices so that they may be used with the
Grantee's Cable System.
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Page 99
(2) The Grantee shall not, as a condition of providing Cable
Service, require a Subscriber to remove any existing antenna or disconnect an
antenna, or prohibit or discourage a Subscriber from installing an antenna
switch, provided that such equipment and installations are consistent with
applicable codes and technically able to shield Grantee's Cable System from any
interference.
(q) Police Powers of the County. Nothing in this Agreement shall
preclude the County from exercising its police powers to enact, amend or
supplement any law or regulation governing cable communications within the
County of Fairfax.
(r) Grantee Bears Its Own Costs. Unless otherwise expressly provided in
this Agreement, all acts that the Grantee is required to perform must be
performed at the Grantee's own expense.
(s) County Bears Its Own Costs. Unless otherwise expressly provided in
this Agreement, all acts that the County is required to perform must be
performed at the County's own expense.
(t) Rights of Third Parties. Nothing herein shall be construed to give
any Person other than the Grantee or the County a right to assert any claim or
cause of action against the Grantee or the County, its employees, elected or
appointed officials, officers, commissions, commissioners, boards or agents,
except as to parties enumerated in Section 7(c)(2).
(u) Appendices. The appendices to this Agreement (the "Appendices"),
attached hereto, and all portions thereof and exhibits thereto, are, except as
otherwise specified in such Appendices, incorporated herein by reference and
expressly made a part of this Agreement. The procedures for approval of any
subsequent amendment or modification to said Appendices shall be the same as
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Page 100
those applicable to any amendment or modification hereof, except as specified in
such Appendices or elsewhere in this Agreement.
(v) Entire Agreement. This Agreement embodies the entire understanding
and agreement of the County and the Grantee with respect to the subject matter
hereof and merges and supersedes all prior representations, agreements, and
understandings, whether oral or written, between the County and the Grantee with
respect to the subject matter hereof, including, without limitation, any and all
written or oral statement or representations by any official, employee, agent,
attorney, consultant, or independent contractor of the County or the Grantee.
IN WITNESS WHEREOF, the parties have set their hands and seals on the
date first above written.
THE BOARD OF SUPERVISORS OF FAIRFAX COUNTY, VIRGINIA
BY: ____________________________
Chairman, Board of Supervisors
BY: ____________________________
County Executive
GRANTEE: MEDIA GENERAL CABLE OF
FAIRFAX COUNTY, INC., a Virginia
Corporation
BY: ____________________________
Title: ________________________
<PAGE>
July 15, 1998
Page 1
APPENDIX 1: LINE EXTENSION POLICY
The intent of the line extension policy as developed is to provide
residents in areas of less than 35 homes per mile with the opportunity to
subscribe to Cable Service at a reasonable installation rate without placing
additional cost burdens on other residents. Capitalized terms not otherwise
defined herein shall have the meaning ascribed to such terms in the Franchise
Agreement to which this line extension policy is attached.
The Communications Administrator or his designee may, at the sole
discretion of the Administrator or the Administrator's designee, waive in
writing in a particular case the requirement of extending service pursuant to
this Line Extension Policy.
The following criteria will be employed:
1) Those areas where the density is 35 homes per mile or greater
will pay no line extension charges. This also pertains to homes
passed by feeder supplying the high density area which are
included in the 35 homes per mile or greater density calculation.
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July 15, 1998
Page 2
2) Media General Cable of Fairfax County, Inc. ("MGC" or "Media
General Cable") will extend Cable Service to areas where
densities are lower than 35 homes per mile at the following
additional cost per installation:
DENSITY LINE EXTENSION
CATEGORY. / MILE SURCHARGE
--------- ------ ---------
I 30-34 $ 75.00
II 25-29 $100.00
III 17-24 $125.00
These are maximum line extension charges for each density
category. MGC has the right to provide any discounts or waivers
as appropriate. All calculated density results will be rounded to
the next higher integer.
3) Subscribers electing to receive Cable Service under the extension
plan will be eligible for a pro rata refund depending on the
number of additional Subscribers taking service during the 24
months following activation of service to each extension area.
Records will be maintained for each extension segment, including
the number of initial subscribing customers and the number of
customers after 24 months of service to each segment.
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July 15, 1998
Page 3
The density of each service area subject to line extension
surcharges will be recalculated 24 months after initial
activation. This will be the only time Media General Cable will
perform a density calculation. If the density has increased to
the point where a lower surcharge would be in effect, the
difference between amounts previously paid and the recalculated
amounts will be refunded.
4) Line extension density is calculated using the following formula:
Underground Density Calculation:
--------------------------------
Homes Per Mile (HPM) = HP
----------------------
CBTF + DBTF + TF
Aerial Density Calculation:
---------------------------
Homes Per Mile (HPM) = HP
---------------------
TF + SF
Where:
CBTF = Cable Bearing Trench Footage
DBTF = Drop Bearing Trench Footage
TF = Transportation Footage
SF = Strand Footage
HP = Homes Passed
HPM = Homes Per Mile
<PAGE>
July 15, 1998
Page 4
a) Density calculations will be based on cumulative homes
passed along the distribution system routing following the
most direct path used by distribution system cables, except
as noted below in sub-paragraphs 4(b), 4(c) and 4(d). As
path split points are encountered, each path outward from
the split point will be calculated as if the other outward
paths do not exist.
(The electronic signal path will always be longer than or
equal to the path used by distribution system cables).
Note: All pedestal locations for underground construction are to
be indicated as 50' of Cable Bearing Trench Footage unless
specific locations have been agreed to which are further
from the main trench, in which case the longer footage will
be indicated.
b) Underground sub-divisions for purposes of homes passed,
system mileage and corresponding density calculations will
be considered as total quantities at the point of connection
to the closest primary distribution system path split point
outside of the sub-division (See Diagram 1).
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July 15, 1998
Page 5
In cases where two sub-divisions, or sections of the same
sub-division, are served from the same split point off the
primary distribution system path, then these sub-divisions,
or sections, shall be added together for purposes of
calculating density (See Diagram 2).
Further, if a sub-division is fed from several split points
from the primary distribution system path because of the
particular design routing chosen, but could technically be
served from a single split point, then the footage for only
one split point shall be used in the density calculation
(See Diagram 3).
c) Underground sub-divisions will pay a line extension
surcharge based on the calculation performed according to
the formula under subparagraph 4a or subparagraph 4b,
whichever charge is the lesser (e.g., if the cumulative
density of an underground sub-division is higher than the
individual sub-division density, or vice versa, the higher
density will be the basis for line extension surcharges).
d) Areas which have a cumulative density less than 17 HPM which
are connected to split points which have a system density of
17 HPM or greater will be recalculated from the split point.
<PAGE>
July 15, 1998
Page 6
Areas with a recalculated cumulative density of 17 HPM or
greater will be charged according to the lower of the
recalculated cumulative density or the system density at the
split point.
e) Density calculations will be made both at the time of design
and not earlier than 2 years from the date each area is
released for marketing. In areas with an initial density of
17 HPM or greater, any rebate due will be sent within 2
years and 90 days from the date the area is releasing for
marketing. In areas where the initial density is below 17
HPM, any rebates due will be made within 90 days of
discovery. Rebates will be issued to the Subscriber who
initially paid the line extension surcharge. MGC shall make
reasonable attempts to locate said Subscriber should he/she
no longer be the owner of the affected dwelling unit.
f) At the time a request is made for cable TV service in low
density areas, Media General Cable shall canvass homes in
the immediate area and along the right-of-way, if
applicable, for inclusion in the construction estimates. If
reasonable attempts to include affected homeowners are
unsuccessful, it will be the requesting homeowner's
responsibility to make further attempts to canvass affected
lot owners. Reasonable attempts by Media General Cable to
contact affected homeowners shall include at least one
on-site visit. If there is no response on-site, then a door
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July 15, 1998
Page 7
hanger shall be left at the residence. If there is no
response to the doorhanger, then contact shall be attempted
by either a follow-up letter or telephone call.
A drop is defined as that cable (RG type or its equivalent and,
if necessary, hardline) necessary to supply only a single
dwelling unit. Where drops in excess of 200' in length are
required, MGC will charge the cost of time and materials for the
portion of the drop exceeding 200'. The drop will be computed
from the feeder termination or tap point, whichever is
appropriate, to the house.
(A) DEFINITIONS
These definitions apply to the line extension section only and may not
apply to other sections of the Franchise Agreement.
HOMES PASSED (HP)
The total number of occupiable residential dwelling units (occupied or
unoccupied) which are shown on current real property tax identification maps of
Fairfax County, VA with the following exceptions:
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July 15, 1998
Page 8
1) Adjoining lots owned by a common owner will be deducted if they do not
contain separate residences and contain improvements which indicate
that they are not intended to contain a residence (e.g. - swimming
pool, tennis court, etc.).
This is intended to preclude lots in areas where the owners are using
adjacent lots for purposes other than residential development. If the
improvement is so located to facilitate future development, the lot
will be included in the density figure.
2) Future residential developments which are a matter of public record as
being permitted and will be developed within a two-year period of
initial Subscriber activation should also be included in the design
and density figures.
Reasonable accuracy is expected based on information available at the
time of design, and any supplemental information affecting density
which is available at the time of installation. The intent of this
exception is to reduce future accounting problems associated with the
rebating procedures in Section 3 above. Those areas anticipated to
increase density to levels above 16 HPM or which will change
categories (I, II, or III) within the rebate period should be
considered to have that density at the time of design.
<PAGE>
July 15, 1998
Page 9
CABLE BEARING TRENCH FOOTAGE (CBTF)
Trench Footage and Road Bore Footage which is designed to contain
distribution system cables within a sub-division or across private
property and feeder cables between the cable entry to the housing
sub-division or individual lots and the closest previously occupied
lot along the designed cable routing. Any footage within the existing
plant as of the Effective Date, or footage along the border of such
existing plant intended to serve or serving homes within existing
plant, is not to be included in this unit.
DROP BEARING TRENCH FOOTAGE (DBTF)
Trench Footage and Road Bore Footage which is designed to contain any
RG cables or equivalent cables within a sub-division or across
privately-owned property which are not intended to be connected to the
lot where located, or, if located in a publicly or privately owned
right-of-way, the lot responsible for maintenance of the right-of-way
at this point.
STRAND FOOTAGE (SF)
Aerial feeder footage along the messenger strand used to support
distribution system cables.
(i) Distribution System
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July 15, 1998
Page 10
That portion of the CATV System intended to connect the signal
origination point (Headend or Hubsite) to the Subscriber Drop using
cable placed in the rights-of-way dedicated for public street
purposes, or using privately-owned rights-of-way to the feeder
termination point(s) for one or more drops.
(ii) Subscriber Drops
That portion of the CATV System intended to connect the distribution
system, as defined above, to an individual Subscriber dwelling along
the routing used by telephone or electric facilities, unless an
alternate routing is acceptable to the homeowner and MGC.
(iii) System Mileage
The transportation footage, strand footage, cable bearing trench
footage, and drop bearing trench footage necessary to connect the
Subscriber drop to the distribution system, converted to miles.
(iv) Density
The ratio of homes passed to system mileage, expressed in homes per
mile (HPM).
<PAGE>
July 15, 1998
Page 11
Cumulative Density - The ratio of total Homes Passed to total
System Mileage along the most direct path used by Distribution
System cables to the point at which the Density is being
computed.
System Density - The higher of:
1) The Cumulative Density at a point; or
2) The highest Cumulative Density beyond a point which is
located along the most direct route to the point of higher
Cumulative Density.
(v) Long Drop
Feed to a single dwelling unit for which the Subscriber drop will
exceed 200'.
TRANSPORTATION FOOTAGE (TF)
The cable bearing strand footage and the cable bearing trench footage
not used as feeder, running between the cable entry to the housing
sub-division or individual lots and the closest previous occupiable
lot along the designed cable routing.
ELECTRONIC SIGNAL PATH (ESP)
The path the signal travels along the cable from the headend or
hubsite to the Subscriber.
<PAGE>
APPENDIX 2: I-NET APPENDIX
TABLE OF CONTENTS
PAGE
1. THE APPENDIX AND THE APPENDIX DOCUMENTS..............................1
2. I-NET FACILITIES AND EQUIPMENT.......................................7
3. PAYMENT.............................................................11
4. OWNERSHIP, MAINTENANCE, AND USE.....................................18
5. THE GRANTEE.........................................................24
6. SUBCONTRACTORS......................................................27
7. CHANGES IN WORK.....................................................27
8. TERMINATION.........................................................28
9. MISCELLANEOUS.......................................................29
<PAGE>
I-NET APPENDIX
1. THE APPENDIX AND THE APPENDIX DOCUMENTS
(a) This Appendix ("Appendix") is an integral part of a Franchise
Agreement dated as of June 1, 1998, between Fairfax County, Virginia ("County"),
and Media General Cable of Fairfax County, Inc. ("Grantee"). It hereby
incorporates by reference and expressly makes a part hereof (i) any Change
Orders as described in Section 7 herein and (ii) any Work Orders as described in
Section 4(b)4(B) Grantee shall effect restoration of connectivity of I-Net plant
that is not bundled together with HSN plant as promptly as practicable within
the estimated restoration times reported to the County pursuant to Section
Response and Restoration Times. The herein (collectively, the Appendix, Change
Orders, Work Orders, and Franchise Agreement are referred to herein as the
"Appendix Documents").
(b) The Appendix Documents and any written amendments made in
accordance with the terms of such documents constitute the entire and exclusive
agreement between the County and the Grantee with reference to the Grantee's
design, construction, and maintenance of the I-Net and the County's payment for
the use thereof. Specifically, without limitation, the Appendix Documents
supersede all prior written or oral communications, representations and
negotiations, if any, between the County and the Grantee relating to the design,
construction, and maintenance of the I-Net and payment for the use thereof.
(c) The Appendix is intended to be an integral whole and shall be
interpreted as internally consistent. In case of disagreement among any of the
Appendix Documents, then the terms of the Change Orders shall supersede the
terms of the Appendix, as amended from time to time.
(d) When a word, term or phrase is used in the Appendix Documents, it
shall be interpreted or construed as follows: First, as defined in this Appendix
or in the body of the Franchise Agreement; second, if not defined, according to
1
<PAGE>
its generally accepted meaning in the construction industry; and third, if there
is no generally accepted meaning in the construction industry, according to its
common and customary usage. As used in this Appendix, the terms set forth below
shall have the following meanings:
(1) "Actual Costs" shall include only the following:
(A) Costs of necessary materials, including fiber optic
cable, equipment and hardware, tools, supplies, fuel,
power, rentals, freight charges and services;
(B) Payments made by the Grantee to subcontractors in
accordance with the requirements of the subcontracts;
(C) Wages and salaries of the Grantee's employees to the
extent that they are performing Work on the I-Net,
whether or not employed at the work site, including,
but not limited to, those employees involved in
designing and mapping the I-Net to the extent such
designing and mapping is over and above any direct cost
that the Grantee would incur in designing and mapping
its HSN, and also including their unemployment
compensation, social security and other normal and
customary benefits, for such part of their time as is
employed on this Work;
(D) Payroll taxes and insurance and contributions
applicable to wages and salaries of the Grantee's
employees to the extent that they are performing Work
on the I-Net, whether or not employed at the work site,
and sales, excise, business and occupation, and other
2
<PAGE>
taxes paid by the Grantee on materials, equipment,
supplies and services chargeable to the design and
construction of the I-Net;
(E) Any labor force travel expenses directly chargeable to
the Work on the I-Net;
(F) Costs of necessary permit fees actually paid by the
Grantee, including right-of-construction permit fees
and inspection fees, if any, related to the I-Net;
(G) Actual rental costs typical in the construction
industry for necessary temporary facilities, machinery,
equipment and tools used in the Work on the I-Net;
(H) That portion directly attributable to the design and
construction of the I-Net of premiums for insurance and
bonds;
(I) Losses, expenses, and cost of reconstructing any Work
destroyed or damaged, not compensated by insurance or
otherwise, and of enforcing the subcontracts and
performance thereunder sustained by the Grantee in
connection with the Work, provided they have resulted
from causes other than the fault or negligence of the
Grantee;
(J) Costs of removal of debris generated by Grantee during
performance of the Work on the I-Net;
(K) Costs incurred in performance of the Work on the I-Net
in taking action to prevent threatened damage, injury,
or loss in case of an emergency affecting the safety of
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<PAGE>
persons and property;
(L) Overhead costs incurred in connection with the Work
equal to eighteen percent per cent of costs otherwise
specified in this Section "1(d)(l);
(M) Inflation costs incurred in connection with the Work as
of the Delivery date specified in Section 2(e).
Delivery shall take place within 48 months of the
Effective Date of the Franchise Agreement. Nothing in
this Appendix shall be construed to prevent the Grantee
from earlier Delivery., up to, but not exceeding, ten
percent per cent of costs otherwise specified in this
Section 1(d)(1), shall include only the following:, as
determined from the Consumer Price Index (All Items)
for the United States, published by the United States
Department of Labor, Bureau of Labor Statistics, with
December 1997 as the base month, provided that the
total of overhead and inflation costs shall not exceed
twenty-eight per cent of costs otherwise enumerated in
this Section 1(d)(1) shall include only the following:
exclusive of overhead and inflation;
(N) Other costs incurred on the relevant portion of the
I-Net in the performance of the Work if and to the
extent approved in advance in writing by the County;
(O) Other reasonable costs actually incurred due to
unanticipated contingencies in connection with the
I-Net in performance of the Work, to the extent that
the following conditions are satisfied--
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(i) the Grantee shows that it did not
anticipate, and should not
reasonably have anticipated, such
contingencies at the time of
execution of this Appendix; and
(ii) such contingencies occurred prior to
Delivery; and
(P) Costs due to the fault, negligence, or delay of the
County, or interference of the County in the
performance of the Work. Actual Costs shall not
include:
(Q) Salaries and other compensation of the Grantee's
employees stationed at the Grantee's principal office
or offices other than the Work site, except as provided
in Sections 1(d)(l)(C) and 1(d)(l)(D);
(R) Overhead and general expenses, except as expressly
included in Section 1(d)(l)(L);
(S) The Grantee's capital expenses, including interest on
the Grantee's capital, employed for the Work;
(T) Costs due to the fault, negligence or delay of (i) the
Grantee, (ii) subcontractors, (iii) anyone directly or
indirectly employed by any of them, or (iv) those for
whose acts any of them are liable (excluding the
County, its elected and appointed officials, officers,
boards, commissions, commissioners, agents, and
employees), including, but not limited to, costs for
(a) the correction of damage, (b) defective or
nonconforming work, (c) disposal and replacement of
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materials and equipment incorrectly ordered or
supplied, and (d) in making good damage to property not
forming a part of the Work.
(2) "Dark Fiber" means fiber optic strands that are capable of
carrying voice, video, and data transmissions but that have not yet been
activated.
(3) "Delivery" means the Grantee's completion of design and
construction of the Dark Fiber to all the sites ("I-Net Sites") specified in
Appendix 4 to the Franchise Agreement (the "I-Net Site Appendix"), and the
County's acceptance of all such Dark Fiber.
(4) "Headend" means equipment that centrally receives and controls
signals to be transmitted through a Cable System, usually including antennas,
preamplifiers, frequency converters, demodulators, modulators and related
equipment. Both the building and the equipment which receive the signals and
process them before application to a Cable System are known as the Headend.
(5) "Hub Site" means an HSN control point located between a Headend
and a node.
(6) "Institutional Network" or "I-Net" means a network of Dark
Fibers related to and, to the extent deemed feasible by the Grantee, jointly
constructed with the HSN System Upgrade of Grantee's Cable System; such network
is to be designed and constructed by the Grantee and is not generally available
to Subscribers of the Grantee's Cable System. As used in this Appendix, the term
"I-Net" shall not include any electronics or other equipment needed to activate
Dark Fibers.
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(7) "Purchase Price" means the County's payments to Grantee as set
forth in Article 3 herein.
(8) "Work" means whatever is required of the Grantee to perform and
complete its duties under this Appendix.
2. I-NET FACILITIES AND EQUIPMENT
(a) The Grantee shall design and build an I-Net with the following
minimum characteristics:
(1) The I-Net shall be a bidirectional, fully fiber-optic network
designed and constructed with single-mode fiber, in a design so that each of the
designated service locations can originate and receive fully interactive video,
data and voice signals. Two linked fiber optic backbone rings shall interconnect
approximately eight to ten Hub Sites at a single point, to be located at one of
the Grantee's Headends. On each ring, sixteen designated dark single-mode fibers
will be dedicated for the I-Net.
(2) The Grantee shall collocate I-Net fiber with HSN fiber whenever
reasonably feasible based on cable industry practices and anticipates designing
and constructing the I-Net simultaneously with the HSN. The I-Net fibers shall
be separate from any fibers utilized for the HSN, and the County shall have only
such property rights in the I-Net fibers as are set forth in Section 4(a).
(3) At the Headend, I-Net fibers shall be terminated and labeled
using ST-type connectors within a separate locked area segregated from the
non-I-Net equipment within the Headend facility (the "Headend I-Net Service
Area"). The Headend I-Net Service Area shall have a minimum area of 200 square
feet and have building security, sufficient heating and air conditioning. 48 V
DC and 120 V AC power shall be available for the Headend I-Net Service Area,
7
<PAGE>
including backup power as specified for the HSN at this site in the Franchise
Agreement. County personnel shall have access twenty-four hours a day, seven
days a week, to the Headend I-Net Service Area, and the County shall be able to
restrict access to the Headend I-Net Service Area to specifically authorized
personnel, except that the Grantee shall have access to the Headend I-Net
Service Area as required to ensure safety and security.
(4) At each Hub Site, I-Net fibers shall be terminated and labeled
using ST-type connectors within a separate locked area within the Hub Site (the
"Hub Site I-Net Service Areas") segregated from the non-I-Net equipment at that
site. The Hub Site I-Net Service Area at each Hub Site shall have a minimum area
of 100 square feet and have building security, sufficient heating and air
conditioning. 48 V DC and 120 V AC power shall be available, including backup
power as specified for the HSN at each such site in the Franchise Agreement.
County personnel shall have access twenty-four hours a day, seven days a week,
to the Hub Site I-Net Service Area at each Hub Site. The County shall be able to
restrict access to the area to specifically authorized personnel, except that
the Grantee shall have access to the Hub Site I-Net Service Areas as required to
ensure safety and security.
(5) The Headend I-Net Service Area and the Hub Site I-Net Service
Areas shall be shared by (i) the County and (ii) any other local governments
that are within the external boundaries of the County and the Cities of Falls
Church and Fairfax, if so authorized by these municipalities to which the
Grantee has provided an I-Net. If any such other local government's equipment is
collocated at a site with the County, then the Grantee shall make all reasonable
efforts to configure the assigned space so that all equipment required by such
collocated parties can readily be accommodated. The County shall identify the
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power and HVAC requirements for the Headend and Hub Site Service Areas not later
than sixty days after the Effective Date of the Franchise Agreement, and the
Grantee shall cooperate with the County in satisfying such requirements.
(6) At least one set of at least six dark single-mode fibers each
will be built to each I-Net site designated by the County as specified in this
Section, in addition to any fibers provided for return feeds from PEG
Origination Sites under the Franchise Agreement. At each I-Net site, fibers
shall be terminated using ST-type connectors at a demarcation point to be agreed
upon by the Grantee and the County up to twelve inches inside the building wall
and consistent with Grantee's direction of approach to the building, consistent
with the FCC's rules as of the effective date of this Appendix or as later
amended (the "Demarcation Point"). Any I-Net fiber starting at the Demarcation
Point and extending outward from the building shall be deemed to be on the
Grantee's side of the Demarcation Point, and any I-Net fiber starting at the
Demarcation Point and extending inward toward the building shall be deemed to be
on the County's side of the Demarcation Point. On the County's side of the
Demarcation Point, the Grantee shall provide, as part of the Purchase Price for
that site, a coil of fiber-optic cable of a length reasonably requested by the
County to permit the County or the facility owner to bring the connection to the
equipment closet in accordance with normal industry practice, provided, however,
that within thirty days after the Grantee's presentation of the design for each
site, the County shall specify the length of the fiber coil it requires for that
site.
(7) The fiber-optic plant shall be installed to industry standards.
The maximum link loss shall be 0.7 dB/km. at 1310 nm, plus a maximum of 0.2 dB
loss for each splice. The average loss shall not exceed 0.3 dB per connector.
The maximum allowed loss shall be 0.75 dB per connector. The Grantee shall
provide documentation of acceptance testing.
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(8) Aerial cable for the I-net may be installed free-standing or
overlashed to existing strand. Where required by utility code for road and rail
crossings, new underground fiber optic cable shall be buried in conduit composed
of concrete or in PVC pipe or polyethylene pipe, or may be directly buried if
enclosed in armored cable. Elsewhere, either conduit or armored cable shall be
used, at the Grantee's option.
(b) Coordination of Design and Construction.
(1) The Grantee shall coordinate its design and construction
planning with the County so that, in addition to the notice provided to the
County pursuant to the system design submission process in the Franchise
Agreement, the County shall have as much notice as reasonably possible so that
it can plan for activation and use of the I-Net as the Grantee builds out the
I-Net fiber.
(2) If the Grantee extends fiber beyond the scope of its original
design for its System Upgrade, it shall provide reasonable notice to the County
so that the County and the Grantee may, if they choose, enter into an agreement
for design and construction of new I-Net sites to be served by such extended
fiber routings and thus reduce the cost of design and construction.
(c) Acceptance. Within twelve months after the Effective Date of the
Franchise Agreement, the Grantee shall provide the County with an I-Net design
plan, including but not limited to maps and specifications for the proposed
I-Net. Construction standards shall be as specified in Section 5(b) of the
Franchise Agreement. Within six months after the effective date of the Franchise
Agreement, the Grantee and the County shall, subject to the County's approval,
develop test procedures and standards for acceptance providing, at a minimum,
that for each segment the Grantee shall conduct tests at the end of the fiber
coil; the County's engineers may observe such tests and inspect the
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installation; the Grantee shall submit the test results to the County; the
County may re-test the segment if it is not satisfied with the results of the
Grantee's tests; and if the County does not object to the performance of a
segment within thirty days from the date the Grantee submits its test results to
the County, the County shall be deemed to have accepted that segment.
(d) Warranty. The Dark Fiber installed by the Grantee pursuant to this
Appendix shall be warranted against defects in materials and workmanship for 12
months after acceptance. Grantee's warranty excludes any remedy for change or
defect caused by abuse, modifications not executed by Grantee, improper
maintenance not performed by Grantee, improper operation, or normal wear and
tear under normal usage. This warranty is in addition to, and does not relieve
the Grantee from, its maintenance responsibilities pursuant to Section 4(b).
(e) Completion. Delivery shall take place within 48 months of the
Effective Date of the Franchise Agreement. Nothing in this Appendix shall be
construed to prevent the Grantee from earlier Delivery.
3. PAYMENT
(a) From a special fund composed of Franchise Fees and the Total Grants
collected by the County from the Grantee in accordance with the Franchise
Agreement and franchise fees collected by the County in accordance with any
other cable television franchise agreement, the County shall pay the Grantee for
the Indefeasible Rights of Use of all Dark Fiber to I-Net Sites furnished
pursuant to this Appendix at a price of $11,200,000.00, based on $28,000 per
site for the 400 I-Net Sites (the "Original Estimate"), as adjusted by any
Excess Amount as specified in subsection 3(b) below. The County and the Grantee
agree that all obligations and liabilities of the County pursuant to this
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<PAGE>
Appendix shall be limited to and payable solely from the special fund described
herein. It is understood and agreed by the County and the Grantee that nothing
in this Appendix or any other provision of the Franchise Agreement shall
constitute a pledge of the full faith and credit of the County or a bond or debt
of the County in violation of Section 10 of Article VII of the Constitution of
Virginia.
(b) The County's payment to the Grantee under this Appendix will
not exceed the Original Cost Estimate except as follows:
(1) Grantee will determine the Actual Cost of design and
construction of the I-Net, subject to the County's reasonable audit rights. To
the extent that the Actual Cost exceeds the Original Cost Estimate (the "Excess
Amount"), the cost of such excess will be shared as follows:
(A) Excess Cost up to four percent of the Original Cost
Estimate: paid by the Grantee
(B) Excess Cost from four percent to ten percent of the
Original Cost Estimate: paid half by the Grantee and
half by the County
(C) Excess Cost above ten percent of the Original Cost
Estimate: paid by the Grantee.
Thus, for example, if the Excess Amount is 11%, the County will pay the
Grantee an amount totaling 3% of the Original Cost Estimate and the Grantee will
be responsible for the remaining amount, totaling 8% of the Original Cost
Estimate.
(2) Additional payments may be specified in Change Orders executed
pursuant to Section 7 herein.
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<PAGE>
(c) Payment.
(1) The County shall pay the Grantee twenty-five percent of the
Original Cost Estimate on July 1, 1998.
(2) The County shall pay the Grantee the remainder of the Original
Cost Estimate, and any Change Order amounts as described in Section 7, according
to the following procedure until the Original Cost Estimate, as adjusted by any
Change Orders, has been paid in full.
(A) Each calendar year by April 1, beginning on April 1,
1999, the Grantee shall provide the County with a
reasonable estimate of its I-Net design and
construction costs for the period of one year beginning
on July 1 following the date of the estimate ("Estimate
Year").
(B) The County shall have thirty days to question the
Grantee's estimate of such costs.
(C) If the County and the Grantee agree on the amount of
the estimated costs before July 1 (the beginning of the
Estimate Year), the County shall make four quarterly
payments, each set at the sum of one-fourth of the
agreed-upon estimate, adjusted by any Change Orders
since the last such adjustment, during the Estimate
Year (on July 1, Oct. 1, Jan. 1, and Apr. 1).
(D) If, however, the County and the Grantee do not agree on
the amount of the estimated costs before July 1 (the
beginning of the Estimate Year), the County shall make
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<PAGE>
four quarterly payments, each set at one-fourth of the
following amounts (the "Default Estimates"), during the
Estimate Year (on July 1, Oct. 1, Jan. 1, and Apr. 1):
(i) Year 2 (1999-2000): thirty-five
percent of the Original Cost
Estimate, adjusted by any Change
Orders since the last such
adjustment;
(ii) Year 3 (2000-2001): forty percent of
the Original Cost Estimate, adjusted
by any Change Orders since the last
such adjustment;
(iii) Year 4 (2001-2002): the remainder of
the Original Cost Estimate, adjusted
by any Change Orders since the last
such adjustment;
provided, however, that the total payment
for the Estimate Year shall be limited to
the remainder of the the Original Cost
Estimate adjusted by any Change Orders since
the last such adjustment if that total is
less than the amount based on the percentage
above for Year 2 or Year 3.
(E) Within sixty days after the end of each Estimate Year
(that is, by July 30), the Grantee shall report to the
County its Actual Costs for the Estimate Year, and the
estimate for that Estimate Year will be trued up
against the Actual Costs as follows. If the Grantee's
Actual Costs were below the estimate for that Estimate
Year, the difference between the two (the "Deficit")
shall be offset against the County's next (Oct. 1)
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<PAGE>
payment (and, if the Oct. 1 payment is not sufficient
to cover the Deficit, against succeeding payments until
the Deficit has been completely absorbed). If the
Grantee's Actual Costs were above the estimate for that
Estimate Year, the County shall pay the Grantee the
difference between the two (the "Deficit") at the time
of its normal Oct. 1 payment.
(F) If the quarterly payments for a given Estimate Year
were set pursuant to the Default Estimate rather than
by agreement of the parties, and if the Deficit for
that year exceeds fifteen percent of the Default
Estimate in either direction, then the party that pays
the Deficit shall also pay interest at the rate
specified in Section 3(e) at the time of the true-up
specified in Section 3(c)(2)(E). No such interest shall
apply in truing up Year 1, for which the 25 percent
payment set in Section The County shall pay the Grantee
twenty-five percent of the Original Cost Estimate on
July 1, 1998. shall be deemed to have been set by
agreement of the parties.
(G) The payments described in this Section 3(c)(2) shall
end when the County has paid the entire Original Cost
Estimate adjusted by any Change Orders.
(3) In addition to the amounts described in Section 3(c)(l) and
3(c)(2), if at any time the Grantee finds that its Actual Costs exceed the
amount of the Purchase Price it has thus far received from the County, the
Grantee may demonstrate this shortfall to the County with appropriate
documentation, and the County shall pay the amount of the shortfall along with
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<PAGE>
its next quarterly payment, or within thirty days if no more quarterly payments
remain. Any amounts so paid by the County that exceed the Original Cost Estimate
shall be counted as part of the Excess Cost pursuant to Section 3(b)(l).
(4) Following Delivery pursuant to Section 2(e), the Grantee shall
submit claims for any Excess Cost incurred to the County with appropriate
documentation. The County shall promptly review such claims for Excess Costs and
pay any such claims it does not dispute, pursuant to Section 3(a). If the County
disputes any such claims, it shall so notify the Grantee within thirty days of
the Grantee's submission of the claim, and the parties shall proceed as swiftly
as possible to resolve such disputes and to complete payment of any amounts due
to the Grantee pursuant to Section 3(a).
(5) Notwithstanding any other provisions of this Appendix, if the
Purchase Price has not been paid in full by the end of the term of the Franchise
Agreement, then the remaining amounts of the Purchase Price due to the Grantee
for all I-Net Sites actually designed and constructed shall be immediately due
and payable by the County to the Grantee upon the termination of the Franchise
Agreement, except as the Grantee and the County may otherwise agree.
(6) The Grantee shall reasonably cooperate with the County in
taking the steps necessary so that the I-Net is, to the maximum extent
consistent with applicable law, eligible for funding pursuant to the universal
service provisions of the Telecommunications Act of 1996, 47 U.S.C. ss. 254, and
the implementing regulations of the Federal Communications Commission, 47 C.F.R.
Part 54, provided, however, that neither party shall be required to take any
such steps that would adversely affect its rights under this Appendix,
materially alter the cost or time for performance under this Appendix, or
prevent it from obtaining the benefits of this Appendix.
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<PAGE>
(d) Pole Attachment Fees. The County shall cooperate with the Grantee
in obtaining any necessary pole attachment arrangements for the I-Net. Where
I-Net and HSN fiber optic sheaths are bundled together, the Grantee shall be
responsible for any pole attachment costs attributable to the I-Net. Where such
sheaths are not bundled together, the County shall reimburse the Grantee for any
incremental pole attachment fees reasonably incurred by the Grantee to provide
the I-Net. The Grantee shall submit monthly statements for any such fees to the
County, and these statements shall be payable on receipt by the County, subject
to the County's reasonable audit rights. The County shall use its best efforts,
upon the Grantee's request, to support the Grantee in taking the position that,
as part of public, educational, and governmental access provided pursuant to a
cable franchise, the I-Net would not result in any incremental pole attachment
fees pursuant to applicable law, provided, however, that neither party shall be
required to take any such steps that would adversely affect its rights under
this Appendix, materially alter the cost or time for performance under this
Appendix, or prevent it from obtaining the benefits of this Appendix.
(e) Audit Rights. The County shall have the right for a period of one
year after payment of the Excess Amount to notify the Grantee in writing of an
audit of the Excess Amount. If the County gives such written notice to the
Grantee within that one-year period, the one-year period shall be tolled for one
additional year to allow the County to conduct an audit. Any legal action by
either party relating to the Excess Amount payment will toll the remaining term,
if any, of the one-year time period and the one-year audit period with respect
to that payment. The Grantee shall keep full and detailed records and accounts
and exercise such controls as may be necessary for proper financial management
under the Appendix. Grantee shall afford the County's authorized personnel and
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<PAGE>
independent auditors, if any, full access to all of the Grantee's books,
records, correspondence, instructions, drawings, receipts, vouchers and other
documents relating to the Work under this Appendix. The Grantee shall preserve
all such records for two years after payment of such invoice, and, if the County
should protest in writing, for such additional time as may be necessary to
resolve the protest. If the audit results in payment or repayment by one party
to the other, such payment shall be with interest from the date of the original
payment at the then-current IRS rate for interest on tax liabilities.
4. OWNERSHIP, MAINTENANCE, AND USE
(a) Ownership. In consideration for the Purchase Price, the County
shall own the indefeasible right to use fiber optic plant dedicated to the I-Net
and any extensions or replacements thereof installed by the Grantee, subject
only to such mechanic's or other liens as Grantee may have pursuant to state law
and to any settlement upon termination pursuant to Section 8(c) (the
"Indefeasible Rights of Use"). The County's Indefeasible Rights of Use shall be
perpetual and shall survive any termination of this Appendix and/or the
Franchise Agreement. In the event the Franchise Agreement is terminated, the
Grantee shall not remove any of the Dark Fiber installed pursuant to this
Appendix.
(b) Maintenance. Grantee shall maintain, repair and, as necessary,
replace I-Net plant on the Grantee's side of the Demarcation Point in accordance
with the following procedures and conditions:
(1) Preventive and Routine Maintenance. Where I-Net and HSN fiber
optic sheaths or coaxial cable are bundled together, Grantee shall perform
routine and preventive maintenance on I-Net plant in the same time and in the
same fashion as routine and preventive maintenance are performed for the HSN,
without charge to the County. In the course of performing routine and preventive
maintenance, Grantee shall use its best efforts to identify potential trouble
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<PAGE>
conditions warranting repair or replacement of I-Net plant not bundled together
with HSN plant. Grantee shall as promptly as practicable report potential
trouble conditions to the County, but Grantee shall not replace or repair I-Net
plant for which the County is responsible for the cost of maintenance having
only potential problems unless and until it has received a notice to proceed
from the County.
(2) Service Outages; Outage Categories. For purposes of this
Appendix, the term "Service Outage" shall mean any condition or damage affecting
the I-Net plant that precludes or substantially impairs the transmission of
information on the I-Net or a portion thereof. Response and restoration times
are determined by the category of service outage as follows:
(A) Critical Outage: Loss of the backbone ring fiber link,
or the loss of service to one of the circuits feeding a
critical facility, such as the Government Center, the
Emergency Operations Center on Woodburn Road, or the
Fairfax County Public Schools computer center located
at Wilton Woods. Approximately ten to fifteen such
critical circuits will be designated by the County by
written notice to the Grantee not later than sixty days
after the Effective Date of the Franchise Agreement,
and any subsequent change in such critical circuits
shall be provided by the County to the Grantee in
writing.
(B) Major Outage: Total loss of service to an I-Net Site
other than one listed as critical pursuant to Section
4(b)(2)(A).
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(C) Minor Outage: Loss of service on a single fiber to any
I-Net Site. (D) Service Interruption: Reduction in
signal throughput to the point where the signal on a
circuit falls below acceptable standards.
Notwithstanding the foregoing classifications, the
County may, in its discretion, reclassify any specific
service outage affecting I-Net plant upon notice to
Grantee, and such reclassification shall govern
response and restoration times.
(3) Response to Outages and Interruptions. The response time (the
point at which the Grantee is engaged in restoration of service) for all Service
Outages, whether reported to Grantee by the County or independently identified
by Grantee, shall be as specified in Section 4(b)(6). Upon identification of a
Service Outage, Grantee shall, within such response time, have qualified
personnel on site to investigate the outage, assess the cause and commence
necessary repairs. To the extent that necessary repairs resulting in restoration
of connectivity on the I-Net can be immediately accomplished, Grantee shall
effect such repairs in connection with its investigation of the cause of the
Service Outage. To the extent that repairs cannot be immediately effected,
Grantee shall, within the response time, inform the County of the apparent cause
of the Service Outage, the anticipated time for restoration of connectivity and,
in cases where the County bears the cost of maintenance, the estimated cost of
restoration connectivity.
(4) Restoration of Service.
(A) Grantee shall, to the maximum extent practicable,
effect restoration of connectivity of any category of
service alarm involving I-Net plant that is bundled
together with HSN plant at the same time as restoration
of co-located HSN plant.
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<PAGE>
(B) Grantee shall effect restoration of connectivity of
I-Net plant that is not bundled together with HSN plant
as promptly as practicable within the estimated
restoration times reported to the County pursuant to
Section 4(b)(6) and shall use its best efforts to
effect such restoration within the service objectives
set forth in Section 4(b)(6); provided, however, that
in the case of any Service Outage affecting I-Net plant
that is not bundled together with HSN plant, the County
may, pursuant to a work order issued to the Grantee
("Work Order"), require Grantee to engage the services
of one or more subcontractors to effect such
restoration.
(C) In the case of a Service Outage involving more than one
category of Service Outage or multiple service outages
involving more than one category of Service Outage,
Grantee shall restore connectivity in the order
specified in Section 4(b)(2), or such other order of
priority as the County reasonably requires. In all
cases involving Service Outages resulting from I-Net
plant that is bundled together with HSN plant, Grantee
shall give priority to restoration of the I-Net plant.
(5) Cost of Maintenance. Where I-Net and HSN plant are bundled
together, the Grantee shall provide maintenance without any charge to the
County. Where such plants are not bundled together, the County shall bear the
Actual Cost of maintenance related to such I-Net plant. The Grantee shall submit
monthly statements to the County for any such Actual Cost of maintenance related
to such I-Net plant, and the County shall pay these statements within sixty days
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<PAGE>
from the date the County receives them, subject to the County's reasonable audit
rights. The County shall pay interest at 1.5 percent per month for any late
payments under this Section 4(b)(5).
(6) Response and Restoration Times. The standards for response and
restoration of service as specified in Sections 4(b)(3) and 4(b)(4) are:
(A) Critical Outage: Response within two hours, minimum
temporary repair (fully operational connectivity, end
to end) completed within four hours, permanent repair
(conforming to all applicable standards as provided
herein) within twenty-four hours.
(B) Major Outage: Response within two hours during normal
business hours, four hours otherwise; temporary repair
completed within six hours, permanent repair within two
business days.
(C) Minor Outage: Response within two hours during normal
business hours, four hours otherwise; permanent repair
within three business days.
(D) Service Interruption: Response within two hours during
normal business hours, eight hours otherwise; permanent
repair within five business days.
Where, for reasons beyond the Grantee's control, restoration of service cannot
be completed in the above time periods even with the exercise of all due
diligence, the Grantee shall complete the restoration of service in the shortest
time possible.
(7) Where the County is obliged under subsection 4(b)(5). Where
I-Net and HSN plant are bundled together, the Grantee shall provide maintenance
without any charge to the County. Where such plants are not bundled together,
the County shall bear the Actual Cost of maintenance related to The to reimburse
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<PAGE>
the Grantee for maintenance costs, the Grantee shall immediately proceed to
effect repair or restoration pursuant to subsections 4(b)(4). and 4(b)(6). The
standards for response and restoration of service as specified in Sections
Response to Outages and Interruptions. The response time (the point at which the
Grantee is engaged in restoration of service) for all to by , but in addition
Grantee shall, as promptly as practicable, notify the Communications
Administrator or his designee of the expected duration of any outage and the
estimated costs of repair.
(8) For purposes of this Appendix, the term "Maintenance" shall
mean any action required to restore physical fiber optic connectivity on the
Grantee's side of the Demarcation Point to the performance standards specified
in Section 2.
(9) If any fiber optic cable in which the County has an
Indefeasible Right of Use should be cut or damaged, and the responsible party is
identified, then the County shall support Grantee's claims for damages against
the responsible party.
(10)Notwithstanding the foregoing provisions, all I-Net wiring on
the County's side of the Demarcation Point and all I-Net Headend electronics,
Hub Site electronics, and I-Net Site electronics, and I-Net wiring inside
building Demarcation Points are the sole responsibility of the County, except to
the extent that the Grantee's negligence or willful action may adversely affect
such equipment or facilities. All costs associated with locating or repairing
any failure which is reported to the Grantee but which subsequently is
determined to have occurred on the County's side of the Demarcation Point shall
be paid for by the County.
(c) Use.
(1) Parties authorized to use the I-Net ("Authorized Users") shall
include, to the extent approved by the County:
(A) the County and the Fairfax County Public Schools and
their agencies and subdivisions;
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(B) all political subdivisions of the State located within
the external boundaries of the County, and their
agencies and subdivisions and the Cities of Falls
Church and Fairfax;
(C) organizations within the external boundaries of the
County and the Cities of Falls Church and Fairfax that
are tax-exempt under Section 501(c)(3) of the Internal
Revenue Code.
(2) The County shall not use or permit any third party to use the
I-Net for resale or for the transmission of third party traffic.
(3) For purposes of this subsection 4(c), "third party traffic"
shall mean communications not involving at least one Authorized User, except
that, to the extent the I-Net is connected to the Internet and communications
not involving at least one Authorized User pass through but do not terminate at
I-Net sites or components in accordance with the normal processes by which
communications are propagated on the Internet, such communications shall not be
considered third party traffic.
(4) The Grantee shall have no control, responsibility or liability
for the signals distributed over the fiber optic components of the I-Net by the
County or other Authorized Users or for their benefit.
5. THE GRANTEE
(a) In no event shall the Grantee be liable for special, consequential,
exemplary, or punitive damages as a result of its performance or non-performance
in design, construction, installation, repair, or maintenance of the I-Net or in
the transmission of any service, information, data, voice or any other
transmission provided under this Appendix.
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(b) If the Grantee performs any of the Work knowing it involves a
recognized and material error, inconsistency or omission in the Appendix
Documents without notice to and approval of the County, the Grantee shall bear
the cost of correction. If the County permits the Grantee to perform any of the
Work knowing it involves a recognized and material error, inconsistency or
omission in the Appendix Documents without notice to and approval of the
Grantee, the County shall bear the cost of correction. The Grantee's provision
of its plans to the County shall not be construed to render the County
responsible for Grantee's planning or execution of the Work or for detecting any
errors, inconsistencies, or omissions therein, except to the extent specifically
set forth herein.
(c) The Grantee shall obey and pay for all permits, fees and licenses
necessary and ordinary for the Work except that the Grantee shall not pay for
permits required by the County, and except as otherwise expressly provided
herein or in the Franchise Agreement. The Grantee shall comply with all lawful
requirements applicable to the Work and shall give and maintain any and all
notices required by applicable law pertaining to the Work.
(d) The Grantee shall supervise and direct the Work, using the
Grantee's skill and attention in accordance with accepted construction industry
practices. The Grantee shall be solely responsible for and have control over
design and construction means, methods, techniques, sequences and procedures and
for coordinating all portions of the Work under this Appendix, unless Appendix
Documents provide for other specific instructions concerning these matters.
(e) The Grantee shall continuously maintain at its local office for the
benefit of the County one record of the Appendix marked to record on a
reasonably current basis any amendments and change orders made during design and
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<PAGE>
construction. Additionally, the Grantee shall make available for inspection by
the County at its local office the maps and specifications and other required
submittals.
(f) The Grantee shall keep the work areas related to the Work
reasonably clean of debris generated by the Grantee during performance of the
Work. Upon final completion of Work, the Grantee shall clean its work areas and
remove all waste generated by the Grantee therefrom.
(g) The County shall have access to the Work at all times from
commencement of the Work through its completion pursuant to applicable law. The
Grantee shall take all reasonable steps to provide access when requested,
provided, however, that such access shall not unreasonably impede efforts of the
Grantee, its subcontractors or others engaged in the Work.
(h) Indemnity
(1) The Grantee's obligation under this section shall include
indemnification for claims made by the Grantee's own employees or agents. In the
event the County incurs any judgment, award and/or cost arising therefrom
including attorneys' fees to enforce the provisions of this Article, all such
fees, expenses, and costs shall be recoverable from the Grantee.
(2) In claims against any person or entity indemnified hereunder by
an employee of the Grantee, a subcontractor, anyone directly or indirectly
employed by them or anyone for whose acts they may be liable, the
indemnification obligation hereunder shall not be limited by a limitation on any
amount or type of damages, compensation or benefits payable by or for the
Grantee or a subcontractor under its Workers Compensation Acts, Disability
Benefit Acts and other employee benefits acts.
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6. SUBCONTRACTORS
(a) A subcontractor is an entity which has a direct contract with the
Grantee to perform a portion of the Work.
(b) The Grantee shall not enter into a subcontract with a proposed
subcontractor with reference to whom the County has made timely and reasonable
objection. The Grantee shall not be required to subcontract with any party to
whom the Grantee has objection.
(c) All subcontracts shall afford the Grantee rights against the
subcontractor which correspond to those rights afforded to the County against
the Grantee herein.
7. CHANGES IN WORK
(a) After the County's designation of I-Net sites for design and
construction in the I-Net Site Appendix, the County may move, add, delete, or
change sites or construction requirements as it deems necessary. The County
shall pay Grantee, or (if the result of a deletion or change is to reduce the
Grantee's Actual Costs) the Grantee shall credit or reimburse the County, for
such moves, adds, deletions or changes at Grantee's Actual Cost of design and
construction at each site, which shall be in addition to the agreed pricing for
the I-Net Sites, and some or all of which design or construction for such moves,
adds, deletions, or changes may take place after 48 months from the effective
date of this Appendix.
(b) Such changes in the Work shall be made pursuant to Change Orders as
defined herein and performed under applicable provisions of this Appendix, and
the Grantee shall proceed promptly with such changes.
(c) "Change Order" shall mean a written order executed by the County
and the Grantee and issued after execution of this Appendix that authorizes and
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directs a change in the Work, an adjustment in any element of the Purchase Price
or the timing of any portion of the design or construction of the I-Net, or any
combination thereof.
(d) Execution of a Change Order by the parties shall constitute
conclusive evidence of such parties' agreement to the ordered changes in the
Work, and that this Appendix is thus amended to reflect the terms of the Change
Order.
(e) The Communications Administrator or his designee shall have
authority to execute Change Orders and Work Orders on behalf of the County.
8. TERMINATION
(a) If County shall fail to perform any material obligation to Grantee,
and if such failure shall continue unremedied for a period of thirty days after
the County's receipt of written notice from the Grantee of the Grantee's intent
to terminate performance, then the Grantee may terminate performance under this
Appendix and pursue any remedies it may have at law or equity.
(b) The County may for any reason whatsoever terminate performance
under this Appendix by the Grantee as to all but not less than all Work, but in
no event may the County terminate the Grantee's maintenance obligations under
this Appendix unless the Grantee's Franchise Agreement is terminated. The County
shall give at least a thirty-day written notice of such termination to the
Grantee, specifying when termination becomes effective.
(c) If performance under this Appendix is terminated pursuant to
subsections 8(a) or 8(a), the Grantee shall incur no further obligations in
connection with the Work or the relevant phase of the Work, and the Grantee
shall stop Work performed for the County pursuant to this Appendix when such
termination becomes effective. The Grantee shall also terminate outstanding
orders and subcontracts related to the terminated portion of the Work. The
Grantee shall settle any liabilities and claims arising out of termination of
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such subcontracts and orders. The Grantee and the County shall promptly settle
any discrepancy between the payments made by the County and the I-Net Sites
accepted by the County, so that the County pays the Actual Costs incurred by the
Grantee through the date of the County's notice of termination and such other
reasonable costs as are incurred by the Grantee after that date to close down
the Work, subject to any offsetting liabilities either party may have to the
other under this Appendix. The County shall retain pursuant to Section 4(a) its
Indefeasible Rights of Use as to all those and only those I-Net Sites that are
accepted over the life of the Appendix.
9. MISCELLANEOUS
If the Grantee shall be delayed or interrupted in the performance or
completion of the Work hereunder by any neglect or default of the County, or by
failure or delay by the County, VDOT or any governmental instrumentality, agency
or any utility to issue any permits or permission upon a timely request
submitted by the Grantee or its contractor representative and tender (except as
to a County permit) of any required permit fee, then it shall be excused from
any delay or failure to perform under the Appendix caused by such neglect or
default of the County.
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<TABLE>
Page 1
APPENDIX 3: PEG ORIGINATION SITE APPENDIX
<PAGE>
Appendix 3
PEG Origination Sites
<CAPTION>
Account Name Building # Site Name City
- ------------ ---------- --------- ----
<S> <C>
Luther Jackson Interm 3020 Gallows Rd FC
George Mason University 4400 University Dr FX
North Virginia CCollege 8333 Little River Tpke AN
Virginia Tech 7045 Haycock Rd FC
Police-EOC 3911 Woodburn Rd AN
Fairfax Cable Access 2929 Eskridge Rd FX
Chapel Sq Media Center 4414 Holborn Ave AN
Government Center 1 12000 Government Center Pky FX
</TABLE>
PEG origination sites for the Cities and Towns shall be identified in the
individual Cities' And Towns' Franchise documents.
<PAGE>
Page 1
APPENDIX 4: I-NET SITE APPENDIX
<PAGE>
<TABLE>
<S> <C>
- ---------------------------------------------------------------------
Acct name Bldg # St name
- ---------------------------------------------------------------------
DPW-Solid waster recycle 6901 Allen Park Rd
- ---------------------------------------------------------------------
Columbia Elem 6720 Alpine Dr
- ---------------------------------------------------------------------
Comprehensive Planning 2855 Annandale Rd
- ---------------------------------------------------------------------
James Lee Center 2855 Annandale Rd
- ---------------------------------------------------------------------
Water Authority 8560 Arlington Blvd
- ---------------------------------------------------------------------
Library-Thomas Jefferson 7415 Arlington Blvd
- ---------------------------------------------------------------------
Lorton Senior Center 7764 Armistead Rd
- ---------------------------------------------------------------------
Fire & Rescue-Lorton # 19 7701 Armstead Rd
- ---------------------------------------------------------------------
Lynbrook Elem 5801 Backlick Rd
- ---------------------------------------------------------------------
Fire & Rescue-Springfield # 22 7011 Backlick Rd
- ---------------------------------------------------------------------
Cooper Interm 977 Balls Hill Rd
- ---------------------------------------------------------------------
BOS-McLean Government Cntr 1437 Balls Hill Rd
- ---------------------------------------------------------------------
FCPA-Clark House 6332 Barcroft Mews Dr
- ---------------------------------------------------------------------
Keene Mill Elem 6310 Bardu Ave
- ---------------------------------------------------------------------
Little River Glen Senior Ctr 4001 Barker Ct
- ---------------------------------------------------------------------
Rolling Valley Elem 6703 Barnack Dr
- ---------------------------------------------------------------------
Mental Health Group Home 2605 Beacon Hill Dr
- ---------------------------------------------------------------------
Beech Tree Elem 3401 Beechtree Ln
- ---------------------------------------------------------------------
FCPA-Mt Vernon Ctr 2017 Belle View Blvd
- ---------------------------------------------------------------------
Herndon H.S. 700 Bennett St
- ---------------------------------------------------------------------
Westmore Elem 11000 Berry St
- ---------------------------------------------------------------------
Bren Mar Elem 6344 Beryl Rd
- ---------------------------------------------------------------------
Enterprise School 1629 Beulah Rd
- ---------------------------------------------------------------------
Wolf Trap Elem 1903 Beulah Rd
- ---------------------------------------------------------------------
Fire & Rescue-Franconia # 5 6300 Beulah St
- ---------------------------------------------------------------------
Anthony Lane Elem 7137 Beulah St
- ---------------------------------------------------------------------
Lanier Interm 3710 Bevan Dr
- ---------------------------------------------------------------------
Calico Corner 3504 Beverly Dr
- ---------------------------------------------------------------------
Economic Develp Auth. 8300 Boone Blvd
- ---------------------------------------------------------------------
Rockhill Group Home 15101 Braddock Rd
- ---------------------------------------------------------------------
Parklawn Elem 4116 Braddock Rd
- ---------------------------------------------------------------------
Braddock Comm Center 12111 Braddock Rd
- ---------------------------------------------------------------------
Braddock Road Group Home 10055 Braddock Rd
- ---------------------------------------------------------------------
FCPA -Wakefield Rec Ctr 8100 Braddock Rd
- ---------------------------------------------------------------------
Wakefield Park Comty Senior Ctr 8100 Braddock Rd
- ---------------------------------------------------------------------
Thomas Jefferson H.S. 6560 Braddock Rd
- ---------------------------------------------------------------------
Oak Wood Shelter Home 7117 Braddock Rd
- ---------------------------------------------------------------------
Weyanoke Elem 6520 Braddock Rd
- ---------------------------------------------------------------------
Franklin Sherman Elem 6630 Brawner St
- ---------------------------------------------------------------------
FCPA-Area 5 Maint Shop 4501 Brookfield Dr
- ---------------------------------------------------------------------
Clearview Elem 12635 Builders Rd
- ---------------------------------------------------------------------
Fire & Rescue-Fairview # 32 5600 Burke Centre Pky
- ---------------------------------------------------------------------
Terra Centre Elem 6000 Burke Centre Pky
- ---------------------------------------------------------------------
Library-Kings Park 9000 Burke Lake Rd
- ---------------------------------------------------------------------
Lake Braddock Secondary 9200 Burke Lake Rd
- ---------------------------------------------------------------------
Burke Center 9645 Burke Lake Rd
- ---------------------------------------------------------------------
Burke Centre Comm Ctr 9645 Burke Lake Rd
- ---------------------------------------------------------------------
FCPA-Area 4 Maint Shop 10401 Burke Lake Rd
- ---------------------------------------------------------------------
Facilities Management 4001 Burke Station Rd
- ---------------------------------------------------------------------
Franconia Group Home 6015 Bush Hill Dr
- ---------------------------------------------------------------------
Walnut Hill Center 7423 Camp Alger Ave
- ---------------------------------------------------------------------
Cameron Elem 3434 Campbell Dr
- ---------------------------------------------------------------------
Deer Park Elem 15109 Carlbern Dr
- ---------------------------------------------------------------------
Fire & Rescue-Fairfax # 26 5316 Carolina Pl
- ---------------------------------------------------------------------
Thoreau Interm 2505 Cedar Ln
- ---------------------------------------------------------------------
Cedar Lane Center 101 Cedar Ln SW
- ---------------------------------------------------------------------
Vienna Elem 128 Center St S
- ---------------------------------------------------------------------
Fire & Rescue-Vienna #2 400 Center St S
- ---------------------------------------------------------------------
Floris Elem 2708 Centreville Rd
- ---------------------------------------------------------------------
Fire & Rescue-Frying Pan # 36 2700 Centreville Rd
- ---------------------------------------------------------------------
BOS-Sully Dist 5900 Centreville Rd
- ---------------------------------------------------------------------
McLean Community Center 1440 Chain Bridge Rd
- ---------------------------------------------------------------------
Oakton Elem 3000 Chain Bridge Rd
- ---------------------------------------------------------------------
Library-Fairfax Regional 3915 Chain Bridge Rd
- ---------------------------------------------------------------------
VDOT- Permits 3565 Chain Bridge Rd
- ---------------------------------------------------------------------
Juvenile & Domestic Court 4000 Chain Bridge Rd
- ---------------------------------------------------------------------
Police & Fire-Massey Bldg 4100 Chain Bridge Rd
- ---------------------------------------------------------------------
Police Annex 4080 Chain Bridge Rd
- ---------------------------------------------------------------------
Sager School 4000 Chain Bridge Rd
- ---------------------------------------------------------------------
Judicial Center 4110 Chain Bridge Rd
- ---------------------------------------------------------------------
Lincolnia Senior Rec Ctr 4710 Chambliss St N
- ---------------------------------------------------------------------
Fire & Rescue-Clifton # 16 12645 Chapel Rd
- ---------------------------------------------------------------------
Springfield Senior Center 6200 Charles Goff Dr
- ---------------------------------------------------------------------
Springfield Estates Elem 6200 Charles Goff Dr
- ---------------------------------------------------------------------
Washington Mill Elem 9100 Cherrytree Dr
- ---------------------------------------------------------------------
Fairhill Elem 3001 Chichester Ln
- ---------------------------------------------------------------------
Churchill Elem 7100 Churchill Rd
- ---------------------------------------------------------------------
Poe Interm 7000 Cindy Ln
- ---------------------------------------------------------------------
Clermont Elem 5720 Clermont Dr
- ---------------------------------------------------------------------
FCPA-Twin lakes Golf Course 6100 Clifton Rd
- ---------------------------------------------------------------------
Clifton Elem 7010 Clifton Rd
- ---------------------------------------------------------------------
FCPA-Area 2 Maint Shop 6621 Columbia Pike
- ---------------------------------------------------------------------
Health Dept-Bailey's Ctr 5827 Columbia Pike
- ---------------------------------------------------------------------
BOS-Mason Governmental Cntr 6507 Columbia Pike
- ---------------------------------------------------------------------
Belvedere Elem 6540 Columbia Pike
- ---------------------------------------------------------------------
Fire & Rescue-Annandale # 8 7128 Columbia Pike
- ---------------------------------------------------------------------
Annandale Senior Center 7200 Columbia Pike
- ---------------------------------------------------------------------
Pendleton House 114 Columbia St E
- ---------------------------------------------------------------------
FCPA-Colvin Mill Run 10017 Colvin Run Rd
- ---------------------------------------------------------------------
Library-Richard Byrd 7250 Commerce St
- ---------------------------------------------------------------------
Laurel Ridge Elem 10110 Commonwealth Blvd
- ---------------------------------------------------------------------
FCPA-Area 7 Maint Shop 9601 Courthouse Rd
- ---------------------------------------------------------------------
Lacey Center 3705 Crest Dr
- ---------------------------------------------------------------------
Alex Haley Elem 8850 Cross Chase Cir
- ---------------------------------------------------------------------
Silverbrook Elem 9350 Crosspointe Dr
- ---------------------------------------------------------------------
Kings Glen Elem 5401 Danbury Forest Dr
- ---------------------------------------------------------------------
McLean H.S. 1633 Davidson Rd
- ---------------------------------------------------------------------
West Springfield Elem 6802 Deland Dr
- ---------------------------------------------------------------------
CSB-ADS-Women's Recovery Ctr 10388 Democracy Ln
- ---------------------------------------------------------------------
ADS 10395 Democracy Ln
- ---------------------------------------------------------------------
Virginia Hills Area #1 6520 Diana Ln
- ---------------------------------------------------------------------
Herndon Elem 630 Dranesville Rd
- ---------------------------------------------------------------------
School personnel Dept 6815 Edsall Rd
- ---------------------------------------------------------------------
Forestdale Elem 6530 Elder Ave
- ---------------------------------------------------------------------
ADS - New Generations 8422 Electric Ave
- ---------------------------------------------------------------------
VDOT Hqts 3975 Fair Ridge Dr
- ---------------------------------------------------------------------
Glasglow Interm 4101 Fairfax Pkwy
- ---------------------------------------------------------------------
Huntington Community Center 2208 Farrington Ave
- ---------------------------------------------------------------------
Mt Vernon Woods Elem 4015 Fielding St
- ---------------------------------------------------------------------
CSB-ADS 5120 First Rd
- ---------------------------------------------------------------------
Braddock Crossing 5120 First Rd
- ---------------------------------------------------------------------
Mosby Woods Elem 9819 Five Oaks Rd
- ---------------------------------------------------------------------
Flint Hill Elem 2444 Flint Hill Rd
- ---------------------------------------------------------------------
My Friends Place 13508 Floris St
- ---------------------------------------------------------------------
Northwest Mental Health 13508 Floris St
- ---------------------------------------------------------------------
Gum Springs Comm. Center 8100 Fordson Rd
- ---------------------------------------------------------------------
Cardinal Forest Elem 8600 Forrester Blvd
- ---------------------------------------------------------------------
Library-Martha Washington 6614 Fort Hunt Rd
- ---------------------------------------------------------------------
Belle View Elem 6701 Fort Hunt Rd
- ---------------------------------------------------------------------
Carl Sanberg Interm 8428 Fort Hunt Rd
- ---------------------------------------------------------------------
Crossfield Elem 2791 Fox Mill Rd
- ---------------------------------------------------------------------
Lee H.S. 6540 Franconia Rd
- ---------------------------------------------------------------------
Key Interm 6402 Franconia Rd
- ---------------------------------------------------------------------
Visions of Hope School 6118 Franconia Rd
- ---------------------------------------------------------------------
Key Center 6404 Franconia Rd
- ---------------------------------------------------------------------
BOS- Lee Dist 6121 Franconia Rd
- ---------------------------------------------------------------------
Edison H.S. 5801 Franconia Rd
- ---------------------------------------------------------------------
Franconia Elem 6043 Franconia Rd
- ---------------------------------------------------------------------
Twain Interm 4700 Franconia Rd
- ---------------------------------------------------------------------
Wilton Woods Center 3701 Franconia Rd
- ---------------------------------------------------------------------
Day Reporting Center 2812 Franklin St
- ---------------------------------------------------------------------
DPW-Line Maintenance 6000 Freds Oak Rd
- ---------------------------------------------------------------------
EMTA-Alban Facility 7245 Fullerton Rd
- ---------------------------------------------------------------------
DPW-Landfill 9850 Furnace Rd
- ---------------------------------------------------------------------
Fire & Rescue-Dunn Loring # 13 2148 Gallows Rd
- ---------------------------------------------------------------------
Dunn Loring Center 2334 Gallows Rd
- ---------------------------------------------------------------------
Stenwood Elem 2620 Gallows Rd
- ---------------------------------------------------------------------
Luther Jackson Interm 3020 Gallows Rd
- ---------------------------------------------------------------------
CSB-ADS-New Generations 2012 Gallows Tree Ln
- ---------------------------------------------------------------------
Fire & Rescue-Great Falls # 12 9916 Georgetown Pike
- ---------------------------------------------------------------------
Langley H.S. 6520 Georgetown Pike
- ---------------------------------------------------------------------
Glen Forest Elem 5829 Glen Forest Dr
- ---------------------------------------------------------------------
Government Center 1 12000 Government Ctn Pky
- ---------------------------------------------------------------------
Government Center 2 12011 Government Ctn Pky
- ---------------------------------------------------------------------
Government Center 3 12055 Government Ctn Pky # 1008
- ---------------------------------------------------------------------
Devonshire Alternative School 2831 Graham Rd
- ---------------------------------------------------------------------
Devonshire Senior Ctr 2831 Graham Rd
- ---------------------------------------------------------------------
Graham Rd Elem 3036 Graham Rd
- ---------------------------------------------------------------------
Lewinsville Senior Center 1609 Great Falls St
- ---------------------------------------------------------------------
FCPA-Hidden Pond nature Ctr 8511 Greeley Blvd
- ---------------------------------------------------------------------
FCPA-Green Springs Garden Pk 4601 Green Spring Rd
- ---------------------------------------------------------------------
Centreville Elem 14330 Green Trails
- ---------------------------------------------------------------------
Gregory Crisis Center 8247 Gregory Dr
- ---------------------------------------------------------------------
Camelot Elem 8100 Guinevere Dr
- ---------------------------------------------------------------------
Gunston Elem 10100 Gunston Rd
- ---------------------------------------------------------------------
Fire & Rescue-Gunston # 20 10417 Gunston Rd
- ---------------------------------------------------------------------
Health Dept 5700 Hanover Ave
- ---------------------------------------------------------------------
Crestwood Elem 6010 Hanover Ave
- ---------------------------------------------------------------------
Groveton Senior Ctr 6900 Harrison Ln
- ---------------------------------------------------------------------
Groveton Elem 6900 Harrison Ln
- ---------------------------------------------------------------------
Kings Park Elem 5400 Harrow Way
- ---------------------------------------------------------------------
Haycock Elem 6616 Haycock Rd
- ---------------------------------------------------------------------
FCPA-Lake Accotink 5660 Heming Ave
- ---------------------------------------------------------------------
North Springfield Elem 7602 Heming Ct
- ---------------------------------------------------------------------
Woodburn Elem 3401 Hemlock Dr
- ---------------------------------------------------------------------
Annandale Terrace Elem 7604 Herald St
- ---------------------------------------------------------------------
Braddock Elem 7825 Heritage Dr
- ---------------------------------------------------------------------
Woodlawn Elem 8505 Highland Ln
- ---------------------------------------------------------------------
Fire & Rescue-Jefferson # 18 3101 Hodge Pl
- ---------------------------------------------------------------------
Chapel Sq Media Center 4414 Holborn Ave
- ---------------------------------------------------------------------
BOS-Braddock Dist 4414 Holborn Ave
- ---------------------------------------------------------------------
Mt Vernon Mental Health 8119 Holland Rd
- ---------------------------------------------------------------------
Lee's Corner Elem 13500 Hollinger Ave
- ---------------------------------------------------------------------
Manuta Elem 9107 Horner Ct
- ---------------------------------------------------------------------
Fire & Rescue-Penn Daw # 11 6624 Hulvey Ter
- ---------------------------------------------------------------------
FCPA-Packard Ctr 4022 Hummer Rd
- ---------------------------------------------------------------------
Lemon Road Elem 7320 Idylwood Rd
- ---------------------------------------------------------------------
Springfield Support Center 6800 Industrial Rd
- ---------------------------------------------------------------------
Fx County School Food Serv 6840 Industrial Rd
- ---------------------------------------------------------------------
Fairfax County Warehouse 6800 Industrial Rd
- ---------------------------------------------------------------------
McLean Community Center 1236 Ingleside Ave
- ---------------------------------------------------------------------
Cherry Run Elem 9732 Ironmaster Dr
- ---------------------------------------------------------------------
Wakefield Forest Elem 4011 Iva Ln
- ---------------------------------------------------------------------
Falls Church H.S. 7521 Jaguar Trail
- ---------------------------------------------------------------------
Madison H.S. 2500 James Madison Dr
- ---------------------------------------------------------------------
Kaleidoscope 8613 Janet Ln
- ---------------------------------------------------------------------
FCPA-Riverbend Nature Center 8814 Jeffery Rd
- ---------------------------------------------------------------------
FCPA-Oak Marr Rec Ctr 3200 Jermantown Rd
- ---------------------------------------------------------------------
Comm Radio Center 3613 Jermantown Rd
- ---------------------------------------------------------------------
EMTA Jermantown 3609 Jermantown Rd
- ---------------------------------------------------------------------
Jermantown Elem 3616 Jermantown Rd
- ---------------------------------------------------------------------
CSB-ADS-Assessment & Ref 3900 Jermantown Rd #200
- ---------------------------------------------------------------------
Sheriff 10604 Judicial Dr
- ---------------------------------------------------------------------
Adult Detention Center 10520 Judicial Dr
- ---------------------------------------------------------------------
Mt Eagle Elem 6116 Kings Hwy N
- ---------------------------------------------------------------------
Oak Hill Elem 3210 Kinross Cir
- ---------------------------------------------------------------------
Chesterbrook Elem 1753 Kirby Rd
- ---------------------------------------------------------------------
Bailey's Elem 6111 Knollwood Dr
- ---------------------------------------------------------------------
Library-Woodrow Wilson 6101 Knollwood Dr
- ---------------------------------------------------------------------
Fire & Rescue-McLean # 1 1455 Laughlin Ave
- ---------------------------------------------------------------------
Belle Willard Center 10310 Layton Hall Dr
- ---------------------------------------------------------------------
Girls Probation House 12720 Lee Hwy
- ---------------------------------------------------------------------
Girls Probation House 12720 Lee Hwy
- ---------------------------------------------------------------------
FCPA-Jefferson Dist Park 7900 Lee Hwy
- ---------------------------------------------------------------------
BOS-Providence Merrifield Vol #28 8739 Lee Hwy
- ---------------------------------------------------------------------
Fire & Rescue-Fair Oaks # 21 12300 Lee Jackson Hwy
- ---------------------------------------------------------------------
Police Academy 14601 Lee Rd
- ---------------------------------------------------------------------
Franklin Interm 3300 Lees Corner Rd
- ---------------------------------------------------------------------
Brookfield Elem 4200 Lees Corner Rd
- ---------------------------------------------------------------------
Marshall H.S. 7731 Leesburg Pike
- ---------------------------------------------------------------------
Library-Tysons Pimmit 7584 Leesburg Pike
- ---------------------------------------------------------------------
Family Services 6245 Leesburg Pike
- ---------------------------------------------------------------------
Spring Hill Elem 8201 Lewinsville Rd
- ---------------------------------------------------------------------
Fort Hunt Elem 8832 Linton Ln
- ---------------------------------------------------------------------
Pimmit Hills Senior Ctr 7510 Lisle Ave
- ---------------------------------------------------------------------
Pimmit Hills Center 7510 Lisle Ave
- ---------------------------------------------------------------------
Fire & Rescue-Annandale # 23 8914 Little River Tpke
- ---------------------------------------------------------------------
Library-George Mason 7001 Little River Tpke
- ---------------------------------------------------------------------
FCPA-Pinecrest Golf Course 6600 Little River Tpke
- ---------------------------------------------------------------------
Mondloch Emer Shelter 3516 Lockheed Blvd
- ---------------------------------------------------------------------
FCPA-Huntley Meadows Ctr 3701 Lockheed Blvd
- ---------------------------------------------------------------------
Hybla Valley Elem 3415 Lockheed Blvd
- ---------------------------------------------------------------------
Herndon Interm 901 Locust St
- ---------------------------------------------------------------------
Freedom Hill Elem 1945 Lord Fairfax Rd
- ---------------------------------------------------------------------
Lorton Center 8101 Lorton Rd
- ---------------------------------------------------------------------
Fire & Rescue-Woodlawn # 24 8701 Lukens Ln
- ---------------------------------------------------------------------
Fire & Rescue-Bailey's X Rds #10 3601 Madison Ln
- ---------------------------------------------------------------------
Westgate Elem 7500 Magarity Rd
- ---------------------------------------------------------------------
Health Dept 10777 Main St
- ---------------------------------------------------------------------
Retirement Admin 10680 Main St
- ---------------------------------------------------------------------
Sheriff-Admin Service 10459 Main St
- ---------------------------------------------------------------------
Woodson House 9517 Main St
- ---------------------------------------------------------------------
School Food Service 9515 Main St
- ---------------------------------------------------------------------
Woodson H.S. 9525 Main St
- ---------------------------------------------------------------------
Library-Patrick Henry 101 Maple Ave E
- ---------------------------------------------------------------------
FCPA-Providence Rec Ctr 7525 Marc Dr
- ---------------------------------------------------------------------
Fire & Rescue-Pohick # 35 7801 Maritime Ln
- ---------------------------------------------------------------------
Marshall Road Elem 730 Marshall Rd SW
- ---------------------------------------------------------------------
Virginia Run Elem 15450 Martins Hundred Dr
- ---------------------------------------------------------------------
Recovery House 2809 Mary St
- ---------------------------------------------------------------------
Hope Center for Women 4010 Maury Pl
- ---------------------------------------------------------------------
Annandale H.S. 4700 Medford Dr
- ---------------------------------------------------------------------
Kent Gardens Elem 1717 Melbourne Dr
- ---------------------------------------------------------------------
Poplar Tree Elem 13440 Melville Ln
- ---------------------------------------------------------------------
Bailey's Crossroads Shelter 3525 Moncure Ave
- ---------------------------------------------------------------------
Holmes Interm 6525 Montrose St
- ---------------------------------------------------------------------
Centre Ridge Elem 14400 New Braddock Rd
- ---------------------------------------------------------------------
Newington Forest Elem 8001 Newington Forest Ave
- ---------------------------------------------------------------------
EMTA 6900 Newington Rd
- ---------------------------------------------------------------------
Hollin Meadows Elem 2310 Nordok Pl
- ---------------------------------------------------------------------
FCPA-Area 3 Maint Shop 6901 North Kings Hwy
- ---------------------------------------------------------------------
Saratoga Elem 8111 Northumberland Rd
- ---------------------------------------------------------------------
Louise Archer Elem 324 Nutley St NW
- ---------------------------------------------------------------------
Ravensworth Elem 5411 Nutting Dr
- ---------------------------------------------------------------------
Library-Dolly Madison 1244 Oak Ridge Ave
- ---------------------------------------------------------------------
Fire & Rescue-Centreville # 38 6001 Oday Dr
- ---------------------------------------------------------------------
Fire & Rescue-Burke # 14 9501 Old Burke Lake Rd
- ---------------------------------------------------------------------
Fire & Rescue-Centreville # 17 5856 Old Centreville Rd
- ---------------------------------------------------------------------
Olde Creek Elem 9524 Old Creek Dr
- ---------------------------------------------------------------------
Irving Interm 8100 Old Keene Mill Rd
- ---------------------------------------------------------------------
Garfield Elem 7101 Old Keene Mill Rd
- ---------------------------------------------------------------------
Health Dept -Willard Ctr 3750 Old Lee Hwy
- ---------------------------------------------------------------------
Layton Hall Elem 3705 Old Lee Hwy
- ---------------------------------------------------------------------
Fairfax H. S. City 3500 Old Lee Hwy
- ---------------------------------------------------------------------
FCPA-George Washington Rec 8426 Old Mt Vernon Rd
- ---------------------------------------------------------------------
Mount Vernon H.S. 8515 Old Mt Vernon Rd
- ---------------------------------------------------------------------
Riverside Elem 8410 Old Mt Vernon Rd
- ---------------------------------------------------------------------
Woodley Hills Elem 8718 Old Mt Vernon Rd
- ---------------------------------------------------------------------
Little Run Elem 4511 Olley Ln
- ---------------------------------------------------------------------
Fairview Elem 5815 Ox Rd
- ---------------------------------------------------------------------
FCPA-Burke Lake Golf Course 7315 Ox Rd
- ---------------------------------------------------------------------
Less Secure Shelter 10646 Page Ave
- ---------------------------------------------------------------------
Police 10600 Page Ave
- ---------------------------------------------------------------------
City Square Bldg 10640 Page Ave
- ---------------------------------------------------------------------
Burkholder Center 10700 Page Ave
- ---------------------------------------------------------------------
Juvenile Detention Center 10650 Page Ave
- ---------------------------------------------------------------------
Juvenile Detention Ctr 10650 Page Ave
- ---------------------------------------------------------------------
Hutchinson Elem 13209 Parcher Ave
- ---------------------------------------------------------------------
Cunningham Park Elem 1001 Park St SE
- ---------------------------------------------------------------------
Mental Health Center 14150 Parkeast Cir
- ---------------------------------------------------------------------
BOS-Mt Vernon Government Cntr 2511 Parkers Ln
- ---------------------------------------------------------------------
Whitman Interm 2500 Parkers Ln
- ---------------------------------------------------------------------
Shelter House Inc. 3080 Patrick Henry Dr
- ---------------------------------------------------------------------
Transitional Group Home 2504 Patrick St
- ---------------------------------------------------------------------
Stuart H.S. 3301 Peace Valley Ln
- ---------------------------------------------------------------------
Oakton Arbor Group Home 3476 Pence Ct
- ---------------------------------------------------------------------
Oakton Arbor Group Home 3476 Pence Ct
- ---------------------------------------------------------------------
Housing & Community Dev 3700 Pender Dr
- ---------------------------------------------------------------------
Frost Interm 4101 Pickett Rd
- ---------------------------------------------------------------------
FCPA-Area 1 Maint Shop 1929 Pimmit Dr
- ---------------------------------------------------------------------
Westbriar Elem 1741 Pine Valley Dr
- ---------------------------------------------------------------------
FCPA-South Run Rec Ctr 9501 Pohick Rd
- ---------------------------------------------------------------------
Greenbriar East Elem 13006 Point Pleasant Dr
- ---------------------------------------------------------------------
Bryant Alternative High 2709 Popkins Ln
- ---------------------------------------------------------------------
Greenbriar West Elem 13300 Poplar Tree Rd
- ---------------------------------------------------------------------
Dranesville Elem 1515 Powells Tavern Pl
- ---------------------------------------------------------------------
Quander Road Center 6400 Quander Rd
- ---------------------------------------------------------------------
West Potomac H.S. 6500 Quander Rd
- ---------------------------------------------------------------------
Sangster Elem 7420 Reservation Dr
- ---------------------------------------------------------------------
Fire & Rescue-Fox Mill # 31 2610 Reston Ave
- ---------------------------------------------------------------------
Health Dept-Mt Vernon Dist 6301 Richmond Hwy
- ---------------------------------------------------------------------
Health Dept South Co 7692 Richmond Hwy
- ---------------------------------------------------------------------
Gunston Alternative School 8305 Richmond Hwy
- ---------------------------------------------------------------------
Mt Vernon Senior Ctr 8305 Richmond Hwy
- ---------------------------------------------------------------------
Library-Lorton 9518 Richmond Hwy
- ---------------------------------------------------------------------
DPW-Wastewater Treatment 9399 Richmond Hwy
- ---------------------------------------------------------------------
Mt Vernon Day Health Care 8850 Richmond Hwy
- ---------------------------------------------------------------------
Mental Health Support 8653 Richmond Hwy
- ---------------------------------------------------------------------
Stratford Landing Elem 8484 Riverside Rd
- ---------------------------------------------------------------------
West Springfield H.S. 6100 Rolling Rd
- ---------------------------------------------------------------------
BOS-Springifeld Dist-W.Sp Vol #27 6140 Rolling Rd
- ---------------------------------------------------------------------
Rose Hill Elem 6301 Rose Hill Dr
- ---------------------------------------------------------------------
Library-John Marshall 6209 Rose Hill Dr
- ---------------------------------------------------------------------
Fire & Rescue-Oakton # 34 10511 Rosehaven St
- ---------------------------------------------------------------------
Library-Centreville 14200 Saint Germain Dr
- ---------------------------------------------------------------------
Fairfax Villa Elem 10900 Santa Clara Dr
- ---------------------------------------------------------------------
Area 4 Admin Office 10515 School St
- ---------------------------------------------------------------------
Hollin Hall Senior Ctr 1500 Shenandoah Rd
- ---------------------------------------------------------------------
Fire & Rescue-Mt Vernon # 9 2601 Sherwood Hall Ln
- ---------------------------------------------------------------------
Library-Sherwood Regional 2501 Sherwood Hall Ln
- ---------------------------------------------------------------------
White Oaks Elem 6130 Shiplett Blvd
- ---------------------------------------------------------------------
Boys Probation House 4410 Shirley Gate Rd
- ---------------------------------------------------------------------
Juvenile & Domestic Boys Home 4410 Shirley Gate Rd
- ---------------------------------------------------------------------
Shrevewood Elem 7525 Shreve Rd
- ---------------------------------------------------------------------
Green Acres Elem 4401 Sideburn Rd
- ---------------------------------------------------------------------
Oak View Elem 5004 Sideburn Rd
- ---------------------------------------------------------------------
Sideburn Support Center 5025 Sideburn Rd
- ---------------------------------------------------------------------
Bonnie Brae Elem 5420 Sideburn Rd
- ---------------------------------------------------------------------
Robinson Secondary 5035 Sideburn Rd
- ---------------------------------------------------------------------
Sleepy Hollow Elem 3333 Sleepy Hollow Rd
- ---------------------------------------------------------------------
Fire & Rescue-Seven Corners # 30 2949 Sleepy Hollow Rd
- ---------------------------------------------------------------------
CSB-ADS-Crossroads 6901 South Van Dorn
- ---------------------------------------------------------------------
Hartwood Foundation 5407 Southampton Dr
- ---------------------------------------------------------------------
Mountain View School 5775 Spindle Ct
- ---------------------------------------------------------------------
FCPA-Spring Hill Rec Ctr 1239 Spring Hill Rd
- ---------------------------------------------------------------------
Fire & Rescue-Tysons corner # 29 1560 Spring Hill Rd
- ---------------------------------------------------------------------
Library-Herndon 660 Spring St
- ---------------------------------------------------------------------
Fire & Rescue-Herndon 680 Spring St.
- ---------------------------------------------------------------------
Union Mill Elem 13611 Springstone Dr
- ---------------------------------------------------------------------
Londontowne Elem 6100 Stone Rd
- ---------------------------------------------------------------------
Criminal Justice Academy 3725 Stonecroft Bv
- ---------------------------------------------------------------------
FCPA-Stoneybrooke Mansion 3900 Stoneybrooke Dr
- ---------------------------------------------------------------------
Library-Chantilly 4000 Stringfelllow Rd
- ---------------------------------------------------------------------
Chantilly H.S. 4201 Stringfellow Rd
- ---------------------------------------------------------------------
Rocky Run Interm 4400 Stringfellow Rrd
- ---------------------------------------------------------------------
Stone Interm 5500 Sully Park Dr
- ---------------------------------------------------------------------
Cub Run Elem 5301 Sully Station Dr
- ---------------------------------------------------------------------
Bailey's Senior Center 5920 Summers Ln
- ---------------------------------------------------------------------
Oakton H.S. 2900 Sutton Rd
- ---------------------------------------------------------------------
Library-Pohick 6450 Sydenstricker Rd
- ---------------------------------------------------------------------
Orange Hunt Elem 6820 Sydenstricker Rd
- ---------------------------------------------------------------------
Hunt Valley Elem 7107 Sydenstricker Rd
- ---------------------------------------------------------------------
Fire & Rescue-Kingstowne # 37 7936 Telegraph Rd
- ---------------------------------------------------------------------
Hayfield Secondary 7630 Telegraph Rd
- ---------------------------------------------------------------------
Hayfield Elem 7633 Telegraph Rd
- ---------------------------------------------------------------------
FCPA-Greendale Golf Course 6700 Telegraph Rd
- ---------------------------------------------------------------------
FCPA-Robert E. Lee Rec Ctr 6601 Telegraph Rd
- ---------------------------------------------------------------------
Springfield Outpatient Unit 8348 Traford Ln
- ---------------------------------------------------------------------
Centreville H.S. 6001 Union Mill Rd
- ---------------------------------------------------------------------
Housing & Community Dev 4500 University Dr
- ---------------------------------------------------------------------
Bucknell Elem 6925 University Dr
- ---------------------------------------------------------------------
Forestville Elem 1085 Utterback Store Rd
- ---------------------------------------------------------------------
Prospect Hill School 11433 Valley Rd
- ---------------------------------------------------------------------
Crossroads Residential School 6901 Van Dorn St South
- ---------------------------------------------------------------------
Fire & Rescue-Chantilly # 15 14005 Vernon St
- ---------------------------------------------------------------------
Fox Mill Elem 2601 Viking Dr
- ---------------------------------------------------------------------
Winter Hill Nutrition 330 Virginia Ave S
- ---------------------------------------------------------------------
Great Falls Elem 701 Walker Rd
- ---------------------------------------------------------------------
CSB-ADS- New Beginning 4213 Walney Rd
- ---------------------------------------------------------------------
FCPA-Walney Visitor Ctr 5040 Walney Rd
- ---------------------------------------------------------------------
Waples Mill Elem 11509 Waples Mill Rd
- ---------------------------------------------------------------------
Waynewood Elem 1205 Waynewood Blvd
- ---------------------------------------------------------------------
DPW-Maintenance & Stormwater 10635 West Dr
- ---------------------------------------------------------------------
FCPA-Frying Pan School 2709 West Ox Rd
- ---------------------------------------------------------------------
CSB-Sunrise Program 3221 West Ox Rd
- ---------------------------------------------------------------------
Sunrise House II 3219 West Ox Rd
- ---------------------------------------------------------------------
Navy Elem 3500 West Ox Rd
- ---------------------------------------------------------------------
Sunrise House I 3221 West Ox Rd
- ---------------------------------------------------------------------
Rt 66 Transfer STation 4618 West Ox Rd
- ---------------------------------------------------------------------
EMTA 4620 West Ox Rd
- ---------------------------------------------------------------------
Police-Heliport 4604 West Ox Rd
- ---------------------------------------------------------------------
Animal Control 4500 West Ox Rd
- ---------------------------------------------------------------------
Fire & Rescue Academy 4600 West Ox Rd
- ---------------------------------------------------------------------
Timber Lane Elem 2737 West St
- ---------------------------------------------------------------------
Bush Hill Elem 5927 Westchester St
- ---------------------------------------------------------------------
Westlawn Elem 3200 Westley Rd
- ---------------------------------------------------------------------
Longfellow Interm 2000 Westmoreland St
- ---------------------------------------------------------------------
Police 14703 Willard Rd
- ---------------------------------------------------------------------
Canterbury Woods Elem 4910 Willet Dr
- ---------------------------------------------------------------------
Pine Spring Elem 7607 Willow Ln
- ---------------------------------------------------------------------
Willow Springs Elem 5400 Willow Springs Sch Rd
- ---------------------------------------------------------------------
Willston Center 6131 Willston Dr
- ---------------------------------------------------------------------
Kilmer Interm 8100 Wolf Trap Rd
- ---------------------------------------------------------------------
Minerva Fisher-ICF 8207 Wolf Trap Rd
- ---------------------------------------------------------------------
Kilmer Center 8102 Wolftrap Rd
- ---------------------------------------------------------------------
Woodburn Mental Health Ctr 3340 Woodburn Rd
- ---------------------------------------------------------------------
Fairfax House 3300 Woodburn Rd
- ---------------------------------------------------------------------
Police-EOC 3911 Woodburn Rd
- ---------------------------------------------------------------------
Police-EOC 3911 Woodburn Rd
- ---------------------------------------------------------------------
David R. Pinn Comm Ctr 10225 Zion Dr
- ---------------------------------------------------------------------
</TABLE>
<PAGE>
APPENDIX 5: SECURITY DEPOSIT APPENDIX
<PAGE>
SECURITY DEPOSIT APPENDIX
Page
----
1. THE APPENDIX; DEFINITIONS...........................................3
1.1. The Appendix...............................................3
1.2. Capitalized Terms..........................................3
1.3. "Award Notice".............................................3
1.4. "Claim Notice".............................................3
1.5. "Disbursement Event".......................................4
1.6. "Escrowed Cash"............................................4
1.7. "Escrow Fund"..............................................4
1.8. "Escrow Release Date"......................................4
1.9. "Claim"....................................................4
1.10. "Security Deposit".........................................4
1.11. "Notice of Agreed Release".................................5
1.12. "Objection"................................................5
1.13. "Uncontested Claim"........................................5
1.14. "Withdrawal Notice"........................................5
2. APPOINTMENT OF ESCROW AGENT.........................................5
2.1. Appointment................................................5
2.2. Fees.......................................................6
3. ESCROW FUND.........................................................6
3.1. Creation of Escrow Fund....................................6
3.2. Investment of Escrow Fund..................................6
3.3. Cooperation................................................7
3.4. Purpose of Escrow Fund.....................................7
3.5. Restoration of Escrow Fund.................................7
4. DISTRIBUTION OF ESCROW FUND.........................................8
4.1. Notice of Claim............................................8
4.2. Disbursement Procedure.....................................9
4.3. Disposition of Escrow Fund.................................9
5. PERFORMANCE OF THE ESCROW AGENT.....................................9
5.1. Disputes...................................................9
6. VACANCIES...........................................................11
6.1. Resignation of the Escrow Agent............................11
1
<PAGE>
6.2. Successor to the Escrow Agent..............................12
6.3. Removal of the Escrow Agent................................12
7. TERMINATION.........................................................12
8. GENERAL PROVISIONS..................................................12
8.1. Notices....................................................12
8.2. Assignment.................................................14
8.3. Amendment..................................................14
8.4. Applicable Law and Forum...................................14
8.5. Waiver of Breach...........................................15
8.6. Headings...................................................15
8.7. Copies.....................................................15
8.8. Entire Agreement...........................................15
8.9. Severability...............................................15
8.10. Incorrect Claim Notice or Payment Demands..................16
2
<PAGE>
SECURITY DEPOSIT APPENDIX
1. THE APPENDIX; DEFINITIONS
1.1. The Appendix. This Appendix ("Appendix") is an integral part of a
Franchise Agreement dated as of June 1, 1998, between Fairfax County, Virginia
("County"), and Media General Cable of Fairfax County, Inc. ("Grantee").
1.2. Capitalized Terms. Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to them in the Franchise
Agreement. As used herein, the following terms shall have the meanings ascribed
to them below.
1.3. "Award Notice" means a written notice executed by County or Grantee
indicating that any Objection submitted by Grantee to any Claim Notice has been
determined and resolved by entry of a final order, decree or judgment by a court
of competent jurisdiction within the constraints of Section 8.4 of this Security
Deposit Appendix, or by consent to entry of any judgment concerning such
Objection. Such notice shall include a true copy of any such order, decree or
judgment, if any, certified by a clerk of such court, and directions from County
or Grantee, as applicable, for any disbursements to be made from the Escrow Fund
in connection with the resolution of such Objection.
1.4. "Claim Notice" means (a) a written notice of a Claim provided by
County to Grantee and the Escrow Agent in accordance with Section 4.1 of this
Security Deposit Appendix, including a statement of the exact or estimated
dollar amount of a Claim; and (b) a written notice of an increase or decrease in
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the exact or estimated dollar amount or range of a Claim, as applicable,
specifically referenced in such written notice provided by County to Grantee and
the Escrow Agent in accordance with Section 4.1 of this Security Deposit
Appendix respectively and relating to a previously provided Claim Notice.
1.5. "Disbursement Event" means any event described in Section 4.2 of this
Security Deposit Appendix upon the occurrence of which the Escrow Agent is
authorized and required to make a disbursement from the Escrow Fund.
1.6 "Escrowed Cash" means any and all income, increments, interest and gain
earned with respect to the investment of the Escrow Fund pursuant to Section 3.2
hereof and any monies in the Escrow Fund in excess of $50,000.
1.7. "Escrow Fund" means the amount of the Security Deposit Escrow and the
Escrowed Cash.
1.8. "Escrow Release Date" means a date no later than ninety days after the
termination of Grantee's Franchise pursuant to the Franchise Agreement.
1.9. "Claim" means any request by the County for payment by the Grantee
that is made in accordance with Section 4 herein.
1.10. "Security Deposit" means the amount of U.S. Fifty Thousand Dollars
(U.S. $50,000) deposited with the Escrow Agent as provided in Section 3.1 of
this Security Deposit Appendix.
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1.11. "Notice of Agreed Release" means a written declaration executed by
County and Grantee specifying the resolution of any Objection to any Claim
Notice, and including directions for any disbursement to be made from the Escrow
Fund in connection with the resolution of such Objection.
1.12. "Objection" means a written objection to a Claim Notice stating in
detail the basis for such objection.
1.13."Uncontested Claim" means (a) any Claim described in any Claim Notice
for which Grantee does not submit a timely Objection, (b) any Claim described in
any Claim Notice for which Grantee submits a timely Objection that is
subsequently withdrawn in a Withdrawal Notice submitted by Grantee and (c) any
Claim to the extent included in an Estimated Claim Amount set forth in any
Objection to any Claim Notice that is timely submitted by Grantee.
1.14. "Withdrawal Notice" means a written declaration (a) executed by
County withdrawing a Claim Notice or reducing the amount of any Claim asserted
in such Claim Notice, or (b) executed by Grantee withdrawing an Objection or
increasing the Estimated Claim Amount included in such Objection.
2. APPOINTMENT OF ESCROW AGENT
2.1. Appointment. Grantee shall appoint an entity possessing the
qualifications specified in Section 6.1, subject to the County's approval
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("Escrow Agent"), to serve as escrow agent upon the terms, conditions and
provisions of this Security Deposit Appendix. Grantee, with County's approval,
has appointed First Union National Bank as the initial Escrow Agent.
2.2. Fees. For its ordinary services hereunder (which shall include
receipt, investment, and disbursement of the Escrow Fund in the manner
contemplated by this Security Deposit Appendix), Grantee shall pay to the Escrow
Agent in advance the annual fee in the amount and in the manner set forth on
Exhibit A to this Security Deposit Agreement.
3. ESCROW FUND
3.1. Creation of Escrow Fund. Grantee hereby agrees to deposit with the
Escrow Agent on the date hereof the amount of $50,000 to be held as a security
deposit (the "Security Deposit") in accordance with Section 11(b) of the
Franchise Agreement. The Escrow Agent shall hold, administer and pay the
Security Deposit in accordance with the terms of this Security Deposit Appendix
and not permit any withdrawal thereof except pursuant to the terms hereof.
3.2. Investment of Escrow Fund. During the term of this Security Deposit
Appendix the Escrow Agent shall invest and reinvest the Escrow Fund as directed
by Grantee in obligations of the United States and agencies thereof or any money
market account or fund investing solely in obligations of the United States or
agencies thereof, or in one or more certificates of deposit, short term notes or
other evidences of indebtedness issued by a commercial banking institution,
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including the Escrow Agent, having total assets at the time of the issuance
thereof of at least $50,000,000 provided that no such investment shall have a
maturity of more than thirty (30) days from the date of such investment unless
specifically agreed to by County.
Any Escrowed Cash shall not be considered part of the Escrow Fund but shall
be distributed quarterly by the Escrow Agent to Grantee on March 31st, June
30th, September 30th, and December 31st of each year.
3.3. Cooperation. County and Grantee shall cooperate with the Escrow Agent
and deliver to the Escrow Agent such additional confirmations, certificates,
affirmations, information and other documents as the Escrow Agent shall
reasonably request in the performance of its obligations under this Security
Deposit Appendix, including any and all such items as the Escrow Agent shall
deem necessary to evidence termination of this Security Deposit Appendix and to
evidence the consent of County and Grantee to the final distribution of the
Escrow Fund in accordance with the terms of this Security Deposit Appendix.
3.4. Purpose of Escrow Fund. The Escrow Fund has been established for the
purpose of providing a source of funds to satisfy claims made by the County for
amounts payable by Grantee to the County under the terms of the Franchise
Agreement and/or applicable law that have not been satisfied from other sources.
3.5. Restoration of Escrow Fund. Not later than thirty days after receipt
of notification by Escrow Agent to Grantee by certified mail, return receipt
requested, of a Disbursement Event involving amounts paid to the County, the
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Grantee shall deposit in the Escrow Fund an amount necessary to restore the
balance of the Escrow Fund to $50,000 pursuant to Section 11(b)(1)(C) of the
Franchise Agreement.
4. DISTRIBUTION OF ESCROW FUND
4.1. Notice of Claim. At any time during the term of the Franchise, the
County may deliver to the Grantee a demand for payment in writing (the "Payment
Demand") containing the purpose, the amount, and reasonable verification of any
payments due by Grantee to the County pursuant to the Franchise Agreement and/or
applicable law that have not been timely paid. If the Grantee does not either
(a) make such payment or (b) file a legal action disputing the Payment Demand
within ten business days of receiving the Payment Demand, then the County may
submit a Claim Notice to the Escrow Agent and the Grantee containing the
following:
(a) a copy of the Payment Demand and the date the Payment
Demand was sent to the Grantee in accordance with the
preceding sentence,
(b) a statement that the Grantee has not paid the amount
specified in the Payment Demand or filed a legal
action disputing the Payment Demand, and
(c) a statement that the Escrow Agent shall pay the
County any amount specified in the Payment Demand and
not yet paid by the Grantee.
If the ten-day period specified in this Section 4.2 ends on a Saturday,
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a Sunday or any legal holiday in Virginia, then such period shall be extended to
include the next day that is not a Saturday, a Sunday or a legal holiday.
4.2. Disbursement Procedure. All disbursements hereunder shall be made by
the Escrow Agent within three (3) business days following its receipt of (i) a
Claim Notice executed in accordance with this Security Deposit Appendix, unless
such Claim Notice is disputed, or (ii) a Notice of Agreed Release.
4.3. Disposition of Escrow Fund. Any funds remaining in the Escrow Fund
upon termination of the Franchise shall be returned to Grantee no later than
ninety days after such termination, except to the extent that such funds are
subject, as of the date of termination, to any unresolved Payment Demand
pursuant to Section 4.1 hereof.
5. PERFORMANCE OF THE ESCROW AGENT
5.1. Disputes
(a) In the event that the Grantee files a legal action
within the ten-day period pursuant to Section 4.1,
the Escrow Agent shall be entitled to refuse to
comply with any adverse claims or demands as long as
such disagreement may continue, and in so refusing,
shall make no delivery or other disposition of any
property then held by it under this Security Deposit
Appendix, and in so doing the Escrow Agent shall be
entitled to continue to refrain from acting until (i)
the right of adverse claimants shall have been
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finally settled by binding arbitration or finally
adjudicated in a court assuming and having
jurisdiction of the property involved herein or
affected hereby within the constraints of Section 8.4
hereof or (ii) all differences shall have been
adjusted by agreement and the Escrow Agent shall have
been notified in writing of such agreement signed by
the parties hereto.
(b) In the event of such disagreement, the Escrow Agent
may, but need not, tender into the registry or
custody of any court of competent jurisdiction within
the constraints of Section 8.4 hereof all money or
property in its hands under the terms of this
Security Deposit Appendix, together with such legal
proceedings as it deems appropriate and thereupon to
be discharged from all further duties under this
Security Deposit Appendix. The filing of any such
legal proceeding shall not deprive the Escrow Agent
of its compensation earned prior to such filing.
(c) The Escrow Agent shall have no obligation to take any
legal action in connection with this Security Deposit
Appendix or towards its enforcement, or to appear in,
prosecute or defend any action or legal proceeding
which would or might involve it in any cost, expense,
loss or liability unless security and indemnity shall
be furnished.
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6. VACANCIES
6.1. Resignation of the Escrow Agent. The Escrow Agent may at any time
resign by giving at least thirty (30) days' prior written notice of such
resignation to each of the other parties hereto and depositing a proportionate
share of its annual fee in the Escrow Fund. In such event, Grantee with the
approval of the County, which approval shall not be unreasonably withheld or
delayed, will promptly select another bank doing business in Virginia, insured
by the Federal Deposit Insurance Corporation, and with assets of not less than
$50,000,000 which will be appointed as successor escrow agent, and the County
and the Grantee shall enter into an agreement with such other bank in
substantially the form of this Security Deposit Appendix which shall then be
deemed the "Security Deposit Appendix" for all purposes under the Franchise
Agreement. The County and the Grantee hereby approve NationsBank of Virginia,
N.A. as satisfactory successor escrow agent in the event that a successor escrow
agent needs to be appointed. From and after the effective date of such
resignation or appointment, the Escrow Agent shall not be obligated to perform
any of the duties of the Escrow Agent hereunder and will not be liable for any
nonperformance thereof nor for any act or failure to act whatsoever on the part
of any successor escrow agent. If a successor for the Escrow Agent hereunder
shall not have been selected, as aforesaid, the Escrow Agent shall be entitled
to petition any court for the appointment of a successor for it hereunder, or in
the alternative, it may transfer and deliver the Escrow Fund to or upon the
order of any court.
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6.2. Successor to the Escrow Agent. Any corporation resulting from any
merger or consolidation to which the Escrow Agent shall be a party, or any
corporation in any manner succeeding to all or substantially all of the business
of the Escrow Agent, provided such corporation shall be a banking corporation
organized under the laws of the United States of America with trust powers,
shall be the successor escrow agent hereunder without the execution or filing of
any paper or any further act on the part of any of the parties hereto.
6.3. Removal of the Escrow Agent. In the event County and Grantee each
consent to the removal of the Escrow Agent and the appointment of a successor
escrow agent, the Escrow Agent shall transfer and deliver the Escrow Fund to
such successor escrow agent whereupon the Escrow Agent shall be discharged from
all further duties hereunder.
7. TERMINATION
This Security Deposit Appendix shall terminate when the entire Escrow Fund
has been distributed after the end of the Franchise Agreement as provided in
Section 1.
8. GENERAL PROVISIONS
8.1. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be given to the designated agents of the
following officials and officers at the following addresses (or at such other
addresses as shall be given in writing by the parties to one another by like
notice):
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County: County Executive
Fairfax County Department of Consumer Affairs
12000 Government Center Parkway
Fairfax, Virginia 22035-0064
Telephone: (703) 324-5949
Facsimile: (703) 803-0489
With a copy (which
shall not constitute
notice) to:
Fairfax County Attorney
Office of County Attorney
12000 Government Center Parkway, Suite 549
Telephone: (703) 342-2421
Facsimile: (703) 324-3938
Grantee: President
Media General Cable of Fairfax County, Inc.
14650 Old Lee Road
Chantilly, Virginia 20151-1799
Telephone: (703) 378 3926
Facsimile: (703) 378-3417
With a copy (which
shall not constitute
notice) to:
General Counsel
Media General, Inc.
333 East Grace Street
Richmond, Virginia 23293-0001
Telephone: (804) 649-6029
Facsimile: (804) 649-6898
Escrow Agent:
Corporate Trust Officer
First Union National Bank
800 East Main Street
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Lower Mezzanine
Richmond, Virginia 23219
Telephone: (804) 343-6058
Facsimile: (804) 343-6699
8.2. Assignment. This Security Deposit Appendix is not intended to confer
upon any person other than the parties to this Security Deposit Appendix any
rights or remedies hereunder. Neither this Security Deposit Appendix nor the
rights or obligations described herein shall be assigned by operation of law or
any party hereto, without the prior written consent of each of the other
parties, except that it may be assigned or transferred by Grantee to any
affiliated entity.
8.3. Amendment. No amendment or modification of this Security Deposit
Appendix shall be valid or binding upon the parties hereto unless made in
writing and signed by County, the Grantee, and the Escrow Agent.
8.4. Applicable Law and Forum. This Security Deposit Appendix shall be
construed and enforced under the laws of the Commonwealth of Virginia. Each of
County, Grantee and the Escrow Agent submits to any state or federal court with
appropriate jurisdiction sitting in Fairfax County, Virginia or Alexandria,
Virginia, in any action or proceeding arising out of or relating to this
Security Deposit Appendix, agrees that all claims in respect of the action or
proceeding may be heard and determined in any such court, and agrees not to
bring any action or proceeding arising out of or relating to this Security
Deposit Appendix in any other court. Each of County, Grantee and the Escrow
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Agent waives any defense of inconvenient forum to the maintenance of any action
or proceeding so brought and waives any bond, surety, or other security that
might be required of any other party with respect thereto. Each of County,
Grantee and the Escrow Agent agrees that a final judgment in any action or
proceeding so brought shall be conclusive and may be enforced by suit on the
judgment or in any other manner provided by law.
8.5. Waiver of Breach. The failure of any party hereto at any time to
require strict compliance by the other parties hereto with any of the provisions
hereof shall not amount to a waiver and shall not diminish the right of any
party thereafter to demand strict compliance therewith or with any other
provision hereof. No waiver by any party hereto of any right hereunder shall be
effective unless expressed in writing.
8.6. Headings. Captions and section headings used herein are for
convenience only and are not a part of this Security Deposit Appendix and shall
not be used in construing it.
8.7. Copies. This Security Deposit Appendix may be executed in two or more
originals, all of which shall be considered one and the same agreement.
8.8. Entire Agreement. This Security Deposit Appendix and the Franchise
Agreement contain the entire agreement among the parties hereto concerning the
transaction contemplated herein and supersede all prior agreements or
understandings between the parties hereto relating to the subject matter hereof.
No oral representation, agreement or understanding made by any party hereto
shall be valid or binding upon such party or any other party hereto.
8.9. Severability. It is the desire and intent of the parties that the
provisions of this Security Deposit Appendix be enforced to the fullest extent
permissible under the law and public policies applied in each jurisdiction in
which enforcement is sought. Accordingly, in the event that any provision of
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this Security Deposit Appendix would be held in any jurisdiction or as to any
person to be invalid, prohibited or unenforceable for any reason, such
provision, as to such jurisdiction or as to such person, shall be ineffective,
without invalidating the remaining provisions of this Security Deposit Appendix
or affecting the validity or enforceability of such provision in any other
jurisdiction as to any other person. Notwithstanding the foregoing, if such
provision could be more narrowly drawn so as not to be invalid, prohibited or
unenforceable in such jurisdiction or as to such person, it shall, as to such
jurisdiction or person, be so narrowly drawn, without invalidating the remaining
provisions of this Security Deposit Appendix or affecting the validity or
enforceability of such provision in any other jurisdiction or as to any other
person.
8.10. Incorrect Claim Notice or Payment Demands. Each of the parties
hereto agree that if it submits an incorrect or false Claim Notice, Uncontested
Claim, Notice of Agreed Release or Payment Demand (collectively "Notices") and
receives money from the Escrow Fund based thereupon, it shall immediately
reimburse the Escrow Fund by the amount of any inaccuracy or overcharge and
shall also reimburse the Escrow Fund for any and all loss, costs, expenses
and/or damages related thereto and shall indemnify and hold harmless the other
parties hereto for any losses, costs, expenses and/or damages incurred
(including attorney and accounting fees and including any fees or expenses
incurred to enforce this paragraph 8.10) due to such inaccurate or
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false Notices or Payment Demand, but only to the extent the other parties hereto
have been adversely effected or prejudiced as a result of such submission.
IN WITNESS WHEREOF, the parties hereto have executed this Security Deposit
Appendix effective as of June 1, 1998.
THE BOARD OF SUPERVISORS OF
FAIRFAX COUNTY, VIRGINIA
BY:
-------------------------------------
Chairman, Board of Supervisors
BY:
-------------------------------------
County Executive
GRANTEE: MEDIA GENERAL CABLE OF
FAIRFAX COUNTY, INC., a Virginia
Corporation
BY:
-------------------------------------
Title:
----------------------------------
FIRST UNION NATIONAL BANK
BY:
-------------------------------------
Title:
----------------------------------
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APPENDIX 6: SECURITY AGREEMENT
<PAGE>
SECURITY AGREEMENT BY AND BETWEEN THE BOARD OF SUPERVISORS OF
FAIRFAX COUNTY, VIRGINIA, AND MEDIA GENERAL CABLE OF FAIRFAX
COUNTY, INC.
This Security Agreement made this 10th day of June, 1998, between the
Board of Supervisors of Fairfax County, Virginia, hereinafter "County" and Media
General Cable of Fairfax County, Inc., hereinafter "Grantee", to secure the duty
to make payments of money from the Grantee to County, such money including
franchise fees that may become due and owing under the Grantee's franchise
agreement with the County dated June 1, 1998 ("Franchise Agreement"), and as
consideration for such Franchise Agreement, the Grantee hereby grants, bargains,
sells, assigns, pledges, transfers, conveys and delivers a security interest to
the County, its successors and assigns, in the following:
(1) all of the Grantee's cable system equipment and facilities,
whenever acquired, located in the franchise area described in the
Franchise Agreement;
(2) all accounts owned by the Grantee at the date of this agreement and
acquired by the Grantee at any time hereafter that are related to the
operation of Grantee's cable system in the franchise area described in
the Franchise Agreement; and
(3) the proceeds from the sale of any of the above (all hereinafter
collectively referred to as "the Collateral").
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ARTICLE I
Indebtedness Secured
Section 1.1 - Indebtedness Secured.
This Security Agreement is made to secure and enforce the indebtedness
described below:
(a) All franchise fees payable to the County under the cable television
franchise agreement between the Grantee and the County.
(b) All other moneys now or hereafter owed to the County by the
Grantee, whether such money represents a liquidated or unliquidated
amount.
ARTICLE II
Representations, Warranties and Covenants
Section 2.1 - Representations, Warranties and Covenants
Grantee hereby represents, warrants and covenants to and with the
County as follows:
(a) No Litigation or Defaults. There are no suits or proceedings
pending or, to the knowledge of the Grantee, threatened against or affecting the
Grantee or any of its properties, including the Collateral hereunder, before any
court or by or before any regulatory authority which, if adversely determined,
would have an adverse effect on the financial condition or business of the
Grantee or any of the Collateral, and Grantee is not in default under any order,
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writ, injunction, decree or demand of any court, regulatory department or
governmental authority.
(b) Warranty of Title.
(1) Grantee has the legal right and authority to grant,
bargain, sell, set over and deliver, grant a security interest in, pledge,
assign, transfer and convey all of its right, title and interest in, to and
under the Collateral (including, but not limited to, Accounts Receivable), and
all rights, interests, remedies, powers and privileges incident thereto, in the
manner and form hereby done or intended. The Collateral is not subject of any
set-off, counterclaim, recoupment or defense.
(2) Grantee has good and transferable title to the Collateral
free and clear of all liens, security interests, charges and encumbrances of
every character, other than the lien and security interest of this Security
Agreement. Grantee hereby binds itself to warrant and defend unto the County,
its successors in this Security Agreement and its assigns, the Collateral
against every person who claims the same, or any part thereof. This Security
Agreement is made with full substitution and subrogation of the County in and to
all covenants and warranties heretofore given or made by others in respect to
the Collateral, or any part thereof.
(3) Grantee's right, title and interest in and to the
Collateral is free and clear of all liens, security interests, charges and
encumbrances other than the lien and security interest of this Security
Agreement. The Grantee has not assigned, pledged or otherwise disposed of the
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whole or any part of its right, title or interest in or to the Collateral to any
person other than County, except as herein stated.
(4) There is no effective financing statement or other similar
instrument on file against the Grantee in any State covering the Collateral, or
any part thereof, or the proceeds of the Collateral, other than this Security
Agreement.
(c) Further Assurances. Grantee will, at the County's request, promptly
correct any defect, error or omission which may be discovered in the contents of
this Security Agreement or in the execution or acknowledgment hereof, and will
execute, acknowledge and deliver such further instruments and do such further
acts as may be necessary or as may be requested by the County: (i) to carry out
more effectively the purposes and intent of this Security Agreement; (ii) to
subject the Grantee's cable system facilities and equipment to the lien and
security interest hereby created; and (iii) to protect and maintain such lien
and security interest.
(d) Payment of Franchisee's Obligations. The Grantee will duly and
punctually pay, when due, all moneys it owes to the County.
(e) Recordation and Rerecordation of Agreement. To the extent permitted
by applicable law, the Grantee will promptly, and at its own expense, record and
rerecord, file and refile, and register and reregister this Security Agreement,
any financing or continuation statements, and every other instrument in addition
or supplemental hereto or thereto, that shall be required by law in order to
perfect and maintain the validity and effectiveness of the lien and security
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interest intended to be created by this Security Agreement, in such manner and
places, and within such times as may be necessary or as the County shall direct
to accomplish such purposes, and to preserve and protect the rights and remedies
of the County. The Grantee shall furnish satisfactory evidence of every such
recording, filing and registration to the County.
(f) Maintenance of Books of Account and Chief Place of Business. The
Grantee will keep proper books of record and account, in which complete and
correct entries will be made of all of its business and financial transactions
(including, without limitation, such books of record and account covering the
Accounts Receivable and the moneys due and to become due thereunder), such
entries to be made in accordance with generally accepted accounting principles
consistently applied in the case of financial transactions. All such books of
record and account shall be kept in the Grantee's principal business office in
the County of Fairfax.
ARTICLE III
Remedies
Section 3.1 - Sale of The Collateral; Enforcement Proceedings.
If any money owed by Grantee to the County shall have become
due and payable, and shall not have been paid, the County shall have the
following rights and powers (including all the rights of a secured party under
the Uniform Commercial Code of the Commonwealth of Virginia):
(a) to sell, to the extent permitted by law, the Collateral or
any part thereof, at one or more public or private sales. At such sales, the
Collateral may be sold as an undivided whole, or as severable parts, on such
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terms and conditions, for cash or credit, as directed in such written request,
at such place or places and otherwise in such manner and upon such notice as may
be required by law, or, in the absence of any such requirement, as the County
may deem appropriate, and to make conveyance to the purchaser or purchasers; or
(b) to proceed by a suit or suits in equity or at law, whether
for the specific performance of any covenant or agreement of the Grantee
contained herein, or in aid of the execution of any power herein granted, or for
any foreclosure or sale of the Collateral, or any part thereof under the
judgment or decree of any court of competent jurisdiction, or for the
appointment of a receiver or receivers of the Grantee as to the Collateral or
for the enforcement of any other appropriate legal or equitable remedy.
Section 3.2 - Manner of Sale of The Collateral.
In exercising the power of sale hereby given, the County may conduct
any number of sales from time to time. The power of sale shall not be exhausted
by any one or more such sales as to any part of the Collateral not lawfully
sold, but shall continue unimpaired until all of the Collateral shall have been
sold or all indebtedness of the Grantee hereunder and under the Franchise
Agreement shall have been paid.
The County shall have the right and power to sell all or any part of
the Collateral at one or more sales, as an entirety or in any undivided or
severable parts, and in such order as it may deem expedient, all in accordance
with any applicable law relating to such matters.
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The sale of all or any portion of the Collateral may be postponed by
County by public announcement at the time and place of such sale, and from time
to time thereafter may be further postponed by public announcement made at the
time of sale fixed by the preceding postponement.
Upon any sale, whether under the power of sale hereby given or by
virtue of judicial proceedings, it shall not be necessary for any person
conducting a sale to have physically present, or constructively in his
possession, any of the Collateral.
Upon the completion of any sale under this Article III, the County
shall be entitled to execute and deliver to the purchaser or purchasers a good
and sufficient instrument of conveyance, sale and transfer of the Collateral, or
any part thereof; and the County or its successors are hereby irrevocably
appointed the true and lawful attorneys for the Grantee, in its name and stead,
to make and execute all necessary conveyances of the property sold.
Notwithstanding the foregoing, the Grantee will, if so requested by the County
or by any purchaser, confirm any such sale or transfer by executing and
delivering to the County or to such purchaser all proper instruments of sale and
transfer, and releases as may be specified in any such request.
Section 3.3 - Application of Proceeds of Sale.
The proceeds of sale of the Collateral, or any part thereof, pursuant
to this Article III, and all other amounts and moneys received by County
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hereunder or in any proceedings for the enforcement hereof, the application of
which has not elsewhere herein been specifically provided for, shall be applied
as follows:
FIRST: To the payment of all necessary costs and expenses incident to
such sale and the enforcement of this Security Agreement, including, but not
limited to, reasonable compensation to the agents, attorneys and counsel of the
County;
SECOND: To the payment of the Franchise Fee and any money owed to the
County hereunder or under the Franchise Agreement between the Grantee and the
County;
THIRD: The remainder, if any, shall be paid to the Grantee, its
successors or assigns, or to whomever may be lawfully entitled to receive the
same, or as a court of competent jurisdiction may direct.
Section 3.4 - Appointment of Receiver.
The Grantee agrees that this Security Agreement shall not be construed
to prohibit the appointment of a receiver, in the event of a default by the
Grantee.
Section 3.5 - Enforcement by County.
All remedies herein expressly provided for shall be in addition to, and
not in derogation of any other remedies now or hereafter existing at law or in
equity. The exercise of one remedy under this Security Agreement shall not
foreclose the use of another.
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ARTICLE IV
Miscellaneous Provisions
Section 4.1 - Headings.
Article and section headings used in this Security Agreement are
intended solely to facilitate reading and reference to the sections and
provisions of this Security Agreement. Such headings shall not affect the
meaning or interpretation of this Security Agreement.
Section 4.2 - Financing Statement.
Attached hereto, as Exhibit A, is a copy of the Financing Statement
which the County and the Grantee have executed in quintuplicate simultaneously
with the execution of this Security Agreement. Exhibit A and this Agreement may
be filed to perfect the security interest created herein.
Section 4.3 - Term.
This Security Agreement shall remain in force and effect from the date
of execution hereof, until all money owing to the County from the Grantee is
paid in full. This Agreement shall not encompass any obligation which comes into
existence more than fifteen years after the date of execution hereof.
Section 4.4 - Virginia Law to Apply.
This Security Agreement shall be construed and governed under and in
accordance with the laws of the Commonwealth of Virginia. All obligations of the
parties created hereunder are performable in Fairfax County, Virginia.
Section 4.5 - Agreement to Bind Successors and Assigns.
9
<PAGE>
This Security Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns.
Section 4.6 - Severability.
If any term or provision of this Security Agreement shall, to any
extent, be held to be invalid or unenforceable by a valid order of any court or
regulatory agency, the remainder hereof shall be valid in all other respects and
continue to be effective. In the event of a subsequent change in applicable law,
so that the provision which had been held invalid is no
10
<PAGE>
longer invalid, said provision shall thereupon return to full force and effect
without further action by the County and shall thereafter be binding on the
Grantee and the County.
IN WITNESS WHEREOF, the parties have set their hands and seals on the
date first above written.
THE BOARD OF SUPERVISORS OF
FAIRFAX COUNTY, VIRGINIA
BY:
-----------------------------------
Chairman, Board of Supervisors
BY:
-----------------------------------
County Executive
GRANTEE: MEDIA GENERAL CABLE OF
FAIRFAX COUNTY, INC., a Virginia
Corporation
BY:
-----------------------------------
Title:
--------------------------------
11
<PAGE>
APPENDIX 7: GUARANTEE OF PERFORMANCE
<PAGE>
GUARANTEE OF PERFORMANCE
WHEREAS, Fairfax County, Virginia ("County") granted a franchise
("Franchise") to Media General Cable of Fairfax County, Inc. ("Grantee"), to
erect, construct, operate, and maintain a cable system in the County pursuant to
Ordinance No. 10-98-H, and the Fairfax County Cable Communications Ordinance,
Chapter 9 of the Code of the County of Fairfax (collectively, the "Franchise
Documents"); and
WHEREAS, Media General, Inc., of Richmond, Virginia
("Guarantor") is a principal shareholder in and the parent of the Grantee and
will have a substantial interest in the Franchise, in the conduct of the
Grantee, and in the Franchise Agreement and Franchise Documents, which are
incorporated herein by reference;
WHEREAS, Guarantor desires to provide the fullest assurance to
the County that Grantee will be able to fully discharge its duties and
obligations under the Franchise Agreement and Franchise Documents;
NOW, THEREFORE, the Guarantor hereby unconditionally
guarantees the due and punctual performance of any and all obligations of the
Grantee required by the Franchise Agreement and Franchise Documents. The
Guarantor irrevocably appoints Grantee, its successors and assigns, as its agent
for the purpose of consenting to all changes in the terms and conditions of the
1
<PAGE>
Franchise Agreement and Franchise Documents. The Guarantor hereby ratifies and
confirms such changes as may be made from time to time, and waives any notice of
acceptance, non-payment, default and non-performance required by the Franchise
Agreement and Franchise Documents.
This Guarantee, unless terminated, substituted or canceled as
hereinafter provided, shall remain in full force and effect for the term of the
Franchise, as it may be renewed or extended and as provided by the Franchise
Agreement and Franchise Documents; provided, however, that upon the County's
prior written approval of a substitute guarantor, which approval shall not be
unreasonably withheld, this Guarantee may be terminated, substituted or canceled
upon written notice from the Guarantor to the County and the Grantee. Any such
substitution of the Guarantor will be implemented in a manner that ensures that
the substitute guarantee is in place and effective prior to or contemporaneously
with the termination, substitution or cancellation of this Guarantee so that
there is no breach in coverage.
Any such notice to be given hereunder shall be addressed to:
County: County Executive
Fairfax County Department of Consumer Affairs
12000 Government Center Parkway
Fairfax, Virginia 22035-0064
Telephone: (703) 324-5949
Facsimile: (703) 803-0489
2
<PAGE>
With a copy (which
shall not constitute
notice) to:
Fairfax County Attorney
Office of County Attorney
12000 Government Center Parkway, Suite 549
Telephone: (703) 342-2421
Facsimile: (703) 324-3938
Grantee: President
Media General Cable of Fairfax County, Inc.
14650 Old Lee Road
Chantilly, Virginia 20151-1799
Telephone: (703) 378 3926
Facsimile: (703) 378-3417
With a copy (which
shall not constitute
notice) to:
General Counsel
Media General, Inc.
333 East Grace Street
Richmond, Virginia 23293-0001
Telephone: (804) 649-6029
Facsimile: (804) 649-6898
Such termination shall not affect liability incurred or accrued under this
Guarantee prior to the effective date of such termination or cancellation.
3
<PAGE>
The Guarantor consents to the release of any security held to
assure Grantee's performance of its obligations.
Media General, Inc., Guarantor
By: __________________________
Title: ________________________
Date: _________________, 1998
4
<PAGE>
APPENDIX 8: ACCEPTANCE OF FRANCHISE BY THE GRANTEE
<PAGE>
ACCEPTANCE OF FRANCHISE BY THE GRANTEE
Media General Cable of Fairfax County, Inc. ("Grantee") hereby accepts
the franchise to erect, construct, maintain, and operate a cable system offered
by Ordinance No. 10-98-H of Fairfax County, Virginia ("County"), as amended
("Granting Ordinance"). By this acceptance, Grantee agrees that, as set forth in
the franchise and the Franchise Agreement, it shall be bound by the terms and
conditions of the Franchise Agreement, any amendments thereto, and the Fairfax
County Cable Communications Ordinance, Chapter 9 of the Code of the County of
Fairfax, and any amendments thereto (collectively, the "Franchise Documents").
By accepting the franchise, the Grantee further: (1) acknowledges and
accepts the County's legal right to issue and enforce the franchise; (2) agrees
that it will not oppose the County's intervention in any proceeding affecting
its cable system; (3) accepts and agrees to comply with each and every provision
of the Franchise Documents; (4) agrees that the franchise and Granting Ordinance
shall not be effective until and unless all conditions precedent are satisfied;
and (5) agrees that the franchise was granted pursuant to processes and
procedures consistent with applicable law, and that it will not raise any claim
to the contrary.
The Grantee declares that it has carefully read all of the terms and
conditions of the Franchise Documents, and accepts and agrees to abide by the
same.
1
<PAGE>
Upon the franchise becoming effective, the Grantee shall be immediately
bound to maintain and operate a cable system under the terms, conditions and
limitations set forth in the Franchise Documents and other applicable law, as of
the time and date it files this written acceptance with the County.
AGREED TO THIS _____ DAY OF _____________, 1998.
Media General Cable of Fairfax County, Inc.
By:
-----------------------------------
Its:
----------------------------------
2
<PAGE>
COMMONWEALTH OF VIRGINIA:
I HEREBY CERTIFY, that on this ___ day of _______________, 1998, before
me, the subscriber, a Notary Public of the Commonwealth of Virginia, in and for
Fairfax County, Virginia, aforesaid personally appeared _______________________
_______________________________________ of_____________________________________
and acknowledged the foregoing Acceptance of Franchise by Grantee in Fairfax
County, Virginia, to be the act and deed of said company.
Fairfax County, Virginia
AS WITNESS my hand and Notary Seal
-------------------------
Notary Public
My Commission Expires:
---------------------
3
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MEDIA
GENERAL, INC.'S CONSOLIDATED CONDENSED BALANCE SHEETS AND CONSOLIDATED CONDENSED
STATEMENTS OF OPERATIONS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-mos
<FISCAL-YEAR-END> DEC-27-1998
<PERIOD-END> JUN-28-1998
<CASH> 4,778
<SECURITIES> 0
<RECEIVABLES> 108,805
<ALLOWANCES> 7,300
<INVENTORY> 17,636
<CURRENT-ASSETS> 150,970
<PP&E> 1,101,500
<DEPRECIATION> 606,338
<TOTAL-ASSETS> 1,863,079
<CURRENT-LIABILITIES> 138,358
<BONDS> 912,434
0
0
<COMMON> 133,644
<OTHER-SE> 312,508
<TOTAL-LIABILITY-AND-EQUITY> 1,863,079
<SALES> 485,843
<TOTAL-REVENUES> 485,843
<CGS> 238,722
<TOTAL-COSTS> 238,722
<OTHER-EXPENSES> 51,475
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 33,852
<INCOME-PRETAX> 53,968
<INCOME-TAX> 19,682
<INCOME-CONTINUING> 34,286
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 34,286
<EPS-PRIMARY> 1.29
<EPS-DILUTED> 1.27
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MEDIA
GENERAL, INC.'S CONSOLIDATED CONDENSED BALANCE SHEETS AND CONSOLIDATED CONDENSED
STATEMENTS OF OPERATIONS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-28-1997
<PERIOD-END> JUN-29-1997
<CASH> 5,087
<SECURITIES> 0
<RECEIVABLES> 104,324
<ALLOWANCES> 6,631
<INVENTORY> 19,307
<CURRENT-ASSETS> 148,851
<PP&E> 1,081,446
<DEPRECIATION> 559,261
<TOTAL-ASSETS> 1,757,500
<CURRENT-LIABILITIES> 131,529
<BONDS> 940,000
0
0
<COMMON> 133,107
<OTHER-SE> 257,804
<TOTAL-LIABILITY-AND-EQUITY> 1,757,500
<SALES> 445,571
<TOTAL-REVENUES> 445,571
<CGS> 225,300
<TOTAL-COSTS> 225,300
<OTHER-EXPENSES> 46,967
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 33,075
<INCOME-PRETAX> 37,817
<INCOME-TAX> 15,694
<INCOME-CONTINUING> 22,123
<DISCONTINUED> 0
<EXTRAORDINARY> (63,000)
<CHANGES> 0
<NET-INCOME> (40,877)
<EPS-PRIMARY> (1.55)
<EPS-DILUTED> (1.54)
</TABLE>
